AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 7, 1999
REGISTRATION NO. 333-21321
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 5
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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LOUIS DREYFUS NATURAL GAS CORP. OKLAHOMA 73-1098614
LOUIS DREYFUS NATURAL GAS TRUST I DELAWARE TO BE APPLIED FOR
LOUIS DREYFUS NATURAL GAS TRUST II DELAWARE TO BE APPLIED FOR
(Exact name of registrants as specified (State or other (I.R.S. Employer Identification
in their charters) jurisdiction of Nos.)
incorporation or
organization)
14000 QUAIL SPRINGS PARKWAY, SUITE 600
OKLAHOMA CITY, OKLAHOMA 73134-2600
405/749-1300
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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JEFFREY A. BONNEY COPIES TO:
LOUIS DREYFUS NATURAL GAS CORP. MICHAEL M. STEWART, ESQ.
14000 QUAIL SPRINGS PARKWAY, SUITE 600 CROWE & DUNLEVY
OKLAHOMA CITY, OKLAHOMA 73134-2600 1800 MID-AMERICA TOWER
405/749-1300 OKLAHOMA CITY, OKLAHOMA 73102-8273
(Name, address, including zip code, and telephone
number,
including area code, of agent for service)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT, AS
DETERMINED BY THE REGISTRANTS.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
REQUIRE.
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SUBJECT TO COMPLETION, DATED OCTOBER 7, 1999
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS
$400,000,000
LOUIS DREYFUS NATURAL GAS CORP.
LOUIS DREYFUS NATURAL GAS TRUST I
LOUIS DREYFUS NATURAL GAS TRUST II
LOUIS DREYFUS NATURAL GAS CORP.
We may offer and sell, in one or more offerings:
- common stock
- preferred stock
- debt securities
The common stock of Louis Dreyfus Natural Gas Corp. trades on the New York
Stock Exchange under the symbol "LD".
THE TRUSTS
The trusts are each Delaware business trusts that may offer and sell
preferred securities in one or more offerings. Each trust will use all of the
proceeds from the sale of its preferred securities to buy subordinated debt
securities of Louis Dreyfus Natural Gas Corp. The trust will receive cash
payments from the subordinated debt securities, which it will distribute to the
holders of its preferred securities. We will unconditionally guarantee the
trusts' obligation to distribute cash to the holder of trust preferred
securities, but only to the extent the trust has funds available to make those
payments and has not made the payments.
THE OFFERING
The total offering price of the securities to be offered by us or the
trusts, in the aggregate, will not exceed $400,000,000. We will provide the
specific terms and the initial public offering price for each offering in a
supplement to this prospectus. You should carefully read this prospectus and the
supplement before you decide to invest. This prospectus may not be used to sell
securities unless accompanied by a prospectus supplement.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED
IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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The date of this Prospectus is , 1999.
TABLE OF CONTENTS
PAGE
-----
About this Prospectus...................................................................................... 3
Certain Forward-Looking Statements......................................................................... 4
Louis Dreyfus Natural Gas Corp............................................................................. 4
The Trusts................................................................................................. 4
Use of Proceeds............................................................................................ 5
Ratio of Earnings to Fixed Charges......................................................................... 5
Description of the Securities We May Offer................................................................. 6
Description of Common Stock................................................................................ 8
Description of Preferred Stock............................................................................. 9
Description of Debt Securities............................................................................. 10
Description of the Trust Preferred Securities.............................................................. 21
Description of the Trust Preferred Securities Guarantee.................................................... 26
Relationship among the Trust Preferred Securities, the Trust Preferred Securities Guarantee and the
Subordinated Debt Securities Held by the Trust........................................................... 29
Plan of Distribution....................................................................................... 29
Validity of Offered Securities............................................................................. 31
Experts.................................................................................................... 31
Where You Can Find More Information........................................................................ 31
Incorporation by Reference................................................................................. 32
ABOUT THIS PROSPECTUS
This prospectus is part of a "shelf" registration statement that we filed
with the Securities and Exchange Commission. By using a shelf registration
statement, we may sell, from time to time, in one or more offerings, any
combination of the securities described in this prospectus. The total dollar
amount of the securities we may sell through these offerings will not exceed
$400,000,000.
This prospectus provides you with a general description of the securities we
may offer. Each time we sell securities, we will provide a prospectus supplement
that contains more specific information about the terms of those securities. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read both this prospectus and any prospectus
supplement together with the additional information described under the heading
"Where You Can Find More Information."
This prospectus does not contain separate financial statements for the
trusts. We do not believe these financial statements would be useful since the
trusts will not have any independent function other than to issue common and
preferred securities and to purchase our subordinated debt securities. We will
provide a full, unconditional guarantee of each trust's obligations under its
common and preferred securities. Each trust is our direct or indirect
wholly-owned subsidiary, and we file consolidated financial information under
the Securities Exchange Act of 1934.
You should rely only on the information contained or incorporated by
reference in this prospectus and the prospectus supplement. We have not, and the
underwriters have not, authorized any other person to provide you with different
information. If anyone provides you with different information, you should not
rely on it. We will not, and the underwriters will not, make an offer to sell
these securities in any jurisdiction where the offer or sale is not permitted.
You should assume that the information appearing in this prospectus, as well as
information we previously filed with the SEC and incorporated by reference, is
accurate as of the date on the front cover of this prospectus only. Our
business, financial condition, results of operations and prospects may have
changed since that date.
3
CERTAIN FORWARD-LOOKING STATEMENTS
All statements made or incorporated by reference in this prospectus other
than purely historical information are "forward-looking statements" within the
meaning of the federal securities laws. These statements reflect our current
expectations and are based on our historical operating trends, proved reserve
and fixed-price contract positions and other currently available information.
Forward-looking statements include statements regarding our future drilling
plans and objectives and related exploration and development budgets and number
and location of planned wells and statements regarding the quality of our
properties and potential reserve and production levels. These statements assume
that no significant changes will occur in the operating environment for our oil
and gas properties and that there will be no material acquisitions or
divestitures except as otherwise described.
The forward-looking statements are subject to all the risks and
uncertainties incident to the acquisition, exploration, development and
marketing of oil and gas reserves. Some of these risks are commodity price,
counterparty, environmental, drilling, reserves, operations and production
risks. Certain of these risks are described in the documents "incorporated by
reference" which you can obtain as described under "Where You Can Find More
Information." We may also make material acquisitions or divestitures, modify our
fixed-price contract positions or enter into financing transactions. None of
these can be predicted with certainty and are not taken into consideration in
the forward-looking statements.
Statements concerning fixed-price contract, interest rate swap and other
financial instrument fair values and their estimated contribution to our future
results of operations are based upon market information as of a specific date.
This market information is often a function of significant judgment and
estimation. Further, market prices for oil and gas and market money rates are
subject to significant volatility.
For all of the these reasons, our actual results may vary materially from
the forward-looking statements and there is no assurance that the assumptions we
have used are necessarily the most likely. We will not update any
forward-looking statements to reflect events or circumstances occurring after
the date the statement is made.
LOUIS DREYFUS NATURAL GAS
Louis Dreyfus Natural Gas Corp. is one of the largest independent natural
gas companies engaged in the development, exploration, acquisition, production
and marketing of natural gas and crude oil in the United States.
The address of our principal executive offices is 14000 Quail Springs
Parkway, Suite 600, Oklahoma City, OK 73134-2600, and our telephone number is
(405) 749-1300.
THE TRUSTS
Each of the trusts is a statutory business trust formed under Delaware law
by:
- a separate declaration of trust executed by Louis Dreyfus Natural Gas, as
depositor, and the trustees (described below) for the trust; and
- the filing of a certificate of trust with the Delaware Secretary of State.
Each trust's declaration will be amended and restated substantially in the
form filed as an exhibit to the registration statement as of the date the
securities of that trust are initially issued. Each amended declaration
will be qualified as an indenture under the Trust Indenture Act of 1939.
Each trust exists solely for the purposes of:
- issuing preferred securities and common securities representing undivided
beneficial interests in the assets of that trust;
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- investing the proceeds of those securities issuances in our junior
subordinated debt securities; and
- engaging only in other incidental activities.
The rights of the holders of the trust securities, including economic
rights, rights to information and voting rights, are set forth in the amended
declaration of each trust, the Delaware Business Trust Act and the Trust
Indenture Act.
We will own, directly or indirectly, all of the common securities of each
trust, which will have an aggregate liquidation amount equal to 3% of the total
capital of each trust. The common securities will generally rank equally in
right of payment with the preferred securities, and payments on both will be
made pro rata. However, upon an event of default under the trust's amended
declaration, the rights of the holders of the common securities to payment of
distributions and payments upon liquidation, redemption and otherwise will be
subordinated to the rights of the holders of the preferred securities. We will
pay all fees and expenses related to the trusts and the offering of trust
securities.
Each trust has a term of approximately 55 years, but may terminate earlier
as provided in its amended declaration. As holder of all of the common
securities, we will be entitled to appoint, remove or replace any of, or
increase or reduce the number of, the trustees of each trust. The business and
affairs of each trust will be conducted by such trustees, and the duties and
obligations of the trustees will be governed by the amended declaration of each
trust.
At least one of the trustees of each trust will be a person who is our
employee or officer, or otherwise affiliated with us. These persons are
sometimes referred to as "regular" trustees. One trustee of each trust will be a
financial institution which will be unaffiliated with us and which will act as
property trustee and as indenture trustee for purposes of the Trust Indenture
Act under the terms of the amended declaration and as may be further described
in a prospectus supplement. The property trustee will hold title to the junior
subordinated debt securities for the benefit of the holders of the trust
securities. In addition, unless the property trustee maintains a principal place
of business in the State of Delaware and otherwise meets the requirements of
applicable laws, one trustee of each trust will be a legal entity having a
principal place of business in, or an individual resident of, the State of
Delaware.
Unless otherwise indicated in a prospectus supplement, Wilmington Trust
Company will be the property trustee and the Delaware trustee. The address of
the principal office of Wilmington Trust Company in the State of Delaware is
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001.
The principal place of business of each trust will be c/o Louis Dreyfus Natural
Gas Corp., 14000 Quail Springs Parkway, Suite 600, Oklahoma City, OK 73134-2600.
USE OF PROCEEDS
Unless we have indicated otherwise in the accompanying prospectus
supplement, we expect to use the net proceeds we receive from any offering of
these securities for our general corporate purposes, including working capital,
repayment or reduction of debt, capital expenditures, and acquisitions of
additional oil and gas properties. Each of the trusts will use the net proceeds
from the sale of its preferred securities to purchase a series of junior
subordinated debt securities from us. We also expect to use the net proceeds
from the sale of those junior subordinated debt securities for the purposes
described in this section.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges for
the periods indicated.
YEAR ENDED DECEMBER 31,
----------------------------------------------------- SIX MONTHS ENDED
1994 1995 1996 1997 1998 JUNE 30, 1999
--------- --------- --------- --------- --------- -------------------
Ratio of earnings to fixed charges.................... 1.9x 1.7x 2.1x -- -- 1.2x
5
For the purpose of calculating the ratio of earnings to fixed charges,
earnings represents net income before income taxes plus fixed charges, less
capitalized interest. Fixed charges consist of interest expense, including
amortization of debt discount and financing costs, capitalized interest and the
portion of rental expense which we believe is representative of the interest
component of rental expense. Earnings were insufficient to cover fixed charges
by $28.3 million and $61.5 million for the years ended December 31, 1997 and
1998, respectively.
DESCRIPTION OF THE SECURITIES WE MAY OFFER
GENERAL
We may issue, in one or more offerings:
- common stock, par value $.01 per share;
- preferred stock, par value $.01 per share; and
- debt securities, which may be senior or subordinated.
The trusts may issue, from time to time, in one or more offerings, trust
preferred securities that we will unconditionally guarantee.
This prospectus contains a summary of the general terms of the various
securities that we or the trusts may offer. The prospectus supplement relating
to any particular securities offered will describe the specific terms of the
securities, which may be in addition to or different from the general terms
summarized in this prospectus. The summary in this prospectus and in any
prospectus supplement does not describe every aspect of the securities and is
subject to and qualified in its entirety by reference to all applicable
provisions of the documents relating to the securities offered. These documents
are or will be filed as exhibits to or incorporated by reference in the
registration statement.
In addition, the prospectus supplement will set forth the terms of the
offering, the initial public offering price and net proceeds to us. Where
applicable, the prospectus supplement will also describe any material United
States federal income tax considerations relating to the securities offered and
indicate whether the securities offered are or will be listed on any securities
exchange.
BOOK-ENTRY SYSTEM
We or the trusts may issue securities in the form of one or more fully
registered global securities. These will be deposited with, or on behalf of, the
Depository Trust Company and registered in the name of its nominee. Except as
described below, the global securities may be transferred, in whole and not in
part, only to DTC or to another nominee of DTC.
DTC has advised us that it is:
- A limited-purpose trust company organized under the laws of the state of
New York;
- A member of the Federal Reserve System;
- A "clearing corporation" within the meaning of the New York Uniform
Commercial Code; and
- A "clearing agency" registered under the provisions of Section 17A of the
Securities Exchange Act of 1934.
DTC was created to hold securities for institutions that have accounts with
DTC ("participants") and to facilitate the clearance and settlement of
securities transactions among its participants through electronic book-entry
changes in participants' accounts. Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations, some of whom own DTC. Access to DTC's book-entry system is also
available to others that clear through or maintain
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a custodial relationship with a participant, either directly or indirectly. DTC
administers its book-entry system in accordance with its rules and bylaws and
legal requirements.
Upon issuance of a global security representing offered securities, DTC will
credit on its book-entry registration and transfer system the principal amount
to participants' accounts. Ownership of beneficial interests in the global
security will be limited to participants or to persons that hold interests
through participants. Ownership of interests in the global security will be
shown on, and the transfer of those ownership interests will be effected only
through, records maintained by DTC with respect to participants' interests and
the participants with respect to the owners of beneficial interests in the
global security. The laws of some jurisdictions may require that certain
purchasers of securities take physical delivery of those securities in
definitive form. These limits and laws may impair the ability to transfer
beneficial interests in a global security.
So long as DTC or its nominee is the registered holder and owner of a global
security, DTC or its nominee will be considered, for all purposes under the
applicable indenture, the sole owner and holder of the related offered
securities. Except as described below, owners of beneficial interests in a
global security will not:
- be entitled to have the offered securities registered in their names; or
- receive or be entitled to receive physical delivery of certificated
offered securities in definitive form.
Each person owning a beneficial interest in a global security must rely on
DTC's procedures, and, if that person holds through a participant, on the
participant's procedures to exercise any rights of a holder of offered
securities under the global security or any applicable indenture, or otherwise.
The indentures provide that DTC may grant proxies and otherwise authorize
participants to take any action which it as the holder of a global security is
entitled to take under the indentures or the global security. We understand that
under existing industry practice, if we or a trust request any action of holders
or an owner of a beneficial interest in a global security desires to take any
action that DTC as the holder of the global security is entitled to take, DTC
would authorize the participants to take that action and the participants would
authorize their beneficial owners to take the action or would otherwise act upon
the instructions of their beneficial owners.
We or the trusts will make payments with respect to securities represented
by a global security to DTC. We expect that DTC, upon receipt of any payments,
will immediately credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests. We also expect that
payments by participants to owners of beneficial interests in a global security
held through them will be governed by standing instructions and customary
practices, as is the case with securities held for customers' accounts in
"street name", and will be the responsibility of the participants. We, the
trusts or any trustee will not have any responsibility or liability for:
- any aspect of the records relating to, or payments made on account of,
beneficial ownership interests in a global security for any securities;
- maintaining, supervising, or reviewing any records relating to any
beneficial ownership interests;
- any other aspect of the relationship between DTC and its participants; or
- the relationship between the participants and the owners of beneficial
interests in a global security.
Unless and until they are exchanged in whole or in part for certificated
securities in definitive form, the global securities may not be transferred
except as a whole by DTC to its nominee or by its nominee to DTC or another
nominee.
7
The securities of any series represented by a global security may be
exchanged for certificated securities in definitive form if:
- DTC notifies us that it is unwilling or unable to continue as depositary
for the global security or if at any time it ceases to be a clearing
agency registered under the Securities Exchange Act of 1934;
- We decide at any time not to have the securities of that series
represented by a global security and so notify DTC; or
- in the case of debt securities, an event of default has occurred and is
continuing with respect to the debt securities.
If there is such an exchange, we will issue certificated securities in
authorized denominations and registered in such names as DTC directs. Subject to
the foregoing, the global securities are not exchangeable, except for a global
securities of the same aggregate denomination to be registered in DTC's or its
nominee's name.
DESCRIPTION OF COMMON STOCK
GENERAL
Our authorized capital stock consists of 100,000,000 shares of common stock,
par value $.01 per share, and 10,000,000 shares of preferred stock, par value
$.01 per share. We describe the preferred stock under the heading "Description
of Preferred Stock" below.
This section summarizes the general terms of the common stock that we may
offer. The prospectus supplement relating to the common stock offered will set
forth the number of shares offered, the initial offering price and market price,
dividend information and any other relevant information. The summary in this
section and in the prospectus supplement does not describe every aspect of the
common stock and is subject to and qualified in its entirety by reference to all
the provisions of our Amended and Restated Certificate of Incorporation and
Bylaws and the Oklahoma General Corporation Act.
TERMS OF THE COMMON STOCK
As of March 31, 1999, there were 40,109,758 shares of common stock issued
and outstanding. All shares of common stock have equal rights to participate in
dividends and, in the event of liquidation, assets available for distribution to
stockholders, subject to any preference established with respect to preferred
stock. Each share of common stock entitles the holder to one vote for such share
held on all matters submitted to a vote of stockholders. Voting rights for the
election of directors are noncumulative. Shares of common stock carry no
conversion, preemptive or subscription rights, and are not subject to
redemption. All outstanding shares of common stock are, and any shares of common
stock issued upon conversion of any convertible securities will be, fully paid
and nonassessable. We may pay dividends on the common stock when, as and if
declared by the Board of Directors. Dividends may be declared in the discretion
of the Board of Directors from funds legally available, subject to restrictions
under agreements related to our indebtedness.
TRANSFER AGENT AND REGISTRAR
The outstanding shares of common stock are listed on the New York Stock
Exchange and trade under the symbol "LD." The transfer agent and registrar of
the common stock is Chase Mellon Shareholder Services, L.L.C.
8
DESCRIPTION OF PREFERRED STOCK
GENERAL
This section summarizes the general terms of the preferred stock that we may
offer. The prospectus supplement relating to a particular series of preferred
stock offered will describe the specific terms of that series, which may be in
addition to or different from the general terms summarized in this section. The
summary in this section and in any prospectus supplement does not describe every
aspect of the preferred stock and is subject to and qualified in its entirety by
reference to all the provisions of our certificate of incorporation, the
certificate of designation relating to the applicable series of preferred stock,
and the Oklahoma General Corporation Act. The certificate of designation will be
filed as an exhibit to or incorporated by reference in the registration
statement.
AUTHORITY OF THE BOARD TO ISSUE PREFERRED STOCK
Our certificate of incorporation authorizes the issuance of 10,000,000
shares of preferred stock, par value of $.01 per share. On March 31, 1999, there
were no shares of preferred stock outstanding. Preferred stock may be issued
from time to time in one or more classes or series with such rights and
preferences, including voting, dividend and conversion rights and other terms,
as the Board of Directors may establish without any further authorization by the
stockholders.
The preferred stock that we may offer will be issued in one or more classes
or series. The prospectus supplement relating to the particular class or series
of preferred stock will describe the specific terms of the class or series,
including:
- the designation and stated value per share of such preferred stock and the
number of shares offered;
- the amount of liquidation preference per share;
- the initial public offering price at which such preferred stock will be
issued;
- the dividend rate (or method of calculation), the dates on which dividends
will be payable and the dates from which dividends shall commence to
cumulate, if any;
- any redemption or sinking fund provisions;
- any conversion or exchange rights; and
- any additional voting, dividend, liquidation, redemption, sinking fund and
other rights, preferences, privileges, limitations and restrictions.
The holders of preferred stock will have no preemptive rights. Upon issuance
against full payment of the purchase price, the preferred stock will be fully
paid and nonassessable. Unless otherwise provided in the prospectus supplement
relating to the particular class or series, the preferred stock will have the
rights described below.
DIVIDENDS
The preferred stock will be preferred over the common stock as to payment of
dividends. Before any dividends or distributions, other than dividends or
distributions payable in common stock, on the common stock shall be declared and
set apart for payment or paid, the holders of shares of each series of preferred
stock will be entitled to receive dividends when, as and if declared by the
Board of Directors. We will pay those dividends either in cash, shares of common
stock or preferred stock or otherwise, at the rate and on the date or dates set
forth in the prospectus supplement. With respect to each series of preferred
stock, the dividends on each share of the series will be cumulative from the
date of issue of the share unless some other date is set forth in the prospectus
supplement relating to the series. Accruals of dividends will not bear interest.
9
LIQUIDATION
The preferred stock will be preferred over the common stock as to asset
distributions so that the holders of each series of preferred stock will be
entitled to be paid, upon our voluntary or involuntary liquidation, dissolution
or winding up and before any distribution is made to the holders of common
stock, the amount set forth in the applicable prospectus supplement. However, in
this case the holders of preferred stock will not be entitled to any other or
further payment. If upon any liquidation, dissolution or winding up our net
assets are insufficient to permit the payment in full of the respective amounts
to which the holders of all outstanding preferred stock are entitled, our entire
remaining net assets will be distributed among the holders of each series of
preferred stock in amounts proportional to the full amounts to which the holders
of each series are entitled.
REDEMPTION OR CONVERSION
The shares of any series of preferred stock will be redeemable or will be
convertible into shares of common stock or any other series of preferred stock
to the extent set forth in the prospectus supplement relating to the series.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The debt securities will be unsecured general obligations and may include:
- senior debt securities, to be issued under the senior indenture; or
- subordinated debt securities, to be issued under the subordinated
indenture.
We may also issue junior subordinated debt securities under the junior
subordinated indenture to one or more of the trusts which will be purchased by
the trusts using proceeds from issuances of trust preferred securities.
This section summarizes the general terms of the debt securities we may
offer. The prospectus supplement relating to any particular debt securities
offered will indicate whether the debt securities are senior debt securities,
subordinated debt securities or junior subordinated debt securities, and will
describe the specific terms of the debt securities, which may be in addition to
or different from the general terms summarized in this section. The summary in
this section and in any prospectus supplement does not describe every aspect of
the senior indenture, subordinated indenture or junior subordinated indenture or
the debt securities, and is subject to and qualified in its entirety by
reference to all the provisions of the applicable indenture and the debt
securities. The forms of the senior indenture, subordinated indenture and junior
subordinated indenture and the forms of the debt securities are or will be filed
as exhibits to or incorporated by reference in the registration statement.
The indentures do not limit the amount of debt securities which may be
issued under the indentures and provide that debt securities may be issued in
principal amounts which may be authorized from time to time. The debt securities
may be issued from time to time in one or more series. Unless otherwise
specified in the prospectus supplement, the senior debt securities will be
unsecured and will rank equally with all other unsecured and unsubordinated
indebtedness. Our subordinated debt securities and our junior subordinated debt
securities will be subordinated in right of payment to the prior payment in full
of our senior indebtedness as described below under "Provisions Applicable to
Subordinated Debt Securities--Subordination," "Provisions Applicable to Junior
Subordinated Debt Securities--Subordination of Junior Subordinated Debt
Securities," and in the applicable prospectus supplement.
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Each prospectus supplement will describe the following terms of the offered
debt securities:
- The title;
- Any limit on the aggregate principal amount;
- Whether the offered debt securities will be issued initially in the form
of a temporary global security or issued in the form of a permanent global
security; the terms and conditions, if any, upon which the global security
may be exchanged in whole or in part for other definitive debt securities;
and the depositary for the global security;
- The date(s) on which the principal and any premium is payable and the
method of determination thereof;
- The interest rate(s), if any, and the method of determination thereof and
the date(s) from which the interest accrues;
- The dates on which the interest, if any, is payable and the regular record
dates for the interest payment dates;
- Our right, if any, to defer payment of interest and the maximum length of
any deferral period;
- The place(s) where principal and any premium and interest is payable;
- Whether the offered debt securities are redeemable at our option and the
redemption price(s) and other redemption terms and conditions;
- Whether we are obligated to redeem or purchase the offered debt securities
according to any sinking fund or similar provision or at the holder's
option and the price(s), period(s), and terms and conditions of that
redemption or purchase obligation;
- If other than denominations of $1,000 and any integral multiple of $1,000,
the denominations in which offered debt securities of the series will be
issuable;
- If other than United States Dollars, the currency or currencies of payment
of principal and any premium and interest;
- If payments are based on an index, the manner in which the amount of
principal payments and any premium and interest is to be determined;
- If other than the full principal amount, the portion of the principal
amount payable if the maturity of the offered debt securities is
accelerated;
- Whether the provisions relating to satisfaction, discharge, and defeasance
described below apply and any additional means of satisfaction, discharge
and defeasance;
- Whether the offered debt securities are subordinated debt securities or
junior subordinated securities and the terms of subordination including
any modification to the subordination provisions described below;
- Any deletions or modifications to the Events of Default described below;
- If applicable, the terms of any right to convert or exchange the offered
debt securities into common stock or other securities;
- Any authenticating or paying agents, registrars, conversion agents or any
other agents with respect to the offered debt securities; and
- Any other terms.
11
Debt securities may be issued and sold at a substantial discount below their
principal amount. If applicable, the prospectus supplement will describe any
special United States federal income tax consequences and other considerations
which apply to debt securities issued at a discount or to any offered debt
securities denominated or payable in a foreign currency or currency unit.
PROVISIONS APPLICABLE TO ALL DEBT SECURITIES
EVENTS OF DEFAULT
Unless otherwise provided in the prospectus supplement with respect to any
series of debt securities, the following are events of default under each
indenture with respect to the debt securities of such series issued under such
indenture:
- failure to pay principal of or premium, if any, on any debt security of
such series when due;
- failure to pay interest, if any, on any debt security of such series when
due, continued for 60 days;
- failure to deposit any mandatory sinking fund payment, when due, in
respect of any debt security of such series, continued for 60 days;
- failure to perform any other covenant made by us in the indenture, other
than a covenant included in the indenture for the benefit of a series of
debt securities other than such series, continued for 90 days after
written notice as provided in the indenture;
- certain events of bankruptcy, insolvency or reorganization; and
- any other event of default as may be specified with respect to debt
securities of such series.
If an event of default with respect to any outstanding series of debt
securities occurs and is continuing, either the trustee or the holders of at
least 25% in principal amount of the outstanding debt securities of such series,
in the case of an event of default described above relating to payment of
principal, premium and interest and other events of default specified with
respect to such series, or at least 25% in principal amount of all outstanding
debt securities under the applicable indenture, in the case of other events of
default, may declare the principal amount of all the debt securities of the
applicable series, or of all outstanding debt securities under the applicable
indenture, as the case may be, to be due and payable immediately. At any time
after a declaration of acceleration has been made, but before a judgment has
been obtained, the holders of a majority in principal amount of the outstanding
debt securities of such series (or of all outstanding debt securities under the
applicable indenture, as the case may be) may, under certain circumstances,
rescind and annul such acceleration. Depending on the terms of our other
indebtedness outstanding from time to time, an event of default under an
indenture may give rise to cross defaults on our other indebtedness.
Each indenture provides that the trustee will, within 90 days after the
occurrence of a default in respect of any series of debt securities, give to the
holders of the debt securities of such series notice of all uncured and unwaived
defaults known to it; provided, however:
- that except in the case of a default in the payment of the principal of or
premium or interest, if any, on, or any sinking fund installment with
respect to, any debt securities of such series, the trustee will be
protected in withholding such notice if it in good faith determines that
the withholding of such notice is in the interest of the holders of the
debt securities of such series; and provided further,
- that such notice shall not be given until at least 60 days after the
occurrence of a default in the performance, or breach, of any covenant or
warranty of ours under such indenture other than for the payment of the
principal of or premium or interest, if any, on, or any sinking fund
installment with respect to, any debt securities of such series.
12
For the purpose of this provision, "default" with respect to debt securities
of any series means any event which is, or after notice or lapse of time, or
both, would become, an event of default with respect to the debt securities of
such series.
The holders of a majority in principal amount of the outstanding debt
securities of any series, or, in certain cases, all outstanding debt securities
under the applicable indenture, have the right, subject to certain limitations
to direct the time, method and place of conducting any proceeding for any remedy
available to the trustee or exercising any trust or power conferred on the
trustee with respect to the debt securities of such series or of all outstanding
debt securities under the applicable indenture. Each indenture provides that in
case an event of default shall occur and be continuing, the trustee shall
exercise such of its rights and powers under the applicable indenture and use
the same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
Subject to such provisions, the trustee will be under no obligation to exercise
any of its rights or powers under any applicable indenture at the request of any
of the holders of the debt securities unless they shall have offered to the
trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request.
The holders of a majority in principal amount of the outstanding debt
securities of any series, or, in certain cases, all outstanding debt securities
under the applicable indenture, may on behalf of the holders of all debt
securities of such series, or of all outstanding debt securities under the
applicable indenture waive any past default under the applicable indenture,
except a default in the payment of the principal of or premium or interest, if
any, on any debt security or in respect of a provision which under the
applicable indenture cannot be modified or amended without the consent of the
holder of each outstanding debt security affected. The holders of a majority in
principal amount of the outstanding debt securities may on behalf of the holders
of all such debt securities waive compliance by us with certain restrictive
provisions of the indentures.
We are required to furnish to the trustee annually a statement as to the
performance by us of certain of our obligations under each indenture and as to
any default in such performance.
MODIFICATION
Modifications and amendments of each indenture may be made by us and the
trustee with the consent of the holders of a majority in principal amount of the
outstanding debt securities under the applicable indenture; provided, however,
that no such modification or amendment may, without the consent of the holder of
each outstanding debt security:
- change the stated maturity date of the principal of or any installment of
interest, if any, on any debt security;
- reduce the principal amount of or the premium or interest, if any, on any
debt security;
- change the place or currency, currencies, or currency unit or units or
payment of principal of or premium or interest, if any, on any debt
security;
- impair the right to institute suit for the enforcement of any payment on
or with respect to any debt security; or
- reduce the percentage in principal amount of outstanding debt securities
the consent of whose holders is required for modification or amendment of
the indentures or for waiver of compliance with certain provisions of the
indentures or for waiver of certain defaults.
Each indenture provides that we and the trustee may, without the consent of
any holders of debt securities, enter into supplemental indentures for the
purposes, among other things, of adding to our covenants, adding additional
events of default, establishing the form or terms of debt securities or curing
ambiguities or inconsistencies in the applicable indenture, provided such action
to cure
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ambiguities or inconsistencies does not adversely affect the interests of the
holders of the debt securities in any material respect.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Without the consent of any holders of outstanding debt securities, we may
consolidate with or merge into, or convey, transfer or lease our assets
substantially as an entirety to any entity, provided that:
- the entity formed by such consolidation or into which we are merged or
which acquires or leases our assets substantially as an entirety is a
corporation, partnership or trust organized under the laws of any United
States jurisdiction and assumes by supplemental indenture our obligations
on the debt securities and under the indentures;
- after giving effect to the transaction, no event of default, and no event
which, after notice or lapse of time or both, would become an event of
default, shall have occurred and be continuing; and
- and certain other conditions are met.
Upon compliance with these provisions by a successor entity, we will (except in
the case of a lease) be relieved of our obligations under the indentures and the
debt securities.
DISCHARGE AND DEFEASANCE
We may terminate our obligations under each indenture, other than our
obligations to pay the principal of and premium and interest, if any, on the
debt securities of any series and certain other obligations, if we:
- irrevocably deposit or cause to be irrevocably deposited with the trustee
as trust funds money or U.S. Government Obligations maturing as to
principal and interest sufficient to pay the principal of, any interest
on, and any mandatory sinking funds in respect of, all outstanding debt
securities of such series on the stated maturity of such payments or on
any redemption date; and
- comply with any additional conditions specified to be applicable with
respect to the defeasance of debt securities of such series.
The terms of any series of debt securities may also provide for legal
defeasance under each indenture. In such case, if we:
- irrevocably deposit or cause to be irrevocably deposited money or U.S.
Government Obligations as described above;
- make a request to the trustee to be discharged from our obligations on the
debt securities of such series; and
- comply with any additional conditions specified to be applicable with
respect to legal defeasance of securities of such series
then we shall be deemed to have paid and discharged the entire indebtedness on
all the outstanding debt securities of such series and our obligations under the
applicable indenture and the debt securities of such series to pay the principal
of and premium and interest, if any, on the debt securities of such series shall
cease, terminate and be completely discharged, and the holders thereof shall
then be entitled only to payment out of the money or U.S. Government Obligations
deposited with the trustee as described above, unless our obligations are
revived and reinstated because the trustee is unable to apply such trust fund by
reason of any legal proceeding, order or judgment.
14
The term "U.S. Government Obligations" is defined in each indenture as
direct noncallable obligations of, or noncallable obligations the payment of
principal of and interest on which is guaranteed by, the United States of
America, or to the payment of which obligations or guarantees the full faith and
credit of the United States of America is pledged, or beneficial interests in a
trust the corpus of which consists exclusively of money or such obligations or a
combination thereof.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Debt securities will be issuable in definitive, registered form. Debt
securities are also issuable in temporary or permanent global form. See
"Description of the Securities We May Offer--Book-Entry System."
Debt securities of any series will be exchangeable for other debt securities
of the same series and of a like aggregate principal amount and tenor of
different authorized denominations.
Debt securities may be presented for exchange as provided above, and may be
presented for registration of transfer with the form of transfer endorsed
thereon duly executed, at the office of the security registrar or at the office
of any transfer agent designated by us for such purpose with respect to any
series of debt securities and referred to in an applicable prospectus
supplement, without service charge and upon payment of any taxes and other
governmental charges as described in the applicable indenture. Such transfer or
exchange will be effected upon the security registrar or such transfer agent, as
the case may be, being satisfied with the documents of title and identity of the
person making the request. The indentures provide that the applicable trustee
will be appointed as security registrar. If a prospectus supplement refers to
any transfer agents, in addition to the security registrar, initially designated
by us with respect to any series of debt securities, we may at any time rescind
the designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts. We will be required to maintain a
transfer agent in each designated place of payment for each series of debt
securities. We may at any time designate additional transfer agents with respect
to any series of debt securities.
In the event of any redemption in part, we will not be required to:
- issue, register the transfer of or exchange debt securities of any series
during a period beginning at the opening of business 15 days prior to the
selection of debt securities of that series for redemption and ending on
the close of business on the day of mailing of the relevant notice of
redemption; or
- register the transfer of or exchange any debt security, or portion
thereof, called for redemption, except the unredeemed portion of any debt
security being redeemed in part.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in a prospectus supplement, payment of principal
of and premium and interest, if any, on debt securities will be made in the
designated currency or currency unit at the office of such paying agent or
paying agents as we may designate from time to time, except that our option
payment of any interest may be made by check mailed to the address of the person
entitled thereto as such address shall appear in the security register. Unless
otherwise indicated in a prospectus supplement, payment of any installment of
interest on debt securities will be made to the person in whose name such debt
security is registered at the close of business on the regular record date for
such interest.
Unless otherwise indicated in a prospectus supplement, the corporate trust
office of the trustee in the Borough of Manhattan, The City of New York will be
designated as our paying agent for payments with respect to debt securities. Any
other paying agents in the United States initially designated by us for the debt
securities will be named in an applicable prospectus supplement. We may at any
time designate additional paying agents or rescind the designation of any paying
agent or approve a change
15
in the office through which any paying agent acts, except that, we will be
required to maintain a paying agent in each designated place of payment for each
series of debt securities.
All moneys we pay to a paying agent for the payment of principal of and any
premium or interest on any debt security which remain unclaimed at the end of
three years after such principal, premium or interest shall have become due and
payable will, subject to applicable escheat laws, be repaid to us and the holder
of such debt security or any coupon will look only to us for payment.
MEETINGS
The indentures contain provisions for convening meetings of the holders of
debt securities of a series. A meeting may be called at any time by the trustee,
and also, upon request, by us or the holders of at least 10% in principal amount
of the outstanding debt securities of such series, in any such case upon notice
given as described under "--Notices" below. Except for any consent that must be
given by the holder of each outstanding debt security, as described under
"--Modification" above, any resolution presented at a meeting or adjourned
meeting at which a quorum is present may be adopted by the affirmative vote of
the holders of a majority in principal amount of the outstanding debt securities
of that series; provided, however, that, except for any consent that must be
given by the holder of each outstanding debt security, as described under
"--Modification" above, any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action that may be
made, given or taken by the holders of a specified percentage, which is less
than a majority in principal amount of the outstanding debt securities of a
series, may be adopted at a meeting or adjourned meeting duly reconvened at
which a quorum is present by the affirmative vote of the holders of such
specified percentage in principal amount of the outstanding debt securities of
that series. Subject to the proviso set forth above, any resolution passed or
decision taken at any meeting of the holders of debt securities of any series
duly held in accordance with the indenture will be binding on all holders of
debt securities of that series and any related coupons. The quorum at any
meeting called to adopt a resolution, and at any reconvened meeting, will be
persons holding or representing a majority in principal amount of the
outstanding debt securities of a series.
NOTICES
Notices to holders of debt securities will be given by mail to the addresses
of such holders as they appear in the security register.
THE TRUSTEE
The applicable prospectus supplement will specify the trustee under the
senior indenture and the subordinated indenture. Wilmington Trust Company or
such other trustee as may be named in a prospectus supplement will be the
trustee under the junior subordinated indenture. Each indenture contains certain
limitations on the right of the trustee, if it is one of our creditors, to
obtain payment of claims in certain cases or to realize on certain property
received with respect to any such claims, as security or otherwise. The trustee
is permitted to engage in other transactions, except that, if it acquires any
conflicting interest, it must eliminate such conflict or resign.
GOVERNING LAW
The senior indenture, the subordinated indenture, the junior subordinated
indenture and the debt securities shall be governed by and construed under New
York law except to the extent that the Trust Indenture Act is applicable.
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PROVISIONS APPLICABLE TO SUBORDINATED DEBT SECURITIES
CERTAIN DEFINITIONS APPLICABLE TO DESCRIPTION OF SUBORDINATION
The term "indebtedness," is defined in the subordinated indenture to mean,
without duplication, with respect to any person, the principal component of:
(a) all obligations of such person
- in respect of borrowed money, whether or not the recourse of the
lender is to the whole or only a portion, of the assets of such
person,
- evidenced by bonds, notes, debentures or similar instruments,
- for the payment of money representing the balance deferred and unpaid
of the purchase price of any property or services other than accounts
payable or other obligations arising in the ordinary course of
business,
- evidenced by bankers acceptances or similar instruments issued or
accepted by banks,
- for the payment of money relating to capitalized lease obligations, or
- evidenced by letter of credit or reimbursement obligation of such
person with respect to any letter of credit other than a letter of
credit entered into for the purpose of providing security in
connection with the forward purchase and sale contracts or energy
swaps with respect to our oil and gas business;
(b) all current net obligations of such person under interest rate swap
obligations and foreign currency hedges;
(c) all liabilities of others of the kind described in the preceding clauses
(a) or (b) that such person has guaranteed or that are otherwise its legal
liability;
(d) indebtedness, as otherwise defined in this definition, of others secured
by a lien on any asset of such person, other than liens securing obligations of
such person under delivery contracts with respect to our oil and gas business,
whether or not such indebtedness is assumed by such person, provided that if the
obligations so secured have not been assumed in full by such person or are not
otherwise such person's legal liability in full, then such obligation shall be
deemed to have been an amount equal to the greater of
(1) the lesser of
- the full amount of such obligations and
- the fair market value of such asset, as determined in good faith
by the Board of Directors of such person, which determination
shall be evidenced by a board resolution, and
(2) the amount of obligations as have been assumed by such person or
which are otherwise such person'slegal liability,
(e) such other items as are described in the prospectus supplement relating
to a particular series of subordinated debt securities; and
(f) any and all deferrals, renewals, and extensions, refinancings and
refunding, whether direct or indirect, of, or amendments, modifications or
supplements to, any liability of the kind described in any of the preceding
clauses or this clause, whether or not between or among the same parties.
The term "permitted junior securities" is defined in the subordinated
indenture as our subordinated debt securities or any successor obligor with
respect to the senior indebtedness, provided
17
for by a plan of reorganization or readjustment that are subordinated in right
of payment to all senior indebtedness that may be outstanding to substantially
the same extent as, or to a greater extent than, the subordinated debt
securities are subordinated as provided in the subordinated indenture.
The term "securities payment" is defined in the subordinated indenture to
mean any payment or distribution of any kind or character, whether by way of
set-off or otherwise and whether in cash, property or securities, including any
junior subordinated payment, as defined in the subordinated indenture, on
account of principal of, or premium, if any, or interest on, or additional
amounts, as defined in the subordinated indenture, with respect to, the
securities or on account of any purchase, repurchase, redemption or other
acquisition of securities, in any case whether by us or by any other person on
our behalf.
The term "senior indebtedness" is defined in the subordinated indenture as:
- all of our indebtedness, including principal, premium, if any, interest
and all other amounts owing in respect of such indebtedness, including
interest that, but for the filing of a petition initiating any proceeding
under to any bankruptcy law with respect to us, would accrue on such
indebtedness at the contractual rate provided in the instruments
evidencing the respective obligations, whether or not such claim is
allowed in such bankruptcy proceeding, whether existing on the date of
issuance of any subordinated debt securities or created, incurred or
assumed later unless such indebtedness by its terms or by the terms of the
instrument creating or evidencing it is subordinate in right of payment to
or equal with the subordinated debt securities;
- all of our reimbursement obligations with respect to letters of credit not
otherwise constituting indebtedness;
- all of our obligations under forward purchase and sale contracts or energy
swaps with respect to our oil and gas business, including obligations to
deliver natural gas or other commodities and liabilities for any breach of
obligations under such contracts;
- all charges, fees, expenses, including reasonable attorneys fees and
expenses, and other amounts incurred by or owing to holders of
indebtedness or obligations described in the preceding clauses in
connection with such indebtedness or obligations;
- all interest payable during the pendency of a proceeding under Title 11 of
the United States Code on indebtedness or obligations referred to in the
first three clauses incurred prior to the commencement of such proceeding;
and
- any of our other indebtedness or obligations as may be defined in the
prospectus supplement for the particular issue of subordinated debt
securities.
Notwithstanding the foregoing, senior indebtedness shall not include:
- any of our indebtedness to a subsidiary of ours,
- our indebtedness to, or guaranteed on behalf of any affiliate, including
without limitation amounts owed for compensation, and
- such other indebtedness or obligations as defined in the prospectus
supplement for the particular issue of subordinated debt securities.
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SUBORDINATION
The payment of the principal of and premium, if any, and interest on the
subordinated debt securities is, to the extent set forth in the subordinated
indenture and in any applicable prospectus supplement, subordinated in right of
payment to the prior payment in full of all senior indebtedness, whether now
outstanding or incurred in the future. Upon any payment or distribution of our
assets to creditors upon any liquidation, dissolution, winding up, assignment
for the benefit of creditors or marshaling of assets and liabilities or any
bankruptcy, insolvency, receivership, liquidation, reorganization or similar
proceedings, the holders of all senior indebtedness will first be entitled to
receive any payment in full of all amounts due or to become due thereon in cash,
or such payment duly provided for, before any securities payment is made, other
than in permitted junior securities.
If a payment event of default shall have occurred and be continuing with
respect to any senior indebtedness, no securities payment shall be made, other
than in permitted junior securities. The term "payment event of default" is
defined as any default in the payment of principal of or premium, if any, or
interest on any senior indebtedness when due, whether at maturity, upon
acceleration or otherwise. In the event that, notwithstanding the restriction
described in the preceding sentence, payment is made to the trustee or a holder
of subordinated debt securities prohibited by any such restriction, then such
payment shall be held in trust for the benefit of, and shall be paid over or
delivered to the holders of senior indebtedness or their representatives, if
any, as their respective interests may appear, prorated to such holders on the
basis of the respective amount of senior indebtedness held by such holders.
The subordination rights of holders of senior indebtedness will not be
prejudiced or impaired by any acts or failures to act by us or by any such
holder. The subordination of the subordinated debt securities set forth above
will not prevent the occurrence of any event of default under the subordinated
indenture. Furthermore, the subordination of the subordinated debt securities as
set forth above will not impair, as between us, the holders of the subordinated
debt securities and creditors other than holders of senior indebtedness, our
obligations to make payments on the subordinated debt securities in accordance
with their terms. In certain circumstances, as set forth in the indenture, the
holders of subordinated debt securities will be subrogated to certain rights of
the holders of senior indebtedness upon payment in full of all senior
indebtedness.
By reason of such subordination, in the event of insolvency of the holders
of senior indebtedness, as well as our other creditors who are holders of
indebtedness that is not subordinated to the senior indebtedness, may recover
more, ratably, than the holders of the subordinated debt securities. The
subordinated debt securities will also be effectively subordinated to all
liabilities, including trade payables and capitalized lease obligations, if any,
of our subsidiaries. Our right to receive the assets of any of our subsidiaries
upon their liquidation or reorganization and the consequent right of the holders
of the subordinated debt securities to participate in those assets will be
subject to the prior payment of claims of that subsidiary's creditors, including
trade creditors, except to the extent that we are a creditor of such subsidiary,
in which case our claims would still be subject to the prior payment of claims
secured by security interests in the assets of such subsidiary and any other
indebtedness of such subsidiary senior to that held by us.
If the subordinated debt securities are issued under the subordinated
indenture, the aggregate principal amount of senior indebtedness outstanding as
of a recent date will be set forth in the prospectus supplement. The
subordinated indenture does not restrict the amount of senior indebtedness that
we may incur, although the terms of the subordinated debt securities offered in
connection with any prospectus supplement may contain such limitations.
The terms of our existing outstanding 9-1/4% Senior Subordinated Notes due
2004 prohibit us from issuing subordinated debt securities ranking senior in
right of payment to the 9-1/4% Notes.
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PROVISIONS APPLICABLE TO JUNIOR SUBORDINATED DEBT SECURITIES
EVENTS OF DEFAULT
In addition to the events described above under "Provisions Applicable to
All Debt Securities-- Events of Default" applicable to all debt securities, the
voluntary or involuntary dissolution, winding up or termination of the trust
that owns the series of junior subordinated debt securities will constitute an
event of default for any series of junior subordinated debt securities issued
under the junior subordinated indenture, except in connection with:
- the distribution of such junior subordinated debt securities to holders of
trust securities of the trust;
- the redemption of all of the trust securities of the trust; and
- mergers, consolidations or amalgamations permitted by the amended
declaration of the trust.
The holders of at least a majority in aggregate liquidation amount of the
trust preferred securities of the trust may waive any default or event of
default with respect to such series and its consequences, except defaults or
events of default that:
- are not waivable under the junior subordinated indenture, such as defaults
regarding payment of principal, premium, if any, or interest; or
- require the consent or vote of greater than a majority in principal amount
of the holders of junior subordinated debt securities to be waived under
the junior subordinated indenture, in which case the event of default may
only be waived by the holders of the same "super-majority" in liquidation
amount of the trust preferred securities.
Any such waiver shall cure such default or event of default. If, under the
amended declaration of a trust, an event of default has occurred and is
attributable to our failure to pay principal, premium, if any, or interest on,
such junior subordinated debt securities, then each holder of the trust
preferred securities of the trust may sue us or seek other remedies, to force
payment to such holder of the principal of, premium, if any, or interest on,
such junior subordinated debt securities having a principal amount equal to the
aggregate liquidation amount of the trust preferred securities held by such
holder.
MODIFICATION OF JUNIOR SUBORDINATED INDENTURE
Under the junior subordinated indenture, we and the indenture trustee may
change certain rights of holders of a series of junior subordinated debt
securities with the written consent of the holders of a majority in principal
amount of the series of junior subordinated debt securities that is affected.
Any such change will be subject to the limitations described above under
"Modification" applicable to the other debt securities. If the property trustee
of the trust, as holder of junior subordinated debt securities, is required to
consent to any amendment, modification or termination of the junior subordinated
indenture, the property trustee will request directions from the holders of the
trust securities of the applicable trust.
SUBORDINATION OF JUNIOR SUBORDINATED DEBT SECURITIES
The junior subordinated debt securities will be unsecured and will be
subordinate and junior in priority of payment to certain of our other
indebtedness to the extent described in a prospectus supplement. The junior
subordinated indenture will not limit the amount of junior subordinated debt
securities which we may issue, nor does it limit us from issuing any other
secured or unsecured debt.
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DESCRIPTION OF THE TRUST PREFERRED SECURITIES
GENERAL
The amended declaration of each trust authorizes the respective trustees to
issue, on behalf of the trust, one series of trust preferred securities. Each
trust will use the proceeds from the sale of the trust preferred securities to
purchase a series of our junior subordinated debt securities issued. The
property trustee will hold these junior subordinated debt securities in trust
for the benefit of the holders of such trust preferred securities.
This section summarizes the general terms of the preferred securities that
the trusts may offer. The prospectus supplement relating to any particular
preferred securities offered by a trust will describe the specific terms of the
preferred securities, which may be in addition to or different from the general
terms summarized in this section. The summary in this section and in any
prospectus supplement does not describe every aspect of the trust preferred
securities offered and is subject to and qualified in its entirety by reference
to all the provisions of the amended declarations and the trust preferred
securities. The forms of the amended declarations and the trust preferred
securities are or will be filed as exhibits to or incorporated by reference in
the registration statement.
We will guarantee the payments of distributions and payments on redemption
or liquidation with respect to the trust preferred securities, but only to the
extent the trust has funds available to make those payments and has not made the
payments. Our trust preferred securities guarantee is described in more detail
below under "Description of the Trust Preferred Securities Guarantee."
The assets of each trust available for distribution to the holders of its
trust preferred securities will be limited to payments from us under the series
of junior subordinated debt securities held by the trust. If we fail to make a
payment on the junior subordinated debt securities, the trust will not have
sufficient funds to make related payments, including distributions, on its trust
preferred securities.
The trust preferred securities guarantee, when taken together with our
obligations under the series of junior subordinated debt securities, the junior
subordinated indenture and the amended declaration of the trust, will provide a
full and unconditional guarantee of amounts due on the trust preferred
securities issued by each trust.
The prospectus supplement relating to any particular preferred securities
offered by a trust will describe the specific terms of the preferred securities,
which may be in addition to or different from the general terms summarized in
this section. In particular, the prospectus supplement will describe:
- the name of such trust preferred securities;
- the designation of the trust preferred securities;
- the dollar amount and number of trust preferred securities issued;
- the annual distribution rate(s) or method of determining such rate(s), the
payment date(s) and the record dates used to determine the holders who are
to receive distributions;
- the date(s) or the method to determine the date(s) from which
distributions shall be cumulative;
- the optional redemption provisions, if any, including the prices, time
periods and other terms and conditions for which such trust preferred
securities shall be purchased or redeemed, in whole or in part;
- the terms and conditions, if any, upon which the applicable series of
junior subordinated debt securities and the related trust preferred
securities guarantee may be distributed to holders of the trust preferred
securities upon liquidation, dissolution, termination or winding up of the
trust;
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- any voting rights of the trust preferred securities other than those
described in this section;
- any securities exchange on which the trust preferred securities will be
listed;
- whether the trust preferred securities are to be issued in book-entry form
and represented by one or more global certificates, and if so, the
depositary for the global certificates and the specific terms of the
depositary arrangements;
- any other relevant rights, preferences, privileges, limitations or
restrictions of such trust preferred securities; and
- any applicable United States Federal income tax considerations.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
The amended declaration of each trust states that the trust shall be
dissolved:
- on the expiration of the term of the trust;
- upon our bankruptcy, dissolution or liquidation;
- upon a change in law requiring the trust to register as an investment
company under the Investment Company Act of 1940;
- unless we take certain actions, upon a change in the law resulting in the
trust being subject to United States Federal income tax on income received
from the junior subordinated debt securities held by the trust, the
interest payable by us on the junior subordinated debt securities not
being deductible for United State Federal income tax purposes, or the
trust being subject to more than a de minimus amount of other taxes;
- upon the redemption, conversion or exchange of all of the trust securities
of the trust;
- upon the repayment of all of the junior subordinated debt securities held
by the trust or at such time as no such junior subordinated debt
securities are outstanding;
- upon entry of a court order for the dissolution of the trust; or
- upon our election to terminate the trust and distribute the related junior
subordinated debt securities directly to the holders of the trust
securities.
In the event of a dissolution, after the trust pays all amounts owed to
creditors, the holders of the trust securities will be entitled to receive:
- cash equal to the aggregate liquidation amount of each trust security
specified in an accompanying prospectus supplement, plus accumulated and
unpaid distributions to the date of payment; or
- junior subordinated debt securities in an aggregate principal amount equal
to the aggregate liquidation amount of the trust securities.
If a trust cannot pay the full amount due on its trust securities because
insufficient assets are available for payment, then the amounts payable by the
trust on its trust securities shall be paid pro rata. However, if an event of
default under the related indenture has occurred, the total amounts due on the
trust preferred securities will be paid before any distribution on the trust
common securities.
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EVENTS OF DEFAULT
An event of default under the junior subordinated indenture relating to a
series of junior subordinated debt securities is an event of default under the
amended declaration of the trust that owns those junior subordinated debt
securities. We have described these events of default under the sections
entitled "Description Debt Securities--Provisions Applicable to All Debt
Securities--Events of Default" and "--Provisions Applicable to Junior
Subordinated Debt Securities--Events of Default."
We and the regular trustees of each trust must file annually with the
property trustee for the trust a certificate stating whether or not they are in
compliance with all the applicable conditions and covenants under the related
amended declaration.
Upon the occurrence of an event of default, the property trustee of the
trust, as the sole holder of the junior subordinated debt securities held by the
trust, will have the right under the junior subordinated indenture to declare
the principal of, premium, if any, and interest on such junior subordinated debt
securities to be immediately due and payable.
If a property trustee fails to enforce its rights under the amended
declaration or the junior subordinated indenture then, to the fullest extent
permitted by law, and subject to the terms of the amended declaration and the
junior subordinated indenture, any holder of trust preferred securities may sue
us, or seek other remedies, to enforce the property trustee's rights under the
amended declaration or the junior subordinated indenture without first
instituting a legal proceeding against such property trustee or any other
person.
If we fail to pay principal, premium, if any, or interest on a series of
junior subordinated debt securities when payable, then a holder of such trust
preferred securities may directly sue us or seek other remedies, to collect its
pro rata share of payments owned.
REMOVAL AND REPLACEMENT OF TRUSTEES
Only the holders of trust common securities may remove or replace the
trustees of a trust. The resignation or removal of any trustee and the
appointment of a successor trustee will be effective only on the acceptance of
appointment by the successor trustee in accordance with the provisions of the
amended declaration for the trust.
CONVERSION OR EXCHANGE RIGHTS
The applicable prospectus supplement will set forth the terms on which the
trust preferred securities are convertible into or exchangeable for our common
stock or other securities or securities of any other person. Such terms will
include provisions as to whether conversion or exchange is mandatory, at the
option of the holder or at our option, and may include provisions for adjustment
of the number of shares of common stock or other securities of ours or any other
person to be received by the holders of trust preferred securities.
MERGERS, CONSOLIDATIONS, CONVERSIONS OR AMALGAMATIONS OF THE TRUSTS
The trusts may not consolidate, amalgamate, merge with or into, or be
converted into or replaced by or convey, transfer or lease their properties and
assets substantially as an entirety to any other corporation or other body,
except as described below. A trust may, with the consent of a majority of its
regular trustees and without the consent of the holders of its trust securities
or the other trustees, engage in any of the merger events referred to above,
provided that:
- the successor entity either
(1) assumes all of the obligations of the trust relating to its trust
securities or
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(2) substitutes other securities for the trust securities that are
substantially similar to such trust securities, so long as the
successor securities rank the same as such trust securities for
distributions and payments upon liquidation, redemption and
otherwise;
- we acknowledge a trustee of such successor entity who has the same powers
and duties as the property trustee of the trust, as the holder of the
particular series of junior subordinated debt securities;
- the trust preferred securities are listed, or any successor securities
will be listed, upon notice of issuance, on the same national securities
exchange or other organization that the trust preferred securities are
then listed;
- the merger event does not cause the trust preferred securities or
successor securities to be downgraded by any national rating agency;
- the merger event does not adversely affect the rights, preferences and
privileges of the holders of the trust securities or successor securities
in any material way;
- the successor entity has a purpose identical to that of the trust;
- prior to the merger event, we have received an opinion of counsel from a
nationally recognized law firm stating that
(1) such merger event does not adversely affect the rights of the holders
of the trust's preferred securities or any successor securities in
any material way (other than with respect to any dilution of the
holders' interest in the new entity) and
(2) following the merger event, neither the trust nor the successor
entity will be required to register as an investment company under
the Investment Company Act of 1940; and
- we or any permitted successor owns all of the common stock of such
successor entity and guarantees the obligations of the successor entity
under the successor securities in the same manner as in the trust
preferred securities guarantee and the guarantee of the common securities
for the trust.
In addition, unless all of the holders of the trust preferred securities and
trust common securities approve otherwise, the trust may not consent to or
engage in a merger event if that event would cause the trust or the successor
entity to be classified other than as a grantor trust for United States federal
income tax purposes.
VOTING RIGHTS; AMENDMENT OF DECLARATION
The holders of trust preferred securities have no voting rights except as
discussed above under "--Mergers, Consolidations, Conversion or Amalgamations of
the Trust" and below under "Description of the Trust Preferred Securities
Guarantee--Amendments and Assignment," and as otherwise required by law or the
amended declaration for the trust.
The amended declaration may be amended if approved by a majority of the
regular trustees of the trust. However, if any proposed amendment provides for,
or such regular trustees otherwise propose,
- any action that would adversely affect the powers, preferences or special
rights of the trust securities, whether by way of amendment to such
amended declaration or otherwise or
- the dissolution, winding-up or termination of the trust other than by the
terms of its amended declaration,
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then the holders of the trust securities as a single class will be entitled to
vote on such amendment or proposal. In that case, the amendment or proposal will
only be effective if approved by a majority in liquidation amount of the trust
securities affected by such amendment or proposal.
If any amendment or proposal referred to in clause (1) above would adversely
affect only a particular class of the trust securities of the trust, then only
the affected class will be entitled to vote on such amendment or proposal. Such
amendment or proposal will only be effective with the approval of a majority in
liquidation amount of such affected class.
No amendment may be made to an amended declaration if such amendment would:
- cause the trust to be characterized as other than a grantor trust for
United States federal income tax purposes;
- impose any additional obligation on us without our consent;
- reduce or otherwise adversely affect the powers of the property trustee;
or
- cause the trust to be deemed to be an "investment company" which is
required to be registered under the Investment Company Act.
The holders of a majority in aggregate liquidation amount of the trust
preferred securities have the right to:
- direct the time, method and place of conducting any proceeding for any
remedy available to the property trustee of the trust; or
- direct the exercise of any trust or power conferred upon the property
trustee under the trust's amended declaration, including the right to
direct the property trustee, as the holder of a series of junior
subordinated debt securities, to
(1) exercise the remedies available under the junior subordinated
indenture with respect to those junior subordinated debt securities,
(2) waive any event of default under the junior subordinated indenture
that is waivable or
(3) cancel an acceleration of the principal of the junior subordinated
debt securities.
However, if the junior subordinated indenture requires the consent of the
holders of more than a majority in aggregate principal amount of the junior
subordinated debt securities, then the property trustee must get approval of the
holders of such "super-majority" in liquidation amount of the trust preferred
securities.
In addition, the property trustee will not be required to take certain of
the actions described above unless it has obtained an opinion of counsel stating
that, as a result of such action, the trust will continue to be classified as a
grantor trust for United States federal income tax purposes.
The property trustee of the trust will notify all holders of trust preferred
securities of the trust of any notice received from the indenture trustee with
respect to the junior subordinated debt securities held by the trust.
As described in the amended declaration, the property trustee may hold a
meeting to have holders of trust preferred securities vote on a change or have
them approve a change by written consent.
Any trust preferred securities that we or our affiliates own will be treated
as if they were not outstanding for purposes of any vote or consent of trust
preferred securities. This means:
- we and any of our affiliates will not be able to vote on or consent to
matters requiring the vote or consent of holders of trust preferred
securities and
25
- any trust preferred securities owned by us or any of our affiliates will
not be counted in determining whether the required percentage of votes or
consents has been obtained.
INFORMATION CONCERNING DUTIES OF THE PROPERTY TRUSTEE
For matters relating to compliance with the Trust Indenture Act, the
property trustee of the trust will have all of the duties and responsibilities
of an indenture trustee under the Trust Indenture Act. The property trustee,
other than during the occurrence and continuance of an event of default under
the trust, undertakes to perform only such duties as are specifically set forth
in the amended declaration and, upon an event of default, must use the same
degree of care and skill as a prudent person would exercise or use in the
conduct of his or her own affairs. Subject to this provision, the property
trustee is under no obligation to exercise any of the powers given it by the
applicable amended declaration at the request of any holder of trust preferred
securities unless it is offered reasonable security or indemnity against the
costs, expenses and liabilities that it might incur. However, the holders of the
trust preferred securities will not be required to offer such an indemnity where
the holders, by exercising their voting rights, direct the property trustee to
take any action following an event of default.
MISCELLANEOUS
The regular trustees of a trust are authorized and directed to conduct the
affairs of the trust and to operate the trust in such a way that
- it will not be deemed to be an "investment company" required to be
registered under the Investment Company Act;
- it will be classified as a grantor trust for United States federal income
tax purposes; and
- the junior subordinated debt securities held by it will be treated as our
indebtedness for the United States federal income tax purposes.
We and the regular trustees of the trust are authorized to take any action,
so long as it is consistent with applicable law or the certificate of trust or
amended declaration, that we and the regular trustees of the trust determine to
be necessary or desirable for such purposes.
Holders of trust preferred securities have no preemptive or similar rights.
The trust may not borrow money, issue debt, execute mortgages or pledge any
of its assets.
GOVERNING LAW
The amended declaration and the related trust preferred securities will be
governed by and construed in accordance with the laws of the State of Delaware
and the Trust Indenture Act.
DESCRIPTION OF THE TRUST PREFERRED SECURITIES GUARANTEE
GENERAL
We will execute a trust preferred securities guarantee, which benefits the
holders of trust preferred securities, at the time that a trust issues those
trust preferred securities. The trust preferred securities guarantee will be
qualified as an indenture under the Trust Indenture Act and will be held for the
benefit of holders of trust preferred securities by a guarantee trustee meeting
the requirements of the Trust Indenture Act. Unless otherwise indicated in a
prospectus supplement, Wilmington Trust Company will be the guarantee trustee.
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GUARANTEE PAYMENT
This section summarizes the general terms of the guarantees that we will
provide in respect of the preferred securities that the trusts may offer. The
summary in this section does not describe every aspect of the guarantee and is
subject to and qualified in its entirety by reference to any description in the
related prospectus supplement and to all the provisions of the guarantee
agreements. The form of the guarantee agreement is filed as an exhibit to the
registration statement.
We will irrevocably agree, as described in the trust preferred securities
guarantee, to pay in full, to the holders of the trust preferred securities
issued by a trust, the following trust preferred securities guarantee payments
when due to the extent not paid by the trust, regardless of any defense, right
of set-off or counterclaim which the trust may have or assert:
- any accrued and unpaid distributions required to be paid on the trust
preferred securities, to the extent that the trust has funds available to
make the payment;
- the redemption price, to the extent that the trust has funds available to
make the payment; and
- upon a voluntary or involuntary dissolution and liquidation of the trust
(other than in connection with a distribution of junior subordinated debt
securities to holders of such trust preferred securities or the
redemption of all such trust preferred securities), the lesser of
(1) the aggregate of the liquidation amount specified in the prospectus
supplement for each trust preferred security plus all accrued and
unpaid distributions on the trust preferred securities to the date of
payment, to the extent the trust has funds available to make the
payment and
(2) the amount of assets of the trust remaining available for
distribution to holders of its trust preferred securities upon a
dissolution and liquidation of the trust ("liquidation payment").
Our obligation to make a trust preferred securities guarantee payment may be
satisfied by directly paying the required amounts to the holders of the trust
preferred securities or by causing the trust to pay the amounts to the holders.
The combined operation of our obligations under the junior subordinated
indenture and the trust preferred securities guarantee and amended declaration
has the effect of providing a full, irrevocable and unconditional guarantee of
the trust's obligations under its trust preferred securities.
STATUS OF THE TRUST PREFERRED SECURITIES GUARANTEE
The trust preferred securities guarantee will constitute an unsecured
obligation of ours and will rank:
- subordinated and junior in right of payment to all of our other
liabilities, including the junior subordinated debt securities, except
those liabilities made equal or subordinate to the guarantee by their
terms; and
- senior to the following:
(1) all capital stock issued by us, other than the most senior preferred
shares issued, from time to time, by us, which will rank equally with
the guarantee, and
(2) any guarantee entered into by us relating to our capital stock, other
than the most senior preferred shares issued, from time to time, by
us.
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The trust preferred securities guarantee will rank equally with obligations
under other guarantee agreements that we may enter into from time to time if
both:
- the agreements are in substantially the form of the preferred securities
guarantee and provide for comparable guarantees payment on preferred
securities issued by other trusts or financing vehicles of ours; and
- the debt relating to those preferred securities are junior subordinated,
unsecured indebtedness of ours.
By acceptance of the trust preferred securities, holders accept the
subordination provisions and other terms of the trust preferred securities
guarantee. The holder of the guaranteed security may sue us or seek other
remedies, to enforce its rights under the trust preferred securities guarantee
without first suing any other person or entity. The trust preferred securities
guarantee will not be discharged except by payment of the guarantee payments in
full to the extent not previously paid or upon distribution of the corresponding
series of junior subordinated debt securities to the holders of trust preferred
securities under the terms of the amended declaration.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of trust preferred securities in any material respect, in which case
no consent of such holders will be required, a trust preferred securities
guarantee may only be amended with the prior approval of the holders of a
majority in aggregate liquidation amount of such trust preferred securities. We
have described the way to obtain any approval under "Description of the Trust
Preferred Securities--Voting Rights; Amendment of Declaration." All guarantees
and agreements contained in the trust preferred securities guarantee will be
binding on our successors, assigns, receivers, trustees and representatives and
are for the benefit of the holders of the applicable trust preferred securities.
TRUST PREFERRED SECURITIES GUARANTEE EVENTS OF DEFAULT
An event of default under the trust preferred securities guarantee occurs if
we fail to make any of our required payments or perform our obligations under
the trust preferred securities guarantee.
The holders of at least a majority in aggregate liquidation amount of the
trust preferred securities will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the guarantee
trustee or to direct the exercise of any trust or power given to the guarantee
trustee under the trust preferred securities guarantee.
INFORMATION CONCERNING DUTIES OF THE TRUST PREFERRED GUARANTEE TRUSTEE
The guarantee trustee under the trust preferred securities guarantee, other
than during the occurrence and continuance of an event of default under the
trust preferred securities guarantee, will only perform the duties that are
specifically described in the trust preferred securities guarantee. After such a
default, the trust preferred guarantee trustee will exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. Subject to this provision, the guarantee trustee is under no
obligation to exercise any of its powers as described in the trust preferred
securities guarantee at the request of any holder of covered trust preferred
securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that it might incur.
TERMINATION OF THE TRUST PREFERRED SECURITIES GUARANTEE
The trust preferred securities guarantee will terminate once the trust
preferred securities are paid in full or upon distribution of the corresponding
series of junior subordinated debt securities to the holders of the trust
preferred securities. The trust preferred securities guarantee will continue to
be
28
effective or will be reinstated if at any time any holder of trust preferred
securities must restore payment of any sums paid under such trust preferred
securities or such trust preferred securities guarantee.
GOVERNING LAW
The trust preferred securities guarantee will be governed by and construed
in accordance with the laws of the State of New York and the Trust Indenture
Act.
RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES,
THE TRUST PREFERRED SECURITIES GUARANTEE
AND THE SUBORDINATED DEBT SECURITIES HELD BY THE TRUST
Payments of distributions and redemption and liquidation payments due on the
trust preferred securities, to the extent the trust has funds available for the
payments, will be guaranteed by us to the extent described above under
"Description of the Trust Preferred Securities Guarantee." The combined
operation of our obligations under the trust preferred securities guarantee,
amended declaration and the junior subordinated indenture has the effect of
providing a full, irrevocable and unconditional guarantee of each of the trusts'
obligations under its trust preferred securities.
As long as we make payments of interest and other payments when due on the
junior subordinated debt securities held by a trust, such payments will be
sufficient to cover the payment of distributions and redemption and liquidation
payments due on the trust preferred securities issued by the trust. This is
because:
- the aggregate principal amount of the junior subordinated debt securities
will be equal to the sum of the aggregate liquidation amount of the trust
securities;
- the interest rate and interest and other payment dates on the junior
subordinated debt securities will match the distribution rate and
distribution and other payment dates for the trust preferred securities;
- we will pay for any and all costs, expenses and liabilities of each trust
except the trust's obligations under its trust preferred securities; and
- each amended declaration provides that a trust will not engage in any
activity that is not consistent with the limited purposes of the trust.
If and to the extent that we do not make payments on such junior
subordinated debt securities, the trust will not have funds available to make
payments of distributions or other amounts due on its trust preferred
securities. In those circumstances, you will not be able to rely upon the trust
preferred securities guarantee for payment of these amounts. Instead, you may
directly sue us or seek other remedies to collect your pro rata share of
payments owed. If you sue us to collect payment, then we will assume your rights
as a holder of trust preferred securities under the amended declaration to the
extent we make a payment to you in any such legal action.
A holder of any trust preferred security may sue us, or seek other remedies,
to enforce its rights under the trust preferred securities guarantee without
first suing the guarantee trustee, the trust or any other person or entity.
PLAN OF DISTRIBUTION
We may sell common stock, preferred stock, any series of debt securities or
guarantees and the trusts may sell trust preferred securities in one or more of
the following ways from time to time:
- to underwriters for resale to the public or to institutional investors;
29
- directly to institutional investors; or
- through agents to the public or to institutional investors.
The offered securities may be distributed periodically in one or more
transactions at:
- a fixed price or prices, which may be changed;
- market prices prevailing at the time of sale;
- prices related to the prevailing market prices; or
- negotiated prices.
In connection with the sale of offered securities, underwriters or agents
may receive compensation from us in the form of underwriting discounts or
commissions. They may also receive commissions from purchasers of offered
securities for whom they may act as agent. Underwriters or agents may sell
offered securities to or through dealers. Those dealers may receive compensation
in the form of discounts, concessions, or commissions from the underwriters
and/or commissions from the purchasers for whom they may act as agent.
The prospectus supplement will set forth the terms of the offering of the
securities, including the name or names of any underwriters or agents, the
purchase price of such securities and the proceeds to us or the trusts, as the
case may be, from such sale, any underwriting discounts or agency fees and other
items constituting underwriters' or agents' compensation, any initial public
offering price, any discounts or concessions allowed or reallowed or paid to
dealers and any securities exchanges on which the securities may be listed.
If underwriters are used in the sale, the offered securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
Unless otherwise set forth in a prospectus supplement, the obligations of
the underwriters to purchase any series of securities will be subject to certain
conditions precedent and the underwriters will be obligated to purchase all of
such series of securities, if any are purchased.
Underwriters, dealers, and agents participating in the distribution of the
offered securities may be deemed to be underwriters, and any discounts and
commissions received by them and any profit realized by them on resale of the
offered securities may be deemed to be underwriting discounts and commissions,
under the Securities Act of 1933. Underwriters and agents may be entitled under
agreements entered into with us and/or the trusts to indemnification by us
and/or the trusts against certain civil liabilities, including liabilities under
the Securities Act, or to contribution with respect to payments which the
underwriters or agents may be required to make in respect thereof.
Underwriters and agents and/or their affiliates may engage in transactions
with or perform services for us and our affiliates in the ordinary course of
business.
Each series of offered securities will be a new issue of securities and will
have no established trading market, other than the common stock which is listed
on the New York Stock Exchange. Any common stock sold will be listed on the New
York Stock Exchange subject to official notice of issuance. Other securities may
or may not be listed on a national securities exchange. Any underwriters to whom
securities are sold by us or by a trust for public offering and sale may make a
market in the securities, but such underwriters will not be obligated to do so
and may discontinue any market making at any time without notice.
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VALIDITY OF OFFERED SECURITIES
The validity of the offered securities will be passed upon for us by Crowe &
Dunlevy, A Professional Corporation, and for the underwriters or agents, if any,
by a firm named in the prospectus supplement relating to the particular
security. Certain matters of Delaware law relating to the trust preferred
securities will be passed upon on behalf of the trusts by Richards, Layton &
Finger, P.A., special Delaware counsel to the trusts.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule, as amended, included in our Annual Report on
Form 10-K as amended for the year ended December 31, 1998, as set forth in their
report, which is incorporated by reference in this prospectus and elsewhere in
the registration statement. Our financial statements and schedule, as amended,
are incorporated by reference in reliance on Ernst & Young LLP's report, given
on their authority as experts in accounting and auditing. Any future audited
financial statements and the reports with respect to such audited financial
statements of our independent public accountants hereafter incorporated by
reference in this prospectus and the registration statement will be incorporated
in reliance upon the authority of that firm as experts in giving those reports
to the extent such firm has audited those financial statements and consented to
the use of their reports with respect to such audited financial statements.
Certain estimates of our oil and gas reserves and related information as of
December 31, 1998 included in our Annual Report on Form 10-K for the year ended
December 31, 1998 and incorporated by reference in this prospectus and elsewhere
in the registration statement have been derived from engineering reports
prepared by our engineers and reviewed and reported on by Ryder Scott Company,
and all such information has been so incorporated in reliance on the authority
of such firm as experts regarding the matters contained in their report. Future
estimates of oil and gas reserves and related information hereafter incorporated
by reference in this prospectus and the registration statement will be
incorporated in reliance upon the reports of the firm examining such oil and gas
reserves and related information and upon the authority of any such firm as
experts regarding the matters contained in their reports, to the extent such
firm has consented to the use of their reports.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the Securities
and Exchange Commission. Our filings are available over the Internet at the
SEC's web site at http://www.sec.gov. You may also read and copy any document we
file with the SEC at the SEC's public reference rooms at:
- 450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549;
- Seven World Trade Center
13th Floor
New York, New York 10048; and
- Citicorp Center
500 West Madison Street
Suite 1400
Chicago, Illinois 60601.
31
You may call the SEC at (202) 942-8090 for more information on the public
reference rooms and their copy charges. You may also inspect the reports and
other information we file with the SEC at:
New York Stock Exchange
20 Broad Street
New York, New York 10005.
We have filed a registration statement on Form S-3 with the SEC that covers
the securities described in this prospectus. For further information about us,
the trusts and the securities, you should refer to our registration statement
and its exhibits. In this prospectus, we have summarized material provisions of
contracts and other documents. Since this prospectus may not contain all the
information that you may find important, you should review the full text of
these documents. We have included copies of these documents as exhibits to our
registration statement. The registration statement can be obtained from the SEC
in the ways described above, or from us.
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" information we file with
them. This means that we can disclose important information to you by referring
you to those documents. Any information we reference in this manner is
considered part of this prospectus. Certain information we file with SEC after
the date of this prospectus will automatically update and, to the extent
inconsistent, supersede the information contained in this prospectus.
We incorporate by reference the following document which we have filed with
the SEC:
- Annual Report on Form 10-K as amended for the year ended December 31,
1998; and
- Quarterly Reports on Form 10-Q as amended for the quarters ended March 31
and June 30, 1999.
We also incorporate by reference any future filings we will make with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 after the date of this prospectus but before the end of the offering of the
securities made by this prospectus.
You may request a copy of these filings, at no cost, by contacting us at:
Investor Relations Department
Louis Dreyfus Natural Gas Corp.
14000 Quail Springs Parkway, Suite 600
Oklahoma City, Oklahoma 73134-2600.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
All capitalized terms used and not defined in Part II of this Registration
Statement shall have been the meanings assigned to them in the Prospectus which
forms a part of this Registration Statement.
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the Company's estimates of the expenses that
it will incur in connection with the offering described in the Registration
Statement:
SEC Registration Fee (actual fee)................................. $ 111,200
Printing and Engraving Expenses................................... 75,000
Legal Fees and Expenses........................................... 125,000
Accountants' Fees and Expenses.................................... 80,000
Rating Agencies' Fees............................................. 168,000
Transfer Agent's and Trustees' Fees and Expenses.................. 50,000
Miscellaneous..................................................... 25,000
---------
Total......................................................... $ 634,200
---------
---------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Certificate of Incorporation provides that, pursuant to
Oklahoma law, the Company's directors shall not be liable for monetary damages
for breach of the directors' fiduciary duty of care to the Company and its
stockholders. The provision in the Certificate of Incorporation does not
eliminate the duty of care and, in appropriate circumstances, equitable remedies
such as injunctive or other forms of non-monetary relief will remain available
under Oklahoma law. However, such remedies may not be effective in all cases. In
addition, each director will continue to be subject to liability for breach of
the director's duty of loyalty to the Company, as well as acts or omissions not
in good faith or involving intentional misconduct, for knowing violations of
law, for actions leading to improper personal benefit to the director, and for
payment of dividends or approval of stock repurchases or redemptions that are
unlawful under Oklahoma law. The provision also does not affect a director's
responsibilities under any other law, such as the state or federal securities
laws.
Under Section 1031 of the Oklahoma General Corporation Act, the Company has
broad powers to indemnify its directors and officers against liabilities they
may incur in such capacities, including liabilities under the Securities Act of
1933 (the "Securities Act").
The Company's Certificate of Incorporation provides that the Company shall
indemnify its directors and officers to the fullest extent permitted by Oklahoma
law. The Certificate of Incorporation requires the Company to indemnify such
persons against expenses, judgments, fines, settlements and other amounts
incurred in connection with any proceeding, whether actual or threatened, to
which any such person may be made a party by reason of the fact that such person
is or was a director or an officer of the Company or any of its affiliated
enterprises, provided such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of the
Company, and with respect to any criminal proceedings, had no reasonable cause
to believe his conduct was unlawful. However, in the case of a derivative
action, an officer or director will not be entitled to indemnification in
respect to any claim, issue or matter as to which such person is adjudged to be
liable to the Company, unless and only to the extent that the court in which the
action was brought determines that such person is fairly and reasonably entitled
to indemnity for expenses.
The Company has entered into Indemnification Agreements with each director
of the Company which require the Company to indemnify such persons against
certain liabilities and expenses incurred
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by any such persons by reason of their status or service as directors or
officers of the Company and which set forth procedures that will apply in the
event of a claim for indemnification under such agreements. The Indemnification
Agreements also require that the Company use commercially reasonable efforts to
maintain policies of directors' liability insurance. The Company's directors and
officers are covered by directors and officers insurance policies providing
insurance protection for liabilities specified in such policies.
The forms of the Underwriting Agreements, which will be filed as Exhibits
hereto, will provide that the Underwriters will indemnify the Registrant, its
directors and officers and certain other persons against liabilities, including
liabilities under the Securities Act with respect to information furnished in
writing to the Registrant for use in this Registration Statement.
ITEM 16. EXHIBITS.
1.1 -- Form of Underwriting Agreement (for equity securities).*
1.2 -- Form of Underwriting Agreement (for debt securities).*
1.3 -- Form of Underwriting Agreement (for preferred securities of the trusts).*
4.1 -- Amended and Restated Certificate of Incorporation of the Registrant
(Incorporated by reference to Exhibit 3.1 of the Registrant's Registration
Statement on Form S-1, Registration No. 33-69102).
4.2 -- Certificate of Merger of the Registrant dated September 9, 1993
(Incorporated by reference to Exhibit 3.2 of the Registrant's Registration
Statement on Form S-1, Registration No. 33-69102).
4.3 -- Amended and Restated Bylaws of the Registrant (Incorporated by reference to
Exhibit 3.3 of the Registrant's Registration Statement on Form S-1,
Registration No. 33-69102).
4.4 -- Certificate of Merger of the Registrant dated November 1, 1993
(Incorporated by reference to Exhibit 3.4 of the Registrant's Registration
Statement on Form S-1, Registration No. 33-69102).
4.5 -- Indenture dated as of June 15, 1994 for $100,000,000 of 9 1/4% Senior
Subordinated Notes due 2004 between the Registrant, as Issuer, and Bank of
Montreal Trust Company, as Trustee (Incorporated by reference to Exhibit
10.2 of the Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1994).
4.6 -- Indenture dated as of December 11, 1997 for $200,000,000 of 6 7/8% Senior
Notes due 2007 between the Registrant, as Issuer, and LaSalle National
Bank, as Trustee (Incorporated by reference to Exhibit 4.1 of the
Registrant's Registration Statement on Form S-4, Registration No.
333-45773).
4.7** -- Form of Indenture with respect to senior indebtedness.
4.8** -- Form of Indenture with respect to subordinated indebtedness.
4.9** -- Form of Indenture with respect to junior subordinated indebtedness to be
issued to the Louis Dreyfus Natural Gas Trust I and II.
4.10 -- Form of senior debt securities (included in Exhibit 4.7).
4.11 -- Form of subordinated debt securities (included in Exhibit 4.8).
4.12 -- Form of junior subordinated debt securities (included in Exhibit 4.9).
4.13 -- Form of Certificate of Designation for preferred stock.*
4.14** -- Certificate of Trust of Louis Dreyfus Natural Gas Trust I.
4.15** -- Certificate of Trust of Louis Dreyfus Natural Gas Trust II.
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4.16** -- Declaration of Trust of Louis Dreyfus Natural Gas Trust I.
4.17** -- Declaration of Trust of Louis Dreyfus Natural Gas Trust II.
4.18** -- Form of Amended and Restated Declaration of Trust for the Louis Dreyfus
Natural Gas Trusts.
4.19 -- Form of Trust Preferred Security (included in Exhibit 4.18).
4.20** -- Form of Guarantee Agreement with respect to the Preferred Securities of the
Louis Dreyfus Natural Gas Trusts.
5.1** -- Opinion of Crowe & Dunlevy, A Professional Corporation.
5.2** -- Opinion of Richards, Layton & Finger, P.A.
12.1*** -- Statement regarding computation of ratio of earnings to fixed charges.
23.1 -- Consent of Crowe & Dunlevy (included in Exhibit 5.1).
23.2 -- Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2).
23.3*** -- Consent of Ernst & Young LLP.
23.4** -- Consent of Ryder Scott Company.
23.5 -- Consents of other experts, if required.*
24.1** -- Powers of Attorney.
25.1 -- Form T-1 Statement of Eligibility under Trust Indenture Act of 1939
relating to Senior Indenture.*
25.2 -- Form T-1 Statement of Eligibility under Trust Indenture Act of 1939
relating to Subordinated Indenture.*
25.3** -- Form T-1 Statement of Eligibility under Trust Indenture Act of 1939 of
Wilmington Trust Company as Trustee under Junior Subordinated Indenture.
25.4** -- Form T-1 Statement of Eligibility under Trust Indenture Act of 1939 of
Wilmington Trust Company, as Property Trustee, relating to Louis Dreyfus
Natural Gas Trust I.
25.5** -- Form T-1 Statement of Eligibility under Trust Indenture Act of 1939 of
Wilmington Trust Company, as Property Trustee, relating to Louis Dreyfus
Natural Gas Trust II.
25.6** -- Form T-1 Statement of Eligibility under Trust Indenture Act of 1939 of
Wilmington Trust Company, as Guarantee Trustee, relating to Louis Dreyfus
Natural Gas Trust I.
25.7** -- Form T-1 Statement of Eligibility under Trust Indenture Act of 1939 of
Wilmington Trust Company, as Guarantee Trustee, relating to Louis Dreyfus
Natural Gas Trust II.
- ------------------------
* To be filed as an exhibit to Form 8-K in reference to the specific offering
of securities, if any, to which it relates.
** Previously filed.
*** Filed herewith.
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ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
this Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) The undersigned Registrant hereby undertakes if securities are to be
offered pursuant to competitive bidding (1) to use its best efforts to
distribute prior to the opening of bids, to prospective bidders, underwriters
and dealers, a reasonable number of copies of a prospectus which at that time
meets the requirements of section 10(a) of the Securities Act, and relating to
the securities offered at competitive bidding, as contained in this Registration
Statement, together with any supplements thereto, and (2) to file an amendment
to this Registration Statement reflecting the results of bidding, terms of the
reoffering and related matters to the extent required by the applicable form,
not later than the first use, authorized by the issuer after the opening of
bids, of a prospectus relating to the securities offered at competitive bidding,
unless no further public offering of such securities by the issuer and no
reoffering of such securities by the purchasers is proposed to be made.
(d) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions referenced to in Item 15 of this
Registration Statement, or otherwise, the Registrant has been advised that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that claim for indemnification against such liabilities
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(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling persons of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
(e) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, the information omitted from
the form of prospectus filed as part of this Registration Statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the Registrants
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this Registration Statement as of the time it was declared
effective.
(f) The undersigned Registrant hereby undertakes to file applications for
the purpose of determining the eligibility of the trustees under the indentures
relating to senior indebtedness, subordinated indebtedness and junior
subordinated indebtedness to act under subsection (a) of Section 310 of the
Trust Indenture Act in accordance with the rules and regulations prescribed by
the Commission under Section 305(b)(2) of the Trust Indenture Act.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Oklahoma City, State of Oklahoma, on October 7, 1999.
LOUIS DREYFUS NATURAL GAS CORP.
By: /s/ JEFFREY A. BONNEY
-----------------------------------------
Jeffrey A. Bonney,
EXECUTIVE VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
President, Chief Executive
/s/ MARK E. MONROE* Officer and Director
- ------------------------------ (principal executive October 7, 1999
Mark E. Monroe officer)
/s/ RICHARD E. BROSS*
- ------------------------------ Executive Vice President October 7, 1999
Richard E. Bross and Director
Executive Vice President
/s/ JEFFREY A. BONNEY and Chief Financial
- ------------------------------ Officer (principal October 7, 1999
Jeffrey A. Bonney financial and accounting
officer)
/s/ SIMON B. RICH, JR.*
- ------------------------------ Chairman of the Board of October 7, 1999
Simon B. Rich, Jr. Directors
/s/ MARK ANDREWS*
- ------------------------------ Vice Chairman of the Board October 7, 1999
Mark Andrews of Directors
/s/ E. WILLIAM BARNETT*
- ------------------------------ Director October 7, 1999
E. William Barnett
/s/ DANIEL R. FINN, JR.*
- ------------------------------ Director October 7, 1999
Daniel R. Finn, Jr.
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SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
/s/ PETER G. GERRY*
- ------------------------------ Director October 7, 1999
Peter G. Gerry
/s/ GERARD LOUIS-DREYFUS*
- ------------------------------ Director October 7, 1999
Gerard Louis-Dreyfus
/s/ JOHN H. MOORE*
- ------------------------------ Director October 7, 1999
John H. Moore
/s/ JAMES R. PAUL*
- ------------------------------ Director October 7, 1999
James R. Paul
/s/ ERNEST F. STEINER*
- ------------------------------ Director October 7, 1999
Ernest F. Steiner
*By: /s/ JEFFREY A. BONNEY
-------------------------
Jeffrey A. Bonney
ATTORNEY-IN-FACT
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of Louis
Dreyfus Natural Gas Trust I and Louis Dreyfus Natural Gas Trust II certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and that it has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Oklahoma City, Oklahoma, on October 7, 1999.
LOUIS DREYFUS NATURAL GAS TRUST I
By: LOUIS DREYFUS NATURAL GAS CORP.,
as Sponsor
By: /s/ JEFFREY A. BONNEY
-----------------------------------------
Jeffrey A. Bonney,
EXECUTIVE VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER
LOUIS DREYFUS NATURAL GAS TRUST II
By: LOUIS DREYFUS NATURAL GAS CORP.,
as Sponsor
By: /s/ JEFFREY A. BONNEY
-----------------------------------------
Jeffrey A. Bonney,
EXECUTIVE VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER
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