Certificate Number of Preferred
Number:___ Securities:_________
CUSIP No.: ____________
Convertible Preferred Securities
of
CalEnergy Capital Trust [ ]
__% Convertible Preferred Securities
(liquidation preference $50 per Convertible Preferred Security)
CalEnergy Capital Trust [ ], a statutory 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 6 1/2% Convertible Preferred Securities (liquidation preference
$50 per Convertible 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 __________, 1997, 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 Annex I to the Declaration. Capitalized
terms used herein but not defined shall have the meaning 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.
Reference is hereby made to select provisions of the Preferred
Securities set forth on the reverse hereof, which select provisions shall for
all purposes have the same effect as if set forth at this place.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
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By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.
Unless the Property Trustee's Certificate of Authentication hereon has
been properly executed, these Preferred Securities shall not be entitled to any
benefit under the Declaration or be valid or obligatory for any purpose.
2
IN WITNESS WHEREOF, the Trust has executed this certificate this __th
day of _________, 1997.
CALENERGY CAPITAL TRUST [ ]
By:
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Name: Steven A. McArthur
Title: Regular Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated: ___________,1997
THE BANK OF NEW YORK,
as Property Trustee
By:
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Authorized Signatory
REVERSE OF SECURITY
Distributions payable on each Preferred Security will be fixed at a
rate per annum of ___% (the "Coupon Rate") of the stated liquidation preference
of $50 per Preferred Security, such rate being the rate of interest payable on
the Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such 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 Debentures held by the Property
Trustee and to the extent the Property Trustee has funds available therefor.
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 for which Distributions are computed, Distributions will be computed on
the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, distributions on the Preferred
Securities will be cumulative, will accrue from ____________, 1997 or from the
most recent distribution date to which interest has been paid or duly provided
for and will be payable quarterly in arrears, on March 1, June 1, September 1
and December 1 of each year, commencing on __________, 1997, to Holders of
record fifteen (15) days prior to such payment dates, which payment dates shall
correspond to the interest payment dates on the Debentures. The Debenture
Issuer has the right under the Indenture to defer payments of interest on the
Debentures by extending the interest payment period from time to time on the
Debentures for successive periods not exceeding 20 consecutive quarters (each
an "Extension Period") during which Extension Periods no interest shall be due
and payable on the Debentures; provided, that no Extension Period shall extend
beyond the date of maturity of the Debentures, as then in effect, or any
earlier redemption date. As a consequence of such extension, Distributions will
also be deferred. Despite such extension, quarterly Distributions will continue
to accrue with interest thereon (to the extent permitted by applicable law) at
the Coupon Rate compounded quarterly during the Extension Periods. Prior to the
termination of any Extension Period, the Debenture Issuer may elect to continue
to defer payments of interest for another consecutive Extension Period;
provided, that any such continued Extension Period, together with all such
previous and consecutive Extension Periods, may not exceed 20 consecutive
quarters. 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,
4
the Debenture Issuer may commence a new Extension Period, subject to the above
requirements.
The Preferred Securities shall be redeemable as provided in the
Declaration.
The Preferred Securities shall be convertible into shares of Common
Stock of CalEnergy Company, Inc., through (i) the exchange of Preferred
Securities for a portion of the Debentures and (ii) the immediate conversion of
such Debentures into Common Stock of CalEnergy Company, Inc., in the manner and
according to the terms set forth in the Declaration.
5
CONVERSION REQUEST
To: THE BANK OF NEW YORK,
as Property Trustee of
CalEnergy Capital Trust VI
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion
below designated, into Common Stock of CALENERGY COMPANY, INC. (the "CalEnergy
Common Stock") in accordance with the terms of the Amended and Restated
Declaration of Trust (the "Declaration"), dated as of ____________, 1997, by
Steven A. McArthur, Craig Hammett and Gregory Abel as Regular Trustees, The
Bank of New York (Delaware), as Delaware Trustee, The Bank of New York, as
Property Trustee, CalEnergy Company, Inc., as Sponsor, and by the Holders, from
time to time, of undivided beneficial interests in the Trust to be issued
pursuant to the Declaration. Pursuant to the aforementioned exercise of the
option to convert these Preferred Securities, the undersigned hereby directs
the Conversion Agent (as that term is defined in the Declaration) to (i)
exchange such Preferred Securities for a portion of the Debentures (as that
term is defined in the Declaration) held by the Trust (at the rate of exchange
specified in the terms of the Preferred Securities set forth as Annex I to the
Declaration) and (ii) immediately convert such Debentures on behalf of the
undersigned, into CalEnergy Common Stock (at the conversion rate specified in
the terms of the Preferred Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment
below. If shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.
6
Dated: ______________
in whole __ in part __
Number of Preferred Securities to
be converted: ___________________
If a name or names other than the
undersigned, please indicate in the
spaces below the name or names in
which the shares of CalEnergy
Common Stock are to be issued,
along with the address or addresses
of such person or persons
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Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and
Social Security or Other Identify-
ing Number
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Signature Guarantee:*
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* (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
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(Insert assignee's social security or tax identification number)
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(Insert address and zip code of assignee)
and irrevocably appoints
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agent to transfer this Preferred Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Dated:
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Signature:
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(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee:**
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** (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934,
as amended.)
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SCHEDULE A
The original number of Preferred Securities represented by this Global
Preferred Security shall be _________. The following increases or decreases in
the number of Preferred Securities represented by this Global Preferred
Security have been made:
Date of Amount of Number of Securities Signature of
increase/ Amount of increase in decrease in number following such authorized
decrease number of Securities of Securities increase/decrease officer of Trustee
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