EXHIBIT 4.1
_________________________________________
AMENDED AND RESTATED DECLARATION
OF TRUST
OXY CAPITAL TRUST I
Dated as of January 20, 1999
_________________________________________
Table of Contents
Page
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ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions................................................. 1
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application............................ 6
Section 2.2 Lists of Holders of Securities.............................. 7
Section 2.3 Reports by the Property Trustee............................. 7
Section 2.4 Periodic Reports to the Property Trustee.................... 7
Section 2.5 Evidence of Compliance with Conditions Precedent............ 7
Section 2.6 Events of Default; Waiver................................... 8
Section 2.7 Event of Default; Notice.................................... 9
ARTICLE III
ORGANIZATION
Section 3.1 Name........................................................ 10
Section 3.2 Office...................................................... 10
Section 3.3 Purpose..................................................... 10
Section 3.4 Authority................................................... 11
Section 3.5 Title to Property of the Trust.............................. 11
Section 3.6 Powers and Duties of the Regular Trustees................... 11
Section 3.7 Prohibition of Actions by the Trust and the Trustees........ 15
Section 3.8 Powers and Duties of the Property Trustee................... 15
Section 3.9 Certain Duties and Responsibilities of the Property Trustee. 17
Section 3.10 Certain Rights of the Property Trustee...................... 19
Section 3.11 Delaware Trustee............................................ 20
Section 3.12 Execution of Documents...................................... 20
Section 3.13 Not Responsible for Recitals or Issuance of Securities...... 20
Section 3.14 Duration of Trust........................................... 21
Section 3.15 Mergers..................................................... 21
ARTICLE IV
SPONSOR
Section 4.1 Sponsor's Purchase of Common Securities..................... 22
Section 4.2 Responsibilities of the Sponsor............................. 23
Section 4.3 Right to Proceed............................................ 23
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ARTICLE V
TRUSTEES
Section 5.1 Number of Trustees...................................................... 24
Section 5.2 Delaware Trustee........................................................ 24
Section 5.3 Property Trustee; Eligibility........................................... 24
Section 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally....... 25
Section 5.5 Regular Trustees........................................................ 25
Section 5.6 Appointment, Removal and Resignation of Trustees........................ 26
Section 5.7 Vacancies Among Trustees................................................ 27
Section 5.8 Effect of Vacancies..................................................... 27
Section 5.9 Meetings................................................................ 27
Section 5.10 Delegation of Power..................................................... 28
Section 5.11 Merger, Conversion, Consolidation or Succession to Business............. 28
ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions........................................................... 28
ARTICLE VII
ISSUANCE OF SECURITIES
Section 7.1 General Provisions Regarding Securities................................. 29
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
Section 8.1 Dissolution and Termination of Trust.................................... 30
ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1 Transfer of Securities.................................................. 31
Section 9.2 Transfer of Certificates................................................ 32
Section 9.3 Deemed Security Holders................................................. 32
Section 9.4 Book Entry Interests.................................................... 33
Section 9.5 Notices to Clearing Agency.............................................. 34
Section 9.6 Appointment of Successor Clearing Agency................................ 34
Section 9.7 Definitive Preferred Security Certificates Under Certain Circumstances.. 34
Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates....................... 35
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ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 10.1 Liability........................................................... 36
Section 10.2 Exculpation......................................................... 36
Section 10.3 Fiduciary Duty...................................................... 37
Section 10.4 Indemnification..................................................... 37
Section 10.5 Outside Businesses.................................................. 38
ARTICLE XI
ACCOUNTING
Section 11.1 Fiscal Year......................................................... 38
Section 11.2 Certain Accounting Matters.......................................... 38
Section 11.3 Banking............................................................. 39
Section 11.4 Withholding......................................................... 39
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1 Amendments.......................................................... 40
Section 12.2 Meetings of the Holders of Securities; Action by Written Consent.... 41
ARTICLE XIII
REPRESENTATIONS OF THE PROPERTY TRUSTEE AND THE DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of the Property Trustee.............. 43
Section 13.2 Representations and Warranties of the Delaware Trustee.............. 43
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Notices............................................................. 44
Section 14.2 Governing Law....................................................... 45
Section 14.3 Intention of the Parties............................................ 45
Section 14.4 Headings............................................................ 46
Section 14.5 Successors and Assigns.............................................. 46
Section 14.6 Partial Enforceability.............................................. 46
Section 14.7 Counterparts........................................................ 46
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
OXY CAPITAL TRUST I
January 20, 1999
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of January 20, 1999 by the undersigned trustees (together with all
other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), Occidental
Petroleum Corporation, a Delaware corporation, as trust sponsor (the "Sponsor"),
and by the holders, from time to time, of the securities representing undivided
beneficial interests in the assets of the Oxy Capital Trust I (the "Trust") to
be issued pursuant to this Declaration;
WHEREAS, certain of the Trustees and the Sponsor established a trust (the
"Trust") under the Business Trust Act (as defined herein) pursuant to a
Declaration of Trust, dated as of December 16, 1998 (the "Original Declaration")
and a Certificate of Trust filed with the Secretary of State of Delaware on
December 16, 1998, for the sole purpose of issuing and selling certain
securities representing undivided beneficial interests in the assets of the
Trust and investing the proceeds thereof in certain Subordinated Notes (as
defined herein) of the Subordinated Notes Issuer (as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions.
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Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Amended and Restated Declaration of Trust as modified, supplemented or amended
from time to time;
(d) all references in this Declaration to Articles and Sections and
Exhibits are to Articles and Sections of and Exhibits to this Declaration unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act as in effect on the date of this Declaration.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Book Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. C. (S)(S)3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
Preferred Securities and in whose name or in the name of a nominee of that
organization, shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Clearing Agency
effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means January 20, 1999.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor legislation.
"Commission" means the Securities and Exchange Commission.
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"Common Security" has the meaning specified in Section 7.1.
"Common Securities Guarantee" means the guarantee agreement to be dated as
of January 20, 1999 of the Sponsor in respect of the Common Securities.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Annex II to Exhibit A.
"Covered Person" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of: (i) the Trust; or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.4.
"Delaware Trustee" has the meaning set forth in Section 5.1.
"Direct Action" has the meaning set forth in Section 3.8(e).
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Event of Default
(as defined in the Indenture) has occurred and is continuing in respect of the
Subordinated Notes.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time or any successor legislation.
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a Security
is registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means
(i) any Trustee;
(ii) any Affiliate of any Trustee;
(iii) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or
(iv) any employee or agent of the Trust or its Affiliates.
"Indenture" means the Indenture dated as of January 20, 1999 among the
Subordinated Notes Issuer and The Bank of New York, as trustee, as supplemented
by an Officers' Certificate (as defined in the Indenture) dated as of January
20, 1999 pursuant to Section 301 of the Indenture.
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"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(h).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities and by the Trust Indenture
Act, Holder(s) of Securities voting together as a single class or, as the
context may require, Holder(s) of Preferred Securities or Common Securities
voting separately as a class, who vote Securities of a relevant class and the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of the Securities
voted by such Holders represents more than 50% of the above stated aggregate
liquidation amount of all Securities of such class.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Declaration shall include:
(a) a statement that each officer signing the Certificate has read the
covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities Guarantee" means the guarantee agreement to be dated
as of January 20, 1999 of the Sponsor in respect of the Preferred Securities.
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the
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Clearing Agency, or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Annex I to Exhibit A.
"Property Trustee" means the Trustee meeting the eligibility requirements
set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in Section 3.8(c).
"Purchase Agreement" means the Purchase Agreement or Underwriting Agreement
for the offering and sale of Preferred Securities, substantially in the form of
Exhibit C.
"Quorum" means a majority of the Regular Trustees or if there are only two
Regular Trustees, both of them.
"Regular Trustee" means any Trustee other than the Property Trustee and the
Delaware Trustee.
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, the
chairman of the board of directors, the president, any vice-president, any
assistant vice-president, the secretary, any assistant secretary, the treasurer,
any assistant treasurer, any trust officer or assistant trust officer or any
other officer of the Property Trustee customarily performing functions similar
to those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor legislation.
"Special Event" has the meaning set forth in the terms of the Securities.
"Sponsor" means Occidental Petroleum Corporation, a Delaware corporation or
any permitted successor thereof under the Indenture, in its capacity as sponsor
of the Trust.
"Subordinated Notes" means the series of Subordinated Notes to be issued by
the Subordinated Notes Issuer under the Indenture to be held by the Property
Trustee pursuant to Section 3.8(a), a specimen certificate for such series of
Subordinated Notes is attached hereto as Exhibit B.
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"Subordinated Notes Issuer" means Occidental Petroleum Corporation, a
Delaware corporation.
"Subordinated Notes Trustee" means The Bank of New York, as trustee under
the Indenture until a successor is appointed thereunder and thereafter means
such successor trustee.
"Successor Property Trustee" means a successor Trustee possessing the
qualifications to act as Property Trustee under Section 5.3(a).
"25% in liquidation amount of the Securities" means, except as provided in
the terms of the Preferred Securities and by the Trust Indenture Act, Holder(s)
of Securities voting together as a single class or, as the context may require,
Holder(s) of Preferred Securities or Common Securities, voting separately as a
class, who vote Securities of a relevant class and the liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of the Securities voted by such Holders
represents 25% of the above stated aggregate liquidation amount of all
Securities of such class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
--------------------------------
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions;
(b) the Property Trustee shall be the only Trustee which is a trustee for
the purposes of the Trust Indenture Act;
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(c) if and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by (S)(S) 310 to 317, inclusive,
of the Trust Indenture Act, such imposed duties shall control; and
(d) the application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
Section 2.2 Lists of Holders of Securities.
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(a) Each of the Sponsor and the Regular Trustees, on behalf of the Trust,
shall provide the Property Trustee (i) semiannually, not later than June 30 and
December 31 in each year, a list, in such form as the Property Trustee may
reasonably require, containing all the information in the possession or control
of the Sponsor, or any of its Paying Agents other than the Property Trustee, as
to the names and addresses of the Holders of Securities ("List of Holders") as
of the preceding June 15 or December 15, as the case may be, and (ii) at such
other times as the Property Trustee may request in writing, within 30 days after
the receipt by the Trust of any such request, a list of similar form and content
as of a date not more than 15 days prior to the time such list is furnished.
The Property Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in Lists of Holders given to it or which
it receives in its capacity as Paying Agent (if acting in such capacity)
provided that the Property Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders; and
(b) the Property Trustee shall comply with its obligations under (S)(S)
311(a), 311(b) and 312(b) of the Trust Indenture Act.
Section 2.3 Reports by the Property Trustee.
-------------------------------
Within 60 days after May 15 of each year, commencing May 1999, the Property
Trustee shall provide to the Holders of the Securities such reports as are
required by (S) 313 of the Trust Indenture Act, if any, in the form and in the
manner provided by (S) 313 of the Trust Indenture Act. The Property Trustee
shall also comply with the requirements of (S) 313(d) of the Trust Indenture
Act.
Section 2.4 Periodic Reports to the Property Trustee.
----------------------------------------
Each of the Sponsor and the Regular Trustees, on behalf of the Trust, shall
provide to the Property Trustee such documents, reports and information as
required by (S) 314 (if any) and the compliance certificate required by (S) 314
of the Trust Indenture Act in the form, in the manner and at the times required
by (S) 314 of the Trust Indenture Act.
Section 2.5 Evidence of Compliance with Conditions Precedent.
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Each of the Sponsor and the Regular Trustees, on behalf of the Trust, shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Declaration which relate to any of the
matters set forth in (S) 314(c) of the Trust
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Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to (S) 314(c)(1) may be given in the form of an Officers' Certificate.
Section 2.6 Events of Default; Waiver.
-------------------------
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
this Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of Subordinated Notes affected thereby (a
"Super Majority") to be waived under the Indenture, the Event of Default
under this Declaration may only be waived by the vote of the Holders of at
least the proportion in liquidation amount of the Preferred Securities
which the relevant Super Majority represents of the aggregate principal
amount of the Subordinated Notes outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of
(S)316(a)(1)(B) of the Trust Indenture Act and such (S)316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote or
consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
this Declaration as provided below in the proviso to this Section 2.6(b),
the Event of Default under this Declaration shall also be not waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under this Declaration as provided below in the
proviso to this Section 2.6(b), the Event of Default under this Declaration
may only be waived by the vote of the Holders of
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at least the proportion in liquidation amount of the Common Securities
which the relevant Super Majority represents of the aggregate principal
amount of the Subordinated Notes outstanding,
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until all Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Securities; and provided, further, that any waiver by the Holders of the
Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote or
consent of the Holder of the Common Securities. The foregoing provisions of this
Section 2.6(b) shall be in lieu of (S)316(a)(1)(A) and (S)316(a)(1)(B) of the
Trust Indenture Act and such (S)316(a)(1)(A) and (S)316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.6(b), upon such waiver, any such default shall
cease to exist and any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other default
or Event of Default with respect to the Common Securities or impair any right
consequent thereon.
(c) A waiver of any Event of Default under the Indenture by the Property
Trustee at the direction of the Holders of the Preferred Securities constitutes
a waiver of the corresponding Event of Default with respect to the Preferred
Securities under this Declaration. Any waiver of an Event of Default under the
Indenture by the Property Trustee at the direction of the Holders of the
Preferred Securities shall also be deemed to constitute a waiver by the Holders
of the Common Securities of the corresponding Event of Default under this
Declaration with respect to the Common Securities for all purposes of this
Declaration without further act, vote or consent of the Holders of the Common
Securities. The foregoing provisions of this Section 2.6(c) shall be in lieu of
(S)316(a)(1)(B) of the Trust Indenture Act and such (S)316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
Section 2.7 Event of Default; Notice.
------------------------
(a) The Property Trustee shall, within 90 days after the occurrence of an
Event of Default with respect to the Securities known to the Property Trustee,
transmit by mail, first class postage prepaid, to the Holders of the Securities,
notices of all such defaults unless such defaults have been cured before the
giving of such notice (the term "defaults" for the purposes of this Section
2.7(a) being hereby defined to be an Event of Default as defined in the
Indenture, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); provided, that,
except for a default in the payment of principal of (or premium, if any) or
interest on any of the Subordinated Notes or in the payment of any sinking fund
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installment established for the Subordinated Notes, the Property Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors and/or
Responsible Officers, of the Property Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 501(1) and 501(2) of the Indenture; or
(ii) any default as to which the Property Trustee shall have received
written notice or of which a Responsible Officer of the Property Trustee
charged with the administration of the Declaration shall have actual
knowledge.
ARTICLE III
ORGANIZATION
Section 3.1 Name.
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The Trust is named "Oxy Capital Trust I", as such name may be modified from
time to time by the Regular Trustees following written notice to the Holders of
Securities. The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Regular Trustees.
Section 3.2 Office.
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The address of the principal office of the Trust is c/o Occidental
Petroleum Corporation, 10889 Wilshire Boulevard, Los Angeles, CA 90024,
Attention: General Counsel. On ten Business Days written notice to the
Property Trustee and Holders of Securities, the Regular Trustees may designate
another principal office.
Section 3.3 Purpose.
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The exclusive purposes and functions of the Trust are (a) to issue and sell
Securities and use the proceeds from such sale to acquire the Subordinated
Notes, and (b) except as otherwise limited herein, to engage in only those other
activities necessary, or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust. It is the intention of all of the parties hereto
that the Trust created hereunder constitutes a "grantor trust" for United States
federal income tax purposes under the Code, and all parties hereto, and the
Holders of the Preferred Securities by the purchase of the Preferred Securities,
agree to treat the Trust with such characterization. The provisions of this
Agreement shall be interpreted consistently with such characterization. Unless
otherwise required by law, by the acceptance of this Trust, neither the
Trustees, the Sponsor nor the Holders of the Preferred Securities or
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Common Securities will take any position which is contrary to the classification
of the Trust as a grantor trust for United States federal income tax purposes.
Section 3.4 Authority.
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(a) Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
(b) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(c) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided that the registration statement referred to in
Section 3.6, including any amendments thereto, shall, subject to Section 3.4(d),
be signed by at least two of the Regular Trustees.
(d) A Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purposes of executing any documents which the Regular Trustees have
power and authority to cause the Trust to execute pursuant to Section 3.6.
Section 3.5 Title to Property of the Trust.
------------------------------
Except as provided in Section 3.8 with respect to the Subordinated Notes
and the Property Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. A Holder
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
Section 3.6 Powers and Duties of the Regular Trustees.
-----------------------------------------
The Regular Trustees shall have the exclusive power, duty and authority to
cause the Trust to engage in the following activities:
(a) to execute, issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Preferred Securities and no more than
one series of Common Securities, and, provided further, there shall be no
interests in the Trust other than the Securities, and the issuance of
11
Securities shall be limited to a simultaneous issuance of both Preferred
Securities and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred Securities, at
the direction of the Sponsor, to:
(i) execute and file with the Commission, at such time as
determined by the Sponsor, a registration statement on Form S-3 prepared by
the Sponsor in relation to the Preferred Securities, including any pre- and
post-effective amendments thereto and any related registration statement to
be filed pursuant to Rule 462(b) of the Securities Act prepared by the
Sponsor;
(ii) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor as necessary in order to qualify or
register all or part of the Preferred Securities in any State in which the
Sponsor has determined to qualify or register such Preferred Securities for
sale;
(iii) execute and file an application prepared by the Sponsor, at
such time as determined by the Sponsor, to the New York Stock Exchange or
any other national stock exchange or the Nasdaq National Market for listing
upon notice of issuance of any Preferred Securities;
(iv) execute and file with the Commission, at such time as
determined by the Sponsor, a registration statement on Form 8-A prepared by
the Sponsor relating to the registration of the Preferred Securities under
Section 12(b) of the Exchange Act, including any amendments thereto
prepared by the Sponsor;
(v) execute and enter into, and perform its obligations under, the
Purchase Agreement providing for the sale of the Preferred Securities;
(vi) execute and deliver letters, documents, or instruments with DTC
relating to the Preferred Securities;
(vii) execute and enter into the Purchase Agreement and other related
agreements providing for the sale of the Securities;
(viii) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor to be necessary in order to qualify
or register all or part of the Preferred Securities in any State in which
the Sponsor has determined to qualify or register such Preferred Securities
for sale or resale, as the case may be; and
(ix) take all actions and perform such duties as may be required of
the Regular Trustees to open checking, deposit or similar banking accounts
as may be necessary in connection with the issuance and sale of the
Securities.
(c) in connection with the issue and sale of Common Securities, to execute
and enter into, and perform its obligations under, the Common Securities
Subscription Agreement dated as
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of January 20, 1999 between the Trust and the Sponsor (the "Common Securities
Subscription Agreement");
(d) to execute and enter into, and perform its obligations under, the
Subordinated Notes Subscription Agreement dated as of January 20, 1999 between
the Trust and the Sponsor (the "Subordinated Notes Subscription Agreement") to
acquire the Subordinated Notes with the proceeds of the sale of the Preferred
Securities and the Common Securities; provided, however, that the Regular
Trustees shall cause legal title to the Subordinated Notes to be owned by and
held of record in the name of the Property Trustee for the benefit of the
Holders of the Preferred Securities and the Common Securities;
(e) to give the Sponsor and the Property Trustee prompt written notice of
the occurrence of a Special Event;
(f) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including for the purposes
of (S)316(c) of the Trust Indenture Act and with respect to Distributions,
voting rights, redemptions and exchanges, and to issue relevant notices to the
Holders of Preferred Securities and Common Securities as to such actions and
applicable record dates;
(g) to take all actions and perform such duties as may be required of the
Regular Trustees pursuant to the terms of the Securities and this Declaration;
(h) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8, the Property Trustee has the
power to bring such Legal Action;
(i) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(j) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(k) to give the certificate to the Property Trustee required by (S)
314(a)(4) of the Trust Indenture Act which certificate may be executed by any
Regular Trustee;
(l) to incur expenses which are necessary or incidental to carrying out
any of the purposes of the Trust;
(m) to act as, or appoint another Person to act as, registrar and transfer
agent for the Securities;
(n) to give prompt written notice to the Holders of the Securities of any
notice received from the Subordinated Notes Issuer of its election to defer
payments of interest on the Subordinated Notes by extending the interest payment
period under the Indenture;
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(o) to take all action which may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Securities or
to enable the Trust to effect the purposes for which the Trust was created;
(p) to take any action, not inconsistent with this Declaration or with
applicable law, which the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust as set out in
this Section 3.6 including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Subordinated Notes Issuer to ensure that
the Subordinated Notes will be treated as indebtedness of the Subordinated
Notes Issuer for United States federal income tax purposes, provided that
such action relating to this clause (iii) does not adversely affect the
interests of Holders; and
(q) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
to be duly prepared and filed by the Regular Trustees, on behalf of the Trust;
(r) to take all actions and perform such duties as may be required of the
Regular Trustees pursuant to Section 11.2 herein;
(s) to the extent provided in this Declaration, to cause the winding up of
the affairs of and liquidation of the Trust and the preparation, execution and
filing of the certificate of cancellation with respect to the Trust with the
Secretary of State of the State of Delaware; and
(t) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
The Regular Trustees shall exercise the powers set forth in this Section
3.6 in a manner which is consistent with the purposes, functions and
characterization for United States federal income tax purposes of the Trust set
out in Section 3.3 and the Regular Trustees shall not take any action which is
inconsistent with or contrary to the purposes, functions and characterization
for United States federal income tax purposes of the Trust set forth in Section
3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of the
powers or the authority of the Property Trustee set forth in Section 3.8.
The Trust initially appoints the Property Trustee as transfer agent and
registrar for the Preferred Securities.
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Section 3.7 Prohibition of Actions by the Trust and the Trustees.
----------------------------------------------------
(a) Notwithstanding any provision herein to the contrary, the Trust shall
not, and the Trustees (including the Property Trustee) shall cause the Trust not
to, engage in any activity other than as required or authorized by this
Declaration. In particular, the Trust shall not and the Trustees (including the
Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Subordinated Notes, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the Securities;
(ii) acquire any assets other than the Subordinated Notes and any
cash proceeds received with respect thereto;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Subordinated Notes;
(v) possess any power or otherwise act in such a way as to vary the
assets of the Trust or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as expressly provided in this Declaration and
Exhibit A hereto, (A) direct the time, method and place of exercising any
trust or power conferred upon the Subordinated Notes Trustee with respect
to the Subordinated Notes, (B) waive any past default that is waivable
under Section 513 of the Indenture, (C) exercise any right to rescind or
annul any declaration that the principal of all the Subordinated Notes
shall be due and payable or (D) consent to any amendment, modification or
termination of the Indenture or the Subordinated Notes, where such consent
shall be required, unless the Trust shall have received an opinion of
counsel to the effect that such modification will not cause more than an
insubstantial risk that for United States federal income tax purposes the
Trust will not be classified as a grantor trust.
Section 3.8 Powers and Duties of the Property Trustee.
-----------------------------------------
(a) The legal title to the Subordinated Notes shall be owned by and held
of record in the name of the Property Trustee for the benefit of the Trust and
the Holders of the Securities. The right, title and interest of the Property
Trustee to the Subordinated Notes shall vest automatically in each Person who
may hereafter be appointed as Property Trustee as set forth in Section 5.6.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and interest
in the Subordinated Notes to the Regular Trustees or to the Delaware Trustee (if
the Property Trustee does not also act as Delaware Trustee).
15
(c) The Property Trustee shall:
(i) establish and maintain a segregated noninterest bearing bank
account (the "Property Trustee Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Trust and the
Holders of the Securities and, upon the receipt of payments of funds made
in respect of the Subordinated Notes held by the Property Trustee, deposit
such funds into the Property Trustee Account and make payments to the
Holders of the Preferred Securities and the Common Securities from the
Property Trustee Account in accordance with Section 6.1. Funds in the
Property Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Property Trustee Account shall be an
account which is maintained with a banking institution the rating on whose
long term unsecured indebtedness is at least equal to the rating assigned
to the Preferred Securities by a "nationally recognized statistical rating
organization", as that term is defined for purposes of Rule 436(g)(2) under
the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred Securities and the
Common Securities to the extent the Subordinated Notes are redeemed or
mature; and
(iii) upon notice of distribution issued by the Regular Trustees in
accordance with the terms of the Preferred Securities and the Common
Securities, engage in such ministerial activities as shall be necessary or
appropriate to effect the distribution of the Subordinated Notes to Holders
of Securities upon the Sponsor's election to dissolve the Trust in
accordance with Section 8.1(a)(v).
(d) The Property Trustee shall take all actions and perform such duties as
may be specifically required of the Property Trustee pursuant to the terms of
the Securities and this Declaration.
(e) The Property Trustee shall have the power to take any Legal Action
which arises out of or in connection with an Event of Default or the Property
Trustee's duties and obligations under this Declaration, the Business Trust Act
or the Trust Indenture Act. If the Property Trustee fails to enforce its rights
under the Subordinated Notes after a Holder of Preferred Securities has made a
written request, such Holder may, to the fullest extent permitted by law,
institute a legal proceeding against the Subordinated Notes Issuer, to enforce
the Property Trustee's rights under the Subordinated Notes, without first
instituting any legal proceeding against the Property Trustee or any other
person or entity. Notwithstanding the foregoing, if an Event of Default has
occurred and is continuing and such event is attributable to the failure of the
Subordinated Notes Issuer to pay interest, premium, if any, or principal on the
Subordinated Notes on the date such interest, premium, if any, or principal is
otherwise payable (or in the case of redemption, on the redemption date), then a
Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of, premium, if any, or
interest on, the Subordinated Notes having a principal amount equal to the
aggregate liquidation amount of the Preferred Securities of such Holder (a
"Direct Action"). Notwithstanding any payments made to such Holder of Preferred
Securities by the Subordinated Notes Issuer in connection with a Direct Action,
the Subordinated Notes Issuer shall remain obligated to pay the principal of,
premium, if
16
any, or interest on the Subordinated Notes held by the Trust or the Property
Trustee of the Trust, and the Subordinated Notes Issuer shall be subrogated to
the rights of the Holder of such Preferred Securities with respect to payments
on the Preferred Securities. Except as provided in the preceding sentences and
in the Preferred Securities Guarantee, the Holders of Preferred Securities will
not be able to exercise directly any other remedy available to the holders of
the Subordinated Notes.
(f) No resignation of the Property Trustee shall be effective unless
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Property Trustee has been appointed and accepted that
appointment in accordance with Section 5.6.
(g) The Property Trustee shall have the legal power to exercise all of the
rights, powers and privileges of a holder of Subordinated Notes under the
Indenture and, if an Event of Default occurs and is continuing, the Property
Trustee shall, for the benefit of Holders of the Securities, enforce its rights
as holder of the Subordinated Notes subject to the rights of the Holders
pursuant to the terms of such Securities and this Declaration.
(h) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to the Preferred Securities and any
such Paying Agent shall comply with (S) 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the Property Trustee at any time and a successor
Paying Agent or additional Paying Agents may be appointed at any time by the
Property Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall have none of
the powers or the authority of the Regular Trustees set forth in Section 3.6.
(j) The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner which is consistent with the purposes, functions and
characterization for United States federal income tax purposes of the Trust set
forth in Section 3.3 and the Property Trustee shall not take any action which is
inconsistent with or contrary to the purposes, functions and characterization
for United States federal income tax purposes of the Trust set out in Section
3.3.
Section 3.9 Certain Duties and Responsibilities of the Property Trustee.
-----------------------------------------------------------
(a) The Property Trustee, before the occurrence of any Event of Default
and after the curing or waiver of all Events of Default that may have occurred:
(i) shall undertake to perform only such duties as are specifically
set forth in this Declaration and in the terms of the Securities, and no
implied covenants, duties or obligations shall be read into this
Declaration against the Property Trustee; and
17
(ii) in the absence of bad faith on the part of the Property Trustee,
the Property Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Property Trustee and conforming
to the requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are specifically
required to be furnished to the Property Trustee, the Property Trustee
shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Declaration.
In case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6), the Property Trustee shall exercise such of the rights
and powers vested in it by this Declaration, and use the same degree of care and
skill in their exercise or use, as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs;
(b) no provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) this Subsection shall not be construed to limit Subsection (a)
of this Section;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in liquidation
amount of the Securities at the time outstanding relating to the time,
method and place of conducting any proceeding for any remedy available to
the Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under this Declaration including, without limitation, with
respect to the Securities; and
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable ground
for believing that the repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(c) Whether or not therein expressly so provided, every provision of this
Declaration relating to the conduct or affecting the liability of or affording
protection to the Property Trustee shall be subject to the provisions of this
Section.
18
Section 3.10 Certain Rights of the Property Trustee.
--------------------------------------
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(ii) any act of the Sponsor or the Regular Trustees contemplated by
this Declaration shall be sufficiently evidenced by an Officers'
Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and rely upon an
Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any recording,
refiling or registration thereof);
(v) the Property Trustee may consult with counsel of its selection
and the written advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in reliance thereon. Such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of its employees;
(vi) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Declaration at the request
or direction of any Holder, unless such Holder shall have offered to the
Property Trustee reasonable security or indemnity against the costs,
expenses and liabilities that might be incurred by it in complying with
such request or direction;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note or other paper or
document, but the Property Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see
fit and, if the Property Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Trust, personally or by agent or attorney;
(viii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Property Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder;
19
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities and the
signature of the Property Trustee or its agents alone shall be sufficient
and effective to perform any such action; and no third party shall be
required to inquire as to the authority of the Property Trustee to so act,
or as to its compliance with any of the terms and provisions of this
Declaration, both of which shall be conclusively evidenced by the Property
Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Property Trustee (i) may request instructions from the Holders of the
Securities which instructions may only be given by the Holders of the same
proportion in liquidation amount of the Securities as would be entitled to
direct the Property Trustee under the terms of the Securities in respect of
such remedy, right or action, (ii) may refrain from enforcing such remedy
or right or taking such other action until such instructions are received,
and (iii) shall be protected in acting in accordance with such
instructions; and
(xi) the Property Trustee shall not be liable for any action taken
or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Declaration.
Section 3.11 Delaware Trustee.
----------------
Notwithstanding any other provision of this Declaration other than Section
5.1, the Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the duties and responsibilities of the
Trustees described in this Declaration, except as mandated by the Business Trust
Act. Except as set forth in Section 5.1, the Delaware Trustee shall be a
Trustee for the sole and limited purpose of fulfilling the requirements of (S)
3807(a) of the Business Trust Act.
Section 3.12 Execution of Documents.
----------------------
Unless otherwise determined by the Regular Trustees and except as otherwise
required by the Business Trust Act, each of the Regular Trustees are authorized
to execute on behalf of the Trust any documents which the Regular Trustees have
the power and authority to execute pursuant to Section 3.6.
Section 3.13 Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their
20
correctness. The Trustees make no representations as to the value or condition
of the property of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration or the
Securities.
Section 3.14 Duration of Trust.
-----------------
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall have existence for 41 years from the Closing Date.
Section 3.15 Mergers.
-------
(a) The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c);
(b) the Trust may, with the consent of a majority of the Regular Trustees
and without the consent of the Holders of the Securities, the Delaware Trustee
or the Property Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided,
that if the Trust is not the surviving entity:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under
the 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 with respect to Distributions
and payments upon liquidation, redemption and maturity and substitutes
for the Common Securities other securities having substantially the
same terms as the Common Securities (the "Successor Common
Securities"), so long as the Successor Common Securities rank the same
as the Common Securities rank with respect to Distributions and
payments upon liquidation, redemption, repayment and otherwise;
(ii) the Subordinated Notes Issuer expressly acknowledges a trustee
of the Successor Entity which possesses the same powers and duties as the
Property Trustee as the Holder of the Subordinated Notes;
(iii) such merger, consolidation, amalgamation or replacement does
not cause the Preferred Securities (including any Successor Securities) to
be downgraded by any nationally recognized statistical rating organization;
(iv) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the Holders
of the Securities (including any Successor Securities and any Successor
Common Securities) in any material respect (other than with respect to any
dilution of the Holders' interest in the new entity);
21
(v) such Successor Entity has a purpose identical to that of the
Trust;
(vi) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of counsel to the Trust
experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the
Holders of the Securities (including any Successor Securities and
Successor Common Securities) in any material respect (other than with
respect to any dilution of the Holders' interest in the new entity);
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company; and
(C) following such merger, consolidation, amalgamation or
replacement, the Successor Entity will continue to be classified as a
grantor trust for United States federal income tax purposes; and
(vii) the Sponsor guarantees the obligations of such Successor Entity
under the Successor Securities and Successor Common Securities at least to
the extent provided by the Preferred Securities Guarantee and the Common
Securities Guarantee, respectively; and
(c) notwithstanding Section 3.15(b), the Trust shall not (except with the
written consent of Holders of 100% of the outstanding Preferred Securities)
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes. Prior to such merger,
consolidation, amalgamation, or replacement, the Sponsor shall have received an
opinion of counsel to the Trust, experienced in such matters to the effect that
following such merger, consolidation, amalgamation or replacement, the Trust
will continue to be classified as grantor trust for United States federal income
tax purposes.
ARTICLE IV
SPONSOR
Section 4.1 Sponsor's Purchase of Common Securities.
---------------------------------------
On the Closing Date the Sponsor will purchase all the Common Securities
issued by the Trust, at the same time as the Preferred Securities are sold, in
an amount at least equal to 3% of the capital of the Trust.
22
Section 4.2 Responsibilities of the Sponsor.
-------------------------------
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission, at such time
as determined by the Sponsor, a registration statement on Form S-3 in relation
to the Preferred Securities, including any amendments thereto;
(b) if necessary, to determine the States in which to take appropriate
action to qualify or register for sale all or part of the Preferred Securities
and to take any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for execution
and filing any documents to be executed and filed by the Trust, as the Sponsor
deems necessary or advisable in order to comply with the applicable laws of any
such States;
(c) if necessary, to prepare for filing by the Trust an application, at
such time as determined by the Sponsor, to the New York Stock Exchange or any
other national stock exchange or the Nasdaq National Market for listing or
quotation upon notice of issuance, of any Preferred Securities;
(d) if necessary, to prepare for filing by the Trust with the Commission,
at such time as determined by the Sponsor, a registration statement on Form 8-A
relating to the registration of the Preferred Securities under Section 12(b) of
the Exchange Act, including any amendments thereto;
(e) if necessary, to negotiate the terms of the Purchase Agreement
providing for the sale of the Preferred Securities;
(f) execute and enter into the Purchase Agreement, the Subordinated Notes
Subscription Agreement and the Common Securities Subscription Agreement to be
entered into with the Company; and
(g) prepare for execution and filing by the Trust of documents, or
instruments to be delivered to DTC relating to the Preferred Securities.
Section 4.3 Right to Proceed.
----------------
The Sponsor acknowledges the rights of Holders to institute a Direct Action
as set forth in Section 3.8(e) hereto.
23
ARTICLE V
TRUSTEES
Section 5.1 Number of Trustees.
------------------
(a) The number of Trustees shall initially be five (5).
(b) At any time before the issuance of any Securities, the Sponsor may, by
written instrument, increase or decrease the number of Trustees.
(c) After the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities; provided, however, that the number of Trustees shall in
no event be less than three (3); provided further that (1) if required by the
Business Trust Act, one Trustee (the "Delaware Trustee") shall be: (a) a natural
person who is a resident of the State of Delaware; or (b) if not a natural
person, an entity which has its principal place of business in the State of
Delaware and otherwise meets the requirements of applicable law (provided that
if the Property Trustee has its principal place of business in the State of
Delaware and otherwise meets the requirements of applicable law, then the
Property Trustee shall also be the Delaware Trustee and Section 3.11 shall have
no application); (2) there shall be at least two Trustees who are employees or
officers of, or are affiliated with the Sponsor; and (3) one Trustee shall be
the Property Trustee for so long as this Declaration is required to qualify as
an indenture under the Trust Indenture Act, and such Trustee may also serve as
Delaware Trustee if it meets the applicable requirements.
Section 5.2 Delaware Trustee.
----------------
The initial Delaware Trustee under this Declaration shall be:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
Attn: Corporate Trust Administration
Section 5.3 Property Trustee; Eligibility.
-----------------------------
The initial Property Trustee shall be:
The Bank of New York
101 Barclay Street, 21W
New York, New York 10286
Attn: Corporate Trust Administration
(a) There shall at all times be one Trustee which shall act as Property
Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
24
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State thereof or of the District of
Columbia, or a corporation or Person permitted by the Commission to act as
an institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes of this
Section 5.3(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the Property Trustee shall cease to be eligible to so
act under Section 5.3(a), the Property Trustee shall immediately resign in the
manner and with the effect set forth in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of (S) 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in (S) 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of (S) 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee, the Common Securities Guarantee
and the Indenture shall be deemed to be specifically described in this
Declaration and the Indenture for purposes of clause (i) of the first proviso
contained in (S) 310(b) of the Trust Indenture Act.
Section 5.4 Qualifications of Regular Trustees and Delaware Trustee
-------------------------------------------------------
Generally.
- ---------
Each Regular Trustee and the Delaware Trustee (unless the Property Trustee
also acts as Delaware Trustee) shall be either a natural person who is at least
21 years of age or a legal entity which shall act through one or more Authorized
Officers.
Section 5.5 Regular Trustees.
----------------
The initial Regular Trustees under this Declaration shall be:
J. R. Havert
A. R. Leach
John R. Zaylor
c/o Occidental Petroleum Corporation
10889 Wilshire Boulevard
Los Angeles, CA 90024
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
25
(b) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6.
Section 5.6 Appointment, Removal and Resignation of Trustees.
------------------------------------------------
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities by vote of the Holders of a
Majority in liquidation amount of the Common Securities voting as a class
at a meeting of the Holders of the Common Securities; and
(b)
(i) The Trustee that acts as Property Trustee shall not be removed in
accordance with Section 5.6(a) until a Successor Property Trustee
possessing the qualifications to act as Property Trustee under Section 5.3
(a "Successor Property Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Property
Trustee and delivered to the Regular Trustees and the Sponsor.
(ii) So long as a Delaware Trustee is required pursuant to Section
5.1, the Trustee that acts as Delaware Trustee shall not be removed in
accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.1 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until such Trustee's death, bankruptcy,
dissolution, termination, removal or resignation. Any Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) no such resignation of the Trustee that acts as the Property
Trustee shall be effective (A) until a Successor Property Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Property Trustee and delivered to the Trust, the Sponsor and the
resigning Property Trustee; or (B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to the holders
of the Securities; and
26
(ii) so long as a Delaware Trustee is required pursuant to Section
5.1, no such resignation of the Trustee that acts as the Delaware Trustee
shall be effective until a Successor Delaware Trustee has been appointed
and has accepted such appointment by instrument executed by such Successor
Delaware Trustee and delivered to the Trust, the Sponsor and the resigning
Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts to
promptly appoint a Successor Delaware Trustee (so long as a Delaware Trustee is
required pursuant to Section 5.1) or Successor Property Trustee, as the case may
be, if the Property Trustee or the Delaware Trustee delivers an instrument of
resignation in accordance with this Section 5.6.
(e) If no Successor Property Trustee or Successor Delaware Trustee shall
have been appointed and accepted appointment as provided in this Section 5.6
within 60 days after delivery of an instrument of resignation or removal, the
Property Trustee or Delaware Trustee resigning or being removed may petition any
court of competent jurisdiction for appointment of a Successor Property Trustee
or Successor Delaware Trustee. Such court may thereupon after such notice, if
any, as it may deem proper and prescribe, appoint a Successor Property Trustee
or Successor Delaware Trustee, as the case may be.
Section 5.7 Vacancies Among Trustees.
------------------------
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by a majority of the Regular Trustees
shall be conclusive evidence of the existence of such vacancy. The vacancy
shall be filled with a Trustee appointed in accordance with Section 5.6.
Section 5.8 Effect of Vacancies.
-------------------
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee, or
any one of them, shall not operate to annul the Trust. Whenever a vacancy in
the number of Regular Trustees shall occur, until such vacancy is filled by the
appointment of a Regular Trustee in accordance with Section 5.6, the Regular
Trustees in office, regardless of their number, shall have all the powers
granted to the Regular Trustees and shall discharge all the duties imposed upon
the Regular Trustees by this Declaration.
Section 5.9 Meetings.
--------
Meetings of the Regular Trustees shall be held from time to time upon the
call of any Regular Trustee. Regular meetings of the Regular Trustees may be
held at a time and place fixed by resolution of the Regular Trustees. Notice of
any in-person meetings of the Regular Trustees shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 48 hours before such meeting. Notice of any
telephonic meetings of the Regular Trustees or any committee thereof shall be
hand delivered or otherwise delivered in writing (including by facsimile, with a
hard copy by overnight courier) not less than 24 hours before a meeting.
Notices shall contain a brief statement of the time, place and anticipated
purposes of the meeting. The presence (whether in person or by telephone) of a
27
Regular Trustee at a meeting shall constitute a waiver of notice of such meeting
except where a Regular Trustee attends a meeting for the express purpose of
objecting to the transaction of any activity on the ground that the meeting has
not been lawfully called or convened. Unless provided otherwise in this
Declaration, any action of the Regular Trustees may be taken at a meeting by
vote of a majority of the Regular Trustees present (whether in person or by
telephone) and eligible to vote with respect to such matter, provided that a
Quorum is present, or without a meeting by the unanimous written consent of the
Regular Trustees.
Section 5.10 Delegation of Power.
-------------------
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section 3.6
including any registration statement or amendment thereto filed with the
Commission or making any other governmental filing.
(b) The Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
Section 5.11 Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which the Property Trustee or the Delaware Trustee, as
the case may be, may be merged or converted or with which either may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be bound by this Declaration, or any corporation succeeding to all
or substantially all the corporate trust business of the Property Trustee or the
Delaware Trustee, as the case may be, shall be the successor of the Property
Trustee or the Delaware Trustee, as the case may be, hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions.
-------------
Holders shall receive Distributions in accordance with the applicable terms
of the relevant Holder's Securities. Distributions shall be made on the
Preferred Securities and the Common Securities in accordance with the
preferences set forth in their respective terms. If and to the extent that the
Subordinated Notes Issuer makes a payment of interest (including Additional
Interest (as defined in the Indenture)), premium, if any, and principal on the
Subordinated Notes held by the Property Trustee (the amount of any such payment
being a "Payment Amount"), the Property Trustee shall and is directed, to the
extent funds are available for that purpose, to make a distribution (a
"Distribution") of the Payment Amount to Holders. In
28
the event the Sponsor shall defer any payment of principal, premium, if any, or
interest on the Subordinated Notes, the Trust shall, in like manner, defer
payments of Distributions on the Securities, and additional Distributions shall
accrue on such Securities for so long as the payment of principal, premium, if
any, or interest on the Subordinated Notes is deferred.
ARTICLE VII
ISSUANCE OF SECURITIES
Section 7.1 General Provisions Regarding Securities.
---------------------------------------
(a) The Regular Trustees shall, on behalf of the Trust, issue one class of
preferred securities representing undivided beneficial interests in the assets
of the Trust having such terms as are set forth in Exhibit A and incorporated
herein by reference (the "Preferred Securities"), and one class of common
securities representing undivided beneficial interests in the assets of the
Trust having such terms as are set forth in Exhibit A and incorporated herein by
reference (the "Common Securities"). The Trust shall have no securities or
other interests in the assets of the Trust other than the Preferred Securities
and the Common Securities;
(b) the Certificates shall be signed on behalf of the Trust by the Regular
Trustees (or if there are more than two Regular Trustees by any two of the
Regular Trustees). Such signatures may be the manual or facsimile signatures of
the present or any future Regular Trustee. Typographical and other minor errors
or defects in any such reproduction of any such signature shall not affect the
validity of any Certificate. In case any Regular Trustee of the Trust who shall
have signed any of the Certificates shall cease to be such Regular Trustee
before the Certificate so signed shall be delivered by the Trust, such
Certificate nevertheless may be delivered as though the person who signed such
Certificate had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who shall at the actual date of
execution of such Security, be the Regular Trustees of the Trust, although at
the date of the execution and delivery of the Declaration any such person was
not such a Regular Trustee. Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation of any stock
exchange on which Securities may be listed, or to conform to usage. A Preferred
Security shall not be valid until authenticated by the manual signature of an
authorized signatory of the Property Trustee. The signature shall be conclusive
evidence that the Preferred Security has been authenticated under this
Declaration. Upon a written order of the Trust signed by one Regular Trustee,
the Property Trustee shall authenticate the Preferred Securities for original
issue. The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Property Trustee may do so. Each
reference in this Declaration to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the same rights as
the Property Trustee to deal with the Trust or an Affiliate;
29
(c) the consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust;
(d) upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and
nonassessable; and
(e) every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by this Declaration.
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
Section 8.1 Dissolution and Termination of Trust.
------------------------------------
(a) The Trust shall dissolve and its affairs shall be wound up, upon the
earliest to occur of the following:
(i) upon the bankruptcy of the Sponsor or the Holder of the Common
Securities;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor, the filing of a certificate of
cancellation with respect to the Trust upon the consent (other than in
connection with a dissolution of the Trust pursuant to clause (v) of this
Section 8.1(a)) of the Holders of at least a Majority in liquidation amount
of the Securities, voting together as a single class, to file such
certificate of cancellation, or the revocation of the charter of the
Sponsor or the Holder of the Common Securities and the expiration of 90
days after the date of revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Sponsor or the Trust or the Holder of the Common Securities;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have been
paid to the Holders in accordance with the terms of the Securities;
(v) upon the election by the Sponsor, effective upon notice to the
Trust, the Property Trustee and the Delaware Trustee, to dissolve the Trust
in accordance with the terms of the Securities and all of the Subordinated
Notes held by the Property Trustee shall have been distributed to the
Holders of Securities in exchange for all of the Securities;
(vi) upon the written direction to the Property Trustee from the
Sponsor at any time to terminate the Trust and, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, the
distribution of Subordinated Notes to Holders in exchange for the
Securities, subject to the Regular Trustees' receipt of an opinion of
30
counsel experienced in such matters to the effect that the Holders of the
Preferred Securities will not recognize any income, gain or loss for United
States federal income tax purposes as a result of the dissolution of the
Trust and such distribution to Holders; or
(vii) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor; and
(b) As soon as is practicable after the occurrence of an event referred to
in Section 8.1(a) or dissolution pursuant to Section 3.14 and upon the
completion of the winding up of the Trust, one of the Regular Trustees (each
Regular Trustee being hereby authorized to take such action) shall file a
certificate of cancellation with the Secretary of State of the State of Delaware
terminating the Trust.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1 Transfer of Securities.
----------------------
(a) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Declaration and in the terms of
the Securities. Any transfer or purported transfer of any Security not made in
accordance with this Declaration shall be null and void;
(b) subject to this Article IX, Preferred Securities shall be freely
transferable; and
(c) subject to this Article IX, the Sponsor and any Related Party may only
transfer Common Securities to the Sponsor or a Related Party of the Sponsor;
provided that, any such transfer shall not violate the Securities Act and is
subject to the condition precedent that the transferor obtain the written
opinion of counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company required to register
under the Investment Company Act or the transferee would become an
Investment Company required to register under the Investment Company Act.
(d) Each Common Security that bears or is required to bear the legend set
forth in this Section 9.1(d) shall be subject to the restrictions on transfer
provided in the legend set forth in this Section 9.1(d), unless such
restrictions on transfer shall be waived by the written consent of the Regular
Trustees, and the Holder of each such Common Security, by such security holder's
acceptance thereof, agrees to be bound by such restrictions on transfer. As
used in this
31
Section 9.1(d) and in Section 9.1(c), the term "transfer" encompasses any sale,
pledge, transfer or other disposition of any such Common Security.
Any certificate evidencing a Common Security shall bear a legend in
substantially the following form, unless otherwise agreed by the Regular
Trustees (with written notice thereof to the Property Trustee):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD UNLESS SUCH OFFER AND SALE ARE
REGISTERED UNDER OR ARE EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT.
THE TRANSFER OF THE SECURITY EVIDENCED HEREBY IS ALSO SUBJECT TO THE
RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO BELOW.
Section 9.2 Transfer of Certificates.
------------------------
(a) The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges which may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration and
the documents incorporated by reference herein.
(b) Notwithstanding any other provisions of this Declaration, a Global
Certificate may not be transferred as a whole, except by the Clearing Agency to
a nominee of the Clearing Agency or by the Clearing Agency or any such nominee
to a successor Clearing Agency or a nominee of such successor Clearing Agency.
Section 9.3 Deemed Security Holders.
-----------------------
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trustees shall have
actual or other notice thereof.
32
Section 9.4 Book Entry Interests.
--------------------
(a) So long as Preferred Securities are eligible for book entry settlement
with the Clearing Agency or unless otherwise required by law, all Preferred
Securities that are so eligible may be represented by one or more, fully
registered, global Preferred Security Certificates (each a "Global
Certificate"), to be delivered to DTC, the initial Clearing Agency, by, or on
behalf of, the Trust. Such Global Certificates shall initially be registered on
the books and records of the Trust in the name of Cede & Co., the nominee of
DTC, and no Preferred Security Beneficial Owner will receive a definitive
Preferred Security Certificate representing such Preferred Security Beneficial
Owner's interests in such Global Certificates, except as provided in Section
9.7. The transfer and exchange of beneficial interests in any such Security in
global form shall be effected through the Clearing Agency in accordance with
this Declaration and the procedures of the Clearing Agency therefor.
(b) Except as provided below, Beneficial Owners of a Preferred Security in
global form shall not be entitled to have certificates registered in their
names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered Holder of such
Preferred Security in global form.
(c) Any Global Certificate may be endorsed with or have incorporated in
the text thereof such legends or recitals or changes not inconsistent with the
provisions of this Declaration as may be required by the Clearing Agency, by any
national securities exchange or by the National Association of Securities
Dealers, Inc. as may be required to comply with any applicable law or any
regulation thereunder or with the rules and regulations of any securities
exchange or interdealer quotation system upon which the Preferred Securities may
be listed or traded or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any particular
Preferred Securities are subject.
(d) Unless and until definitive, fully registered Preferred Security
Certificates (the "Definitive Preferred Security Certificates") have been issued
to the Preferred Security Beneficial Owners pursuant to Section 9.7:
(i) the provisions of this Section 9.4 shall be in full force and
effect with respect to such Preferred Securities;
(ii) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment
of Distributions on the Global Certificates and receiving approvals, votes
or consents hereunder) as the Holder of the Preferred Securities and the
sole holder of the Global Certificates and shall have no obligation to the
Preferred Security Beneficial Owners;
(iii) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(iv) the rights of the Beneficial Owners of Preferred Securities in
global form shall be exercised only through the Clearing Agency and shall
be limited to those established by law and agreements between such
Preferred Security Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants. The Clearing Agency
33
will make book entry transfers among the Clearing Agency Participants and
receive and transmit payments of Distributions on the Global Certificates
to such Clearing Agency Participants. DTC will make book entry transfers
among the Clearing Agency Participants, provided, that solely for the
purposes of determining whether the Holders of the requisite amount of
Preferred Securities have voted on any matter provided for in this
Declaration, so long as Definitive Preferred Security Certificates have not
been issued, the Trustees may conclusively rely on, and shall be protected
in relying on, any written instrument (including a proxy) delivered to the
Trustees by the Clearing Agency setting forth the Preferred Securities
Beneficial Owners' votes or assigning the right to vote on any matter to
any other Persons either in whole or in part.
Notwithstanding any other provisions of this Declaration (other than the
provisions set forth in this Section 9.4(d)), a Preferred Security in global
form may not be transferred as a whole except by the Clearing Agency to a
nominee of the Clearing Agency or by a nominee of the Clearing Agency to the
Clearing Agency or another nominee to a successor Clearing Agency or a nominee
of such successor Clearing Agency.
Section 9.5 Notices to Clearing Agency.
--------------------------
Whenever a notice or other communication to the Preferred Security Holders
is required under this Declaration, unless and until Definitive Preferred
Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Trustees shall give all such
notices and communications, specified herein to be given to the Preferred
Security Holders, to the Clearing Agency, and shall have no notice obligations
to the Preferred Security Beneficial Owners.
Section 9.6 Appointment of Successor Clearing Agency.
----------------------------------------
If any Clearing Agency notifies the Trust that it is unwilling or unable to
continue its services as securities depositary with respect to the Preferred
Securities if such Clearing Agency ceases to perform such services, or if at any
time such Clearing Agency ceases to be a clearing agency registered as such
under the Exchange Act when such Clearing Agency is required to be so registered
to act as such depositary, then the Regular Trustees may, in their sole
discretion, appoint a successor Clearing Agency with respect to such Preferred
Securities.
Section 9.7 Definitive Preferred Security Certificates Under Certain
--------------------------------------------------------
Circumstances.
- -------------
If:
(a) a Clearing Agency notifies the Trust that it is unwilling or unable to
continue its services as securities depositary with respect to the Preferred
Securities, if such Clearing Agency ceases to perform such services, or if at
any time such Clearing Agency ceases to be a clearing agency registered as such
under the Exchange Act when such Clearing Agency is required to be so registered
to act as such depositary, and a successor Clearing Agency is not appointed
within 90 days after such discontinuance pursuant to Section 9.6; or
34
(b) the Regular Trustees (with the consent of the Sponsor) in their sole
discretion determine that the Preferred Securities in global form shall be
exchanged for certificated Preferred Securities;
then:
(i) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
(ii) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Preferred Security Certificates to be delivered to Preferred
Security Beneficial Owners of such Preferred Securities in accordance with
the instructions of the Clearing Agency. Neither the Trustees nor the
Trust shall be liable for any delay in delivery of such instructions and
each of them may conclusively rely on and shall be protected in relying on,
said instructions of the Clearing Agency. The Definitive Preferred
Security Certificates shall be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as
may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on
which Preferred Securities may be listed, or to conform to usage.
At such time as all interests in a Preferred Security in global form have
been redeemed, exchanged, repurchased or canceled, such Preferred Security in
global form shall be, upon receipt thereof, canceled by the Trust in accordance
with standing procedures and instructions of the Clearing Agency.
Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Property Trustee or the Regular
Trustees such security or indemnity as may be required by them to keep each of
them harmless,
then:
in the absence of notice that such Certificate shall have been acquired by a
bona fide purchaser, the Property Trustee or any Regular Trustee on behalf of
the Trust shall execute and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
denomination. In connection with the issuance of any new Certificate under this
Section 9.8, the Property Trustee or the Regular Trustees may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection
35
therewith. Any duplicate Certificate issued pursuant to this Section shall
constitute conclusive evidence of an ownership interest in the relevant
Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 10.1 Liability.
---------
(a) Except as expressly set forth in this Declaration, the Preferred
Securities Guarantee, the Common Securities Guarantee and the terms of the
Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities,
which shall be made solely from assets of the Trust; or
(ii) be required to pay to the Trust or to any Holder of Securities
any deficit upon dissolution of the Trust or otherwise.
(b) Pursuant to (S) 3803(a) of the Business Trust Act, the Holders of the
Securities, in their capacity as such, shall be entitled to the same limitation
of personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of Delaware.
Section 10.2 Exculpation.
-----------
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence (or, in the case of
the Property Trustee, except as otherwise set forth in Section 3.9) or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
36
Section 10.3 Fiduciary Duty.
--------------
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than duties
imposed on the Property Trustee under the Trust Indenture Act), are agreed by
the parties hereto to replace such other duties and liabilities of such
Indemnified Person;
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and any Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provide that an Indemnified Person shall act in a manner
that is, or provides terms that are, fair and reasonable to the Trust or
any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or
obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
Section 10.4 Indemnification.
---------------
(a) The Sponsor shall indemnify each Indemnified Person for, and hold each
Indemnified Person harmless against, any loss, liability or expense incurred by
such Indemnified Person by reason of any act or omission performed or omitted by
such Indemnified Person without negligence or bad faith (or, in case of the
Property Trustee, except as set forth in Section
37
3.9) on behalf of the Trust and in a manner such Indemnified Person reasonably
believed to be within the scope of authority conferred on such Indemnified
Person by this Declaration;
(b) reasonable expenses (including reasonable legal fees and expenses)
incurred by an Indemnified Person in defending any claim, demand, action, suit
or proceeding shall, from time to time, be advanced by the Sponsor prior to the
final disposition of such claim, demand, action, suit or proceeding upon receipt
by the Sponsor of an undertaking by or on behalf of the Indemnified Person to
repay such amount if it shall be determined that the Indemnified Person is not
entitled to be indemnified as authorized in Section 10.4(a); and
(c) the provisions of this Section 10.4 shall survive the termination of
this Declaration or resignation or removal of any Trustee.
Section 10.5 Outside Businesses.
------------------
Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee (subject to Section 5.3(c)) may engage in or possess an interest in
other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders of Securities shall have no rights by virtue of this Declaration in
and to such independent ventures or the income or profits derived therefrom, and
the pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the
Sponsor, the Delaware Trustee, or the Property Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken by
the Trust, and any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee shall have the right to take for its own account (individually
or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person, the Delaware Trustee and
the Property Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act as
depositary for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
Section 11.1 Fiscal Year.
-----------
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year, or
such other year as is required by the Code.
Section 11.2 Certain Accounting Matters.
--------------------------
(a) At all times during the existence of the Trust, the Trust shall keep,
or cause to be kept, full books of account, records and supporting documents,
which shall reflect in reasonable detail, each transaction of the Trust. The
books of account shall be maintained on the accrual method of accounting, in
accordance with generally accepted accounting principles, consistently
38
applied. The Trust shall use the accrual method of accounting for United States
federal income tax purposes. The books of account and the records of the Trust
shall be examined by and reported upon, as of the end of each Fiscal Year, by a
firm of independent certified public accountants selected by the Regular
Trustees of the Trust.
(b) The Trust shall cause to be duly prepared and delivered to each of the
Holders of Securities, any annual United States federal income tax information
statement, required by the Code, containing such information with regard to the
Securities held by each Holder as is required by the Code and the Treasury
Regulations. Notwithstanding any right under the Code to deliver any such
statement at a later date, the Trust shall endeavor to deliver all such
statements within 30 days after the end of each Fiscal Year of the Trust.
(c) The Trust shall cause to be duly prepared and filed with the
appropriate taxing authority, an annual United States federal income tax return,
on a Form 1041 or such other form required by United States federal income tax
law, and any other annual income tax returns required to be filed by the Trust
on behalf of the Trust with any state or local taxing authority.
Section 11.3 Banking.
-------
The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Subordinated Notes held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Regular Trustees; provided, however, that
the Property Trustee shall designate the signatories for the Property Trustee
Account.
Section 11.4 Withholding.
-----------
The Trust shall comply with all withholding requirements under United
States federal, state and local law. The Trust shall request, and the Holders
shall provide to the Trust, such forms or certificates as are necessary to
establish an exemption from withholding with respect to each Holder, and any
representations and forms as shall reasonably be requested by the Trust to
assist it in determining the extent of, and in fulfilling, its withholding
obligations. The Trust shall file required forms with applicable jurisdictions
and, unless an exemption from withholding is properly established by a Holder,
shall remit amounts withheld with respect to the Holder to applicable
jurisdictions. To the extent that the Trust is required to withhold and pay
over any amounts to any authority with respect to distributions or allocations
to any Holder, the amount withheld shall be deemed to be a distribution in the
amount of the withholding to the Holder. In the event of any claimed over-
withholding, Holders shall be limited to an action against the applicable
jurisdiction. If the amount required to be withheld was not withheld from
actual Distributions made, the Trust may reduce subsequent Distributions by the
amount of such withholding.
39
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1 Amendments.
----------
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may be amended by, and only by, a
written instrument approved and executed by the Regular Trustees (or, if there
are more than two Regular Trustees a majority of the Regular Trustees);
provided, however, that:
(i) no amendment shall be made, and any such purported amendment
shall be void and ineffective, to the extent the result thereof would be
to:
(A) cause the Trust to fail to be classified for the purposes of
United States federal income taxation as a grantor trust;
(B) affect the powers or the rights of the Property Trustee or
the Delaware Trustee without the written consent of the Property
Trustee or the Delaware Trustee, as the case may be; or
(C) cause the Trust to be deemed to be an Investment Company
which is required to be registered under the Investment Company Act;
(ii) at such time after the Trust has issued any Securities which
remain outstanding, any amendment which would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only
with such additional requirements as may be set forth in the terms of such
Securities;
(iii) Section 9.1 (c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(iv) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities; and
(v) the rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities.
(b) Notwithstanding Section 12.1(a)(ii), this Declaration may be amended
from time to time by the Holders of a Majority in liquidation amount of the
Common Securities and the Property Trustee, without the consent of the Holders
of the Preferred Securities, to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that may
be defective or inconsistent with any other provision or to make any other
provisions with
40
respect to matters or questions arising under this Declaration, which shall
not be inconsistent with the other provisions of this Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) to ensure the Trust's classification as a grantor trust for
United States federal income tax purposes; and
(v) to modify, eliminate or add to any provisions of this
Declaration to such extent as shall be necessary to ensure that the Trust
will not be required to register as an investment company under the
Investment Company Act.
(c) Subject to Section 12.1(a), this Declaration may be amended by the
Holders of a Majority in liquidation amount of the Common Securities and the
Property Trustee if:
(i) The Holders of a Majority in liquidation amount of the Preferred
Securities consent to such amendment; and
(ii) the Regular Trustees have received an opinion of counsel
experienced in such matters to the effect that such amendment or the
exercise of any power granted to the Regular Trustees in accordance with
such amendment will not affect the Trust's status as a grantor trust for
United States federal income tax purposes or the Trust's exemption from
status as an "investment company" under the Investment Company Act.
(d) Any amendments of this Declaration shall become effective when notice
thereof is given to Holders of Securities.
Section 12.2 Meetings of the Holders of Securities; Action by Written
--------------------------------------------------------
Consent.
- -------
(a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the Securities)
to consider and act on any matter on which Holders of such class of Securities
are entitled to act under the terms of this Declaration, the terms of the
Securities or the rules of any stock exchange on which the Preferred Securities
are listed or admitted for trading. The Regular Trustees shall call a meeting
of the Holders of such class of Holders, if directed to do so by the Holders of
at least 25% in liquidation amount of the Securities of such class. Such
direction shall be given by delivering to the Regular Trustees one or more calls
in a writing stating that the signing Holders of Securities wish to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Holders of Securities calling a meeting shall specify in
writing the Security Certificates held by the Holders of Securities exercising
the right to call a meeting and only those Securities specified shall be counted
for purposes of determining whether the required percentage set forth in the
second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more than
60 days before the date of
41
such meeting. Whenever a vote, consent or approval of the Holders of
Securities is permitted or required under this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation and
the Holders of the Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) except to the extent that the Business Trust Act, the Trust
Indenture Act, this Declaration, the terms of the Securities or the listing
rules of any stock exchange on which the Preferred Securities are then
listed or trading otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings of
Holders of Securities, including notice of the time, place or purpose of
any meeting at which any matter is to be voted on by any Holders of
Securities, waiver of any such notice, action by consent without a meeting,
the establishment of a record date, quorum requirements, voting in person
or by proxy or any other matter with respect to the exercise of any such
right to vote.
42
ARTICLE XIII
REPRESENTATIONS OF THE PROPERTY TRUSTEE AND
THE DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of the Property Trustee.
------------------------------------------------------
The Trustee which acts as initial Property Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Property Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(a) The Property Trustee is a New York banking corporation with power and
authority to execute and deliver, and to carry out and perform its obligations
under the terms of, the Declaration;
(b) the Declaration has been duly executed and delivered by the Property
Trustee, and it constitutes a legal, valid and binding obligation of the
Property Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the enforcement of
such remedies is considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of the Articles
of Organization or Bylaws of the Property Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any New York State or Federal banking authority is required for the
execution, delivery or performance by the Property Trustee, of the Declaration.
Section 13.2 Representations and Warranties of the Delaware Trustee.
------------------------------------------------------
The Trustee which acts as initial Delaware Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Delaware Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) The Delaware Trustee is a Delaware banking corporation, duly
organized, validly existing and in good standing;
(b) the Delaware Trustee satisfies the requirements set forth in Section
5.1(c) and has the power and authority to execute and deliver, and to carry out
and perform its obligations under the terms of, this Declaration and, if it is
not a natural person, is duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization;
(c) this Declaration under Delaware law constitutes a legal, valid and
binding obligation of the Delaware Trustee, enforceable against it in accordance
with its terms, subject to
43
applicable bankruptcy, reorganization, moratorium, insolvency and other similar
laws affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
(d) no consent, approval or authorization of, or registration with or
notice to, any Delaware State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of this Declaration;
and
(e) the execution, delivery and performance of this Declaration by the
Delaware Trustee do not conflict with, or constitute a violation or breach of,
the charter or bylaws of the Delaware Trustee.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Notices.
-------
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, postage prepaid, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Trust may give
notice of to the Holders of the Securities):
Oxy Capital Trust I
c/o Occidental Petroleum Corporation
10889 Wilshire Boulevard
Los Angeles, California 90024
Attention: General Counsel
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as the Delaware Trustee may give notice of to the
Holders of the Securities):
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
Attn: Corporate Trust Administration
(c) if given to the Property Trustee, at the mailing address set forth
below (or such other address as the Property Trustee may give notice of to the
Holders of the Securities):
The Bank of New York
101 Barclay Street, 21W
New York, New York 10286
Attention: Corporate Trust Administration
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Trust):
Occidental Petroleum Corporation
10889 Wilshire Boulevard
Los Angeles, California 90024
Attention: Vice President, Treasurer
(e) if given to any other Holder, at the address set forth on the books
and records of the Trust.
(f) All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed except that if a notice or
other document is refused delivery or cannot be delivered because of a changed
address of which no notice was given, such notice or other document shall be
deemed to have been delivered on the date of such refusal or inability to
deliver.
Section 14.2 Governing Law.
-------------
This Declaration and the rights of the parties hereunder shall be governed
by and interpreted in accordance with the laws of the State of Delaware and all
rights and remedies shall be governed by such laws without regard to principles
of conflict of laws.
Section 14.3 Intention of the Parties.
------------------------
It is the intention of the parties hereto that the Trust be classified for
United States federal income tax purposes as a grantor trust. The provisions of
this Declaration shall be interpreted to further this intention of the parties.
45
Section 14.4 Headings.
--------
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
Section 14.5 Successors and Assigns.
----------------------
Whenever in this Declaration any of the parties hereto is named or referred
to, the successors and assigns of such party shall be deemed to be included, and
all covenants and agreements in this Declaration by the Sponsor and the Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether so expressed.
Section 14.6 Partial Enforceability.
----------------------
If any provision of this Declaration, or the application of such provision
to any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
Section 14.7 Counterparts.
------------
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
46
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
A. R. Leach,
as Regular Trustee
/s/ A. R. Leach
----------------------------------------
J. R. Havert,
as Regular Trustee
/s/ J. R. Havert
----------------------------------------
John R. Zaylor,
as Regular Trustee
/s/ John R. Zaylor
----------------------------------------
The Bank of New York (Delaware),
as Delaware Trustee
By: /s/ Walter N. Gitlin
--------------------------------------
Name: Walter N. Gitlin
------------------------------------
Title: Authorized Signatory
-----------------------------------
The Bank of New York,
as Property Trustee
By: /s/ T. C. Knight
--------------------------------------
Name: Thomas C. Knight
------------------------------------
Title: Assistant Vice President
-----------------------------------
Occidental Petroleum Corporation,
as Sponsor
By: /s/ J. R. Havert
--------------------------------------
Name: J. R. Havert
------------------------------------
Title: Vice President & Treasurer
-----------------------------------
47
EXHIBIT A
TERMS OF
8.16% TRUST ORIGINATED PREFERRED SECURITIES
8.16% TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust,
dated as of January 20, 1999 (as amended from time to time, the "Declaration"),
the designation, rights, privileges, restrictions, preferences and other terms
and provisions of the Preferred Securities and the Common Securities are set out
below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration or, if not defined in such Declaration, as defined in
the Prospectus referred to below):
1. Designation and Number.
----------------------
a. Preferred Securities. 21,000,000 Preferred Securities of the
--------------------
Trust with an aggregate liquidation amount with respect to the assets of the
Trust of Five Hundred Twenty-Five Million Dollars ($525,000,000), and a
liquidation amount with respect to the assets of the Trust of $25 per Preferred
Security, are hereby designated for the purposes of identification only as
"8.16% Trust Originated Preferred Securities" (the "Preferred Securities"). The
Preferred Security Certificates evidencing the Preferred Securities shall be
substantially in the form attached hereto as Annex I, with such changes and
additions thereto or deletions therefrom as may be required by ordinary usage,
custom or practice or to conform to the rules of any stock exchange on which the
Preferred Securities are listed.
b. Common Securities. 649,485 Common Securities of the Trust with an
-----------------
aggregate liquidation amount with respect to the assets of the Trust of Sixteen
Million Two Hundred Thirty-Seven Thousand One Hundred Twenty-Five Dollars
($16,237,125), and a liquidation amount with respect to the assets of the Trust
of $25 per Common Security, are hereby designated for the purposes of
identification only as "8.16% Trust Originated Common Securities" (the "Common
Securities"). The Common Security Certificates evidencing the Common Securities
shall be substantially in the form attached hereto as Annex II, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
2. Distributions.
-------------
a. Periodic Distributions payable on each Security will be fixed at
a rate per annum of 8.16% (the "Coupon Rate") of the stated liquidation amount
of $25 per Security, such rate being the rate of interest payable on the
Subordinated Notes to be held by the Property Trustee. Distributions in arrears
for more than one quarterly period will bear interest thereon at the Coupon Rate
(to the extent permitted by applicable law). The term "Distributions" as used in
these terms includes such periodic cash distributions and any such interest
payable unless otherwise stated. A Distribution is payable only to the extent
that payments are made in respect of the Subordinated Notes held by the Property
Trustee. The amount of Distributions payable for any period will be computed for
any full quarterly Distribution period on the basis of a 360-day year of twelve
30-day months, and for any period shorter than a full quarterly Distribution
period
A-1
for which Distributions are computed, Distributions will be computed on the
basis of the actual number of days elapsed in such a 30-day month.
b. Distributions on the Securities will be cumulative, will accrue
from January 20, 1999 and will be payable quarterly in arrears, on March 31,
June 30, September 30 and December 31 of each year, commencing on March 31,
1999, except as otherwise described below. The Subordinated Notes Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Subordinated Notes for a period
not exceeding 20 consecutive quarterly periods (each, an "Extension Period") but
not beyond the maturity date of the Subordinated Notes and, as a consequence of
such extension, Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accrue with interest thereon (to the
extent permitted by applicable law) at the Coupon Rate during any such Extension
Period. Prior to the termination of any such Extension Period, the Subordinated
Notes Issuer may further extend such Extension Period; provided that such
Extension Period together with all such previous and further extensions thereof
may not exceed 20 consecutive quarterly periods. Payments of accrued
Distributions will be payable to Holders as they appear on the books and records
of the Trust on the first record date after the end of the Extension Period.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Subordinated Notes Issuer may commence a new Extension Period, subject
to the above requirements.
c. Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. While the Preferred Securities remain in book entry only form,
the relevant record dates shall be one Business Day prior to the relevant
payment dates which payment dates correspond to the interest payment dates on
the Subordinated Notes. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment in respect of the Preferred
Securities will be made as described under the heading "Certain Terms of the
Preferred Securities -- Book-Entry-Only Issuance -- The Depository Trust
Company" in the Prospectus Supplement dated January 13, 1999 (the "Prospectus
Supplement") to the Prospectus dated January 8, 1999 (as so supplemented the
"Prospectus") of the Trust included in the Registration Statement on Form S-3 of
the Sponsor, the Trust and certain other business trusts. The relevant record
dates for the Common Securities shall be the same record dates as for the
Preferred Securities. If the Preferred Securities shall not continue to remain
in book entry only form, the relevant record dates for the Preferred Securities,
shall conform to the rules of any securities exchange on which the securities
are listed and, if none, shall be the 15/th/ day of the last month of each
quarterly distribution period, even if that day is not a Business Day.
Distributions payable on any Securities that are not punctually paid on any
Distribution payment date, as a result of the Subordinated Notes Issuer having
failed to make a payment under the Subordinated Notes, will cease to be payable
to the Person in whose name such Securities are registered on the relevant
record date, and such defaulted Distribution will instead be payable to the
Person in whose name such Securities are registered on the special record date
or other specified date determined in accordance with the Indenture. If any date
on which Distributions are payable on the Securities is not a Business Day, then
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 of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be
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made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date.
d. In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
In the event of any voluntary or involuntary dissolution, winding-up or
termination of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities, after paying or making reasonable provision to pay all claims and
obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act, an amount equal to the aggregate of the stated liquidation amount of
$25 per Security plus accrued and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"), unless, in
connection with such dissolution, winding-up or termination, Subordinated Notes
in an aggregate principal amount equal to the aggregate stated liquidation
amount of such Securities, with an interest rate equal to the Coupon Rate of,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on, such Securities, shall be distributed on a Pro Rata
basis to the Holders of the Securities in exchange for such Securities, after
paying or making reasonable provision to pay all claims and obligations of the
Trust in accordance with Section 3808(e) of the Business Trust Act.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
---------------------------
a. Upon the repayment of the Subordinated Notes in whole or in part,
whether at maturity or upon redemption, the proceeds from such repayment or
payment shall be simultaneously applied to redeem Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Subordinated
Notes so repaid or redeemed, at the redemption price for the Subordinated Notes,
payable in cash (the "Redemption Price"). Holders will be given not less than
30 nor more than 60 days notice of such redemption.
b. If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the Preferred Securities to be redeemed will be as described in
Paragraph 4(h)(ii) below.
c. The Subordinated Notes are redeemable, in whole or in part, at
the option of the Subordinated Notes Issuer, on one or more occasions, at any
time on or after January 20, 2004, at a redemption price equal to 100% of the
principal amount per Subordinated Note, plus, in each case, accrued and unpaid
interest thereon at the date of the redemption for the Subordinated Notes.
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d. If, at any time, a Tax Event or an Investment Company Event (each
as defined below, and each a "Special Event") shall occur and be continuing, the
Subordinated Notes Issuer shall have the right, upon not less than 30 nor more
than 60 days notice, to redeem the Subordinated Notes in whole or in part, for
cash within 90 days following the occurrence of such Special Event, at a
redemption price equal to 100% of the principal amount to be redeemed plus any
accrued and unpaid interest thereon to the date of such redemption and,
following such redemption, Securities with an aggregate liquidation amount equal
to the aggregate principal amount of the Subordinated Notes so redeemed shall be
redeemed by the Trust at the Redemption Price on a Pro Rata basis in accordance
with paragraph 8 hereof. The Common Securities will be redeemed Pro Rata with
the Preferred Securities, except that if an Event of Default has occurred and is
continuing, the Preferred Securities will have priority over the Common
Securities with respect to payment of the Redemption Price.
e. The following terms used herein shall be defined as follows:
(i) "Investment Company Event" means that the Trust shall have
received an opinion of counsel experienced in practice under the Investment
Company Act 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 1940 Act Law"), there is more than an insubstantial risk that the
Trust is or will be considered an Investment Company which is required to be
registered under the Investment Company Act, which Change in 1940 Act Law
becomes effective on or after the date of the Prospectus Supplement.
(ii) "Tax Event" means that the Trust shall have received an
opinion of counsel experienced in such matters to the effect that on or after
the date of the Prospectus Supplement, as a result of (a) 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 (b) any official or administrative
pronouncement or action, or judicial decision, interpreting or applying such
laws or regulations, where such change or amendment becomes effective, or such
pronouncement, action or decision is announced or occurs, in each case on or
after the date of the Prospectus Supplement, there is more than an insubstantial
risk that (i) the Trust is or will be within 90 days of the date of such
opinion, subject to United States federal income tax with respect to interest
accrued or received on the Subordinated Notes, (ii) the Trust is, or will be
within 90 days of the date of such opinion, subject to more than a minimal
amount of other taxes, duties, assessments or other governmental charges, or
(iii) interest payable by the Subordinated Notes Issuer to the Trust on the
Subordinated Notes is not, or within 90 days of the date of such opinion will
not be, deductible, in whole or in part, by the Subordinated Notes Issuer for
United States federal income tax purposes.
f. The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before the
date of redemption.
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g. In the event that the Sponsor makes the election referred to in
Section 8.1(a)(v) of the Declaration, the Regular Trustees shall dissolve the
Trust and, after paying or making reasonable provision to pay all claims and
obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act, cause Subordinated Notes, held by the Property Trustee, having an
aggregate stated liquidation amount of, with an interest rate identical to the
Coupon Rate of, and accrued and unpaid interest equal to accrued and unpaid
Distributions on and having the same record date for payment, as the Securities,
to be distributed to the Holders of the Securities in liquidation of such
Holders' interests in the Trust on a Pro Rata basis in accordance with paragraph
8 hereof. On and from the date fixed by the Regular Trustees for any
distribution of Subordinated Notes and dissolution of the Trust: (i) the
Securities will no longer be deemed to be outstanding, (ii) The Depository Trust
Company (the "Depository") or its nominee (or any successor Clearing Agency or
its nominee), as the record Holder of the Preferred Securities, will receive a
registered global certificate or certificates representing the Subordinated
Notes to be delivered upon such distribution and (iii) any certificates
representing Securities, except for certificates representing Preferred
Securities held by the Depository or its nominee (or any successor Clearing
Agency or its nominee), will be deemed to represent beneficial interests in the
Subordinated Notes having an aggregate principal amount equal to the aggregate
stated liquidation amount of, with an interest rate identical to the Coupon Rate
of, and accrued and unpaid interest equal to accrued and unpaid Distributions on
such Securities until such certificates are presented to the Subordinated Notes
Issuer or its agent for transfer or reissue. If the Subordinated Notes are
distributed to Holders of the Securities, pursuant to the terms of the
Indenture, the Subordinated Notes Issuer will use its best efforts to have the
Subordinated Notes listed on the New York Stock Exchange or on such other
exchange as the Preferred Securities were listed immediately prior to the
distribution of the Subordinated Notes.
h. Redemption or Distribution Procedures.
-------------------------------------
(i) Notice of any redemption of, or notice of distribution of
Subordinated Notes in exchange for the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities to be
redeemed or exchanged not fewer than 30 nor more than 60 days before the date
fixed for redemption or exchange thereof which, in the case of a redemption,
will be the date fixed for redemption of the Subordinated Notes. For purposes
of the calculation of the date of redemption or exchange and the dates on which
notices are given pursuant to this paragraph 4(h)(i), a Redemption/Distribution
Notice shall be deemed to be given on the day such notice is first mailed, by
first-class mail, postage prepaid, to Holders of Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of Securities
at the address of each such Holder appearing in the books and records of the
Trust. No defect in the Redemption/Distribution Notice or in the mailing of
either thereof with respect to any Holder shall affect the validity of the
redemption or exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities
are to be redeemed, the Securities to be redeemed will be redeemed Pro Rata from
each Holder of Securities, it being understood that, in respect of Preferred
Securities registered in the name of and held of record by the Depository (or
any successor Clearing Agency) or any other nominee, the distribution of the
proceeds of such redemption will be made to each Clearing Agency
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Participant (or person on whose behalf such nominee holds such securities) in
accordance with the procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice which notice may only be issued if the
Subordinated Notes are redeemed as set out in this paragraph 4 (which notice
will be irrevocable) then (A) while the Preferred Securities are in book entry
only form, with respect to the Preferred Securities, by 12:00 noon, New York
City time, on the redemption date, provided that the Subordinated Notes Issuer
has paid the Property Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Subordinated Notes, the Property Trustee
will deposit irrevocably with the Depository (or successor Clearing Agency)
funds sufficient to pay the Redemption Price with respect to the Preferred
Securities and will give the Depository irrevocable instructions and authority
to pay the Redemption Price to the Holders of the Preferred Securities, and (B)
if the Preferred Securities are issued in definitive form, with respect to the
Preferred Securities, and with respect to the Common Securities, provided that
the Subordinated Notes Issuer has paid the Property Trustee a sufficient amount
of cash in connection with the related redemption or maturity of the
Subordinated Notes, the Property Trustee will pay the Redemption Price to the
Holders of such Securities by check mailed to the address of the relevant Holder
appearing on the books and records of the Trust on the redemption date. If a
Redemption/Distribution Notice shall have been given and funds deposited as
required, if applicable, then immediately prior to the close of business on the
date of such deposit, or on the redemption date, as applicable, Distributions
will cease to accrue on the Securities so called for redemption and all rights
of Holders of such Securities so called for redemption will cease, except the
right of the Holders of such Securities to receive the Redemption Price, but
without interest on such Redemption Price. Neither the Regular Trustees nor the
Trust shall be required to register or cause to be registered the transfer of
any Securities which have been so called for redemption. If any date fixed for
redemption of Securities is not a Business Day, then payment of the Redemption
Price 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 of any such
delay) except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date fixed for redemption. If
payment of the Redemption Price in respect of Securities is improperly withheld
or refused and not paid either by the Property Trustee or by the Sponsor as
guarantor pursuant to the relevant Securities Guarantee, Distributions on such
Securities will continue to accrue, from the original redemption date to the
actual date of payment, in which case the actual payment date will be considered
the date fixed for redemption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in respect of the Preferred
Securities, the Depository or its nominee (or any successor Clearing Agency or
its nominee) if the Global Certificates have been issued or if Definitive
Preferred Security Certificates have been issued, to the Holder thereof, and (B)
in respect of the Common Securities, to the Holder thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), provided the
acquiror is not the Holder of the Common Securities or the obligor under the
Indenture, the Sponsor or any of its subsidiaries may
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at any time and from time to time purchase outstanding Preferred Securities by
tender, in the open market or by private agreement.
5. Voting Rights Applicable to Preferred Securities.
------------------------------------------------
a. Except as provided under paragraphs 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Preferred Securities
will have no voting rights.
b. Subject to the requirements of the third to last sentence of this
paragraph, the Holders of a Majority in liquidation amount of the Preferred
Securities, voting separately as a class, may direct the time, method, and place
of conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under the
Declaration, including (i) directing the time, method, and place of conducting
any proceeding for any remedy available to the Subordinated Notes Trustee, or
exercising any trust or power conferred on the Subordinated Notes Trustee with
respect to the Subordinated Notes, (ii) waiving any past default and its
consequences that is waivable under Section 513 of the Indenture, (iii)
exercising any right to rescind or annul a declaration that the principal of all
the Subordinated Notes shall be due and payable or (iv) consenting to any
amendment, modification or termination of the Indenture or the Subordinated
Notes where such consent shall be required, provided, however, that where a
consent under the Indenture would require the consent or act of the Holders of
greater than a majority in principal amount of Subordinated Notes affected
thereby (a "Super Majority"), the Property Trustee may only give such consent or
take such action at the direction of the Holders of at least the proportion in
liquidation amount of the Preferred Securities which the relevant Super Majority
represents of the aggregate principal amount of the Subordinated Notes
outstanding. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Preferred Securities.
Other than with respect to directing the time, method and place of conducting
any remedy available to the Property Trustee or the Subordinated Notes Trustee
as set forth above, the Property Trustee shall not take any action in accordance
with the directions of the Holders of the Preferred Securities under this
paragraph unless the Property Trustee has obtained an opinion of counsel to the
effect that for the purposes of United States federal income tax the Trust will
not be classified as other than a grantor trust on account of such action. If
the Property Trustee fails to enforce its rights under the Declaration, any
Holder of Preferred Securities may institute a legal proceeding directly against
any Person to enforce the Property Trustee's rights under the Declaration,
without first instituting a legal proceeding against the Property Trustee or any
other Person. Notwithstanding the foregoing, if an Event of Default has occurred
and is continuing with respect to the Preferred Securities and such event is
attributable to the failure of the Subordinated Notes Issuer to pay interest,
premium, if any, or principal on the Subordinated Notes on the date such
interest, premium, if any, or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a holder of Preferred Securities may
institute a Direct Action for enforcement of payment to such holder of the
principal of, premium, if any, or interest on, Subordinated Notes having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such holder on or after the respective due date specified in the
Subordinated Notes. Notwithstanding any payments made to such Holder of
Preferred Securities by the Subordinated Notes Issuer in connection with a
Direct Action, the Subordinated Notes Issuer shall remain obligated to pay the
principal of, premium, if any, and interest on the Subordinated Notes held by
the Trust or the Property Trustee, and the Subordinated Notes Issuer
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shall be subrogated to the rights of the Holder of such Preferred Securities
with respect to payments on the Preferred Securities to the extent of any
payment made by the Subordinated Notes Issuer to such Holder in any Direct
Action. Except as provided in the preceding sentences, the Holders of Preferred
Securities will not be able to exercise directly any other remedy available to
the holders of the Subordinated Notes.
c. Any approval or direction of Holders of Preferred Securities may
be given at a separate meeting of Holders of Preferred Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
d. No vote or consent of the Holders of the Preferred Securities
will be required for the Trust to redeem and cancel Preferred Securities or to
distribute the Subordinated Notes in accordance with the Declaration and the
terms of the Securities.
e. 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 the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights With Respect to Common Securities.
-----------------------------------------------
a. Except as provided under paragraphs 6(b), 6(c) and 7 and as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
b. The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
c. Subject to Section 2.6 of the Declaration and only after all
Events of Default with respect to the Preferred Securities have been cured,
waived or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation amount
of the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred upon the Property
Trustee under the Declaration, including (i) directing the time, method, place
of conducting any proceeding for any remedy available to the Subordinated Notes
Trustee, or exercising any trust or power conferred on the Subordinated Notes
Trustee with respect to the Subordinated Notes, (ii) waiving any past default
and its consequences that is waivable under Section 513 of the Indenture, or
(iii) exercising any right to rescind or annul a declaration that the principal
of all the Subordinated
A-8
Notes shall be due and payable, provided, however, that where a consent or
action under the Indenture would require the consent or act of the Holders of
greater than a majority in principal amount of Subordinated Notes affected
thereby (a "Super Majority"), the Property Trustee may only give such consent or
take such action at the direction of the Holders of at least the proportion in
liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Subordinated Notes
outstanding. Pursuant to this paragraph 6(c), the Property Trustee shall not
revoke any action previously authorized or approved by a vote of the Holders of
the Common Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Property Trustee or the
Subordinated Notes Trustee as set forth above, the Property Trustee shall not
take any action in accordance with the directions of the Holders of the Common
Securities under this paragraph unless the Property Trustee has obtained an
opinion of counsel to the effect that for the purposes of United States federal
income tax the Trust will not be classified as other than a grantor trust on
account of such action. If the Property Trustee fails to enforce its rights
under the Declaration, any Holder of Common Securities may, to the fullest
extent permitted by law, institute a legal proceeding directly against any
Person to enforce the Property Trustee's rights under the Declaration, without
first instituting a legal proceeding against the Property Trustee or any other
Person. Notwithstanding the foregoing, if an Event of Default has occurred and
is continuing with respect to the Common Securities and such event is
attributable to the failure of the Subordinated Notes Issuer to pay interest or
principal on the Subordinated Notes on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date), then a
holder of Common Securities may institute a proceeding for enforcement of
payment to such holder of the principal of, or interest on, Subordinated Notes
having a principal amount equal to the aggregate liquidation amount of the
Common Securities of such holder on or after the respective due date specified
in the Subordinated Notes.
d. Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
e. No vote or consent of the Holders of the Common Securities will
be required for the Trust to redeem and cancel Common Securities or to
distribute the Subordinated Notes in accordance with the Declaration and the
terms of the Securities.
7. Amendments to Declaration and Indenture.
---------------------------------------
a. In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
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dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 or Section 3.14 of the Declaration, then the Holders of outstanding
Securities as a class, will be entitled to vote on such amendment or proposal
(but not on any other amendment or proposal) and such amendment or proposal
shall not be effective except with the approval of the Holders of at least a
Majority in liquidation amount of the Securities, voting together as a single
class; provided, however, that if any amendment or proposal referred to in
clause (i) above would adversely affect only the Preferred Securities or the
Common Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.
b. In the event the consent of the Property Trustee as the holder of
the Subordinated Notes is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Subordinated
Notes, the Property Trustee shall request the direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
the consent of the Holders of greater than a majority in aggregate principal
amount of the Subordinated Notes (a "Super Majority"), the Property Trustee may
only give such consent at the direction of the Holders of at least the
proportion in liquidation amount of the Securities which the relevant Super
Majority represents of the aggregate principal amount of the Subordinated Notes
outstanding; provided, further, that the Property Trustee shall not take any
action in accordance with the directions of the Holders of the Securities under
this paragraph 7(b) unless the Property Trustee has been furnished an opinion of
counsel to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action.
8. Pro Rata.
--------
A reference in these terms of the Securities to any payment, distribution
or treatment as being "Pro Rata" shall mean pro rata to each Holder of
Securities according to the aggregate liquidation amount of the Securities held
by the relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Indenture has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
9. Ranking.
-------
The Preferred Securities rank pari passu and payment thereon shall be made
Pro Rata with the Common Securities except that, where an Event of Default
occurs and is continuing
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under the Indenture in respect of the Subordinated Notes held by the Property
Trustee, the rights of Holders of the Common Securities to payment in respect of
Distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights to payment of the Holders of the Preferred
Securities.
10. Acceptance of Securities Guarantee and Indenture.
------------------------------------------------
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
11. No Preemptive Rights.
--------------------
The Holders of the Securities shall have no preemptive rights to subscribe
for any additional Securities.
12. Miscellaneous.
-------------
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee and the Indenture to a Holder without charge on written
request to the Trust at its principal place of business.
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Annex I
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT This
Preferred Security is a Global Certificate within the meaning of the Declaration
hereinafter referred to and is registered in the name of The Depository Trust
Company (the "Depository") or a nominee of the Depository. This Preferred
Security is exchangeable for Preferred Securities registered in the name of a
person other than the Depository or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Preferred
Security (other than a transfer of this Preferred Security as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository) may be registered except in
limited circumstances.
Unless this Preferred Security is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York) to the Trust or its
agent for registration of transfer, exchange or payment, and any Preferred
Security issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]
Certificate Number _______ Number of Preferred Securities _______
CUSIP NO.__________
Certificate Evidencing Preferred Securities
of
OXY CAPITAL TRUST I
8.16% Trust Originated Preferred Securities
(liquidation amount $25 per Preferred Security)
OXY CAPITAL TRUST I, a business trust formed under the laws of the State of
Delaware (the "Trust"), hereby certifies that CEDE & CO. (the "Holder") is the
registered owner of preferred securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the 8.16% Trust
Originated Preferred Securities (liquidation amount $25 per preferred security)
(the "Preferred Securities"). The Preferred Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities represented hereby are issued and shall
in all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of January 20, 1999, as the same may
be amended from time to time (the "Declaration") including the designation of
the terms of the Preferred Securities as set forth in Exhibit A to the
Declaration. Capitalized terms used herein but not defined shall have the
respective meanings given them in the Declaration. The Holder is entitled to the
benefits of the Preferred Securities Guarantee to the extent provided therein.
The Sponsor will provide a copy of the Declaration, the Preferred Securities
Guarantee and the Indenture to a Holder without charge upon written request to
the Trust at its principal place of business.
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Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Subordinated Notes as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Subordinated
Notes.
IN WITNESS WHEREOF, the Trust has executed this certificate this 20th day
of January, 1999.
_________________________________________
J. R. Havert, as Regular Trustee
_________________________________________
Anthony R. Leach, as Regular Trustee
CERTIFICATE OF AUTHENTICATION
This is one of the Securities issued
under the Amended and Restated Declaration
of Trust described herein.
Dated: January 20, 1999
THE BANK OF NEW YORK, as Property Trustee
By: ______________________________
Name:
Title:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:________________________________________________________
(Insert assignee's social security or tax
________________________________________________________________________________
identification number)
________________________________________________________________________________
A-13
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:_____________________________ Signature:_______________________________
(Sign exactly as your name
appears on the other side of
this Preferred Security
Certificate)
Signature Guarantor:_____________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS) WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM, PURSUANT TO
S.E.C. RULE 17Ad-15.
A-14
Annex II
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD UNLESS SUCH OFFER AND SALE ARE REGISTERED UNDER OR ARE EXEMPT
FROM REGISTRATION UNDER THE SECURITIES ACT. THE TRANSFER OF THE SECURITY
EVIDENCED HEREBY IS ALSO SUBJECT TO THE RESTRICTIONS SET FORTH IN THE
DECLARATION REFERRED TO BELOW.
Certificate Number _________ Number of Common Securities _____________
Certificate Evidencing Common Securities
of
OXY CAPITAL TRUST I
8.16% Trust Originated Common Securities.
(liquidation amount $25 per Common Security)
OXY CAPITAL TRUST I, a business trust formed under the laws of the State of
Delaware (the "Trust"), hereby certifies that Occidental Petroleum Corporation
(the "Holder") is the registered owner of common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 8.16% Trust Originated Common Securities (liquidation amount $25
per common security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of January 20,
1999, as the same may be amended from time to time (the "Declaration") including
the designation of the terms of the Common Securities as set forth in Exhibit A
to the Declaration. Capitalized terms used herein but not defined shall have the
respective meanings given them in the Declaration. The Holder is entitled to the
benefits of the Common Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Common Securities Guarantee
and the Indenture to a Holder without charge upon written request to the Trust
at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Subordinated Notes as indebtedness and the Common Securities
as evidence of indirect beneficial ownership in the Subordinated Notes.
A-15
IN WITNESS WHEREOF, the Trust has executed this certificate this 20th day
of January, 1999.
_________________________________________
J. R. Havert, as Regular Trustee
_________________________________________
Anthony R. Leach, as Regular Trustee
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common
Security Certificate to:________________________________________________________
(Insert assignee's social security or tax
________________________________________________________________________________
identification number)
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:________________________ Signature:_______________________________
(Sign exactly as your name appears on the
other side of this Common Security
Certificate)
Signature Guarantor:_____________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS) WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM, PURSUANT TO
S.E.C. RULE 17Ad-15.
A-16
EXHIBIT B
SPECIMEN OF SUBORDINATED NOTE
B-1
EXHIBIT C
UNDERWRITING AGREEMENT
B-1