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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10 - K
/x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended May 31,1997 Commission File No. 0-4016
WORTHINGTON INDUSTRIES, INC.
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(Exact name of Registrant as specified in its Charter)
DELAWARE 31-1189815
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(State of Incorporation) (IRS Employer Identification No.)
1205 Dearborn Drive, Columbus, Ohio 43085
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(Address of principal executive offices) (Zip Code)
(614) 438-3210
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(Registrant's telephone number, including area code)
Securities Registered Pursuant To Section 12(b) of the Act: None
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Securities Registered Pursuant To Section 12(g) of the Act:
Title of each class:
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Common Stock, $.01 par value (96,749,759 shares outstanding at August 8, 1997)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
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Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates
of the Registrant at August 8, 1997 was approximately $1,500,000,000 (computed
by reference to the closing price for such shares on such date).
Portions of the Registrant's Annual Report to Shareholders for the
fiscal year ended May 31, 1997 are incorporated by reference into Part I and
Part II. Portions of the definitive proxy statement furnished to shareholders of
the Registrant in connection with the annual meeting of shareholders to be held
on September 18, 1997 are incorporated by reference into Part III.
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PART I
Item 1. - Business.
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Worthington Industries, Inc. was initially incorporated in Ohio in
1955. It reincorporated in Delaware in 1986 through a statutory merger.
Worthington Industries, Inc. and its subsidiaries are herein referred to as the
"Company." The Company's operations are grouped into three segments: processed
steel products, custom products and cast products. The Company's sales for its
fiscal year ended May 31, 1997 were $1.9 billion.
The Company is the largest independent flat rolled steel processor in
the United States. The Company's steel processing operations do not make steel,
but rather, they purchase it from steel producers and then process it to exact
specifications for approximately 1,700 industrial customers primarily in the
automotive, automotive supply, appliance, electrical, communication,
construction, office furniture, office equipment, agricultural, machinery,
aerospace and leisure time industries. The Company believes it offers the widest
array of steel processing services in the industry. The Company currently
operates eleven steel processing facilities (with its twelfth under
construction) and is a partner in three steel processing joint ventures, with a
concentration in the largest steel consuming region of the United States.
For the year ended May 31, 1997, net sales of the Company's processed
steel products segment were approximately $1.4 billion, representing
approximately 74.1% of the Company's total fiscal year 1997 sales. In addition
to steel processing, this segment also includes (i) the Company's pressure
cylinder business which management believes to be the largest producer of
portable low pressure liquefied petroleum gas cylinders and refrigerant gas
cylinders in North America, (ii) the Company's metal framing products business,
Dietrich Industries, which is the nation's largest producer and supplier of
metal framing products for the commercial and residential construction markets,
and (iii) the recently acquired automotive body panel business of The
Gerstenslager Company ("Gerstenslager").
The Company acquired Gerstenslager on February 21, 1997 in a tax-free,
stock-for-stock exchange valued at approximately $113 million and accounted for
as a pooling of interests. Gerstenslager is a major independent producer of
aftermarket automotive body panels in the United States. Gerstenslager's sales
in fiscal 1997 were approximately $123 million. Gerstenslager's customers
include domestic automobile and truck manufacturers and foreign automotive
transplants. Based in Wooster, Ohio, Gerstenslager employs over 1,000 people and
occupies over 800,000 square feet of manufacturing, warehouse and office space.
Under pooling of interests accounting, Gerstenslager has been included in the
processed steel products segment as if it were always a part of the Company.
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The principal stockholder of Gerstenslager was JDEL, Inc., an
investment vehicle of John H. McConnell, the Company's Chairman Emeritus and
Founder, John P. McConnell, the Company's Chairman and Chief Executive Officer,
and their families. In connection with the transaction, the Company received a
fairness opinion from an independent investment banker and approval of the
transaction by a Special Committee of the Company's Board of Directors comprised
of independent directors.
The Company's custom products segment includes Worthington Custom
Plastics, Inc., one of the ten largest plastic injection molding companies in
the United States, which sells primarily to the automotive, lawn and garden,
recreational, appliance, furniture, business equipment, audio equipment, airline
and medical industries, and Worthington Precision Metals, Inc., which supplies
components primarily for automotive transmission, power steering and brake
applications.
The Company's cast products segment consists primarily of Buckeye Steel
Castings Company, one of the two largest suppliers of large railcar castings in
the United States and the leading North American designer and producer of
undercarriages for mass transit cars.
For information regarding the net sales and revenues, earnings before
income taxes, and identifiable assets attributable to each segment for each of
the last three fiscal years, reference is made to such information appearing on
page I-14 of the Company's 1997 Annual Report to Shareholders, which information
is incorporated herein by reference.
See Note J of the Company's Notes to Consolidated Financial Statements,
which are incorporated by reference into Item 8 hereof, for information
concerning the Company's investments in unconsolidated affiliates.
Processed Steel Products.
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The Company's processed steel products segment includes its steel
processing businesses, its pressure cylinder business and commencing with its
acquisition in February 1996, the metal framing business. It also includes the
Gerstenslager automotive body panel business. Since Gerstenslager was acquired
in a pooling of interests transaction, its results are included as if it were
always part of the Company. For the fiscal year ended May 31, 1997, sales of the
processed steel products segment were $1.418 billion, approximately 74.1% of the
Company's total sales.
The Company's steel processing operations are conducted through its
Worthington Steel Company operations ("Worthington Steel"). Worthington Steel
occupies a niche in the steel industry by focusing on more specialized products
requiring more exact specifications, which typically cannot be supplied as
efficiently
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by steel mills, metal service centers or steel end users. Worthington Steel is
the largest independent flat rolled steel processor in the United States and
operates eleven processing facilities, with a concentration in the Michigan,
Ohio and Indiana market, the largest flat rolled steel consuming market in the
United States. The Company's newest steel processing facility, located in Delta,
Ohio, started up its slitting and pickling operations late in calendar 1996 and
its hot dipped galvanizing line in April 1997. The Company's twelfth steel
processing facility, located in Decatur, Alabama, is scheduled for start-up in
calendar 1998.
Worthington Steel buys coils of wide, open tolerance steel from major
integrated steel mills and mini-mills and processes it to the precise type,
thickness, length, width, shape, temper and surface quality specified by
approximately 1,700 industrial customers, principally in the automotive,
automotive supply, appliance, electrical, communications, construction, office
furniture, office equipment, agricultural, machinery and leisure time
industries. The Company purchases and supplies steel based on the specific
orders of customers and does not typically process steel for inventory.
Worthington Steel's computer-aided processing capabilities include among others:
pickling, a chemical process using an acidic solution to remove surface oxide
which develops on hot rolled steel; slitting, which cuts steel to specific
widths; cut-to-length, which flattens the steel and cuts it to exact lengths;
roller leveling, a method of applying pressure to achieve precise flatness
tolerances for steel which is cut into exact lengths; cold reduction, which
achieves close tolerances of thickness and temper by rolling; edge rolling,
which conditions the edges of the steel by imparting round, smooth or knurled
edges; blanking, through which steel is cut into specific shapes; painting; hot
dipped galvanizing; nickel plating; and annealing, a thermal process that
changes the hardness and certain metallurgical characteristics of steel.
Worthington Steel also "toll processes" steel for the steel mills and
large end users. Toll processing is similar to Worthington's normal steel
processing, except the mill or end user retains the title to the steel and has
the responsibility for selling the product. Toll processing enables the Company
to participate in the market for wide sheet steel and large standard orders,
which is a market generally served by steel mills, rather than by intermediate
steel processors.
Steel processing is highly competitive. The Company competes with many
other intermediate processors. The Company knows of no other intermediate
processor which offers the same type and extent of technical service support
provided by the Company relating to material testing and application of material
suited to the particular needs of customers (see "Technical Services"). The
Company is unable to gauge, however, the extent to which its technical service
capability has improved its competitive position.
Worthington Cylinder Corporation ("Worthington Cylinders") is the
nation's largest producer of portable low pressure L.P. gas and refrigerant
cylinders.
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Worthington Cylinders' primary products are steel cylinders with refrigerant gas
capacities of 15 to 1,000 lbs. and steel and aluminum cylinders with L.P. gas
capacities of 4-1/4 to 420 lbs. These cylinders are designed and produced in
accordance with safety requirements prescribed by the U.S. Department of
Transportation which specify materials, design limitations, and marking,
inspection and testing procedures. The cylinders are produced by precision
stamping, deep drawing and welding of component parts to customer
specifications. They are then tested, painted and packaged as required.
The Company's refrigerant cylinders are used primarily by major
refrigerant gas producers to contain refrigerant gases for use in charging
residential, commercial, automotive and other air conditioning and refrigeration
systems. Reusable steel and aluminum L.P. gas cylinders are sold to
manufacturers of barbecue grills, propane and gas grill distributors, mass
merchandisers, and manufacturers and users of material handling, heating,
cooking and camping equipment. The Company manufactures other low pressure
cylinder products, including recapture and recycling tanks for refrigerant
gases, helium tanks, and cylinders to hold other gases. The Company also
produces high pressure acetylene, industrial, medical, halon and electronic gas
cylinders. While a large percentage of sales are made to major accounts,
Worthington Cylinders has over 2,000 customers. It operates seven manufacturing
facilities located in Ohio, Oklahoma, Alabama and Ontario, and a joint venture
facility near Sao Paulo, Brazil.
The Company has two principal competitors in its major low pressure
cylinder markets, of which management believes the Company has the largest
share. The Company also has two principal competitors in its high pressure
cylinder markets, both of which have a larger share than the Company. However,
the Company otherwise has no reliable information with respect to the size of
any of its various product markets or its relative position therein.
The Company's metal framing business is carried on by Dietrich
Industries, which was acquired on February 5, 1996. Dietrich is the largest
supplier of metal framing products for the commercial and residential
construction markets in the United States. The Company believes that Dietrich is
the only national supplier of metal framing products and supplies approximately
35% of the metal framing products sold in the United States. It has five large
regional competitors and numerous small, more localized competitors. Dietrich
operates eighteen facilities in thirteen states.
On February 21, 1997 the Company acquired The Gerstenslager Company, a
leading independent supplier of Class A exterior body panels to the North
American automotive original equipment and service part markets. The Company
believes Gerstenslager to be the largest independent supplier of exposed sheet
metal products for the North American automotive aftermarket. Gerstenslager is
unique in its ability to handle the very large number of low volume parts
managing over
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3,000 die sets for component parts on past and current automobile and truck
production models. The Company's largest customers are the domestic automobile
manufacturers. It also serves transplant automobile manufacturers, heavy duty
truck manufacturers, and suppliers to the automotive industry.
Gerstenslager competes with captive stamping plants owned by the
automotive companies and independent tier one suppliers of current model
components, however these stampers are generally unwilling to keep tooling for
past model service business which has a low volume nature. The Company has a
number of smaller competitors in this market, but believes that Gerstenslager
has the largest share of the automotive aftermarket for exterior body panels.
The largest customer of the processed steel products segment is General
Motors Corporation, purchasing through decentralized divisions and subsidiaries
and in different geographical areas. (See "Marketing and Competition"). The loss
of General Motors as a customer could have an adverse effect on the segment, but
the Company has no reason to believe that the loss of this customer is likely.
The Company purchases steel in large quantities, at regular intervals
from major primary producers for its steel processing, pressure cylinder, metal
framing and automotive body panel operations. During the fiscal year ended May
31, 1997 the Company's major suppliers were Rouge Steel Company (in which the
Company holds a minority equity position), AK Steel Corporation, Bethlehem Steel
Corporation, LTV Steel Corporation, USX Corporation, WCI Steel, Inc. and Weirton
Steel Corporation. During the fiscal year ended May 31, 1997, the Company's
major suppliers of aluminum for pressure cylinders were Alumax Aluminum Sales
Corporation and Specialty Blanks Incorporated. Management believes that its
supplier relationships are good.
Custom Products.
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The Company's custom products segment includes its custom plastics
business and its precision metal business. Sales by the custom products segment
totaled $380 million for the year ended May 31, 1997, representing approximately
19.9% of the Company's net sales. The Company's custom plastics business
represents the major portion of these sales.
The Company's custom plastics business is conducted through Worthington
Custom Plastics, Inc., one of the ten largest producers of injection molded
plastic products in the United States. Historically, sales to the automotive
market had dominated the customs plastic business. In recent years the Company
has increased sales to manufacturers of appliances, lawn and garden equipment,
audio equipment, business equipment, furniture, recreational products, and other
items.
On December 3, 1996, the Company acquired substantially all of the
assets of Plastics Manufacturing, Inc. ("PMI") of Harrisburg, North Carolina,
one of the
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largest manufacturers of plastic injection molded and thermoformed parts in the
southeastern United States. With annualized revenues of approximately $80
million, PMI primarily serves the business equipment, commercial airline and
medical industries. The Company believes that Worthington Custom Plastics is one
of the two largest suppliers of injection molded plastic parts for
non-automotive uses.
Principal custom products are a variety of custom made injection molded
plastic components (both functional and decorative) which, depending on the
customers' needs, can also be painted, assembled, silk screened, vacuum
metalized, hot stamped, roll foiled, vinyl wrapped, foamed in-place and/or
appliqued by the Company. Worthington Custom Plastics operates nine plants
located in Ohio, Kentucky, North Carolina and South Carolina.
The Company's precision metals business is conducted through
Worthington Precision Metals, Inc. which supplies metal components requiring
extremely precise tolerances for use primarily in the automotive industry for
transmission, power steering and brake applications. This business operates two
facilities located in Ohio and Tennessee.
The custom products segment relies heavily on sales to General Motors
Corporation, The Ford Motor Company and Chrysler Corporation. The loss of any of
these customers could have an adverse effect on the segment but the Company has
no reason to believe that the loss of any of these customers is likely.
Plastic resins and bar steel, the major raw materials required by this
segment, are available from many sources.
The Company has numerous competitors in the sale of its custom
products. This business competes in its markets by seeking to provide
well-engineered, quality products within required delivery terms to meet the
specific needs of its plastic parts and precision metal component customers.
Cast Products.
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The Company's cast products segment consists primarily of Buckeye Steel
Castings Company ("Buckeye Steel") which operates the largest single site steel
foundry in the United States. Buckeye Steel manufactures a diverse line of cast
steel products ranging in size from 100 lbs. to 30 tons. These products are
offered to the railroad, mass transit, construction and off highway equipment
markets. The Company believes Buckeye Steel is one of the two largest suppliers
of large railcar castings in the United States and is the leading North American
designer and producer of undercarriages for mass transit cars. The cast products
segment had sales of $114 million for the year ended May 31, 1997, representing
approximately 6.0% of total Company sales.
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In general, there are a number of companies involved in the sale of
steel castings; however, there are three major competitors in the sale of
certain railcar castings. The Company's cast products are generally sold under
trademark which is a stylized "Circle B", and the Company utilizes various other
owned and licensed trademarks and patents in connection with its cast products.
Scrap steel, the major raw material required by the cast products
segment, is purchased from several sources. Supplies of scrap steel have been
adequate, although pricing in the market tends to be volatile. Other raw
materials used by this segment are obtained from a number of major suppliers.
Joint Ventures
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The Company is a member in one consolidated and six unconsolidated
joint ventures.
- Spartan Steel Coating, L.L.C., a 52% owned consolidated joint
venture with Rouge Steel, is constructing a cold rolled hot
dipped galvanizing facility near Monroe, Michigan. This
facility is expected to begin operations in mid-1998.
- Worthington/Armstrong Venture ("WAVE"), a 50% owned joint
venture with Armstrong World Industries, is one of the three
leading United States manufacturers of suspended ceiling
systems for concealed and lay-in panel ceilings. WAVE operates
facilities in Pennsylvania, Maryland, Nevada, Spain, China,
and France and expects to open facilities in England and
Michigan.
- Worthington Specialty Processing, a 50% owned joint venture
with USX Corporation, operates a plant in Jackson, Michigan
which primarily toll processes for USX Corporation.
- Acerex S.A. de C.V., a 50% owned joint venture with Hylsa S.A.
de C.V., is a steel processing company located in Monterrey,
Mexico.
- TWB Company, a 33.3% owned joint venture with Thyssen Steel,
Rouge Steel, LTV Steel and Bethlehem Steel, is located in
Monroe, Michigan. It produces laser welded blanks for use in
the auto industry for products such as inner door frames.
- Worthington S.A., a 52% owned joint venture with three
Brazilian propane producers, operates a cylinder manufacturing
facility near Sao Paulo, Brazil.
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- London Industries, Inc., a 60% owned London, Ohio joint
venture with Sumitomo and Nissen Chemitech of Japan, produces
injection molded plastics parts, concentrating on sales to
foreign transplant automakers.
See Note J of the Company's Notes to Consolidated Financial Statements
for additional information on these joint ventures.
Investment In Rouge Steel
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The Company also owns a minority interest (27%) in Rouge Steel Company,
an integrated steel mill located in Dearborn, Michigan. This relationship, along
with a long term steel supply agreement, have assured the Company a steady
supply of high quality steel at competitive prices in all market conditions.
Since Worthington acquired its equity position in 1990, Rouge Steel has been the
Company's largest steel supplier.
In the first quarter of fiscal 1997, the Company converted certain of
its Class B common stock of Rouge Steel into Class A common stock of Rouge
Steel, which reduced its voting percentage in Rouge Steel below 20%, and it
resigned from its two seats on the Rouge Steel Board of Directors. As a result,
the Company's investment in Rouge no longer qualified for the equity method of
accounting and was changed to the cost method for the 1997 fiscal year. Under
the equity method, Rouge Steel had contributed $21.7 million and $32.1 million
to the Company's pre-tax earnings during fiscal 1996 and 1995, respectively.
Under the cost method of accounting, only dividends received by Worthington from
its Rouge Common Stock are credited to pre-tax earnings.
In March 1997, the Company issued 5,999,600 DECS SM (Debt Exchangeable
for Common Stock SM). Under the DECS the Company issued $93 million principal
amount of 7-1/4% exchangeable notes due March 1, 2000. At maturity of the Notes,
the principal amount of each DECS will be mandatorily exchanged by Worthington
into shares of Rouge Class A Common Stock (or at the Company's option cash
equivalent for all or part thereof) at a defined exchange rate. The Company's
current Rouge stockholdings are sufficient to settle the DECS liability.
Technical Services.
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The Company employs a staff of engineers and other technical personnel
and maintains fully-equipped, modern laboratories to support its operations. The
facilities enable the Company to verify, analyze and document the physical,
chemical, metallurgical and mechanical properties of its raw materials and
products. Technical service personnel also work in conjunction with the sales
force to determine the types of flat rolled steel and steel castings required
for the particular needs of the Company's customers. In order to provide such
service, the Company maintains a continuing program of developmental engineering
with respect to the
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characteristics and performance of its products under varying conditions.
Laboratory facilities are also used to perform the quality control and extensive
testing of all low pressure cylinders required by the regulations of the U. S.
Department of Transportation and associated agencies, as well as varying
customer requirements. The Company also maintains a separate testing facility
for its steel castings operation.
Marketing and Competition.
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The Company's products and services are sold primarily by Company sales
personnel.
As a percentage of the Company's consolidated sales and revenues, sales
of steel processing services represented 42% for fiscal 1997, 48% for fiscal
1996, and 54% for fiscal 1995; sales of metal framing products represented 15.6%
for fiscal 1997 and less than 10% in fiscal 1996 and 1995 since it was acquired
in February 1996; sales of pressure cylinders represented 10% for fiscal 1997,
11% for fiscal 1996, and 12% for 1995; sales of custom plastics represented 17%
for fiscal 1997, 17% in 1996, and 16% in 1995.
During fiscal year ended May 31, 1997, General Motors Corporation,
purchasing through decentralized divisions and subsidiaries in different
geographical areas, accounted for approximately 14.0% of the Company's
consolidated sales and revenues.
The principal methods of competition encountered by the Company are
quality of product, ability to meet delivery requirements of customers, and
price. Geographic proximity to customers has a significant effect upon relative
ability to meet customer delivery schedules and impacts the freight charge
portion of overall product price. See also the information set forth above as to
competition in the various segments.
Environmental Regulation.
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The Company's manufacturing facilities, generally in common with those
of similar industries making similar products, are subject to many federal,
state and local requirements relating to the protection of the environment. The
Company continually examines ways to reduce emissions and waste and to effect
cost savings related to environmental compliance. Management does not anticipate
that capital expenditures for environmental control facilities required in order
to meet environmental requirements will be material when compared with the
Company's overall capital expenditures.
Employees.
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The Company employs approximately 12,000 people.
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Subsequent Event
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On August 14, 1997, the Company experienced a fire at its steel
processing facility in Monroe, Ohio. The fire significantly damaged the pickling
area of the facility and caused less extensive damage to the remainder of the
plant. The Company has shifted as much business as possible to its other
locations, with the remainder being sent to third party processors. Although the
Company has not yet been able to fully evaluate the damages and the time for
repairs or replacement of the facilities and its equipment, the Company
anticipates that operations will return in stages, with blanking to return
first, slitting second, and pickling over a longer period.
The Company carries both property damage and business interruption
insurance and as a result, the Company does not expect the fire to have a
material adverse impact on the Company's financial results.
Item 2. - Properties.
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The Company's corporate offices are located in Columbus, Ohio. Its
principal properties consist of 52 manufacturing facilities, excluding those of
unconsolidated affiliates. These facilities are well maintained and in good
operating condition, excluding the Monroe, Ohio steel processing facility which
was recently damaged by a fire - see Item 1 under "Subsequent Events." These
facilities contain in excess of 9,000,000 sq. ft. in the aggregate and are
adequate to meet the Company's present needs.
The locations of these facilities are set forth on page I-28 of the
Company's Annual Report to Shareholders for the year ended May 31, 1997, which
information is incorporated herein by reference.
See Item 1 under the heading "Joint Ventures" for the location of the
Company's unconsolidated affiliates.
Item 3. - Legal Proceedings.
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Not Applicable.
Item 4. - Submission of Matters to a Vote of Security Holders.
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Not Applicable.
Executive Officers of the Registrant.
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The following table lists the names, positions held, and ages of all
the executive officers of the Company:
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<TABLE>
<CAPTION>
PRESENT
OFFICE
NAME AGE POSITIONS WITH THE COMPANY HELD SINCE
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<S> <C> <C> <C>
John H. McConnell 74 Chairman Emeritus, Founder 1996
John P. McConnell 43 Vice Chairman, Chief Executive
Officer 1996
Donald G. Barger, Jr. 54 Vice President, Chief Financial
Officer 1993
Robert J. Borel 54 Vice President-Engineering 1985
William S. Dietrich 59 President - Dietrich Industries
Inc., a subsidiary of the Company 1997
Edward A. Ferkany 60 Vice President-Processed Steel 1985
Thomas L. Hockman 53 Vice President-Administration 1997
Pete A. Klisares 61 Assistant to the Chairman 1993
Donal H. Malenick 58 President, Chief Operating Officer 1976
Charles D. Minor 70 Secretary 1955
Ralph V. Roberts 50 Vice President-Corporate Development 1997
Mark H. Stier 50 Vice President-Human Resources 1997
</TABLE>
The principal employment of Donal H. Malenick, Robert J. Borel and
Edward A. Ferkany for more than the last five years has been in their present
capacity with the Company. William S. Dietrich has been President of Dietrich
Industries for more than the last five years.
John P. McConnell's principal occupation for more than five years prior
to July 1990 had been in various capacities with the Company. In July 1990, he
resigned his employment with the Company to become President of JMAC, Inc., a
private holding company. John P. McConnell was elected Vice Chairman of the
Company in June 1992, Chief Executive Officer as of June 1, 1993, and Chairman
of the Board in September 1996.
John H. McConnell was Chairman and Chief Executive Officer of the
Company from its founding in 1955 until he retired from the position of Chief
Executive Officer in 1993 and as Chairman in 1996.
Donald G. Barger, Jr. was Vice President-Corporate Controller for B. F.
Goodrich Company for more than five years prior to September 1993, when he
became Vice President, Chief Financial Officer of the Company.
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Thomas L. Hockman was Assistant Treasurer and Manager of Compensation
and Benefits for the Company for more than five years prior to becoming Vice
President-Personnel in January 1993. He became Vice President-Administration in
1997.
Pete A. Klisares was Manufacturing Vice President and General Manager
for AT&T for more than five years prior to May 1991 and Executive Director of
JMAC, Inc. from May 1991 through December 1991. He became Assistant to the
Chairman of the Company in December 1991. He was named Executive Vice President
effective August 1993 and maintained that position until August 1997 when he
again assumed the position of Assistant to the Chairman.
Charles D. Minor was a partner in the law firm of Vorys, Sater, Seymour
and Pease, counsel to the Company, for more than five years prior to January
1993. In January 1993 he became counsel to that firm.
Ralph V. Roberts served as President of Worthington Armstrong Venture,
a joint venture between the Company and Armstrong World Industries, Inc. from
its formation in June 1992 until he became Vice President Corporate Development
in June 1997. Prior to that time, he served in various positions with the
Company including as Vice President-General Manager of two of the Company's
steel processing facilities.
Mark H. Stier was Vice President - General Manager of the Company's
subsidiary, The Worthington Steel Company, Porter, Indiana, for more than ten
years prior to August 1997, when he became Vice President-Corporate Human
Resources of the Company. Prior to that time he had served in various capacities
with the Company.
Executive officers serve at the pleasure of the directors. John H.
McConnell is the father of John P. McConnell. There are no other family
relationships among the executive officers of the Company. No arrangements or
understandings exist pursuant to which any person has been, or is to be,
selected as an officer.
PART II
Item 5. - Market for Registrant's Common Equity and Related Stockholder Matters.
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The information called for by this Item 5 is incorporated by reference
herein from the information set forth under the caption "Stock Trading, Price
and Dividend Information" on page I-4 of the Company's 1997 Annual Report to
Shareholders.
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Item 6. - Selected Financial Data.
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The information called for by this Item 6 is incorporated by reference
herein from the information on page I-5 under the caption "Five Year Selected
Financial Data" under the headings "Financial Results" and "Financial Position."
Item 7. - Management's Discussion and Analysis of Financial Condition and
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Results of Operations.
- ----------------------
The information called for by this Item 7 is incorporated by reference
herein from the information set forth under the caption "Management's Discussion
and Analysis" on pages I-6 through I-9 of the Company's 1997 Annual Report to
Shareholders.
Item 7A. - Quantitative and Qualitative Disclosures about Market Risk.
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Not applicable.
Item 8. - Financial Statements and Supplementary Data.
- ------------------------------------------------------
The following consolidated financial statements of Worthington
Industries, Inc. and Subsidiaries and Report of Independent Auditors, set forth
on pages I-10 through I-27 of the Company's 1997 Annual Report to Shareholders
are incorporated herein by reference.
Consolidated Balance Sheets--May 31, 1997 and 1996
Consolidated Statements of Earnings--Years ended May 31, 1997, 1996 and
1995.
Consolidated Statements of Shareholders' Equity--Years ended May 31,
1997, 1996 and 1995.
Consolidated Statements of Cash Flows--Years ended May 31, 1997, 1996
and 1995.
Notes to Consolidated Financial Statements
Report of Independent Auditors
Item 9. - Changes in and Disagreements with Accountants on Accounting and
- -------------------------------------------------------------------------
Financial Disclosure.
- ---------------------
Not applicable.
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<PAGE> 15
PART III
Item 10. - Directors and Executive Officers of the Registrant.
- --------------------------------------------------------------
In accordance with General Instruction G(3), the information required
by this Item 10 is incorporated by reference herein from the material under the
heading "Election of Directors" contained on pages 2 through 5 of the Company's
Proxy Statement for its 1997 Annual Meeting of Shareholders to be held on
September 18, 1997. The information regarding Executive Officers required by
Item 401 of Regulation S-K is included in Part I hereof under an appropriate
caption. Disclosure required under Item 405 of Regulation S-K is included on
page 5 of the Proxy Statement.
Item 11. - Executive Compensation.
- ----------------------------------
In accordance with General Instruction G(3), the information required
by this Item 11 is incorporated by reference herein from the information
contained in the Company's Proxy Statement for its 1997 Annual Meeting of
Shareholders under the heading "Election of Directors - Compensation of
Directors" on pages 4 and 5, and under the heading "Executive Compensation" -
"Summary of Cash and Certain Other Compensation" on page 12, "Option Grants" on
page 13, and "Option Exercises and Holdings" on pages 13 and 14.
Item 12. - Security Ownership of Certain Beneficial Owners and Management.
- --------------------------------------------------------------------------
In accordance with General Instruction G(3), the information required
by this Item 12 is incorporated by reference herein from the material under the
headings "Voting Securities and Principal Holders Thereof - Security Ownership
of Certain Beneficial Owners" contained on page 2 and "Election of Directors"
contained on pages 3 and 4 of the Company's Proxy Statement for its 1997 Annual
Meeting of Shareholders.
Item 13. - Certain Relationships and Related Transactions.
- ----------------------------------------------------------
In accordance with General Instruction G(3), the information required
by this Item 13 is incorporated by reference herein from footnote 2 to the table
under the heading "Election of Directors" contained on page 3 and the material
under the heading "Gerstenslager Transaction" on page 13 of the Company's Proxy
Statement for its 1997 Annual Meeting of Shareholders.
PART IV
Item 14. - Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
- ----------------------------------------------------------------------------
(a)(1) and (2) The response to this portion of Item 14 is submitted as a
separate section of this report--See List of Financial
Statements and Financial Statement Schedules on page F-1 of
this report.
15
<PAGE> 16
(3) Listing of Exhibits--See Index to Exhibits beginning on page E-1 of
this report. The index to exhibits specifically identifies each
management contract or compensatory plan required to be filed as an
Exhibit to this Form 10-K.
(b) None.
(c) Exhibits filed with this report are attached hereto.
(d) Financial Statement Schedules--The response to this portion of Item 14
is submitted as a separate section of this report--See List of
Financial Statements and Financial Statement Schedules on Page F-1.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
WORTHINGTON INDUSTRIES, INC.
Date: August 27, 1997 By: /s/Donald G. Barger
--------------------
Donald G. Barger, Jr.
Vice President-Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE DATE TITLE
--------- ---- -----
<S> <C> <C>
* * Director, Chairman and
- ----------------------- Chief Executive Officer
John P. McConnell
* * Director, Chairman Emeritus
- ----------------------- and Founder
John H. McConnell
* * Director, President and
- ----------------------- Chief Operating Officer
Donal H. Malenick
* * Director, Assistant to the
- ----------------------- Chairman
Pete A. Klisares
</TABLE>
16
<PAGE> 17
<TABLE>
<S> <C> <C>
/s/Donald G. Barger * Vice President,
- ----------------------- Chief Financial Officer
Donald G. Barger, Jr.
* * Director, Secretary
- -----------------------
Charles D. Minor
* * Director
- -----------------------
William S. Dietrich
* * Director
- -----------------------
Charles R. Carson
* * Director
- -----------------------
John E. Fisher
* * Director
- -----------------------
John F. Havens
* * Director
- -----------------------
Katherine S. LeVeque
* * Director
- -----------------------
Robert B. McCurry
* * Director
- -----------------------
Gerald B. Mitchell
* * Director
- -----------------------
James Petropoulos
</TABLE>
*By:/s/Donald G. Barger, Jr. Date: 8/27/97
------------------------- -------
Donald G. Barger, Jr.
Attorney-In-Fact
17
<PAGE> 18
ANNUAL REPORT ON FORM 10-K
ITEM 14 (a) (1) AND (2) AND ITEM 14 (d)
WORTHINGTON INDUSTRIES, INC. AND SUBSIDIARIES
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements of Worthington Industries, Inc.,
and Subsidiaries, set forth on pages I-10 through I-27 of the Company's 1997
Annual Report to Shareholders, are incorporated by reference in Item 8:
Consolidated Balance Sheets -- May 31, 1997 and 1996
Consolidated Statements of Earnings -- Years ended May 31, 1997, 1996 and 1995
Consolidated Statements of Shareholders' Equity -- Years ended May 31, 1997,
1996 and 1995
Consolidated Statements of Cash Flows -- Years ended May 31, 1997, 1996 and 1995
Notes to Consolidated Financial Statements
Report of Independent Auditors
The following consolidated financial statement schedules of Worthington
Industries, Inc. and Subsidiaries are included in Item 14 (d):
Schedule II - Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable, and therefore have been omitted.
F-1
<PAGE> 19
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
WORTHINGTON INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
COL. A COL.B COL.C COL.D COL.E
- ---------------------------------------------------------------------------------------------------------------------
Additions
------------------------------------
Balance (1) (2) Balance at
DESCRIPTION at Beginning Charged to Cost Charged to Other Deductions End of
of Period and Expenses Accounts - Describe -Describe Period
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year Ended May 31, 1997:
Deducted from asset accounts:
Allowance for possible
losses on trade accounts
receivable $2,792,000 $947,368 $300,000 (C) $139,368 (A) $3,900,000
========== ======== ======== ========== ==========
Year Ended May 31, 1996:
Deducted from asset accounts:
Allowance for possible
losses on trade accounts
receivable $2,411,000 $355,199 $750,000 (B) $724,199 (A) $2,792,000
========== ======== ========= ========== ==========
Year Ended May 31, 1995:
Deducted from asset accounts:
Allowance for possible
losses on trade accounts
receivable $2,549,000 $881,866 $152 $1,020,018 (A) $2,411,000
========== ======== ========= ========== ==========
</TABLE>
Note A - Uncollectible accounts charged to the allowance.
Note B - Amount from Dietrich acquisition.
Note C - Amount from PMI acquisition.
<PAGE> 20
EXHIBIT INDEX
-------------
3(a) Certificate of Incorporation of Incorporation herein by reference
Worthington Industries, Inc. to Exhibit 3 of the Company's
Quarterly Report on Form 10-Q for
the Quarter ended August 31, 1994
3(b) Bylaws of Worthington Industries, Incorporated herein by reference
Inc. to Exhibit 3(b) of the Company's
Annual Report on Form 10-K for the
fiscal year ended May 31, 1992
4(a) Form of Indenture dated as of May
15, 1996 between the Company and
PNC Bank, Ohio, National Association,
as Trustee, relating to up to
$450,000,000 of debt securities
4(b) Form of 7-1/8% Notes due 2006
4(c) First Supplemental Indenture dated
as of February 27, 1997 between the
Company and PNC Bank as Trustee
4(d) 7-1/4% Exchangeable Note Due March 1,
2000
4(e) Revolving Credit Agreement dated
as of May 30, 1997 between the Company
and The Bank of Nova Scotia, PNC Bank,
Ohio, National Association,
Nationsbank, N.A., Wachovia Bank of
Georgia, N.A., ABN Amro Bank N.V. and
Bank One, N.A.
4(f) Agreement to furnish instruments
defining rights of holders of long-
term debt
<PAGE> 21
10(a) Amended 1980 Stock Option Plan, Incorporated herein by reference
as amended* to Annex B to the Prospectus filed
as part of Post-Effective Amendment
No. 1 to the Company's Registration
Statement on Form S-8 (Registration
No. 2-80094)
10(b) 1990 Stock Option Plan* Incorporated herein by reference to
Exhibit 10(d) of the Company's
Annual Report on Form 10-K for the
fiscal year ended May 31, 1991
10(c) Executive Deferred Compensation Incorporated herein by reference
Plan* to Exhibit 10(e) of the Company's
Annual Report on Form 10-K for the
fiscal year ended May 31, 1984
10(d) Deferred Compensation Plan for Incorporated herein by reference to
Directors* Exhibit 10(f) of the Company's
Annual Report on Form 10-K for the
fiscal year ended May 31, 1984
10(e) 1997 Long-Term Incentive Plan
13 Annual Report to Shareholders
21 Subsidiaries of the Company
23 Consent of Ernst & Young, LLP
24 Powers of Attorney
27 Financial Data Schedule
*Management Compensation Plan
<PAGE> 1
Exhibit 4(a)
WORTHINGTON INDUSTRIES, INC.
and
PNC BANK, OHIO, NATIONAL ASSOCIATION
as Trustee
------------
Indenture
Dated as of May 15, 1996
------------
Debt Securities
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
RECITALS OF THE COMPANY............................................................................... l
ARTICLE I
Definitions
-----------
SECTION 1.01. Certain Terms Defined................................................... 1
SECTION 1.02. Incorporation by Reference of Trust
Indenture Act .......................................................... 18
SECTION 1.03. Rules of Construction................................................... 18
ARTICLE II
Debt Securities
---------------
SECTION 2.01. Forms Generally......................................................... 19
SECTION 2.02. Form of Trustee's Certificate of
Authentication.......................................................... 19
SECTION 2.03. Principal Amount; Issuable in
Series.................................................................. 20
SECTION 2.04. Execution of Debt Securities............................................ 23
SECTION 2.05. Authentication and Delivery of Debt
Securities.............................................................. 24
SECTION 2.06. Denomination of Debt Securities......................................... 26
SECTION 2.07. Registration of Transfer and Exchange................................... 26
SECTION 2.08. Temporary Debt Securities............................................... 27
SECTION 2.09. Mutilated, Destroyed, Lost or Stolen
Debt Securities......................................................... 28
SECTION 2.10. Cancellation of Surrendered Debt
Securities.............................................................. 29
SECTION 2.11. Provisions of the Indenture and Debt
Securities for the Sole Benefit of
the Parties and the Holders............................................. 30
SECTION 2.12. Payment of Interest; Interest Rights
Preserved............................................................... 30
SECTION 2.13. Securities Denominated in Foreign
Currencies.............................................................. 31
SECTION 2.14. Wire Transfers.......................................................... 31
SECTION 2.15. Securities Issuable in the Form of a
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
Global Security......................................................... 31
SECTION 2.16. Medium Term Securities.................................................. 34
SECTION 2.17. Defaulted Interest...................................................... 35
SECTION 2.18. Judgments............................................................... 36
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
ARTICLE III
Redemption of Debt Securities
-----------------------------
<S> <C> <C>
SECTION 3.01. Applicability of Article................................................ 37
SECTION 3.02. Notice of Redemption; Selection of
Debt Securities......................................................... 37
SECTION 3.03. Payment of Debt Securities Called for
Redemption.............................................................. 39
SECTION 3.04. Mandatory and Optional Sinking
Funds................................................................... 40
SECTION 3.05. Redemption of Debt Securities for
Sinking Fund............................................................ 40
ARTICLE IV
Particular Covenants of the Company
-----------------------------------
SECTION 4.01. Payment of Principal of, and Premium,
If Any, and Interest on, Debt
Securities ............................................................ 43
SECTION 4.02. Maintenance of Offices or Agencies
for Registration of Transfer,
Exchange and Payment of Debt
Securities.............................................................. 43
SECTION 4.03. Appointment to Fill a Vacancy in the
Office of Trustee....................................................... 44
SECTION 4.04. Duties of Paying Agents, etc............................................ 44
SECTION 4.05. Statement by Officers as to Default..................................... 45
SECTION 4.06. Further Instruments and Acts............................................ 45
SECTION 4.07. Existence............................................................... 45
SECTION 4.08. Maintenance of Properties............................................... 46
SECTION 4.09. Payment of Taxes and Other Claims ....................................... 46
SECTION 4.10. Limitation on Liens..................................................... 46
SECTION 4.11. Limitation on Sale/Leaseback
Transactions............................................................ 47
SECTION 4.12. Limitation on Indebtedness of
Restricted Subsidiaries................................................. 47
SECTION 4.13. Limitation on Issuance of Preferred
Stock by Restricted Subsidiaries........................................ 48
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
ARTICLE V
Holders' Lists and Reports by the Company and the Trustee
---------------------------------------------------------
<S> <C> <C>
SECTION 5.01. Company to Furnish Trustee
information as to Names and
Addresses of Holders; Preservation
of Information.......................................................... 48
SECTION 5.02. Communications to Holders............................................... 49
SECTION 5.03. Reports by Company...................................................... 49
SECTION 5.04. Reports by Trustee...................................................... 50
SECTION 5.05. Record Dates for Action by Holders...................................... 50
ARTICLE VI
Remedies of the Trustee and Holders in Event of Default
-------------------------------------------------------
SECTION 6.01. Events of Default....................................................... 51
SECTION 6.02. Collection of Indebtedness by
Trustee, etc............................................................ 55
SECTION 6.03. Application of Moneys Collected by
Trustee................................................................. 56
SECTION 6.04. Limitation on Suits by Holders.......................................... 57
SECTION 6.05. Remedies Cumulative; Delay or
Omission in Exercise of Rights Not
a Waiver of Default..................................................... 58
SECTION 6.06. Rights of Holders of Majority in
Principal Amount of Debt Securities
to Direct Trustee and to Waive
Default................................................................. 59
SECTION 6.07. Trustee to Give Notice of Defaults
Known to It, but May Withhold Such
Notice in Certain Circumstances......................................... 60
SECTION 6.08. Requirement of an Undertaking to Pay
Costs in Certain Suits Under the
Indenture or Against the Trustee........................................ 60
ARTICLE VII
Concerning the Trustee
----------------------
SECTION 7.01. Certain Duties and Responsibilities..................................... 60
SECTION 7.02. Certain Rights of Trustee............................................... 62
</TABLE>
iv
<PAGE> 6
<TABLE>
<S> <C> <C>
SECTION 7.03. Trustee Not Liable for Recitals in
Indenture or in Debt Securities......................................... 64
SECTION 7.04. Trustee, Paying Agent or Registrar
May Own Debt Securities ................................................ 64
</TABLE>
v
<PAGE> 7
<TABLE>
<S> <C> <C>
SECTION 7.05. Moneys Received by Trustee to be Held
in Trust................................................................ 64
SECTION 7.06. Compensation and Reimbursement.......................................... 64
SECTION 7.07. Right of Trustee to Rely on an
Officers' Certificate Where No Other
Evidence Specifically Prescribed........................................ 65
SECTION 7.08. Separate Trustee; Replacement of
Trustee................................................................. 65
SECTION 7.09. Successor Trustee by Merger............................................. 67
SECTION 7.10. Eligibility; Disqualification........................................... 67
SECTION 7.11. Preferential Collection of Claims
Against Company......................................................... 68
SECTION 7.12. Compliance with Tax Laws................................................ 68
ARTICLE VIII
Concerning the Holders
----------------------
SECTION 8.01. Evidence of Action by Holders........................................... 68
SECTION 8.02. Proof of Execution of Instruments and
of Holding of Debt Securities........................................... 69
SECTION 8.03. Who May Be Deemed Owner of Debt
Securities.............................................................. 69
SECTION 8.04. Instruments Executed by Holders Bind
Future Holders.......................................................... 69
ARTICLE IX
Supplemental Indentures
-----------------------
SECTION 9.01. Purposes for Which Supplemental
Indenture May Be Entered into
Without Consent of Holders.............................................. 70
SECTION 9.02. Modification of Indenture with
Consent of Holders of Debt
Securities.............................................................. 73
SECTION 9.03. Effect of Supplemental Indentures....................................... 74
SECTION 9.04. Debt Securities May Bear Notation
of Changes by Supplemental
Indentures.............................................................. 74
SECTION 9.05. Payment for Consent..................................................... 75
</TABLE>
vi
<PAGE> 8
<TABLE>
<CAPTION>
ARTICLE X
Consolidation of, Merger, Sale or Conveyance
--------------------------------------------
<S> <C> <C>
SECTION 10.01. Consolidations and Mergers of the
Company................................................................. 75
SECTION 10.02. Rights and Duties of Successor
Corporation............................................................. 75
ARTICLE XI
Satisfaction and Discharge of Indenture;
----------------------------------------
Defeasance; Unclaimed Moneys
----------------------------
SECTION 11.01. Applicability of Article................................................ 76
SECTION 11.02. Satisfaction and Discharge of
Indenture............................................................... 76
SECTION 11.03. Conditions to Defeasance................................................ 78
SECTION 11.04. Application of Trust Money.............................................. 79
SECTION 11.05. Repayment to Company.................................................... 79
SECTION 11.06. Indemnity for U.S. Government
Obligations............................................................. 80
SECTION 11.07. Reinstatement........................................................... 80
ARTICLE XII
Miscellaneous Provisions
------------------------
SECTION 12.01. Successors and Assigns of Company
Bound by Indenture...................................................... 80
SECTION 12.02. Acts of Board, Committee or Officer
of Successor Company Valid.............................................. 80
SECTION 12.03. Required Notices or Demands............................................. 80
SECTION 12.04. Indenture and Debt Securities to Be
Construed in Accordance with the
Laws of the State of New York........................................... 81
SECTION 12.05. Officers' Certificate and Opinion of
Counsel to Be Furnished upon
Application or Demand by the
Company................................................................. 81
SECTION 12.06. Payments Due on Legal Holidays.......................................... 82
SECTION 12.07. Provisions Required by Trust
Indenture Act to Control................................................ 82
</TABLE>
vii
<PAGE> 9
<TABLE>
<S> <C> <C>
SECTION 12.08. Indenture May Be Executed in
Counterparts............................................................ 82
SECTION 12.09. Computation of Interest on Debt
Securities.............................................................. 83
SECTION 12.10. Effect of Headings...................................................... 83
SECTION 12.11. Rules by Trustee, Paying Agent and
Registrar............................................................... 83
SECTION 12.12. No Recourse Against Others.............................................. 83
SECTION 12.13. Severability............................................................ 83
SIGNATURES ........................................................................ 83
</TABLE>
viii
<PAGE> 10
WORTHINGTON INDUSTRIES, INC.
Debt Securities
CROSS REFERENCE SHEET *
This Cross Reference Sheet shows the location in the Indenture of the provisions
inserted pursuant to Sections 310-318(a), inclusive of the Trust Indenture Act
of 1939.
<TABLE>
<CAPTION>
Indenture
TIA Section Section
----------- -------
<S> <C>
310(a)(1) .................................................................. 7.10
(a)(2) .................................................................. 7.10
(a)(3) .................................................................. 7.10
(a)(4) .................................................................. 7.10
(a)(5) .................................................................. 7.10
(b) .................................................................. 7.10
(c) .................................................................. N.A. **
311(a) .................................................................. 7.11
(b) .................................................................. 7.11
(c) .................................................................. N.A.
312(a) .................................................................. 5.01
(b) .................................................................. 5.02
(c) .................................................................. 5.02
313(a) .................................................................. 5.04
(b)(1) .................................................................. 5.04
(b)(2) .................................................................. 5.04
(c) ..................................................................12.03
(d) .................................................................. 5.04
314(a)(1) ..................................................................5.03(a)
(a)(2) ..................................................................5.03(b)
(a)(3) ..................................................................5.03(a) & (b)
& 12.03
(a)(4) ..................................................................4.05
</TABLE>
* The Cross Reference Sheet is not part of the Indenture.
** N.A means "Not Applicable."
<PAGE> 11
<TABLE>
<CAPTION>
Indenture
TIA Section Section
----------- -------
<S> <C> <C>
(b) ..................................................................N.A.
(c)(1) ..................................................................12.05
(c)(2) ..................................................................12.05
(c)(3) ..................................................................N.A.
(d) ..................................................................N.A.
(e) ..................................................................12.05
(f) ..................................................................4.06
315(a) ..................................................................7.01(a)
(b) ..................................................................6.07 & 12.03
(c) ..................................................................7.01
(d) ..................................................................7.01
(e) ..................................................................6.08
316(a)(last sentence) ..................................................................1.01
(a)(1)(A) ..................................................................6.06
(a)(1)(B) ..................................................................6.06
(a)(2) ..................................................................9.01(d)
(b) ..................................................................6.04
(c) ..................................................................5.05
317(a)(1) ..................................................................6.02
(a)(2) ..................................................................6.02
(b) ..................................................................4.04
318(a) ..................................................................12.07
</TABLE>
<PAGE> 12
INDENTURE dated as of May 15, 1996, between WORTHINGTON
INDUSTRIES, INC., a corporation duly organized and existing under the laws of
the State of Delaware (hereinafter sometimes called the "Company"), and PNC
Bank, Ohio, National Association, an association duly incorporated and existing
under the Federal laws of the United States (hereinafter sometimes called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its debentures,
notes, bonds or other evidences of indebtedness to be issued in one or more
series unlimited as to principal amount (herein called the "Debt Securities"),
as in this Indenture provided.
All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH
That in order to declare the terms and conditions upon which
the Debt Securities are authenticated, issued and delivered, and in
consideration of the premises, and of the purchase and acceptance of the Debt
Securities by the holders thereof, the Company and the Trustee covenant and
agree with each other, for the benefit of the respective Holders from time to
time of the Debt Securities or any series thereof, as follows:
ARTICLE I
Definitions
-----------
SECTION 1.01. CERTAIN TERMS DEFINED. The terms defined in this
Section 1.01 (except as herein otherwise
<PAGE> 13
expressly provided or unless the context otherwise requires) for all purposes of
this Indenture and of any Indenture supplemental hereto shall have the
respective meanings specified in this Section 1.01. All other terms used in this
Indenture which are defined in the Trust Indenture Act or which are by reference
therein defined in the Securities Act (except as herein otherwise expressly
provided or unless the context otherwise requires), shall have the meanings
assigned to such terms in the Trust Indenture Act and in the Securities Act as
in force as of the date of original execution of this Indenture.
"AFFILIATE" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"AUTHORIZED NEWSPAPER" means a newspaper in an official
language of the country of publication customarily published at least once a
day, and customarily published for at least five days in each calendar week, and
of general circulation in such city or cities specified pursuant to Section 2.03
with respect to the Debt Securities of any series. Where successive publications
are required to be made in Authorized Newspapers, the successive publications
may be made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any business day in such city.
"ATTRIBUTABLE INDEBTEDNESS" in respect of a Sale/Leaseback
Transaction means, as of the time of determination, (i) if the obligation in
respect of such Sale/Leaseback Transaction is a Capitalized Lease Obligation,
the amount of such obligation determined in accordance with GAAP and included in
the financial statements of the lessee or (ii) if the obligation in respect of
such Sale/Leaseback Transaction is not a Capitalized Lease Obligation, the total
Net Amount of Rent required to be paid by the lessee under such lease during the
remaining term thereof (including any period for which the lease has been
extended), discounted from the respective due dates thereof to such
determination date at the rate per annum borne by the Debt Securities compounded
semi-annually.
2
<PAGE> 14
"BANK INDEBTEDNESS" means any and all amounts payable under or
in respect of the Credit Agreement, as supplemented amended or modified from
time to time, including principal, premium (if any), interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company whether or not a claim for post-filing
interest is allowed in such proceedings), fees, charges, expenses, reimbursement
obligations, guarantees and all other amounts payable thereunder or in respect
thereof.
"BANKS" means the Lenders, as such term is defined in the
Credit Agreement.
"BOARD OF DIRECTORS" means either the Board of Directors of
the Company or any duly authorized committee or subcommittee of such Board,
except as the context may otherwise require.
"BUSINESS DAY" means, when used with respect to any Place of
Payment specified pursuant to Section 2.03, any day that is not a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or trust
companies in such Place of Payment are authorized or obligated by law to close,
except as otherwise specified pursuant to Section 2.03.
"CAPITALIZED LEASE OBLIGATION" means an obligation that is
required to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP; and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty.
"CAPITAL STOCK" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests (including partnership interests) in (however
designated) equity of such Person, including any Preferred Stock, but excluding
any debt securities convertible into such equity.
"COMMODITY PRICE PROTECTION AGREEMENT" means, in respect of
any Person, any forward contract, commodity swap
3
<PAGE> 15
agreement, commodity option agreement or other similar agreement or arrangement
designed to protect such Person against fluctuations in commodity prices.
"COMMON STOCK" means the common shares, $.01 par value per
share, of the Company, which shares are currently traded over-the-counter on the
NASDAQ National Market.
"COMPANY" means Worthington Industries, Inc., a Delaware
corporation, and, subject to the provisions of Article X, shall also include its
successors and assigns.
"COMPANY ORDER" means a written order of the Company, signed
by its Chairman of the Board, Vice Chairman, President or any Vice President and
by its Treasurer, Secretary, any Assistant Treasurer or any Assistant Secretary.
"CONSOLIDATED NET TANGIBLE ASSETS" means, as of any date of
determination, the sum of the amounts that would appear on a consolidated
balance sheet of the Company and its Subsidiaries for the total assets (less
accumulated depletion, depreciation or amortization, allowances for doubtful
receivables, other applicable reserves and other properly deductible items) of
the Company and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP, after giving effect to purchase accounting and after
deducting therefrom, to the extent included in total assets, in each case as
determined on a consolidated basis in accordance with GAAP (without
duplication): (i) the aggregate amount of liabilities of the Company and its
Subsidiaries which may properly be classified as current liabilities (including
taxes accrued as estimated); (ii) current Indebtedness and current maturities of
long-term Indebtedness; (iii) minority interests in the Company's subsidiaries
held by Persons other than the Company or a wholly owned Subsidiary of the
Company; and (iv) unamortized debt discount and expenses and other unamortized
deferred charges, goodwill, patents, trademarks, service marks, trade names,
copyrights, licenses, organization or developmental expenses and other
intangible items.
"CONSOLIDATED NET WORTH" means the total of the amount shown
on the balance sheet of the Company and its consolidated Subsidiaries,
determined on a consolidated basis in accordance with GAAP, as of the end of the
most recent fiscal quarter of the Company ending at least 45 days prior to the
taking of any action
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for the purpose of which the determination is being made, as (i) the par or
stated value of all outstanding Capital Stock of the Company plus (ii) paid-in
capital or capital surplus relating to such Capital Stock plus (iii) any
retained earnings or earned surplus less (A) any accumulated deficit and (B) any
amounts attributable to Disqualified Stock.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" or other similar term
means the office of the Trustee at which the corporate trust business of the
Trustee shall, at any particular time, be principally administered in the United
States of America, except that with respect to the presentation of Debt
Securities for payment or for registration of transfer and exchange, such term
shall also mean the office of the Trustee or the Trustee's agent in the Borough
of Manhattan, the city and state of New York, at which at any particular time
its corporate agency business shall be conducted.
"CREDIT AGREEMENT" means the Credit Facility Agreement dated
as of April 28, 1995, among the Company and certain of its subsidiaries, each as
a Borrower, and the Lenders party thereto, as supplemented, amended or modified
from time to time.
"CURRENCY" means Dollars or Foreign Currency.
"CURRENCY EXCHANGE PROTECTION AGREEMENT" means, in respect of
any Person, any foreign exchange contract, currency swap agreement, currency
option or other similar agreement or arrangement designed to protect such Person
against fluctuations in currency exchange rates.
"DEBT SECURITY" or "DEBT SECURITIES" has the meaning stated in
the first recital of this Indenture and more particularly means any debt
security or debt securities, as the case may be of any series authenticated and
delivered under this Indenture.
"DEFAULT" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"DEPOSITARY" means, unless otherwise specified by the Company
pursuant to either Section 2.03 or 2.15, with respect to registered Debt
Securities of any series issuable or issued in whole or in part in the form of
one or more Global Securities, The Depository Trust Company, New York, New York,
or any
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<PAGE> 17
successor thereto registered as a clearing agency under the Exchange Act or
other applicable statute or regulations.
"DISQUALIFIED STOCK" of a Person means Redeemable Stock of
such Person as to which the maturity, mandatory redemption, conversion or
exchange or redemption at the option of the holder thereof occurs, or may occur,
on or prior to the first anniversary of the Stated Maturity of the Debt
Securities.
"DOLLAR" or "$" means such currency of the United States as at
the time of payment is legal tender for the payment of public and private debts.
"DOLLAR EQUIVALENT" means, with respect to any monetary amount
in a Foreign Currency, at any time for the determination thereof, the amount of
Dollars obtained by converting such Foreign Currency involved in such
computation into Dollars at the spot rate for the purchase of Dollars with the
applicable Foreign Currency as quoted by Bankers Trust Company (unless another
comparable financial institution is designated by the Company) in New York, New
York at approximately 11:00 a.m. (New York time) on the date two business days
prior to such determination.
"EUROPEAN CURRENCY UNITS" has the meaning assigned to it from
time to time by the Council of the European Communities.
"EUROPEAN COMMUNITIES" means the European Economic Community,
the European Coal and Steel Community and the European Atomic Energy Community.
"EVENT OF DEFAULT" has the meaning specified in Section 6.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FLOATING RATE SECURITY" means a Debt Security that provides
for the payment of interest at a variable rate determined periodically by
reference to an interest rate index specified pursuant to Section 2.03.
"FOREIGN CURRENCY" means a currency issued by the government
of any country other than the United States or a composite currency the value of
which is determined by reference to the values of the currencies of any group of
countries.
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"GAAP" means generally accepted accounting principles in the
United States as in effect as of the date on which the Debt Securities of the
applicable series are issued, including those set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
approved by a significant segment of the accounting profession. All ratios and
computations based on GAAP contained in this Indenture shall be computed in
conformity with GAAP consistently applied.
"GLOBAL SECURITY" means with respect to any series of Debt
Securities issued hereunder, a Debt Security which is executed by the Company
and authenticated and delivered by the Trustee to the Depositary or pursuant to
the Depositary's instruction, all in accordance with this Indenture and any
Indentures supplemental hereto, or resolution of the Board of Directors and set
forth in an Officers' Certificate, which shall be registered in the name of the
Depositary or its nominee and which shall represent, and shall be denominated in
an amount equal to the aggregate principal amount of, all the Outstanding Debt
Securities of such series or any portion thereof, in either case having the same
terms, including, without limitation, the same original issue date, date or
dates on which principal is due and interest rate or method of determining
interest.
"GOVERNMENT CONTRACT LIEN" means any Lien required by any
contract, statute, regulation or order in order to permit the Company or any of
its Subsidiaries to perform any contract or subcontract made by it with or at
the request of the United States or any State thereof or any department, agency
or instrumentality of either or to secure partial, progress, advance or other
payments by the Company or any of its Subsidiaries to the United States or any
State thereof or any department agency or instrumentality of either pursuant to
the provisions of any contract, statute, regulation or order.
"GUARANTEE" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness or other
obligation of any other Person and any obligation, direct or indirect,
contingent or otherwise, of such Person (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or other
obligation of
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<PAGE> 19
such other Person (whether arising by virtue of partnership arrangements, or by
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (ii)
entered into for purposes of assuring in any other manner the obligee of such
Indebtedness or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); PROVIDED,
HOWEVER, that the term "Guarantee" shall not include endorsements for collection
or deposit in the ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning.
"HEDGING OBLIGATIONS" of any Person means the obligations of
such Person pursuant to any Interest Rate Protection Agreement, Currency
Exchange Protection Agreement or Commodity Price Protection Agreement or other
similar agreement.
"HOLDER," "HOLDER OF DEBT SECURITIES" or other similar terms
means, with respect to a Registered Security, the Registered Holder.
"INCUR" means issue, assume, Guarantee, incur or otherwise
become liable for; PROVIDED, however, that any Indebtedness or Capital Stock of
a Person existing at the time such Person becomes a Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be incurred
by such Subsidiary at the time it becomes a Subsidiary. The terms "Incurred",
"Incurrence" and "Incurring" shall each have a correlative meaning.
"INDEBTEDNESS" means, with respect to any Person on any date
of determination (without duplication),
(i) the principal of Indebtedness of such Person for borrowed
money;
(ii) the principal of obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments;
(iii) all Capitalized Lease Obligations of such Person;
(iv) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services (except Trade Payables);
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<PAGE> 20
(v) all obligations of such Person in respect of letters of
credit, banker's acceptances or other similar instruments or credit
transactions (including reimbursement obligations with respect
thereto), other than obligations with respect to letters of credit
securing obligations (other than obligations described in (i) through
(iv) above) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn upon or, if
and to the extent drawn upon, such drawing is reimbursed no later than
the third business day following receipt by such Person of a demand for
reimbursement following payment on the letter of credit;
(vi) the amount of all obligations of such Person with respect
to the redemption, repayment or other repurchase of any Disqualified
Stock or, with respect to any Subsidiary of the Company, any Preferred
Stock (but excluding, in each case, any accrued dividends);
(vii) all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed
by such Person; PROVIDED, HOWEVER, that the amount of such Indebtedness
shall be the lesser of (A) the fair market value of such asset at such
date of determination and (B) the amount of such Indebtedness of such
other Persons;
(viii) all Indebtedness of other Persons to the extent
Guaranteed by such Person; and
(ix) to the extent not otherwise included in this definition,
obligations in respect of Hedging Obligations except those secured by
Permitted Liens.
For purposes of this definition, the maximum fixed redemption, repayment or
repurchase price of any Disqualified Stock or Preferred Stock that does not have
a fixed redemption, repayment or repurchase price shall be calculated in
accordance with the terms of such Stock as if such Stock were redeemed, repaid
or repurchased on any date on which Indebtedness shall be required to be
determined pursuant to this Indenture; PROVIDED, HOWEVER, that if such Stock is
not then permitted to be redeemed, repaid or repurchased, the redemption,
repayment or repurchase price shall be the book value of such Stock as reflected
in the most
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<PAGE> 21
recent financial statements of such Person. The amount of Indebtedness of any
Person at any date shall be the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability, upon the
occurrence of the contingency giving rise to the obligation, of any contingent
obligations at such date.
"INDENTURE" means this instrument as originally executed, or,
if amended or supplemented as herein provided, as so amended or supplemented and
shall include the form and terms of particular series of Debt Securities as
contemplated hereunder, whether or not a supplemental Indenture is entered into
with respect thereto.
"INTEREST RATE PROTECTION AGREEMENT" means, in respect of any
Person, any interest rate swap agreement, interest rate option agreement,
interest rate cap agreement, interest rate collar agreement, interest rate floor
agreement or other similar agreement or arrangement designed to protect such
Person against fluctuations in interest rate.
"LIEN" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof).
"NET AMOUNT OF RENT" as to any lease for any period means the
aggregate amount of rent payable by the lessee with respect to such period after
excluding amounts required to be paid on account of maintenance and repairs,
insurance, taxes, assessments, water rates and similar charges. In the case of
any lease that is terminable by the lessee upon the payment of a penalty, such
net amount shall also include the amount of such penalty, but no rent shall be
considered as payable under such lease subsequent to the first date upon which
it may be so terminated.
"OFFICERS' CERTIFICATE" means a certificate signed by the
Chairman of the Board, the Vice Chairman, the President or any Vice President
and by the Treasurer, the Secretary or any Assistant Treasurer or Assistant
Secretary of the Company each such certificate shall include the statements
provided for in Section 12.05, if applicable.
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"OPINION OF COUNSEL" means an opinion in writing signed by
legal counsel for the Company (which counsel may be an employee of the Company),
or outside counsel for the Company. Each such opinion shall include the
statements provided for in Section 12.05, if applicable.
"ORIGINAL ISSUE DISCOUNT DEBT SECURITY" means any Debt
Security which provides for an amount less than the principal amount thereof to
be due and payable upon a declaration or acceleration of the maturity thereof
pursuant to Section 6.01.
OUTSTANDING" when used with respect to any series of Debt
Securities, means, as of the date of determination, all Debt Securities of that
series theretofore authenticated and delivered under this Indenture, except:
(i) Debt Securities of that series theretofore canceled by the
Trustee or delivered to the Trustee for cancellation;
(ii) Debt Securities of that series for whose payment or
redemption money in the necessary amount has been theretofore deposited
with the Trustee or any paying agent (other than the Company) in trust
or set aside and segregated in trust by the Company (if the Company
shall act as its own paying agent) for the holders of such Debt
Securities; PROVIDED, that, if such Debt Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been
made; and
(iii) Debt Securities of that series which have been paid
pursuant to Section 2.09 or in exchange for or in lieu of which other
Debt Securities have been authenticated and delivered pursuant to this
Indenture, other than any such Debt Securities in respect of which
there shall have been presented to the Trustee proof satisfactory to it
that such Debt Securities are held by a bona fide purchaser in whose
hands such Debt Securities are valid obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Debt Securities of any series have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Debt Securities
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<PAGE> 23
owned by the Company or any other obligor upon the Debt Securities or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Debt Securities which the Trustee
knows to be so owned shall be so disregarded. Debt Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Debt Securities and that the pledgee is not the Company or
any other obligor upon the Debt Securities or an Affiliate of the Company or of
such other obligor. In determining whether the Holders of the requisite
principal amount of Outstanding Debt Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the principal
amount of an Original Issue Discount Debt Security that shall be deemed to be
Outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a declaration
of acceleration of the maturity thereof pursuant to Section 6.01. In determining
whether the Holders of the requisite principal amount of the Outstanding Debt
Securities of any series have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of a Debt
Security denominated in one or more foreign currencies or currency units that
shall be deemed to be Outstanding for such purposes shall be the Dollar
Equivalent, determined in the manner provided as contemplated by Section 2.03 on
the date of original issuance of such Debt Security, of the principal amount
(or, in the case of any Original Issue Discount Security, the Dollar Equivalent
on the date of original issuance of such Security of the amount determined as
provided in the preceding sentence above) of such Debt Security.
"PARI PASSU", as applied to the ranking of any Indebtedness of
a Person in relation to other Indebtedness of such Person, means that each such
Indebtedness either (i) is not subordinate in right of payment to any
Indebtedness or (ii) is subordinate in right of payment to the same Indebtedness
as is the other, and is so subordinate to the same extent, and is not
subordinate in right of payment to each other or to any Indebtedness as to which
the other is not so subordinate.
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"PERMITTED LIENS" means, with respect to any Person, (a)
pledges or deposits by such Person under worker's compensation laws,
unemployment insurance laws, social security laws or similar legislation, or
good faith deposits in connection with bids, tenders, contracts (other than for
the payment of Indebtedness) or leases to which such Person is a party, or
deposits to secure public or statutory obligations of such Person or deposits of
cash or bonds to secure performance, surety or appeal bonds to which such Person
is a party or which are otherwise required of such Person, or deposits as
security for contested taxes or import duties or for the payment of rent or
other obligations of like nature, in each case Incurred in the ordinary course
of business; (b) Liens imposed by law, such as carriers', warehousemen's,
laborers', materialmen's, landlords', vendors', workmen's, operators', factors
and mechanics liens, in each case for sums not yet due or being contested in
good faith by appropriate proceedings; (c) Liens for taxes, assessments and
other governmental charges or levies not yet delinquent or which are being
contested in good faith by appropriate proceedings; (d) survey exceptions,
encumbrances, easements or reservations of or with respect to, or rights of
others for or with respect to, licenses, rights-of-way, sewers, electric and
other utility lines and usages, telegraph and telephone lines, pipelines,
surface use, operation of equipment, permits, servitudes and other similar
matters, or zoning or other restrictions as to the use of real property or Liens
incidental to the conduct of the business of such Person or to the ownership of
its properties which were not Incurred in connection with Indebtedness and which
do not in the aggregate materially adversely affect the value of said properties
or materially impair their use in the operation of the business of such Person;
(e) Liens existing on or provided for under the terms of agreements existing on
the Issue Date (including, without limitation, under the Credit Agreement); (f)
Liens on property at the time the Company or any of its Subsidiaries acquired
the property or the entity owning such property, including any acquisition by
means of a merger or consolidation with or into the Company; PROVIDED, HOWEVER,
that any such Lien may not extend to any other property owned by the Company or
any of its Subsidiaries, (g) Liens securing a Hedging Obligation so long as such
Hedging Obligation is of the type customarily entered into for the purpose of
limiting risk; (h) Purchase Money Liens; (i) Liens securing only Indebtedness of
a Subsidiary of the Company to the Company or one or more wholly owned
Subsidiaries of the Company; (j) Liens on any property to secure Indebtedness
Incurred in connection with the construction,
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<PAGE> 25
installation or financing of pollution control or abatement facilities or other
forms of industrial revenue bond financing or Indebtedness issued or Guaranteed
by the United States, any state or any department, agency or instrumentality
thereof; (k) Government Contract Liens; (l) Liens securing Indebtedness of joint
ventures in which the Company or a Subsidiary has an interest to the extent such
Liens are on property or assets of, such joint ventures; (m) Liens resulting
from the deposit of funds or evidences of Indebtedness in trust for the purpose
of defeasing Indebtedness of the Company or any of its Subsidiaries; (n) legal
or equitable encumbrances deemed to exist by reason of negative pledges or the
existence of any litigation or other legal proceeding and any related lis
pendens filing (excluding any attachment prior to judgment lien or attachment
lien in aid of execution on a judgment); (o) any attachment Lien being contested
in good faith and by proceedings promptly initiated and diligently conducted,
unless the attachment giving rise thereto will not, within sixty days after the
entry thereof, have been discharged or fully bonded or will not have been
discharged within sixty days after the termination of any such bond; (p) any
judgment Lien, unless the judgment it secures will not, within sixty days after
the entry thereof, have been discharged or execution thereof stayed pending
appeal, or will not have been discharged within sixty days after the expiration
of any such stay; (q) Liens to banks arising from the issuance of letters of
credit issued by such banks ("issuing banks") on the following: (i) any and all
shipping documents, warehouse receipts, policies or certificates of insurance
and other document accompanying or relative to drafts drawn under any credit,
and any draft drawn thereunder (whether or not such documents, goods or other
property be released to or upon the order of the Company or any Subsidiary under
a security agreement or trust or bailee receipt or otherwise), and the proceeds
of each and all of the foregoing; (ii) the balance of every deposit account, now
or at the time hereafter existing, of the Company or any Subsidiary with the
issuing banks, and any other claims of the Company or any Subsidiary against the
issuing banks; and all property claims and demands and all rights and interests
therein of the Company or any Subsidiary and all evidences thereof and all
proceeds thereof which have been or at any time will be delivered to or
otherwise come into the issuing bank's possession, custody or control, or into
the possession, custody or control of any bailee for the issuing bank or of any
of its agents or correspondents for the account of the issuing bank, for any
purpose, whether or not the express purpose of being used by the issuing bank as
collateral
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<PAGE> 26
security or for the safekeeping or for any other or different purpose, the
issuing bank being deemed to have possession or control of all of such property
actually in transit to or from or set apart for the issuing bank, any bailee for
the issuing bank or any of its correspondents for other acting in its behalf, it
being understood that the receipt at any time by the issuing bank, or any of its
bailees, agents or correspondents, or other security, of whatever nature,
including cash, will not be deemed a waiver of any of the issuing bank's rights
or power hereunder; (iii) all property shipped under or pursuant to or in
connection with any credit or drafts drawn thereunder or in any way related
thereto, and all proceeds thereof; (iv) all additions to and substitutions for
any of the property enumerated above in this subsection; (r) rights of a common
owner of any interest in property held by such Person; (s) farmout, carried
working interest, joint operating, unitization, royalty, overriding royalty,
sales and similar agreements relating to the exploration or development of, or
production from, oil and gas properties entered into the ordinary course of
business; (t) any defects, irregularities or deficiencies in title to easements,
rights-of-way or other properties which do not in the aggregate materially
adversely affect the value of such properties or materially impair their use in
the operation of the business of such Person; and (u) Liens to secure any
refinancing, refunding, extension, renewal or replacement (or successive
refinancings. refundings, extensions, renewals or replacements), as a whole, or
in part, of any indebtedness secured by any Lien referred to in the foregoing
clauses (e) through (l); PROVIDED, HOWEVER, that (i) such new Lien shall be
limited to all or part of the same property that secured the original Lien (plus
improvements on such property) and (ii) the Indebtedness secured by such Lien at
such time is not increased to any amount greater than the sum of (A) the
outstanding principal amount or, if greater, committed amount of the
Indebtedness described under clauses (e) through (l) at the time the original
Lien became a Permitted Lien under this Indenture and (B) an amount necessary to
pay any fees and expenses, including premiums, related to such refinancing,
refunding, extension, renewal or replacement.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
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"PLACE OF PAYMENT" mean, when used with respect to the Debt
Securities of any series, the place or places where the principal of, and
premium, if any, and interest on, the Debt Securities of that series are payable
as specified pursuant to Section 2.03.
"PREFERRED STOCK" as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"PRINCIPAL PROPERTY" means any manufacturing plant or other
similar facility (including production machinery and equipment located thereon)
or warehouse, owned or leased by the Company or any Subsidiary, which is located
within the United States other than (a) any such plant or facility which the
Board of Directors determines in good faith by board resolution is not of
material importance to the total business conducted, or assets owned, by the
Company and its Subsidiaries as an entirety, or (b) any portion of any such
plant or facility which the Board of Directors determines by Board Resolution in
good faith not to be of material importance to the use or operation thereof.
"Production machinery and equipment" means production machinery and equipment in
such manufacturing plants used directly in the production of the Company's or
any Subsidiary's products.
"PURCHASE MONEY LIEN" means a Lien on property securing
Indebtedness Incurred by the Company or any of its Subsidiaries to provide funds
for all or any portion of the cost of acquiring, constructing, altering,
expanding, improving or repairing such property or assets used in connection
with such property.
"REDEEMABLE STOCKS" means, with respect to any Person, any
Capital Stock which by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable) or upon the happening of any
event (i) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise, (ii) is convertible or exchangeable for Indebtedness
(other than Preferred Stock) or Disqualified Stock or (iii) is redeemable at the
option of the holder thereof, in whole or in part.
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"REGISTERED HOLDER" means the Person in whose name a
Registered Security is registered in the Debt Security Register (as defined in
Section 2.07(a)).
"REGISTERED SECURITY" means any Debt Security registered as to
principal and interest in the Debt Security Register (as defined in Section
2.07(a)).
"REGISTRAR" has the meaning set forth in Section 2.07(a).
"REPRESENTATIVE" means the trustee, agent or representative
(if any) for an issue of Indebtedness.
"RESPONSIBLE OFFICER" when used with respect to the Trustee,
means any officer within the Trustee, including any Vice President, any Second
Vice President, any trust officer or any other officer of the Trustee performing
functions similar to those performed by the persons who at the time shall be
such officers, and any other officer of the Trustee to whom corporate trust
matters are referred because of his knowledge of and familiarity with the
particular subject.
"RESTRICTED SUBSIDIARY" means a subsidiary of the Company
which shall at the time, directly or indirectly, through one or more
subsidiaries or in combination with one or more subsidiaries or the Company,
owns or leases a Principal Property.
"SALE/LEASEBACK TRANSACTION" means an arrangement relating to
property owned on the Issue Date or thereafter acquired whereby the Company or
any of its Subsidiaries transfers such property to a Person and the Company or
any of its Subsidiaries leases it from such Person.
"SECURED INDEBTEDNESS" means any Indebtedness of the Company
secured by a Lien.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"STATED MATURITY" means, with respect to any security, the
date specified in such security as the fixed date on which the payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such
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<PAGE> 29
security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"SUBSIDIARY" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by (i) such
Person, (ii) such Person and one or more Subsidiaries of such Person or (iii)
one or more Subsidiaries of such Person.
"TEMPORARY CASH INVESTMENTS" means any of the following: (i)
investments in U.S. Government Obligations maturing within 90 days of the date
of acquisition thereof, (ii) investments in time deposit accounts, certificates
of deposit and money market deposits maturing within 90 days of the date of
acquisition thereof issued by a bank or trust company which is organized under
the laws of the United States, any State thereof or any foreign country
recognized by the United States having capital, surplus and undivided profits
aggregating in excess of $500,000,000 (or the Dollar Equivalent thereof) and
whose long-term debt is rated "A" or higher according to Moody's Investors
Service, Inc. (or such similar equivalent rating by at least one "nationally
recognized statistical rating organization" (as defined in Rule 436 under the
Securities Act)), (iii) repurchase obligations with a term of not more than 7
days for underlying securities of the types described in clause (i) above
entered into with a bank meeting the qualifications described in clause (ii)
above and (iv) investments in commercial paper, maturing not more than 90 days
after the date of acquisition, issued by a corporation (other than an Affiliate
of the Company) organized and in existence under the laws of the United States
or any foreign country recognized by the United States with a rating at the time
as of which any investment therein is made of "P-1" (or higher) according to
Moody's Investors Service, Inc. or "A-1" (or higher) according to Standard and
Poor's Corporation.
"TRADE PAYABLES" means, with respect to any Person, any
accounts payable or any Indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person arising in the ordinary course of
business of such Person in connection with the acquisition of goods or services.
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<PAGE> 30
"TRUSTEE" initially means PNC Bank, Ohio, National
Association, Cincinnati, Ohio and any other Person or Persons appointed as such
from time to time pursuant to Section 7.08, and, subject to the provisions of
Article VII, includes its or their successors and assigns. If at any time there
is more than one such Person, "Trustee" as used with respect to the Debt
Securities of any series shall mean the Trustee with respect to the Debt
Securities of that series.
"TRUST INDENTURE ACT" (except as herein otherwise expressly
provided) means the Trust Indenture Act of 1939 as in force at the date of this
indenture as originally executed and, to the extent required by law, as amended.
"UNITED STATES" means the United States of America (including
the States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.
"UNITED STATES ALIEN" means any Person who, for United States
Federal income tax purposes, is a foreign corporation, a nonresident alien
individual, a nonresident alien fiduciary of a foreign estate or trust, or a
foreign partnership one or more members of which is, for United States Federal
income tax purposes, a foreign corporation, a nonresident alien individual or a
nonresident alien fiduciary of a foreign estate or trust.
"U.S. GOVERNMENT OBLIGATIONS" means securities that are (x)
direct obligations of the United States for the payment of which its full faith
and credit is pledged or (y) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States, which, in either case, are not callable or redeemable at the
option of the issuer thereof.
"YIELD TO MATURITY" means the yield to maturity, calculated at
the time of issuance of a series of Debt Securities, or, if applicable, at the
most recent redetermination of interest on such series and calculated in
accordance with accepted financial practice.
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE
ACT. This Indenture is subject to the mandatory
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provisions of the Trust Indenture Act which are incorporated by reference in and
made a part of this indenture. The following Trust Indenture Act terms have the
following meanings:
"indenture securities" means the Debt Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company and
any other obligor on the Debt Securities.
All other Trust Indenture Act terms used in this Indenture
that are defined by the Trust Indenture Act, reference to another statute or
defined by rules of the Securities and Exchange Commission have the meanings
assigned to them by such definitions.
SECTION 1.03. RULES OF CONSTRUCTION. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP; and
(7) the principal amount of any Preferred Stock shall be the
greater of (i) the maximum liquidation value of such Preferred Stock or
(ii) the maximum mandatory redemption or
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mandatory repurchase price with respect to such Preferred Stock.
ARTICLE II
Debt Securities
---------------
SECTION 2.01. FORMS GENERALLY. The Debt Securities of each
series shall be in substantially the form established without the approval of
any Holder by or pursuant to a resolution of the Board of Directors or in one or
more Indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as the Company
may deem appropriate (and, if not contained in a Supplemental Indenture entered
into in accordance with Article IX, as are not prohibited by the provisions of
this Indenture) or as may be required or appropriate to comply with any law or
with any rules made pursuant thereto or with any rules of any securities
exchange on which such series of Debt Securities may be listed, or to conform to
general usage, or as may, consistently herewith, be determined by the officers
executing such Debt Securities as evidenced by their execution of the Debt
Securities.
The definitive Debt Securities of each series shall be
printed, lithographed or engraved on steel engraved borders or may be produced
in any other manner, all as determined by the officers executing such Debt
Securities, as evidenced by their execution of such Debt Securities.
SECTION 2.02. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's Certificate of Authentication on all Debt Securities authenticated
by the Trustee shall be in substantially the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated
therein referred to in the within-mentioned Indenture.
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PNC Bank, Ohio, National Association
As Trustee
By
-----------------------------------------
Authorized Signature
SECTION 2.03. PRINCIPAL AMOUNT; ISSUABLE IN SERIES. The
aggregate principal amount of Debt Securities which may be issued, executed,
authenticated, delivered and outstanding under this Indenture is unlimited.
The Debt Securities may be issued in one or more series. There
shall be established, without the approval of any Holders, in or pursuant to a
resolution of the Board of Directors and set forth in an Officers' Certificate,
or established in one or more Indentures supplemental hereto, prior to the
issuance of Debt Securities of any series any or all of the following:
(l) the title of the Debt Securities of the series (which
shall distinguish the Debt Securities of the series from all other Debt
Securities);
(2) any limit upon the aggregate principal amount of the Debt
Securities of the series which may be authenticated and delivered under
this Indenture (except for Debt Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of,
other Debt Securities of the series pursuant to this Article II);
(3) the date or dates on which the principal and premium, if
any, of the Debt Securities of the series are payable;
(4) the rate or rates (which may be fixed or variable) at
which the Debt Securities of the series shall bear interest, if any, or
the method of determining such rate or rates, the date or dates from
which such interest shall accrue, the interest payment dates on which
such interest shall be payable, or the method by which such date will
be determined, in the case of Registered Securities, the record dates
for the determination of Holders thereof to whom such interest is
payable; and the basis upon which interest will
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be calculated if other than that of a 360-day year of twelve thirty-day
months;
(5) the place or places, if any, in addition to or instead of
the corporate trust office of the Trustee where the principal of, and
interest on, Debt Securities of the series shall be payable;
(6) the price or prices at which, the period or periods within
which and the terms and conditions upon which Debt Securities of the
series may be redeemed, in whole or in part, at the option of the
Company or otherwise;
(7) the obligation, if any, of the Company to redeem, purchase
or repay Debt Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof, and the
price or prices to which and the period or periods within which and the
terms and conditions upon which Debt Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligations;
(8) the terms, if any, upon which the Debt Securities of the
series may be convertible into or exchanged for Common Stock, Preferred
Stock (which may be represented by depositary shares), other Debt
Securities or warrants for Common Stock, Preferred Stock or
Indebtedness or other securities of any kind of the Company or any
other obligor and the terms and conditions upon which such conversion
or exchange shall be effected, including the initial conversion or
exchange price or rate, the conversion or exchange period and any other
provision in addition to or in lieu of those described herein;
(9) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Debt Securities of the
series shall be issuable;
(10) if the amount of principal of interest on Debt Securities
of the series may be determined with reference to an index or pursuant
to a formula, the manner in which such amounts will be determined;
(11) if the principal amount payable at the Stated Maturity of
Debt Securities of the series will not be
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determinable as of any one or more dated prior to such Stated Maturity,
the amount which will be deemed to be such principal amount as of any
such date for any purpose, including the principal amount thereof which
will be due and payable upon any maturity other than the Stated
Maturity or which will be deemed to be Outstanding as of any such date
(or, in any such case, the manner in which such deemed principal amount
is to be determined); and the manner of determining the equivalent
thereof in the currency of the United States of America for purposes of
the definition of Dollar Equivalent;
(12) any changes or additions to Article XI, including the
addition of additional covenants that may be subject to the covenant
defeasance option pursuant to Section l1.02(b)(ii);
(13) if other than such coin or Currency of the United States
as at the time of payment is legal tender for payment of public and
private debts, the coin or Currency or Currencies or units of two or
more Currencies in which payment of the principal of and premium, if
any, and interest on, Debt Securities of the series shall be payable;
(14) if other than the principal amount thereof, the portion
of the principal amount of Debt Securities of the series which shall be
payable upon declaration of acceleration of the maturity thereof
pursuant to Section 6.01 or provable in bankruptcy pursuant to Section
6.02;
(15) the terms, if any, of the transfer, mortgage, pledge or
assignment as security for the Debt Securities of the series of any
properties, assets, moneys, proceeds, securities or other collateral,
including whether certain provisions of the Trust Indenture Act are
applicable and any corresponding changes to provisions of this
Indenture as currently in effect;
(16) any addition to or change in the Events of Default with
respect to the Debt Securities of the series and any change in the
right of the Trustee or the Holders to declare the principal of and
interest on, such Debt Securities due and payable;
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(17) if the Debt Securities of the series shall be issued in
whole or in part in the form of a Global Security or Securities, the
terms and conditions, if any, upon which such Global Security or
Securities may be exchanged in whole or in part for other individual
Debt Securities in definitive registered form; and the Depositary for
such Global Security or Securities and the form of any legend or
legends to be borne by any such Global Security or Securities in
addition to or in lieu of the legend referred to in Section 2.15;
(18) any trustees, authenticating or paying agents, transfer
agents or registrars;
(19) the applicability of, and any addition to or change in
the covenants and definitions currently set forth in this Indenture or
in the terms currently set forth in Article X, including conditioning
any merger, conveyance, transfer or lease permitted by Article X upon
the satisfaction of an Indebtedness coverage standard by the Company
and Successor Company (as defined in Article X);
(20) the terms, if any, of any Guarantee of the payment of
principal of and interest on, Debt Securities of the series and any
corresponding changes to the provisions of this Indenture as currently
in effect;
(21) with regard to Debt Securities of the series that do not
bear interest the dates for certain required reports to the Trustee;
and
(22) any other terms of the Debt Securities of the series
(which terms shall not be prohibited by the provisions of this
Indenture).
All Debt Securities of any one series appertaining thereto
shall be substantially identical except as to denomination and except as may
otherwise be provided in or pursuant to such resolution of the Board of
Directors and as set forth in such Officers' Certificate or in any such
Indenture supplemental hereto.
SECTION 2.04. EXECUTION OF DEBT SECURITIES. The Debt
Securities shall be signed on behalf of the Company by its Chairman of the
Board, its Vice Chairman, its President or a Vice
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President and by its Secretary, an Assistant Secretary, a Treasurer or an
Assistant Treasurer. Such signatures upon the Debt Securities may be the manual
or facsimile signatures of the present or any future such authorized officers
and may be imprinted or otherwise reproduced on the Debt Securities. The seal of
the Company, if any, may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted or otherwise reproduced on the Debt Securities.
Only such Debt Securities as shall bear thereon a certificate
of authentication substantially in the form hereinbefore recited, signed
manually by the Trustee, shall be entitled to the benefits of this Indenture or
be valid or obligatory for any purpose. Such certificate by the Trustee upon any
Debt Security executed by the Company shall be conclusive evidence that the Debt
Security so authenticated has been duly authenticated and delivered hereunder.
In case any officer of the Company who shall have signed any
of the Debt Securities shall cease to be such officer before the Debt Securities
so signed shall have been authenticated and delivered by the Trustee, or
disposed of by the Company, such Debt Securities nevertheless may be
authenticated and delivered or disposed of as though the Person who signed such
Debt Securities had not ceased to be such officer of the Company; and any Debt
Security may be signed on behalf of the Company by such Persons as, at the
actual date of the execution of such Debt Security, shall be the proper officers
of the Company, although at the date of such Debt Security or of the execution
of this Indenture any such Person was not such officer.
SECTION 2.05. AUTHENTICATION AND DELIVERY OF DEBT SECURITIES.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Debt Securities of any series executed by the
Company to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Debt Securities to or upon a Company Order. In
authenticating such Debt Securities and accepting the additional
responsibilities under this Indenture in relation to such Debt Securities, the
Trustee shall be entitled to receive, and (subject to Section 7.0l) shall be
fully protected in relying upon:
(l) a copy of any resolution or resolutions of the Board of
Directors, certified by the Secretary or Assistant
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Secretary of the Company, authorizing the terms of issuance of any
series of Debt Securities;
(2) an executed supplemental Indenture, if any;
(3) an Officers' Certificate; and
(4) an Opinion of Counsel prepared in accordance with Section
12.05 which shall also state:
(a) that the form of such Debt Securities has been
established by or pursuant to a resolution of the Board of
Directors or by a supplemental Indenture as permitted by
Section 2.01 in conformity with the provisions of this
Indenture;
(b) that the terms of such Debt Securities have been
established by or pursuant to a resolution of the Board of
Directors or by a supplemental Indenture as permitted by
Section 2.03 in conformity with the provisions of this
Indenture;
(c) that such Debt Securities, when authenticated and
delivered by the Trustee and issued by the Company in the
manner and subject to any conditions specified in such Opinion
of Counsel, will constitute valid and legally binding
obligations of the Company, enforceable in accordance with
their terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may
be limited by equitable principles of general applicability;
(d) that the Company has the corporate power to issue
such Debt Securities and has duly taken all necessary
corporate action with respect to such issuance;
(e) that the issuance of such Debt Securities will
not contravene the charter or by-laws of the Company or result
in any material violation of any of the terms or provisions of
any law or regulation or of any
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indenture, mortgage or other agreement known to such counsel
by which the Company is bound;
(f) that authentication and delivery of such Debt
Securities and the execution and delivery of any supplemental
Indenture will not violate the terms of this Indenture; and
(g) such other matters as the Trustee may reasonably
request.
Such Opinion of Counsel need express no opinion as to whether
a court in the United States would render a money judgment in a currency other
than that of the United States.
The Trustee shall have the right to decline to authenticate
and deliver any Debt Securities under this Section 2.05 if the Trustee, being
advised by counsel, determines that such action may not lawfully be taken or if
the Trustee in good faith by its board of directors or trustees, executive
committee or a trust committee of directors, trustees or vice presidents shall
determine that such action would expose the Trustee to personal liability to
existing Holders.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Debt Securities of any series. Unless
limited by the terms of such appointment, an authenticating agent may
authenticate Debt Securities whenever the Trustee may do so. Each reference in
this Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as any Registrar, paying
agent or agent for service of notices and demands.
Unless otherwise provided in the form of Debt Security for any
series, each Debt Security shall be dated the date of its authentication.
SECTION 2.06. DENOMINATION OF DEBT SECURITIES. Unless
otherwise provided in the form of Debt Security for any series, the Debt
Securities of each series shall be issuable only as Registered Securities in
such denominations as shall be specified or contemplated by Section 2.03. In the
absence of any such specification with respect to the Debt Securities of any
series,
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the Debt Securities of such series shall be issuable in denominations of $1,000
and any integral multiple thereof.
SECTION 2.07. REGISTRATION OF TRANSFER AND EXCHANGE. (a) The
Company shall keep or cause to be kept a register for each series of Registered
Securities issued hereunder (hereinafter collectively referred to as the "Debt
Security Register"), in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Registered
Securities and the transfer of Registered Securities as in this Article II
provided. At all reasonable times the Debt Security Register shall be open for
inspection by the Trustee. Subject to Section 2.15, upon due presentment for
registration of transfer of any Registered Security at any office or agency to
be maintained by the Company in accordance with the provisions of Section 4.02,
the Company shall execute and the Trustee shall authenticate and deliver in the
name of the transferee or transferees a new Registered Security or Registered
Securities of authorized denominations for a like aggregate principal amount.
Unless and until otherwise determined by the Company by
resolution of the Board of Directors, the register of the Company for the
purpose of registration, exchange or registration of transfer of the Registered
Securities shall be kept at the corporate trust office of the Trustee and, for
this purpose, the Trustee shall be designated "Registrar".
Registered Securities of any series (other than a Global
Security) may be exchanged for a like aggregate principal amount of Registered
Securities of the same series of other authorized denominations. Subject to
Section 2.15, Registered Securities to be exchanged shall be surrendered at the
office or agency to be maintained by the Company as provided in Section 4.02,
and the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor the Registered Security or Registered Securities which the
Holder making the exchange shall be entitled to receive.
(b) All Registered Securities presented or surrendered for
registration of transfer, exchange or payment shall (if so required by the
Company, the Trustee or the Registrar) be duly endorsed or be accompanied by a
written instrument or instruments of transfer, in form satisfactory to the
Company, the Trustee and
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the Registrar, duly executed by the Registered Holder or his attorney duly
authorized in writing.
All Debt Securities issued in exchange for or upon transfer of
Debt Securities shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture as the Debt
Securities surrendered for such exchange or transfer.
No service charge shall be made for any exchange or
registration of transfer of Debt Securities (except as provided by Section
2.09), but the Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto, other than
those expressly provided in this Indenture to be made at the Company's own
expense or without expense or without charge to the Holders.
The Company shall not be required (a) to issue, register the
transfer of or exchange any Debt Securities for a period of 15 days next
preceding any mailing of notice of redemption of Debt Securities of such series
or (b) to register the transfer of or exchange any Debt Securities selected,
called or being called for redemption.
Prior to the due presentation for registration of transfer of
any Debt Security, the Company, the Trustee, any paying agent or any Registrar
may deem and treat the Person in whose name a Debt Security is registered as the
absolute owner of such Debt Security for the purpose of receiving payment of
principal of, and premium, if any, and interest on, such Debt Security and for
all other purposes whatsoever, whether or not such Debt Security is overdue, and
none of the Company, the Trustee, any paying agent or Registrar shall be
affected by notice to the contrary.
None of the Company, the Trustee, any agent of the Trustee,
any paying agent or any Registrar will have any responsibility or liability for
any aspect of the records relating to, or payments made on account of,
beneficial ownership interests of a Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
SECTION 2.08. TEMPORARY DEBT SECURITIES. Pending the
preparation of definitive Debt Securities of any series, the
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Company may execute and the Trustee shall authenticate and deliver temporary
Debt Securities (printed, lithographed, photocopied, typewritten or otherwise
produced) of any authorized denomination, and substantially in the form of the
definitive Debt Securities in lieu of which they are issued, in registered form
and with such omissions, insertions and variations as may be appropriate for
temporary Debt Securities, all as may be determined by the Company with the
concurrence of the Trustee. Temporary Debt Securities may contain such reference
to any provisions of this Indenture as may be appropriate. Every temporary Debt
Security shall be executed by the Company and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and with like
effect, as the definitive Debt Securities.
If temporary Debt Securities of any series are issued, the
Company will cause definitive Debt Securities of such series to be prepared
without unreasonable delay. (a) After the preparation of definitive Debt
Securities of such series, the temporary Debt Securities of such series shall be
exchangeable for definitive Debt Securities of such series upon surrender of the
temporary Debt Securities of such series at the office or agency of the Company
at a Place of Payment for such series, without charge to the Holder thereof,
except as provided in Section 2.07 in connection with a transfer, and (b) upon
surrender for cancellation of any one or more temporary Debt Securities of any
series, the Company shall execute and the Trustee shall authenticate and deliver
in exchange therefor a like principal amount of definitive Debt Securities of
the same series of authorized denominations and of like tenor. Until so
exchanged, temporary Debt Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Debt Securities
of such series, except as otherwise specified as contemplated by Section
2.03(17) with respect to the payment of interest on Global Securities in
temporary form.
Upon any exchange of a portion of a temporary Global Security
for a definitive Global Security or for the individual Debt Securities
represented thereby pursuant to Section 2.07 or this Section 2.08, the temporary
Global Security shall be endorsed by the Trustee to reflect the reduction of the
principal amount evidenced thereby, whereupon the principal amount of such
temporary Global Security shall be reduced for all purposes by the amount to
exchanged and endorsed.
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SECTION 2.09. MUTILATED, DESTROYED, LOST OR STOLEN DEBT
SECURITIES. If (i) any mutilated Debt Security is surrendered to the Trustee at
its corporate trust office (in the case of Registered Securities) or (ii) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Debt Security, and there is delivered to the
Company and the Trustee such security or indemnity as may be required by them to
save each of them and any paying agent harmless, and neither the Company nor the
Trustee receives notice that such Debt Security has been acquired by a bona fide
purchaser, then the Company shall execute and, upon a Company Order, the Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Debt Security, a new Debt Security of the
same series of like tenor, form, terms and principal amount, bearing a number
not contemporaneously Outstanding. Upon the issuance of any substituted Debt
Security, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses connected therewith. In case any Debt Security which has matured
or is about to mature or which has been called for redemption shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a
substituted Debt Security, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated Debt Security) if the
applicant for such payment shall furnish the Company and the Trustee with such
security or indemnity as either may require to save it harmless from all risk,
however remote, and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction, loss or theft of
such Debt Security and of the ownership thereof.
Every substituted Debt Security of any series issued pursuant
to the provisions of this Section 2.09 by virtue of the fact that any Debt
Security is destroyed, lost or stolen shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Debt Security shall be found at any time, and shall be entitled to all
the benefits of this Indenture equally and proportionately with any and all
other Debt Securities of that series duly issued hereunder. All Debt Securities
shall be held and owned upon the express condition that the foregoing provisions
are exclusive with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Debt Securities, and shall preclude any and all other
rights or remedies, notwithstanding any law or
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statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.
SECTION 2.10. CANCELLATION OF SURRENDERED DEBT SECURITIES. All
Debt Securities surrendered for payment, redemption, registration of transfer or
exchange shall, if surrendered to the Company or any paying agent or a
Registrar, be delivered to the Trustee for cancellation by it, or if surrendered
to the Trustee, shall be canceled by it, and no Debt Securities shall be issued
in lieu thereof except as expressly permitted by any of the provisions of this
Indenture. All canceled Debt Securities held by the Trustee shall be destroyed
(subject to the record retention requirements of the Exchange Act) and
certification of their destruction delivered to the Company, unless otherwise
directed. On request of the Company, the Trustee shall deliver to the Company
canceled Debt Securities held by the Trustee. If the Company shall acquire any
of the Debt Securities, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented thereby unless and
until the same are delivered or surrendered to the Trustee for cancellation. The
Company may not issue new Debt Securities to replace Debt Securities it has
redeemed, paid or delivered to the Trustee for cancellation.
SECTION 2.l1. PROVISIONS OF THE INDENTURE AND DEBT SECURITIES
FOR THE SOLE BENEFIT OF THE PARTIES AND THE HOLDERS. Nothing in this Indenture
or in the Debt Securities, expressed or implied, shall give or be construed to
give to any Person, other than the parties hereto, the Holders or any Registrar
or paying agent, any legal or equitable right, remedy or claim under or in
respect of this Indenture, or under any covenant, condition or provision herein
contained; all its covenants, conditions and provisions being for the sole
benefit of the parties hereto, the Holders and any Registrar and paying agents.
SECTION 2.12. PAYMENT OF INTEREST; RIGHTS PRESERVED. (a)
Interest on any Registered Security that is payable and is punctually paid or
duly provided for on any interest payment date shall be paid to the Person in
whose name such Registered Security is registered at the close of business on
the regular record date for such interest notwithstanding the cancellation of
such Registered Security upon any transfer or exchange subsequent to the regular
record date. Payment of interest on Registered Securities shall be made at the
corporate trust office of the
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Trustee (except as otherwise specified pursuant to Section 2.03), or at the
option of the Company, by check mailed to the address of the Person entitled
thereto as such address shall appear in the Debt Security Register or, if
provided pursuant to Section 2.03 and in accordance with arrangements
satisfactory to the Trustee, at the option of the Registered Holder by wire
transfer to an account designated by the Registered Holder.
(b) Subject to the foregoing provisions of this Section 2.12
and Section 2.17, each Debt Security of a particular series delivered under this
Indenture upon registration of transfer of or in exchange for or in lieu of any
other Debt Security of the same series shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Debt
Security.
SECTION 2.13. SECURITIES DENOMINATED IN FOREIGN CURRENCIES.
(a) Except as otherwise specified pursuant to Section 2.03 for
Registered Securities of any series, payment of the principal of, and premium,
if any, and interest on, Registered Securities of such series will be made in
Dollars.
(b) For the purposes of calculating the principal amount of
Debt Securities of any series denominated in a Foreign Currency or in units of
two or more Foreign Currencies (including European Currency Units) for any
purpose under this Indenture, the principal amount of such Debt Securities at
any time Outstanding shall be deemed to be the Dollar Equivalent of such
principal amount as of the date of any such calculation.
In the event any Foreign Currency or currencies or units of
two or more Currencies in which any payment with respect to any series of Debt
Securities may be made ceases to be a freely convertible Currency on United
States Currency markets, for any date thereafter on which payment of principal
of, or premium, if any, or interest on, the Debt Securities of a series is due,
the Company shall select the Currency of payment for use on such date, all as
provided in the Debt Securities of such series. In such event, the Company
shall, as provided in the Debt Securities of such series, notify the Trustee of
the Currency which it has selected to constitute the funds necessary to meet the
Company's obligations or such payment date and of the amount of such Currency to
be paid. Such amount shall be
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determined as provided in the Debt Securities of such series. The payment to the
Trustee with respect to such payment date shall be made by the Company solely in
the Currency so selected.
SECTION 2.14. WIRE TRANSFERS. Notwithstanding any other
provision to the contrary in this Indenture, the Company may make any payment of
monies required to be deposited with the Trustee on account of principal of, or
premium, if any, or interest on, the Debt Securities (whether pursuant to
optional or mandatory redemption payments, interest payments or otherwise) by
wire transfer immediately available funds to an account designated by the
trustee on or before the date such moneys are to be paid to the Holders of the
Debt Securities in accordance with the terms hereof.
SECTION 2.15. SECURITIES ISSUABLE IN THE FORM OF A GLOBAL
SECURITY. (a) If the Company shall establish pursuant to Sections 2.01 and 2.03
that the Debt Securities of a particular series are to be issued in whole or in
part in the form of one or more Global Securities, then the Company shall
execute and the Trustee or its agent shall, in accordance with Section 2.05,
authenticate and deliver, such Global Security or Securities, which (i) shall
represent, and shall be denominated in an amount equal to the aggregate
principal amount of, the Outstanding Debt Securities of such series to be
represented by such Global Security or Securities, or such portion thereof as
the Company shall specify in an Officers' Certificate, (ii) shall be registered
in the name of the Depositary for such Global Security or Securities or its
nominee, (iii) shall be delivered by the Trustee or its agent to the Depositary
or pursuant to the Depositary's instruction and (iv) shall bear a legend
substantially to the following effect: 'Unless and until it is exchanged in
whole or in part for the individual Debt Securities represented hereby, this
Global Security may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary', or such other
legend as may then be required by the Depositary for such Global Security or
Securities.
(b) Notwithstanding any other provision of this Section
2.15 or of Section 2.07 to the contrary, and subject to the provisions of
paragraph (c) below, unless the terms of a
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Global Security expressly permit such Global Security to be exchanged in whole
or in part for definitive Debt Securities in registered form, a Global Security
may be transferred, in whole but not in part and in the manner provided in
Section 2.07, only by the Depositary to a nominee of the Depositary for such
Global Security, or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary, or by the Depositary or a nominee of the Depositary
to a successor Depositary for such Global Security selected or approved by the
Company, or to a nominee of such successor Depositary.
(c) (i) If at any time the Depositary for a Global Security or
Securities notifies the Company that it is unwilling or unable to continue as
Depositary for such Global Security or Securities or if at any time the
Depositary for the Debt Securities for such series shall no longer be eligible
or in good standing under the Exchange Act or other applicable statute, rule or
regulation, the Company shall appoint a successor Depositary with respect to
such Global Security or Securities. If a successor Depositary for such Global
Security or Securities is not appointed by the Company within 90 days after the
Company receives such notice or becomes aware of such ineligibility, the Company
shall execute, and the Trustee or its agent, upon receipt of a Company Order for
the authentication and delivery of such individual Debt Securities of such
series in exchange for such Global Security, will authenticate and deliver,
individual Debt Securities of such series of like tenor and terms in definitive
form in an aggregate principal amount equal to the principal amount of the
Global Security in exchange for such Global Security or Securities.
(ii) The Company may at any time and in its sole discretion
determine that the Debt Securities of any series or portion thereof issued or
issuable in the form of one or more Global Securities shall no longer be
represented by such Global Security or Securities. In such event the Company
will execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of individual Debt Securities of such series in
exchange in whole or in part for such Global Security, will authenticate and
deliver individual Debt Securities of such series of like tenor and terms in
definitive form in an aggregate principal amount equal to the principal amount
of such series or portion thereof in exchange for such Global Security or
Securities.
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(iii) If specified by the Company pursuant to Sections 2.01
and 2.03 with respect to Debt Securities issued or issuable in the form of a
Global Security, the Depositary for such Global Security may surrender such
Global Security in exchange in whole or in part for individual Debt Securities
of such series of like tenor and terms in definitive form on such terms as are
acceptable to the Company, the Trustee and such Depositary. Thereupon the
Company shall execute, and the Trustee or its agent upon receipt of a Company
Order for the authentication and delivery of definitive Debt Securities of such
series shall authenticate and deliver, without service charge, (1) to each
Person specified by such Depositary a new Debt Security or Securities of the
same series of like tenor and terms and of any authorized denomination as
requested by such Person in aggregate principal amount equal to and in exchange
for such Persons beneficial interest in the Global Security; and (2) to such
Depositary a new Global Security of like tenor and terms and in an authorized
denomination equal to the difference, if any, between the principal amount of
the surrendered Global Security and the aggregate principal amount of Debt
Securities delivered to Holders thereof.
(iv) In any exchange provided for in any of the preceding
three paragraphs, the Company will execute and the Trustee or its agent will
authenticate and deliver individual Debt Securities. Upon the exchange of the
entire principal amount of a Global Security for individual Debt Securities,
such Global Security shall be canceled by the Trustee or its agent. Except as
provided in the preceding paragraph, Registered Securities issued in exchange
for a Global Security pursuant to this Section 2.15 shall be registered in such
names and in such authorized denominations as the Depositary for such Global
Security, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee or the Registrar. The Trustee or the
Registrar shall deliver such Registered Securities to the Persons in whose names
such Registered Securities are so registered.
(v) Payments in respect of the principal of and interest on
any Debt Securities registered in the name of the Depositary or its nominee will
be payable to the Depositary or such nominee in its capacity as the registered
owner of such Global Security. The Company and the Trustee may treat the Person
in whose name the Debt Securities, including the Global Security, are registered
as the owner thereof for the purpose of
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receiving such payments and for any and all other purposes whatsoever. None of
the Company, the Trustee, any Registrar, the paying agent or any agent of the
Company or the Trustee will have any responsibility or liability for (a) any
aspect of the records relating to or payments made on account of the beneficial
ownership interests of the Global Security by the Depositary or its nominee or
any of the Depositary's direct or indirect participants, or for maintaining,
supervising or reviewing any records of the Depositary, its nominee or any of
its direct or indirect participants relating to the beneficial ownership
interests of the Global Security, (b) the payments to the beneficial owners of
the Global Security of amounts paid to the Depositary or its nominee, or (c) any
other matter relating to the actions and practices of the Depositary, its
nominee or any of its direct or indirect participants. None of the Company, the
Trustee or any such agent will be liable for any delay by the Depositary, its
nominee, or any of its direct or indirect participants in identifying the
beneficial owners of the Debt Securities, and the Company and the Trustee may
conclusively rely on, and will be protected in relying on, instructions from the
Depositary or its nominee for all purposes (including with respect to the
registration and delivery, and the respective principal amounts, of the Debt
Securities to be issued).
SECTION 2.16. MEDIUM TERM SECURITIES. Notwithstanding any
contrary provision herein, if all Debt Securities of a series are not to be
originally issued at one time, it shall not be necessary for the Company to
deliver to the Trustee an Officers' Certificate, resolutions of the Board of
Directors, supplemental Indenture, Opinion of Counsel or written order or any
other document otherwise required pursuant to Section 2.01, 2.03, 2.05 or l2.05
at or prior to the time of authentication of each Debt Security of such series
if such documents are delivered to the Trustee or its agent at or prior to the
authentication upon original issuance of the first such Debt Security of such
series to be issued; PROVIDED, that any subsequent request by the Company to the
Trustee to authenticate Debt Securities of such series upon original issuance
shall constitute a representation and warranty by the Company that, as of the
date of such request, the statements made in the Officers' Certificate delivered
pursuant to Section 2.05 or 12.05 shall be true and correct as if made on such
date and that the Opinion of Counsel delivered at or prior to such time of
authentication of an original issuance of Debt Securities shall specifically
state that it shall relate to all subsequent issuances of Debt Securities of
such series that
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are identical to the Debt Securities issued in the first issuance of Debt
Securities of such series.
A Company Order delivered by the Company to the Trustee in the
circumstances set forth in the preceding paragraph, may provide that Debt
Securities which are the subject thereof will be authenticated and delivered by
the Trustee or its agent on original issue from time to time upon the telephonic
or written order of Persons designated in such written order (any such
telephonic instructions to be promptly confirmed in writing by such Person) and
that such Persons are authorized to determine, consistent with the Officers'
Certificate, supplemental Indenture or resolution of the Board of Directors
relating to such written order, such terms and conditions of such Debt
Securities as are specified in such Officers' Certificate, supplemental
Indenture or such resolution.
SECTION 2.17. DEFAULTED INTEREST. Any interest on any Debt
Security of a particular series which is payable, but is not punctually paid or
duly provided for, on the dates and in the manner provided in the Debt
Securities of such series and in this Indenture (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Registered Holder thereof
on the relevant record date by virtue of having been such Registered Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (i) or (ii) below:
(i) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities of
such series are registered at the close of business on a special record
date for the payment of such Defaulted Interest, which shall be fixed
in the following manner: The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
such Registered Security of such series and the date of the proposed
payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a special record date
for
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the payment of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Company of such special record date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the special record date therefor to be
mailed, first class postage pre-paid, to each Holder thereof at its
address as it appears in the Security Register, not less than 10 days
prior to such special record date. Notice of the proposed payment of
such Defaulted Interest and the special record date therefor having
been so mailed, such Defaulted Interest shall be paid to the Persons in
whose names the Registered Securities of such series are registered at
the close of business on such special record date.
(ii) The Company may make payment of any Defaulted Interest on
the Registered Securities of such series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
the Registered Securities of such series may be listed, and upon such
notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the
Trustee.
SECTION 2.18. JUDGMENTS. The Company may provide pursuant to
Section 2.03 for Debt Securities of any series that (a) the obligation, if any,
of the Company to pay the principal of, and premium, if any, and interest on,
the Debt Securities of any series in a Foreign Currency or Dollars (the
"Designated Currency") as may be specified pursuant to Section 2.03 is of the
essence and agrees that, to the fullest extent possible under applicable law,
judgments in respect of Debt Securities of such series shall be given in the
Designated Currency; (b) the obligation of the Company to make payments in the
Designated Currency of the principal of, and premium, if any, and interest on,
such Debt Securities shall, notwithstanding any payment in any other Currency
(whether pursuant to a judgment or otherwise), be discharged only to the extent
of the amount in the Designated Currency that the Holder receiving such payment
may, in accordance with normal banking procedures, purchase with the sum paid in
such other Currency (after any premium and cost of
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exchange) on the business day in the country of issue of the Designated Currency
or in the international banking community (in the case of a composite currency)
immediately following the day on which such Holder receives such payment; (c) if
the amount in the Designated Currency that may be so purchased for any reason
falls short of the amount originally due, the Company shall pay such additional
amounts as may be necessary to compensate for such shortfall; and (d) any
obligation of the Company not discharged by such payment shall be due as a
separate and independent obligation and, until discharged as provided herein,
shall continue in full force and effect.
ARTICLE III
Redemption of Debt Securities
-----------------------------
SECTION 3.01. APPLICABILITY OF ARTICLE. The provisions of this
Article shall be applicable to the Debt Securities of any series which are
redeemable before their Stated Maturity except as otherwise specified as
contemplated by Section 2.03 for Debt Securities of such series.
SECTION 3.02. NOTICE OF REDEMPTION; SELECTION OF DEBT
SECURITIES. In case the Company shall desire to exercise the right to redeem all
or, as the case may be, any part of the Debt Securities of any series in
accordance with their terms, a resolution of the Board of Directors of the
Company or a supplemental Indenture, the Company shall fix a date for redemption
and shall give notice of such redemption at least 30 and not more than 60 days
prior to the date fixed for redemption to the Holders of Debt Securities of such
series so to be redeemed as a whole or in part, in the manner provided in
Section 12.03. The notice if given in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice. In any case, failure to give such notice or any defect in
the notice to the Holder of any Debt Security of a series designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Debt Security of such series.
Each such notice of redemption shall specify the date fixed
for redemption, the redemption price at which Debt Securities of such series are
to be redeemed, the Place or Places of Payment that payment will be made upon
presentation and
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surrender of such Debt Securities, that any interest accrued to the date fixed
for redemption will be paid as specified in said notice, that the redemption is
for a sinking fund payment (if applicable), that on and after said date any
interest thereon or on the portions thereof to be redeemed will cease to accrue,
that in the case of Original Issue Discount Securities original issue discount
accrued after the date fixed for redemption will cease to accrue, the terms of
the Debt Securities of that series pursuant to which the Debt Securities of that
series are being redeemed and that no representation is made as to the
correctness or accuracy of the CUSIP number, if any, listed in such notice or
printed on the Debt Securities of that series. If less than all the Debt
Securities of a series are to be redeemed the notice of redemption shall specify
the CUSIP numbers of the Debt Securities of that series to be redeemed. In case
any Debt Security of a series is to be redeemed in part only, the notice of
redemption shall state the portion of the principal amount thereof to be
redeemed and shall state that on and after the date fixed for redemption, upon
surrender of such Debt Security, a new Debt Security or Debt Securities of that
series in principal amount equal to the unredeemed portion thereof.
At least 60 days before the redemption date unless the Trustee
consents to a shorter period, the Company shall give notice to the Trustee of
the redemption date, the principal amount of Debt Securities to be redeemed and
the series and terms of the Debt Securities pursuant to which such redemption
will occur. Such notice shall be accompanied by an Officers' Certificate and an
Opinion of Counsel from the Company to the effect that such redemption will
comply with the conditions herein. If fewer than all the Debt Securities of a
series are to be redeemed, the record date relating to such redemption shall be
selected by the Company and given to the Trustee, which record date shall be not
less than 15 days after the date of notice to the Trustee.
On or prior to the redemption date for any Registered
Securities, the Company shall deposit with the Trustee or with a paying agent
(or, if the Company is acting as its own paying agent, segregate and hold in
trust) an amount of money in the Currency in which such Debt Securities are
denominated (except as provided pursuant to Section 2.03) sufficient to pay the
redemption price of such Registered Securities or any portions thereof that are
to be redeemed on that date.
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If less than all the Debt Securities of like tenor and terms
of a series are to be redeemed (other than pursuant to mandatory sinking fund
redemptions) the Trustee shall select, in such manner as in its sole discretion
it shall deem appropriate and fair, the Debt Securities of that series or
portions thereof (in multiples of $1,000) to be redeemed. In any case where more
than one Registered Security of such series is registered in the same name, the
Trustee in its discretion may treat the aggregate principal amount so registered
as if it were represented by one Registered Security of such series. The Trustee
shall promptly notify the Company in writing of the Debt Securities selected for
redemption and, in the case of any Debt Securities selected for partial
redemption, the principal amount thereof to be redeemed. If any Debt Security
called for redemption shall not be so paid upon surrender thereof on such
redemption date, the principal, premium, if any, and interest shall bear
interest until paid from the redemption date at the rate borne by the Debt
Securities of that series. If less than all the Debt Securities of unlike tenor
and terms of a series are to be redeemed, the particular Debt Securities to be
redeemed shall be selected by the Company. Provisions of this Indenture that
apply to Debt Securities called for redemption also apply to portions of Debt
Securities called for redemption.
SECTION 3.03. PAYMENT OF DEBT SECURITIES CALLED FOR
REDEMPTION. If notice of redemption has been given as provided in Section 3.02,
the Debt Securities or portions of Debt Securities of the series with respect to
which such notice has been given shall become due and payable on the date and at
the Place or Places of Payment stated in such notice at the applicable
redemption price, together with any interest accrued to the date fixed for
redemption, and on and after said date (unless the Company shall default in the
payment of such Debt Securities at the applicable redemption price, together
with any interest accrued to said date) any interest on the Debt Securities or
portions of Debt Securities of any series so called for redemption shall cease
to accrue and any original issue discount in the case of Original Issue Discount
Securities shall cease to accrue. On presentation and surrender of such Debt
Securities at the Place or Places of Payment in said notice specified, the said
Debt Securities or the specified portions thereof shall be paid and redeemed by
the Company at the applicable redemption price, together with any interest
accrued thereon to the date fixed for redemption.
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Any Debt Security that is to be redeemed only in part shall be
surrendered at the corporate trust office or such other office or agency of the
Company as is specified pursuant to Section 2.03 (in the case of Registered
Securities) and at the principal London office of the Trustee or such other
office or agency of the Company outside the United States as is specified
pursuant to Section 2.03 (in the case of Bearer Securities) with, if the
Company, the Registrar or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company, the
Registrar and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing, and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Debt Security without service
charge, a new Debt Security or Debt Securities of the same series, of like tenor
and form, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Debt Security so surrendered; except that if a Global
Security is so surrendered, the Company shall execute, and the Trustee shall
authenticate and deliver to the Depositary for such Global Security, without
service charge, a new Global Security in a denomination equal to and in exchange
for the unredeemed portion of the principal of the Global Security so
surrendered. In the case of a Debt Security providing appropriate space for such
notation, at the option of the Holder thereof, the Trustee, in lieu of
delivering a new Debt Security or Debt Securities as aforesaid, may make a
notation on such Debt Security of the payment of the redeemed portion thereof.
SECTION 3.04. MANDATORY AND OPTIONAL SINKING FUNDS. The
minimum amount of any sinking fund payment provided for by the terms of Debt
Securities of any series, resolution of the Board of Directors or a supplemental
Indenture is herein referred to as a "mandatory sinking fund payment", and any
payment in excess of such minimum amount provided for by the terms of Debt
Securities of any series, resolution of the Board of Directors or a supplemental
Indenture is herein referred to as an "optional sinking fund payment".
In lieu of making all or any part of any mandatory sinking
fund payment with respect to any Debt Securities of a series in cash, the
Company may at its option (a) deliver to the Trustee Debt Securities of that
series (together with the unmatured Coupons, if any, appertaining thereto)
theretofore purchased or otherwise acquired by the Company or (b) receive
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credit for the principal amount of Debt Securities of that series which have
been redeemed either at the election of the Company pursuant to the terms of
such Debt Securities or through the application of permitted optional sinking
fund payments pursuant to the terms of such Debt Securities, resolution or
supplemental Indenture; PROVIDED, that such Debt Securities have not been
previously so credited. Such Debt Securities shall be received and credited for
such purpose by the Trustee at the redemption price specified in such Debt
Securities, resolution or supplemental Indenture for redemption through
operation of the sinking fund and the amount of such mandatory sinking fund
payment shall be reduced accordingly.
SECTION 3.05. REDEMPTION OF DEBT SECURITIES FOR SINKING FUND.
Not less than 60 days prior to each sinking fund payment date for any series of
Debt Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, any resolution or supplemental
Indenture, the portion thereof, if any, which is to be satisfied by payment of
cash in the Currency in which the Debt Securities of such series are denominated
(except as provided pursuant to Section 2.03) and the portion thereof, if any,
which is to be satisfied by delivering and crediting Debt Securities of that
series pursuant to this Section 3.05 (which Debt Securities, if not previously
redeemed, will accompany such certificate) and whether the Company intends to
exercise its right to make any permitted optional sinking fund payment with
respect to such series. Such certificate shall also state that no Event of
Default has occurred and is continuing with respect to such series. Such
certificate shall be irrevocable and upon its delivery the Company shall be
obligated to make the cash payment or payments therein referred to, if any, on
or before the next succeeding sinking fund payment date. Failure of the Company
to deliver such certificate (or to deliver the Debt Securities specified in this
paragraph) shall not constitute a Default, but such failure shall require that
the sinking fund payment due on the next succeeding sinking fund payment date
for that series shall be paid entirely in cash and shall be sufficient to redeem
the principal amount of such Debt Securities subject to a mandatory sinking fund
payment without the option to deliver or credit Debt Securities as provided in
this Section 3.05 and without the right to make any optional sinking fund
payment, if any, with respect to such series.
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Any sinking fund payment or payments (mandatory or optional)
made in cash plus any unused balance of any preceding sinking fund payments made
in cash which shall equal or exceed $100,000 (or a lesser sum if the Company
shall so request) with respect to the Debt Securities of any particular series
shall be applied by the Trustee on the sinking fund payment date on which such
payment is made (or, if such payment is made before a sinking fund payment date,
on the sinking fund payment date following the date of such payment) to the
redemption of such Debt Securities at the Redemption Price specified in such
Debt Securities, resolution or supplemental Indenture for operation of the
sinking fund together with any accrued interest to the date fixed for
redemption. Any sinking fund moneys not so applied or allocated by the Trustee
to the redemption of Debt Securities shall be added to the next cash sinking
fund payment received by the Trustee for such series and, together with such
payment, shall be applied in accordance with the provisions of this Section
3.05. Any and all sinking fund moneys with respect to the Debt Securities of any
particular series held by the Trustee on the last sinking fund payment date with
respect to Debt Securities of such series and not held for the payment or
redemption of particular Debt Securities shall be applied by the Trustee,
together with other moneys, if necessary, to be deposited sufficient for the
purpose, to the payment of the principal of the Debt Securities of that series
at its Stated Maturity.
The Trustee shall select the Debt Securities to be redeemed
upon such sinking fund payment date in the manner specified in the last
paragraph of Section 3.02 and the Company shall cause notice of the redemption
thereof to be given in the manner provided in Section 3.02 except that the
notice of redemption shall also state that the Debt Securities are being
redeemed by operation of the sinking fund. Such notice having been duly given,
the redemption of such Debt Securities shall be made upon the terms and in the
manner stated in Section 3.O3.
At least one business day before each sinking fund payment
date, the Company shall pay to the Trustee (or, if the Company is acting as its
own paying agent, the Company shall segregate and hold in trust) in cash a sum
in the Currency in which the Debt Securities of such series are denominated
(except as provided pursuant to Section 2.03) equal to any interest accrued to
the date fixed for redemption of Debt Securities or
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portions thereof to be redeemed on such sinking fund payment date pursuant to
this Section 3.05.
The Trustee shall not redeem any Debt Securities of a series
with sinking fund moneys or mail any notice of redemption of such Debt
Securities by operation of the sinking fund for such series during the
continuance of a Default in payment of interest on such Debt Securities or of
any Event of Default (other than an Event of Default occurring as a consequence
of this paragraph) with respect to such Debt Securities, except that if the
notice of redemption of any such Debt Securities shall theretofore have been
mailed in accordance with the provisions hereof, the Trustee shall redeem such
Debt Securities if cash sufficient for that purpose shall be deposited with the
Trustee for that purpose in accordance with the terms of this Article III.
Except as aforesaid, any moneys in the sinking fund for such series at the time
when any such Default or Event of Default shall occur and any moneys thereafter
paid into such sinking fund shall, during the continuance of such Default or
Event of Default, be held as security for the payment of such Debt Securities;
PROVIDED, HOWEVER, that in case such Event of Default or Default shall have been
cured or waived as provided herein, such moneys shall thereafter be applied on
the next sinking fund payment date for such Debt Securities on which such moneys
may be applied pursuant to the provisions of this Section 3.05.
ARTICLE IV
Particular Covenants of the Company
-----------------------------------
SECTION 4.01. PAYMENT OF PRINCIPAL OF, AND PREMIUM, IF ANY,
AND INTEREST ON, DEBT SECURITIES. The Company, for the benefit of each series of
Debt Securities, will duly and punctually pay or cause to be paid the principal
of, and premium, if any, and interest on, each of the Debt Securities at the
place, at the respective times and in the manner provided herein and in the Debt
Securities. Each installment of interest on the Debt Securities may at the
Company's option be paid by mailing checks for such interest payable to the
Person entitled thereto pursuant to Section 2.07(a) to the address of such
Person as it appears on the Debt Security Register.
Principal, premium and interest of Debt Securities of any
series shall be considered paid on the date due if on such
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date the Trustee or any paying agent holds in accordance with this Indenture
money sufficient to pay in the Currency in which the Debt Securities of such
series are denominated (except as provided pursuant to Section 2.03) all
principal, premium and interest then due.
The Company shall pay interest on overdue principal at the
rate specified therefor in the Debt Securities and it shall pay interest on
overdue installments of interest at the same rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICES OR AGENCIES FOR
REGISTRATION OF TRANSFER, EXCHANGE AND PAYMENT OF DEBT SECURITIES. The Company
will maintain in each Place of Payment for any series of Debt Securities, an
office or agency where Debt Securities of such series may be presented or
surrendered for payment, where Debt Securities of such series may be surrendered
for transfer or exchange and where notices and demands to or upon the Company in
respect of the Debt Securities of such series and this Indenture may be served.
The Company will give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the corporate trust office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
presentations, surrenders, notices and demands.
The Company may also from time to time designate different or
additional offices or agencies to be maintained for such purposes (in or outside
of such Place of Payment), and may from time to time rescind any such
designation; PROVIDED, HOWEVER, that no such designation or rescission shall in
any manner relieve the Company of its obligations described in the preceding
paragraph. The Company will give prompt written notice to the Trustee of any
such additional designation or rescission of designation and any change in the
location of any such different or additional office or agency.
SECTION 4.03. APPOINTMENT TO FILL A VACANCY IN THE OFFICE OF
TRUSTEE. The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 7.10, a
Trustee, so that there shall
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at all times be a Trustee hereunder with respect to each series of Debt
Securities.
SECTION 4.04. DUTIES OF PAYING AGENTS, ETC. (a) The Company
shall cause each paying agent, if any, other than the Trustee, to execute and
deliver to the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provisions of this Section 4.04,
(i) that it will hold all sums held by it as such agent for
the payment of the principal of, and premium, if any, or interest on,
the Debt Securities of any series (whether such sums have been paid to
it by the Company or by any other obligor on the Debt Securities of
such series) in trust for the benefit of the Holders of the Debt
Securities of such series;
(ii) that it will give the Trustee notice of any failure by
the Company (or by any other obligor on the Debt Securities of such
series) to make any payment of the principal of and premium, if any, or
interest on, the Debt Securities of such series when the same shall be
due and payable; and
(iii) that it will at any time during the continuance of an
Event of Default, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held by it as such agent.
(b) If the Company shall act as its own paying agent, it will,
on or before each due date of the principal of, and premium, if any, or interest
on, the Debt Securities if any, of any series, set aside, segregate and hold in
trust for the benefit of the Holders of the Debt Securities of such series a sum
sufficient to pay such principal, premium, if any, or interest so becoming due.
The Company will promptly notify the Trustee of any failure by the Company to
take such action or the failure by any other obligor on such Debt Securities to
make any payment of the principal of, and premium, if any, or interest on, such
Debt Securities when the same shall be due and payable.
(c) Anything in this Section 4.04 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other reason, pay or
cause to be paid to the Trustee all sums
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held in trust by it or any paying agent, as required by this Section 4.04, such
sums to be held by the Trustee upon the same trusts as those upon which such
sums were held by the Company or such paying agent.
(d) Whenever the Company shall have one or more paying agents
with respect to any series of Debt Securities, it will, prior to each due date
of the principal of, and premium, if any, or interest on, any Debt Securities of
such series, deposit with any such paying agent a sum sufficient to pay the
principal, premium or interest so becoming due, such sum to be held in trust for
the benefit of the Persons entitled thereto, and (unless any such paying agent
is the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
(e) Anything in this Section 4.04 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section
4.04 is subject to the provisions of Section 11.05.
SECTION 4.05. STATEMENT BY OFFICERS AS TO DEFAULT. The Company
will deliver to the Trustee, on or before a date not more than four months after
the end of each fiscal year of the Company (currently ending May 31) ending
after the date hereof, an Officers' Certificate stating, as to each officer
signing such certificate, that (i) in the course of his performance of his
duties as an officer of the Company he would normally have knowledge of any
Default, (ii) whether or not to the best of his knowledge any Default occurred
during such year and (iii) if to the best of his knowledge the Company is in
Default, specifying all such Defaults and what action the Company is taking or
proposes to take with respect thereto. The Company also shall comply with
Section 3l4(a)(4) of the Trust Indenture Act.
Section 4.06. FURTHER INSTRUMENTS AND ACTS. The Company will,
upon request of the Trustee, execute and deliver such further instrument and do
such further acts as may reasonably be necessary or proper to carry out more
effectually the purposes of this Indenture.
Section 4.07. EXISTENCE. Subject to Article X, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its existence, rights (charter and statutory) and franchises;
PROVIDED, HOWEVER, that the Company shall not be required to preserve any such
right or
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franchise if the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
Section 4.08. MAINTENANCE OF PROPERTIES. The Company will
cause all properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on by the Company and
its Subsidiaries may be properly and advantageously conducted at all times;
PROVIDED, HOWEVER, that nothing in this Section shall prevent the Company or a
Subsidiary from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Company, not
materially detrimental to the conduct of the business of the Company and its
Subsidiaries, taken as a whole, and not disadvantageous in any material respect
to the Holders.
SECTION 4.09. PAYMENT OF TAXES AND OTHER CLAIMS. The Company
will pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any Subsidiary, PROVIDED, HOWEVER, that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.
SECTION 4.10. LIMITATION ON LIENS. Unless the Company
contemporaneously secures the Debt Securities equally and ratably with (or prior
to) such obligation, the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or permit to exist any Lien on
any Principal Property, or any shares of Capital Stock or any Indebtedness of
any Restricted Subsidiary whether owned on the Issue Date or thereafter
acquired, securing any obligation except for:
(i) Permitted Liens; or
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(ii) Liens other than those referred to in Section 4.10(i)
above securing Indebtedness if, after giving pro forma effect to the
Incurrence of such Indebtedness (and the receipt and application of the
proceeds thereof) or the securing of outstanding Indebtedness, the sum
of (without duplication) (A) all Indebtedness of the Company and its
Subsidiaries secured by Liens (other than Permitted Liens) and (B) all
Attributable Indebtedness in respect of Sale/Leaseback Transactions
with respect to any Principal Property, at the time of determination
does not exceed 10% of Consolidated Net Tangible Assets.
SECTION 4.11. LIMITATION ON SALE/LEASEBACK TRANSACTIONS. The
Company shall not, and shall not permit any of its Subsidiaries to, enter into
any Sale/Leaseback Transaction with respect to any Principal Property unless (i)
the Company or such Subsidiary would be entitled to create a Lien on such
Principal Property securing Indebtedness in an amount equal to the Attributable
Indebtedness with respect to such Sale/Leaseback Transaction without securing
the Debt Securities pursuant to Section 4.10 or (ii) the Company, within six
months from the effective date of such Sale/Leaseback Transaction, applies to
the voluntary defeasance or retirement (excluding retirements of Debt Securities
and other Indebtedness ranking PARI PASSU with the Debt Securities as a result
of conversions or pursuant to mandatory sinking fund or mandatory prepayment
provisions or by payment at maturity) of Debt Securities or other Indebtedness
ranking PARI PASSU with the Debt Securities an amount equal to the Attributable
Indebtedness in respect of such Sale/Leaseback Transaction.
SECTION 4.12. LIMITATION ON INDEBTEDNESS OF RESTRICTED
SUBSIDIARIES. The Company will not permit any Restricted Subsidiary to issue,
assume or guarantee any Indebtedness for borrowed money other than (1)
Indebtedness secured by a lien which such Restricted Subsidiary is permitted to
create or assume pursuant to Section 4.10 without securing the Securities, (2)
Indebtedness to the Company or another Restricted Subsidiary, (3) Indebtedness
of any corporation that exists at the time such corporation becomes a Restricted
Subsidiary, PROVIDED that, such indebtedness is not incurred in anticipation of
such corporation becoming a Restricted Subsidiary, (4) Indebtedness of a
corporation that exists at the time such corporation is merged with or into or
consolidated with a Restricted Subsidiary or at
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the time of a sale, lease or other disposition of all or substantially all the
properties of a corporation to a Restricted Subsidiary, PROVIDED that, such
Indebtedness is not incurred in anticipation of such merger, consolidation or
sale, lease or other disposition, (5) Indebtedness incurred in connection with
any industrial development bond financing, (6) Indebtedness incurred by such
Restricted Subsidiary in the ordinary course of the business of such Restricted
Subsidiary and which matures not more than, and is not renewable or executable
at the option of the obligor to a date more than, twelve months after the date
such Indebtedness is incurred, and (7) Indebtedness incurred by any Restricted
Subsidiary to extend, renew or replace, in whole or in part, any Indebtedness
referred to in the foregoing clauses (3) or (4) or Indebtedness of any
Restricted Subsidiary existing at the date hereof, PROVIDED that the principal
amount of Indebtedness so incurred shall not exceed the principal amount of
indebtedness outstanding at the time of such extension, renewal or replacement.
Notwithstanding the foregoing, the Company may permit one or
more Restricted Subsidiaries to issue, assume or guarantee any Indebtedness for
borrowed money which is not secured by a Lien upon any Principal Property or
shares of Capital Stock or Indebtedness of any Restricted Subsidiary, PROVIDED
that, the aggregate amount of all such Indebtedness permitted by this paragraph
(together with all Liens created, assumed or incurred by the Company and its
Subsidiaries (as measured by all Indebtedness secured by all such Liens then
outstanding or to be so created or assumed) and all Sale/Leaseback Transactions
entered into (as measured by the Attributable Indebtedness of all such
Sale/Leaseback Transactions then outstanding or to be so entered into)) at any
time outstanding shall not exceed 10% of Consolidated Net Tangible Assets.
SECTION 4.13. LIMITATION ON ISSUANCE OF PREFERRED STOCK BY
RESTRICTED SUBSIDIARIES. The Company will not permit any of its Restricted
Subsidiaries to issue any Preferred or preference Stock (except to the Company
or any wholly owned Restricted Subsidiary) or permit any person other than the
Company or any wholly owned Restricted Subsidiary to hold any such Preferred or
preference Stock.
ARTICLE V
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Holders' Lists and Reports
--------------------------
by the Company and the Trustee
------------------------------
SECTION 5.01. COMPANY TO FURNISH TRUSTEE INFORMATION AS TO
NAMES AND ADDRESSES OF HOLDERS; PRESERVATION OF INFORMATION. The Company
covenants and agrees that it will furnish or cause to be furnished to the
Trustee with respect to the Registered Securities of each series:
(a) not more than 15 days after each record date with respect
to the payment of interest, if any, a list, in such form as the Trustee
may reasonably require, of the names and addresses of the Registered
Holders as of such record date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list as of a date not more than 15 days prior to the time such list is
furnished;
PROVIDED, HOWEVER, that so long as the Trustee shall be the Registrar, such
lists shall not be required to be furnished.
The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
Holders (l) contained in the most recent list furnished to it as provided in
this Section 5.01 or (2) received by it in the capacity of paying agent or
Registrar (if so acting) hereunder.
The Trustee may destroy any list furnished to it as provided
in this Section 5.01 upon receipt of a new list so furnished.
SECTION 5.02. COMMUNICATIONS TO HOLDERS. Holders may
communicate pursuant to Section 312(b) of the Trust Indenture Act with other
Holders with respect to their rights under this Indenture or the Debt
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of Section 312(c) of the Trust Indenture Act.
SECTION 5.03. REPORTS BY COMPANY. (a) The Company covenants
and agrees, and any obligor hereunder shall covenant and agree, to file with the
Trustee and the Holders (in the manner and to the extent provided in Section
5.04), within 15
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days after the Company or such obligor, as the case may be, is required to file
the same with the Securities and Exchange Commission, copies of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as said Commission may from time to time by
rules and regulations prescribe) which the Company or such obligor, as the case
may be, may be required to file with said Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company or such obligor, as the
case may be, is not required to file information, documents or reports pursuant
to either of such Sections, then to file with the Trustee, the Holders (in the
manner and to the extent provided in Section 5.04) and said Commission, in
accordance with rules and regulations prescribed from time to time by said
Commission, such of the supplementary and periodic information, documents and
reports which may be required pursuant to Section 13 of the Exchange Act in
respect of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations.
(b) The Company covenants and agrees, and any obligor
hereunder shall covenant and agree, to file with the Trustee, the Holders (in
the manner and to the extent provided in Section 5.04) and the Securities and
Exchange Commission, in accordance with the rules and regulations prescribed
from time to time by said Commission, such additional information, documents,
and reports with respect to compliance by the Company or such obligor, as the
case may be, with the conditions and covenants provided for in this Indenture as
may be required from time to time by such rules and regulations.
SECTION 5.04. REPORTS BY TRUSTEE. As promptly as practicable
after each January 1 beginning with the January 1 following the date of this
Indenture, and in any event prior to February 15 in each year, the Trustee shall
mail to each Holder a brief report dated as of the previous December 31 that
complies with Section 313(a) of the Trust Indenture Act. The Trustee also shall
comply with Section 313(b) of the Trust Indenture Act.
Reports pursuant to this Section 5.04 shall be transmitted by
mail:
(1) to all Registered Holders, as the names and addresses of
such Holders appear in the Debt Security Register;
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(2) except in the cases of reports under Section 313(b)(2) of
the Trust Indenture Act, to each holder of a Debt Security of any
series whose name and address appear in the information preserved at
the time by the Trustee in accordance with Section 5.02.
A copy of each report at the time of its mailing to Holders
shall be filed with the Securities and Exchange Commission and each stock
exchange (if any) on which the Debt Securities of any series are listed. The
Company agrees to notify promptly the Trustee whenever the Debt Securities of
any series become listed on any stock exchange and of any delisting thereof.
SECTION 5.05. RECORD DATES FOR ACTION BY HOLDERS. If the
Company shall solicit from the Holders of Debt Securities of any series any
action (including the making of any demand or request, the giving of any
direction, notice, consent or waiver or the taking of any other action), the
Company may, at its option, by resolution of the Board of Directors, fix in
advance a record date for the determination of Holders of Debt Securities
entitled to take such action, but the Company shall have no obligation to do so.
Any such record date shall be fixed at the Company's discretion. If such a
record date is fixed, such action may be sought or given before or after the
record date, but only the Holders of Debt Securities of record at the close of
business on such record date shall be deemed to be Holders of Debt Securities
for the purpose of determining whether Holders of the requisite proportion of
Debt Securities of such series Outstanding have authorized or agreed or
consented to such action, and for that purpose the Debt Securities of such
series Outstanding shall be computed as of such record date.
ARTICLE VI
Remedies of the Trustee and Holders in Event of Default
-------------------------------------------------------
SECTION 6.01. EVENTS OF DEFAULT. If any one or more of the
following shall have occurred and be continuing with respect to Debt Securities
of any series (each of the following, an "Event of Default"):
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(a) default in the payment of any installment of interest upon
any Debt Securities of that series as and when the same shall become
due and payable, and continuance of such default for a period of 30
days; or
(b) default in the payment of the principal of or premium, if
any, on any Debt Securities of that series as and when the same shall
become due and payable, whether at maturity, upon redemption, by
declaration, upon required repurchase or otherwise; or
(c) default in the payment of any sinking fund payment with
respect to any Debt Securities of that series as and when the same
shall become due and payable; or
(d) failure on the part of the Company to comply with Article
X; or
(e) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the
Company in the Debt Securities of that series, in any resolution of the
Board of Directors authorizing the issuance of that series of Debt
Securities, in this Indenture with respect to such series or in any
supplemental Indenture with respect to such series (other than a
covenant a default in the performance of which is elsewhere in this
Section specifically dealt with), continuing for a period of 60 days
after the date on which written notice specifying such failure and
requiring the Company to remedy the same shall have been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Debt Securities of that series at the time
Outstanding; or
(f) Indebtedness of the Company or any Subsidiary of the
Company is not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a default,
the total amount of such Indebtedness unpaid or accelerated exceeds
$20,000,000 or its Dollar Equivalent at the time and such default
remains uncured or such acceleration is not rescinded for 10 days after
the date on which written notice specifying such failure and requiring
the Company to remedy the same shall have been given, by registered or
certified mail, to the
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Company by the Trustee or to the Company and the Trustee by the Holders
of at least 25% in aggregate principal amount of the Debt Securities of
that series at the time Outstanding; or
(g) the Company or any of its Restricted Subsidiaries shall
(i) voluntarily commence any proceeding or file any petition seeking
relief under Title 11 of the United States Code or any other Federal or
State bankruptcy, insolvency or similar law, (ii) consent to the
institution of, or fail to controvert within the time and in the manner
prescribed by law, any such proceeding or the filing of any such
petition, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator or similar official for the Company or
any such Restricted Subsidiary or for a substantial part of its
property, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors, (vi) admit in writing its
inability or fail generally to pay its debts as they become due, (vii)
take corporate action for the purpose of effecting any of the
foregoing, or (viii) take any comparable action under any foreign laws
relating to insolvency; or
(h) the entry of an order or decree by a court having
competent jurisdiction in the premises for (i) relief in respect of the
Company or any of its Restricted Subsidiaries or a substantial part of
any of their property under Title 11 or the United States Code or any
other Federal or State bankruptcy, insolvency or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator or similar
official for the Company or any such Restricted Subsidiary or for a
substantial part of any of their property (except any decree or order
appointing such official of any Restricted Subsidiary pursuant to a
plan under which the assets and operations of such Restricted
Subsidiary are transferred to or combined with another Subsidiary or
Subsidiaries of the Company or to the Company) or (iii) the winding-up
or liquidation of the Company or any such Restricted Subsidiary (except
any decree or order approving or ordering the winding up or liquidation
of the affairs of a Restricted Subsidiary pursuant to a plan under
which the assets and operations of such Restricted Subsidiary are
transferred to or combined with another Subsidiary or
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Subsidiaries of the Company or to the Company); and such order or
decree shall continue unstayed and in effect for 60 consecutive days;
or any similar relief is granted under any foreign laws and the order
or decree stays in effect for 60 consecutive days; or
(i) any judgment or decree for the payment of money in excess
of $20,000,000 or its Dollar Equivalent at the time is entered against
the Company or any Subsidiary of the Company by a court or courts of
competent jurisdiction, which judgment is not covered by insurance, and
is not discharged and either (A) an enforcement proceeding has been
commenced by any creditor upon such judgment or decree or (B) there is
a period of 60 days following the entry of such judgment or decree
during which such judgment or decree is not discharged, waived or the
execution thereof stayed and, in the case of (A) or (B), such default
continues for 10 days after the date on which written notice specifying
such failure and requiring the Company to remedy the same shall have
been given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least
25% in aggregate principal amount of the Debt Securities of that series
at the time Outstanding; or
(j) any other Event of Default provided with respect to Debt
Securities of that series;
then and in each and every case that an Event of Default described in clause
(a), (b), (c), (d), (e), (f), (i) or (j) with respect to Debt Securities of that
series at the time Outstanding occurs and is continuing, unless the principal of
and interest on all the Debt Securities of that series shall have already become
due and payable, either the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Debt Securities of that series then
Outstanding hereunder, by notice in writing to the Company (and to the Trustee
if given by Holders), may declare the principal of (or, if the Debt Securities
of that series are Original Issue Discount Debt Securities, such portion of the
principal amount as may be specified in the terms of that series) and interest
on all the Debt Securities of that series to be due and payable immediately, and
upon any such declaration the same shall become and shall be immediately due and
payable, anything in this Indenture or in the Debt Securities of that series
contained to the contrary notwithstanding. If an Event of
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Default described in clause (g) or (h) occurs, then and in each and every such
case, unless the principal of and interest on all the Debt Securities shall have
become due and payable, the principal of (or, if any Debt Securities are
Original Issue Discount Debt Securities, such portion of the principal amount as
may be specified in the terms thereto) and interest on all the Debt Securities
then Outstanding hereunder shall IPSO FACTO become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holders, anything in this Indenture or in the Debt Securities contained to the
contrary notwithstanding.
The Holders of a majority in principal amount of the Debt
Securities of a particular series by notice to the Trustee may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree already rendered and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of acceleration. Upon any such rescission, the parties hereto
shall be restored respectively to their several positions and rights hereunder,
and all rights, remedies and powers of the parties hereto shall continue as
though no proceeding had been taken.
In case the Trustee or any Holder shall have proceeded to
enforce any right under this Indenture and such proceedings shall have been
discontinued or abandoned because of such rescission or annulment or for any
other reason or shall have been determined adversely to the Trustee or such
Holder, then and in every such case the parties hereto shall be restored
respectively to their several positions and rights hereunder and all rights,
remedies and powers of the parties hereto shall continue as though no such
proceeding had been taken.
The foregoing Events of Default shall constitute Events of
Default whatever the reason for any such Event of Default and whether is
voluntary or involuntary or is effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body.
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any event which with the giving of notice and the lapse of time would become
an Event of Default
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under clause (c), (d), (e), (f), (i) or (j), its status and what action the
Company is taking or proposes to take with respect thereto.
SECTION 6.02. COLLECTION OF INDEBTEDNESS BY TRUSTEE, ETC. If
an Event of Default occurs and is continuing, the Trustee, in its own name and
as trustee of an express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the sums so due
and unpaid or enforce the performance of any provision of the Debt Securities of
the affected series or this Indenture, and may prosecute any such action or
proceedings to judgment or final decree, and may enforce any such judgment or
final decree against the Company or any other obligor upon the Debt Securities,
and the Coupons, if any, appertaining thereto, of such series (and collect in
the manner provided by law out of the property of the Company or any other
obligor upon the Debt Securities of such series wherever situated the moneys
adjudged or decreed to be payable).
In case there shall be pending proceedings for the bankruptcy
or for the reorganization of the Company or any other obligor upon the Debt
Securities of any series under Title 11 of the United States Code or any other
Federal or State bankruptcy, insolvency or similar law, or in case a receiver,
trustee or other similar official shall have been appointed for its property, or
in case of any other similar judicial proceedings relative to the Company or any
other obligor upon the Debt Securities of any series, its creditors or its
property, the Trustee, irrespective of whether the principal of Debt Securities
of any series shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand pursuant to the provisions of this Section 6.O2, shall be entitled
and empowered, by intervention in such proceedings or otherwise, to file and
prove a claim or claims for the whole amount of principal, premium, if any, and
interest (or, if the Debt Securities of such series are Original Issue Discount
Debt Securities, such portion of the principal amount as may be specified in the
terms of such series) owing and unpaid in respect of the Debt Securities of such
series, and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
for reimbursement of all expenses and liabilities Incurred, and all advances
made, by the
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Trustee except as a result of its negligence or bad faith) and of the Holders
thereof allowed in any such judicial proceedings relative to the Company, or any
other obligor upon the Debt Securities of such series, its creditors or its
property, and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of such Holders and of the Trustee on their behalf, and
any receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of such Holders to make payments to the Trustee, and, in the
event that the Trustee shall consent to the making of payments directly to such
Holders, to pay to the Trustee such amount as shall be sufficient to cover
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
all other reasonable expenses and liabilities Incurred, and all advances made,
by the Trustee except as a result of its negligence or bad faith.
All rights of action and of asserting claims under this
Indenture, or under any of the Debt Securities appertaining thereto, of any
series, may be enforced by the Trustee without the possession of any such Debt
Securities or the production thereof in any trial or other proceedings relative
thereto, and any such action or proceedings instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment (except for any amounts payable to the Trustee pursuant to Section
7.06) shall be for the ratable benefit of the Holders of all the Debt Securities
in respect of which such action was taken.
In case of an Event of Default hereunder the Trustee may in
its discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture, or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
SECTION 6.03. APPLICATION OF MONEYS COLLECTED BY TRUSTEE. Any
moneys or other property collected by the Trustee pursuant to Section 6.02 with
respect to Debt Securities of any series shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys or
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other property, upon presentation of the several Debt Securities of such series
in respect of which moneys or other property have been collected, and the
notation thereon of the payment, if only partially paid, and upon surrender
thereof if fully paid:
FIRST: To the payment of all money due the Trustee pursuant to
Section 7.06;
SECOND: In case the principal of the Outstanding Debt
Securities in respect of which such moneys have been collected shall
not have become due, to the payment of interest on the Debt Securities
of such series in the order of the maturity of the installments of such
interest, with interest (to the extent that such interest has been
collected by the Trustee) upon the overdue installments of interest at
the rate or Yield to Maturity (in the case of Original Issue Discount
Debt Securities) borne by the Debt Securities of such series, such
payments to be made ratably to the Persons entitled thereto, without
discrimination or preference;
THIRD: In case the principal of the Outstanding Debt
Securities in respect of which such moneys have been collected shall
have become due, by declaration or otherwise, to the payment of the
whole amount then owing and unpaid upon the Debt Securities of such
series for principal and premium, if any, and interest, with interest
on the overdue principal and premium, if any, and (to the extent that
such interest has been collected by the Trustee) upon overdue
installments of interest at the rate or Yield to Maturity (in the case
of Original Issue Discount Debt Securities) borne by the Debt
Securities of such series; and, in case such moneys shall be
insufficient to pay in full the whole amount so due and unpaid upon the
Debt Securities of such series, then to the payment of such principal
and premium, if any, and interest, without preference or priority of
principal and premium, if any, over interest, or of interest over
principal and premium, if any, or of any installment of interest over
any other installment of interest, or of any Debt Security of such
series over any Debt Security of such series, ratably to the aggregate
of such principal and premium, if any, and interest; and
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FOURTH: The remainder, if any, shall be paid to the Company,
its successors or assigns, or to whomsoever may be lawfully entitled to
receive the same, or as a court of competent jurisdiction may direct.
The Trustee may fix a record date and payment date for any
payment to Holders pursuant to this Section 6.03. At least 15 days before such
record date, the Company shall mail to each Holder and the Trustee a notice that
states the record date, the payment date and amount to be paid.
SECTION 6.04. LIMITATION ON SUITS BY HOLDERS. No Holder of any
Debt Security of any series shall have any right by virtue or by availing of any
provision of this Indenture to institute any action or proceeding at law or in
equity or in bankruptcy or otherwise, upon or under or with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless such Holder previously shall have given to the Trustee
written notice of an Event of Default with respect to Debt Securities of that
same series and of the continuance thereof and unless the Holders of not less
than 25% in aggregate principal amount of the Outstanding Debt Securities of
that series shall have made written request upon the Trustee to institute such
action or proceedings in respect of such Event of Default in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
Incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity shall have failed to institute any
such action or proceedings and no direction inconsistent with such written
request shall have been given to the Trustee pursuant to Section 6.06; it being
understood and intended, and being expressly covenanted by the Holder of every
Debt Security with every other Holder and the Trustee, that no one or more
Holders shall have any right in any manner whatever by virtue or by availing of
any provision of this Indenture to affect, disturb or prejudice the rights of
any Holders, or to obtain or seek to obtain priority over or preference to any
other such Holder, or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all such
Holders. For the protection and enforcement of the provisions of this Section
6.04, each and every Holder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
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Notwithstanding any other provision in this Indenture,
however, the right of any Holder of any Debt Security to receive payment of the
principal of, and premium, if any, and (subject to Section 2.12) interest on,
such Debt Security on or after the respective due dates expressed in such Debt
Security, and to institute suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of such Holder.
SECTION 6.05. REMEDIES CUMULATIVE; DELAY OR OMISSION IN
EXERCISE OF RIGHTS NOT A WAIVER OF DEFAULT. All powers and remedies given by
this Article VI to the Trustee or to the Holders shall, to the extent permitted
by law, be deemed cumulative and not exclusive of any thereof or of any other
powers and remedies available to the Trustee or the Holders, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any Holder to exercise any right or power accruing upon any
Default occurring and continuing as aforesaid, shall impair any such right or
power, or shall be construed to be a waiver of any such Default or an
acquiescence therein; and, subject to the provisions of Section 6.04, every
power and remedy given by this Article VI or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Holders.
SECTION 6.06. RIGHTS OF HOLDERS OF MAJORITY IN PRINCIPAL
AMOUNT OF DEBT SECURITIES TO DIRECT TRUSTEE AND TO WAIVE DEFAULT. The Holders of
a majority in aggregate principal amount of the Debt Securities of any series at
the time Outstanding shall have the right 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; PROVIDED, HOWEVER, that such direction shall not be
otherwise than in accordance with law and the provisions of this Indenture, and
that subject to the provisions of Section 7.01, the Trustee shall have the right
to decline to follow any such direction if the Trustee being advised by counsel
shall determine that the action so directed may not lawfully be taken, or if the
Trustee shall by a responsible officer or officers determine that the action so
directed would involve it in personal liability or would be unjustly prejudicial
to Holders of Debt Securities of
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such series not taking part in such direction; and PROVIDED, FURTHER, HOWEVER,
that nothing in this Indenture contained shall impair the right of the Trustee
to take any action deemed proper by the Trustee and which is not inconsistent
with such direction by such Holders. Prior to the acceleration of the maturity
of the Debt Securities of any series, as provided in Section 6.01, the Holders
of a majority in aggregate principal amount of the Debt Securities of that
series at the time Outstanding may on behalf of the Holders of all the Debt
Securities of that series waive any past Default or Event of Default and its
consequences for that series specified in the terms thereof as contemplated by
Section 2.03, except (i) a Default in the payment of the principal of, and
premium, if any, or interest on, any of the Debt Securities and (ii) a Default
in respect of a provision that under Section 9.02 cannot be amended without the
consent of each Holder affected thereby. In case of any such waiver, such
Default shall cease to exist, any Event of Default arising therefrom shall be
deemed to have been cured for every purpose of this Indenture, and the Company,
the Trustee and the Holders of the Debt Securities of that series shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
SECTION 6.07. TRUSTEE TO GIVE NOTICE OF DEFAULTS KNOWN TO IT,
BUT MAY WITHHOLD SUCH NOTICE IN CERTAIN CIRCUMSTANCES. The Trustee shall, within
90 days after the occurrence of a Default known to it with respect to a series
of Debt Securities give to the Holders thereof, in the manner provided in
Section 12.03, notice of all Defaults with respect to such series known to the
Trustee, unless such Defaults shall have been cured or waived before the giving
of such notice; PROVIDED, that, except in the case of Default in the payment of
the principal of, or premium, if any, or interest on, any of the Debt Securities
of such series or in the making of any sinking fund payment with respect to the
Debt Securities of such series, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee or
a committee of directors or responsible officers of the Trustee in good faith
determine that the withholding of such notice is in the interests of the Holders
thereof.
SECTION 6.08. REQUIREMENT OF AN UNDERTAKING TO PAY COSTS IN
CERTAIN SUITS UNDER THE INDENTURE OR AGAINST THE TRUSTEE. All parties to this
Indenture agree, and each Holder of
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any Debt Security by his acceptance thereof shall be deemed to have agreed, that
any court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit in the manner and to
the extent provided in the Trust Indenture Act, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 6.08 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than ten percent in principal amount of the Outstanding Debt
Securities of that series or to any suit instituted by any Holder for the
enforcement of the payment of the principal of, or premium, if any, or interest
on, any Debt Security on or after the due date for such payment expressed in
such Debt Security.
ARTICLE VII
Concerning the Trustee
----------------------
SECTION 7.01. CERTAIN DUTIES AND RESPONSIBILITIES. The
Trustee, prior to the occurrence of an Event of Default and after the curing or
waiving of all Events of Default which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this
Indenture. In case an Event of Default has occurred (which has not been cured or
waived), the Trustee shall exercise such of the rights and powers vested in it
by this 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.
No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(a) this subsection shall not be construed to limit the effect
of the first paragraph of this Section 7.01;
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(b) prior to the occurrence of an Event of Default with
respect to the Debt Securities of a series and after the curing or
waiving of all Events of Default with respect to such series which may
have occurred:
(1) the duties and obligations of the Trustee with
respect to Debt Securities of any series shall be determined
solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such
duties and obligations with respect to such series as are
specifically set forth in this Indenture, and no implied
covenants or obligations with respect to such series shall be
read into this Indenture against the Trustee; and
(2) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture;
but in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Indenture; but the Trustee shall examine
the evidence furnished to it pursuant to Section 5.03 to
determine whether or not such evidence conforms to the
requirement of this Indenture;
(c) the Trustee shall not be liable for an error of
judgment made in good faith by a responsible officer, unless
it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(d) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it with respect to
Debt Securities of any series in good faith in accordance with
the direction of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Debt Securities
of that series relating to the time, method and place of
conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the
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Trustee, under this Indenture with respect to Debt Securities
of such series.
None of the provisions of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any personal
financial liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if there shall be reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 7.02. CERTAIN RIGHTS OF TRUSTEE. Except as otherwise
provided in Section 7.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party
or parties;
(b) any request, direction, order or demand of the company
mentioned herein shall be sufficiently evidenced by a Company Order
(unless other evidence in respect thereof be herein specifically
prescribed); and any resolution of the Board of Directors may be
evidenced to the Trustee by a copy thereof certified by the Secretary
or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel, and the advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered
or omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request,
order or direction of any of the
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Holders of Debt Securities of any series pursuant to the provisions of
this Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be Incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Indenture;
(f) prior to the occurrence of an Event of Default and after
the curing of all Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, approval
or other paper or document, unless requested in writing to do so by the
Holders of a majority in aggregate principal amount of the then
outstanding Debt Securities of a series affected by such matter;
PROVIDED, HOWEVER, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is not, in the opinion of the
Trustee, reasonably assured to the Trustee by the security afforded to
it by the terms of this Indenture, the Trustee may require reasonable
indemnity against such costs, expenses or liabilities as a condition to
so proceeding. The reasonable expense of every such investigation shall
be paid by the Company or, if paid by the Trustee, shall be repaid by
the Company upon demand;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed by it with due care hereunder; and
(h) if any property other than cash shall at any time be
subject to a Lien in favor of the Holders, the Trustee, if and to the
extent authorized by a receivership or bankruptcy court of competent
jurisdiction or by the supplemental instrument subjecting such property
to such lien, shall be entitled to make advances for the purpose of
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preserving such property or of discharging tax Liens or other prior
Liens or encumbrances thereon.
SECTION 7.03. TRUSTEE NOT LIABLE FOR RECITALS IN INDENTURE OR
IN DEBT SECURITIES. The recitals contained herein, in the Debt Securities
(except the Trustee's certificate of authentication) shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Debt Securities of any series, except
that the Trustee represents that it is duly authorized to execute and deliver
this Indenture, authenticate the Debt Securities and perform its obligations
hereunder, and that the statements made by it or to be made by it in a Statement
of Eligibility and Qualification on Form T-l supplied to the Company are true
and accurate. The Trustee shall not be accountable for the use or application by
the Company of any of the Debt Securities or of the proceeds thereof.
SECTION 7.04. TRUSTEE, PAYING AGENT OR REGISTRAR MAY OWN DEBT
SECURITIES. The Trustee or any paying agent or Registrar, in its individual or
any other capacity, may become the owner or pledgee of Debt Securities and
subject to the provisions of the Trust Indenture Act relating to conflicts of
interest and preferential claims may otherwise deal with the Company with the
same rights it would have if it were not Trustee, paying agent or Registrar.
SECTION 7.05. MONEYS RECEIVED BY TRUSTEE TO BE HELD IN TRUST.
Subject to the provisions of Section 11.05, all moneys received by the Trustee
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any moneys received by it hereunder. So long as no
Event of Default shall have occurred and be continuing, all interest allowed on
any such moneys shall be paid from time to time to the Company upon a Company
Order.
SECTION 7.06. COMPENSATION AND REIMBURSEMENT. The Company
covenants and agrees to pay in Dollars to the Trustee from time to time, and the
Trustee shall be entitled to, reasonable compensation for all services rendered
by it hereunder (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust), and, except
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as otherwise expressly provided herein, the Company will pay or reimburse in
Dollars the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents, attorneys and counsel and of all
Persons not regularly in its employ) except any such expense, disbursement or
advances as may arise from its negligence or bad faith. The Company also
covenants to indemnify in Dollars the Trustee for, and to hold it harmless
against, any loss, liability or expense Incurred without negligence, willful
misconduct or bad faith on the part of the Trustee, arising out of or in
connection with the acceptance or administration of this trust or trusts
hereunder, including the reasonable costs and expenses of defending itself
against any claim of liability in connection with the exercise or performance of
any of its powers or duties hereunder. The obligations of the Company under this
Section 7.06 to compensate and indemnify the Trustee and to pay or reimburse the
Trustee for expenses, disbursements and advances shall constitute additional
Indebtedness hereunder and shall survive the satisfaction and discharge of this
Indenture. The Company and the Holders agree that such additional Indebtedness
shall be secured by a Lien prior to that of the Debt Securities upon all
property and funds held or collected by the Trustee, as such, except funds held
in trust for the payment of principal of, and premium, if any, or interest on,
particular Debt Securities.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(g) or (h) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency, reorganization or other similar
law.
SECTION 7.07. RIGHT OF TRUSTEE TO RELY ON AN OFFICERS'
CERTIFICATE WHERE NO OTHER EVIDENCE SPECIFICALLY PRESCRIBED. Except as otherwise
provided in Section 7.01, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Trustee,
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shall be full warrant to the Trustee for any action taken, suffered or omitted
by it under the provisions of this Indenture upon the faith thereof.
SECTION 7.08. SEPARATE TRUSTEE; REPLACEMENT OF TRUSTEE. The
Company may, but need not, appoint a separate Trustee for any one or more series
of Debt Securities. The Trustee may resign with respect to one or more or all
series of Debt Securities at any time by giving notice to the Company. The
Holders of a majority in principal amount of the Debt Securities of a particular
series may remove the Trustee for such series and only such series by so
notifying the Trustee and may appoint a successor Trustee. The Company shall
remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in principal amount of the Debt Securities of a particular
series and such Holders do not reasonably promptly appoint a successor Trustee,
or if a vacancy exists in the office of Trustee for any reason (the Trustee in
such event being referred to herein as the retiring Trustee), the Company shall
promptly appoint a successor Trustee. No resignation or removal of the Trustee
and no appointment of a successor Trustee shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of this Section 7.08.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of Debt Securities of each applicable series. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the Lien provided for in section 7.06.
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If a successor Trustee does not take office within 60 days
after the retiring Trustee gives notice of resignation or is removed, the
retiring Trustee or the Holders of 25% in principal amount of the Debt
Securities of any applicable series may petition any court of competent
jurisdiction for the appointment of a successor Trustee for the Debt Securities
of such series.
If the Trustee fails to comply with Section 7.10, any Holder
of Debt Securities of any applicable series may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee for the Debt Securities of such series.
Notwithstanding the replacement of the Trustee pursuant to
this Section 7.08, the Company's obligations under Section 7.06 shall continue
for the benefit of the retiring Trustee.
In the case of the appointment hereunder of a separate or
successor trustee with respect to the Debt Securities of one or more series, the
Company, any retiring Trustee and each successor or separate Trustee with
respect to the Debt Securities of any applicable series shall execute and
deliver an Indenture supplemental hereto (1) which shall contain such provisions
as shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of any retiring trustee with respect to the Debt
Securities of any series as to which any such retiring Trustee is not retiring
shall continue to be vested in such retiring Trustee and (2) that shall add to
or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one trustee, it being understood that nothing herein or in such
supplemental Indenture shall constitute such Trustees co-trustees of the same
trust and that each such separate, retiring or successor Trustee shall be
Trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation or banking
association without any further act shall be the successor Trustee.
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In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Debt Securities shall have been authenticated but
not delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Debt Securities so
authenticated; and in case at that time any of the Debt Securities shall not
have been authenticated, any successor to the Trustee may authenticate such Debt
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Debt Securities or in this Indenture
provided that the certificate of the Trustee shall have.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall
at all times satisfy the requirements of Section 310(a) of the Trust Indenture
Act. The Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition. No obligor upon the Debt Securities of a particular series or Person
directly or indirectly controlling, controlled by or under common control with
such obligor shall serve as Trustee upon the Debt Securities of such series. The
Trustee shall comply with Section 310(b) of the Trust Indenture Act; PROVIDED,
HOWEVER, that there shall be excluded from the operation of Section 310(b)(l) of
the Trust Indenture Act this Indenture or any indenture or indentures under
which other securities or certificates of interest or participation in other
securities of the Company are outstanding if the requirements for such exclusion
set forth in Section 310(b)(l) of the Trust Indenture Act are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY. The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent indicated therein.
SECTION 7.l2. COMPLIANCE WITH TAX LAWS. The Trustee hereby
agrees to comply with all U.S. Federal income tax information reporting and
withholding requirements applicable to it with respect to payments of premium
(if any) and interest on the Debt Securities, whether acting as Trustee,
Security
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Registrar, paying agent or otherwise with respect to the Debt Securities.
ARTICLE VIII
Concerning the Holders
----------------------
SECTION 8.01. EVIDENCE OF ACTION BY HOLDERS. Whenever in this
Indenture it is provided that the Holders of a specified percentage in aggregate
principal amount of the Debt Securities of any or all series may take action
(including the making of any demand or request, the giving of any direction,
notice, consent or waiver or the taking of any other action) the fact that at
the time of taking any such action the Holders of such specified percentage have
joined therein may be evidenced (a) by any instrument or any number of
instruments of similar tenor executed by Holders in person or by agent or proxy
appointed in writing, (b) by the record of the Holders voting in favor thereof
at any meeting of Holders duly called and held in accordance with the provisions
of Section 5.02 or (c) by a combination of such instrument or instruments and
any such record of such a meeting of Holders.
SECTION 8.02. PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING
OF DEBT SECURITIES. Subject to the provisions of Sections 7.01, 7.O2 and 12.11,
proof of the execution of any instrument by a Holder or his agent or proxy shall
be sufficient if made in accordance with such reasonable rules and regulations
as may be prescribed by the Trustee or in such manner as shall be satisfactory
to the Trustee.
The ownership of Registered Securities of any series shall be
proved by the Debt Security Register or by a certificate of the Registrar for
such series.
The Trustee may require such additional proof of any matter
referred to in this Section 8.02 as it shall deem necessary.
SECTION 8.03. WHO MAY BE DEEMED OWNER OF DEBT SECURITIES.
Prior to due presentment for registration of transfer of any Registered
Security, the Company, the Trustee, any paying agent and any Registrar may deem
and treat the Person in whose name any Registered Security shall be registered
upon
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the books of the Company as the absolute owner of such Registered Security
(whether or not such Registered Security shall be overdue and notwithstanding
any notation of ownership or other writing thereon) for the purpose of receiving
payment of or on account of the principal of and premium, if any, and (subject
to Section 2.03) interest on such Registered Security and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Registrar shall be affected by any notice to the contrary; and all such payments
so made to any such Holder for the time being, or upon his order, shall be valid
and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for moneys payable upon any such Registered Security.
None of the Company, the Trustee, any paying agent or the
Registrar will 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 or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
SECTION 8.04. INSTRUMENTS EXECUTED BY HOLDERS BIND FUTURE
HOLDERS. At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.01, of the taking of any action by the Holders of the
percentage in aggregate principal amount of the Debt Securities of any series
specified in this Indenture in connection with such action and subject to the
following paragraph, any Holder of a Debt Security which is shown by the
evidence to be included in the Debt Securities the Holders of which have
consented to such action may, by filing written notice with the Trustee at its
corporate trust office and upon proof of holding as provided in Section 8.02,
revoke such action so far as concerns such Debt Security. Except as aforesaid
any such action taken by the Holder of any Debt Security shall be conclusive and
binding upon such Holder and upon all future Holders and owners of such Debt
Security and of any Debt Security issued upon transfer thereof or in exchange or
substitution therefor, irrespective of whether or not any notation in regard
thereto is made upon such Debt Security or such other Debt Securities. Any
action taken by the Holders of the percentage in aggregate principal amount of
the Debt Securities of any series specified in this Indenture in connection with
such action shall be conclusively binding upon the Company, the Trustee and the
Holders of all the Debt Securities of such series.
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The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders of Registered Securities
entitled to give their consent or take any other action required or permitted to
be taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Holders of Registered Securities at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to give such consent or to
revoke any consent previously given or to take any such action, whether or not
such Persons continue to be Holders of Registered Securities after such record
date. No such consent shall be valid or effective for more than 120 days after
such record date unless the consent of the Holders of the percentage in
aggregate principal amount of the Debt Securities of such series specified in
this Indenture shall have been received within such 120-day period.
ARTICLE IX
Supplemental Indentures
-----------------------
SECTION 9.01. PURPOSES FOR WHICH SUPPLEMENTAL INDENTURE MAY BE
ENTERED INTO WITHOUT CONSENT OF HOLDERS. The Company, when authorized by a
resolution of the Board of Directors, and the Trustee may from time to time and
at any time, without the consent of Holders, enter into an Indenture or
Indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof) for one or
more of the following purposes:
(a) to evidence the succession pursuant to Article X of
another Person to the Company, or successive successions, and the
assumption by the Successor Company (as defined in Section 10.01) of
the covenants, agreements and obligations of the Company in this
Indenture and in the Debt Securities;
(b) to surrender any right or power herein conferred upon the
Company, to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions for the protection of the
Holders of all or any series of Debt Securities (and if such covenants
are to be for the benefit of less than all series of Debt Securities,
stating that such covenants are expressly being included
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solely for the benefit of such series) as the Board of Directors shall
consider to be for the protection of the Holders of such Debt
Securities, and to make the occurrence, or the occurrence and
continuance, of a Default in any of such additional covenants,
restrictions, conditions or provisions a Default or an Event of Default
permitting the enforcement of all or any of the several remedies
provided in this Indenture; PROVIDED, that in respect of any such
additional covenant, restriction, condition or provision such
supplemental Indenture may provide for a particular period of grace
after Default (which period may be shorter or longer than that allowed
in the case of other Defaults) or may provide for an immediate
enforcement upon such Default or may limit the remedies available to
the Trustee upon such Default or may limit the right of the Holders of
a majority in aggregate principal amount of any or all series of Debt
Securities to waive such default;
(c) to cure any ambiguity or to correct or supplement any
provision contained herein, in any supplemental Indenture or in any
Debt Securities of any series that may be defective or inconsistent
with any other provision contained herein, in any supplemental
Indenture or in the Debt Securities of such series; to convey,
transfer, assign, mortgage or pledge any property to or with the
Trustee, or to make such other provisions in regard to matters or
questions arising under this Indenture as shall not adversely affect
the interests of any Holders of Debt Securities of any series;
(d) to modify or amend this Indenture in such a manner as to
permit the qualification of this Indenture or any Indenture
supplemental hereto under the Trust Indenture Act as then in effect,
except that nothing herein contained shall permit or authorize the
inclusion in any Indenture supplemental hereto of the provisions
referred to in Section 316(a)(2) of the Trust Indenture Act;
(e) to add to or change any of the provisions of this
Indenture to change or eliminate any restrictions on the payment of
principal of, or premium, if any, or interest on, Registered
Securities; PROVIDED, that any such action shall not adversely affect
the interests of the Holders of Debt Securities of any series in any
material respect or permit
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or facilitate the issuance of Debt Securities of any series in
uncertificated form;
(f) to evidence the succession of another corporation to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Debt Securities;
(g) to add Guarantees with respect to the Debt Securities or
to secure the Debt Securities;
(h) to add to, change or eliminate any of the provisions of
this Indenture in respect of one or more series of Debt Securities;
PROVIDED, HOWEVER, that any such addition, change or elimination not
otherwise permitted under this Section 9.01 shall (i) neither (A) apply
to any Debt Security of any series created prior to the execution of
such supplemental Indenture and entitled to the benefit of such
provision nor (B) modify the rights of the Holder of any such Debt
Security with respect to such provision or (ii) shall become effective
only when there is no such Debt Security Outstanding;
(i) to evidence and provide for the acceptance of appointment
hereunder by a successor or separate Trustee with respect to the Debt
Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee; and
(j) to establish the form or terms of Debt Securities of any
series as permitted by Sections 2.01 and 2.03.
The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental Indenture, to make any further
appropriate agreements and stipulations which may be therein contained and to
accept the conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental Indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental Indenture authorized by the provisions of
this Section 9.01 may be executed by the Company and the
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Trustee without the consent of the Holders of any of the Debt Securities
appertaining thereto at the time Outstanding, notwithstanding any of the
provisions of Section 9.02.
After an amendment under this Section 9.01 becomes effective,
the Company shall mail to Holders of Debt Securities of each series affected
thereby a notice briefly describing such amendment. The failure to give such
notice to all such Holders, or any defect therein, shall not impair or affect
the validity of an amendment under this Section 9.01.
SECTION 9.02. MODIFICATION OF INDENTURE WITH CONSENT OF
HOLDERS OF DEBT SECURITIES. Without notice to any Holder but with the consent
(evidenced as provided in Section 8.01) of the Holders of not less than a
majority in aggregate principal amount of the Outstanding Debt Securities of
each series affected by such supplemental Indenture, the Company, when
authorized by a resolution of the Board of Directors, and the Trustee may from
time to time and at any time enter into an Indenture or Indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act as in
force at the date of execution thereof) for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Indenture or of any supplemental Indenture or of modifying in any manner the
rights of the Holders of the Debt Securities of such series; PROVIDED, that no
such supplemental Indenture, without the consent of the Holders of each Debt
Security so affected, shall (i) reduce the percentage in principal amount of
Debt Securities of any series whose Holders must consent to an amendment; (ii)
reduce the rate of or extend the time for payment of interest on any Debt
Security; (iii) reduce the principal of or extend the Stated maturity of any
Debt Security; (iv) reduce the premium payable upon the redemption of any Debt
Security or change the time at which any Debt Security may or shall be redeemed
in accordance with Article III; (v) make any Debt Security payable in Currency
other than that stated in the Debt Security; (vi) release any security that may
have been granted in respect of the Debt Securities; or (vii) make any change in
Section 6.06 or this Section 9.02.
A supplemental Indenture which changes or eliminates any
covenant or other provision of this Indenture which has been expressly included
solely for the benefit of one or more particular series of Debt Securities or
which modifies the rights of the Holders of Debt Securities of such series with
respect to
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such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Debt Securities of any other series.
Upon the request of the Company, accompanied by a copy of a
resolution of the Board of Directors authorizing the execution of any such
supplemental Indenture, and upon the filing with the Trustee of evidence of the
consent of Holders as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental Indenture unless such supplemental Indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion but shall not be
obligated to enter into such supplemental Indenture.
It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed supplemental
Indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
After an amendment under this Section 9.02 becomes effective,
the Company shall mail to Holders of Debt Securities of each series affected
thereby a notice briefly describing such amendment. The failure to give such
notice to all such Holders, or any defect therein, shall not impair or affect
the validity of an amendment under this Section 9.02.
SECTION 9.03. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the
execution of any supplemental Indenture pursuant to the provisions of this
Article IX, this Indenture shall be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the Holders shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such supplemental Indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and all
purposes.
The Trustee, subject to the provisions of Sections 7.01 and
7.02, may receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any such supplemental Indenture complies with the
provisions of this Article IX.
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SECTION 9.04. DEBT SECURITIES MAY BEAR NOTATION OF CHANGES BY
SUPPLEMENTAL INDENTURES. Debt Securities of any series authenticated and
delivered after the execution of any supplemental Indenture pursuant to the
provisions of this Article IX may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental Indenture. New Debt Securities of any series so modified as to
conform, in the opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any such supplemental Indenture may
be prepared and executed by the Company, authenticated by the Trustee and
delivered in exchange for the Debt Securities of such series then Outstanding.
Failure to make the appropriate notation or to issue a new Debt Security of such
series shall not affect the validity of such amendment.
SECTION 9.05. PAYMENT FOR CONSENT. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Debt Securities unless such consideration
is offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE X
Consolidation, Merger, Sale or Conveyance
-----------------------------------------
SECTION 10.01. CONSOLIDATIONS AND MERGERS OF THE COMPANY. The
Company shall not consolidate with or merge with or into any Person, or convey,
transfer or lease all or substantially all its assets, unless: (i) either (a)
the Company shall be the continuing Person in the case of a merger or (b) the
resulting, surviving or transferee Person if other than the Company (the
"Successor Company") shall be a corporation organized and existing under the
laws of the United States, any State thereof or the District of Columbia and the
Successor Company shall expressly assume, by an Indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, all
the obligations of the Company under the Debt Securities according to their
tenor, and this
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Indenture; (ii) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor Company
or any Subsidiary of the Company as a result of such transaction as having been
Incurred by the Successor Company or such Subsidiary at the time of such
transaction), no Default or Event of Default would occur or be continuing; and
(iii) the Company shall have delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger or
transfer and such supplemental Indenture (if any) comply with this Indenture.
SECTION 10.02. RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. In
case of any consolidation or merger, or conveyance or transfer of the assets of
the Company as an entirety or virtually as an entirety in accordance with
Section 10.01, the Successor Company shall succeed to and be substituted for the
Company, with the same effect as if it had been named herein as the party of the
first part, and the predecessor corporation shall be relieved of any further
obligation under the Indenture and the Securities. The Successor Company
thereupon may cause to be signed, and may issue either in its own name or in the
name of the Company, any or all the Debt Securities issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of the Successor Company, instead of the Company,
and subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver any Debt Securities
which previously shall have been signed and delivered by the officers of the
Company to the Trustee for authentication, and any Debt Securities which the
Successor Company thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Debt Securities so issued shall in all
respects have the same legal rank and benefit under this Indenture as the Debt
Securities theretofore or thereafter issued in accordance with the terms of this
Indenture as though all such Debt Securities had been issued at the date of the
execution hereof.
In case of any such consolidation, merger, sale or conveyance
such changes in phraseology and form (but not in substance) may be made in the
Debt Securities appertaining thereto thereafter to be issued as may be
appropriate.
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ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE;
----------------------------------------------------
UNCLAIMED MONEYS
----------------
SECTION 11.01. APPLICABILITY OF ARTICLE. If, pursuant to Section
2.03, provision is made for the defeasance of Debt Securities of a series, then
the provisions of this Article XI relating to defeasance of Debt Securities
shall be applicable except as otherwise specified pursuant to Section 2.03 for
Debt Securities of such series.
SECTION l1.02. SATISFACTION AND DISCHARGE OF INDENTURE;
DEFEASANCE. (a) If at any time (i) the Company shall have delivered to the
Trustee for cancellation all Debt Securities of any series theretofore
authenticated and delivered (other than (1) any Debt Securities of such series
which shall have been destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 2.09 and (2) Debt Securities for whose
payment money has theretofore been deposited in trust and thereafter repaid to
the Company as provided in Section 11.05) or (ii) all Debt Securities of such
series not theretofore delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and the
Company shall deposit with the Trustee as trust funds the entire amount in the
Currency in which such Debt Securities are denominated (except as otherwise
provided pursuant to Section 2.03) sufficient to pay at maturity or upon
redemption all Debt Securities of such series not theretofore delivered to the
Trustee for cancellation, including principal and premium, if any, and interest
due or to become due on such date of maturity or redemption date, as the case
may be, and if in either case the Company shall also pay or cause to be paid all
other sums payable hereunder by the Company, then this Indenture shall cease to
be of further effect (except as to any surviving rights of registration of
transfer or exchange of such Debt Securities herein expressly provided for and
rights to receive payments of principal of, and premium, if any, and interest
on, such Debt Securities with respect to the Debt Securities of such series, and
the Trustee, on demand of the Company accompanied by an Officers' Certificate
and an Opinion of Counsel and at the cost and expense of the Company, shall
execute
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proper instruments acknowledging satisfaction of and discharging this Indenture.
(b) Subject to Sections 11.02(c), 11.03 and 11.07, the Company at
any time may terminate, with respect to Debt Securities of a particular series,
(i) all its obligations under the Debt Securities of such series and this
Indenture with respect to the Debt Securities of such series ("legal defeasance
option") or (ii) its obligations with respect to the Debt Securities of such
series under clause (iii) of Section 10.01 and the related operation of Section
6.01(d) and the operation of Sections 6.01(e), (f), (i) and (j) ("covenant
defeasance option"). The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of
the Debt Securities of the defeased series may not be accelerated because of an
Event of Default. If the Company exercises its covenant defeasance option,
payment of the Debt Securities of the defeased series may not be accelerated
because of an Event of Default specified in Sections 6.01(d), (e), (f), (i) and
(j) (except to the extent covenants or agreements referenced in such Sections
remain applicable).
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.07, 2.09, 4.02, 4.04, 5.01, 7.06, 7.10, 11.05, 11.06
and 11.07 shall survive until the Debt Securities of the defeased series have
been paid in full. Thereafter, the Company's obligations in Sections 7.06, 11.05
and 11.06 shall survive.
SECTION 11.03. CONDITIONS OF DEFEASANCE. The Company may exercise
its legal defeasance option or its covenant defeasance option with respect to
Debt Securities of a particular series only if:
(l) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations for the payment of principal of, and
premium, if any, and interest on, the
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Debt Securities of such series to maturity or redemption, as the case may
be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay the principal, premium and
interest when due on all the Debt Securities of such series to maturity
or redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Section 6.01(g) or (h) with respect to the
Company occurs which is continuing at the end of the period;
(4) no Default has occurred and is continuing on the date of such
deposit and after giving effect thereto;
(5) the deposit does not constitute a default under any other
agreement binding on the Company;
(6) the Company delivers to the Trustee an Opinion of Counsel to
the effect that the trust resulting from the deposit does not constitute,
or is qualified as, a regulated investment company under the Investment
Company Act of 1940;
(7) in the event of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from the Internal Revenue Service a ruling, or (ii)
since the date of this Indenture there has been a change in the
applicable Federal income tax law, in either case of the effect that, and
based thereon such Opinion of Counsel shall confirm that, the Holders of
Debt Securities of such series will not recognize income, gain or loss
for Federal income tax purposes as a result of such defeasance and will
be subject to Federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such defeasance had
not occurred;
(8) in the event of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion
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of Counsel to the effect that the Holders of Debt Securities of such
series will not recognize income, gain or loss for Federal income tax
purposes as a result of such covenant defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such covenant defeasance had
not occurred; and
(9) the Company delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent to
the defeasance and discharge of the Debt Securities of such series as
contemplated by this Article XI have been compiled with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Debt Securities of such series
at a future date in accordance with Article III.
SECTION 11.04. APPLICATION OF TRUST MONEY. The Trustee shall hold
in trust money or U.S. Government Obligations deposited with it pursuant to this
Article XI. It shall apply the deposited money and the money from U.S.
Government Obligations through any paying agent and in accordance with this
Indenture to the payment of principal of, and premium, if any, and interest on,
the Debt Securities of the defeased series.
SECTION 11.05. REPAYMENT TO COMPANY. The Trustee and any paying
agent shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and
any paying agent shall pay to the Company upon request any money held by them
for the payment of principal, premium or interest that remains unclaimed for two
years, and, thereafter, Holders entitled to such money must look to the Company
for payment as general creditors.
SECTION 11.06. INDEMNITY FOR U.S. GOVERNMENT OBLIGATIONS. The
Company shall pay and shall indemnify the Trustee and the Holders against any
tax, fee or other change imposed on or assessed against deposited U.S.
Government Obligations or the principal and interest received on such U.S.
Government Obligations.
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SECTION 11.07 REINSTATEMENT. If the Trustee or any paying agent
is unable to apply any money or U.S. Government Obligations in accordance with
this Article XI by reason of any legal proceeding or by reason of any order or
judgment of any court or government authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Debt Securities of the defeased series shall be revived and
reinstated as though no deposit had occurred pursuant to this Article XI until
such time as the Trustee or any paying agent is permitted to apply all such
money or U.S. Government Obligations in accordance with this Article XI.
ARTICLE XII
MISCELLANEOUS PROVISIONS
------------------------
SECTION 12.01. SUCCESSORS AND ASSIGNS OF COMPANY BOUND BY
INDENTURE. All the covenants, stipulations, promises and agreements in this
Indenture contained by or in behalf of the Company or the Trustee shall bind its
successors and assigns, whether so expressed or not.
SECTION 12.02. ACTS OF BOARD, COMMITTEE OR OFFICER OF SUCCESSOR
COMPANY VALID. Any act or proceeding by any provision of this Indenture
authorized or required to be done or performed by any board, committee or
officer of the Company shall and may be done and performed with like force and
effect by the like board, committee or officer of any Successor Company.
SECTION 12.03. REQUIRED NOTICES OR DEMANDS. Except as otherwise
expressly provided in this Indenture, any notice or demand which by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the Holders to or on the Company may be given or served by
being deposited postage prepaid in a post office letter box in the United States
addressed (until another address is filed by the Company with the Trustee) as
follows: Worthington Industries, Inc., 1205 Dearborn Drive, Worthington, Ohio
43085, Attention: Chief Financial Officer. Except as otherwise expressly
provided in this Indenture, any notice, direction, request or demand by the
Company or by any Holder to or upon the Trustee may be given or made, for all
purposes, by being deposited postage prepaid in a post office letter box in the
United States addressed to the corporate trust office of the Trustee initially
at P.O. Box 1198,
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Cincinnati, Ohio 45201. The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice required or permitted to a Registered Holder by the
Company or the Trustee pursuant to the provisions of this Indenture shall be
deemed to be properly mailed by being deposited postage prepaid in a post office
letter box in the United States addressed to such Holder at the address of such
Holder as shown on the Debt Security Register. Any report pursuant to Section
313 of the Trust Indenture Act shall be transmitted in compliance with
subsection (c) therein.
In the event of suspension of regular mail service or by reason
of any other cause it shall be impracticable to give notice by mail, then such
notification as shall be given with the approval of the Trustee shall constitute
sufficient notice for every purpose thereunder.
In the event of suspension of publication of any Authorized
Newspaper or by reason of any other cause it shall be impracticable to give
notice by publication, then such notification as shall be given with the
approval of the Trustee shall constitute sufficient notice for every purpose
hereunder.
Failure to mail a notice or communication to a Holder or any
defect in it or any defect in any notice by publication as to a Holder shall not
affect the sufficiency of such notice with respect to other Holders. If a notice
or communication is mailed or published in the manner provided above, it is
conclusively presumed duly given.
SECTION 12.04. INDENTURE AND DEBT SECURITIES TO BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. This Indenture, each Debt
Security and each Coupon shall be deemed to be New York contracts, and for all
purposes shall be construed in accordance with the laws of said State (without
reference to principles of conflicts of law).
SECTION 12.05. OFFICERS' CERTIFICATE AND OPINION OF COUNSEL TO BE
FURNISHED UPON APPLICATION OR DEMAND BY THE COMPANY. Upon any application or
demand by the Company to the Trustee to take any action under any of the
provisions of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent provided for in
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this Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with, except that in the case of any
such application or demand as to which the furnishing of such document is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (1) a statement that the Person
making such certificate or opinion has read such covenant or condition, (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based, (3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
SECTION 12.06. PAYMENTS DUE ON LEGAL HOLIDAYS. In any case where
the date of maturity of interest on or principal of and premium, if any, on the
Debt Securities of a series or the date fixed for redemption or repayment of any
Debt Security or the making of any sinking fund payment shall not be a business
day at any Place of Payment for the Debt Securities of such series, then payment
of interest or principal and premium, if any, or the making of such sinking fund
payment need not be made on such date at such Place of Payment, but may be made
on the next succeeding business day at such Place of Payment with the same force
and effect as if made on the date of maturity or the date fixed for redemption,
and no interest shall accrue for the period after such date. If a record date is
not a business day, the record date shall not be affected.
SECTION 12.07. PROVISIONS REQUIRED BY TRUST INDENTURE ACT TO
CONTROL. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included in this Indenture which
is required to be included in this Indenture by any of Sections 310 to 318,
inclusive, of the Trust Indenture Act, such required provision shall control.
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SECTION 12.08. COMPUTATION OF INTEREST ON DEBT SECURITIES.
Interest, if any, on the Debt Securities shall be computed on the basis of a
360-day year of twelve 30-day months, except as may otherwise be provided
pursuant to Section 2.03.
SECTION 12.09. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The
Trustee may make reasonable rules for action by or a meeting of Holders. The
Registrar and any paying agent may make reasonable rules for their functions.
SECTION 12.10. NO RECOURSE AGAINST OTHERS. An incorporator or any
past, present or future director, officer, employee or stockholder, as such, of
the Company shall not have any liability for any obligations of the Company
under the Debt Securities or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Debt Security, each Holder shall waive and release all such liability. The
waiver and release shall be part of the consideration for the issue of the Debt
Securities.
SECTION 12.11. SEVERABILITY. In case any provision in this
Indenture, the Debt Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 12.12. EFFECT OF HEADINGS. The article and section
headings herein and in the Table of Contents are for convenience only and shall
not affect the construction hereof.
SECTION 12.13. INDENTURE MAY BE EXECUTED IN COUNTERPARTS. This
Indenture may be executed in any number of counterparts, each of which shall be
an original; but such counterparts shall together constitute but one and the
same instrument.
The Trustee hereby accepts the trusts in this Indenture upon the
terms and conditions herein set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly signed as of the date first written above.
WORTHINGTON INDUSTRIES, INC.
92
<PAGE> 104
By:
------------------------------
Name: Donald G. Barger, Jr.
Title: Vice President and
Chief Financial Officer
PNC BANK, OHIO, NATIONAL ASSOCIATION
By:
Name:
Title:
<PAGE> 1
EXHIBIT 4 (b)
EXHIBIT A
NOTE
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL DEBT
SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY
OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITARY
Unless this certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
WORTHINGTON INDUSTRIES, INC.
7-1/8% Note Due May 15, 2006
CUSIP No. 981811AB8 $150,000,000
No. 0001
Worthington Industries, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Issuer",
which term includes any successor Person under the Indenture hereinafter
referred to) as obligor, for value received, hereby promises to pay to CEDE &
CO., or registered assigns, the principal sum of ONE HUNDRED FIFTY MILLION and
00/100 DOLLARS on May 15, 2006, and to pay interest thereon from May 24, 1996,
or from the most recent interest payment date to which interest has been paid or
duly provided for, semi-annually on May 15 and November 15 in each year,
commencing November 15, 1996, at the rate of 7-1/8% per annum, until the
principal hereof is paid or made available for payment. The Issuer shall also
pay interest on overdue principal or installments of interest at such rate. The
interest so payable, and punctually paid or duly provided for, on any interest
payment date will, as provided in such Indenture, be paid to the Person in whose
name this Debt Security is registered at the close of business on the record
date for such interest, which shall be May 1 or November 1 (whether or not a
business day), as the case may be, next preceding such interest payment date.
Any interest on this Debt Security which is payable, but is not punctually paid
or duly provided for, on the dates and in the manner provided in the Debt
Security and such Indenture shall forthwith cease to be payable to the
Registered Holder hereof on the relevant record date, and such Defaulted
Interest may be paid by the Issuer to the Person in whose name this Debt
Security is registered at the close of business on a special record date
<PAGE> 2
for the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to the Holder hereof not less than 10 days prior to such
special record date, or may be paid by the Issuer on this Debt Security in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which this Debt Security may be listed, and upon such notice as may
be required by such exchange, all as more fully provided in said Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, payment of interest on this Debt Security shall be made at
the corporate trust office of the Trustee, or at the option of the Issuer, by
check mailed to the address of the Person entitled hereto as such address shall
appear in the Debt Security Register or, at the option of the Registered Holder
by wire transfer to an account designated by the Registered Holder, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
This Debt Security is one of a duly authorized issue of
securities of the Issuer (herein called the "Debt Securities"), issued and to be
issued in one or more series under an Indenture, dated as of May 15, 1996
(herein called the "Indenture", which term shall have the meaning assigned to it
in such instrument), between the Issuer and PNC Bank, Ohio, National Association
as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), and reference is hereby made to the Indenture for
a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Issuer, the Trustee and the Registered Holders of
the Debt Securities and of the terms upon which the Debt Securities are, and are
to be, authenticated and delivered. This Debt Security is one of the series
designated on the face hereof.
This Debt Security is not subject to redemption and is not
callable prior to maturity.
The Indenture contains provisions for defeasance at any time of
the entire indebtedness of this Debt Security or certain restrictive covenants
and Events of Default with respect to this Debt Security, in each case upon
compliance with certain conditions set forth in the Indenture. Such provisions
shall be applicable to this Debt Security.
If an Event of Default with respect to this Debt Security shall
occur and be continuing, the principal of and interest on this Debt Security may
be declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein
provided, without notice to any Holder but with the consent of Holders of not
less than a majority in aggregate principal amount of the Outstanding Debt
Securities of each series affected by such supplemental Indenture, the Company
and the Trustee at any time to enter into an Indenture or supplemental Indenture
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
Indenture or of modifying in any manner the rights of the Holders of the Debt
Securities of such series. The Indenture also permits, with certain exceptions
as therein provided, prior to the acceleration of the maturity of
-2-
<PAGE> 3
the Debt Securities of any series, the Holders of specified percentages in
aggregate principal amount of the Debt Securities of that series at the time
Outstanding may on behalf of the Holders of all the Debt Securities of that
series waive any past Default or Event of Default and its consequences for that
series specified in the terms thereof. Any such consent or waiver by the Holder
of this Debt Security shall be conclusive and binding upon such Holder and upon
all future Holders of this Debt Security and of any Debt Security issued upon
the registration of transfer hereof or in lieu hereof, whether or not notation
of such consent or waiver is made upon this Debt Security.
As provided in and subject to the provisions of the Indenture,
the Holder of this Debt Security shall not have the right to institute any
action or proceeding at law or in equity or in bankruptcy or otherwise, upon or
under or with respect to the Indenture, or for the appointment of a receiver or
trustee, or for any other remedy thereunder, unless such Holder previously shall
have given to the Trustee written notice of an Event of Default with respect to
the Debt Securities of this series and of the continuance thereof and unless the
Holders of not less than 25% in aggregate principal amount of the Outstanding
Debt Securities of this series shall have made written request upon the Trustee
to institute such action or proceedings in respect of such Event of Default in
its own name as Trustee thereunder and shall have offered to the Trustee such
reasonable indemnity, and the Trustee, for 60 days after its receipt of such
notice, request and offer of indemnity shall have failed to institute any such
action or proceedings and no direction inconsistent with such written request
shall have been given to the Trustee by the Holders of a majority in aggregate
principal amount of the Debt Securities of this series at the time Outstanding.
The foregoing shall not apply to any suit instituted by the Holder of this Debt
Security for the enforcement of any payment of principal hereof or interest
hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Debt Security or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Debt Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Debt Security is registrable in the Debt
Security Register, upon surrender of this Debt Security for registration of
transfer at the office or agency of the Issuer in any Place of Payment, duly
endorsed or accompanied by a written instrument or instruments of transfer, in
form satisfactory to the Issuer, the Trustee and the Registrar duly executed by
the Registered Holder or his attorney duly authorized in writing, and thereupon
the Issuer shall execute and the Trustee shall authenticate and deliver in the
name of the transferee or transferees a new Debt Security or Debt Securities of
authorized denominations for a like aggregate principal amount.
The Debt Securities of this series are issuable only in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Debt Securities of this series are
-3-
<PAGE> 4
exchangeable in whole or in part for a like aggregate principal amount of Debt
Securities of this series and of like tenor and terms of a different authorized
denomination, as requested by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations
therein set forth, no service charge shall be made for any such registration of
transfer of Debt Securities, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto.
Prior to due presentation for registration of transfer of this
Debt Security, the Issuer, the Trustee, any paying agent or any Registrar may
deem and treat the Person in whose name this Debt Security is registered as the
absolute owner hereof for all purposes, whether or not this Debt Security be
overdue, and none of the Issuer, the Trustee, any paying agent or Registrar
shall be affected by notice to the contrary.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
Unless the certificate of authentication hereon has been executed
by the Trustee referred to herein by manual signature, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
duly executed under its corporate seal.
<TABLE>
<CAPTION>
<S> <C>
Dated: May 24, 1996 WORTHINGTON INDUSTRIES, INC.
By
-----------------------------------------
Donald G. Barger, Jr., Vice President and
Chief Financial Officer
By
-----------------------------------------
Dale T. Brinkman, Assistant Secretary
</TABLE>
-----------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated
therein referred to in the within-mentioned Indenture.
PNC Bank, Ohio, National Association
As Trustee
<PAGE> 5
By_____________________________
Authorized Signature
-5-
<PAGE> 1
Exhibit 4(c)
================================================================================
WORTHINGTON INDUSTRIES, INC.,
Issuer
and
PNC BANK, OHIO, NATIONAL ASSOCIATION,
Trustee
-----------------------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of February 27, 1997
Supplemental to Indenture dated as of May 15, 1996
================================================================================
<PAGE> 2
FIRST SUPPLEMENTAL INDENTURE dated as of February 27, 1997 (this
"Supplemental Indenture"), made and entered into by and between Worthington
Industries, Inc., a corporation organized and existing under the laws of the
State of Delaware having its principal office at 1205 Dearborn Drive, Columbus,
OH 43085 (the "Company"), and PNC Bank, Ohio, National Association, a national
banking association duly organized and existing under the laws of the United
States, as Trustee (the "Trustee") under the indenture of the Company (the
"Indenture") dated as of May 15, 1996.
WHEREAS, the Indenture provides for the issuance from time to
time of Debt Securities, issuable for the purposes and subject to the
limitations contained in the Indenture; and
WHEREAS, Sections 9.01(h) and (j) of the Indenture also provide
that the Company and Trustee may enter into one or more indentures supplemental
to the Indenture without the consent of any Holder (a) to add to, change or
eliminate any of the provisions of the Indenture with respect to any series of
Debt Securities if such action becomes effective when no such Debt Security is
Outstanding and (b) to provide for the form or terms of Debt Securities of any
series as permitted by Sections 2.01 and 2.03 thereof; and
WHEREAS, the Company has duly authorized the creation of a series
of its Debt Securities denominated its "7 1/4% Exchangeable Notes Due March 1,
2000" representing up to 5,999,600 of its "Debt Exchangeable for Common Stock
SM" (such Debt Securities being referred to herein as the "DECS SM"), the
principal amount of which is mandatorily exchangeable at Maturity into shares of
Class A Common Stock, par value $.01 per share (the "Rouge Common Stock"), of
Rouge Steel Company, a Delaware corporation ("Rouge"), or, at the option of the
Company (under the circumstances described herein), cash, in either case at the
Exchange Rate (as defined herein) and/or such other consideration as permitted
or required by the terms of the DECS; and
WHEREAS, the entry into this Supplemental Indenture by the
parties hereto is in all respects authorized by the provisions of the Indenture;
and
WHEREAS, the Company has duly authorized the execution and
delivery of this Supplemental Indenture, and all things necessary have been done
to make the DECS, when executed by the Company and authenticated and delivered
hereunder and duly issued by the Company, the valid obligations of the Company,
and to make this Supplemental Indenture a valid agreement of the Company, in
accordance with their and its terms:
NOW, THEREFORE:
For and in consideration of the premises and purchase of the Debt
Securities of any series issued on or after the date hereof by the Holders
thereof, it is mutually covenanted and agreed, for the equal and proportionate
benefit of all Holders of the securities of any such series, as follows:
<PAGE> 3
ARTICLE I
Certain Provisions of General Application
SECTION 101. Definitions.
For all purposes of the Indenture and this Supplemental
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article;
(2) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to the Indenture and this Supplemental Indenture as a
whole and not to any particular Article, Section or other subdivision; and
(3) capitalized terms used but not defined herein are used as
they are defined in the Indenture.
"Adjustment Event" has the meaning set forth in Section 204(b).
"All Cash Delivery Option" has the meaning set forth in Section
202.
"Business Day" means any day that is not a Saturday, a Sunday or
a day on which the NYSE, banking institutions or trust companies in The City of
New York are authorized or obligated by law or executive order to close.
"Closing Price" of any security on any date of determination
means (i) the closing sale price (or, if no closing price is reported, the last
reported sale price) of such security (regular way) on the NYSE on such date
(ii) if such security is not listed for trading on the NYSE on any such date, as
reported in the composite transactions for the principal United States
securities exchange on which such security is so listed, (iii) if such security
is not so listed on a United States national or regional securities exchange, as
reported by the Nasdaq Stock Market, (iv) if such security is not so reported,
the last quoted bid price for such security in the over-the-counter market as
reported by the National Quotation Bureau or similar organization or (v) if such
security is not so quoted, the average of the mid-point of the last bid and ask
prices for such security from at least three nationally recognized investment
banking firms selected by the Company for such purpose.
"DECS" has the meaning set forth in the recitals to this
Supplemental Indenture.
"Dilution Event" has the meaning set forth in Section 205(a)(ii).
"Exchange Rate" means a rate equal to (a) if the Maturity Price
is greater than $18.29 (the "Threshold Appreciation Price"), 0.8475 shares of
Rouge Common Stock per DECS,
2
<PAGE> 4
(b) if the Maturity Price is less than or equal to the Threshold Appreciation
Price but is greater than the Initial Price, (i) a fraction equal to the Initial
Price divided by the Maturity Price of (ii) one share of Rouge Common Stock per
DECS (such fractional share being calculated to the nearest 1/10,000th of a
share or, if there is not a nearest 1/10,000th of a share, to the next highest
1/10,000th of a share) and (c) if the Maturity Price is less than or equal to
the Initial Price, one share of Rouge Common Stock per DECS; PROVIDED, HOWEVER,
that the Exchange Rate is subject to adjustment from time to time pursuant to
Section 204(a).
"Initial Price" means $15.50 per share of Rouge Common Stock.
"Market Price" means, as of any date of determination, the
average Closing Price per share of Rouge Common Stock on the 20 Trading Days
immediately prior to (but not including) the date of determination; PROVIDED,
HOWEVER, that if there are not 20 Trading Days for the Rouge Common Stock
occurring later than the 60th calendar day immediately prior to, but not
including, such date, Market Price means the market value per share of Rouge
Common Stock as of such date as determined by a nationally recognized investment
banking firm retained for such purpose by the Company.
"Maturity" means the date on which the principal of a DECS
becomes due and payable as provided herein, whether at Stated Maturity or by
declaration of acceleration or otherwise.
"Maturity Price" means the average Closing Price per share of
Rouge Common Stock on the 20 Trading Days immediately prior to (but not
including) the date of Maturity; PROVIDED, HOWEVER, that if there are not 20
Trading Days for the Rouge Common Stock occurring later than the 60th calendar
day immediately prior to, but not including, the date of Maturity, Maturity
Price means the market value per share of Rouge Common Stock as of Maturity as
determined by a nationally recognized independent investment banking firm
retained for such purpose by the Company.
"NYSE" means the New York Stock Exchange, Inc.
"Ordinary Cash Dividend" has the meaning set forth in
subparagraph (5) of Section 204.
"Partial Cash Delivery Option" has the meaning set forth in
Section 202.
"Reported Securities" has the meaning set forth in subparagraph
(3) of Section 204(b).
"Rouge Common Stock" has the meaning set forth in the recitals to
this Supplemental Indenture.
3
<PAGE> 5
"Share Components" means the ratios of shares of Rouge Common
Stock per DECS specified in clauses (a), b(ii) and (c) of the definition of
"Exchange Rate" set forth in this Article.
"Threshold Appreciation Price" has the meaning specified in the
definition of "Exchange Rate" set forth in this Article.
"Trading Day" means a day on which the security the Closing Price
of which is being determined (a) is not suspended from trading on any national
or regional securities exchange or association or over-the-counter market at the
close of business and (b) has traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the
primary market for the trading of such security.
"Transaction Value" means (a) for any cash received in any
Adjustment Event, the amount of cash received per share of Rouge Common Stock,
(b) for any Reported Securities received in any Adjustment Event, an amount
equal to (x) the average Closing Price per security of such Reported Securities
on the 20 Trading Days immediately prior to (but not including) Maturity
multiplied by (y) the number of such Reported Securities (as adjusted pursuant
to subparagraph (b)(4) of Section 204) received per share of Rouge Common Stock
and (c) for any property received in any Adjustment Event other than cash or
such Reported Securities, an amount equal to the fair market value of the
property received per share of Rouge Common Stock on the date such property is
received, as determined by a nationally recognized investment banking firm
retained for this purpose by the Company; PROVIDED, HOWEVER, that in the case of
clause (b), (i) with respect to securities that are Reported Securities by
virtue of only clause (iv) of the definition of Reported Securities, Transaction
Value with respect to such Reported Security means the average of the mid-point
of the last bid and ask prices for such Reported Security as of Maturity from
each of at least three nationally recognized investment banking firms retained
for such purpose by the Company multiplied by the number of such Reported
Securities (as adjusted pursuant to subparagraph (b)(4) of Section 204) received
per share of Rouge Common Stock and (ii) with respect of all other Reported
Securities, if there are not 20 Trading Days for any particular Reported
Security occurring later than the 60th calendar day immediately prior to, but
not including, the date of Maturity, Transaction Value with respect to such
Reported Security means the market value per security of such Reported Security
as of Maturity as determined by a nationally recognized investment banking firm
retained for such purpose by the Company multiplied by the number of such
Reported Securities (as adjusted pursuant to subparagraph (b)(4) of Section 204)
received per share of Rouge Common Stock. For purposes of calculating the
Transaction Value, any cash, Reported Securities or other property receivable in
an Adjustment Event shall be deemed to have been received immediately prior to
the close of business on the record date for such Adjustment Event or, if there
is no record date for such Adjustment Event, immediately prior to the close of
business on the effective date of such Adjustment Event.
4
<PAGE> 6
SECTION 102. Effect of Headings.
The Article and Section headings herein are for convenience only
and shall not affect the construction hereof.
SECTION 103. Successors and Assigns.
All covenants and agreements in this Supplemental Indenture by
the Company shall bind its successors and assigns, whether so expressed or not.
SECTION 104. Separability.
In case any provision in this Supplemental Indenture or the DECS
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 105. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Supplemental
Indenture by any of the provisions of the Trust Indenture Act, such required
provision shall control.
SECTION 106. Benefits of Supplemental Indenture.
Nothing in this Supplemental Indenture, expressed or implied,
shall give to any person, other than the parties hereto and their successors
hereunder, and the Holders of the DECS any benefit or any legal or equitable
right, remedy or claim under this Supplemental Indenture.
SECTION 107. Governing Law.
THIS SUPPLEMENTAL INDENTURE AND THE DECS SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND THIS SUPPLEMENTAL
INDENTURE AND EACH SUCH DECS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
ARTICLE II
The DECS
SECTION 201. Title and Terms.
There is hereby created under the Indenture a series of Debt
Securities known and designated as the "7 1/4% Exchangeable Notes Due March 1,
2000" of the Company. The aggregate principal amount of DECS that may be
authenticated and delivered under this
5
<PAGE> 7
Indenture is limited to $92,993,800, except for DECS authenticated and delivered
upon reregistration of, transfer of, or in exchange for, or in lieu of, other
DECS pursuant to Section 2.07, 2.08, 2.09 or 9.04 of the Indenture.
The Stated Maturity for payment of principal of the DECS shall be
March 1, 2000 and the DECS shall bear interest at the rate of 71/4% per
annum, from March 4, 1997 or the most recent Interest Payment Date to which
interest has been paid or duly provided for, payable quarterly in arrears on
March 1, June 1, September 1 and December 1 of each year (commencing June 1,
1997), to the persons in whose names the DECS (or any predecessor securities)
are registered at the close of business on the last day of the calendar month
immediately preceding such interest payment date, until principal thereof is
paid or made available for payment.
The DECS shall be initially issued in the form of a Global
Security and the depositary for the DECS shall be the Depository Trust Company,
New York, New York (the "Depositary").
The DECS shall not be redeemable prior to their Stated Maturity
and shall not be subject to any sinking fund.
The DECS shall be mandatorily exchangeable as provided in Section
202.
The DECS shall be issuable in denominations of $15.50 and any
integral multiple thereof.
The Company shall not be obligated to pay any additional amount
on the DECS in respect of taxes, except as otherwise provided in Sections 206
and 302.
The form of DECS attached hereto as Exhibit A is hereby adopted,
pursuant to Section 9.01(j) of the Indenture, as a form of Debt Securities of a
series that consists of DECS.
SECTION 202. Exchange at Maturity.
Subject to Section 204(b), at Maturity the principal amount of
each DECS shall be mandatorily exchanged by the Company into a number of shares
of Rouge Common Stock at the Exchange Rate. The Holders of the DECS shall be
responsible for the payment of any and all brokerage costs upon the subsequent
sale of such shares. The Company may, at its option, in lieu of delivering
either
(a) all, but not less than all of the shares of Rouge Common
Stock otherwise deliverable on the date of Maturity (the "All Cash Delivery
Option") or
(b) a percentage (selected by the Company in its discretion, but
not to exceed 20%) of the shares of Rouge Common Stock otherwise deliverable on
the date of Maturity (the "Partial Cash Delivery Option"),
6
<PAGE> 8
deliver cash in an amount (calculated to the nearest 1/100th of a dollar per
DECS or, if there is not a nearest 1/100th of a dollar, then to the next higher
1/100th of a dollar) equal to the product of the number of shares of Rouge
Common Stock specified in clause (a) or (b) of this sentence, as the case may
be, multiplied by the Maturity Price; PROVIDED, HOWEVER, without regard to the
exercise of either of the foregoing options, with respect to those Holders to
whom the Company has determined delivery of cash may violate applicable state
law, the Company will deliver shares of Rouge Common Stock as provided herein.
An election to exercise the Partial Cash Delivery Option with respect to a
percentage of the shares of Rouge Common Stock otherwise deliverable on the date
of Maturity shall not in any way limit the Company's obligation to deliver the
remaining shares of Rouge Common Stock otherwise deliverable on the date of
Maturity. As further provided in Section 203, no fractional shares of Rouge
Common stock shall be issued pursuant to this Section 202. In determining the
amount of cash deliverable in exchange for the DECS in lieu of shares of Rouge
Common Stock pursuant to the third sentence of this Section 202, if more than
one DECS shall be surrendered for exchange at one time by the same Holder, the
amount of cash which shall be delivered upon exchange shall be computed on the
basis of the aggregate number of DECS so surrendered at Maturity.
SECTION 203. No Fractional Shares.
If more than one DECS shall be surrendered for exchange pursuant
to Section 202 at one time by the same Holder, the number of full shares of
Rouge Common Stock which shall be delivered upon such exchange, in whole or in
part, as the case may be, shall be computed on the basis of the aggregate number
of DECS surrendered. No fractional shares or scrip representing fractional
shares of Rouge Common Stock shall be issued or delivered upon any exchange
pursuant to Section 202 of any DECS. In lieu of any fractional share of Rouge
Common Stock which, but for the immediately preceding sentence, would otherwise
be deliverable upon such exchange, the Company, through any applicable Paying
Agent, shall make a cash payment in respect of such fractional interest in an
amount equal to the value of such fractional shares at the Maturity Price. The
Company shall, upon such exchange of any DECS, provide cash to any applicable
Paying Agent in an amount equal to the cash payable with respect to any
fractional shares of Rouge Common Stock deliverable upon such exchange, and the
Company shall retain such fractional shares of Rouge Common Stock.
SECTION 204. Adjustment of Exchange Rate.
(a) ADJUSTMENT FOR DISTRIBUTIONS, CERTAIN RECLASSIFICATIONS, ETC.
The Exchange Rate shall be subject to adjustment from time to time as follows:
(i) If Rouge shall:
(A) pay a stock dividend or make a distribution, in either case,
with respect to the Rouge Common Stock in shares of such stock;
7
<PAGE> 9
(B) subdivide or split its outstanding shares of Rouge Common
Stock;
(C) combine its outstanding shares of Rouge Common Stock into a
smaller number of shares; or
(D) issue by reclassification (other than a reclassification
pursuant to clause (ii), (iii), (iv) or (v) of the definition of
Adjustment Event in paragraph (b) of this Section) of its shares of
Rouge Common Stock any shares of common stock of Rouge;
then, in any such event, the Exchange Rate shall be adjusted by adjusting
each of the Share Components of the Exchange Rate in effect immediately
prior to such event so that a Holder of any DECS shall be entitled to
receive, upon mandatory exchange pursuant to Section 202 of the principal
amount of such DECS at Maturity, the number of shares of Rouge Common Stock
(or, in the case of a reclassification referred to in clause (D) of this
sentence, the number of shares of other common stock of Rouge issued
pursuant thereto) which such Holder of such DECS would have owned or been
entitled to receive immediately following such event had such DECS been
exchanged immediately prior to such event or any record date with respect
thereto. Each such adjustment shall become effective at the opening of
business on the Business Day next following the record date for
determination of holders of Rouge Common Stock entitled to receive such
dividend or distribution in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of
a subdivision, split, combination or reclassification. Each such adjustment
shall be made successively.
(ii) If Rouge shall, after the date hereof, issue rights or
warrants (other than rights to purchase Rouge Common Stock pursuant to a
plan for the reinvestment of dividends or interest) to all holders of Rouge
Common Stock entitling them to subscribe for or purchase shares of Rouge
Common Stock at a price per share less than the Market Price of the Rouge
Common Stock on the Business Day next following the record date for the
determination of holders of Rouge Common Stock entitled to receive such
rights or warrants, then in each case the Exchange Rate shall be adjusted
by multiplying each of the Share Components of the Exchange Rate in effect
on the record date for the issuance of such rights or warrants, by a
fraction, of which the numerator shall be (A) the number of shares of Rouge
Common Stock outstanding on the record date for the issuance of such rights
or warrants, plus (B) the number of additional shares of Rouge Common Stock
offered for subscription or purchase pursuant to such rights or warrants,
and of which the denominator shall be (X) the number of shares of Rouge
Common Stock outstanding on the record date for the issuance of such rights
or warrants, plus (Y) the number specified in clause (B) above multiplied
by the quotient of the exercise price of such rights or warrants divided by
the Market Price of the Rouge Common Stock on the Business Day next
following the record date for the determination of holders of Rouge Common
Stock entitled to receive such rights or warrants. Such adjustment shall
become
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<PAGE> 10
effective at the opening of business on the Business Day next following the
record date for the determination of stockholders entitled to receive such
rights or warrants. To the extent that such rights or warrants expire prior
to the Maturity of the DECS and shares of Rouge Common Stock are not
delivered pursuant to such rights or warrants prior to such expiration, the
Exchange Rate shall be readjusted to the Exchange Rate which would then be
in effect had such adjustments for the issuance of such rights or warrants
been made upon the basis of delivery of only the number of shares of Rouge
Common Stock actually delivered pursuant to such rights or warrants. Each
such adjustment shall be made successively.
(iii) Any shares of Rouge Common Stock issuable in payment of a
dividend shall be deemed to have been issued immediately prior to the close
of business on the record date for such dividend for purposes of
calculating the number of outstanding shares of Rouge Common Stock under
paragraph (a)(ii) of this Section.
(iv) All adjustments to the Exchange Rate shall be calculated to
the nearest 1/10,000th of a share of Rouge Common Stock (or if there is not
a nearest 1/10,000th of a share, to the next higher 1/10,000th of a share).
No adjustment in the Exchange Rate shall be required unless such adjustment
would require an increase or decrease of at least one percent therein;
PROVIDED, HOWEVER, that any adjustments which by reason of this paragraph
(a)(iv) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. If an adjustment is made to the
Exchange Rate pursuant to paragraphs (a)(i) or (a)(ii) of this Section, an
adjustment shall also be made to the Maturity Price as such term is used
throughout the definition of Exchange Rate set forth in Section 101. The
required adjustment to the Maturity Price shall be made at Maturity by
multiplying the Maturity Price by the cumulative number or fraction
determined under paragraphs (a)(i) and/or (a)(ii) of this Section by which
the original Exchange Rate was multiplied to adjust such rate. In the case
of the reclassification of any shares of Rouge Common Stock into any shares
of common stock of Rouge other than Rouge Common Stock, such shares of
common stock shall be deemed shares of Rouge Common Stock solely to
determine the Maturity Price and to apply the Exchange Rate at Maturity.
Each such adjustment to the Exchange Rate and the Maturity Price shall be
made successively.
(b) OTHER ADJUSTMENT EVENTS. In the event of (i) any dividend or
distribution by Rouge to all holders of Rouge Common Stock of evidences of its
indebtedness or other assets (excluding any dividends or distributions referred
to in clause (A) of paragraph (a)(i) of this Section, any shares of common stock
issued pursuant to a reclassification referred to in clause (D) of paragraph
(a)(i) of this Section and any Ordinary Cash Dividends) or any issuance by Rouge
to all holders of Rouge Common Stock of rights or warrants to subscribe for or
purchase any of its securities (other than rights or warrants referred to in
paragraph (a)(ii) of this Section), (ii) any consolidation or merger of Rouge
with or into another entity (other than a merger or consolidation in which Rouge
is the continuing corporation and in which the Rouge Common
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<PAGE> 11
Stock outstanding immediately prior to the merger or consolidation is not
exchanged for cash, securities or other property of Rouge or another
corporation), (iii) any sale, transfer, lease or conveyance to another
corporation of the property of Rouge as an entirety or substantially as an
entirety, (iv) any statutory exchange of securities of Rouge with another
corporation (other than in connection with a merger or acquisition) or (v) any
liquidation, dissolution or winding up of Rouge (any such event, an "Adjustment
Event"), the property receivable by Holders of DECS at Maturity shall be subject
to adjustment from time to time as follows:
(1) Each Holder of a DECS will receive at Maturity, in lieu
of or (in the case of an Adjustment Event described in clause (i) of
this paragraph (b)) in addition to, the shares of Rouge Common Stock
that it would otherwise receive as required by Section 202, cash in an
amount equal to (A) if the Maturity Price is greater than the
Threshold Appreciation Price, 0.8475 multiplied by the Transaction
Value, (B) if the Maturity Price is less than or equal to the
Threshold Appreciation Price but is greater than the Initial Price,
the product of (x) the Initial Price divided by the Maturity Price
multiplied by (y) the Transaction Value and (C) if the Maturity Price
is less than or equal to the Initial Price, the Transaction Value.
(2) Following an Adjustment Event, the Maturity Price, as
such term is used throughout the definition of Exchange Rate and in
subparagraph (b)(1) above, shall be deemed to equal (A) if shares of
Rouge Common Stock are outstanding at Maturity, the Maturity Price of
the Rouge Common Stock, as adjusted pursuant to the provisions of
paragraph (a)(iv) of this Section, otherwise zero, plus (B) the
Transaction Value.
(3) Notwithstanding the foregoing, with respect to any
securities received in such Adjustment Event that (A) are (i) listed
on a United States national securities exchange, (ii) reported on a
United States national securities system subject to last sale
reporting, (iii) traded in the over-the-counter market and reported on
the National Quotation Bureau or similar organization or (iv) for
which bid and ask prices are available from at least three nationally
recognized investment banking firms and (B) are either (x) perpetual
equity securities or (y) non-perpetual equity or debt securities with
a stated maturity after the Stated Maturity ("Reported Securities"),
the Company may, at its option, in lieu of delivering the amount of
cash deliverable in respect of Reported Securities received in an
Adjustment Event, determined in accordance with subparagraph (b)(1),
deliver a number of such Reported Securities with a value equal to
such cash amount, as determined in accordance with clause (b) of the
definition of Transaction Value set forth in Section 101; PROVIDED,
HOWEVER, that (i) if such option is exercised, the Company shall
either (X) deliver Reported Securities in respect of all, but not less
than all, cash amounts that would otherwise be deliverable in respect
of Reported Securities received in an Adjustment Event or (Y) deliver
a percentage (selected by the Company in its discretion, but not to
exceed 20%) of the cash amounts that would otherwise be deliverable in
respect of such Reported Securities and deliver Reported Securities in
respect of the remainder of such cash amounts, (ii) the Company may
not
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<PAGE> 12
exercise such option if the Company has made an election to exercise
the All Cash Delivery Option or if such Reported Securities have not
yet been delivered to the holders entitled thereto following such
Adjustment Event or any record date with respect thereto and (iii)
subject to clause (ii) of this proviso, the Company shall exercise
such option if the Company does not elect to exercise the All Cash
Delivery Option. If the Company elects to deliver any Reported
Securities, each Holder of a DECS will be responsible for the payment
of any and all brokerage and other transaction costs upon the sale of
such Reported Securities. If, following any Adjustment Event, any
Reported Security ceases to qualify as a Reported Security, then (x)
the Company may no longer elect to deliver such Reported Security in
lieu of an equivalent amount of cash and (y) notwithstanding clause
(b) of the definition of Transaction Value, the Transaction Value of
such Reported Security shall mean the fair market value of such
Reported Security on the date such security ceases to qualify as a
Reported Security, as determined by a nationally recognized investment
banking firm retained for this purpose by the Company.
(4) The amount of cash and/or the kind and number of
securities into which the DECS shall be exchangeable after an
Adjustment Event shall be subject to adjustment following the date of
such Adjustment Event in the same manner and upon the occurrence of
the same type of events as described in paragraphs (a) and (b) of this
Section with respect to Rouge Common Stock and Rouge.
(5) For purposes of the foregoing, the term "Ordinary Cash
Dividend" means, with respect to any consecutive 365-day period, any
dividend with respect to Rouge Common Stock paid in cash to the extent
that the amount of such dividend, together with the aggregate amount
of all other dividends on the Rouge Common Stock paid in cash during
such 365-day period, does not exceed on a per share basis 10% of the
average of the Closing Prices of the Rouge Common Stock over such
365-day period. For purposes of this subparagraph (b)(5), any cash
dividend shall be deemed to be paid as of the record date for such
cash dividend.
SECTION 205. Notice of Adjustments and Certain Other Events.
(a) Whenever the Exchange Rate is adjusted as herein provided or
an Adjustment Event occurs, the Company shall:
(i) forthwith compute the adjusted Exchange Rate (or Transaction
Value) in accordance with Section 204 and prepare a certificate signed by
an officer of the Company setting forth the adjusted Exchange Rate (or
Transaction Value), the method of calculation thereof in reasonable
detail and the facts requiring such adjustment and upon which such
adjustment is based, which certificate shall be conclusive, final and
binding evidence of the correctness of the adjustment, and file such
certificate forthwith with the Trustee; and
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<PAGE> 13
(ii) within 10 Business Days following the occurrence of an event
that permits or requires an adjustment to the Exchange Rate pursuant to
Section 204(a) (each, a "Dilution Event") or an Adjustment Event that
permits or requires a change in the consideration to be received by
Holders pursuant to Section 204(b) (or, in either case, if the Company is
not aware of such occurrence, as soon as practicable after becoming so
aware), provide written notice to the Trustee and to the Holders of the
outstanding DECS of the occurrence of such Dilution Event or Adjustment
Event including a statement in reasonable detail setting forth the method
by which any adjustment to the Exchange Rate or change in the
consideration to be received was determined and setting forth the revised
Exchange Rate or consideration, as the case may be, per DECS, PROVIDED,
THAT, in respect of any adjustment to the Maturity Price, such notice
need only disclose the factor by which the Maturity Price is to be
multiplied pursuant to Section 204(a)(iv) in order to determine which
clause of the definition of the Exchange Rate will apply at Maturity, it
being understood that, until Maturity, the Exchange Rate itself cannot be
determined.
(b) In case at any time while any of the DECS are outstanding the
Company receives notice that:
(i) Rouge shall declare a dividend (or any other distribution) on
or in respect of the Rouge Common Stock to which Section 204(a)(i) or
(ii) shall apply (other than any cash dividends and distributions, if
any, paid from time to time by Rouge that do not constitute Ordinary Cash
Dividends);
(ii) Rouge shall authorize the issuance to all holders of Rouge
Common Stock of rights or warrants to subscribe for or purchase shares of
Rouge Common Stock or of any other subscription rights or warrants;
(iii) there shall occur any conversion or reclassification of
Rouge Common Stock (other than a subdivision or combination of
outstanding shares of such Rouge Common Stock) or any consolidation,
merger or reorganization to which Rouge is a party and for which approval
of any stockholders of Rouge is required, or the sale or transfer of all
or substantially all of the assets of Rouge; or
(iv) there shall occur the voluntary or involuntary dissolution,
liquidation or winding up of Rouge;
then the Company shall promptly cause to be delivered to the Trustee and
any applicable Paying Agent and filed at the office or agency maintained
for the purpose of exchange of DECS at Maturity in the Borough of
Manhattan, in The City of New York by the Trustee (or any applicable
Paying Agent), and shall promptly cause to be mailed to the Holders of
DECS at their last addresses as they shall appear upon the registration
books of the Security Registrar, at least 10 days before the date
hereinafter specified (or the earlier of the dates hereinafter specified,
in the event that more than one is specified), a notice
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<PAGE> 14
stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution or grant of rights or warrants, or, if a
record is not to be taken, the date as of which the holders of Rouge
Common Stock of record to be entitled to such dividend, distribution or
grant of rights or warrants are to be determined, or (y) the date, if
known by the Company, on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up is
expected to become effective. Following any Adjustment Event, the
provisions of this paragraph (b) shall apply with respect to any Reported
Securities in the same manner as with respect to Rouge and the Rouge
Common Stock
(c) On or prior to twenty-one Business Days preceding the Stated
Maturity of the DECS, the Company will provide notice to the Holders of record
of the DECS and to the Trustee and will publish a notice in a daily newspaper of
national circulation stating whether the Company will deliver, in accordance
with Section 202, Rouge Common Stock, cash (and/or, in accordance with Section
204(b), cash or Reported Securities) or a combination thereof upon the mandatory
exchange of the principal amount of the DECS and, if a combination of cash or
such securities, the relative proportion of each; PROVIDED, HOWEVER, in the
event the Company intends to deliver cash, the Company shall have the right to
require certification as to the domicile and residency of each beneficial holder
of DECS, as a condition to delivery of such cash. After the close of business on
the Business Day immediately preceding the Stated Maturity of the DECS, the
Company shall notify the Trustee in writing of the number of shares of Rouge
Common Stock and/or Reported Securities, or the amount of cash, to be delivered
per DECS.
SECTION 206. Taxes.
(a) The Company will pay any and all documentary, stamp, transfer
or similar taxes that may be payable in respect of the transfer and delivery of
Rouge Common Stock (or Reported Securities) pursuant hereto; PROVIDED, HOWEVER,
that the Company shall not be required to pay any such tax which may be payable
in respect of any transfer involved in the delivery of Rouge Common Stock (or
Reported Securities) in a name other than that in which the DECS so exchanged
were registered, and no such transfer or delivery shall be made unless and until
the person requesting such transfer has paid to the Company the amount of any
such tax, or has established, to the satisfaction of the Company, that such tax
has been paid.
(b) The parties hereto hereby agree, and each Holder of a DECS by
its purchase of a DECS hereby agrees:
(i) to treat, for U.S. federal income tax purposes, each DECS as
a forward purchase contract to purchase Rouge Common Stock at Maturity
(including as a result of acceleration or otherwise) (the "FORWARD
PURCHASE CONTRACT CHARACTERIZATION"), under the terms of which contract
(a) at the time of issuance of the DECS the Holder deposits irrevocably
with the Company a fixed amount of cash equal to the purchase price of
the DECS to assure the fulfillment of the Holder's purchase obligation
described in clause (c)
13
<PAGE> 15
below, which deposit will unconditionally and irrevocably be applied at
Maturity to satisfy such obligation, (b) until Maturity the Company will
be obligated to pay interest on such deposit at a rate equal to the
stated rate of interest on the DECS as compensation to the Holder for the
Company's use of such cash deposit during the term of the DECS, and (c)
at Maturity such cash deposit unconditionally and irrevocably will be
applied by the Company in full satisfaction of the Holder's obligation
under the forward purchase contract, and the Company will deliver to the
Holder the number of Rouge Common Shares (and/or Reported Securities)
that the Holder is entitled to receive at that time pursuant to the terms
of the DECS (subject to the Company's right to deliver cash in lieu of
the Rouge Common Shares and Reported Securities);
(ii) to treat, consistent with the above characterization, (x)
amounts paid to the Company in respect of the original issue of a DECS as
allocable in their entirety to the amount of the cash deposit
attributable to such DECS, and (y) amounts denominated as interest that
are payable with respect to the DECS as interest payable on the amount of
such deposit, includible annually in the income of the Holder as interest
income in accordance with its method of accounting; and
(iii) to file all U.S. federal, state and local income and
franchise tax returns consistent with the forward purchase contract
characterization (unless required otherwise by an applicable taxing
authority).
SECTION 2.07. Delivery of Securities upon Maturity.
All Rouge Common Stock and Reported Securities deliverable to
Holders upon the Maturity of the DECS shall be delivered to such Holders,
whenever practicable, in such manner (such as by book-entry transfer) so as to
assure same-day transfer of such securities to Holders and otherwise in the
manner customary at such time for delivery of such securities and securities of
the same type.
ARTICLE III
Covenants
SECTION 301. Shares Free and Clear.
With respect to the DECS only and for the benefit of only the
Holders thereof, the Company covenants and warrants that upon exchange of a DECS
at Maturity pursuant to the Indenture and this Supplemental Indenture, the
Holder of a DECS shall receive valid title to the Rouge Common Stock (and, in
the event an Adjustment Event has occurred and Reported Securities are
delivered, the Reported Securities) for which such DECS is at such time
exchangeable pursuant to this Indenture, free and clear of any and all liens,
claims, charges and encumbrances whatsoever. Except as provided in Section
206(a), the Company will pay all taxes
14
<PAGE> 16
and charges with respect to the delivery of Rouge Common Stock (and Reported
Securities) delivered in exchange for DECS hereunder. In addition, the Company
further warrants that any Rouge Common Stock (and Reported Securities) so
delivered in exchange for DECS hereunder shall be free of any transfer
restrictions (other than such as are solely attributable to any Holder's status
as an affiliate of Rouge or the issuer of such Reported Securities).
Section 302. Discharge of Indenture.
With respect to the DECS only and for the benefit of only the
Holders thereof, Section 11.02(a) of the Indenture is amended to read in its
entirety as follows:
"(a) If at any time (i) the Company shall have delivered to the Trustee
for cancellation all of the DECS theretofore authenticated and
delivered (other than (1) any DECS which shall have been destroyed,
lost or stolen and which shall have been replaced or paid as provided
in Section 2.09 and (2) DECS for whose payment money has theretofore
been deposited in trust and thereafter repaid to the Company as
provided in Section 11.05) or (ii) all DECS not theretofore delivered
to the Trustee for cancellation shall have become due and payable, and
the Company shall deposit with the Trustee in trust the number of
shares of Rouge Common Stock (and/or Reported Securities) or the entire
amount of money in Dollars (except as otherwise provided pursuant to
Section 2.03) sufficient to pay all DECS not theretofore delivered to
the Trustee for cancellation, including principal and interest due, in
accordance with the terms of such DECS, and if in either case the
Company shall also pay or cause to be paid all other sums payable
hereunder by the Company, then this Indenture shall cease to be of
further effect (except as to any surviving rights of registration of
transfer or exchange of such DECS herein expressly provided for and
rights to receive payments of principal of, and interest on, the DECS
with respect to the DECS), and the Trustee, on demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel and
at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this
Indenture."
With respect to the DECS only and for the benefit of only the
Holders thereof, the Company surrenders all rights and powers conferred on it by
Section 11.02(b) and Section 11.03 of the Indenture.
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<PAGE> 17
ARTICLE V
Miscellaneous
SECTION 501. Confirmation of Indenture.
The Indenture, as supplemented and amended by this Supplemental
Indenture and all other indentures supplemental thereto, is in all respects
ratified and confirmed, and the Indenture, this Supplemental Indenture and all
indentures supplemental thereto shall be read, taken and construed as one and
the same instrument.
SECTION 502. Concerning the Trustee.
The Trustee assumes no duties, responsibilities or liabilities by
reason of this Supplemental Indenture other than as set forth in the Indenture.
-------------------
This Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
16
<PAGE> 18
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
WORTHINGTON INDUSTRIES, INC.
By:__________________________
Name:
Title:
Attest:_________________________
Name:
Title:
PNC BANK, OHIO, NATIONAL ASSOCIATION,
as Trustee
By:____________________________
Name:
Title:
Attest:_________________________
Name:
Title:
17
<PAGE> 19
STATE OF )
) SS:
COUNTY OF )
On the day of _________, 1997, before me personally came
___________ ________________, to me known, who, being by me duly sworn, did
depose and say that she/he is the __________________ of WORTHINGTON INDUSTRIES,
INC., one of the corporations described in and which executed the foregoing
instrument; that she/he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that she/he signed
her/his name thereto by like authority.
-----------------------
Notary Public
SEAL
STATE OF )
) SS:
COUNTY OF )
On the day of _________, 1997, before me personally came
___________ ________________, to me known, who, being by me duly sworn,
did depose and say that she/he is the ___________________ of PNC BANK, OHIO,
NATIONAL ASSOCIATION, one of the corporations described in and which executed
the foregoing instrument; that she/he knows the seal of said corporation; that
the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that
she/he signed her/his name thereto by like authority.
-----------------------
Notary Public
SEAL
18
<PAGE> 20
EXHIBIT A
This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of the
Depositary or a nominee of the Depositary. Unless and until it is exchanged in
whole or in part for the individual Debt Securities represented hereby, this
Global Security may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
Unless this Security is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
Company or its agent for registration of transfer, exchange or payment, and any
security issued is registered in the name of Cede & Co., or such other name as
requested by an authorized representative of the Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.
NO._________________ CUSIP NO.
Form of Face of DECS
WORTHINGTON INDUSTRIES, INC.
5,999,600 DECS SM
(Debt Exchangeable for Common Stock SM)
7 1/4 % Exchangeable Note due March 1, 2000
(Subject to Exchange at Maturity into Shares of
Class A Common Stock, Par Value $.01 Per Share,
of Rouge Steel Company)
Worthington Industries, Inc., a Delaware corporation (hereinafter
called the "Company," which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to Cede & Co. or registered assigns, the principal sum of NINETY TWO MILLION,
NINE HUNDRED AND NINETY THREE THOUSAND AND EIGHT HUNDRED DOLLARS (or $15.50 for
each Debt Exchangeable for Common Stock (each, a "DECS") represented by this
note) on March 1, 2000 (subject to the mandatory exchange provisions at Maturity
described below), and to pay interest (computed on
F-1
<PAGE> 21
the basis of a 360-day year of twelve 30-day months) on such principal amount
from March 4, 1997, or from the most recent Interest Payment Date (as defined
below) to which interest has been paid or duly provided for, quarterly on March
1, June 1, September 1 and December 1 of each year (each, an "Interest Payment
Date" and, collectively, the "Interest Payment Dates"), commencing June 1, 1997,
at the rate per annum specified in the title of this note, until the principal
hereof is paid or made available for payment. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in said Indenture, be paid to the person in whose name this DECS (or
the DECS in exchange or substitution for which this DECS was issued) is
registered at the close of business on the Regular Record Date (as defined
below) for interest payable on such Interest Payment Date. The Regular Record
Date for any interest payment is the close of business on the last day of the
calendar month immediately preceding the relevant Interest Payment Date, whether
or not a Business Day (as defined below), PROVIDED, that interest payable at
Maturity shall be payable to the person to whom the principal hereof is payable.
In any case where such Interest Payment Date shall not be a Business Day, then
(notwithstanding any other provision of said Indenture or this DECS) payment of
such interest need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on such date,
and, if such payment is so made, no interest shall accrue for the period from
and after such date. Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the registered Holder on such Regular
Record Date, as the case may be, and may be paid to the person in whose name
this DECS (or the DECS in exchange or substitution for which this DECS was
issued) is registered at the close of business on a record date for the payment
of such interest to be fixed by the Trustee for the DECS, notice whereof shall
be given to Holders of the DECS not less than 10 days prior to such record date,
or may be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the DECS may be listed, and
upon such notice as may be required by such exchange. At Maturity, the principal
amount of this DECS will be mandatorily exchanged into a number of shares of
Class A Common Stock, par value $.01 per share (the "Rouge Common Stock"), of
Rouge Steel Company ("Rouge") at the Exchange Rate (as defined below). The
"Exchange Rate" is equal to (a) if the Maturity Price (as defined below) is
greater than $18.29 (the "Threshold Appreciation Price"), 0.8475 shares of Rouge
Common Stock per DECS, (b) if the Maturity Price is less than or equal to the
Threshold Appreciation Price but is greater than $15.50 (the "Initial Price"), a
fraction equal to the Initial Price divided by the Maturity Price of one share
of Rouge Common Stock per DECS (such fractional share being calculated to the
nearest 1/10,000th of a share or, if there is not a nearest 1/10,000th of a
share, to the next higher 1/10,000th of a share) and (c) if the Maturity Price
is less than or equal to the Initial Price, one share of Rouge Common Stock per
DECS. ACCORDINGLY, THE VALUE OF THE ROUGE COMMON STOCK TO BE RECEIVED BY HOLDERS
OF THE DECS (OR, AS DISCUSSED BELOW, THE CASH EQUIVALENT OR OTHER CONSIDERATION
THAT MAY BE RECEIVED IN LIEU OF OR IN ADDITION TO SUCH SHARES) AT MATURITY WILL
NOT NECESSARILY EQUAL THE PRINCIPAL AMOUNT OF SUCH DECS. Any shares of Rouge
Common Stock delivered by the Company to the Holders of the DECS that are not
affiliated with Rouge shall be free of any
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<PAGE> 22
transfer restrictions, and the holders of DECS will be responsible for the
payment of any and all brokerage costs upon the subsequent sale of such shares.
No fractional shares of Rouge Common Stock will be issued at Maturity as
provided in the Indenture. The Company may, at its option, in lieu of delivering
either (a) all, but not less than all of the shares of Rouge Common Stock
otherwise deliverable on the date of Maturity (the "All Cash Delivery Option")
or (b) a percentage (selected by the Company in its discretion, but not to
exceed 20%) of the shares of Rouge Common Stock otherwise deliverable on the
date of Maturity (the "Partial Cash Delivery Option"), in either case, deliver
cash in an amount equal to the value of the number of shares of Rouge Common
Stock specified in clause (a) or (b) of this sentence, as the case may be, at
the Maturity Price as provided in the Indenture; PROVIDED, HOWEVER, without
regard to the exercise of either of the foregoing options, with respect to those
Holders to whom the Company has determined delivery of cash may violate
applicable state law, the Company will deliver shares of Rouge Common Stock as
provided in the Indenture. An election to exercise the Partial Cash Delivery
Option with respect to a percentage of the shares of Rouge Common stock
otherwise deliverable on the date of Maturity shall not in any way limit the
Company's obligation to deliver the remaining shares of Rouge Common Stock
otherwise deliverable on the date of Maturity. Notwithstanding the foregoing,
(i) in the case of certain dilution events, the Exchange Rate will be subject to
adjustment and (ii) in the case of certain adjustment events, the consideration
received by Holders of DECS at Maturity will be other securities and/or cash,
each as provided in the Indenture.
The "Maturity Price" is defined as the average Closing Price per
share of Rouge Common Stock on the 20 Trading Days immediately prior to (but not
including) the date of Maturity or, under certain circumstances, the market
value per share of Rouge Common Stock as of the date of Maturity as determined
by a nationally recognized independent investment banking firm retained for such
purpose by the Company, as provided in the Indenture. The "Closing Price" of any
security on any date of determination means (i) the closing sale price (or, if
no closing price is reported, the last reported sale price) of such security
(regular way) on the New York Stock Exchange (the "NYSE") on such date, (ii) if
such security is not listed for trading on the NYSE on any such date, as
reported in the composite transactions for the principal United States
securities exchange on which such security is so listed, (iii) if such security
is not so listed on a United States national or regional securities exchange, as
reported by the Nasdaq Stock Market, (iv) if such security is not so reported,
the last quoted bid price for such security in the over-the-counter market as
reported by the National Quotation Bureau or similar organization or (v) if such
security is not so quoted, the average of the mid-point of the last bid and ask
prices for such security from each of at least three nationally recognized
investment banking firms selected for this purpose by the Company. A "Trading
Day" is defined as a day on which the security the Closing Price of which is
being determined (i) is not suspended from trading on any national or regional
securities exchange or association or over-the-counter market at the close of
business and (ii) has traded at least once on the national or regional
securities exchange or association or over-the- counter market that is the
primary market for the trading of such security. "Business Day" means any day
that is not a Saturday, a Sunday or a day on which the NYSE, banking
F-3
<PAGE> 23
institutions or trust companies in The City of New York, New York are authorized
or obligated by law or executive order to close.
Interest on this DECS will be payable, and delivery of Rouge
Common Stock and/or such other consideration as permitted or required herein
(or, at the Company's option, cash in an amount equal to the value of such Rouge
Common Stock and/or other consideration) in exchange for the principal amount of
this DECS at Maturity will be made upon surrender of this DECS, at the office or
agency of the Company maintained for that purpose in The City of New York, New
York, and payment of interest on (and, if the Company elects not to deliver
Rouge Common Stock and/or other securities upon exchange at Maturity, the cash
equivalent thereof payable upon exchange for the principal amount of) this DECS
will be made in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
PROVIDED, HOWEVER, that at the option of the Company payment of interest may be
made by check mailed to the address of the person entitled thereto as such
address shall appear on the register for the DECS.
ADDITIONAL PROVISIONS OF THIS DECS ARE CONTAINED ON THE REVERSE
HEREOF AND SUCH PROVISIONS SHALL HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH
IN THIS PLACE.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee for this DECS by manual signature, this DECS
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose. "DECS" and "Debt Exchangeable for Common Stock" are
service marks of Salomon Brothers Inc.
IN WITNESS WHEREOF, Worthington Industries, Inc. has caused this
instrument to be duly executed under its corporate seal.
Dated: WORTHINGTON INDUSTRIES, INC.
By:______________________
Name:
Title:
By:______________________
Name:
Title:
Attest:
Name:
F-4
<PAGE> 24
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated
herein and referred to in the within-mentioned Indenture.
PNC BANK, OHIO, NATIONAL ASSOCIATION
as Trustee
By:____________________________
Authorized Signature
F-5
<PAGE> 25
Form of Reverse of DECS
WORTHINGTON INDUSTRIES, INC.
7 1/4% Exchangeable Note due March 1, 2000
(Subject to Exchange at Maturity into Shares of
Class A Common Stock, Par Value $.01 Per Share,
of Rouge Steel Company)
This DECS is one of a duly authorized issue of debentures, notes,
bonds or other evidences of indebtedness (hereinafter called the "Debt
Securities") of the Company of the series hereinafter specified, which series is
limited in aggregate principal amount to $92,993,800, all such Debt Securities
issued and to be issued under an indenture dated as of May 15, 1996 between the
Company and PNC Bank, Ohio, National Association, as Trustee, as supplemented by
a First Supplemental Indenture dated as of February 27, 1997 (as so supplemented
and as may be further supplemented from time to time, the "Indenture") between
the Company and PNC Bank, Ohio, National Association as trustee (herein called
the "Trustee," which term includes any successor Trustee under the Indenture),
pursuant to which the Company has designated PNC Bank, Ohio, National
Association as Trustee for the DECS, to which Indenture and all other indentures
supplemental thereto reference is hereby made for a statement of the rights and
limitation of rights thereunder of the Holders of the Debt Securities and of the
rights, obligations, duties and immunities of the Trustee for each series of
Debt Securities and of the Company, and the terms upon which the Debt Securities
are and are to be authenticated and delivered. As provided in the Indenture, the
Debt Securities may be issued in one or more series, which different series may
be issued in various aggregate principal amounts, may be denominated in
currencies other than U.S. Dollars, (including composite currencies), may mature
at different times, may bear interest, if any, at different rates, may be
subject to different redemption provisions, if any, may be subject to different
sinking fund or other purchase provisions, if any, may be subject to different
covenants and Events of Default and may otherwise vary as in the Indenture
provided or permitted. This DECS is one of a series of the Debt Securities
designated as 7 1/4% Exchangeable Notes Due March 1, 2000.
The DECS may not be redeemed prior to Stated Maturity and are not
entitled to the benefit of any sinking fund.
The provisions contained in the Indenture for defeasance of the
Company's obligations upon compliance by the Company with certain conditions set
forth therein will not be applicable to the DECS. Certain other provisions
contained in the Indenture pertaining to satisfaction and discharge of the
Indenture upon deposit of funds with the Trustee shall apply to the DECS in the
manner set forth in the First Supplemental Indenture referred to above.
R-1
<PAGE> 26
If an Event of Default with respect to the DECS, as defined in
the Indenture, shall occur and be continuing, the principal of all DECS may be
declared due and payable and therefore will result in the mandatory exchange of
the principal amount thereof for Rouge Common Stock and/or other consideration
as permitted or required under the terms hereof (or, at the Company's option,
cash), all in the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Debt Securities
of each series under the Indenture at any time by the Company with the consent
of the Holders of not less than a majority in aggregate principal amount of the
Debt Securities at the time outstanding of each series to be affected thereby.
The Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Debt Securities of any series
at the time outstanding, on behalf of the Holders of all the Debt Securities of
such series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences
with respect to such series. Any such consent or waiver by the Holder of this
DECS shall be conclusive and binding upon such Holder and upon all future
Holders of this DECS and of any DECS issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent of
waiver is made upon this DECS.
No reference herein to the Indenture and no provision of this
DECS or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on
this DECS at the times, place and rate, and in the manner, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, this DECS is transferable on the register for the DECS, upon
surrender of this DECS for registration of transfer at the office or agency of
the Company to be maintained for that purpose in The City of New York, New York,
or at any other office or agency of the Company maintained for that purpose,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar for the DECS duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new DECS, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees. No service
charge shall be made for any such transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection with the registration of such transfer or exchange,
other than certain exchanges not involving any transfer.
Certain capitalized terms used in this DECS but not defined
herein have the meanings set forth in the Indenture.
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<PAGE> 27
THIS DECS SHALL FOR ALL PURPOSES BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company, the Trustee for the DECS and any agent of the
Company or such Trustee may treat the person in whose name this DECS is
registered as the owner hereof for the purpose of receiving payment as herein
provided and for all other purposes, whether or not this DECS be overdue, and
neither the Company, such Trustee nor any such agent shall be affected by notice
to the contrary.
R-3
<PAGE> 28
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - __________ Custodian _________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right Under Uniform Gifts to Minors Act
of survivorship and not as
tenants in common
------------------------------
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
-----------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Please Print or Type Name and Address Including Postal Zip Code of Assignee
- --------------------------------------------------------------------------------------------------------------
the within DECS and all rights thereunder, hereby irrevocably constituting and appointing
______________________________________________________________________________________________________attorney
to transfer said DECS on the books of Worthington Industries, Inc. with full power of substitution in the
premises.
Dated:_______________________________ _________________________________________________________________
Signature
_________________________________________________________________
NOTICE: The signature to this assignment must correspond with the
name as it appears upon the face of the within DECS in every
particular, without alteration or enlargement or any change
whatsoever.
</TABLE>
R-4
<PAGE> 1
Exhibit 4(d)
This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of the
Depositary or a nominee of the Depositary. Unless and until it is exchanged in
whole or in part for the individual Debt Securities represented hereby, this
Global Security may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
Unless this Security is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
Company or its agent for registration of transfer, exchange or payment, and any
security issued is registered in the name of Cede & Co., or such other name as
requested by an authorized representative of the Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.
NO.___________ CUSIP NO. ________________
WORTHINGTON INDUSTRIES, INC.
______________ DECS SM
(Debt Exchangeable for Common Stock SM)
7 1/4% Exchangeable Note due March 1, 2000
(Subject to Exchange at Maturity into Shares of
Class A Common Stock, Par Value $.01 Per Share,
of Rouge Steel Company)
Worthington Industries, Inc., a Delaware corporation (hereinafter
called the "Company," which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to Cede & Co. or registered assigns, the principal sum of _____________________
__________________________________________________________________ DOLLARS (or
$15.50 for each Debt Exchangeable for Common Stock (each, a "DECS") represented
by this note) on March 1, 2000 (subject to the mandatory exchange provisions at
Maturity described below), and to pay interest (computed on the basis of a
360-day year of twelve 30-day months) on such principal amount from March 4,
1997, or from the most recent Interest Payment Date (as defined below) to which
interest has been paid or duly provided for, quarterly on March 1, June 1,
September 1 and December 1 of each year (each, an "Interest Payment Date" and,
collectively, the "Interest Payment Dates"), commencing June 1, 1997, at the
rate per annum specified in the title of this note, until the principal hereof
is paid or made available for payment. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
said Indenture, be paid to the person in whose name this DECS (or the DECS in
F-1
<PAGE> 2
exchange or substitution for which this DECS was issued) is registered at the
close of business on the Regular Record Date (as defined below) for interest
payable on such Interest Payment Date. The Regular Record Date for any interest
payment is the close of business on the last day of the calendar month
immediately preceding the relevant Interest Payment Date, whether or not a
Business Day (as defined below), PROVIDED, that interest payable at Maturity
shall be payable to the person to whom the principal hereof is payable. In any
case where such Interest Payment Date shall not be a Business Day, then
(notwithstanding any other provision of said Indenture or this DECS) payment of
such interest need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on such date,
and, if such payment is so made, no interest shall accrue for the period from
and after such date. Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the registered Holder on such Regular
Record Date, as the case may be, and may be paid to the person in whose name
this DECS (or the DECS in exchange or substitution for which this DECS was
issued) is registered at the close of business on a record date for the payment
of such interest to be fixed by the Trustee for the DECS, notice whereof shall
be given to Holders of the DECS not less than 10 days prior to such record date,
or may be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the DECS may be listed, and
upon such notice as may be required by such exchange. At Maturity, the principal
amount of this DECS will be mandatorily exchanged into a number of shares of
Class A Common Stock, par value $.01 per share (the "Rouge Common Stock"), of
Rouge Steel Company ("Rouge") at the Exchange Rate (as defined below). The
"Exchange Rate" is equal to (a) if the Maturity Price (as defined below) is
greater than $18.29 (the "Threshold Appreciation Price"), 0.8475 shares of Rouge
Common Stock per DECS, (b) if the Maturity Price is less than or equal to the
Threshold Appreciation Price but is greater than $15.50 (the "Initial Price"), a
fraction equal to the Initial Price divided by the Maturity Price of one share
of Rouge Common Stock per DECS (such fractional share being calculated to the
nearest 1/10,000th of a share or, if there is not a nearest 1/10,000th of a
share, to the next higher 1/10,000th of a share) and (c) if the Maturity Price
is less than or equal to the Initial Price, one share of Rouge Common Stock per
DECS. ACCORDINGLY, THE VALUE OF THE ROUGE COMMON STOCK TO BE RECEIVED BY HOLDERS
OF THE DECS (OR, AS DISCUSSED BELOW, THE CASH EQUIVALENT OR OTHER CONSIDERATION
THAT MAY BE RECEIVED IN LIEU OF OR IN ADDITION TO SUCH SHARES) AT MATURITY WILL
NOT NECESSARILY EQUAL THE PRINCIPAL AMOUNT OF SUCH DECS. Any shares of Rouge
Common Stock delivered by the Company to the Holders of the DECS that are not
affiliated with Rouge shall be free of any transfer restrictions, and the
holders of DECS will be responsible for the payment of any and all brokerage
costs upon the subsequent sale of such shares. No fractional shares of Rouge
Common Stock will be issued at Maturity as provided in the Indenture. The
Company may, at its option, in lieu of delivering either (a) all, but not less
than all of the shares of Rouge Common Stock otherwise deliverable on the date
of Maturity (the "All Cash Delivery Option") or (b) a percentage (selected by
the Company in its discretion, but not to exceed 20%) of the shares of Rouge
Common Stock otherwise deliverable on the date of Maturity (the "Partial Cash
Delivery Option"), in either case, deliver cash in an amount equal to the value
of the number of shares of Rouge Common Stock specified in clause (a) or (b) of
this sentence, as the case may be, at the Maturity Price as provided in the
Indenture; PROVIDED, HOWEVER, without regard to the exercise of either of the
foregoing options, with respect to those Holders to whom the Company
F-2
<PAGE> 3
has determined delivery of cash may violate applicable state law, the Company
will deliver shares of Rouge Common Stock as provided in the Indenture. An
election to exercise the Partial Cash Delivery Option with respect to a
percentage of the shares of Rouge Common stock otherwise deliverable on the date
of Maturity shall not in any way limit the Company's obligation to deliver the
remaining shares of Rouge Common Stock otherwise deliverable on the date of
Maturity. Notwithstanding the foregoing, (i) in the case of certain dilution
events, the Exchange Rate will be subject to adjustment and (ii) in the case of
certain adjustment events, the consideration received by Holders of DECS at
Maturity will be other securities and/or cash, each as provided in the
Indenture.
The "Maturity Price" is defined as the average Closing Price per
share of Rouge Common Stock on the 20 Trading Days immediately prior to (but not
including) the date of Maturity or, under certain circumstances, the market
value per share of Rouge Common Stock as of the date of Maturity as determined
by a nationally recognized independent investment banking firm retained for such
purpose by the Company, as provided in the Indenture. The "Closing Price" of any
security on any date of determination means (i) the closing sale price (or, if
no closing price is reported, the last reported sale price) of such security
(regular way) on the New York Stock Exchange (the "NYSE") on such date, (ii) if
such security is not listed for trading on the NYSE on any such date, as
reported in the composite transactions for the principal United States
securities exchange on which such security is so listed, (iii) if such security
is not so listed on a United States national or regional securities exchange, as
reported by the Nasdaq Stock Market, (iv) if such security is not so reported,
the last quoted bid price for such security in the over-the-counter market as
reported by the National Quotation Bureau or similar organization or (v) if such
security is not so quoted, the average of the mid-point of the last bid and ask
prices for such security from each of at least three nationally recognized
investment banking firms selected for this purpose by the Company. A "Trading
Day" is defined as a day on which the security the Closing Price of which is
being determined (i) is not suspended from trading on any national or regional
securities exchange or association or over-the-counter market at the close of
business and (ii) has traded at least once on the national or regional
securities exchange or association or over-the- counter market that is the
primary market for the trading of such security. "Business Day" means any day
that is not a Saturday, a Sunday or a day on which the NYSE, banking
institutions or trust companies in The City of New York, New York are authorized
or obligated by law or executive order to close.
Interest on this DECS will be payable, and delivery of Rouge
Common Stock and/or such other consideration as permitted or required herein
(or, at the Company's option, cash in an amount equal to the value of such Rouge
Common Stock and/or other consideration)
F-3
<PAGE> 4
in exchange for the principal amount of this DECS at Maturity will be made upon
surrender of this DECS, at the office or agency of the Company maintained for
that purpose in The City of New York, New York, and payment of interest on (and,
if the Company elects not to deliver Rouge Common Stock and/or other securities
upon exchange at Maturity, the cash equivalent thereof payable upon exchange for
the principal amount of) this DECS will be made in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; PROVIDED, HOWEVER, that at the option of the
Company payment of interest may be made by check mailed to the address of the
person entitled thereto as such address shall appear on the register for the
DECS.
ADDITIONAL PROVISIONS OF THIS DECS ARE CONTAINED ON THE REVERSE
HEREOF AND SUCH PROVISIONS SHALL HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH
IN THIS PLACE.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee for this DECS by manual signature, this DECS
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose. "DECS" and "Debt Exchangeable for Common Stock" are
service marks of Salomon Brothers Inc.
IN WITNESS WHEREOF, Worthington Industries, Inc. has caused this
instrument to be duly executed under its corporate seal.
Dated: WORTHINGTON INDUSTRIES, INC.
By:______________________
Name:
Title:
By:______________________
Name:
Title:
Attest:
Name:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated
herein and referred to in the within-mentioned Indenture.
PNC BANK, OHIO, NATIONAL ASSOCIATION
as Trustee
By:____________________________
Authorized Signature
F-4
<PAGE> 5
WORTHINGTON INDUSTRIES, INC.
7 1/4% Exchangeable Note due March 1, 2000
(Subject to Exchange at Maturity into Shares of
Class A Common Stock, Par Value $.01 Per Share,
of Rouge Steel Company)
This DECS is one of a duly authorized issue of debentures, notes,
bonds or other evidences of indebtedness (hereinafter called the "Debt
Securities") of the Company of the series hereinafter specified, which series is
limited in aggregate principal amount to $92,993,800, all such Debt Securities
issued and to be issued under an indenture dated as of May 15, 1996 between the
Company and PNC Bank, Ohio, National Association, as Trustee, as supplemented by
a First Supplemental Indenture dated as of February 26, 1997 (as so supplemented
and as may be further supplemented from time to time, the "Indenture") between
the Company and PNC Bank, Ohio, National Association as trustee (herein called
the "Trustee," which term includes any successor Trustee under the Indenture),
pursuant to which the Company has designated PNC Bank, Ohio, National
Association as Trustee for the DECS, to which Indenture and all other indentures
supplemental thereto reference is hereby made for a statement of the rights and
limitation of rights thereunder of the Holders of the Debt Securities and of the
rights, obligations, duties and immunities of the Trustee for each series of
Debt Securities and of the Company, and the terms upon which the Debt Securities
are and are to be authenticated and delivered. As provided in the Indenture, the
Debt Securities may be issued in one or more series, which different series may
be issued in various aggregate principal amounts, may be denominated in
currencies other than U.S. Dollars, (including composite currencies), may mature
at different times, may bear interest, if any, at different rates, may be
subject to different redemption provisions, if any, may be subject to different
sinking fund or other purchase provisions, if any, may be subject to different
covenants and Events of Default and may otherwise vary as in the Indenture
provided or permitted. This DECS is one of a series of the Debt Securities
designated as 7 1/4% Exchangeable Notes Due March 1, 2000.
The DECS may not be redeemed prior to Stated Maturity and are not
entitled to the benefit of any sinking fund.
The provisions contained in the Indenture for defeasance of the
Company's obligations upon compliance by the Company with certain conditions set
forth therein will not be applicable to the DECS. Certain other provisions
contained in the Indenture pertaining to satisfaction and discharge of the
Indenture upon deposit of funds with the Trustee shall apply to the DECS in the
manner set forth in the First Supplemental Indenture referred to above.
If an Event of Default with respect to the DECS, as defined in
the Indenture, shall occur and be continuing, the principal of all DECS may be
declared due and payable and therefore will result in the mandatory exchange of
the principal amount thereof for Rouge Common Stock and/or other consideration
as permitted or required under the terms hereof (or, at the Company's option,
cash), all in the manner and with the effect provided in the Indenture.
R-1
<PAGE> 6
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Debt Securities
of each series under the Indenture at any time by the Company with the consent
of the Holders of not less than a majority in aggregate principal amount of the
Debt Securities at the time outstanding of each series to be affected thereby.
The Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Debt Securities of any series
at the time outstanding, on behalf of the Holders of all the Debt Securities of
such series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences
with respect to such series. Any such consent or waiver by the Holder of this
DECS shall be conclusive and binding upon such Holder and upon all future
Holders of this DECS and of any DECS issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent of
waiver is made upon this DECS.
No reference herein to the Indenture and no provision of this
DECS or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on
this DECS at the times, place and rate, and in the manner, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, this DECS is transferable on the register for the DECS, upon
surrender of this DECS for registration of transfer at the office or agency of
the Company to be maintained for that purpose in The City of New York, New York,
or at any other office or agency of the Company maintained for that purpose,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar for the DECS duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new DECS, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees. No service
charge shall be made for any such transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection with the registration of such transfer or exchange,
other than certain exchanges not involving any transfer.
Certain capitalized terms used in this DECS but not defined
herein have the meanings set forth in the Indenture.
THIS DECS SHALL FOR ALL PURPOSES BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company, the Trustee for the DECS and any agent of the
Company or such Trustee may treat the person in whose name this DECS is
registered as the owner hereof for the purpose of receiving payment as herein
provided and for all other purposes, whether or not this DECS be overdue, and
neither the Company, such Trustee nor any such agent shall be affected by notice
to the contrary.
R-2
<PAGE> 7
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - __________ Custodian ____________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right Under Uniform Gifts to Minors Act
of survivorship and not as
tenants in common _________________________________
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
-----------------------------------
<TABLE>
<CAPTION>
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee
<S> <C>
- -----------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Please Print or Type Name and Address Including Postal Zip Code of Assignee
- --------------------------------------------------------------------------------------------------------------
the within DECS and all rights thereunder, hereby irrevocably constituting and appointing
______________________________________________________________________________________________________attorney
to transfer said DECS on the books of Worthington Industries, Inc. with full power of substitution in the
premises.
Dated:_______________________________ _________________________________________________________________
Signature
_________________________________________________________________
NOTICE: The signature to this assignment must correspond with the
name as it appears upon the face of the within DECS in every
particular, without alteration or enlargement or any change
whatsoever.
</TABLE>
R-3
<PAGE> 1
EXHIBIT 4(e)
AMENDED AND RESTATED
LOAN AGREEMENT
$190,000,000
CREDIT FACILITY
FROM
THE BANK OF NOVA SCOTIA
PNC BANK, OHIO, NATIONAL ASSOCIATION
NATIONSBANK, N.A.
WACHOVIA BANK OF GEORGIA, N.A.
ABN AMRO BANK N.V.
AND
BANK ONE, N.A.
(COLLECTIVELY, THE "LENDERS")
AND
THE BANK OF NOVA SCOTIA
AND
PNC BANK, OHIO, NATIONAL ASSOCIATION
AS AGENT FOR THE LENDERS
TO
WORTHINGTON INDUSTRIES, INC. ("BORROWER")
DATED AS OF MAY 30, 1997
<PAGE> 2
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. DEFINITIONS................................................................................... 1
-----------
1.1 DEFINED TERMS............................................................... 1
-------------
1.2 OTHER DEFINITIONAL PROVISIONS.............................................. 15
------------------------------
1.3 ADDITIONAL DEFINITIONAL PROVISIONS.......................................... 15
----------------------------------
2. CREDIT FACILITIES............................................................................. 15
-----------------
2.1 REVOLVING CREDIT FACILITY................................................... 15
-------------------------
2.2 THE COMPETITIVE BID FACILITY................................................ 17
----------------------------
2.3 ADDITIONAL PROVISIONS REGARDING FUNDING..................................... 20
---------------------------------------
2.4 PRINCIPAL PAYMENTS.......................................................... 21
------------------
2.5 DEFAULT RATE................................................................ 21
------------
2.6 TERMINATION OR REDUCTION OF REVOLVING COMMITMENTS........................... 22
-------------------------------------------------
2.7 RECORDS..................................................................... 22
-------
2.8 ASSUMPTIONS REGARDING NOTICES............................................... 22
-----------------------------
2.9 COMPUTATIONS, FEES, PAYMENTS, ETC........................................... 23
---------------------------------
2.10 ADDITIONAL COSTS............................................................ 24
----------------
2.11 OBLIGATION TO INDEMNIFY..................................................... 26
-----------------------
2.12 EXTENSION................................................................... 26
---------
3. CONDITIONS PRECEDENT.......................................................................... 27
--------------------
3.1 CLOSING..................................................................... 27
-------
3.2 EACH ADVANCE................................................................ 27
------------
4. REPRESENTATIONS AND WARRANTIES................................................................ 28
------------------------------
4.1 ORGANIZATION................................................................ 28
------------
4.2 LATEST FINANCIALS........................................................... 28
-----------------
4.3 RECENT ADVERSE CHANGES...................................................... 28
----------------------
4.4 LITIGATION, ETC............................................................. 28
---------------
4.5 TAXES....................................................................... 28
-----
4.6 AUTHORITY................................................................... 28
---------
4.7 OTHER DEFAULTS.............................................................. 29
--------------
4.8 LICENSES, ETC............................................................... 29
-------------
4.9 ERISA....................................................................... 29
-----
4.10 REGULATION U................................................................ 29
------------
4.11 CLOSING MEMO................................................................ 29
------------
4.12 ENVIRONMENTAL MATTERS....................................................... 29
---------------------
5. AFFIRMATIVE COVENANTS......................................................................... 29
---------------------
5.1 BOOKS AND RECORDS........................................................... 29
-----------------
</TABLE>
(i)
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
5.2 SEC FILINGS AND SHAREHOLDERS REPORTS........................................ 30
------------------------------------
5.3 QUARTERLY STATEMENTS........................................................ 30
--------------------
5.4 ANNUAL STATEMENTS........................................................... 30
-----------------
5.5 TAXES....................................................................... 30
-----
5.6 INSURANCE................................................................... 30
---------
5.7 COMPLIANCE WITH LAWS........................................................ 30
--------------------
5.8 ENVIRONMENTAL VIOLATIONS.................................................... 31
------------------------
5.9 ERISA COMPLIANCE............................................................ 31
----------------
5.10 NOTICE OF DEFAULT........................................................... 31
-----------------
5.11 CHANGE IN BUSINESS.......................................................... 31
------------------
6. NEGATIVE COVENANTS............................................................................ 31
------------------
6.1 LIENS....................................................................... 31
-----
6.2 RESTRICTIONS ON INDEBTEDNESS OF CONSOLIDATED SUBSIDIARIES................... 31
---------------------------------------------------------
6.3 OWNERSHIP................................................................... 31
---------
6.4 CONSOLIDATED INDEBTEDNESS TO CAPITALIZATION................................. 32
-------------------------------------------
6.5 NET WORTH................................................................... 32
---------
6.6 MERGER...................................................................... 32
------
6.7 SALE OF ASSETS.............................................................. 32
--------------
6.8 TRANSACTIONS WITH UNRESTRICTED SUBSIDIARIES................................. 32
-------------------------------------------
6.9 GOVERNANCE DOCUMENTS........................................................ 32
--------------------
7. EVENTS OF DEFAULT............................................................................. 32
-----------------
7.1 PAYMENT..................................................................... 32
-------
7.2 COVENANTS................................................................... 32
---------
7.3 REPRESENTATIONS AND WARRANTIES.............................................. 33
------------------------------
7.4 BANKRUPTCY, ETC............................................................. 33
---------------
7.5 BANKRUPTCY, ETC., OF UNRESTRICTED SUBSIDIARY................................ 33
--------------------------------------------
7.6 JUDGMENTS................................................................... 33
---------
7.7 OTHER INDEBTEDNESS.......................................................... 33
------------------
8. INTERCREDITOR LIEN AND PAYMENT PROVISIONS..................................................... 34
-----------------------------------------
8.1 SHARING OF PAYMENTS, ETC.................................................... 34
------------------------
8.2 RECEIPT OF PAYMENTS BY LENDERS.............................................. 35
------------------------------
8.3 DISTRIBUTIONS, ETC.......................................................... 35
------------------
8.4 BENEFIT..................................................................... 36
-------
9. REPRESENTATIONS AND WARRANTIES TO SURVIVE..................................................... 36
-----------------------------------------
10. ENVIRONMENTAL INDEMNIFICATION................................................................. 36
-----------------------------
11. AGENTS........................................................................................ 36
------
11.1 AUTHORIZATION AND ACTION.................................................... 36
------------------------
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C> <C>
11.2 AGENTS' RELIANCE, ETC....................................................... 37
---------------------
11.3 AGENTS AND THEIR AFFILIATES................................................. 37
---------------------------
11.4 LENDER CREDIT DECISION...................................................... 38
----------------------
11.5 INDEMNIFICATION............................................................. 38
---------------
11.6 SUCCESSOR AGENT............................................................. 38
---------------
11.7 RELATIONS AMONG LENDERS..................................................... 39
-----------------------
11.8 BENEFIT..................................................................... 39
-------
12. GENERAL....................................................................................... 39
-------
12.1 WAIVER...................................................................... 39
------
12.2 NOTICES..................................................................... 40
-------
12.3 SUCCESSORS AND ASSIGNS...................................................... 41
----------------------
12.4 MODIFICATIONS............................................................... 43
-------------
12.5 ILLEGALITY.................................................................. 44
----------
12.6 GENDER, ETC................................................................. 45
-----------
12.7 HEADINGS.................................................................... 45
--------
12.8 LIABILITY OF LENDERS........................................................ 45
--------------------
12.9 EXECUTION IN COUNTERPARTS................................................... 45
-------------------------
12.10 REMEDIES CUMULATIVE......................................................... 45
-------------------
12.11 COSTS, EXPENSES AND LEGAL FEES.............................................. 45
------------------------------
12.12 INDEMNITY................................................................... 46
---------
12.13 CONTINUING AGREEMENT........................................................ 46
--------------------
12.14 COMPLETE AGREEMENT.......................................................... 46
------------------
12.15 NO THIRD PARTY BENEFICIARIES................................................ 46
----------------------------
12.16 TAX WITHHOLDING CLAUSE...................................................... 46
----------------------
12.17 NO PARTNERSHIP OR JOINT VENTURE............................................. 47
-------------------------------
12.18 GOVERNING LAW AND JURISDICTION; WAIVER OF JURY
----------------------------------------------------
TRIAL................................................................................. 47
-----
Exhibits
--------
Exhibit A Form of Designation Agreement..........................................................49
</TABLE>
(iii)
<PAGE> 5
AMENDED AND RESTATED
LOAN AGREEMENT
--------------
WORTHINGTON INDUSTRIES, INC. ("Borrower"), the banks listed on the
signature pages hereof (each individually "Revolving Credit Lender" and
collectively "Revolving Credit Lenders"), and THE BANK OF NOVA SCOTIA and PNC
BANK, OHIO, NATIONAL ASSOCIATION, as agents for the Lenders (as hereinafter
defined) and individually as Revolving Credit Lenders (individually, the "Agent"
and jointly and severally, "Agents"), hereby agree as set forth in the following
sections of this Agreement. This Agreement completely amends and restates the
Loan Agreement between Borrower, Lenders and Agents dated as of April 28, 1995.
All references in the Loan Documents (as hereinafter defined) to the "Loan
Agreement" will mean this Agreement and all amendments hereto and restatements
hereof.
1. DEFINITIONS
1.1 DEFINED TERMS. For purposes of this Agreement the following
terms will have the following meanings:
"Active Consolidated Subsidiary" will mean a Consolidated
Subsidiary having a net worth in excess of $1,000,000.
"Advance" or "Advances" will mean Revolving Loans and
Competitive Bid Loans made pursuant to this Agreement.
"Administrative Agent" will mean The Bank of Nova Scotia, its
successors and assigns.
"Administrative Agent's Account" will mean the account of
Administrative Agent maintained by Administrative Agent at its office for
purpose of receipt of funds hereunder and as designated by Administrative Agent
in a written notice to Borrower and Lenders.
"Affiliate" will mean, with respect to any Person (a) any
other Person directly or indirectly controlling, controlled by or under common
control with such Person, or (b) any Person who is a director or officer of such
Person or any Subsidiary thereof. A Person will be deemed to control another
Person if such Person possesses, directly or indirectly, the power to (i) vote
ten percent (10%) or more of the voting equity of such other Person, or (ii)
direct or cause the direction of the management and policies of such other
Person, whether through voting securities, by contract or otherwise.
"Aggregate Outstanding Revolving Credit" will mean an amount
equal to the aggregate unpaid principal amount of all Revolving Loans and of all
Competitive Bid Loans.
1
<PAGE> 6
"Agreement" will mean this Loan Agreement and any amendments
or supplements thereto made from time to time in accordance with the terms of
this Agreement.
"Alternate Base Rate" will mean the higher of: (i) the
average of the Base Rate of each of the Agents or (ii) the Federal Funds Rate
plus 1/2% per annum. Any change in the Alternate Base Rate due to a change in
the Base Rate or the Federal Funds Rate will be effective on the effective date
of such change in the Base Rate or the Federal Funds Rate without notice to
Borrower. The Administrative Agent will provide Borrower notice of any change in
the Alternate Base Rate as soon as practicable but in any event within 24 hours,
provided, however, that any failure of Administrative Agent to provide such
notice will not affect the effectiveness of the change in the Alternate Base
Rate.
"Alternate Base Rate Advance" will mean any Advance
or Converted Advance that bears interest based upon the Alternate Base Rate.
"Applicable Margin" will mean:
a. as to Revolving Loans that bear interest
at the Euro-Rate, initially 18.5 basis points; provided that such rate will be
adjusted as follows based on Borrower's Senior Unsecured Debt Rating determined
as of the end of the previous quarter:
SENIOR UNSECURED DEBT RATING APPLICABLE MARGIN
(IN BASIS POINTS)
greater than or equal to A/A2 17.0
A-/A3 18.5
BBB+/Baa1 20.0
BBB/Baa2 22.5
less than BBB/Baa2 25.0
The Applicable Margin as to Revolving Loans that bear interest at the Euro-Rate
will be adjusted as of the first day of the fiscal quarter based upon the Senior
Unsecured Debt Rating as determined by Administrative Agent. In the event that
Borrower's Senior Unsecured Debt Rating by Moody's Investor Service, Inc. is
different from the rating received from Standard & Poors Ratings Service, a
division of McGraw-Hill Companies, Inc. ("Standard & Poors"), the higher of the
two ratings will control. Such adjustments will apply to all outstanding
Revolving Loans that bear interest at the Euro-Rate and to any such Advances
made or converted on or after such date.
2
<PAGE> 7
b. as to Competitive Bid Loans that bear
interest at the Euro-Rate, the margin specified in the related Competitive Bid
accepted by Borrower.
"Assignment and Acceptance" will mean a form substantially in
the form of the Amended and Restated Assignment and Acceptance form delivered to
each Revolving Credit Lender to transfer interests in its Loans.
"Attorneys Fees" will mean the reasonable value of the
services (and all costs and expenses related thereto) of the attorneys (and all
paralegals and other staff employed by such attorneys) employed by Lender from
time to time to: (i) take any action in or with respect to any suit or
proceedings (bankruptcy or otherwise) relating to this Agreement; (ii) enforce
any of Lender's rights to collect any of the Obligations; (iii) give Lender
advice with respect to this Agreement, including but not limited to advice in
connection with any default, workout or bankruptcy; and (iv) prepare any
amendments, restatements, amendments or waivers to this Agreement or any of the
documents executed in connection with any of the Obligations.
"Available Commitment" will mean, as to any Revolving Credit
Lender at any time, an amount equal to the excess, if any, of (a) such Revolving
Credit Lender's Revolving Commitment OVER (b) the then outstanding Revolving
Loans made by such Revolving Credit Lender.
"Base Rate" will mean the rates established by each of the
Administrative Agent and the Documentation Agent from time to time based on its
consolidation of various factors, including money market, business and
competitive factors, and is not necessarily its most favored interest rate,
provided that in no event will the Base Rate of either Agent exceed such Agent's
announced "prime rate".
"Borrower's Account" will mean the account of Borrower at
Administrative Agent designated by Administrative Agent for use hereunder.
"Borrowing" will mean an Advance made on a given Borrowing
Date.
"Borrowing Date" will mean the date on which an Advance is
made.
"Business Day" will mean a day of the year on which banks
located in New York, New York are not required or authorized to close and, if
the applicable Business Day relates to any Euro-Rate Advance, such day must also
be a day on which dealings are carried on in the London interbank market.
"Capitalization" will mean Consolidated Indebtedness plus Net
Worth. "Closing" will mean the execution and delivery of the documents listed on
the Closing Memo.
"Closing Date" will mean April 28, 1995.
3
<PAGE> 8
"Closing Memo" will mean the Amended and Restated Closing
Memorandum between Borrower and Documentation Agent in connection with the
transactions represented by this Agreement.
"Code" will mean the Internal Revenue Code of 1986, as
amended or supplemented from time to time.
"Competitive Bid Borrowings" will mean the amount of
Competitive Bid Loans outstanding at any particular time.
"Competitive Bid Conditions" will mean the conditions set
forth in SECTION 2.2 and 3, below, and in the Competitive Bid Notes.
"Competitive Bid Facility" will mean the credit facility
described in SECTION 2.2 below.
"Competitive Bid Lender" will mean any Lender that makes a
Competitive Bid Loan, its successors and assigns.
"Competitive Bid Loans" will mean the Advances described in
SECTION 2.2, below.
"Competitive Bid Notes" will mean collectively the Amended
and Restated Competitive Bid Notes evidencing the Competitive Bid Facility
described in SECTION 2.2, below, and will include all amendments thereto and any
future restatements thereof.
"Competitive Bid Rate" will mean the interest rate applicable
to a Competitive Bid or a Competitive Bid Loan.
"Competitive Bid Request" will mean the form for requesting
Competitive Bid Loans in the form of the Amended and Restated Competitive Bid
Requests delivered by Documentation Agent to Borrower, and all amendments
thereto and any future restatements thereof.
"Competitive Bids" will mean offers by Revolving Credit
Lenders to make Competitive Bid Loans made in accordance with SECTION 2.2,
below, pursuant to the form for requesting Competitive Bid Loans delivered by
Documentation Agent to Revolving Credit Lenders in connection with the Closing
and all amendments thereto and restatements thereof.
"Compliance Certificate" will mean the Amended and Restated
Compliance Certification in the form delivered to Borrower by Documentation
Agent.
"Consolidated Group" will mean Borrower and those of its
Subsidiaries treated as Consolidated Subsidiaries for purposes of this
Agreement.
"Consolidated Indebtedness" will mean at any date, the
Indebtedness of Borrower and its Consolidated Subsidiaries, determined on a
consolidated basis as of such date.
4
<PAGE> 9
"Consolidated Subsidiary" will mean at any date any
Subsidiary the accounts of which would be consolidated with those of Borrower in
its consolidated financial statements if such statements were prepared as of
such date, but excluding any Unrestricted Subsidiary.
"Conversion" or "Converted" will mean the switching from one
rate mode to another for a particular Advance or Converted Advance in accordance
with the terms of this Agreement.
"Converted Advance" will mean a Revolving Advance where the
rate of interest originally elected has been converted by means of a Conversion.
"Credit Facilities" will mean the Revolving Credit Facility
and the Competitive Bid Facility evidenced by this Agreement as described in
SECTION 2, below.
"Current Audited Financial Statements" will mean Borrower's
audited consolidated balance sheet dated May 31, 1994 and Borrower's related
audited consolidated statements of earnings, shareholders' equity and cash flows
for the fiscal year ended May 31, 1994, all as set forth in Borrower's Form 10-K
for the year ended May 31, 1994.
"Current Financial Statements" will mean the Current Audited
Financial Statements and Borrower's unaudited consolidated balance sheet dated
November 30, 1994 and Borrower's related unaudited consolidated statements of
earnings, shareholders' equity and cash flows for the six months ended November
30, 1994, all as set forth in Borrower's Form 10-Q for the six months ended
November 30, 1994 (subject to normal year-end adjustments).
"Default" will mean any event or condition which, with the
passage of time or the giving of notice or both, would constitute an Event of
Default.
"Default Rate" will mean the Alternate Base Rate in effect,
from time to time, plus two percent (2%) per annum, but not more than the
highest rate permitted by applicable law.
"Designated Lender" will mean any Person who has been
designated by a Revolving Credit Lender to fund Competitive Bid Loans and has
executed a Designation Agreement and thereby become a party to this Agreement
pursuant to Section 12.3.7.
"Designating Lender" shall have the meaning assigned to such
term in Section 12.3.7.
"Designation Agreement" means a designation agreement entered
into by a Revolving Credit Lender and a Designated Lender and accepted by the
Agent, in substantially the form of EXHIBIT A hereto.
"Documentation Agent" will mean PNC Bank, Ohio, National
Association, its successors and assigns.
5
<PAGE> 10
"Dollars" will mean lawful money of the United States of
America.
"Environmental Laws" will mean any and all federal, state,
local and foreign statutes, laws, judicial decisions, regulations, ordinances,
rules, judgments, orders, decrees, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
the environment, the effect of the environment on human health or to the
emission, discharge or release of pollutants, contaminants, Hazardous Wastes or
substances into the environment including, without limitation, ambient air,
surface water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Wastes or substances or the
clean-up or other remediation thereof.
"ERISA" will mean the Employee Retirement Income Security Act
of 1974, or any successor statute, as amended or supplemented from time to time.
"ERISA Affiliate" will mean any person (as defined in Section
3(a) of ERISA) including each trade or business (whether or not incorporated)
that together with Borrower, or any Subsidiary thereof, would be deemed to be a
"single employer" or member of the same "controlled group" within the meaning of
Section 414 of the Code.
"Event of Default" will have the meaning set forth in
Section 7.
"Eurocurrency Liabilities" will have the meaning assigned to
that term in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Euro-Rate" will mean, with respect to the Revolving Loans
comprising any Advance or Converted Advance to which the Euro-Rate applies for
an Interest Period, the interest rate per annum determined by the Administrative
Agent by dividing (the resulting quotient will be rounded upward to the nearest
1/100th of 1% per annum): (i) the rate of interest determined by the
Administrative Agent in accordance with its usual procedures (which
determination will be conclusive absent manifest error) to be the average of the
London interbank offered rates set forth on the "LIBOR" page of the Reuters
Monitor Money Rate Service (or appropriate successor, or if Reuters or its
successor ceases to provide such quotes, a comparable replacement determined by
the Administrative Agent) at approximately 11:00 a.m. London time two (2)
Business Days prior to the first day of such Interest Period for an amount
comparable to such Advance or Converted Advance and having a borrowing date and
maturity comparable to such Interest Period by (ii) a number equal to 1.00 minus
the Euro-Rate Reserve Percentage. The Euro-Rate may also be expressed by the
following formula:
Average of London interbank offered rates on LIBOR page of
Euro-Rate = Reuters Monitor Money Rate Service or appropriate successor
-------------------------------------------------------------
1.00 - Euro-Rate Reserve Percentage
"Euro-Rate Advance" will mean any Advance or Converted
Advance that bears interest based upon the Euro-Rate.
6
<PAGE> 11
"Euro-Rate Competitive Bid Loan" will mean a Competitive Bid
Loan with interest based upon the Euro-Rate.
"Euro-Rate Reserve Percentage" of Lender for the Interest
Period for any Euro-Rate Advance will mean the reserve percentage applicable, if
any, as determined by Administrative Agent, during such Interest Period (or, if
more than one such percentage will be so applicable, the daily average of such
percentages for those days in such Interest Period during which any such
percentage are applicable) under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for such Lender
with respect to liabilities or assets consisting of or including Eurocurrency
Liabilities having a term equal to such Interest Period.
"Facility Fee" will mean the fee specified in SECTION
2.9.2(a), below.
"Federal Funds Rate" will mean, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
for such transactions received by Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fixed Rate" will mean with respect to each Fixed Rate
Advance, the rate specified in the Competitive Bid accepted by Borrower with
respect to such Fixed Rate Advance.
"Fixed Rate Advance" will mean any Advance that bears
interest based upon a Fixed Rate.
"Fixed Rate Competitive Bid Loan" will mean a Competitive Bid
Loan with interest based upon the Fixed Rate.
"GAAP" will mean generally accepted accounting principles.
"Governmental Authority" will mean any nation or government,
any state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, including, without limitation, any department,
commission, board, bureau, agency, administration, service or other
instrumentality of the United States of America, of any state, the District of
Columbia, municipality or any other governmental entity.
"Hazardous Wastes", "hazardous substances" and "pollutants or
contaminants" will mean any substances, waste, pollutant or contaminant now or
hereafter included with any respective terms under any now existing or
hereinafter enacted or amended federal, state or local statute, ordinance, code
or regulation designed to protect the environment,
7
<PAGE> 12
including but not limited to the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. SECTION 9601 ET SEQ. ("CERCLA").
"Indebtedness" will mean, for any Person at any date, without
duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bond, debentures, notes or other similar
instruments, (iii) all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable arising in the
ordinary course of business, (iv) all obligations of such Person as lessee that
are capitalized in accordance with generally accepted accounting principles, (v)
all Indebtedness of others guaranteed by such Person and (vi) all contingent or
non-contingent obligations of such Person to reimburse any bank or other Person
in respect of amounts paid or payable (currently or in the future, on a
contingent or non-contingent basis) under a letter of credit or similar
instrument; provided, however, that in calculating Borrower's Indebtedness,
Borrower's "DECS" Exchangeable Notes relating to its investment in Rouge Steel
will be excluded from Borrower's Indebtedness.
"Interest Period" will mean, for each Advance or Converted
Advance bearing interest at the Euro-Rate, or each Advance bearing interest at
the Fixed Rate, the period commencing on the date of such Advance or Converted
Advance, through and including the last day of the period selected by Borrower
pursuant to the provisions below. The duration of each such Interest Period will
be thirty, sixty, ninety or one hundred eighty days for Euro-Rate Advances and
the number of days selected by Borrower for Fixed Rate Advances, except as such
is limited below, in each case as Borrower may select; PROVIDED, HOWEVER, that:
A. Borrower may not select any Interest
Period for any Advances or Converted Advances which end after
the Termination Date;
B. whenever the last day of any such
Interest Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period will be
extended to occur on the next succeeding Business Day; and
C. Fixed Rate Advances will have a minimum
interest period of 7 days and a maximum Interest Period of
180 days.
"Lender" will mean any Revolving Credit Lender or Designated
Lender. "Loan Documents" will mean this Agreement, the Notes and the documents
listed on the Closing Memo.
"Loans" will mean any and all advances of funds under this
Agreement or any of the Notes.
"Majority Lenders" will mean, when taken in the aggregate:
(i) prior to any acceleration of the Loans by Agents, Revolving Credit Lenders
holding at least fifty-one percent (51%) of the Total Commitment and (ii) after
any acceleration of the Loans by Agents,
8
<PAGE> 13
Lenders holding at least fifty-one percent (51%) of the outstanding Loans, in
any case, as adjusted from time to time.
"Material Adverse Effect" will mean an effect on the
business, financial condition, assets or liabilities of Borrower and its
Consolidated Subsidiaries, considered on a consolidated basis, which, when
combined on a cumulative basis with other changes in the business, financial
condition, assets and liabilities of Borrower and its Consolidated Subsidiaries,
considered on a consolidated basis: (i) would have an adverse effect on the
ability of Borrower to perform its obligations under the Loan Documents or (ii)
would result in a material adverse change in the financial condition of Borrower
and its Consolidated Subsidiaries, considered on a consolidated basis.
"Multiemployer Plan" will mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which Borrower or any ERISA Affiliate
(other than one considered an ERISA Affiliate only pursuant to subsection (m)
or (o) of Code Section 414) is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions.
"Net Worth," at any particular time, will mean assets minus
liabilities, as determined in accordance with GAAP. Net Worth will be calculated
on a consolidated basis for Borrower and its Consolidated Subsidiaries.
"Notes" will mean the Revolving Notes and the Competitive Bid
Notes of Borrower to the Lenders dated as of _________, 1997 evidencing the
Revolving Loans and the Competitive Bid Loans, and will include any amendments,
extensions and renewals made thereto from time to time.
"Notice of Borrowing" will mean the notice required under
SECTION 2.1, below, in the form delivered by Documentation Agent to Borrower in
connection with the Closing.
"Notice of Prepayment" will mean the notice required under
SECTION 2.4, below, in connection with a prepayment of any of the Loans in the
form delivered by Documentation Agent to Borrower in connection with the
Closing.
"Notices" will mean all Notices of Borrowing, Notices of
Prepayment, Competitive Bid Requests, any notice of termination or reduction of
Revolving Commitments and any other notices under this Agreement.
"Obligations" will mean and include all loans, advances,
debts, liabilities, obligations, covenants and duties owing to Agents and/or any
or all of Lenders from Borrower of any kind or nature arising under this
Agreement, the Notes or any of the Loan Documents, whether direct or indirect,
absolute or contingent, joint or several, due or to become due, now existing or
hereafter arising, and all charges, expenses, fees, including but not limited to
reasonable Attorneys Fees, and any other sums chargeable to Borrower under any
of the Obligations.
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"PBGC" will mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
"Permitted Liens" will mean:
a. liens securing the payment of taxes, either not
yet due or the validity of which is being contested by the
Person being charged in good faith by appropriate
proceedings, and as to which it has set aside on its books
adequate reserves to the extent required by GAAP;
b. deposits under workers' compensation,
unemployment insurance and social security laws, or to
secure the performance of bids, tenders, contracts (other
than for the repayment of borrowed money) or leases, or to
secure statutory obligations or surety or appeal bonds, or
to secure indemnity, performance or other similar bonds in
the ordinary course of business;
c. liens imposed by law, such as carriers',
warehousemen's or mechanics' liens, incurred by it in good
faith in the ordinary course of business;
d. purchase money liens incurred in the connection
with the acquisition of capital assets limited to the
specific assets acquired with such financing (subject to the
acquisition of such assets and incurrence of such debt being
otherwise permitted by the terms of this Agreement);
e. liens existing on the date of this Agreement
securing Indebtedness outstanding on the date of this
Agreement in aggregate principal amount not exceeding
$10,700,000;
f. any lien existing on any asset of any
corporation at the time such corporation becomes a
Subsidiary and not created in contemplation of such event;
g. any lien on any asset of any corporation
existing at the time such corporation is merged or
consolidated with or into Borrower or a Subsidiary and not
created in contemplation of such event;
h. any lien existing on any asset prior to the
acquisition thereof by Borrower or a Subsidiary and not
created in contemplation of such event;
i. any lien arising out of the refinancing,
extension, renewal or refunding of any Indebtedness secured
by any lien permitted by any of the foregoing clauses
(d)-(h) of this definition, provided that such Indebtedness
is not increased and is not secured by any additional
assets;
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j. liens incidental to the conduct of its business
or the ownership of its assets which (i) do not secure
Indebtedness or derivative obligations, (ii) do not secure
any obligation, or related series of obligations, in an
amount exceeding $20,000,000 and (iii) do not in the
aggregate materially detract from the value of its assets or
materially impair the use thereof in the operation of its
business;
k. liens on cash and cash equivalents securing
derivative obligations, provided that the aggregate amount
of cash equivalents subject to such liens may at no time
exceed $10,000,000;
l. any attachment lien being contested in good
faith and by proceedings promptly initiated and diligently
conducted, unless the attachment giving rise thereto will
not, within sixty days after the entry thereof, have been
discharged or fully bonded or will not have been discharged
within sixty days after the termination of any such bond;
m. any judgment lien, unless the judgment it
secures will not, within sixty days after the entry thereof,
have been discharged or execution thereof stayed pending
appeal, or will not have been discharged within sixty days
after the expiration of any such stay;
n. easements, rights-of-way, zoning restrictions
and other restrictions, charges or encumbrances incurred in
the ordinary course of business and not materially
interfering with the ordinary conduct of the business;
o. any lien on property of a Subsidiary securing
Indebtedness of such Subsidiary owing to Borrower or a
Consolidated Subsidiary; and
p. liens to banks arising from the issuance of
letters of credit issued by such banks ("issuing banks") on
the following: (i) any and all shipping documents, warehouse
receipts, policies or certificates of insurance and other
document accompanying or relative to drafts drawn under any
credit, and any draft drawn thereunder (whether or not such
documents, goods or other property be released to or upon
the order of Borrower or any Subsidiary under a security
agreement or trust or bailee receipt or otherwise), and the
proceeds of each and all of the foregoing; (ii) the balance
of every deposit account, now or at any time hereafter
existing, of Borrower or any Subsidiary with the issuing
banks, and any other claims of Borrower or any Subsidiary
against the issuing banks; and all property claims and
demands and all rights and interests therein of Borrower or
any Subsidiary and all evidences thereof and all proceeds
thereof which have been or at any time will be delivered to
or otherwise come into the issuing bank's possession,
custody or control, or into the possession, custody or
control of any bailee for the issuing bank or of any of its
agents or correspondents for the account of the issuing
bank, for any
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purpose, whether or not the express purpose of being used by
the issuing bank as collateral security or for the
safekeeping or for any other or different purpose, the
issuing bank being deemed to have possession or control of
all of such property actually in transit to or from or set
apart for the issuing bank, any bailee for the issuing bank
or any of its correspondents for others acting in its
behalf, it being understood that the receipt at any time by
the issuing bank, or any of its bailees, agents or
correspondents, or other security, of whatever nature,
including cash, will not be deemed a waiver of any of the
issuing bank's rights or power hereunder; (iii) all property
shipped under or pursuant to or in connection with any
credit or drafts drawn thereunder or in any way related
thereto, and all proceeds thereof; (iv) all additions to and
substitutions for any of the property enumerated above in
this subsection.
"Person" will mean an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.
"Plan" will mean any pension plan subject to the provisions
of Title IV of ERISA or Section 412 of the Code and which is maintained for
employees of Borrower or any ERISA Affiliate.
"Prepayment Premium" will mean the following and will be
applicable regardless of whether or not such prepayment is in full or in part,
or voluntary, on default or otherwise:
a. as to Euro-Rate Advances and Fixed Rate
Advances, an amount equal to the excess of the interest that
would have been received from Borrower by Administrative
Agent for the account of Lender at the rate applicable to
the portion of the Advance prepaid during the remaining
portion of the relevant Interest Period, over the return
which Lender could have obtained if it invested the amount
of such prepayment at the Euro-Rate that would have been in
effect if an Interest Period began on the date of such
prepayment; and such funds had remained invested until the
expiration of the relevant Interest Period; and
b. as to Alternate Base Rate Advances, zero.
"Ratable Portion" will mean: (i) as to Revolving Loans, with
respect to any Revolving Credit Lender, a fraction (expressed as a percentage),
the numerator of which will be the amount of such Revolving Credit Lender's
Revolving Commitment, and the denominator of which will be the aggregate amount
of all of Revolving Credit Lenders' Revolving Commitments; PROVIDED, however,
that as to any Revolving Credit Lender that fails or refuses to make its Ratable
Portion of any Advance, such Revolving Credit Lender's Ratable Portion of
payments distributable to Revolving Credit Lenders will be adjusted accordingly
and (ii) as to Competitive Bid Loans, with respect to any Lender, a fraction
(expressed as a percentage), the numerator of which will be the amount of such
Lender's outstanding
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Competitive Bid Loans, and the denominator of which will be the aggregate amount
of all of Lenders' outstanding Competitive Bid Loans; PROVIDED, however, that as
to any Revolving Credit Lender that fails or refuses to make its Ratable Portion
of any Advance, such Revolving Credit Lender's Ratable Portion of payments
distributable to Lenders will be adjusted accordingly and interest on
Competitive Bid Loans will be allocated pro rata based on interest actually due
each Lender.
"Reportable Event" will mean any reportable event as defined
in Section 4043(b) of ERISA or the regulations issued thereunder with respect to
a Plan (other than a Plan maintained by an ERISA Affiliate which is considered
an ERISA Affiliate only pursuant to subsection (m) or (o) of Code Section 414).
"Responsible Officer" will mean, with respect to any Person
its chairman, chief executive officer, president, chief financial officer,
controller, treasurer or an assistant treasurer with respect to Compliance
Certificates and notices of termination or reduction of the Total Commitments
and with respect to any other Notices hereunder, any officers or employees
authorized by resolutions delivered by Borrower to Administrative Agent from
time to time.
"Revised Closing Date" will mean May ___, 1997.
"Revolving Commitment" will mean, as to any Revolving Credit
Lender, the dollar amount set forth opposite its name on the AMENDED AND
RESTATED SCHEDULE 1 hereto under the heading Revolving Commitment, as such
amount may be reduced from time to time pursuant to this Agreement.
"Revolving Conditions" will mean the conditions set forth in
SECTIONS 2.1 and 3, below, and in the Revolving Notes.
"Revolving Credit Facility" will mean collectively the credit
facility described in SECTION 2.1, below.
"Revolving Loans" will mean the Advances described in SECTION
2.1, below.
"Revolving Notes" will mean collectively the notes evidencing
the evidencing the credit facility described in SECTION 2.1, below, which will
be in the form of the Amended and Restated Revolving Credit Notes delivered by
Borrower to Revolving Credit Lenders dated the Revised Closing Date 1997, and
will include all amendments, extensions and renewals made thereto from time to
time.
"Senior Unsecured Debt Rating" will mean the rating given to
Borrower's senior unsecured debt by Moody's Investors Service, Inc. (or any
successor to its securities ratings business) or by Standard & Poor's
Corporation (or any successor to its securities ratings business).
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"Side Letter" will mean the letter between the Documentation
Agent, Administrative Agent and Borrower relating to certain fees executed in
connection with the arrangement of the Credit Facilities.
"Subsidiary" will mean any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by Borrower.
"Termination Date" will mean five years from the Revised
Closing Date, subject to extensions as provided in SECTION 2.12, below;
PROVIDED, however, that the Termination Date will in no event be later than the
date on which all of the Revolving Commitments for the Credit Facilities will
have been terminated in whole, whether by expiration or upon acceleration.
"Total Commitment" will mean $190,000,000, as such amount may
be reduced, from time to time, in accordance with the terms of this Agreement.
"Total Revolving Commitment" will mean the aggregate of the
Revolving Commitments.
"UCC" will mean the Uniform Commercial Code as adopted by the
applicable state or states.
"Unrestricted Subsidiary" will mean any Subsidiary which
would otherwise be a Consolidated Subsidiary, but which has been designated as
an Unrestricted Subsidiary by Borrower pursuant to the provisions hereof.
Borrower will deliver to Documentation Agent a list of any Subsidiaries it
wishes to designate as Unrestricted Subsidiaries, if any, as of the closing of
this Agreement. Thereafter, from time to time Borrower may at its option:
a. designate any Consolidated Subsidiary as an
Unrestricted Subsidiary but only if: (i) immediately
after giving effect to such change in designation no
condition or event will exist which constitutes a
Default or an Event of Default and (ii) the
elimination of the Subsidiary from the Consolidated
Group would not have a Material Adverse Effect,
provided, however, that Borrower may not designate
any Consolidated Subsidiaries as Unrestricted
Subsidiaries if the aggregate operating income of the
Consolidated Subsidiaries so designated at that time
would account for more than 30% of the consolidated
operating income of the Borrower and its Consolidated
Subsidiaries for the most recently completed four
fiscal quarters. Thereafter, for purposes of this
calculation: (i) operating income of Unrestricted
Subsidiaries will be excluded from the consolidated
operating income of the Borrower and its Consolidated
Subsidiaries and (ii) fiscal quarters used previously
will be excluded; and
b. designate any Unrestricted Subsidiary which
otherwise meets the definition of a Consolidated
Subsidiary, as a Consolidated Subsidiary, if
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but only if, immediately after giving effect to such change
in designation: (i) any and all outstanding Indebtedness of
such Subsidiary could then have been incurred in compliance
with this Agreement and (ii) no condition or event will exist
which constitutes a Default or an Event of Default, provided,
however, that if Borrower has designated a Subsidiary which
was previously treated as a Consolidated Subsidiary as an
Unrestricted Subsidiary during the term of this Agreement,
Borrower may not again designate such Subsidiary as a
Consolidated Subsidiary without the consent of the Majority
Lenders.
Any change in designation will be made by Borrower giving written notice to the
Administrative Agent not less than thirty nor more than sixty days prior to the
date for such change in designation, in each case specifying such date and the
name of the Subsidiary whose designation is to be so changed, which notice will
be accompanied by an officer's certificate certifying that the conditions
required for such change in designation will not be violated. Administrative
Agent then in turn will send a copy of such designation request to Lenders.
Notwithstanding the foregoing, if due to an acquisition or other event which
would cause an entity which was not previously a Consolidated Subsidiary to
become a Consolidated Subsidiary, Borrower may immediately elect to have such
entity not become a Consolidated Subsidiary, but instead to be designated as an
Unrestricted Subsidiary, without regard to the notice period set forth above.
"Withdrawal Liability" will mean liability to a Multiemployer
Plan as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
1.2 OTHER DEFINITIONAL PROVISIONS. Capitalized terms used
herein and not otherwise defined herein will have the meanings given such terms
in the Notes. Unless otherwise specified, all accounting terms used herein will
be interpreted, all accounting determinations hereunder will be made, and all
financial statements required to be delivered hereunder will be prepared in
accordance with GAAP as in effect from time to time, applied on a basis
consistent (except for changes concurred in by Borrower's independent public
accountants) with the Current Audited Financial Statements; provided that, if
Borrower notifies the Agents that Borrower wishes to amend any covenant in
Section 6 to eliminate a material variation in the operation of such covenant by
virtue of a change in GAAP (or if Agents notify Borrower that the Majority
Lenders wish to amend Section 6 for such purpose), then Borrower's compliance
with such covenant will be determined on the basis of GAAP in effect immediately
before the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to Borrower and
the Majority Lenders.
1.3 ADDITIONAL DEFINITIONAL PROVISIONS. All terms defined in
this Agreement in the singular will have comparable meanings when used in the
plural and vice-versa. The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement will mean this Agreement as a whole
and not any particular provision of this Agreement.
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2. CREDIT FACILITIES.
2.1 REVOLVING CREDIT FACILITY
2.1.1 BORROWINGS. Each Revolving Credit Lender severally
agrees to make, subject to the terms and conditions herein set forth, loans to
Borrower on any Business Day during the period from the Closing Date to the
Business Day preceding the Termination Date upon the request of Borrower in an
amount not to exceed the Available Commitment of such Revolving Credit Lender;
provided that:
a. the Aggregate Outstanding Revolving Credit will
not exceed at any time the Total Commitment, except as
provided in Section 2.13;
b. the making of Competitive Bid Loans by a
Revolving Credit Lender will not change the obligation of
such Revolving Credit Lender to make Revolving Loans
hereunder up to its Available Commitment;
c. within the above-described limits, Borrower may
borrow and reborrow under this Section; and
d. the Revolving Loans will be evidenced by the
Revolving Notes and will bear interest and be payable in the
manner set forth herein.
2.1.2 MANNER OF BORROWINGS. Borrower will give Administrative
Agent a Notice of Borrowing with respect to each Borrowing under the Revolving
Credit Facility, not later than 11:00 a.m. (New York, New York time) three
Business Days prior to the proposed Borrowing Date with respect to Euro-Rate
Advances and one Business Day prior to the proposed Borrowing Date with respect
to Alternate Base Rate Advances. Administrative Agent will give to each
Revolving Credit Lender prompt notice thereof by telex, telecopier or cable.
Each Notice of Borrowing will be by telex, telecopier or cable (or by telephonic
notice confirmed in writing by a Notice of Borrowing delivered no later than the
close of business on the day on which such telephonic notice is given),
specifying therein all matters required by such Notice, including but not
limited to the requested: (i) Borrowing Date and (ii) aggregate amount of such
Borrowing. Each Borrowing will be in an aggregate principal amount of $5,000,000
or in integral multiples of $1,000,000 in excess thereof. Each Revolving Credit
Lender will, before 11:00 a.m. (New York, New York time) on the Borrowing Date,
make available for Administrative Agent's Account, in same day funds, such
Revolving Credit Lender's Ratable Portion of such Borrowing. After
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in SECTION 3 hereof, Administrative Agent will
make such funds available to Borrower by crediting Borrower's Account.
2.1.3 RATES OF INTEREST.
2.1.3.1 Borrower will pay Administrative Agent
for the account of Revolving Credit Lenders interest on the outstanding
principal balance of each Advance or Converted Advance under the Revolving
Credit Facility from the date of each such Advance or Converted Advance until
paid at a rate of interest equal to: (i) the Alternate Base
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Rate or (ii) the Applicable Margin plus the Euro-Rate, as such rate is selected
by Borrower in each Notice of Borrowing and for the Interest Period selected in
such Notice of Borrowing.
2.1.3.2 Notwithstanding any of the foregoing to the
contrary, in the event that: (i) no interest rate is selected, (ii) no Interest
Period is selected, or (iii) an Interest Period expires and no new interest rate
is selected in a Notice of Borrowing with respect to an Advance or Converted
Advance, the rate of interest payable on such Advance or Converted Advance under
the Revolving Credit Facility will be the rate for Alternate Base Rate Advances
until otherwise elected in connection with a Conversion.
2.1.4 CONVERSIONS. Borrower may on any Business Day, upon
delivering to Administrative Agent a Notice of Borrowing specifying a
"Conversion" not later than 11:00 a.m. (New York, New York time) on the third
Business Day prior to the proposed conversion, convert all or any portion of
Euro-Rate Advances or Alternate Base Rate Advances under the Revolving Credit
Facility into an Advance or Advances in a different rate mode; provided,
however, that: (i) any conversion of any Euro-Rate Advances will be in a minimum
amount of $5,000,000 and integral multiples of $1,000,000 in excess thereof and
(ii) any conversion of any Euro-Rate Advances will be made effective only on the
last day of the Interest Period for such Advances. No conversion will be
effective unless a proper, timely and fully completed Notice of Borrowing
specifying a Conversion is delivered to Administrative Agent.
2.1.5 INTEREST PAYMENTS. Interest will accrue from the date of
each Advance or Converted Advance under the Revolving Credit Facility. Accrued
interest on each Alternate Base Rate Advance will be due and payable quarterly
commencing on the last day of each fiscal quarter following such Alternate Base
Rate Advance; provided, however, that interest on Alternate Base Rate Advances
will be due and payable upon payment in full of all such Advances. Accrued
interest on each Euro-Rate Advance will be due and payable at the end of the
applicable Interest Period; provided, however, that interest on each Euro-Rate
Advance will be due and payable at least every ninety days.
2.2 THE COMPETITIVE BID FACILITY.
2.2.1 COMPETITIVE BID PROCEDURE.
2.2.1.1 Borrower may request the Revolving Credit Lenders
to make Competitive Bids in respect of an aggregate amount of Competitive Bid
Borrowings at any time outstanding not in excess of: (i) the Total Commitment in
effect at such time less (ii) the Aggregate Outstanding Revolving Credit at such
time. In order to request Competitive Bids, Borrower will pay Administrative
Agent a fee as set forth in the Side Letter and hand deliver or telecopy to the
Administrative Agent a duly completed Competitive Bid Request by 11:00 a.m. (New
York, New York time) three Business Days prior to the proposed Borrowing. A
Competitive Bid Request that does not conform substantially to the format of the
form delivered by Documentation Agent to Borrower and Revolving Credit Lenders
in connection with the Closing may be rejected in the Administrative Agent's
sole discretion, and the Administrative Agent will promptly notify Borrower of
such rejection by telecopier. Promptly after its receipt of a Competitive Bid
Request that is not rejected as aforesaid, the Administrative Agent will invite
by telecopier (in the form delivered by Documentation Agent to Borrower and
Revolving
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Credit Lenders in connection with the Closing) the Revolving Credit Lenders to
bid, on the terms and conditions of this Agreement, to make Competitive Bid
Loans pursuant to the Competitive Bid Request.
2.2.1.2 Each Revolving Credit Lender may, in its sole
discretion, make one or more Competitive Bids to Borrower responsive to any
Competitive Bid Request. Each Competitive Bid by a Revolving Credit Lender must
be received by the Administrative Agent via telecopier, in the form delivered by
Documentation Agent to Borrower and Revolving Credit Lenders in connection with
the Closing, (i) in the case of a Euro-Rate Competitive Bid Loan, not later than
10:00 a.m. (New York, New York time) two Business Days before a proposed
Competitive Bid Loan and (ii) in the case of a Fixed Rate Competitive Bid Loan,
not later than 10:00 a.m. (New York, New York time) one Business Day before the
day of a proposed Competitive Bid Loan. Multiple bids will be accepted by the
Administrative Agent. Competitive Bids that do not conform substantially to the
form delivered by Documentation Agent to Borrower and Revolving Credit Lenders
in connection with the Closing may be rejected by the Administrative Agent after
conferring with, and upon the instruction of, Borrower; and the Administrative
Agent will notify the Revolving Credit Lender making such nonconforming bid of
such rejection as soon as practicable. Each Competitive Bid will refer to this
Agreement and specify: (i) the principal amount (which will be in a minimum
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof and which may equal the entire principal amount of the Competitive Bid
Loan requested by Borrower) of the Competitive Bid Loan or Loans that the
Revolving Credit Lender is willing to make to Borrower (such Competitive Bid
Loan or Loans may be funded by such Lender's Designated Lender as provided in
Section 2.2.1.5 and 12.3.7, however, such Lender shall not be required to
specify in its Competitive Bid whether such Competitive Bid Loans will be funded
by such Designated Lender), (ii) the Competitive Bid Rate or Rates at which the
Revolving Credit Lender is prepared to make the Competitive Bid Loan or Loans
and (iii) if applicable, the Interest Period and the last day thereof. If any
Revolving Credit Lender will elect not to make a Competitive Bid, such Revolving
Credit Lender will so notify the Administrative Agent via telecopier: (i) in the
case of Euro-Rate Competitive Bid Loans, not later than 10:00 a.m. (New York,
New York time) two Business Days before a proposed Competitive Borrowing, and
(ii) in the case of all other Competitive Bid Loans, not later than 10:00 a.m.
(New York, New York time) one Business Day before a proposed Competitive Bid
Loan; PROVIDED, HOWEVER, that failure by any Revolving Credit Lender to give
such notice will not cause such Revolving Credit Lender to be obligated to make
any Competitive Bid Loan as part of such Competitive Bid Loan. A Competitive Bid
submitted by a Revolving Credit Lender pursuant to this Section, if such bid has
not been conveyed to Borrower, will be irrevocable absent consent from
Administrative Agent.
2.2.1.3 The Administrative Agent will promptly notify
Borrower by telecopier of all the Competitive Bids made, the Competitive Bid
Rate, the Interest Period and the principal amount of each Competitive Bid Loan
in respect of which a Competitive Bid was made and the identity of the Revolving
Credit Lender that made each bid. The Administrative Agent will send a copy of
all Competitive Bids to Borrower for its records as soon as practicable after
completion of the bidding process set forth in this Section.
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2.2.1.4 Borrower may in its sole and absolute discretion,
subject only to the provisions of this subsection, accept or reject any
Competitive Bid or portion thereof. Borrower will notify the Administrative
Agent by telephone, confirmed by telecopier in the form of a Competitive Bid
Accept/Reject Letter, whether and to what extent it has decided to accept or
reject any of or all the bids referred to in this Section: (i) in the case of a
Euro-Rate Competitive Bid Loan, not later than 11:00 a.m. (New York, New York
time) two Business Days before a proposed Competitive Bid Loan, and (ii) in the
case of all other Competitive Bid Loans, not later than 11:00 a.m. (New York,
New York time) one Business Day before the day of a proposed Competitive Bid
Loan; PROVIDED, HOWEVER, that: (i) the failure by Borrower to give such notice
will be deemed to be a rejection of all the bids, (ii) Borrower will not accept
a bid or portion thereof made at a particular Competitive Bid Rate if Borrower
has decided to reject a bid made at a lower Competitive Bid Rate, (iii) the
aggregate amount of the Competitive Bids accepted by Borrower will not exceed
the principal amount specified in the Competitive Bid Request, (iv) if Borrower
will accept a bid or bids made at a particular Competitive Bid Rate but the
amount of such bid or bids will cause the total amount of bids to be accepted by
Borrower to exceed the amount specified in the Competitive Bid Request, then
Borrower will accept a portion of such bid or bids in an amount equal to the
amount specified in the Competitive Bid Request less the amount of all other
Competitive Bids accepted with respect to such Competitive Bid Request, which
acceptance, in the case of multiple bids at such Competitive Bid Rate, will be
made pro rata in accordance with the amount of each such bid at such Competitive
Bid Rate, and (v) except pursuant to clause (iv) above, no bid will be accepted
for a Competitive Bid Loan unless such Competitive Bid Loan is in a minimum
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof; PROVIDED FURTHER, HOWEVER, that if a Competitive Bid Loan must be in an
amount less than $1,000,000 because of the provisions of clause (iv) above, such
Competitive Bid Loan may be for a minimum of $1,000,000 or any integral multiple
thereof, and in calculating the pro rata allocation of acceptances of portions
of multiple bids at a particular Competitive Bid Rate pursuant to clause (iv)
the amounts will be rounded to integral multiples of $1,000,000 in a manner
which will be in the discretion of Borrower. A notice given by Borrower pursuant
to this subsection will be irrevocable.
2.2.1.5 The Administrative Agent will promptly notify each
bidding Revolving Credit Lender whether or not its Competitive Bid has been
accepted (and if so, in what amount and at what Competitive Bid Rate) by
telecopy sent by the Administrative Agent, and each successful bidder will
thereupon become bound, subject to the other applicable conditions hereof, to
make the Competitive Bid Loan in respect of which its bid has been accepted;
PROVIDED HOWEVER, that Lender may designate its Designated Lender to fund a
Competitive Bid Loan on its behalf as described in Section 12.3.7. Any
Designated Lender which funds a Competitive Bid Loan will on and after the time
of such funding become the obligee under such Competitive Bid Loan and be
entitled to receive payment thereof when due. No Revolving Credit Lender shall
be relieved of its obligation to fund a Competitive Bid Loan, and no Designated
Lender shall assume such obligation, prior to the time such Competitive Bid Loan
is funded.
2.2.1.6 A Competitive Bid Request will not be made within
three Business Days after the date of any previous Competitive Bid Request.
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2.2.1.7 If the Administrative Agent elects to submit a
Competitive Bid in its capacity as a Revolving Credit Lender, it will submit
such bid directly to Borrower one half of an hour earlier than the latest time
at which the other Revolving Credit Lenders are required to submit their bids to
the Administrative Agent pursuant to this Section.
2.2.2 RATES OF INTEREST.
2.2.2.1 Borrower will pay Administrative Agent for the
account of Lender interest on the outstanding principal balance of each
Competitive Bid Loan hereunder from the date of each such Advance until paid at
a rate of interest equal to: (i) the Fixed Rate or (ii) the Applicable Margin
plus the Euro-Rate, as such rate is accepted by Borrower for each Competitive
Bid Loan.
2.2.2.2 Notwithstanding anything to the contrary contained
herein, in the event that a Competitive Bid Loan matures and is not repaid, it
will bear interest at the Default Rate
2.2.3 PAYMENTS.
2.2.3.1 Interest will accrue from the date of each Advance
under the Competitive Bid Facility. Accrued interest on each Advance under the
Competitive Bid Facility will be due and payable at the end of the applicable
Interest Period; provided, however, that interest on each such Advance will be
due and payable at least every ninety days.
2.2.3.2 Principal of each Competitive Bid Loan will be due at
the time specified in Section 2.4.1.
2.2.4 PREPAYMENTS.
The Borrower may not prepay the Competitive Bid Loans unless
specifically provided to the contrary in the Competitive Bid made by such
Lender.
2.3 ADDITIONAL PROVISIONS REGARDING FUNDING.
2.3.1 As to all Advances, Administrative Agent may assume
that each Lender (or its Designated Lender, if applicable) will make its
Advances available to Administrative Agent on the Borrowing Date in accordance
with this Agreement, and Administrative Agent may, but will not be obligated to,
advance to Borrower on such Lender's behalf such Lender's Advance, or any
portion of such share, for the account of such Lender unless such Lender will
have notified Administrative Agent in writing prior to 10:00 a.m. (New York, New
York time) on the Borrowing Date that funds will not be made available by such
Lender for such Advance, in which case Administrative Agent promptly will notify
Borrower of such fact. If any such funds are so advanced by Administrative
Agent, such Lender and Borrower severally agree to pay such amount to
Administrative Agent, forthwith on demand, together with interest thereon for
each day from the date such amount is made available to Borrower until the date
such amount is paid to Administrative Agent, at (i) in the case of Borrower, a
rate per annum equal to the interest rate payable by Borrower with respect to
such
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Loan in effect from time to time while such Advance is outstanding and (ii)
in the case of such Lender, one percent (1%) in excess of the Federal Funds
Rate. If such Lender will pay to Administrative Agent such amount, such amount
so paid will constitute such Lender's Advance as part of such Borrowing.
2.3.2 No Lender's obligation to make any Advance will be
affected by any other Lender's failure to make funds available for the same or
any other Borrowing, nor will any Lender be liable for the failure of any other
Lender to fulfill an obligation to make any Advance.
2.3.3 Borrower will not be entitled to request any Advance
which, if made, would result in an aggregate of more than twelve separate
interest rates being applicable under all of the Notes at any one time. For
purposes of the foregoing, Advances having different Interest Periods,
regardless of whether they have the same interest rate, will be considered
separate Advances.
2.4 PRINCIPAL PAYMENTS.
2.4.1 LOANS. Borrower will pay: (i) to Administrative Agent
for the account of Revolving Credit Lenders the outstanding principal amount of,
and all accrued and unpaid interest on, all Revolving Loans on the Termination
Date and (ii) to the Administrative Agent for the account of each Competitive
Bid Lender the outstanding principal amount of each Competitive Bid Loan on the
earlier to occur of: (a) the maturity date of each Competitive Bid Loan or (b)
the Termination Date.
2.4.2 OPTIONAL PREPAYMENT OF THE CREDIT FACILITIES. Subject
to the terms and conditions of this Agreement, Borrower may elect to prepay all
or any part of a Revolving Loan at any time by delivering to Administrative
Agent a Notice of Prepayment, at least one Business Day prior to the proposed
prepayment date in the case of a Alternate Base Rate Advance, and at least three
Business Days prior to the proposed date of prepayment in the case of any other
type of Revolving Loan, provided that each such partial prepayment of any
Revolving Loan will be in an aggregate principal amount of $5,000,000 or in
integral multiples of $1,000,000 in excess thereof and provided further that
each prepayment of any Revolving Loan will be accompanied by payment of the
accrued interest to the date of prepayment on the principal amount prepaid and
any applicable Prepayment Premium. Each Notice of Prepayment must specify, as to
each Revolving Loan being prepaid, the proposed prepayment date, the Revolving
Loan being prepaid and the aggregate principal amount of the prepayment. All
prepayments will be paid to Administrative Agent.
2.4.3 MANDATORY PREPAYMENT OF THE CREDIT FACILITIES. In the
event that the Aggregate Outstanding Revolving Credit would in whole or in part
exceed any applicable Revolving Conditions or Competitive Bid Conditions,
whether after giving effect to any reduction or termination of the Total
Commitment or otherwise, Borrower immediately will make a prepayment of
principal in an amount sufficient to eliminate the excess, provided further that
each such prepayment (other than a prepayment of an Alternate Base Rate Advance,
in which case a interest will be due on the next regularly scheduled payment
date for interest for Alternate Base Rate Advances and on the Termination Date)
will be accompanied by payment
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of the accrued interest to the date of prepayment on the principal amount
prepaid and any applicable Prepayment Premium.
2.5 DEFAULT RATE. At the option of the Required Lenders, upon
the occurrence of any Event of Default, the unpaid principal amount of each
Advance, and to the extent not paid when due, the unpaid amount of all interest,
fees, expenses and other amounts payable hereunder, will bear interest at the
Default Rate in effect from time to time.
2.6 TERMINATION OR REDUCTION OF REVOLVING COMMITMENTS 2.6
TERMINATION OR REDUCTION OF REVOLVING COMMITMENTS 2.6 TERMINATION OR REDUCTION
OF REVOLVING COMMITMENTS. Borrower will have the right from time to time to
terminate or reduce the Total Commitment, upon not less than three days' prior
notice by Borrower to Administrative Agent in writing or by telecopy or
facsimile transmission, which notice will: (i) specify the effective date of
such termination or reduction, (ii) be irrevocable and effective only upon
receipt by Administrative Agent and (iii) be signed by an Responsible Officer;
provided, however, that after giving effect to any such termination or
reduction, all Revolving Conditions set forth in Section 2.1.1 must be
satisfied. Any optional reduction of the amount of the Total Commitment will be
in the amount of $5,000,000 or in integral multiples of $1,000,000 in excess
thereof or in the full amount of the Total Commitment as then in effect. Any
termination or reduction pursuant to this Section will be permanent.
Administrative Agent promptly will give notice to each Revolving Credit Lender
of any termination or reduction hereunder. Any such termination or reduction
will be accompanied by a payment of the accrued but unpaid Facility Fee with
respect to the amount of the Total Commitment that is terminated or reduced.
2.7 RECORDS. Each Lender is hereby authorized by Borrower to record in its books
and records, the date, amount, Interest Rate, and applicable Interest Period, if
any, of each Advance made to Borrower, the date and amount of each payment of
principal or interest thereon, which books and records will constitute PRIMA
FACIE evidence of the accuracy of the information so recorded, PROVIDED,
however, that failure of any Lender to record, or any error in recording, any
such information will not relieve Borrower of its obligations to repay the
outstanding principal amount of the Advances, all accrued interest thereon, and
other amounts payable with respect thereto in accordance with the terms of the
Notes and this Agreement. The information as reflected by records maintained by
Administrative Agent related to Advances will prevail, absent manifest error, in
the event that the information as reflected by the records maintained by
Borrower differs from Administrative Agent's records in any respect.
2.8 ASSUMPTIONS REGARDING NOTICES.
2.8.1 RESPONSIBLE OFFICERS. Any Responsible Officer of
Borrower may submit a Notice on behalf of Borrower. Agents and each Lender will
be entitled to rely conclusively on each Responsible Officer's authority to
submit a Notice on behalf of Borrower until Agents receive written notice from
Borrower to the contrary. Except in the case where Agents have reasonable cause
to believe a written or oral notice is unauthorized, Agents will have no duty to
verify the authenticity of the signature appearing on any written Notice and,
with respect to an oral Notice, Agents will have no duty to verify the identity
of any Person representing himself as one of the Responsible Officers entitled
to make such a request on behalf of Borrower.
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2.8.2 NO LIABILITY. Neither Agents nor any Lender
will incur any liability to Borrower in acting upon any Notice which Agent or
such Lender believes in good faith to have been given by a Responsible Officer
or for otherwise acting in good faith in accordance with this SECTION 2 and,
upon Agents' accepting any Notice, Borrower will have effectively elected the
Borrowing, conversion, continuation, prepayment, reduction or termination
thereunder.
2.8.3 NOTICE IRREVOCABLE. Any Notice (whether
telephonic, telecopy, or facsimile or otherwise) given or deemed to have been
given pursuant to this Section will be irrevocable.
2.9 COMPUTATIONS, FEES, PAYMENTS, ETC.
2.9.1 COMPUTATIONS. All computations of interest and of fees
hereunder will be made by Administrative Agent on the basis of: (i) for
Alternate Base Rate Advances, Fixed Rate Advances and fees and expenses due
hereunder, a 365/366 day year and (ii) in the case of Euro-Rate Advances, a 360
day year, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest or
fees are payable. Each determination by Administrative Agent of an Interest Rate
or fee hereunder will be conclusive and binding for all purposes, absent
manifest error. Whenever any payment to be made by Borrower hereunder or under
any of the other Loan Documents is stated to be due on a day other than a
Business Day, such payment will be made on the next succeeding Business Day, and
such extension of time will in such case be included in the computation of
payment of interest or fees, as the case may be.
2.9.2 FEES. The fees described in this subsection represent
compensation for services rendered and to be rendered separate and apart from
the lending of money or the provision of credit and do not constitute
compensation for the use or forbearance of money, and the obligation of Borrower
to pay such fees will be in addition to and not in lieu of the obligation of
Borrower to pay interest, other fees and expenses otherwise described herein or
in the other Loan Documents. The following fees will be paid by Borrower:
a. FACILITY FEE. Borrower will pay to
Administrative Agent for the account of Revolving
Credit Lenders a facility fee from and including the
Closing Date to the Termination Date, computed based
on the Senior Unsecured Debt Rating; provided that,
in the event that Borrower's Senior Unsecured Debt
Rating by Moody's Investor Service, Inc. is different
from the rating received from Standard & Poors
Corporation, the higher of the two ratings will
control, which rating will be determined as of the
end of the previous fiscal quarter and at the
applicable rate set forth below on the Total
Commitment, such fee to be payable quarterly in
arrears on last day of each fiscal quarter of
Borrower and upon the Termination Date and to be
shared by Revolving Credit Lenders in their Ratable
Portions:
SENIOR UNSECURED DEBT RATING APPLICABLE MARGIN
(IN BASIS POINTS)
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greater than or equal to A/A2 8.0
A-/A3 9.0
BBB+/Baa1 10.0
BBB/Baa2 12.5
less than BBB/Baa2 15.0
b. DOCUMENTATION AGENT CLOSING EXPENSES.
All out-of-pocket expenses, including reasonable
legal expenses incurred by Documentation Agent in
connection with the preparation, negotiation,
execution and delivery of this Agreement and the
other Loan Documents and the closing of the Credit
Facilities, will be paid by Borrower to Documentation
Agent for the account of Documentation Agent on the
Closing Date.
c. AGENTS FEES. The fees for the Agents
will be set forth in the Side Letter.
2.9.3 PAYMENTS. Borrower will make each
payment hereunder and under the Notes, as the case may be, not later than 11:00
a.m. (New York, New York time) on the day when due by deposit to Administrative
Agent's Account in same day funds. Amounts received by Administrative Agent
after 11:00 a.m. (New York, New York time) on any Business Day will be deemed to
have been received on the next Business Day. Subject to the foregoing,
Administrative Agent will cause to be distributed to each Lender on the Business
Day of receipt by Administrative Agent an amount equal to the amount of such
payment then due such Lender. Payments when received will be applied in the
following order: (i) to charges, fees and expenses (including Attorneys' Fees)
due Agents and/or Lenders, (ii) to accrued interest and (iii) to principal.
2.9.4 FAILURE TO MAKE PAYMENTS BY BORROWER. Unless
Administrative Agent will have received notice from Borrower prior to the date
on which any payment is due to Administrative Agent hereunder that Borrower will
not make such payment in full, Administrative Agent may assume that Borrower has
made such payment in full to Administrative Agent on such date and
Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent Borrower will not have so made such
payment in full to Administrative Agent, each Lender will repay to
Administrative Agent forthwith on demand such amount distributed to such Lender
together with interest thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to
Administrative Agent, at the Federal Funds Rate. If and to the extent
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Borrower makes only partial payment to Administrative Agent, each Lender will
repay to Administrative Agent, in accordance with this Section, only the amount
distributed to such Lender by Administrative Agent, with interest thereon, that
exceeds the Ratable Portion of the partial payment received by Administrative
Agent from Borrower.
2.10 ADDITIONAL COSTS.
2.10.1 TAXES, RESERVE REQUIREMENTS, ETC. In the event
that any applicable law, rule or regulation now or hereafter in effect and
whether or not presently applicable to any of Lenders, or any interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by Lenders with any
guideline, request or directive of any such authority (whether or not having the
force of law), will (i) subject any Lender to any tax or affect the basis of
taxation of payments to any of Lenders of any amounts payable by Borrower under
this Agreement (other than taxes imposed on the overall net income of any of
Lenders, by the jurisdiction, or by any political subdivision or taxing
authority of any such jurisdiction, in which any Lender has its principal
office), or (ii) will impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by any of Lenders (including but not limited to a
request or requirement which affects the manner in which any of Lenders
allocates capital resources to its commitments or obligations, including without
limitation its obligations under this Agreement, the Loans and other
obligations) or (iii) will impose any other condition affecting this Agreement,
any of the Obligations or any of the Loan Documents, and the result of any of
the foregoing is to increase the direct or indirect cost of making, funding or
maintaining the Loans or the other Obligations or to reduce the amount of any
sum received or receivable by any of Lenders thereon, calculated on a net basis
for any one or related series of the foregoing events, then Borrower will pay to
such Lenders from time to time, upon request by any of such Lenders, with a copy
of such request to be provided to Administrative Agent, additional amounts
sufficient to compensate such Lenders for such increased cost or reduced sum
receivable.
2.10.2 CAPITAL ADEQUACY. If either: (i) the
introduction of, or any change in or in the interpretation or administration of,
any United States or foreign law, rule or regulation, or (ii) compliance with
any directive, guidelines or request from any central bank or other governmental
authority (whether or not having the force of law), promulgated, made, or that
becomes effective (in whole or in part) after the date hereof affects or would
affect the amount of capital required or expected to be maintained by any of
Lenders or any corporation directly or indirectly owning or controlling any of
Lenders and any Lender determines that such introduction, change or compliance
has or would have the effect of reducing the rate of return on Lender's capital
or on the capital of such owning or controlling corporation as a consequence of
its obligations hereunder or under any of the Loans, or other Obligations or any
commitment to lend thereunder or relating thereto, calculated on a net basis for
any one or related series of the foregoing events, to a level below that which
any Lender or such owning or controlling corporation could have achieved but for
such introduction, change or compliance (after taking into account such Lender's
policies or the policies of such owning or controlling corporation, as the case
may be, regarding capital adequacy) by an amount deemed by such Lender (in its
sole discretion) to be material, then, from time to time, Borrower will pay to
such Lender such additional amount or amounts as will compensate such Lender for
such reduction.
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2.10.3 CERTIFICATE OF LENDER. To the extent
reasonably practicable, each Lender will give Borrower prompt written notice of
any claim under this SECTION 2.10 and will take steps to minimize the impact of
any of the events described in SECTIONS 2.10.1 AND/OR 2.10.2, above, by
transferring its Revolving Commitment and its Revolving Loans outstanding
hereunder to another office, branch, subsidiary or affiliate of such Lender, so
long as such action is not disadvantageous to such Lender. A certificate of a
Lender setting forth such amount or amounts as will be necessary to compensate
Lender as specified in SECTIONS 2.10.1 AND/OR 2.10.2, above, which will include
detailed explanations and calculations, will be delivered to Borrower and will
be conclusive absent manifest error. Borrower will pay Administrative Agent for
the account of Lender the amount shown as due on any such certificate within
five (5) days after its receipt of the same. Failure on the part of any Lender
to deliver any such certificate will not constitute a waiver of such Lender's
rights to demand compensation for any particular period or any future period.
The protection of this Section will be available to any Lender regardless of any
possible contention of invalidity or inapplicability of the law, regulation,
etc., that results in the claim for compensation under this Section, but if any
law, regulation, etc., is later found to be invalid or inapplicable, each Lender
promptly will return to Borrower any sums received under this Section. The
agreements and obligations contained in this Section will survive the payment in
full of the Obligations and any termination of this Agreement.
2.11 OBLIGATION TO INDEMNIFY. In the event of Borrower's
failure to accept the proceeds from an Advance after making a request therefor,
Administrative Agent will immediately prepay such Advance and Borrower will pay
to Administrative Agent for the account of Lenders on written demand an amount
equal to interest that would have accrued on such Advance plus any applicable
Prepayment Premium, calculated through the date of such prepayment by
Administrative agent of such amounts. The obligations of Borrower under this
Section will survive the payment in full of the Obligations and any termination
of this Agreement.
2.12 EXTENSION. Upon the written request of Borrower to the
Agents at least sixty but not more than ninety days prior to the first and
second anniversary of the Revised Closing Date, each Revolving Credit Lender in
its sole discretion may extend its Revolving Commitment in each case for an
additional period of one year. In no event, however, will any Revolving Credit
Lender be under any obligation to extend its Revolving Commitment beyond the
initial Termination Date. Each Revolving Credit Lender will have thirty days
from its receipt of an extension request to respond to Borrower and
Administrative Agent in writing; and if no such written response is so received,
such Revolving Credit Lender will be deemed to have elected not to extend its
Revolving Commitment. In the event that any Revolving Credit Lender elects not
to extend its Revolving Commitment, such Revolving Credit Lender, on the written
request of Borrower, will resign its position as an Agent hereunder if such
Revolving Credit Lender is an Agent, and Borrower will have the following
options, provided that: (i) no Event of Default or Default exists hereunder and
(ii) Revolving Credit Lenders holding at least 40% of the Total Commitment have
agreed to extend their Revolving Commitments:
a. upon thirty days prior written notice
to Revolving Credit Lenders: (i) terminate upon the
expiration of such thirty days the Revolving
Commitment of the Revolving Credit Lender or
Revolving Credit Lenders that do not agree to extend,
(ii) pay Administrative Agent
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upon the expiration of such thirty days for the
account of such Revolving Credit Lender or Revolving
Credit Lenders all sums due hereunder, which payment
will not be shared by Revolving Credit Lenders
hereunder, (iii) permanently reduce the Total
Commitment by the Revolving Commitments of such
Revolving Credit Lender or Revolving Credit Lenders
who do not agree to extend and (iv) extend the
Revolving Commitments of the Revolving Credit Lenders
who have agreed to extend;
b. upon thirty days prior written notice
to Revolving Credit Lenders: (i) terminate effective
upon the initial Termination Date the Revolving
Commitment of the Revolving Credit Lender or
Revolving Credit Lenders that do not agree to extend,
(ii) pay Administrative Agent on the initial
Termination Date for the account of such Revolving
Credit Lender or Revolving Credit Lenders that do not
agree to extend all sums due hereunder, which payment
will not be shared by Revolving Credit Lenders
hereunder, (iii) permanently reduce effective upon
the initial Termination Date the Total Commitment by
the Revolving Commitments of such Revolving Credit
Lender or Revolving Credit Lenders who do not agree
to extend and (iv) extend the Revolving Commitments
of the Revolving Credit Lenders who have agreed to
extend; or
c. upon ninety days prior written notice
to Revolving Credit Lenders: (i) terminate effective
upon the expiration of such ninety days the Revolving
Commitment of the Revolving Credit Lender or
Revolving Credit Lenders that do not agree to extend,
(ii) pay Administrative Agent on the expiration of
such ninety days for the account of such Revolving
Credit Lender or Revolving Credit Lenders all sums
due hereunder, which payment will not be shared by
Revolving Credit Lenders hereunder, (iii) within such
ninety day period find a replacement Revolving Credit
Lender or Revolving Credit Lenders acceptable to
Borrower that will execute a counterpart of this
Agreement and other documents reasonably acceptable
to Agents and (iv) extend the Revolving Commitments
of the Revolving Credit Lenders who have agreed to
extend.
2.13 INCREASE OF TOTAL COMMITMENT. Upon the written request of
Borrower in the form of the Advice Of Increase given to the Agents at least
forty-five but not more than ninety days prior to the effective date of the
requested increase, Borrower may request an increase in the amount of the Total
Commitment to an amount not in excess of $250,000,000 (the "Increased
Commitment"). Each Revolving Credit Lender in its sole discretion may
participate pro rata in the Increased Commitment; provided, however that in no
event will any Revolving Credit Lender be under any obligation to increase its
Revolving Commitment beyond its Revolving Commitment as set forth on Schedule 1.
Each Revolving Credit Lender will have twenty-one days from its receipt of an
increase request to respond to Borrower and Administrative Agent in writing; and
if no such written response is so received, such Revolving Credit Lender will be
deemed to have elected not to increase its Revolving Commitment. In the event
that one or more of the Revolving Credit Lenders elect not to increase such
Revolving
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Credit Lender's Revolving Commitment, then Borrower and the Agents may
distribute such unsubscribed portion of the Increased Commitment among one or
more of the other Revolving Credit Lenders who elect to participate in the
Increased Commitment in such a fashion as Borrower and the Agents decide in the
exercise of their reasonable discretion. In the event that any of the Revolving
Credit Lenders elect to make any portion of the Increased Commitment available
to Borrower, each such Revolving Credit Lender agrees to provide Documentation
Agent with such documentation as may be reasonably requested by such
Documentation Agent to document the additional extension, as determined by such
Documentation Agent in the exercise of its reasonable discretion.
3. CONDITIONS PRECEDENT.
3.1 CLOSING. Lenders' obligations to close this Agreement are
subject to the fulfillment of each of the following conditions:
3.1.1 CLOSING MEMO. Lenders have received each of
the documents listed on the Closing Memo, all in form and substance reasonably
satisfactory to Agents.
3.1.2 OTHER CONDITIONS. The conditions set forth in
SECTION 3.2, below, will have been fully satisfied whether or not an initial
Advance is taken.
3.2 EACH ADVANCE. The obligation of each Lender to make any
Advance is subject to the fulfillment of each of the following conditions to the
reasonable satisfaction of Administrative Agent:
3.2.1 NO DEFAULTS. There does not exist any Default
or Event of Default either before or after giving effect thereto.
3.2.2 ACCURACY. The representations and warranties
contained in this Agreement and in the other Loan Documents are true, correct
and complete in all respects on and as of the day of the making of any
Borrowing.
3.2.3 NOTICES. Agents will have received all
required Notices.
4. REPRESENTATIONS AND WARRANTIES. To induce Lenders to extend the
Credit Facilities herein contemplated, Borrower hereby represents and warrants
as follows:
4.1 ORGANIZATION. Borrower and each of its Active Consolidated
Subsidiaries is a corporation duly organized and in good standing under the laws
of the state of its incorporation, is duly qualified in all jurisdictions where
required by the conduct of its business or ownership of its assets, except where
the failure to so qualify would not have a Material Adverse Effect, and has the
power and authority to own and operate its assets and to conduct its business as
is now done.
4.2 LATEST FINANCIALS. The Current Financial Statements as delivered
to Lenders, fairly present in conformity with GAAP the consolidated financial
position of Borrower
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and its Consolidated Subsidiaries as of such date and their consolidated results
of operations and cash flows for such period.
4.3 RECENT ADVERSE CHANGES. Between the date of the Current Audited
Financial Statements and Closing, neither Borrower nor any Consolidated
Subsidiary has, to the extent it would have a Material Adverse Effect: (i)
suffered any damage, destruction or loss, (ii) incurred any material obligations
or liabilities, whether accrued, absolute, contingent or otherwise, (iii)
discharged or satisfied any material lien or encumbrance of any kind or (iv)
suffered any other materially adverse event or condition of any character.
4.4 LITIGATION, ETC. As of the date hereof, there are no actions,
suits, proceedings or governmental investigations pending, or, to its knowledge,
threatened against Borrower or any of its Consolidated Subsidiaries which, in
the reasonable judgment of Borrower, would result in a Material Adverse Effect.
4.5 TAXES. United States Federal income tax returns of Borrower and its
Consolidated Subsidiaries have been examined and closed through the fiscal year
ended May 31, 1990. Borrower and its Consolidated Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by Borrower or any
Consolidated Subsidiary. The charges, accruals and reserves on the books of
Borrower and its Consolidated Subsidiaries in respect of taxes or other
governmental charges are, in the opinion of Borrower, adequate.
4.6 AUTHORITY. Borrower has full power and authority to enter into the
transactions provided for in this Agreement. The documents to be executed by it
in connection with this Agreement, when executed and delivered by it will
constitute the legal, valid and binding obligations of it enforceable in
accordance with their respective terms except as such enforceability may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws in effect from time to time affecting the rights of creditors
generally and except as such enforceability may be subject to general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in law or in equity).
4.7 OTHER DEFAULTS. There does not now exist any material default or
violation by Borrower or any Consolidated Subsidiary of or under any of the
terms, conditions or obligations of: (i) its Articles or Certificate of
Incorporation and Regulations or Bylaws, as applicable, (ii) any indenture,
mortgage, deed of trust, franchise, permit, contract, agreement, or other
instrument to which it is a party or by which it is bound or (iii) any law,
regulation, ruling, order, injunction, decree, condition or other requirement
applicable to or imposed upon it by any law or by any governmental authority,
court or agency; and the transactions contemplated by this Agreement and the
Loan Documents will not result in any such default or violation. As used herein,
a material default or violation will mean one which would result in a Material
Adverse Effect.
4.8 LICENSES, ETC. Borrower and each of its Consolidated Subsidiaries
has obtained any and all licenses, permits, franchises, or other governmental
authorizations necessary
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for the ownership of its properties and the conduct of its business, except
where failure to obtain any such item would not cause a Material Adverse Effect.
4.9 ERISA. Borrower and each of its Consolidated Subsidiaries is in
compliance with the applicable provisions of ERISA and the regulations and
published interpretations thereunder, to the extent necessary to avoid a
Material Adverse Effect.
4.10 REGULATION U. No part of the proceeds of any Loans will be used to
purchase or carry any margin stock (as such term is defined in Regulation U of
the Board of Governors of the Federal Reserve System).
4.11 CLOSING MEMO. The information contained in each of the documents
listed on the Closing Memo to be executed or delivered by it or relating to it
is complete and correct in all material respects.
4.12 ENVIRONMENTAL MATTERS. Borrower and its Consolidated Subsidiaries
are in material compliance with Environmental Laws and neither Borrower nor any
of its Consolidated Subsidiaries are subject to any liability or obligation
under any Environmental Laws which would have a Material Adverse Effect.
5. AFFIRMATIVE COVENANTS. Borrower covenants and agrees that from the
date of execution of this Agreement until all Obligations to Lenders have been
fully paid and this Agreement terminated, Borrower will:
5.1 BOOKS AND RECORDS. Maintain proper books of account and other
records and enter therein complete and accurate entries and records of all of
its transactions and give representatives of Agents, at Revolving Credit
Lenders' expense, reasonable access thereto at all reasonable times, including
permission to examine, copy and make abstracts from any of such books and
records and such other information as it may from time to time reasonably
request. In addition, it will be available to Agents, or cause its officers to
be available from time to time upon reasonable notice to discuss the status of
the Loans, its business and any statements, records or documents furnished or
made available to Agents in connection with this Agreement.
5.2 SEC FILINGS AND SHAREHOLDERS REPORTS. Deliver to each Revolving
Credit Lender within 14 days of the filing or distribution thereof: (i) copies
of all periodic reports on Forms 10-K, 10-Q and 8-K which it may make to or file
with the Securities Exchange Commission, and with its 10-K and 10-Q filings, a
Compliance Certificate and (ii) its quarterly and annual reports to its
shareholders.
5.3 QUARTERLY STATEMENTS. If Borrower is not required to file 10-Q
filings with the Securities Exchange Commission or does not file the same within
forty-five days after the end of each fiscal quarter, furnish Revolving Credit
Lenders within forty-five days after the end of each fiscal quarter internally
prepared financial statements with respect to such fiscal quarter, which
financial statements will include a balance sheet as of the end of such period
and earnings, shareholders' equity and cash flow statements for such period and:
(i) be accompanied by a Compliance Certificate, and (ii) be on a consolidated
basis for Borrower and its
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Consolidated Subsidiaries, if any, in accordance with
GAAP, subject to normal year-end adjustments.
5.4 ANNUAL STATEMENTS. If Borrower is not required to file 10-K filings
with the Securities Exchange Commission or does not file the same within ninety
days after the end of each fiscal year, furnish each Revolving Credit Lender
within ninety days after the end of each fiscal year Borrower's annual audited
financial statements with respect to such fiscal year, which financial
statements will include a balance sheet as of the end of such period and
earnings, shareholders' equity and cash flow statements for such period and: (i)
be accompanied by a Compliance Certificate, (ii) be on a consolidated basis for
Borrower and its Consolidated Subsidiaries, if any, in accordance with GAAP, and
(iii) contain the unqualified opinion of an independent certified public
accountant reasonably acceptable to Administrative Agent; examination will have
been made in accordance with generally accepted auditing standards and such
opinion will contain a report reasonably satisfactory to Administrative Agent
setting forth any inconsistency in the application of generally accepted
accounting principles with the preceding years' statements, if any.
5.5 TAXES. Pay and discharge when due all material taxes, assessments,
charges, levies and other similar liabilities imposed upon it, its income,
profits, property or business, except those which currently are being contested
in good faith by appropriate proceedings and for which it has set aside
adequate reserves or made other adequate provision with respect thereto. As
used herein, material will mean those items which could result in a Material
Adverse Effect if not so paid or discharged.
5.6 INSURANCE. Keep its insurable real and personal property insured
with responsible insurance companies against loss or damage from hazards and
maintain public liability insurance, all in an amount reasonably consistent with
Borrower's current practices.
5.7 COMPLIANCE WITH LAWS. Comply in all material respects with all laws
and regulations applicable to it and to the operation of its business, including
without limitation those relating to environmental and health matters, and do
all things necessary to maintain, renew and keep in full force and effect all
rights, permits, licenses, certificates, satisfactory clearances and franchises
necessary to enable it to continue its business, to the extent its failure to
comply with or do any of the foregoing could result in a Material Adverse
Effect.
5.8 ENVIRONMENTAL VIOLATIONS. Promptly notify Administrative Agent of
any violation by it of any Environmental Law; to the extent such violation
would, in the reasonable judgment of Borrower, have a Material Adverse Effect.
5.9 ERISA COMPLIANCE. To the extent necessary to prevent a Material
Adverse Effect, Borrower will, and will cause each of its Consolidated
Subsidiaries to, comply in all material respects with the applicable provisions
of ERISA. Borrower will promptly furnish to Administrative Agent, information
relating to: (i) any Reportable Event, (ii) any Plan termination or any
intention of Plan termination, (iii) any failure to make any payment to the PBGC
or any other payment with respect to a Plan or (iv) any possible Withdrawal
Liability with respect to a Multiemployer Plan, to the extent any of the
foregoing could have a Material Adverse Effect.
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5.10 NOTICE OF DEFAULT. Notify Administrative Agent in writing within
five Business Days after it knows or has reason to know of the occurrence of an
Event of Default.
5.11 CHANGE IN BUSINESS. Not make any change in its business which
would cause the type of business primarily conducted by Borrower and its
Consolidated Subsidiaries, considered on a consolidated basis, to be materially
different from the type of business primarily being conducted on the date
hereof.
6. NEGATIVE COVENANTS. Borrower covenants and agrees that from the date
of execution of this Agreement until all of the Obligations have been fully paid
and this Agreement terminated:
6.1 LIENS. Borrower will not and will cause its Consolidated
Subsidiaries to not incur, create, assume, become or be liable in any way, or
suffer to exist any mortgage, pledge, lien, charge, or other encumbrance of any
nature whatsoever on any of its assets, now or hereafter owned, other than
Permitted Liens.
6.2 RESTRICTIONS ON INDEBTEDNESS OF CONSOLIDATED SUBSIDIARIES. Borrower
will not permit any Consolidated Subsidiary to become or to be liable in respect
of any Indebtedness, other than: (i) Indebtedness of a corporation existing at
the time such corporation becomes a Subsidiary and not created in contemplation
of such event, (ii) Indebtedness to Borrower or another Consolidated Subsidiary,
and (iii) other Indebtedness of Consolidated Subsidiaries in an aggregate
principal amount at any time outstanding not exceeding 15% of Borrower's Net
Worth.
6.3 OWNERSHIP. Borrower will not permit or suffer any Person or its
Affiliates (other than John H. McConnell, John P. McConnell, their Affiliates or
a group in which the foregoing are a principal participant) to acquire 30% or
more of the stock (or equivalent ownership or controlling interest) having by
the terms thereof ordinary voting power to elect a majority of the directors of
Borrower (irrespective of whether or not at the time stock of any class or
classes of Borrower will have or might have voting power by reason of the
happening of any contingency). 6.4 CONSOLIDATED INDEBTEDNESS TO CAPITALIZATION.
6.4 CONSOLIDATED INDEBTEDNESS TO CAPITALIZATION. Borrower will not
permit the ratio of Borrower's Consolidated Indebtedness to Borrower's
Capitalization to be greater than 50% calculated as of the end of each fiscal
quarter of Borrower.
6.5 NET WORTH. Borrower will not permit Borrower's Net Worth to be less
than $450,000,000 calculated as of the end of each fiscal quarter of Borrower.
6.6 MERGER. Borrower will not merge or consolidate with or into any
other Person unless either (i) Borrower is the surviving entity or (ii) Borrower
merges or consolidates with a Consolidated Subsidiary and the surviving
corporation: (a) is organized and existing under the laws of a state of the
United States, (b) has the majority of its property and assets within the
continental limits of the United States of America, and (c) assumes in writing
all of the obligations and liabilities of Borrower under the Loan Documents; and
immediately after
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giving effect to such transaction, no condition or event exists which
constitutes a Default or an Event of Default.
6.7 SALE OF ASSETS. Borrower will not sell, lease, or otherwise dispose
of all or substantially all of Borrower's assets calculated on a consolidated
basis for Borrower and its Consolidated Subsidiaries.
6.8 TRANSACTIONS WITH UNRESTRICTED SUBSIDIARIES. Borrower and its
Consolidated Subsidiaries will not enter into any material transaction,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, with any Unrestricted Subsidiary unless such
transaction is otherwise permitted under this Agreement and is on fair and
reasonable terms not materially less favorable to it than it would obtain in a
comparable arm's length transaction with an unrelated entity.
6.9 GOVERNANCE DOCUMENTS. Borrower will not amend or change its
Certificate of Incorporation or its Bylaws in any manner which is materially
adverse to the Lenders.
7. EVENTS OF DEFAULT. Upon the occurrence of any of the following
events:
7.1 PAYMENT. The non-payment by Borrower of: (i) any principal amount
of any of the Advances when due, whether by acceleration or otherwise or (ii)
the non-payment by Borrower of any interest, fees or other amounts owing
hereunder or under any of the other Loan Documents within five days of when the
same is due;
7.2 COVENANTS 7.2 COVENANTS 7.2 COVENANTS. The default in the due
observance of any covenant or agreement to be kept or performed by Borrower
under the terms of this Agreement or any of the Loan Documents and the failure
or inability of it to cure such default: (i) within forty-five (45) days after
written notice thereof from Borrower to Administrative Agent if given within the
period provided in Section 5.10, above, or (ii) if such notice is not given by
Borrower within the period specified in Section 5.10, within forty-five days of
the date Borrower was required to give notice thereof pursuant to Section 5.10;
provided that such forty-five day grace period will not apply to: (i) any
default which in Administrative Agent's good faith determination is incapable of
cure or (ii) any default in any covenants listed in Sections 6.3 through 6.7;
7.3 REPRESENTATIONS AND WARRANTIES. Any representation or warranty made
by Borrower in this Agreement is false or erroneous in any material respect as
of the date made;
7.4 BANKRUPTCY, ETC., OF BORROWER OR AN ACTIVE CONSOLIDATED SUBSIDIARY.
Borrower or an Active Consolidated Subsidiary that is material to the business,
operations or financial condition of Borrower and its Consolidated Subsidiaries
considered on a consolidated basis: (i) dissolves or is the subject of any
dissolution, a winding up or liquidation; (ii) makes a general assignment for
the benefit of creditors; or (iii) files or has filed against it a petition in
bankruptcy, for a reorganization or an arrangement, or for a receiver, trustee
or similar creditors' representative for its property or assets or any part
thereof, or any other proceeding under any federal or state insolvency law, and
if filed against it, the same has not been dismissed or discharged within sixty
days thereof;
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7.5 BANKRUPTCY, ETC., OF UNRESTRICTED SUBSIDIARY. An Unrestricted
Subsidiary: (i) makes a general assignment for the benefit of creditors or (ii)
files or has filed against it a petition in bankruptcy, for a reorganization or
an arrangement, or for a receiver, trustee or similar creditors' representative
for its property or assets or any part thereof, or any other proceeding under
any federal or state insolvency law, and if filed against it, the same has not
been dismissed or discharged within sixty days thereof, but only if such event
would result in a Material Adverse Effect;
7.6 JUDGMENTS. Unless adequately insured or bonded, the entry of a
final judgment for the payment of money involving more than $10,000,000 against
Borrower and the failure by Borrower: (i) to discharge the same, or cause it to
be discharged, within thirty days from the date of the order, decree or process
under which or pursuant to which such judgment was entered or (ii) to secure a
stay of execution pending appeal of such judgment; or the entry of one or more
final monetary or non-monetary judgments or orders against Borrower which,
singly or in the aggregate, does or could reasonably be expected to cause a
Material Adverse Effect; or
7.7 OTHER INDEBTEDNESS. A default by Borrower with respect to any
evidence of Indebtedness in excess of $5,000,000 by it for borrowed money (other
than to Lenders pursuant to this Agreement), if the effect of such default is to
accelerate the maturity of such Indebtedness or to permit the holder thereof to
cause such Indebtedness to become due prior to the stated maturity thereof, or
if any Indebtedness of it in excess of $5,000,000 for borrowed money (other than
to Lenders pursuant to this Loan Agreement) is not paid when due and payable,
whether at the due date thereof or a date fixed for prepayment or otherwise
(after the expiration of any applicable grace period);
then in any such event ("Event of Default"), the Agents, acting jointly, may, or
upon the request of the Majority Lenders will, take any or all of the following
actions (provided that if any Event of Default specified in SECTION 7.4, above,
as to Borrower, occurs, the results described in clauses (i) and (ii), below,
will occur automatically): (i) declare the Revolving Commitments terminated,
(ii) declare all principal, interest and other amounts due and payable hereunder
and under the Loan Documents to be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which hereby are
waived by Borrower, and (iii) exercise any other rights and remedies provided
hereunder, under any of the Loan Documents and/or by applicable law. After the
occurrence of any Event of Default Lenders are authorized at any time and from
time to time without notice to Borrower to offset, appropriate and apply to all
or any part of the Obligations all moneys, credits, deposits (general or
special, demand or time, provisional or final) and other property of any nature
whatsoever of Borrower now or at any time hereafter in the possession of, in
transit to or from, under the control or custody of, or on deposit with (whether
held by Borrower individually or jointly with another party) any of Lenders and
any or all indebtedness at any time owing by such Lender to or for the credit or
account of Borrower. The rights and remedies of Lenders upon the occurrence of
any Event of Default will include but not be limited to all rights and remedies
provided in the Loan Documents and all rights and remedies provided under
applicable law. Borrower irrevocably waives any right to direct the application
of any payments received by any Lender or Agents from or on behalf of Borrower
after the occurrence of any Event of Default.
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8. INTERCREDITOR LIEN AND PAYMENT PROVISIONS.
8.1 SHARING OF PAYMENTS, ETC.
8.1.1 Except as otherwise expressly required by the terms of
this Agreement, each payment or prepayment of principal, interest, fees,
expenses and other charges under the Credit Facilities and each reduction of the
Total Commitment will be applied pro-rata among Lenders in accordance with their
respective Ratable Portions applicable thereto.
8.1.2 If any Revolving Credit Lender as to Revolving Credit
Loans or Lender as to Competitive Bid Loans at any time obtains any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) on account of Advances owing to it (other than payments pursuant
to SECTION 2.11, and payments of fees and expenses to Agents pursuant to
SECTIONS 2.9.2 (B) AND (C) and of indemnities and expenses to Agents pursuant to
the terms of this Agreement), in excess of its Ratable Portion, such Lender will
forthwith purchase from the other Lenders such participations in the Advances,
as applicable, owing to them as will be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them; PROVIDED, however,
that if all or any portion of such excess payment is thereafter recovered from
such purchasing Lender, such purchase from each Lender will be rescinded and
such Lender will repay to the purchasing Lender the purchase price to the extent
of such recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required payment
to (ii) the total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in respect of
the total amount so recovered. Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section may, to the fullest
extent permitted by law, exercise all of its rights of payment (including the
right of set-off) with respect to such participation as fully as if such Lender
were the direct creditor of Borrower in the amount of such participation.
8.1.3 Borrower and Lenders further acknowledge that
Administrative Agent will not be obligated to make any Advances to the extent
that any of the other Lenders do not contribute their Ratable Portion of any
Advance.
8.1.4 Each Lender's Ratable Portion of any payment hereunder
will be reduced to the extent that such Lender has not contributed its Ratable
Portion of any amount owing to Administrative Agent hereunder.
8.1.5 Each Lender's obligation to purchase participation
interests pursuant to this Agreement will be absolute and unconditional.
8.1.6 Each Lender will be entitled to receive from
Administrative Agent its Ratable Portion of interest on Advances of such Lender
only as calculated based upon funds actually received by Administrative Agent
from each Lender by 11:00 a.m. (New York, New York time) on the day due from
such Lender. Funds received by Administrative Agent after such cut off time will
be treated as having been received by Administrative Agent on the next Business
Day following the day on which received.
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8.1.7 To the extent that Administrative Agent will have
disbursed a Borrowing on a day prior to receipt by Administrative Agent of a
Lender's Ratable Portion of such Borrowing, interest accrued and paid on such
unfunded sums will be for the account of Administrative Agent.
8.2 RECEIPT OF PAYMENTS BY LENDERS. Should any payment or
distribution not permitted by the provisions of this Agreement or the Loan
Documents or proceeds thereof be received by any Lender upon or with respect to
all or any part of the Notes or Obligations prior to the full payment and
satisfaction of the Obligations in the priority set forth in this Section and
the termination of all financing arrangements between Lenders and Borrower, such
Lender will deliver the same to Administrative Agent in precisely the form
received (except for the endorsement or assignment of Lender where necessary),
for application to the Obligations (whether due or not due in such order and
manner as set forth herein), and, until so delivered, the same will be held in
trust by such Lender as property of Administrative Agent on behalf of all of
Lenders. In the event of the failure of any Lender to make any such endorsement
or assignment, Administrative Agent on behalf of all of Lenders, or any of its
officers or employees on behalf of Administrative Agent on behalf of all of
Lenders, is hereby irrevocably authorized in its own name or in the name of
Lenders to make the same, and is hereby appointed each Lender's attorney-in-fact
for those purposes, that appointment being coupled with an interest and
irrevocable.
8.3 DISTRIBUTIONS, ETC. In the event of any distribution,
division or application, partial or complete, voluntary or involuntary, by
operation of law or otherwise, of all or any part of the assets of Borrower or
the proceeds thereof to creditors of Borrower or to any indebtedness,
liabilities and obligations of Borrower, or upon any liquidation, dissolution or
other winding up of Borrower or Borrower's business, or in the event of any sale
(singly or in the aggregate) of all or any substantial part of the assets of
Borrower, or in the event of any receivership, insolvency or bankruptcy
proceeding, or assignment for the benefit of creditors, or any proceeding by or
against Borrower for any relief under any bankruptcy or insolvency law or other
laws relating to the relief of debtors, readjustment of indebtedness,
reorganization, compositions or extensions, then and in any such event any
payment or distribution of any kind or character, either in cash, securities or
other property, which will be payable or deliverable upon or with respect to all
or any part of the Obligations will be paid or delivered directly to
Administrative Agent for application to the Obligations (whether due or not due
in order and manner as set forth herein) until the Obligations will have been
fully paid and satisfied. Lenders hereby irrevocably authorize and empower
Administrative Agent to demand, sue for, collect and receive every such payment
or distribution and give acquittance therefor and to file claims and take such
other proceedings in Administrative Agent's own name or in the name of Lenders
or otherwise, as Lender may deem necessary or advisable to carry out the
provisions of this Section. Lenders hereby agree to execute and deliver to
Agents such limited powers of attorney, assignments, endorsements or other
instruments as may be requested by Agents in order to enable Agents to enforce
any and all claims upon or with respect to the Obligations, and to collect and
receive any and all payments or distributions which may be payable or
deliverable at any time upon or with respect to the Obligations.
8.4 BENEFIT. The provisions of this Section are solely for
the benefit of Lenders, and may at any time or times be changed by Lenders
pursuant to the terms of this
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Agreement, as they may elect but without necessity of notice to or consent or
approval by Borrower or any other Person (other than Lenders pursuant to the
terms of this Agreement with respect to amendments, modifications, etc.); and
neither Borrower nor any other Person will have any right to rely on or enforce
any of the provisions hereof.
9. REPRESENTATIONS AND WARRANTIES TO SURVIVE. All
representations, warranties, covenants and agreements made by Borrower herein
and in the other Loan Documents will survive the execution and delivery of this
Agreement, the Loan Documents and the issuance of the Notes.
10. ENVIRONMENTAL INDEMNIFICATION. Borrower agrees that it
will indemnify and hold harmless Agents and Lenders from any costs, expenses,
clean-up costs, waste disposal costs, litigation costs, fines, penalties
including without limitation those costs, expenses, and fines within the meaning
of CERCLA and other related liabilities which may arise under Environmental Laws
in connection with the assets of Borrower or its Consolidated Subsidiaries or
the operation of their businesses, to the extent Agents or Lenders may be held
responsible for such items as a result of this Loan Agreement, any acts or
omissions in connection therewith, or any matters relating thereto. The
provisions of this Section will survive any termination of this Agreement.
11. AGENTS.
11.1 AUTHORIZATION AND ACTION. Each Lender hereby
appoints and irrevocably authorizes Agents to take such action as agent on its
behalf and to exercise such powers and discretion under this Agreement and the
other Loan Documents as are delegated to Agents by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto. Without
limitation of the foregoing, each Lender hereby expressly authorizes Agents to
execute, deliver and perform its obligations hereunder and under each of the
Loan Documents to which either of Agents are a party, and to exercise hereunder
or thereunder all rights, powers and remedies that Agents may have hereunder or
thereunder. Each Lender agrees that any action taken by Agents in accordance
with the provisions of this Agreement or the Loan Documents, and the exercise by
Agents of the powers set forth herein or therein, together with such other
powers as are reasonably incidental thereto, will be authorized and binding upon
all Lenders. As to any matters not expressly provided for hereunder or by the
Loan Documents (including, without limitation, enforcement or collection of the
Obligations), Agents will not be required to exercise any discretion or take any
action, but will be required to act or to refrain from acting (and will be fully
protected in so acting or refraining from acting) upon the instructions of the
Majority Lenders (or if applicable under SECTION 12.4 below, all Lenders), and
such instructions will be binding upon all Lenders. The duties of Agents will be
mechanical and administrative in nature and Agents will have no fiduciary
relationship in respect of any Lender. If Agents will request instructions from
any Lenders with respect to any act or failure to act in connection with this
Agreement, the Credit Facilities or any of the Loan Documents, Agents will be
entitled to refrain from such act or taking such action unless and until Agents
have received instructions and Agents will have no liability to any Person or
Lender by reason of so refraining. Agents will not be required to take any
action which exposes Agents to personal liability or is contrary to this
Agreement or applicable law.
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11.2 AGENTS' RELIANCE, ETC. Neither Agents, any Affiliate of
Agents, nor any of their respective directors, officers, agents, employees,
attorneys or consultants will be liable for any action taken or omitted to be
taken by it or them under or in connection with this Agreement, any of the
Obligations or any Loan Document, except for its or their own gross negligence
or willful misconduct. Without limitation of the generality of the foregoing,
Agents: (a) may consult with legal counsel (including counsel for Borrower),
independent public accountants and other experts selected by Agents and will not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (b) make no
warranty or representation to any Lender and will not be responsible to any
Lender for any statements, warranties or representations made in or in
connection with this Agreement, the Notes or any Loan Document; (c) will not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement, the Obligations or
any Loan Document on the part of Borrower or as to the existence or possible
existence of any Default or Event of Default or to inspect the property
(including the books and records) of Borrower; (d) will not be responsible to
any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the Obligations or any Loan
Document or any other instrument or document furnished pursuant thereto; and (e)
will incur no liability under or in respect of this Agreement, the Obligations
or any Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telephone, telegram, cable, telecopy or
telex) believed by it to be genuine and signed or sent by the proper party or
parties. Agents will not be liable for any apportionment or distribution of
payments made by it reasonably and in good faith pursuant to this Agreement, and
if any such apportionment or distribution is subsequently determined to have
been made in error the sole recourse of any Person to whom payment was due, but
not made, will be to recover from the recipients of such payments any payment in
excess of the amount to which they are determined to have been entitled.
11.3 AGENTS AND THEIR AFFILIATES. With respect to its
Revolving Commitments, the Advances made by it and the Notes issued to it,
Agents will have the same rights and powers under the Loan Documents as any
other Lender and may exercise the same as though they were not Agents; and the
term "Lender" or "Lenders" will, unless otherwise expressly indicated, include
Agents in their individual capacity. Agents and their Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with Borrower, Borrower's Affiliates and any
Person who may do business with or own securities of Borrower or Borrower's
Affiliates, all as if they were not Agents and without any duty to account
therefor to Lenders.
11.4 LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon Agents or any other Lender and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon Agents or any
other Lender and based on such documents and information as it will deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under or otherwise relating to this Agreement and the
Obligations; and Agents will not have any duty or responsibility at any time to
provide any Lender with any credit or other information with respect thereto.
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11.5 INDEMNIFICATION. Lenders agree to indemnify Agents (to
the extent not reimbursed by Borrower), ratably according to their respective
Revolving Commitments existing on the date hereof, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against Agents in any way relating to or
arising out of this Agreement, the Notes, the Obligations or any of the Loan
Documents or any action taken or omitted by Agents under this Agreement, the
Notes, the Obligations or any of the Loan Documents, PROVIDED that no Lender
will be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from Agents' gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender agrees to reimburse Agents promptly
upon demand for its ratable share of any out-of-pocket expenses incurred by
Agents in connection with the preparation, review, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, the Notes, the Obligations or
any of the Loan Documents, or any of them, to the extent that Agents are not
reimbursed for such expenses by Borrower. The provisions of this Section will
survive the termination of this Agreement.
11.6 SUCCESSOR AGENTS. Either Agent may resign at any time as
Agent under this Agreement, the Notes or the Loan Documents by giving written
notice thereof to Lenders and Borrower, which resignation will be effective only
upon the appointment of a successor Agent. Upon any such resignation, the
Majority Lenders will, on behalf of Lenders, appoint a successor Agent, which
will be a commercial bank organized under the laws of the United States of
America or of any State thereof and having a combined capital and surplus of at
least $500,000,000. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent will thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent will be discharged from its duties and obligations under
this Agreement; PROVIDED, however, that the successor Agent will not be
considered as a Lender for purposes of this Agreement unless it is otherwise a
Lender. After any retiring Agent's resignation, the provisions of this Section
will inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement. If the other Lenders request either
Agent to resign, then, prior to such resignation, the other Lenders will cause
such Agent to be paid all amounts owed to such Agent hereunder, including,
without limitation, such Agent's Ratable Portion of all outstanding Advances and
other Obligations.
11.7 RELATIONS AMONG LENDERS. Each Lender agrees that it will
not take or institute any actions or proceedings, against Borrower under this
Agreement or any of the Loan Documents, without the prior written consent of the
Majority Lenders.
11.8 BENEFIT. The provisions of this Section are solely for
the benefit of Agents and Lenders, and may at any time or times be changed by
Lenders as they may elect without necessity of notice to or consent or approval
by Borrower or other Person (other than Lenders pursuant to SECTION 12.4,
below); and neither Borrower or other Person will have any right to rely on or
enforce any of the provisions hereof. In performing its actions and duties under
this
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Agreement Agents act solely as Agent of Lenders and do not assume or have
any obligation toward or agency relationship with or for Borrower.
12. GENERAL.
12.1 WAIVER. No delay or omission on the part of any Lender
or Agents to exercise any right or power arising from any Event of Default will
impair any such right or power or be considered a waiver of any such right or
power or a waiver of any such Event of Default or any acquiescence therein nor
will the action or nonaction of any Lender or Agents in case of such Event of
Default impair any right or power arising as a result thereof or affect any
subsequent default or any other default of the same or a different nature. No
disbursement of Advances hereunder will constitute a waiver of any of the
conditions to Lenders' or Agents' obligation to make further disbursements; nor,
in the event that Borrower is unable to satisfy any such condition, will any
such disbursement have the effect of precluding Lenders from thereafter
declaring such inability to be a Default or an Event of Default. No modification
or waiver of any provision of this Agreement or any of the Loan Documents, nor
consent to any departure by Borrower therefrom, will be established by conduct,
custom or course of dealing; and no modification, waiver or consent will in any
event be effective unless the same is in writing and specifically refers to this
Agreement, and then such waiver or consent will be effective only in the
specific instance and for the purpose for which given. No notice to or demand on
Borrower in any case will entitle Borrower to any other or further notice or
demand in the same, similar or other circumstance. Unless otherwise agreed in
writing by all Lenders pursuant to SECTION 12.4 hereof, the liability of
Borrower will not be affected by any surrender, exchange, acceptance, or release
by Agents or any Lender of any party or other person or any other guarantee or
any security held by it for any of the Obligations or by Agents' or any Lender's
failure to take any steps to perfect or maintain its lien or security interest
in or to preserve any of its rights to, any guarantee, security or other
collateral for any of the Obligations, by any delay or omission in exercising
any right, remedy or power with respect to any of the Obligations or any
guarantee or collateral therefor, or by any irregularity, unenforceability or
invalidity of any of the Obligations or any security or guarantee therefor.
Subject to SECTION 12.4 hereof, Lenders at any time and from time to time, and
without impairing, releasing, discharging or modifying the liabilities of
Borrower hereunder, may (a) without the consent of or notice to Borrower, change
the manner, amount, place or terms of payment or performance of or interest
rates on, or change or extend the time of payment of, or other terms relating
to, any of the Obligations, (b) renew, substitute, modify, amend or alter, or
grant consents or waivers relating to, any of the Obligations without the
consent of or notice to Borrower, (c) renew, substitute, modify, amend or alter,
or grant consents or waivers relating to, any guarantee or any security for any
guarantee, (d) apply any and all payments received by a Lender by whomever paid
or however realized, to any of the Obligations in such order, manner and amount
as such Lender may determine in its sole discretion, (e) deal with any Person in
respect of the Obligations in such manner as such Lender deems appropriate in
its sole discretion and/or (f) substitute any security or guarantee.
Irrespective of the taking or refraining from the taking of any such action, the
obligations of Borrower will remain in full force and effect. Lenders and Agents
in their sole discretion may determine the reasonableness of the period which
may elapse prior to the making of demand for any payment upon Borrower and need
not pursue any remedy or remedies against Borrower or any other Person before
having recourse against Borrower hereunder.
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12.2 NOTICES. All notices, demands, requests, consents,
approvals and other communications required or permitted hereunder will be in
writing and will be conclusively deemed to have been received by a party hereto
and to be effective if delivered personally to such party, or sent by telex,
telecopy (followed by written confirmation) or other telegraphic means, or by
overnight courier service, or by certified or registered mail, return receipt
requested, postage prepaid, addressed to such party at the address set forth
below or to such other address as any party may give to the other in writing for
such purpose:
To Administrative Agent: The Bank of Nova Scotia
600 Peach Street, N.E., Suite 2700
Atlanta, Georgia 30308
Attention: Amanda Norsworthy
Telecopier No.: (404) 888-8998
Telephone No.: (404) 877-1551
To Documentation Agent: PNC Bank, Ohio, National Association
Energy, Metals & Mining - 26th Floor
201 East Fifth Street
Cincinnati, Ohio 45202
Attention: Matthew D. Tevis
Telecopier No.: (513) 651-8952
Telephone No.: (513) 651-8686
To Borrower: Worthington Industries, Inc.
1205 Dearborn Drive
Columbus, Ohio 43085
Attention: Assistant Treasurer
Telecopier No.: (614) 438-7508
Telephone No.: (614) 438-3179
With copy with Worthington Industries, Inc.
respect to notices 1205 Dearborn Drive
under Section 7 only: Columbus, Ohio 43085
Attention: General Counsel
Telecopier No.: (614) 840-3706
Telephone No.: (614) 438-3001
To Revolving Credit Lenders: At their addresses set forth on the
Amended and Restated Schedule 1,
attached hereto
To Designated Lenders: At their addresses set forth in the
applicable Designation Agreement
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<PAGE> 46
All such communications, if personally delivered, will be conclusively deemed to
have been received by a party hereto and to be effective when so delivered, or
if sent by telex, telecopy or telegraphic means, on the day on which
transmitted, or if sent by overnight courier service, on the day after deposit
thereof with such service, or if sent by certified or registered mail, on the
third business day after the day on which deposited in the mail. except that
notices and communications to Administrative Agent pursuant to SECTION 2 above,
will not be effective until received by Administrative Agent.
12.3 SUCCESSORS AND ASSIGNS.
12.3.1 This Agreement will be binding upon and inure to the
benefit of Borrower and Lenders and their respective successors and assigns,
PROVIDED, however, that Borrower may not assign this Agreement in whole or in
part without the prior written consent of all of the Lenders.
12.3.2 Each Lender may, with the prior written consent of
Agents and Borrower, which consent will not be unreasonably withheld, assign to
one or more banks or other entities all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Revolving Commitments, the Advances owing to it and the Note or
Notes held by it); PROVIDED, HOWEVER, that except as provided in Section 12.3.7,
(i) each Revolving Credit Lender may assign to an Affiliate of such Revolving
Credit Lender that is a bank without any such consent and each Designated Lender
may assign its Competitive Bid Loan to its Designating Lender or to another
Designated Lender designated by such Designating Lender and such assignment by a
Designated Lender will not be subject to the requirements of clauses (ii)
through (iv) of this Section 12.3.2 provided that the Designated Lender and
Designating Lender notify the Administrative Agent promptly of such assignment,
(ii) each such assignment will be of a uniform, and not a varying, percentage of
all rights and obligations under and in respect of all of the Credit Facilities,
(iii) except in the case of an assignment of all of a Revolving Credit Lender's
rights and obligations under this Agreement, (A) the amount of the Revolving
Commitment of the assigning Revolving Credit Lender being assigned pursuant to
each such assignment (determined as of the date of the Assignment and Acceptance
with respect to such assignment) will in no event be less than $5,000,000 and
will be an integral multiple of $1,000,000 and (B) after giving effect to each
such assignment, the amount of the Revolving Commitment of the assigning
Revolving Credit Lender will in no event be less than $10,000,000 unless it is
reduced to zero, and (iv) the parties to each such assignment will execute and
deliver to Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note or Notes subject
to such assignment and, for the sole account of Administrative Agent, a
processing and recordation fee of $2,500. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in such
Assignment and Acceptance, (x) the assignee thereunder will be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, have the rights and obligations
of a Revolving Credit Lender hereunder and (y) Revolving Credit Lender assignor
thereunder will, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement (and, in the case of
an Assignment and Acceptance covering all or the remaining portion of an
assigning
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Revolving Credit Lender's rights and obligations under this Agreement, such
Revolving Credit Lender will cease to be a party hereto).
12.3.3 Administrative Agent will maintain at
its address referred to above for notices a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the recordation of
the names and addresses of Lenders and the respective Revolving Commitments of,
and principal amount of the Advances owing to, each Lender from time to time
(the "Register"). The entries in the Register will be conclusive and binding for
all purposes, absent manifest error, and Borrower, Administrative Agent and
Lenders may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register will be available for
inspection by Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
12.3.4 Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an assignee, together with any
Note or Notes subject to such assignment, Administrative Agent will, if such
Assignment and Acceptance has been completed and is in substantially the form of
delivered to Lenders in connection with the Closing, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to Borrower. Within five Business Days
after its receipt of such notice, Borrower, at its own expense, will execute and
deliver to Administrative Agent in exchange for the surrendered Note or Notes a
new Note or Notes to the order of such assignee in an amount equal to the
applicable Commitment assumed by it pursuant to such Assignment and Acceptance
and, if the assigning Lender has retained a Commitment hereunder, a new Note or
Notes to the order of the assigning Lender in an amount equal to the Commitment
retained by it hereunder. Such new Note or Notes will be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Note or Notes, will be dated the effective date of such Assignment and
Acceptance.
12.3.5 Each Lender may sell participation to
one or more banks or other entities in all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Revolving Commitments, and the Advances owing to it and the Note
or Notes held by it); PROVIDED, HOWEVER, that (i) such Lender's obligations
under this Agreement (including, without limitation, its Revolving Commitments
to Borrower hereunder) will remain unchanged, (ii) such Lender will remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender will remain the holder of any such Notes for all
purposes of this Agreement, (iv) Borrower, Agents and the other Lenders will
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and (v) no participant
under any such participation will have any right to approve any amendment or
waiver of any provision of any Loan Document, or any consent to any departure by
any party therefrom except the following if so provided in the participation
agreement: (i) changes to the amount of, or rate of interest on, any Note held
by any Lender and (ii) postpone any date fixed for any payment of principal of,
or interest on, any of the Notes. Notwithstanding the foregoing, Borrower agrees
that each such participant will, to the extent provided in its participation, be
entitled to the rights and benefits under SECTION 2.10 and, subject to SECTION
7, all rights of setoff under this Agreement with respect to its participating
interest, in each case, as if such participant were a Lender.
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12.3.6 Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section,
disclose to the assignee or participant or proposed assignee or participant, any
information relating to Borrower furnished to such Lender by or on behalf of
Borrower.
12.3.7 Any Revolving Credit Lender (each a "Designating
Lender") may at any time designate one or more Designated Lenders to fund
Competitive Bid Loans which the Designating Lender is required to fund subject
to the terms of this Section 12.3.7 and the provisions on Section 12.3.2 shall
not apply to such designation. No Revolving Credit Lender shall be entitled to
make more than two such designations. The parties to each such designation shall
execute and deliver to the Agent, for its acceptance, a Designation Agreement.
Upon such receipt of an appropriately completed Designation Agreement executed
by a Designating Lender and a designee representing that it is a Designated
Lender, the Documentation Agent will accept such Designation Agreement and give
prompt notice thereof to the Borrower, whereupon, from and after the effective
date specified in the Designation Agreement, the Designated Lender shall become
a party to this Agreement with a right to make Competitive Bid Loans on behalf
of its Designating Lender pursuant to Section 2.2 after the Borrower has
accepted a Competitive Bid (or a portion thereof) of the Designating Lender.
Each Designating Lender shall serve as the agent (in its capacity as a
Designating Lender) of the Designated Lender and shall on behalf of the
Designated Lender give and receive all communications and notices and take all
actions hereunder, including without limitation votes, approvals, waivers,
consents and amendments under or relating to this Agreement or the other Loan
Documents. Any such notice, communication, vote, approval, waiver, consent or
amendment shall be signed by the Designating Lender as agent (in its capacity as
a Designating Lender) for the Designated Lender and shall not be signed by the
Designated Lender. The Borrower, the Agents and the Lenders may rely thereon
without any requirement that the Designated Lender sign or acknowledge the same.
12.4 MODIFICATIONS. No modification, amendment or waiver of
any provision of this Agreement or any of the Loan Documents nor consent to any
departure therefrom by Borrower will in any event be effective unless the same
is in writing signed by the Majority Lenders and specifically refers to this
Agreement, and then such waiver or consent will be effective only in the
specific instance and for the purpose for which given, PROVIDED, however, that
no amendment, waiver or consent will, unless in writing and signed by all
Lenders, (i) except as provided in SECTION 2.13, change the percentage amount of
the Revolving Commitments or of the aggregate unpaid principal amount of the
Notes or the number of Lenders which will be required for Lenders or any of them
to take any action hereunder; (ii) waive any Event of Default under SECTION 7.1
hereof; (iii) amend SECTIONS 7, 10, 12.3.1 or this SECTION 12.4; (iv) increase
any Commitment of any Lender; (v) change the rate of interest on any Note held
by any Lender; (vi) postpone any date fixed for any payment of principal of, or
interest on, any of the Notes; or (vii) release Borrower; and PROVIDED further,
however, that no amendment, waiver or consent will, unless in writing and signed
by Agents in addition to all Lenders or the Majority Lenders, as the case may
be, affect the rights or duties of Agents under this Agreement, the Obligations
or any Loan Document. No notice to or demand on Borrower in any case will
entitle Borrower to any other or further notice or demand in the same, similar
or other circumstance. Notwithstanding anything to the contrary contained
herein, Agents may in their sole discretion subject to approval of Borrower and
without the consent of the Majority
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Lenders reduce or increase the fees or expenses that Borrower is required to pay
to Agents for their own account.
12.5 ILLEGALITY. If fulfillment of any provision hereof or
any transaction related hereto or of any provision of any of the Loan Documents,
at the time performance of such provision is due, involves transcending the
limit of validity prescribed by law, then IPSO FACTO, the obligation to be
fulfilled will be reduced to the limit of such validity; and if any clause or
provisions herein contained other than the provisions hereof pertaining to
repayment of the Obligations operates or would prospectively operate to
invalidate this Agreement in whole or in part, then such clause or provision
only will be void, as though not herein contained, and the remainder of this
Agreement will remain operative and in full force and effect; and if such
provision pertains to repayment of the Obligations, then, at the option of
Lenders, all of the Obligations will become immediately due and payable.
12.6 GENDER, ETC. Whenever used herein, the singular number
will include the plural, the plural the singular and the use of the masculine,
feminine or neuter gender will include all genders.
12.7 HEADINGS. The headings in this Agreement are for
convenience only and will not limit or otherwise affect any of the terms hereof.
12.8 LIABILITY OF LENDERS. Borrower hereby agrees that
neither Agents nor Lenders will be chargeable for any negligence, mistake, act
or omission of any accountant, examiner, agent or attorney selected with
reasonable care and in the exercise of good faith by Lenders in making
examinations, investigations or collections under the Loan Documents, unless
Agents or Lenders actually know that such mistake, negligence, act or omission
is incorrect at the time committed.
12.9 EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed will be deemed to be an
original and all of which taken together will constitute one and the same
agreement.
12.10 REMEDIES CUMULATIVE. No single or partial exercise of
any right or remedy by Lenders will preclude any other or further exercise
thereof or the exercise of any other right or remedy. All remedies hereunder and
in any instrument or document evidencing, securing, guaranteeing or relating to
any Loan or now or hereafter existing at law or in equity or by statute are
cumulative and none of them will be exclusive of the others or any other remedy.
All such rights and remedies may be exercised separately, successively,
concurrently, independently or cumulatively from time to time and as often and
in such order as Lenders may deem appropriate.
12.11 COSTS, EXPENSES AND LEGAL FEES. Borrower will be solely
responsible for all reasonable fees and expenses for appraisals, surveys, title
insurance, lien searches environmental reports, recording fees, documentary
taxes and similar items. Borrower agrees to reimburse on demand Agents and
Lenders for all reasonable out-of-pocket costs and expenses, including, without
limitation, due diligence expenses and reasonable fees and expenses of
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auditors, attorneys (which attorneys may be Agent's employees) and including,
without limitation, the reasonable Attorneys Fees and disbursements and other
expenses, expended or incurred in amending, supplementing, waiving or enforcing
provisions of this Agreement and the other Loan Documents; in enforcing this
Agreement and the other Loan Documents (with respect to the enforcement of this
Agreement and other Loan Documents, Borrower agrees to reimburse on demand the
Lenders for all reasonable out-of-pocket costs and expenses incurred in
connection with such enforcement); in obtaining advice from auditors, attorneys
and other advisors regarding its rights and responsibilities under this
Agreement and the other Loan Documents, or the perfection, protection or
preservation of rights and interests hereunder or thereunder; in collecting any
sum which is not paid when due under this Agreement and the other Loan
Documents; in negotiations with respect to any Default or Event of Default or
any restructuring or "working out" the credit facilities; and/or in the
protection, perfection, preservation and enforcement of any and all rights of
Agents and Lender's in connection with this Agreement and any of the other Loan
Documents, including, without limitation, the fees and costs incurred in any
out-of-court work-out, any litigation or in any bankruptcy or reorganization
proceeding or similar proceeding.
12.12 INDEMNITY. Borrower will indemnify, defend and hold
harmless Agents and Lenders, their respective directors, officers, counsel and
employees, from and against all claims, demands, liabilities, judgments, losses,
damages, costs and expenses, joint or several (including all accounting fees and
Attorneys Fees reasonably incurred), that any such indemnified party may incur
arising under or by reason of this Agreement, any of the Credit Facilities or
Loan Documents, or any act hereunder or thereunder or with respect hereto or
thereto except the willful misconduct or negligence of such indemnified party.
Without limiting the generality of the foregoing, Borrower agrees that if, after
receipt by Agents or any Lender of any payment of all or any part of the
Obligations, demand is made at any time upon Agents and/or any Lender for the
repayment or recovery of any amount or amounts received by it in payment or on
account of the Obligations and Agents and/or Lender repays all or any part of
such amount or amounts by reason of any judgment, decree or order of any court
or administrative body, or by reason of any settlement or compromise of any such
demand, this Agreement will continue in full force and effect and Borrower will
be liable, and will indemnify, defend and hold harmless Agents and Lenders for
the amount or amounts so repaid. The provisions of this Section will be and
remain effective notwithstanding any contrary action which may have been taken
by Borrower in reliance upon such payment, and any such contrary action so taken
will be without prejudice to Agents and any Lender's rights under this Agreement
and will be deemed to have been conditioned upon such payment having become
final and irrevocable. The provisions of this Section will survive the
termination of this Agreement.
12.13 CONTINUING AGREEMENT. This Agreement is and is intended
to be a continuing Agreement and will remain in full force and effect until the
Obligations are finally and irrevocably paid in full and the Credit Facilities
are terminated.
12.14 COMPLETE AGREEMENT. This Agreement, together with the
exhibits and schedules hereto, the other Loan Documents and related documents
delivered on the Closing Date and on the Revised Closing Date constitutes the
entire agreement of the parties hereto regarding the subject matter hereof and
thereof and supersedes any prior or written agreements or understandings
regarding such subject matter.
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12.15 NO THIRD PARTY BENEFICIARIES. Nothing express or
implied herein is intended or will be construed to confer upon or give any
person, firm or corporation, other than the parties hereto, any right to remedy
hereunder or by reasons hereof.
12.16 TAX WITHHOLDING CLAUSE. Each Lender or assignee or
participant of Lender that is not incorporated under the laws of the United
States of America or a state thereof agrees that it will deliver to each of the
Borrower and the Documentation Agent two (2) duly completed copies of the
following: (i) Internal Revenue Service Form W-9, 4224 or 1001, or other
applicable forms prescribed by the Internal Revenue Service, certifying that
such Lender, assignee or participant is entitled to receive payments under this
Agreement and the other Loan Documents without deduction or withholding of any
United Stated federal income taxes, or is subject to such tax at a reduced rate
under an applicable tax treaty, or (ii) Internal Revenue Service Form W-8 or
other applicable form of certificate of such Lender, assignee or participant
indicating that no such exemption or reduced rate is allowable with respect to
such payments. Each Lender, assignee or participant required to deliver to
Borrower and the Documentation Agent a form or certificate pursuant to the
preceding sentence will deliver such form or certificate as follows: (A) each
Lender which is a party hereto on the Closing Date will deliver such form or
certificate at least five (5) Business Days prior to the first date on which any
interest or fees are payable by Borrower hereunder for the account of such
Lender; (B) each assignee or participant will deliver such form or certificate
at least five (5) Business Days before the effective date of such assignment or
participation (unless Documentation Agent in its sole discretion will permit
such form or certificate less than five (5) Business Days before such date in
which case it will be due on the date specified by Documentation Agent). Each
Lender, assignee or participant that so delivers a Form W-8, W-9, 4224 or 1001
further undertakes to deliver to each of Borrower and the Documentation Agent
two (2) additional copies of such form (or a successor form) on or before the
date that such form expires or becomes obsolete or after the occurrence of any
event requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by Borrower or Documentation Agent, either certifying that such
Lender, assignee or participant is entitled to receive payments under this
Agreement and the other Loan Documents without deduction or withholding of any
United States federal income taxes or is subject to such tax at a reduced rate
under an applicable tax treaty or stating that no such exemption or reduced rate
is allowable. Documentation Agent will be entitled to withhold United States
federal income taxes at the full withholding rate unless Lender, assignee or
participant establishes an exemption or that it is subject to a reduced rate as
established pursuant to the above provisions.
12.17 NO PARTNERSHIP OR JOINT VENTURE. Nothing contained
herein or in any of the agreements or transactions contemplated hereby is
intended or will be constructed to create any relationship other than as
expressly stated herein or therein and will not create any joint venture,
partnership or other relationship.
12.18 GOVERNING LAW AND JURISDICTION; WAIVER OF JURY TRIAL.
THIS AGREEMENT WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES
HERETO DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO WITHOUT
REGARD TO ITS CONFLICT OF LAWS PRINCIPLES, AND BORROWER HEREBY AGREES TO THE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN HAMILTON COUNTY, OHIO,
AND CONSENT THAT ANY
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SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL DIRECTED TO BORROWER AT THE
ADDRESS SET FORTH HEREIN FOR NOTICES AND SERVICE SO MADE WILL BE DEEMED TO BE
COMPLETED FIVE (5) BUSINESS DAYS AFTER THE SAME HAS BEEN DEPOSITED IN U.S.
MAILS, POSTAGE PREPAID; PROVIDED THAT NOTHING CONTAINED HEREIN WILL PREVENT
AGENTS FROM BRINGING ANY ACTION OR EXERCISING ANY RIGHTS AGAINST ANY SECURITY OR
AGAINST BORROWER INDIVIDUALLY OR AGAINST ANY PROPERTY OF BORROWER, WITHIN ANY
OTHER STATE OR NATION. BORROWER WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER.
BORROWER, AGENTS AND LENDERS EACH UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH
AGREEMENTS.
Dated as of May 30, 1997.
WORTHINGTON INDUSTRIES, INC.
as Borrower
By: /s/ D. G. Banger
--------------------------------
Print Name: D. G. Banger
------------------------
Title: VICE PRESIDENT CFO
-----------------------------
THE BANK OF NOVA SCOTIA,
on its own behalf as Lender and as
Administrative Agent,
By:
--------------------------------
Print Name:
------------------------
Title:
-----------------------------
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SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL DIRECTED TO BORROWER AT THE
ADDRESS SET FORTH HEREIN FOR NOTICES AND SERVICE SO MADE WILL BE DEEMED TO BE
COMPLETED FIVE (5) BUSINESS DAYS AFTER THE SAME HAS BEEN DEPOSITED IN U.S.
MAILS, POSTAGE PREPAID; PROVIDED THAT NOTHING CONTAINED HEREIN WILL PREVENT
AGENTS FROM BRINGING ANY ACTION OR EXERCISING ANY RIGHTS AGAINST ANY SECURITY OR
AGAINST BORROWER INDIVIDUALLY OR AGAINST ANY PROPERTY OF BORROWER, WITHIN ANY
OTHER STATE OR NATION. BORROWER WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER.
BORROWER, AGENTS AND LENDERS EACH UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH
AGREEMENTS.
Dated as of May 30, 1997.
WORTHINGTON INDUSTRIES, INC.
as Borrower
By:
--------------------------------
Print Name:
------------------------
Title:
-----------------------------
THE BANK OF NOVA SCOTIA,
on its own behalf as Lender and as
Administrative Agent,
By: /s/ F.C.H. Ashby
----------------------------------
Print Name: F.C.H. Ashby
--------------------------
Title: Senior Manager Loan Operations
-------------------------------
48
<PAGE> 54
PNC BANK, OHIO, NATIONAL
ASSOCIATION,
on its own behalf as Lender and as
Documentation Agent,
By: /s/ Matthew D. Tevis
--------------------------------
Print Name: Matthew D.Tevis
------------------------
Title: Vice President
-----------------------------
NATIONSBANK, N.A.
AS LENDER
By:
--------------------------------
Print Name:
------------------------
Title:
-----------------------------
WACHOVIA BANK OF GEORGIA, N.A.
AS LENDER
By:
--------------------------------
Print Name:
------------------------
Title:
-----------------------------
ABN AMRO BANK N.V.
AS LENDER
By:
--------------------------------
Print Name:
------------------------
Title:
-----------------------------
49
<PAGE> 55
PNC BANK, OHIO, NATIONAL
ASSOCIATION,
on its own behalf as Lender and as
Documentation Agent,
By:
--------------------------------
Print Name:
------------------------
Title:
-----------------------------
NATIONSBANK, N.A.
AS LENDER
By: /s/ Philip S. Durand
--------------------------------
Print Name: Philip S. Durand
------------------------
Title: Vice President
-----------------------------
WACHOVIA BANK OF GEORGIA, N.A.
AS LENDER
By:
--------------------------------
Print Name:
------------------------
Title:
-----------------------------
ABN AMRO BANK N.V.
AS LENDER
By:
--------------------------------
Print Name:
------------------------
Title:
-----------------------------
49
<PAGE> 56
PNC BANK, OHIO, NATIONAL
ASSOCIATION,
on its own behalf as Lender and as
Documentation Agent,
By:
--------------------------------
Print Name:
------------------------
Title:
-----------------------------
NATIONSBANK, N.A.
AS LENDER
By:
--------------------------------
Print Name:
------------------------
Title:
-----------------------------
WACHOVIA BANK OF GEORGIA, N.A.
AS LENDER
By: /s/ Michael Ripps
--------------------------------
Print Name: Michael Ripps
------------------------
Title: Vice President
-----------------------------
ABN AMRO BANK N.V.
AS LENDER
By:
-------------------------------
Print Name:
-----------------------
Title:
----------------------------
49
<PAGE> 57
PNC BANK, OHIO, NATIONAL
ASSOCIATION,
on its own behalf as Lender and as
Documentation Agent,
By:
------------------------------------------------
Print Name:
----------------------------------------
Title:
---------------------------------------------
NATIONSBANK, N.A.
AS LENDER
By:
------------------------------------------------
Print Name:
----------------------------------------
Title:
---------------------------------------------
WACHOVIA BANK OF GEORGIA, N.A.
AS LENDER
By:
------------------------------------------------
Print Name:
----------------------------------------
Title:
---------------------------------------------
ABN AMRO BANK N.V.
AS LENDER
By: /s/ J. Gregory Selby /s/ Katheryn C. Toth
------------------------------------------------
Print Name: J. Gregory Selby Katheryn C. Toth
----------------------------------------
Title: VP GYP
---------------------------------------------
49
<PAGE> 58
BANK ONE, N.A.
AS LENDER
By: /s/ Douglas H. Klamfoth
--------------------------------
Print Name: Douglas H. Klamfoth
------------------------
Title: Vice President
-----------------------------
50
<PAGE> 59
EXHIBIT A
DESIGNATION AGREEMENT
51
<PAGE> 1
EXHIBIT 4(f)
------------
Agreement to furnish instruments defining rights of holders of long-term debt
<PAGE> 2
[WORTHINGTON INDUSTRIES LETTERHEAD]
August 26, 1997
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Worthington Industries, Inc. - Form 10-K
Gentlemen:
Worthington Industries, Inc., a Delaware corporation, is today
executing a Form 10-K, Annual Report.
Pursuant to the instructions relating to the Exhibits, Worthington
Industries, Inc. hereby agrees to furnish to the Commission, upon request,
copies of instruments and agreements defining the rights of holders of its
long-term debt and of the long-term debt of its consolidated subsidiaries.
Very Truly yours,
WORTHINGTON INDUSTRIES, INC.
/s/ Donal H. Malenick
Donal H. Malenick
President
Enclosures
<PAGE> 1
Exhibit 10(e)
1997 LONG-TERM INCENTIVE PLAN
SECTION 1. PURPOSE. The purposes of the Worthington Industries, Inc. 1997
Long-Term Incentive Plan (the "Plan") are to encourage selected key employees of
Worthington Industries, Inc. and its subsidiaries (collectively the "Company")
to acquire a proprietary and vested interest in the growth and performance of
the Company, to generate an increased incentive to contribute to the Company's
future success and prosperity, thus enhancing the value of the Company for the
benefit of share owners, and to enhance the ability of the Company to attract
and retain individuals of exceptional talent upon whom, in large measure, the
sustained progress, growth and profitability of the Company depends.
SECTION 2. ADMINISTRATION. The Plan shall be administered by the
Committee. The Committee shall have full power and authority, subject to such
orders or resolutions not inconsistent with the provisions of the Plan as may
from time to time be adopted by the Board, to: (i) select the Employees of the
Company to whom Awards may from time to time be granted hereunder; (ii)
determine the type or types of Award to be granted to each Participant
hereunder; (iii) determine the number of Shares to be covered by each Award
granted hereunder; (iv) determine the terms and conditions, not inconsistent
with the provision of the Plan, of any Award granted hereunder; (v) determine
whether, to what extent and under what circumstances Awards may be settled in
cash, Shares or other property or canceled or suspended; (vi) determine whether,
to what extent and under what circumstances cash, Shares, and other property and
other amounts payable with respect to an Award under the Plan shall be deferred
either automatically or at the election of the Participant; (vii) interpret and
administer the Plan and any instrument or agreement entered into under the Plan;
(viii) establish such rules and regulations and appoint such agents as it shall
deem appropriate for the proper administration of the Plan; and (ix) make any
other determination and take any other action that the Committee deems necessary
or desirable for administration of the Plan. Decisions of the Committee shall be
final, conclusive and binding upon all persons, including the Company, any
Participant, any shareholder, and any employee of the Company. A majority of the
members of the Committee may determine its actions and fix the time and place of
its meetings.
SECTION 3. DURATION OF, AND SHARES SUBJECT TO PLAN.
(a) Term. The Plan shall remain in effect until terminated by the Board,
provided, however, that no Incentive Stock Option may be granted more than ten
(10) years after the Effective Date of the Plan.
(b) Shares Subject to the Plan. The maximum number of Shares in respect of
which Awards may be granted under the Plan, subject to adjustment as provided in
Section 3(c) of the Plan, is 4,500,000 Shares. Notwithstanding the foregoing, in
no event shall more than 1,000,000 Shares be cumulatively available for Awards
of Incentive Stock Options under the Plan and provided further that no
Participant may be granted Awards in any one calendar year with respect to more
than two hundred thousand (200,000) Shares.
For the purpose of computing the total number of Shares available for
Awards under the Plan, there shall be counted against the foregoing limitations
the number of Shares subject to issuance upon exercise or settlement of Award as
of the dates on which such Awards are granted. Shares which were previously
subject to Awards shall again be available for Awards under the Plan if any such
Awards are forfeited, terminated, expire unexercised, settled in cash or
property other than Shares or exchanged for other Awards (to the extent of such
forfeiture, termination or expiration of such Awards), or if the Shares subject
thereto can otherwise no longer be issued. Further, any Shares which are used as
full or partial payment to the Company by a Participant of the purchase price of
Shares upon exercise of a Stock Option shall again be available for Awards under
the Plan.
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<PAGE> 2
Shares which may be issued under the Plan may be either authorized and
unissued shares or issued shares which have been reacquired by the Company. No
fractional shares shall be issued under the Plan.
(c) Changes in Shares. In the event of any merger, reorganization,
consolidation, recapitalization, stock dividend, stock split, reverse stock
split, spin off, exchange of shares or similar transaction or other change in
corporate structure or capitalization affecting the Shares or the price thereof,
such adjustments and other substitutions shall be made to the Plan and to Awards
as the Committee in its sole discretion deems equitable or appropriate,
including without limitation such adjustments in the aggregate number, class and
kind of Shares which may be delivered under the Plan, in the aggregate or to any
one Participant, in the number, class, kind and option or exercise price of
Shares subject to outstanding Options, Stock Appreciation Rights or other Awards
granted under the Plan, and in the number, class and kind of Shares subject to,
Awards granted under the Plan (including, if the Committee deems appropriate,
the substitution of similar options to purchase the shares of, or other awards
denominated in the shares of, another company) as the Committee may determine to
be appropriate in its sole discretion, provided that the number of Shares or
other securities subject to any Award shall always be a whole number.
SECTION 4. ELIGIBILITY. Any Employee (excluding any member of the
Committee) shall be eligible to be selected as a Participant.
SECTION 5. STOCK OPTIONS. Options may be granted hereunder to
Participants either alone or in addition to other Awards granted under the Plan.
Any Option granted under the Plan shall be evidenced by an Award Agreement in
such form as the Committee may from time to time approve. Any such Option shall
be subject to the following terms and conditions and to such additional terms
and conditions, not inconsistent with the provisions of the Plan, as the
Committee shall deem desirable. The provisions of Options need not be the same
with respect to each recipient.
(a) Option Price. The purchase price per Share purchasable under an Option
shall be determined by the Committee in its sole discretion; provided that such
purchase price shall not be less than the Fair Market Value of the Share on the
date of the grant of the Option.
(b) Option Period. The term of each Option shall be fixed by the Committee
in its sole discretion; provided that no Incentive Stock Option shall be
exercisable after the expiration of ten years from the date the Option is
granted.
(c) Exercisability. Options shall be exercisable at such time or times as
determined by the Committee at or subsequent to grant. Unless other determined
by the Committee at or subsequent to grant, no Incentive Stock Option shall be
exercisable during the year ending on the day before the first anniversary date
of the granting of the Incentive Stock Option.
(d) Method of Exercise. Subject to the other provisions of the Plan and
any applicable Award Agreement, any Option may be exercised by the Participant
in whole or in part at such time or times, and the Participant may make payment
of the option price in such form or forms, including, without limitation,
payment by delivery of cash, Shares or other consideration (including, where
permitted by law and the Committee, Awards) having a Fair Market Value on the
exercise date equal to the total option price, or by any combination of cash,
Shares and other consideration as the Committee may specify in the applicable
Award Agreement.
(e) Incentive Stock Options. In accordance with rules and procedures
established by the Committee, the aggregate Fair Market Value (determined as of
the time of grant) of the Shares with respect to which Incentive Stock Options
held by any Participant which are exercisable for the first time by such
Participant during any calendar year under the Plan (and under any other benefit
plans of the Company or of any parent or subsidiary corporation of the Company)
shall not exceed $100,000 or, if different, the maximum limitation in effect at
the time of grant under
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<PAGE> 3
Section 422 of the Code, or any successor provision, and any regulations
promulgated thereunder. The terms of any Incentive Stock Option granted
hereunder shall comply in all respects with the provisions of Section 422 of the
Code, or any successor provision, and any regulations promulgated thereunder.
SECTION 6. STOCK APPRECIATION RIGHTS. Stock Appreciation Rights may be
granted hereunder to Participants either alone or in addition to other Awards
granted under the Plan and may, but need not, relate to a specific Option
granted under Section 5. The provisions of Stock Appreciation Rights need not be
the same with respect to each recipient. Any Stock Appreciation Right related to
a Nonstatutory Stock Option may be granted at any time thereafter before
exercise or expiration of such Option. Any Stock Appreciation Right related to
an Incentive Stock Option must be granted at the same time such Option is
granted. In the case of any Stock Appreciation Right related to any Option, the
Stock Appreciation Right or applicable portion thereof shall terminate and no
longer be exercisable upon the termination or exercise of the related Option,
except that a Stock Appreciation Right granted with respect to less than the
full number of Shares covered by a related Option shall not be reduced until the
exercise or termination of the related Option exceeds the number of shares not
covered by the Stock Appreciation Right. Any Option related to any Stock
Appreciation Right shall no longer be exercisable to the extent the related
Stock Appreciation Right has been exercised. The Committee may impose such
conditions or restrictions on the exercise of any Stock Appreciation Right as it
shall deem appropriate.
SECTION 7. RESTRICTED STOCK.
(a) Issuance. Restricted Stock Awards may be issued hereunder to
Participants either alone or in addition to other Awards granted under the Plan,
for such consideration as determined by the Committee in its sole discretion and
the Committee may issue such Awards for no consideration or for such minimum
consideration as may be required by applicable law. Restricted Stock Awards
shall contain such limitations, terms and conditions and other provisions as
determined by the Committee in its sole discretion. The provisions of Restricted
Stock Awards need not be the same with respect to each recipient.
(b) Registration. Any Restricted Stock issued hereunder may be evidenced
in such manner as the Committee in its sole discretion shall deem appropriate,
including, without limitation, book-entry registration or issuance of a stock
certificate or certificates. In the event any stock certificate is issued in
respect of shares of Restricted Stock awarded under the Plan, such certificate
shall be registered in the name of the Participant, and shall bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such Award.
(c) Forfeiture. Except as otherwise determined by the Committee at the
time of grant, upon termination of employment for any reason during the
restriction period, all shares of Restricted Stock still subject to restriction
shall be forfeited by the Participant and reacquired by the Company, for the
purchase price paid by the Participant or such other consideration (or no
consideration) as set by the Committee as part of the terms and conditions of
the Award, provided that except as provided in Section 11, in the event of a
Participant's retirement, permanent disability, other termination of employment
or death, or in cases of special circumstances, the Committee may, in its sole
discretion, waive in whole or in part any or all remaining restrictions with
respect to such Participant's shares of Restricted Stock. Unrestricted Shares,
evidenced in such manner as the Committee shall deem appropriate, shall be
issued to the grantee after the period of forfeiture, as determined or modified
by the Committee, shall expire.
SECTION 8. PERFORMANCE AWARDS. Performance Awards may be issued hereunder
to Participants, either alone or in addition to other Awards granted under the
Plan, for such consideration as determined by the Committee, in its sole
discretion, and the Committee may issue such Awards for no consideration or for
such minimum consideration as may be required by applicable law. The performance
criteria to be achieved during any Performance Period, the length of the
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<PAGE> 4
Performance Period and the other terms and conditions and provisions with
respect to the Award shall be determined by the Committee upon the grant of each
Performance Award. Except as provided in Section 10, Performance Awards will be
distributed only after the end of the relevant Performance Period. Performance
Awards may be paid in cash, Shares, other property or any combination thereof,
in the sole discretion of the Committee at the time of payment. The performance
levels to be achieved for each Performance Period and the amount of the Award to
be distributed shall be conclusively determined by the Committee. Performance
Awards may be paid in a lump sum or in installments following the close of the
Performance Period. The maximum value of the property, including cash, that may
be paid or distributed to any Participant pursuant to a grant of Performance
Units made in any one calendar year shall be $2,500,000. The provisions of
Performance Awards need not be the same with respect to each recipient.
SECTION 9. OTHER STOCK UNIT AWARDS.
(a) Stock and Administration. Other Awards of Shares and other Awards that
are valued in whole or in part by reference to, or are otherwise based on,
Shares or other property ("Other Stock Unit Awards") may be granted hereunder to
Participants, either alone or in addition to other Awards granted under the
Plan. Other Stock Unit Awards may be paid in Shares, cash or any other form of
property as the Committee shall determine.
(b) Terms and Conditions. Other Stock Unit Awards granted under this
Section 9 may be issued for such consideration as determined by the Committee in
its sole discretion, and the Committee may issue such Awards for no
consideration or for such minimum consideration as may be required by applicable
law. Shares (including securities convertible into Shares) purchased pursuant to
a purchase right awarded under this Section 9 shall be purchased for such
consideration as the Committee shall in its sole discretion determine, which
shall not be less than the Fair Market Value of such Shares or other securities
as of the date such purchase right is awarded. The terms and conditions and
other provisions with respect to Other Stock Unit Awards shall be determined by
the Committee. The provisions of Other Stock Unit Awards need not be the same
with respect to each recipient.
SECTION 10. CHANGE IN CONTROL PROVISIONS.
(a) Impact of Event. Notwithstanding any other provision of the Plan to
the contrary, but subject to the provisions of Section 10(d), in the event of a
Change in Control:
(i) Any Options and Stock Appreciation Rights outstanding as of the
date such Change in Control is determined to have occurred, and which are
not then exercisable and vested, shall become fully exercisable and vested
to the full extent of the original grant; provided, that in the case of a
Participant holding a Stock Appreciation Right who is actually subject to
Section 16(b) of the Exchange Act, such Stock Appreciation Right shall not
become fully vested and exercisable unless it shall have been outstanding
for at least six months at the date such Change in Control is determined to
have occurred.
(ii) The restrictions and deferral limitations applicable to any
Restricted Stock shall lapse, and such Restricted Stock shall become free
of all restrictions and limitations and become fully vested and
transferable to the full extent of the original grant.
(iii) All Performance Awards shall be considered to be earned and
payable in full, and any deferral or other restriction shall lapse and such
Performance Awards shall be immediately settled or distributed.
(iv) The restrictions and deferral limitations and other conditions
applicable to any Other Stock Unit Awards or any other Awards shall lapse,
and such Other Stock Unit Awards or such other Awards shall become free of
all restrictions, limitations or conditions and become fully vested and
transferable to the full extent of the original grant.
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<PAGE> 5
(b) Change in Control Cash-Out. Notwithstanding any other provision of the
Plan, during the 60-day period from and after a Change in Control (the "Exercise
Period"), if the Committee shall determine at, or at any time after the time of
grant, a Participant holding an Option shall have the right, whether or not the
Option is fully exercisable and in lieu of the payment of the Purchase Price for
the Shares being purchased under the Option and by giving notice to the Company,
to elect (within the Exercise Period) to surrender all or part of the Option to
the Company and to receive cash, within 30 days of such notice, in an amount
equal to the amount by which the Change in Control Price per Share on the date
of such election shall exceed the purchase price per Share under the Option (the
"Spread") multiplied by the number of Shares granted under the Option as to
which the right granted under this Section 10(b) shall have been exercised;
provided, that if the Change in Control is within six months of the date of
grant of a particular Option held by a Participant who is an officer or director
of the Company and is subject to Section 16(b) of the Exchange Act, no such
election shall be made by such Participant with respect to such Option prior to
six months from the date of grant. However, if the end of such 60-day period
from and after a Change-in-Control is within six months of the date of grant of
an Option held by a Participant who is an officer or director of the Company and
is subject to Section 16(b) of the Exchange Act, such Option (unless theretofore
exercised) shall be canceled in exchange for a cash payment to the Participant,
effected on the day which is six months and one day after the date of grant of
such Option, equal to the Spread multiplied by the number of Shares granted
under the Option.
(c) Pooling Transaction. Notwithstanding any other provision of this Plan,
if any right granted pursuant to this Plan would make a Change in Control
transaction ineligible for pooling-of-interests accounting under APB No. 16 that
(after giving effect to any other actions taken to cause such transaction to be
eligible for such pooling-of-interests accounting treatment) but for the nature
of such grant would otherwise be eligible for such accounting treatment, the
Committee shall have the ability to substitute for the cash payable pursuant to
such right Shares with a Fair Market Value equal to the cash that would
otherwise be payable pursuant thereto.
(d) Provisions not Applicable. The provisions of this Section 10 shall not
apply (i) if the Committee determines at the time of grant that such Section
shall not apply or (ii) to any Change in Control when expressly provided
otherwise by a three-fourths vote of the Whole Board, but only if a majority of
the members of the Board then in office and acting upon such matters shall be
Continuing Directors.
SECTION 11. CODE SECTION 162(M) PROVISIONS.
(a) Applicability. Notwithstanding any other provision of this Plan, if
the Committee determines at the time Restricted Stock, a Performance Award or an
Other Stock Unit Award is granted to a Participant that such Participant is, or
is likely to be at the time he or she recognizes income for federal income tax
purposes in connection with such Award a Covered Employee then the Committee may
provide that this Section 11 is applicable to such Award.
(b) Performance Goals. If an Award is subject to this Section 11, then the
lapsing of restrictions thereon and the distribution of cash, Shares or other
property pursuant thereto, as applicable, shall be subject to the achievement of
one or more objective performance goals established by the Committee, which
shall be based on the attainment of one or any combination of the following:
specified levels of earnings per share from continuing operations, operating
income, revenues, gross margin, return on operating assets, return on equity,
economic value added, stock price appreciation, total stockholder return
(measured in terms of stock price appreciation and dividend growth), or cost
control, of the Company or an Affiliate or division of the Company for or within
which the Participant is primarily employed, or such other measures as the
Committee may determine to comply with the requirements of Section 162(m) of the
Code and the regulations thereunder. Such Performance Goals also may be based
upon the attaining specified levels of performance under one or more of the
measures described above relative to the
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<PAGE> 6
performance of other corporations. Such performance goals shall be set by the
Committee within the time period prescribed by, and shall otherwise comply with
the requirements of, Section 162(m) of the Code and the regulations thereunder.
(c) Limitations on Adjustments. Notwithstanding any provision of this Plan
other than Section 10, with respect to any Award that is subject to this Section
11, the Committee may not adjust upwards the amount payable pursuant to such
Award, nor may it waive the achievement of the applicable performance goals
except in the case of the death or disability of the Participant.
(d) Other Restrictions. The Committee shall have the power to impose such
other restrictions on Awards subject to this Section 11 as it may deem necessary
or appropriate to ensure that such Awards satisfy all requirements for
"performance-based compensation" within the meaning of Section 162 (m)(4)(B) of
the Code or any successor thereto.
SECTION 12. AMENDMENTS AND TERMINATIONS. The Board may amend, alter or
discontinue the Plan, but no amendment, alteration, or discontinuation shall be
made that would impair the rights of an Optionee or Participant under an Award
theretofore granted, without the optionee's or Participant's consent, or that
without the approval of the Stockholders would:
(a) except as is provided in Section 3(c) of the Plan, increase the total
number of shares reserved for the purpose of the Plan; or
(b) change the employees or class of employees eligible to participate in
the Plan.
The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any Participant without his consent.
SECTION 13. GENERAL PROVISIONS.
(a) No Assignment. Unless the Committee determines otherwise at the time
the Award is granted, no Award, and no Shares subject to Awards described in
Section 9 which have not been issued or as to which any applicable restriction,
performance or deferral period has not lapsed, may be sold, assigned,
transferred, pledged or otherwise encumbered, except by will or by the laws of
descent and distribution; provided that, if so determined by the Committee, a
Participant may, in the manner established by the Committee, designate a
beneficiary to exercise the rights of the Participant with respect to any Award
upon the death of the Participant. Each Award shall be exercisable, during the
Participant's lifetime, only by the Participant or, if permissible under
applicable law, by the Participant's guardian or legal representative.
(b) Term of Awards. The term of each Award shall be for such period of
months or years from the date of its grant as may be determined by the
Committee; provided that in no event shall the term of any Incentive Stock
Option or any Stock Appreciation Right related to any Incentive Stock Option
exceed a period of ten (10) years from the date of its grant.
(c) No Right to Award. No Employee or Participant shall have any claim to
be granted any Award under the Plan and there is no obligation for uniformity of
treatment of Employees or Participants under the Plan.
(d) Written Agreement Required. The prospective recipient of any Award
under the Plan shall not, with respect to such Award, be deemed to have become a
Participant, or to have any rights with respect to such Award, until and unless
such recipient shall have executed an agreement or other instrument evidencing
the Award and delivered a fully executed copy thereof to the Company, and
otherwise complied with the then applicable terms and conditions.
(e) Adjustments. Except as provided in Section 11, the Committee shall be
authorized to make adjustments in Performance Award criteria or in the terms and
conditions of other Awards in recognition of unusual or nonrecurring events
affecting the Company or its financial statements or changes in applicable laws,
regulations or accounting principles. The Committee may correct
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<PAGE> 7
any defect, supply any omission or reconcile any inconsistency in the Plan or
any Award in the manner and to the extent it shall deem desirable to carry it
into effect. In the event the Company shall assume outstanding employee benefit
awards or the right or obligation to make future awards in connection with the
acquisition of another corporation or business entity, the Committee may, in its
discretion, make such adjustments in the terms of Awards under the Plan as it
shall deem appropriate.
(f) Cancellations and Forfeitures. The Committee shall have full power and
authority to determine whether, to what extent, and under what circumstances,
any Award shall be canceled or suspended. In particular, but without limitation,
all outstanding Awards to any Participant shall be canceled if the Participant,
without the consent of the Committee, while employed by the Company or after
termination of such employment becomes associated with, employed by, renders
services to, or owns any interest in (other than any nonsubstantial interest, as
determined by the Committee), any business that is in competition with the
Company or with any business in which the Company has a substantial interest as
determined by the Committee.
In the event a Participant terminates his or her employment with the
Company for any reason whatsoever, and within eighteen (18) months after the
date thereof becomes associated with, employed by, renders services to, or owns
any interest in (other than any nonsubstantial interest, as determined by the
Committee), any business that is in competition with the Company or with any
business in which the Company has a substantial interest as determined by the
Committee, the Committee, in its sole discretion, may require such Participant
to return to the Company the economic value of any Award which is realized or
obtained (measured at the date of exercise) by such Participant at any time
during the period beginning on that date which is six months prior to the date
of such Participant's termination of employment with the Company.
(g) Securities Laws Restrictions. No Shares shall be issued under the Plan
unless counsel for the Company shall be satisfied that such issuance will be in
compliance with applicable Federal and state securities laws. All certificates
for Shares delivered under the Plan pursuant to any Award shall be subject to
such stock-transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations, and other requirements of the Securities
and Exchange Commission, any stock exchange upon which the Shares are then
listed, and any applicable Federal or state securities law, and the Committee
may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
(h) Deferrals. The Committee shall be authorized to establish procedures
pursuant to which the payment of any Award may be deferred. Subject to the
provisions of this Plan and any Award Agreement, the recipient of an Award
(including, without limitation, any deferred Award) may, if so determined by the
Committee, be entitled to receive, currently or on a deferred basis, interest or
dividends, or interest or dividend equivalents, with respect to the number of
shares covered by the Award, as determined by the Committee, in its sole
discretion, and the Committee may provide that such amounts (if any) shall be
deemed to have been reinvested in additional Shares or otherwise reinvested.
(i) Payment Requirements. Except as otherwise required in any applicable
Award Agreement or by the terms of the Plan, recipients of Awards under the Plan
shall not be required to make any payment or provide consideration other than
the rendering of services.
(j) Withholding. The Company shall be authorized to withhold from any
Award granted or payment due under the Plan the amount of withholding taxes due
in respect of an Award or payment hereunder and to take such other action as may
be necessary in the opinion of the Company to satisfy all obligations for the
payment of such taxes. The Committee shall be authorized to establish procedures
for election by Participants to satisfy such withholding taxes by delivery of,
or directing the Company to retain Shares.
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<PAGE> 8
(k) Other Arrangements. Nothing contained in this Plan shall prevent the
Board from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is otherwise required, and such
arrangements may be either generally applicable or applicable only in specific
cases.
(l) Applicable Law. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Delaware and applicable Federal law.
(m) Invalid Provisions. If any provision of this Plan is or becomes or is
deemed invalid, illegal or unenforceable in any jurisdiction, or would
disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan, it
shall be stricken and the remainder of the Plan shall remain in full force and
effect.
(n) Foreign Nationals. Awards may be granted to Employees who are foreign
nationals or employed outside the United States, or both, on such terms and
conditions different from those specified in the Plan as may, in the judgment of
the Committee, be necessary or desirable in order to recognize differences in
local law or tax policy. The Committee also may impose conditions on the
exercise or vesting of Awards in order to minimize the Company's obligation with
respect to tax equalization for Employees on assignments outside their home
country.
(o) No Right to Employment. Neither the adoption of the Plan nor the
granting of any Award shall confer upon any employee of the Company any right to
continued employment with the Company, nor shall it interfere in any way with
the right of the Company to terminate the employment of any of its employees at
any time, with or without cause.
(p) Treatment as Compensation for Other Purposes. Payments and other
benefits received by a Participant under an Award made pursuant to the Plan
shall not be deemed a part of a Participant's regular, recurring compensation
for purposes of the termination indemnity or severance pay law of any country
and shall not be included in, nor have any effect on, the determination of
benefits under any other employee benefit plan or similar arrangement provided
by the Company unless expressly so provided by such other plan or arrangements,
or except where the Committee expressly determines that an Award or portion of
an Award should be included to accurately reflect competitive compensation
practices or to recognize that an Award has been made in lieu of a portion of
competitive annual cash compensation. Awards under the Plan may be made in
combination with or in tandem with, or as alternatives to, grants, awards or
payments under any other Company plans. The Plan notwithstanding, the Company
may adopt such other compensation programs and additional compensation
arrangements as it deems necessary to attract, retain and reward employees for
their service with the Company.
Section 14. EFFECTIVE DATE OF THE PLAN. The Plan shall be effective on
the Effective Date.
Section 15. DEFINITIONS. As used in the Plan, the following terms shall
have the meanings set forth below:
(a) "Award" shall mean any Option, Stock Appreciation Right,
Restricted Stock Award, Performance Share, Performance Unit, Dividend
Equivalent, Other Stock Unit Award, or any other right, interest, or option
relating to Shares granted pursuant to the provisions of the Plan.
(b) "Award Agreement" shall mean any written agreement, contract, or
other instrument or document evidencing any Award granted by the Committee
hereunder.
(c) "Board" shall mean the Board of Directors of Worthington
Industries, Inc.
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<PAGE> 9
(d) "Change in Control" shall mean the following:
(i) A Change in Control shall have occurred when any Acquiring
Person (other than (i) Worthington or any Worthington Subsidiary, (ii)
any employee benefit plan of the Company or any trustee of or fiduciary
with respect to any such plan when acting in such capacity, or (iii) any
person who, on the Effective Date of the Plan, is an Affiliate of this
Company and owning in excess of ten percent (10%) of the outstanding
shares of the Company and the respective successors, executors, legal
representatives, heirs and legal assigns of such person), alone or
together with its Affiliates and Associates, has acquired or obtained
the right to acquire the beneficial ownership of twenty-five percent
(25%) or more of the Shares then outstanding.
(ii) "Acquiring Person" means any person (any individual, firm,
corporation or other entity) who or which, together with all Affiliates
and Associates, has acquired or obtained the right to acquire the
beneficial ownership of twenty-five percent (25%) or more of the Shares
then outstanding.
(iii) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(iv) "Continuing Director" means any person who was a member of the
Board on the Effective Date of the Plan or thereafter elected by the
shareholders or appointed by the Board prior to the date as of which the
acquiring Person became a Substantial Shareholder (as such term is
defined in Article Six of the Company's Certificate of Incorporation)
or, a person designated (before his initial election or employment as a
director) as a Continuing Director by three-fourths of the Whole Board,
but only if a majority of the Whole Board shall then consist of
Continuing Directors.
(v) "Whole Board" means the total number of directors which the
Company would have if there were no vacancies.
(e) "Change in Control Price Per Share" shall mean the highest price
per Share (i) paid by the Acquiring Person in connection with the
transactions that results in the Change in Control; or (ii) paid or offered
by the Acquiring Person, to acquire other Shares in excess of 1% of the
outstanding shares, at any time after the change in control and before the
Participant exercises his election under Section 10(b).
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.
(g) "Committee" shall mean the Compensation and Stock Option Committee
of the Board, composed of no fewer than three directors, each of whom is a
Disinterested Person and an "outside director" within the meaning of
Section 162(m) of the Code.
(h) "Company" shall mean Worthington Industries, Inc., a Delaware
corporation, and its subsidiaries, direct or indirect. Subsidiaries of the
Company shall include any entity of which the Company owns 50% or more.
(i) "Covered Employee" shall mean a "covered employee" within the
meaning of Section 162(m)(3) of the Code.
(j) "Disinterested Person" shall have the meaning set forth in Rule
16b-3(d)(3) promulgated by the Securities and Exchange Commission under the
Exchange Act or any successor definition adopted by the Securities and
Exchange Commission.
(k) "Dividend Equivalent" shall mean any right granted pursuant to
Section 14(h) hereof.
(l) "Effective Date" shall mean September 18, 1997.
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<PAGE> 10
(m) "Employee" shall mean any salaried employee of the Company. Unless
otherwise determined by the Committee in its sole discretion, for purposes
of the Plan, an Employee shall be considered to have terminated employment
and to have ceased to be an Employee if his or her employer ceases to be a
subsidiary of Worthington, even if he or she continues to be employed by
such employer.
(n) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto.
(o) "Fair Market Value" shall mean, with respect to any property, the
fair market value of such property determined pursuant to the regulations
issued under Section 422 of the Code or by such other methods or procedures
as shall be established from time to time by the Committee.
(p) "Incentive Stock Option" shall mean an Option granted under
Section 5 hereof that is intended to meet the requirements of Section 422
of the Code or any successor provision thereto.
(q) "Nonstatutory Stock Option" shall mean an Option granted under
Section 5 hereof that is not intended to be an Incentive Stock Option.
(r) "Option" shall mean any right granted to a Participant under the
Plan allowing such Participant to purchase Shares at such price or prices
and during such period or periods as the Committee shall determine.
(s) "Other Stock Unit Award" shall mean any right granted to a
Participant by the Committee pursuant to Section 9 hereof.
(t) "Participant" shall mean an Employee who is selected by the
Committee to receive an Award under the Plan.
(u) "Performance Award" shall mean any Award of Performance Shares or
Performance Units pursuant to Section 8 hereof.
(v) "Performance Period" shall mean that period established by the
Committee at the time any Performance Award is granted or at any time
thereafter during which any performance goal specified by the Committee
with respect to such Award are to be measured.
(w) "Performance Share" shall mean any grant pursuant to Section 8
hereof of a unit valued by reference to a designated number of Shares,
which value may be paid to the Participant by delivery of such property as
the Committee shall determine, including, without limitation, cash, Shares,
or any combination thereof, upon achievement of such performance goals
during the Performance Period as the Committee shall establish at the time
of such grant or thereafter.
(x) "Performance Unit" shall mean any grant pursuant to Section 8
hereof of a unit valued by reference to a designated amount of property
other than Shares, which value may be paid to the Participant by delivery
of such property as the Committee shall determine, including, without
limitation, cash, Shares, or any combination thereof, upon achievement of
such performance goals during the Performance Period as the Committee shall
establish at the time of such grant or thereafter.
(y) "Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization,
limited liability company, other entity or government or political
subdivision thereof.
(z) "Restricted Stock" shall mean any Share issued with the
restriction that the holder may not sell, transfer, pledge, or assign such
Share and with such other restrictions as the Committee, in its sole
discretion, may impose (including, without limitation, any restriction
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<PAGE> 11
on the right to vote such Share, and the right to receive any cash
dividends), which restrictions may lapse separately or in combination at
such time or times, in installments or otherwise, as the Committee may deem
appropriate.
(aa) "Restricted Stock Award" shall mean an award of Restricted Stock
under Section 7 hereof.
(bb) "Shares" shall mean the shares of common stock, $.01 par value,
of the Company and such other securities of the Company as the Committee
may from time to time determine.
(cc) "Stock Appreciation Right" shall mean any right granted to a
Participant pursuant to Section 6 hereof to receive, upon exercise by the
Participant, the excess of (i) the Fair Market Value of one Share on the
date of exercise or, if the Committee shall so determine in the case of any
such right other than one related to any Incentive Stock Option, at any
time during a specified period before the date of exercise over (ii) the
grant price of the right on the date of grant, or if granted in connection
with an outstanding Option on the date of grant of the related Option, as
specified by the Committee in its sole discretion, which, other than in the
case of substitute awards, shall not be less than the Fair Market Value of
one Share on such date of grant of the right or the related Option, as the
case may be. Any payment by the Company in respect of such right may be
made in cash, Shares, other property, or any combination thereof, as the
Committee, in its sole discretion, shall determine.
(dd) "Worthington" shall mean Worthington Industries, Inc., a Delaware
corporation.
B-11
<PAGE> 1
Exhibit 13
WORTHINGTON
INDUSTRIES,
INC.
1997
ANNUAL REPORT
TO SHAREHOLDERS
I-1
<PAGE> 2
WORTHINGTON INDUSTRIES, INC.
1997 ANNUAL REPORT
CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
A Message to Our Shareholders......................................................... I-3
The Company........................................................................... I-3
Stock Trading, Price and Dividend Information......................................... I-4
Five Year Selected Financial Data..................................................... I-5
Management's Discussion and Analysis.................................................. I-6
Consolidated Financial Statements
Consolidated Balance Sheets -- May 31, 1997 and 1996................................ I-10
Consolidated Statements of Earnings -- Years ended May 31, 1997, 1996 and 1995...... I-11
Consolidated Statements of Shareholders' Equity -- Years ended May 31, 1997, 1996
and 1995......................................................................... I-12
Consolidated Statements of Cash Flows -- Years ended May 31, 1997, 1996 and 1995.... I-13
Industry Segment Data -- Years ended May 31, 1997, 1996 and 1995.................... I-14
Notes to Consolidated Financial Statements............................................ I-15
Report of Management.................................................................. I-26
Report of Independent Auditors........................................................ I-27
Company Locations..................................................................... I-28
Officers & Directors.................................................................. I-29
</TABLE>
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<PAGE> 3
A MESSAGE TO OUR SHAREHOLDERS
This 1997 Annual Report contains the Worthington Industries, Inc. audited
financial statements and all of the information that regulations of the
Securities and Exchange Commission (the "SEC") require to be presented in an
Annual Report to Shareholders. For legal purposes this is the Worthington
Industries, Inc. 1997 Annual Report to Shareholders. Although attached to the
Proxy Statement, this is not part of the Proxy Statement, is not deemed to be
soliciting material, and is not deemed to be filed with the SEC except to the
extent that it is expressly incorporated by reference in a document filed with
the SEC.
We invite our shareholders to also consider our 1997 Summary Annual Report,
which accompanies the Proxy Statement. That Report presents information
concerning the business and financial results of the Company in a format of
detail we believe most of our shareholders will find useful and informative.
Shareholders who would like to receive more detailed information may request our
Annual Report on Form 10-K.
THE WORTHINGTON INDUSTRIES, INC. ANNUAL REPORT ON FORM 10-K, AS FILED WITH
THE SEC, WILL BE PROVIDED TO ANY SHAREHOLDER, WITHOUT CHARGE, UPON WRITTEN
REQUEST TO THE WORTHINGTON INDUSTRIES, INC. INVESTOR RELATIONS DEPARTMENT, 1205
DEARBORN DRIVE, COLUMBUS, OHIO 43085.
THE COMPANY
Worthington Industries, Inc. (together with its subsidiaries, the
"Company") is a leading manufacturer of metal and plastic products. It conducts
its business through three segments: processed steel products, custom products,
and cast products. The Company's net sales for the fiscal year ending May 31,
1997 were approximately $1.9 billion.
PROCESSED STEEL PRODUCTS SEGMENT
STEEL PROCESSING. Worthington Steel is an intermediate processor of flat
rolled steel, processing approximately 3 million tons of steel per year. Its
processing capabilities include pickling, slitting, rolling, annealing, edging,
tension leveling, cut-to-length, configured blanking, laser blank welding,
painting, nickel plating, and hot dipped galvanizing. Worthington Steel has
approximately 1700 customers principally in the automotive, automotive supply,
appliance, electrical, communications, construction, office furniture, office
equipment, agricultural, machinery and leisure time industries.
PRESSURE CYLINDERS. Worthington Cylinders produces portable low pressure
liquid propane cylinders and refrigerant gas cylinders. Refrigerant gas
cylinders are used primarily by major refrigerant gas producers to contain
refrigerant gases for use in charging residential, commercial, automotive and
other air conditioning and refrigeration systems. Reusable steel and aluminum
liquid propane gas cylinders are sold to manufacturers of barbecue grills,
propane and gas grill distributors, mass merchandisers, and manufacturers and
users of material handling, heating, cooking and camping equipment. The Company
also produces recycle and recovery tanks for refrigerant gases, helium balloon
kits, and high pressure cylinders for acetylene, medical, industrial, halon and
electronic gases. Worthington Cylinders has over 2000 customers.
METAL FRAMING. Dietrich Industries is the nation's leading producer of
metal framing products for the commercial and residential building industries.
Major customers include building products distributors, commercial and
residential contractors, and gypsum producers.
AFTERMARKET BODY PANELS. The Gerstenslager Company is a leading independent
supplier of automotive aftermarket body panels in the United States. Major
customers include domestic and transplant automotive and heavy duty truck
manufacturers.
I-3
<PAGE> 4
CUSTOM PRODUCTS SEGMENT
CUSTOM PLASTICS. Worthington Custom Plastics is one of the nation's ten
largest injection molded plastic parts suppliers. Processing capabilities
include painting, foam-in-place molding, vacuum forming, intricate assembly,
silk screening, vacuum metalizing, hot stamping, thermoforming, roll foiling and
appliques. The Company sells to automobile manufacturers and their suppliers,
and to manufacturers of appliances, lawn and garden products, recreational
products, business equipment, audio equipment, furniture, and other items.
PRECISION METALS. Worthington Precision Metals produces extremely close
tolerance metal components for use in power steering, transmission, anti-lock
brake and other automotive mechanical systems. Its customers are primarily
automobile manufacturers and their first tier suppliers.
CAST PRODUCTS SEGMENT
STEEL CASTINGS. Buckeye Steel Castings designs, produces and machines a
broad line of railcar castings, as well as a wide variety of industrial castings
in sizes from 100 lbs. to 30 tons. Buckeye is also North America's leading
designer and producer of undercarriages for mass transit cars. Its products are
sold to the railroad, mass transit, construction and off-highway equipment
markets.
STOCK TRADING, PRICE AND DIVIDEND INFORMATION
Worthington Industries, Inc. Common Stock trades on the Nasdaq Stock Market
under the symbol "WTHG" and is listed in most newspapers as "WorthInd." As of
May 31, 1997, Worthington Industries, Inc. had approximately 10,800 shareholders
of record.
<TABLE>
<CAPTION>
NASDAQ
AVERAGE PRICES
FISCAL 1996 SHARES DAILY ---------------- CASH
QUARTER ENDED TRADED VOLUME LOW HIGH DIVIDENDS
- ------------- ---------- ------- ------ ------ ---------
<S> <C> <C> <C> <C> <C>
August 31.............................. 17,304,700 266,266 $19.13 $23.25 $.11
November 30............................ 24,815,800 393,902 $16.63 $20.25 $.11
February 29............................ 17,686,900 285,273 $18.50 $22.13 $.11
May 31................................. 14,093,600 220,213 $19.50 $22.50 $.12
FISCAL 1997
QUARTER ENDED
- -------------
August 31.............................. 14,306,400 223,538 $17.50 $21.63 $.12
November 30............................ 20,569,800 326,505 $19.00 $22.25 $.12
February 28............................ 18,142,300 292,618 $18.13 $22.00 $.12
May 31................................. 14,394,800 228,489 $17.38 $21.00 $.13
</TABLE>
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<PAGE> 5
WORTHINGTON INDUSTRIES, INC. AND SUBSIDIARIES
FIVE YEAR SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
MAY 31 1997 1996 1995 1994 1993
------ ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
In thousands, except per share
FINANCIAL RESULTS
Net Sales...................................... $1,911,720 $1,578,090 $1,565,675 $1,349,083 $1,167,896
Cost of Goods Sold............................. 1,634,191 1,333,757 1,310,184 1,146,580 985,170
--------- --------- --------- --------- ---------
Gross Margin................................... 277,529 244,333 255,491 202,503 182,726
Selling, General & Administrative Expense...... 123,283 101,829 90,241 76,430 71,765
--------- --------- --------- --------- ---------
Operating Income............................... 154,246 142,504 165,250 126,073 110,961
Miscellaneous Income........................... 936 1,013 648 955 1,140
Interest Expense............................... (18,427) (8,687) (6,673) (3,460) (3,961)
Equity in Net Income of Unconsolidated
Affiliates - Joint Ventures.................. 13,777 7,333 6,216 (555) 1,816
Equity in Net Income of Unconsolidated
Affiliate - Rouge............................ -- 21,729 32,111 19,406 2,771
--------- --------- --------- --------- ---------
Earnings Before Income Taxes................... 150,532 163,892 197,552 142,419 112,727
Income Taxes................................... 57,214 62,919 74,423 53,521 41,791
--------- --------- --------- --------- ---------
Net Earnings................................... 93,318 100,973 123,129 88,898 70,936
Per Share.................................... 0.97 1.05 1.28 0.93 0.74
Per Share - Core (without Rouge equity)...... 0.97 0.90 1.06 0.79 0.72
Depreciation and Amortization.................. 51,388 41,458 36,384 34,468 31,307
Cash Provided By Operating Activities.......... 78,363 146,193 78,313 66,058 66,595
Cash Dividends Declared........................ 45,965 40,872 37,212 33,161 29,329
Per Share.................................... 0.4900 0.4501 0.4101 0.3669 0.3270
Capital Expenditures........................... $ 172,905 $ 119,286 $ 71,314 $ 49,386 $ 29,826
Average Shares Outstanding..................... 96,557 96,487 96,405 96,053 95,374
FINANCIAL POSITION
Current Assets................................. $ 594,128 $ 505,104 $ 474,853 $ 435,465 $ 384,722
Current Liabilities............................ 246,794 167,585 191,672 171,991 149,578
--------- --------- --------- --------- ---------
Working Capital................................ 347,334 337,519 283,181 263,474 235,144
Net Fixed Assets............................... 691,027 544,052 358,579 323,649 308,731
Total Assets................................... 1,561,186 1,282,424 964,299 837,707 731,419
Total Debt*.................................... 417,883 317,997 108,916 73,306 66,541
Shareholders' Equity........................... 715,518 667,318 608,142 525,137 455,784
Per Share.................................... 7.40 6.91 6.30 5.46 4.76
Total Committed Capital*....................... $1,133,401 $ 985,315 $ 717,058 $ 598,443 $ 522,325
Shares Outstanding............................. 96,711 96,505 96,515 96,236 95,788
PERFORMANCE COMPARISON
PROFITABILITY
Return on Net Sales (after taxes).............. 4.9% 6.4% 7.9% 6.6% 6.1%
Return on Average Total Committed Capital*
(after taxes)................................ 8.8% 11.9% 18.7% 15.9% 14.2%
Return on Average Total Committed Capital* (pre
tax & interest).............................. 15.9% 20.3% 31.0% 26.0% 23.3%
Return on Average Shareholders' Equity
(after taxes)................................ 13.5% 15.8% 21.7% 18.1% 16.4%
FINANCIAL CONDITION
Current Ratio.................................. 2.4X 3.0X 2.5X 2.5X 2.6X
Total Debt*/Total Committed Capital*........... 37% 32% 15% 12% 13%
ASSET USE
Inventory Turnover............................. 6.4X 6.5X 6.0X 6.4X 6.4X
Accounts Receivable/Days Sales................. 44 43 46 43 45
GROWTH
Net Sales...................................... 21.1% 0.8% 16.1% 15.5% 14.4%
Net Earnings................................... -7.6% -18.0% 38.5% 25.3% 18.9%
Earnings Per Share............................. -7.6% -18.0% 37.6% 25.7% 17.5%
Earnings Per Share - Core (without Rouge
equity)...................................... 7.8% -15.1% 34.2% 9.7% 20.0%
Cash Dividends Declared Per Share.............. 8.9% 9.7% 11.8% 12.2% 7.3%
</TABLE>
All financial data except cash dividends declared includes the results of The
Gerstenslager Company which was acquired in February 1997 through a pooling of
interests.
* Excludes DECS of $88,494,000 at May 31, 1997.
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<PAGE> 6
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Fiscal 1997 was the second most profitable year in the 42 year history of
Worthington Industries for its core businesses. Record annual sales of $1.9
billion were up 21% versus the prior year reflecting the start-up of new
facilities, the inclusion of full year results for Dietrich Industries (acquired
February 1996), the acquisition of Plastics Manufacturing, Inc. (PMI) in
December 1996, and the overall strength of the economy. Net earnings of $93.3
million and earnings per share of $.97 were up 8% over the prior year (adjusted
to eliminate the Rouge Steel equity earnings). Earnings, before interest, taxes,
depreciation, amortization and affiliate earnings, of $206.6 million were a
record, up 12% over the prior year and 2% over fiscal 1995.
Effective the first quarter 1997, the Company took certain steps that
resulted in changing the accounting for its investment in Rouge Steel from the
equity method to the cost method. Accordingly, results for fiscal 1997 do not
reflect the equity earnings from Rouge Steel. The Company believes that to
appropriately compare periods, prior years' results should be adjusted to
eliminate the impact of Rouge Steel. Therefore, core business comparisons do not
include Rouge Steel equity earnings.
Fiscal 1996 sales of just under $1.6 billion were up 1% over fiscal 1995.
For core businesses, net earnings of $86.8 million and earnings per share of
$.90 were both down 15% from the Company's records in fiscal 1995.
The Company continued its aggressive investment program during fiscal 1997.
It completed three acquisitions, formed two joint ventures, started up its
largest steel processing plant to date, broke ground on an even larger steel
processing plant, and invested in several other significant capital projects.
In June 1996, the Company purchased SCM Technologies (SCM), a Canadian
manufacturer of high pressure industrial, medical, helium and electronic gas
cylinders. In December 1996, the Company acquired the net assets of PMI, one of
the largest manufacturers of plastic injection molded parts and thermoformed
panels in the southeastern United States. PMI serves the business equipment,
commercial airline, and medical industries. On February 21, 1997, the Company
acquired The Gerstenslager Company (Gerstenslager) in a tax free pooling of
interests, stock-for-stock exchange. Gerstenslager is a major independent
producer of automotive aftermarket body panels in the United States. Results for
the Company are restated to include Gerstenslager for all periods presented.
In November 1996, the Company and Rouge Steel formed a joint venture to
build a light gauge hot dipped galvanizing facility in Monroe County, Michigan.
The joint venture, called Spartan Steel Coating, broke ground late in fiscal
1997 and is scheduled to be on line in fiscal 1998. The Company owns 52% of the
joint venture and will manage the facility.
In February 1997, the Company formed a joint venture with three of Brazil's
major gas distributors to manufacture pressure cylinders in a facility
previously operated by the three distributors. The Company owns 52% of this
venture and will manage the facility. This venture provides the Company the
opportunity to significantly increase its presence in South American markets.
In general, demand for the Company's products, except for cast products,
was stronger in fiscal 1997 than in fiscal 1996 reflecting the overall strength
of the economy. However, profit margin percentages were lower, primarily due to
higher raw material prices for steel, the start-up of the Company's new hot
dipped galvanizing line, operating problems at the Malvern, Pennsylvania steel
processing plant, and reduced castings volume. In fiscal 1996, sales were
affected by slowing demand in most of the Company's product lines. Margin
percentages declined due to lower volume and lower selling prices used to
stimulate demand. Shifts in product mix, designed
I-6
<PAGE> 7
to increase volume in some lines of business while increasing overall
profitability, reduced average selling prices and margin percentages. As a
percentage of sales, gross margin was 14.5% in fiscal 1997, 15.5% in 1996 and
16.3% in 1995.
Selling, general and administrative (S, G & A) expense as a percentage of
sales was 6.4% in fiscal 1997, 6.5% in 1996 and 5.8% in 1995. In fiscal 1997, S,
G & A increased in line with sales. During fiscal 1996, higher benefit costs and
the addition of Dietrich's higher overhead cost structure were only partially
offset by decreased profit sharing.
Interest expense more than doubled in fiscal 1997 following a 30% increase
in fiscal 1996. The average interest rate dropped 53 basis points in fiscal
1997. The average interest rate was 5.96% in fiscal 1997, 6.49% in 1996, and
6.65% in 1995. Interest is capitalized on major projects in progress.
Capitalized interest totaled $6.6 million in fiscal 1997, $2.9 million in 1996
and $.5 million in 1995. Average debt outstanding was $419.6 million in fiscal
1997, $178.2 million in 1996, and $108.3 million in 1995. Debt levels rose in
fiscal 1997 to fund capital spending, the acquisitions of SCM and PMI, and
increased working capital to support sales growth. Debt levels rose in fiscal
1996 to fund capital spending and the purchase of Dietrich.
Equity in net income of unconsolidated affiliates, excluding Rouge Steel,
increased 88% in fiscal 1997. Equity from Worthington Armstrong Venture (WAVE)
was up substantially. In April 1997, WAVE announced it agreed to buy Peytesa,
SA, a privately held Spanish ceiling grid manufacturer. The transaction will
close in fiscal 1998. WAVE also announced its intentions to build new plants in
Team Valley, England, and Benton Harbor, Michigan. TWB made progress,
substantially reducing its operating loss on increasing production volume. In
April 1997, Bethlehem Steel, LTV Steel, and Rouge Steel joined the Company and
Thyssen, Inc. as minority shareholders of TWB, and the Company's ownership in
TWB was reduced from 50% to 33%. The Acerex joint venture in Mexico posted
profits in its first full fiscal year in operation. In fiscal 1996, equity in
net income of unconsolidated affiliates, excluding Rouge Steel, increased 18%
from fiscal 1995, as WAVE and TWB both posted significant improvements.
The effective tax rate decreased in fiscal 1997 due to lower state taxes.
The effective rate was 38.0% in fiscal 1997, 38.4% in 1996 and 37.7% in 1995.
The effective tax rate rose in fiscal 1996 due to permanent differences that
became a larger percentage of pre-tax earnings.
PROCESSED STEEL PRODUCTS
In fiscal 1997, the processed steel products segment had its best year
ever, both in sales and operating income. Sales of $1.4 billion and operating
income of $120.9 million were up 27% and 10%, respectively. Operating income
return on sales decreased to 8.5%, primarily due to raw material price
increases, the previously mentioned start-up of new facilities, operating
problems at the Malvern, Pennsylvania steel processing plant, and some product
mix shifts in cylinders and automotive body panels. Steel processing sales were
up over fiscal 1996 primarily due to increased volume at most plants and
additional sales generated by the Delta start-up. Operating income in steel
processing was down for the reasons stated above, resulting in a decrease in
operating income return on sales. Pressure cylinders sales and operating income
were up over fiscal 1996 due to the combination of increased volume in low
pressure liquid propane and recyclable refrigerant cylinders and the acquisition
of SCM in June 1996. In fiscal 1997, both sales and operating income increased
at Dietrich, reflecting a full year of operations, greater volume, and better
margins. Gerstenslager fiscal 1997 sales and operating income were up reflecting
new contracts and the overall strength of the economy.
Fiscal 1996 sales for the processed steel products segment of $1.1 billion
and operating income of $109.7 million were down .3% and 11%, respectively, from
1995. Sales were lower primarily due to lower volume. Operating margins were
lower due to reduced volume and lower selling prices designed to attract more
volume. Profits were also affected by the General Motors strike during the third
quarter and the shutdown of the zinc plating line at the Malvern plant in
I-7
<PAGE> 8
the fourth quarter, which has since been replaced by a new nickel plating line.
Dietrich's operations, which were included from the date of acquisition only,
suffered from pricing pressures and the traditionally slow winter commercial
construction season. Pressure cylinders' sales and earnings were down as
increased demand for heating tanks did not fully offset lower shipments of
refrigerant cylinders. This shift in product mix also affected margins.
In fiscal 1997, the Company's new steel processing facility in Delta, Ohio
commenced operations, bringing on line pickling, slitting and hot dipped
galvanizing. The neighboring North Star/BHP mini-mill began supplying steel to
the plant, however at lower than expected levels. In March 1997, the Company
broke ground for its new cold mill plant in Decatur, Alabama. Pickling and
slitting operations are expected to begin in mid-calendar 1998, followed by cold
mill operations in mid-calendar 1999. At capacity, the plant will be able to
process one million tons of steel per year.
CUSTOM PRODUCTS
Sales for custom products of $380 million were up 18% in fiscal 1997, due
in part to the acquisition of PMI in December 1996, and strong automotive
volume. Operating income of $25.6 million was up 41% driven by increased
automotive volume in custom plastics, the PMI acquisition and improved results
from precision metals.
Sales for custom products of $321 million were up 6% in fiscal 1996.
Operating income decreased 8% to $18.2 million or 5.7% of sales, as better
performance by custom plastics was offset by lower results for precision metals.
The plastics operations increased sales and earnings due to new automotive and
appliance contracts and improvements at the newer facilities in South Carolina
and Kentucky. Volume from new jobs increased sales for precision metals above
1995, but profits were lower due to inefficiencies caused by start-ups and
specification changes on certain high volume parts.
CAST PRODUCTS
As expected in fiscal 1997, sales for cast products decreased 21% to $113.8
million and operating income decreased 47% to $7.8 million. Railcar demand was
down from fiscal 1996 resulting in a decrease in volume, pricing, and leveraging
of fixed costs.
In fiscal 1996, sales decreased 6% to $143.7 million and operating income
was down 33% to $14.6 million. As with fiscal 1997, the primary reason for the
decrease was lower railcar demand.
LIQUIDITY AND CAPITAL RESOURCES
At May 31, 1997, the Company's balance sheet remained strong. Liquid net
assets, as reflected by working capital of $347.3 million, represented 22.2% of
total assets. Working capital as a percentage of sales improved to 18.2%,
dropping from 21.4% in fiscal 1996 and about equal to the fiscal 1995 level of
18.1%. The current ratio was 2.4 to 1 versus 3.0 to 1 at May 31, 1996.
In March 1997, $93 million in Debt Exchangeable for Common Stock (DECS),
payable in Rouge Steel stockholdings, was issued by the Company. In the opinion
of the Company, it is appropriate to examine the Company's debt without the
DECS, since the Company intends to satisfy the DECS obligation with currently
owned Rouge stock.
At May 31, 1997, total balance sheet debt was $506.4 million, $417.9
million if the DECS was excluded. Long-term debt was $450.4 million, $361.9
million without the DECS. Total debt to total committed capital, both excluding
DECS, was 37% versus 32% last year and 15% in fiscal 1995.
Cash provided by operating activities of $78.4 million was down from fiscal
1996's record of $146.2 million, primarily due to increased accounts receivable
and inventory as a result of sales
I-8
<PAGE> 9
growth. At fiscal year end 1997, days sales in accounts receivable increased one
day from fiscal year end 1996 after declining three days from fiscal year-end
1995.
Dividends declared of $.49 per share were a record for the 29th consecutive
year. Capital invested in the Company's businesses (capital expenditures,
investments in unconsolidated affiliates, acquisitions and the market value of
the Worthington stock exchanged for Gerstenslager) totaled $361 million in
fiscal 1997, a 22% increase over fiscal 1996. The most significant projects were
the Delta, Ohio steel processing and galvanizing plant, the Decatur, Alabama
steel processing cold roll plant, the Spartan Steel joint venture with Rouge,
the Malvern, Pennsylvania nickel plating line addition, and the acquisitions
previously noted.
On May 30, 1997, the Company renegotiated its revolving credit agreement
with its bank group to increase the capacity of the revolver to $190 million. At
May 31, 1997, $50 million of the revolver was unused. In connection with various
construction projects, the Company had purchase commitments approximating $165
million as of May 31, 1997. The Company's immediate borrowing capacity, plus its
cash generated from operations, should be more than sufficient to fund expected
normal operating costs, dividends, debt payments and capital expenditures for
existing businesses. While there are no specific needs at this time, the Company
regularly considers long-term debt issuance an alternative depending on
financial market conditions.
The Company believes that environmental issues will not have a material
effect on capital expenditures, consolidated financial position of future
results or operations.
SAFE HARBOR STATEMENT
The Company wishes to take advantage of the Safe Harbor provisions included
in the Private Securities Litigation Reform Act of 1995 (the "Act"). Statements
by the Company relating to future revenues, growth, stock appreciation or plant
start-ups or capabilities and other statements which are not historical
information constitute "forward looking statements" within the meaning of the
Act. All forward looking statements are subject to risks and uncertainties which
could cause actual results to differ from those projected. Factors that could
cause actual results to differ materially include, but are not limited to, the
following: general economic conditions; conditions in the Company's major
markets; competitive factors and pricing pressures; product demand and changes
in product mix; changes in pricing or availability of raw material, particularly
steel; delays in construction or equipment supply; and other risks described
from time to time in the Company's filings with the Securities and Exchange
Commission.
I-9
<PAGE> 10
WORTHINGTON INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
MAY 31
------------------------
DOLLARS IN THOUSANDS 1997 1996
---------- ----------
<S> <C> <C>
Current Assets:
Cash and cash equivalents.............................................................. $ 7,212 $ 17,580
Accounts receivable, less allowances of $3,900 and $2,792 at May 31, 1997 and 1996..... 266,836 244,256
Inventories
Raw materials........................................................................ 187,572 133,459
Work in process and finished products................................................ 109,316 82,700
---------- ----------
296,888 216,159
Prepaid expenses and other current assets.............................................. 23,192 27,109
---------- ----------
Total Current Assets............................................................ 594,128 505,104
Investment in Unconsolidated Affiliates.................................................. 57,040 138,212
Intangible Assets........................................................................ 98,132 65,256
Other Assets............................................................................. 32,365 29,800
Investment in Rouge...................................................................... 88,494 --
Property, Plant and Equipment:
Land................................................................................... 30,531 23,261
Buildings.............................................................................. 212,848 172,039
Machinery and equipment................................................................ 683,155 564,510
Construction in progress............................................................... 110,087 88,965
---------- ----------
1,036,621 848,775
Less accumulated depreciation.......................................................... 345,594 304,723
---------- ----------
691,027 544,052
---------- ----------
Total Assets.................................................................... $1,561,186 $1,282,424
========== ==========
LIABILITIES
Current Liabilities:
Accounts payable....................................................................... $ 117,910 $ 88,718
Notes payable.......................................................................... 50,000 --
Accrued compensation, contributions to employee benefit plans and related taxes........ 38,058 39,217
Dividends payable...................................................................... 12,572 10,901
Other accrued items.................................................................... 20,244 18,454
Income taxes........................................................................... 2,026 7,820
Current maturities of long-term debt................................................... 5,984 2,475
---------- ----------
Total Current Liabilities....................................................... 246,794 167,585
Other Liabilities........................................................................ 18,839 17,912
Long-Term Debt:
Conventional long-term debt............................................................ 361,899 315,522
Debt exchangeable for common stock..................................................... 88,494 --
---------- ----------
450,393 315,522
Deferred Income Taxes.................................................................... 120,765 114,087
Contingent Liabilities -- Note G......................................................... -- --
Minority Interest........................................................................ 8,877 --
EQUITY
Shareholders' Equity
Preferred shares, $1.00 par value, authorized -- 1,000,000 shares, issued and
outstanding -- none.................................................................. -- --
Common shares, $.01 par value, authorized -- 150,000,000 shares, issued and
outstanding -- 1997 -- 96,711,235 shares; 1996 -- 96,505,271 shares.................. 968 965
Additional paid-in capital............................................................. 114,052 106,079
Unrealized loss on investment.......................................................... (5,563) --
Minimum pension liability.............................................................. -- (189)
Foreign currency translation adjustment................................................ (1,861) (1,248)
Retained earnings...................................................................... 607,922 561,711
---------- ----------
715,518 667,318
---------- ----------
Total Liabilities and Shareholders' Equity...................................... $1,561,186 $1,282,424
========== ==========
</TABLE>
See notes to consolidated financial statements.
All financial data includes the results of The Gerstenslager Company which was
acquired in February 1997 through a pooling of interests.
I-10
<PAGE> 11
WORTHINGTON INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
YEAR ENDED MAY 31
----------------------------------------
IN THOUSANDS, EXCEPT PER SHARE 1997 1996 1995
---------- ---------- ----------
<S> <C> <C> <C>
Net sales............................................ $1,911,720 $1,578,090 $1,565,675
Cost of goods sold................................... 1,634,191 1,333,757 1,310,184
---------- ---------- ----------
Gross Margin.................................. 277,529 244,333 255,491
Selling, general and administrative expense.......... 123,283 101,829 90,241
---------- ---------- ----------
Operating Income.............................. 154,246 142,504 165,250
Other income (expense):
Miscellaneous income............................... 936 1,013 648
Interest expense................................... (18,427) (8,687) (6,673)
Equity in net income of unconsolidated
affiliates -- Joint Ventures.................... 13,777 7,333 6,216
Equity in net income of unconsolidated
affiliate -- Rouge.............................. -- 21,729 32,111
---------- ---------- ----------
Earnings Before Income Taxes.................. 150,532 163,892 197,552
Income taxes......................................... 57,214 62,919 74,423
---------- ---------- ----------
Net Earnings......................................... $ 93,318 $ 100,973 $ 123,129
========== ========== ==========
Average Common Shares Outstanding.................... 96,557 96,487 96,405
Earnings Per Share................................... $ .97 $ 1.05 $ 1.28
========== ========== ==========
</TABLE>
See notes to consolidated financial statements.
All financial data includes the results of The Gerstenslager Company which was
acquired in February 1997 through a pooling of interests.
I-11
<PAGE> 12
WORTHINGTON INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE 1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
COMMON SHARES:
Balance at beginning of year......................... $ 965 $ 965 $ 963
Sale of common shares under stock option plan,
(173,026 in 1997; 116,051 in 1996; 198,144 in
1995)............................................. 2 1 2
Sale of shares under dividend reinvestment plan,
(95,438 in 1997; 90,561 in 1996; 81,102 in
1995)............................................. 1 -- --
Purchase and retirement of common shares,
(62,500 in 1997; 216,500 in 1996)................. -- (1) --
-------- --------
Balance at May 31............................ $ 968 $ 965 $ 965
======== ========
ADDITIONAL PAID-IN CAPITAL:
Balance at beginning of year......................... $106,079 $102,943 $ 96,637
Sale of common shares under stock option plan,
(173,026 in 1997; 116,051 in 1996; 198,144 in
1995)............................................. 2,114 1,549 2,569
Sale of shares under dividend reinvestment plan,
(95,438 in 1997; 90,561 in 1996; 81,102 in
1995)............................................. 1,895 1,820 1,664
Transactions of unconsolidated affiliates............ 4,033 10 2,073
Purchase and retirement of common shares,
(62,500 in 1997; 216,500 in 1996)................. (69) (243) --
-------- --------
Balance at May 31............................ $114,052 $106,079 $102,943
======== ========
UNREALIZED LOSS ON INVESTMENT:
Balance at beginning of year......................... $ -- $ -- $ --
Valuation adjustment................................. (5,563) -- --
-------- --------
Balance at May 31............................ ($ 5,563) $ -- $ --
======== ========
MINIMUM PENSION LIABILITY:
Balance at beginning of year......................... ($ 189) ($ 1,210) ($ 2,135)
Minimum pension liability adjustment................. 189 339 122
Transactions of unconsolidated affiliate............. -- 682 803
-------- --------
Balance at May 31............................ $ -- ($ 189) ($ 1,210)
======== ========
TRANSLATION ADJUSTMENT:
Balance at beginning of year......................... ($ 1,248) ($ 146) $ --
Foreign currency translation adjustment.............. (613) (1,102) (146)
-------- --------
Balance at May 31............................ ($ 1,861) ($ 1,248) ($ 146)
======== ========
RETAINED EARNINGS:
Balance at beginning of year......................... $561,711 $505,588 $429,671
Net earnings......................................... 93,318 100,973 123,129
Cash dividends declared:
(per share: $.49 in 1997; $.45 in 1996; $.41 in
1995)........................................... (45,965) (40,872) (47,212)
Purchase and retirement of common shares,
(62,500 in 1997; 216,500 in 1996)................. (1,142) (3,978) --
-------- --------
Balance at May 31............................ $607,922 $561,711 $505,588
======== ========
</TABLE>
See notes to consolidated financial statements.
All financial data includes the results of The Gerstenslager Company
which was acquired in February 1997 through a pooling of interests.
I-12
<PAGE> 13
WORTHINGTON INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED MAY 31
------------------------------------
IN THOUSANDS 1997 1996 1995
--------- --------- --------
<S> <C> <C> <C>
Operating Activities:
Net earnings......................................... $ 93,318 $ 100,973 $123,129
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization..................... 51,388 41,458 36,384
Provision for deferred income taxes............... 3,326 9,884 15,201
Equity in undistributed net income of
unconsolidated affiliates....................... (9,625) (25,153) (37,847)
Minority interest................................. (27) -- --
Changes in assets and liabilities:
Accounts receivable............................. (8,005) 8,573 (22,989)
Inventories..................................... (70,322) 32,713 (18,279)
Prepaid expenses and other current assets....... 8,331 2,732 (8,411)
Other assets.................................... (2,801) (2,412) 652
Accounts payable and accrued expenses........... 11,658 (22,118) (8,137)
Other liabilities............................... 1,122 (457) (1,390)
--------- --------- --------
Net Cash Provided By Operating Activities.... 78,363 146,193 78,313
Investing Activities:
Investment in property, plant and equipment, net..... (172,905) (119,286) (71,314)
Acquisitions, net of cash acquired................... (69,942) (169,391) --
Investments in unconsolidated affiliates............. (5,420) (8,315) (10,857)
--------- --------- --------
Net Cash Used By Investing Activities........ (248,267) (296,992) (82,171)
Financing Activities:
Proceeds from (payments on) short-term borrowings.... 50,000 (38,200) 28,200
Proceeds from long-term debt......................... 165,715 425,974 35,900
Principal payments on long-term debt................. (23,589) (180,473) (28,490)
Proceeds from issuance of common shares.............. 4,011 3,370 4,235
Proceeds from minority interest...................... 8,904 -- --
Repurchase of common shares.......................... (1,211) (4,222) --
Dividends paid....................................... (44,294) (39,963) (46,276)
--------- --------- --------
Net Cash Provided (Used) By Financing
Activities................................. 159,536 166,486 (6,431)
--------- --------- --------
Increase (decrease) in cash and cash equivalents..... (10,368) 15,687 (10,289)
Cash and cash equivalents at beginning of year....... 17,580 1,893 12,182
--------- --------- --------
Cash and Cash Equivalents at End of Year..... $ 7,212 $ 17,580 $ 1,893
========= ========= ========
</TABLE>
See notes to consolidated financial statements.
All financial data includes the results of The Gerstenslager Company
which was acquired in February 1997 through a pooling of interests.
I-13
<PAGE> 14
WORTHINGTON INDUSTRIES, INC. AND SUBSIDIARIES
INDUSTRY SEGMENT DATA
<TABLE>
<CAPTION>
MAY 31,
------------------------------------
IN THOUSANDS 1997 1996 1995
---------- ---------- ----------
<S> <C> <C> <C>
NET SALES
Processed steel products............................... $1,417,891 $1,113,351 $1,110,432
Custom products........................................ 380,048 321,013 302,096
Cast products.......................................... 113,781 143,726 153,147
---------- ---------- ----------
$1,911,720 $1,578,090 $1,565,675
========== ========== ==========
EARNINGS
Processed steel products............................... $ 120,866 $ 109,742 $ 123,806
Custom products........................................ 25,607 18,200 19,754
Cast products.......................................... 7,773 14,562 21,690
---------- ---------- ----------
Operating income.................................... 154,246 142,504 165,250
Miscellaneous income..................................... 936 1,013 648
Interest expense......................................... (18,427) (8,687) (6,673)
Equity in net income of unconsolidated affiliates........ 13,777 29,062 38,327
---------- ---------- ----------
Earnings before income taxes........................ $ 150,532 $ 163,892 $ 197,552
========== ========== ==========
IDENTIFIABLE ASSETS
Processed steel products............................... $1,042,770 $ 821,135 $ 554,408
Custom products........................................ 232,301 178,679 165,619
Cast products.......................................... 70,376 71,225 78,099
Corporate.............................................. 158,699 73,173 61,409
---------- ---------- ----------
1,504,146 1,144,212 859,535
Investment in unconsolidated affiliates................ 57,040 138,212 104,764
---------- ---------- ----------
$1,561,186 $1,282,424 $ 964,299
========== ========== ==========
DEPRECIATION AND AMORTIZATION EXPENSE
Processed steel products............................... $ 31,656 $ 24,290 $ 21,296
Custom products........................................ 12,843 10,330 8,710
Cast products.......................................... 4,928 4,647 4,362
Corporate.............................................. 1,961 2,191 2,016
---------- ---------- ----------
$ 51,388 $ 41,458 $ 36,384
========== ========== ==========
CAPITAL EXPENDITURES
Processed steel products............................... $ 157,521 $ 89,841 $ 41,698
Custom products........................................ 9,083 17,423 22,254
Cast products.......................................... 3,722 5,427 4,041
Corporate.............................................. 2,579 6,595 3,321
---------- ---------- ----------
$ 172,905 $ 119,286 $ 71,314
========== ========== ==========
</TABLE>
- ---------------
( ) Indicates deduction
Corporate expenses are allocated on a consistent basis among industry
segments over the three-year period. "Capital expenditures" are net of normal
disposals and exclude amounts in connection with acquisitions and divestitures.
See notes to consolidated financial statements.
All financial data includes the results of The Gerstenslager Company
which was acquired in February 1997 through a pooling of interests.
I-14
<PAGE> 15
WORTHINGTON INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Consolidation: The consolidated financial statements include the accounts
of Worthington Industries, Inc. and subsidiaries (the "Company"). Investments in
unconsolidated affiliates are accounted for using the equity method. Significant
intercompany accounts and transactions are eliminated. Certain reclassifications
were made to prior years' amounts to conform with the 1997 presentation.
Use of Estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
Investment in Rouge: In the first quarter of 1997, the Company irrevocably
converted Class B shares (2.5 votes per share) of Rouge Steel Company common
stock for Class A shares (1 vote per share) of Rouge Steel Company common stock
which reduced its voting interest in Rouge to below 20%. In addition, the
Company's seats on the Board of Directors of Rouge, and its future right to
those seats, were relinquished. As a result of these two steps, the Company has
no ability to exercise significant influence over Rouge. Therefore, the
Company's investment in Rouge no longer qualifies for the equity method of
accounting and was changed to the cost method. As a result, after May 31, 1996,
the Company's equity share of Rouge earnings is no longer included in reported
earnings or earnings per share. In addition, the investment in Rouge common
stock was transferred from investment in unconsolidated affiliates and is shown
separately in 1997. This investment is adjusted to market value as an
"available-for-sale" security with a net of tax adjustment to shareholder's
equity.
Cash and Cash Equivalents: The Company considers all highly liquid
investments purchased with a maturity of three months or less to be cash
equivalents.
Inventories: Inventories are valued at the lower of cost or market. Cost is
determined using the specific identification method for steel processing and the
first-in, first-out method for all other businesses.
Deferred Start-up Costs: The Company's policy is to capitalize certain
costs of starting up new plants and facilities. It is the Company's opinion that
these costs are recoverable and will be amortized beginning with the start of
production over a period not to exceed five years. At May 31, 1997, unamortized
deferred start-up costs totaled $5,475,000.
Intangible Assets: Intangible Assets include goodwill which is being
amortized on the straight-line method over periods ranging from 30 to 40 years.
Unamortized goodwill was $97,728,000 at May 31, 1997. Amortization expense was
$2,409,000 in 1997 and $548,000 in 1996.
Property and Depreciation: Property, plant and equipment are carried at
cost and depreciated using the straight-line and units-of-production methods
over the estimated useful lives of the assets. Accelerated depreciation methods
are used for income tax purposes.
Capitalized Interest: Interest is capitalized in connection with
construction of qualified assets. Under this policy, the Company capitalized
interest of $6,559,000 in 1997, $2,880,000 in 1996 and $529,000 in 1995.
Revenue Recognition: The Company recognizes revenue at the time of
shipment.
Environmental Costs: Environmental costs are capitalized if the costs
extend the life of the property, increase its capacity, and/or mitigate or
prevent contamination from future operations. Costs related to environmental
contamination treatment and clean-up are charged to expense.
I-15
<PAGE> 16
WORTHINGTON INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Earnings Per Share: Earnings per common share equals net earnings divided
by the weighted average number of common shares outstanding. Common stock
equivalents were not included in the weighted average common shares outstanding
as the dilution would be immaterial. During February 1997, the Financial
Accounting Standards Board (FASB) issued Statement No. 128, "Earnings Per
Share," effective for the Company's third quarter of fiscal 1998. This statement
establishes standards for computing and presenting earnings per share (EPS). It
requires dual presentation of basic and diluted EPS on the face of the income
statement and a reconciliation between the computations. The impact of Statement
No. 128 on the calculation of EPS is not expected to be material.
Recently Issued FASB Statements: The FASB recently issued Statements No.
129, "Disclosure of Information about Capital Structure," No. 130, "Reporting
Comprehensive Income," and Statement No. 131, "Disclosures about Segments of an
Enterprise and Related Information." Statement No. 129 deals with items already
disclosed by the Company. Statement No. 130, effective for fiscal 1999, will
require separate reporting of certain items affecting shareholders' equity
outside of those included in arriving at net earnings. Statement No. 131,
effective for fiscal 1999, establishes requirements for reporting information
about operating segments in annual reports and interim statements. This
statement will require a change in the way the Company's segments are presently
reported; however, the extent of the change has not been determined.
Statements of Cash Flows: With respect to non-cash activities, the Company
recorded its increased equity from the Rouge Steel Company's initial public
offering as an increase in investments in unconsolidated affiliates of
$3,215,000 and additional paid-in capital (net of deferred taxes) of $2,073,000
in 1995.
Supplemental cash flow information for the years ended May 31 is as
follows:
<TABLE>
<CAPTION>
IN THOUSANDS 1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Interest paid................................ $26,587 $11,273 $ 7,325
Income taxes paid............................ 58,912 51,346 65,270
</TABLE>
Derivatives and Financial Instruments: The following methods and
assumptions were used by the Company in estimating the fair value of its
financial instruments: Cash and cash equivalents, other assets, and long-term
debt-The carrying amounts reported in the balance sheets approximate fair value.
The Company does not engage in currency speculation and generally enters
into forward exchange contracts only to hedge specific foreign currency
transactions. The amount of these contracts outstanding at any time is
immaterial. Gains or losses from these contracts offset gains or losses of the
assets, liabilities or transactions being hedged.
Risks and Uncertainties: The Company, including unconsolidated affiliates,
operates 66 production facilities in 22 states and eight countries (see "Company
Locations" on page I-28), in the business segments listed in Industry Segment
Data on page I-14, and does business in the markets described under "The
Company" beginning on page I-3. The Company's largest markets are the automotive
and automotive supply markets. Foreign operations and exports represent less
than 10% of the Company's production and sales, respectively. The Company's
largest supplier is Rouge Steel Company from whom it purchases steel at a slight
discount under a purchase contract expiring in 2003. Less than 30% of the
Company's labor force is covered by collective bargaining agreements, all of
which expire over one year from May 31, 1997. See Note H for significant
business transacted with a major customer. The concentration of credit risks
from financial instruments related to the markets served by the Company, is not
expected to have a
I-16
<PAGE> 17
WORTHINGTON INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
material adverse effect on the Company's consolidated financial position, cash
flow or future results of operations.
NOTE B -- SHAREHOLDERS' EQUITY
The Board of Directors is empowered to determine the issue prices, dividend
rates, amounts payable upon liquidation, voting rights and other terms of the
preferred shares when issued.
NOTE C -- DEBT
Debt at May 31 is summarized as follows:
<TABLE>
<CAPTION>
IN THOUSANDS 1997 1996
-------- --------
<S> <C> <C>
Short-term notes payable to bank -- unsecured........ $ 50,000 $ --
Revolver -- unsecured................................ 140,000 85,000
Senior notes due 2006 -- unsecured................... 200,000 200,000
Other................................................ 27,883 32,997
-------- --------
Total conventional debt.................... 417,883 317,997
Debt exchangeable for common stock................... 88,494 --
-------- --------
Total debt................................. 506,377 317,997
Less current maturities and short-term notes
payable............................................ 55,984 2,475
-------- --------
Total long-term debt....................... $450,393 $315,522
======== ========
</TABLE>
The short-term note payable to bank was borrowing against the Company's
uncommitted line of credit and at May 31, 1997 had a weighted average interest
rate of 5.9%.
On May 30, 1997, the Company amended the terms of its revolving credit
agreement. Under the amended terms, the Company maintains a $190,000,000
revolving credit facility with six banks, of which $50,000,000 was available on
May 31, 1997. The credit agreement is committed through 2002 and the agreement
permits two one year extensions with the consent of the parties. The Company
pays a commitment fee of nine basis points per annum on the unused credit
amount. The rate of interest is determined at the time of borrowing, based upon
a choice of options as specified in the agreement, and was 5.9% at May 31, 1997.
To maintain compliance with the agreement, the Company must preserve a ratio of
debt to total capitalization, excluding the DECS, of less than 50%. At May 31,
1997, the Company's ratio of debt to total capitalization, as calculated in
accordance with the agreement, was 38.6%.
During the year ended May 31, 1996, the Company filed a shelf registration
for the issuance of up to $450,000,000 of debt securities and issued
$200,000,000 of 7.125% Notes due 2006. The majority of the proceeds were used to
repay a bridge loan credit facility that was used to finance the acquisition of
Dietrich Industries (see Note K).
During March 1997, the Company issued approximately $93 million of three
year notes exchangeable into Class A Common Stock of Rouge Steel Company in the
form of DECS (SM) (Debt Exchangeable for Common Stock (SM)). The DECS have an
interest rate of 7.25% and are due March 1, 2000. At maturity, holders of the
DECS will receive in exchange for the principle amount of the notes, shares of
common stock of Rouge Steel Company (Rouge shares) held by the Company (or at
the Company's option, cash in lieu of the shares). It is the Company's intention
to settle the majority of the DECS using Rouge shares. The number of Rouge
shares (or the amount of cash to be paid) will be based upon the price of Rouge
Steel Class A Common Stock shortly before the maturity of the DECS. If the value
of Rouge shares increases to a certain point the
I-17
<PAGE> 18
WORTHINGTON INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECS liability would increase, partially offsetting the market value increase in
the stock. Because the stock is considered an "available for sale" security, a
net of tax adjustment to shareholder's equity will be made for the net change
both in stock value and the carrying amount of the DECS liability. The Company
used the net proceeds from the DECS offering to pay down short-term notes
payable and to partially fund the Spartan Steel Coating joint venture.
At May 31, 1997, the Company had "Other" debt that primarily included
industrial development revenue bonds and a Canadian dollar revolving term credit
facility with interest rates ranging from 3.4% to 8.0%. In the previous year,
"Other" debt primarily includes industrial development revenue bonds and
borrowings of Gerstenslager that were repaid at the date of the Gerstenslager
acquisition.
The Company enters into interest rate swap agreements to manage interest
costs and exposure to changing interest rates. At May 31, 1997, agreements were
in place that effectively converted $150,000,000 of the 7.125% Notes due 2006
from fixed rate debt to floating. The interest rate swap agreements are
accounted for by recording interest expense at the variable rate (6.0% at May
31, 1997). No gains or losses are explicitly deferred. These agreements expire
on May 15, 2001. The counterparties to these agreements are major financial
institutions.
Principal payments due on long-term debt, including lease purchase
obligations, in the next five fiscal years are as follows: 1998 -- $5,984,000;
1999 -- $1,200,000; 2000 -- $98,336,000; 2001 -- $1,138,000;
2002 -- $141,147,000; and thereafter -- $208,572,000.
The Company is guarantor on bank loans primarily for three separate joint
ventures. These guarantees totaled $34,000,000 at May 31, 1997, and relate to
debt with varying maturities. The Company believes the guarantees will not
significantly affect its consolidated financial position or future results of
operations.
NOTE D -- INCOME TAXES
Income taxes for the years ended May 31 were as follows:
<TABLE>
<CAPTION>
IN THOUSANDS 1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Current:
Federal................................... $47,420 $44,364 $49,553
State and local........................... 6,468 8,671 9,669
Deferred:
Federal................................... 3,809 9,916 14,042
State..................................... (483) (32) 1,159
------- ------- -------
$57,214 $62,919 $74,423
======= ======= =======
</TABLE>
Under Statement of Financial Accounting Standards Board No. 109,
"Accounting for Income Taxes," the liability method is used in accounting for
income taxes. Under this method, deferred tax assets and liabilities are
determined based on differences between financial reporting and tax bases of
assets and liabilities, and are measured using enacted tax rates and laws that
will be in effect when the differences are expected to reverse.
I-18
<PAGE> 19
WORTHINGTON INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
and the amounts used for income tax purposes. The components of the Company's
deferred tax liabilities and assets as of May 31 are as follows:
<TABLE>
<CAPTION>
IN THOUSANDS 1997 1996
-------- --------
<S> <C> <C>
Deferred tax assets:
Allowance for doubtful accounts.................... $ 1,395 $ 1,291
Inventory.......................................... (1,896) (4,671)
Accrued expenses................................... 4,422 4,629
Income taxes....................................... 3,686 3,257
Other.............................................. 620 553
-------- --------
8,227 5,059
Deferred tax liabilities:
Property, plant and equipment...................... 80,923 75,176
Undistributed earnings of unconsolidated
affiliates...................................... 39,842 38,911
-------- --------
120,765 114,087
-------- --------
Net deferred tax liability........................... $112,538 $109,028
======== ========
</TABLE>
The reasons for the difference between the effective income tax rate and
the statutory federal income tax rate were as follows:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Federal statutory rate................................ 35.0% 35.0% 35.0%
State and local income taxes, net of federal tax
benefit............................................. 2.6 3.5 3.7
Other................................................. .4 (.1) (1.0)
---- ---- ----
38.0% 38.4% 37.7%
==== ==== ====
</TABLE>
NOTE E -- EMPLOYEE BENEFIT PLANS
Certain employees of the Company participate in a current cash profit
sharing plan and a deferred profit sharing plan. Contributions to and costs for
these plans are determined as a percentage of the Company's pre-tax income
before profit sharing.
Certain operations have non-contributory defined benefit pension plans
covering a majority of their employees qualified by age and service. Company
contributions to these plans comply with ERISA's minimum funding requirements.
I-19
<PAGE> 20
WORTHINGTON INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
A summary of the components of net periodic pension cost for the defined
benefit plans in 1997, 1996 and 1995, and the contributions charged to pension
expense for the defined contribution plans follows:
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -------
IN THOUSANDS
<S> <C> <C> <C>
Defined benefit plans:
Service cost (benefits earned during the period)........... $ 1,792 $ 1,563 $ 1,356
Interest cost on projected benefit obligation.............. 3,735 3,525 3,242
Actual return on plan assets............................... (5,924) (9,644) (3,949)
Net amortization and deferral.............................. 955 5,673 281
------- ------- -------
Net pension cost on defined benefit plans.................. 558 1,117 930
Defined contribution plans................................... 6,397 5,298 5,373
------- ------- -------
Total pension expense...................................... $ 6,955 $ 6,415 $ 6,303
======= ======= =======
</TABLE>
Pension expense was calculated assuming a weighted average discount rate of
7.9% and a weighted average expected long-term rate of 8.0%. Plan assets consist
principally of listed equity securities and fixed income instruments. The
following table sets forth the funded status and amounts recognized in the
Company's consolidated balance sheet for defined benefit pension plans at May
31:
<TABLE>
<CAPTION>
PLANS WHOSE
PLANS WHOSE ASSETS ACCUMULATED
EXCEED ACCUMULATED BENEFITS
BENEFITS EXCEED ASSETS
-------------------- -------------------
1997 1996 1997 1996
-------- ------- ------- -------
IN THOUSANDS
<S> <C> <C> <C> <C>
Actuarial present value of benefit obligations:
Vested....................................... $ 45,445 $37,849 $10,047 $ 9,014
======== ======= ======= =======
Accumulated.................................. $ 45,945 $38,200 $10,469 $ 9,551
======== ======= ======= =======
Projected benefit obligation................... $ 45,945 $38,200 $10,469 $ 9,551
Plan assets at fair value...................... 55,861 52,199 8,206 7,587
-------- ------- ------- -------
Projected benefit obligation less than (in
excess of) plan assets....................... $ 9,917 $13,999 $(2,262) $(1,964)
======== ======= ======= =======
Comprised of:
Accrued pension cost........................... $ -- $ -- $(1,979) $(1,732)
Prepaid pension cost........................... 3,678 3,244 (86) (23)
Unrecognized:
Net gain..................................... 15,398 15,541 803 931
Prior service cost........................... (10,603) (6,505) (1,987) (2,169)
Unrecorded net asset (obligation) at
transition, net of amortization.............. 1,444 1,718 (30) (5)
Adjustment to recognize minimum liability...... -- -- 1,017 1,034
-------- ------- ------- -------
$ 9,917 $13,999 $(2,262) $(1,964)
======== ======= ======= =======
</TABLE>
NOTE F -- STOCK OPTIONS
Under its employee stock option plans, the Company may grant employees
incentive stock options to purchase shares at not less than 100% of market value
at date of grant or non-qualified
I-20
<PAGE> 21
WORTHINGTON INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
stock options at a price determined by the Compensation and Stock Option
Committee. Generally, options are exercisable at the rate of 20% per year
beginning one year from date of grant and expire ten years thereafter.
The following table summarizes the option plans' activity for the years
ended May 31:
<TABLE>
<CAPTION>
1997 1996 1995
-------------------- -------------------- --------------------
WEIGHTED WEIGHTED WEIGHTED
-AVERAGE -AVERAGE -AVERAGE
IN THOUSANDS, EXCEPT PER SHARE OPTIONS PRICE OPTIONS PRICE OPTIONS PRICE
------- -------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding -- beginning of year..... 2,174 15.57 1,821 13.97 1,164 9.00
Granted.............................. 434 20.44 501 20.20 882 19.25
Exercised............................ (173) 8.92 (116) 9.48 (198) 8.91
Forfeited............................ (65) 18.92 (32) 19.46 (27) 9.09
----- ----- -----
Outstanding -- end of year........... 2,370 16.85 2,174 15.57 1,821 13.97
===== ===== =====
Exercisable at end of year........... 1,081 13.14 996 10.73 939 9.01
Weighted-average fair value of
options granted during the year.... $4.96 $4.51
</TABLE>
Options outstanding at May 31, 1997 had exercise prices ranging from $7.11
to $21.375 and expiration dates ranging from December 1997 to February 2007.
The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation." Accordingly, no compensation cost has been recognized for the
stock option plans. Had compensation cost for the Company's stock option plans
been determined based on the fair value at the grant date for awards in 1997 and
1996 consistent with the provisions of SFAS No. 123, the Company's net earnings
and earnings per share would not have been materially affected.
The fair value of each option grant was estimated on the date of grant
using the Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants: dividend yields of 2.53%; expected volatility of
23.0%; risk-free interest rates of 5.12%; and expected lives of 5 years. Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in the
Company's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.
NOTE G -- CONTINGENT LIABILITIES AND COMMITMENTS
The Company is a defendant in certain legal actions. In the opinion of
management, the outcome of these actions, which is not clearly determinable at
the present time, would not significantly affect the Company's consolidated
financial position or future results of operations. The Company believes that
environmental issues will not have a material effect on capital expenditures,
consolidated financial position or future results of operations.
In connection with various construction projects, the Company had purchase
commitments approximating $165 million as of May 31, 1997.
NOTE H -- INDUSTRY SEGMENT DATA
Sales for processed steel products and custom products include $267,126,000
in 1997, $220,542,000 in 1996 and $222,231,000 in 1995 to a major automobile
manufacturer purchasing through decentralized divisions and subsidiaries in
different geographical areas. Industry segment
I-21
<PAGE> 22
WORTHINGTON INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
descriptions on pages I-3 and I-4, Company locations on page I-28, and segment
data on page I-14 of the Annual Report are an integral part of these financial
statements.
NOTE I -- RELATED PARTY TRANSACTIONS
The Company purchases from and sells to affiliated companies, certain raw
materials and services at prevailing market prices. Sales to affiliated
companies for fiscal 1997, 1996 and 1995, totaled $25 million, $51 million and
$61 million, respectively. Accounts receivable related to these transactions
were $16 million and $10 million at May 31, 1997 and 1996, respectively.
Purchases for fiscal 1997, 1996 and 1995, totaled $1 million, $167 million and
$194 million, respectively. Accounts payable to related parties were $5 million
and $18 million at May 31, 1997 and 1996, respectively.
NOTE J -- INVESTMENT IN UNCONSOLIDATED AFFILIATES
During the quarter ended August 31, 1996, the Company took certain steps
relative to its investment in Rouge Steel which resulted in the Company
accounting for this investment on the cost method instead of the equity method
(see Note A). As a result, after May 31, 1996, Rouge's results are no longer
included in the table below.
The Company's investments in affiliated companies which are not
"majority-owned" and controlled are accounted for using the equity method.
Investments carried at equity and the percentage interest owned consist of
Worthington Specialty Processing, partnership (50%), London Industries, Inc.
(60%), Worthington Armstrong Venture, partnership (50%), TWB Company (33%),
Acerex, S.A. de C.V. (50%) and Worthington S.A. (52%).
During April 1997, TWB Company sold new shares for $19.5 million to three
different owners giving them a total ownership interest of 33%. As a result, the
Company's share of ownership was reduced from 50% to 33%. An increase in
additional paid-in capital of $3,798,000 (net of deferred taxes of $2,328,000)
was recorded from the transaction. The proceeds were used by TWB to repay
advances to the Company.
During February 1997 the Company formed Worthington S.A., a joint venture
with three major gas distributors in Brazil. At May 31, 1997, the Company's
share of the underlying net assets of Worthington S.A. was less than the
carrying amount included in investment in unconsolidated affiliates by
$2,248,000. This difference is being amortized by decreasing equity in net
income of unconsolidated affiliates using the straight-line method over 40
years.
Financial information for affiliated companies accounted for by the equity
method is as follows:
<TABLE>
<CAPTION>
1997 1996 1995
-------- ---------- ----------
IN THOUSANDS
<S> <C> <C> <C>
Current assets........................ $ 91,267 $ 553,023 $ 569,447
Noncurrent assets..................... 130,259 287,247 227,315
Current liabilities................... 32,152 233,441 240,044
Noncurrent liabilities................ 72,646 176,618 167,915
Minority interests.................... -- 6,404 21,404
Net sales............................. 240,545 1,383,343 1,386,824
Gross margin.......................... 56,775 122,500 170,234
Net income............................ $ 24,813 $ 88,644 $ 122,116
</TABLE>
I-22
<PAGE> 23
WORTHINGTON INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The Company's share of undistributed earnings of unconsolidated affiliates
included in consolidated retained earnings was $76,166,000 at May 31, 1997.
NOTE K -- ACQUISITIONS
During June 1996, the Company acquired the stock of SCM Technologies (SCM)
for $8.4 million. SCM designs, engineers and manufactures high pressure
industrial, medical, halon and electronic gas cylinders and is located near
Windsor, Ontario. The transaction was accounted for as a purchase. The results
of operations for SCM are included in the financial statements of the Company
since the date of acquisition. Goodwill in the amount of $3.8 million resulting
from the purchase is being amortized using the straight-line method over 40
years.
On December 3, 1996, the Company acquired the net assets of Plastics
Manufacturing, Inc. (PMI) for $61.6 million in a business combination accounted
for as a purchase. PMI is a manufacturer of plastic injection molded and
thermoformed parts. The results of operations for PMI are included in the
financial statements of the Company since the date of acquisition. Goodwill in
the amount of $30.6 million resulting from the purchase is being amortized using
the straight-line method over 30 years.
Proforma results including SCM and PMI since the beginning of the earliest
period presented would not be materially different than actual results.
On February 21, 1997, the Company acquired The Gerstenslager Company
(Gerstenslager) in a business combination accounted for as a pooling of
interests. Gerstenslager is a producer of aftermarket automotive body panels in
the United States. Gerstenslager was primarily owned by a subsidiary of JMAC,
Inc., an investment company which is owned by John P. McConnell, Chairman and
CEO of the Company and a partnership involving John P. McConnell, John H.
McConnell, Chairman Emeritus, and a trust for the benefit of their families. All
of the stock of Gerstenslager was exchanged for 5,675,000 Common Shares of the
Company which had a value of $113 million based on an average share price prior
to the closing date. The Board of Directors of the Company received an opinion
from an independent investment banking firm attesting to the fairness of this
consideration. All financial statements of the Company have been restated to
include Gerstenslager for all periods presented. Transactions between the
companies have been immaterial. Sales and net income for the Company before the
pooling, Gerstenslager and the combined results for the periods presented are as
follows:
<TABLE>
<CAPTION>
WORTHINGTON
IND., INC.
AS
PREVIOUSLY
IN THOUSANDS REPORTED GERSTENSLAGER COMBINED
----------- ------------- -----------
<S> <C> <C> <C>
SIX MONTHS ENDED NOVEMBER 30, 1997 (UNAUDITED)
Net sales......................................... $ 831,821 $ 56,820 $ 888,641
Net income........................................ $ 40,116 $ 4,512 $ 44,628
YEAR ENDED MAY 31, 1996
Net sales......................................... $ 1,477,838 $ 100,252 $ 1,578,090
Net income........................................ $ 91,342 $ 9,631 $ 100,973
YEAR ENDED MAY 31, 1995
Net sales......................................... $ 1,483,569 $ 82,106 $ 1,565,675
Net income........................................ $ 116,686 $ 6,443 $ 123,129
</TABLE>
I-23
<PAGE> 24
WORTHINGTON INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
On February 5, 1996, the Company acquired all of the outstanding capital
stock of Dietrich Industries, Inc. (Dietrich) for approximately $146 million in
cash and $23 million in assumed liabilities, net of cash acquired. Dietrich,
based in Pittsburgh, Pennsylvania, is involved primarily in the manufacture and
sale of metal framing products for the commercial and residential construction
markets. The acquisition was accounted for using purchase accounting with
results for Dietrich included since the purchase date. The purchase price
exceeded the fair value of the net assets acquired by approximately $66 million
which is being amortized over 40 years.
The following proforma data summarizes the results of operations of the
Company for the twelve months ended May 31, 1996 and May 31, 1995, assuming
Dietrich was acquired at June 1, 1994. In preparing the proforma data,
adjustments have been made to conform Dietrich's accounting policies to those of
the Company and to reflect purchase accounting adjustments and interest expense:
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
---------------------------
IN THOUSANDS, EXCEPT PER SHARE (UNAUDITED) MAY 31, 1996 MAY 31, 1995
------------ ------------
<S> <C> <C>
Net sales.......................................... $1,761,067 $1,851,037
========== ==========
Net earnings....................................... 102,134 126,902
========== ==========
Earnings per common share.......................... $ 1.06 $ 1.32
========== ==========
</TABLE>
The proforma information does not purport to be indicative of the results
of operations which would have actually been obtained if the acquisition had
occurred on the dates indicated or the results of operations which will be
reported in the future.
NOTE L -- QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following is a summary of the unaudited quarterly results of operations
for the years ended May 31, 1997 and 1996:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-----------------------------------------
IN THOUSANDS, EXCEPT PER SHARE AUGUST NOVEMBER FEBRUARY MAY
-------- -------- -------- --------
<S> <C> <C> <C> <C>
1997
Net sales........................................ $430,292 $458,349 $486,551 $536,528
Gross margin..................................... 63,355 65,688 68,239 80,247
Net earnings..................................... 21,961 22,667 21,817 26,873
Earnings per share............................... $ .23 $ .23 $ .23 $ .28
1996
Net sales........................................ $345,901 $375,611 $386,454 $470,124
Gross margin..................................... 50,131 57,208 61,228 75,766
Net earnings..................................... 22,487 27,849 24,059 26,578
Earnings per share............................... $ .23 $ .29 $ .25 $ .28
</TABLE>
I-24
<PAGE> 25
WORTHINGTON INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The data above has been restated to include the results of The
Gerstenslager Company which was acquired in February 1997 through a pooling of
interests. Gerstenslager's separate results before the acquisition, and the
change to previously reported results for the Company are shown below.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------------------
IN THOUSANDS, EXCEPT PER SHARE AUGUST NOVEMBER FEBRUARY MAY
------- ------- ------- -------
<S> <C> <C> <C> <C>
1997
Net sales............................................. $27,721 $29,099
Gross margin.......................................... 5,680 5,485
Net earnings.......................................... 2,362 2,150
Earnings per share.................................... $ .01 $ .00
1996
Net sales............................................. $20,165 $21,067 $26,230 $32,790
Gross margin.......................................... 3,126 4,197 6,939 8,808
Net earnings.......................................... 979 1,661 3,163 3,828
Earnings per share.................................... $ (.01) $ .00 $ .02 $ .03
</TABLE>
I-25
<PAGE> 26
REPORT OF MANAGEMENT
The management of Worthington Industries is responsible for the preparation
of the accompanying consolidated financial statements in conformity with
generally accepted accounting principles appropriate in the circumstances.
Management is also responsible for the determination of estimates and judgments
used in the financial statements and the preparation of other financial
information included in this Annual Report to Shareholders. The financial
statements have been audited by Ernst & Young LLP, independent auditors.
The management of the Company has established and maintains an accounting
system and related internal controls that it believes are sufficient to provide
reasonable assurance that assets are safeguarded against unauthorized
acquisition, use or disposition, that transactions are executed and recorded in
accordance with management's authorization and that the financial records are
reliable for preparing financial statements. The concept of reasonable assurance
is based on the recognition that the cost of a system of internal control must
be related to the benefits derived and that the balancing of the factors
requires estimates and judgments. Management considers the recommendations of
the internal auditors and independent certified public accountants concerning
the Company's system of internal control and takes appropriate actions which are
cost effective in the circumstances.
The Board of Directors has an Audit Committee of Directors who are not
members of management. The Audit Committee meets periodically with the Company's
management, internal auditors and independent certified public accountants to
review matters relating to financial reporting, auditing and internal control.
To ensure auditor independence, both the internal auditors and independent
certified public accountants have full and free access to the Audit Committee.
/s/ JOHN P. McCONNELL
--------------------------------------
John P. McConnell, Chairman & CEO
/s/ DONALD G. BARGER, JR.
--------------------------------------
Donald G. Barger, Jr., Vice
President-CFO
/s/ MICHAEL R. SAYRE
--------------------------------------
Michael R. Sayre, Corporate Controller
I-26
<PAGE> 27
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Worthington Industries, Inc.
We have audited the accompanying consolidated balance sheets of Worthington
Industries, Inc. and subsidiaries as of May 31, 1997 and 1996, and the related
consolidated statements of earnings, shareholders' equity, and cash flows for
each of the three years in the period ended May 31, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Worthington
Industries, Inc. and subsidiaries at May 31, 1997 and 1996, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended May 31, 1997 in conformity with generally accepted accounting
principles.
/s/ ERNST & YOUNG LLP
--------------------------------------
Ernst & Young LLP
Columbus, Ohio
June 18, 1997
I-27
<PAGE> 28
COMPANY LOCATIONS
PROCESSED STEEL PRODUCTS
THE WORTHINGTON STEEL COMPANY
Columbus, Monroe & Delta, Ohio
Louisville, Kentucky
Rock Hill, South Carolina
Baltimore, Maryland
Jackson & Taylor, Michigan
Malvern, Pennsylvania
Porter, Indiana
Decatur, Alabama
Midland, Georgia
WORTHINGTON CYLINDER CORPORATION
Columbus, Jefferson & Westerville, Ohio
Claremore, Oklahoma
Citronelle, Alabama
Guelph & Tilbury, Ontario, Canada
DIETRICH INDUSTRIES, INC.
Hammond & LaPorte, Indiana
Hicksville, Warren & Aurora, Ohio
Atlanta, Georgia
Baltimore, Maryland
Lunenburg, Massachusetts
Colton & Stockton, California
Phoenix, Arizona
Wildwood & Miami, Florida
East Brunswick, New Jersey
Hutchins, Texas
Fredericksburg, Virginia
Denver, Colorado
Lenexa, Kansas
THE GERSTENSLAGER COMPANY
Wooster, Ohio
CUSTOM PRODUCTS
WORTHINGTON CUSTOM PLASTICS, INC.
Mason, Salem & Upper Sandusky, Ohio
St. Matthews, South Carolina
Lebanon, Kentucky
Harrisburg & Concord, North Carolina
WORTHINGTON PRECISION METALS, INC.
Mentor, Ohio
Franklin, Tennessee
CAST PRODUCTS
BUCKEYE STEEL CASTINGS COMPANY
Columbus, Ohio
WORTHINGTON MACHINE TECHNOLOGY
Columbus, Ohio
I. H. SCHLEZINGER
Columbus, Ohio
JOINT VENTURES
WORTHINGTON SPECIALTY PROCESSING (WSP)
Steel Processing
Jackson, Michigan
ACEREX
Steel Processing
Monterrey, Mexico
SPARTAN STEEL COATING
Steel Processing
Monroe, Michigan
TWB COMPANY
Tailor Laser Welded Blanks
Monroe, Michigan
WORTHINGTON ARMSTRONG VENTURE (WAVE)
Suspended Ceilings
Malvern, Pennsylvania
Sparrows Point, Maryland
Valenciennes, France
North Las Vegas, Nevada
Shanghai, China
Madrid, Spain
Team Valley, England
Benton Harbor, Michigan
WORTHINGTON S.A.
Pressure Cylinders
Sao Palo, Brazil
LONDON INDUSTRIES, INC.
Custom Plastics
London, Ohio
I-28
<PAGE> 29
OFFICERS & DIRECTORS
CORPORATE OFFICERS
John H. McConnell*
Chairman Emeritus & Founder
Director, 1955
John P. McConnell*
Chairman & Chief Executive Officer
Director, 1975
Donal H. Malenick*
President & Chief Operating Officer
Director, 1959
Pete A. Klisares*
Assistant to the Chairman
Director, 1991
William S. Dietrich
President - Dietrich Industries
Director, 1996
Donald G. Barger, Jr.
Vice President & Chief Financial Officer, 1993
Edward A. Ferkany
Group Vice President - Processed Steel, 1974
Robert J. Borel
Vice President - Engineering, 1973
Ralph V. Roberts
Vice President - Corporate
Development, 1973
Mark H. Stier
Vice President - Human Resources, 1975
Thomas L. Hockman
Vice President - Personnel, 1973
Dale T. Brinkman
General Counsel, 1982
Michael R. Sayre
Corporate Controller, 1993
OUTSIDE DIRECTORS
Charles R. Carson+
Retired Senior Vice President
General Electric Company
Director, 1986
John E. Fisher++
Retired General Chairman
Nationwide Insurance Companies
Director, 1993
John F. Havens++
Retired Chairman
Banc One Corporation
Director, 1988
Katherine S. LeVeque+
Chief Executive Officer
LeVeque Enterprises
Commercial Real Estate
Director, 1992
Robert B. McCurry++
Senior Advisor to President
Toyota Motor Sales, U.S.A. Inc.
Director, 1972
Charles D. Minor+
Counsel
Vorys, Sater, Seymour and Pease
Secretary - Director, 1962
Gerald B. Mitchell++
Retired Chairman
Dana Corporation
Director, 1986
James Petropoulos+
Owner
James Petropoulos & Company
Commercial Real Estate
Director, 1976
SUBSIDIARY OFFICERS
John R. Halula
Group Vice President, 1980
Worthington Custom Plastics, Inc.
Joe W. Harden
Vice President - General Manager, 1980
Buckeye Steel Castings Company
Derek R. West
Vice President - General Manager, 1991
Worthington Precision Metals, Inc.
Virgil L. Winland
Group Vice President, 1971
Worthington Cylinder
Corporation
Jay D. Wisner
President, 1997
The Gerstenslager Company
- ---------------
* Member of Executive Committee
+ Member of Audit Committee
++ Member of Compensation and Stock Option Committee
Note: Year indicates initial year of employment or Board membership
I-29
<PAGE> 1
EXHIBIT 21
WORTHINGTON INDUSTRIES, INC.
A DELAWARE CORPORATION
<TABLE>
<CAPTION>
JURISDICTION OF
SUBSIDIARY (1) INCORPORATION
- -------------------------------------------------------------------------------------------
<S> <C>
Dietrich Industries, Inc. Pennsylvania
The Gerstenslager Company Michigan
I. H. Schlezinger, Inc. Ohio
Worthington Industries of Michigan, Inc. Michigan
SUBSIDIARIES OF WORTHINGTON INDUSTRIES OF MICHIGAN, INC.
The Worthington Steel Company Indiana
The Worthington Steel Company Kentucky
The Worthington Steel Company Maryland
The Worthington Steel Company North Carolina
The Worthington Steel Company Delaware
.......NRM Trucking Co. (2) Delaware
Worthington Steel of Michigan, Inc. Michigan
d/b/a The Worthington Steel Company
Worthington Cylinder Corporation Ohio
Worthington Acetylene Cylinders, Inc. (3) Alabama
(d/b/a North American Cylinders, Inc.)
Worthington Cylinders of Canada, Inc. (3) Ontario, Canada
Steel Cylinder Manufacturing, Inc. (4) Ontario, Canada
Buckeye Steel Castings Company Ohio
Buckeye Energy Company, Inc. (5) Ohio
B-I Sales, Inc. (5) Michigan
GSI Engineering, Inc. (5) Delaware
Buckeye International Development, Inc.(5) Ohio
Worthington Custom Plastics, Inc. (5) Ohio
Worthington Precision Metals, Inc. (6) Tennessee
Industrias Worthington Do Brasil Ltda Laws / Federative Republic of Brazil
Worthington Industries of Mexico, S.A. de C.V. Mexico
</TABLE>
(1) All subsidiaries are 100% owned by the listed parent unless otherwise
noted
Some minor or non-functioning corporations are not listed
(2) Wholly-owned subsidiary of Worthington Steel Company(DE)
(3) Wholly-owned subsidiary of Worthington Cylinder Corporation
(4) Wholly-owned subsidiary of Worthington Cylinders of Canada, Inc.
(5) Wholly-owned subsidiary of Buckeye Steel Castings Company
(6) Wholly-owned subsidiary of Worthington Custom Plastics, Inc.
<PAGE> 2
JOINT VENTURES
Worthington Specialty Processing (7) Michigan
London Industries, Inc. (8) Ohio
TWB Company, L.L.C. (9) Michigan
Worthington Armstrong Venture (10) Delaware
Acerex, S.A. de C.V. (11) Mexico
Worthington S.A. (12) Brazil
* * * * *
(7) 50% Joint Venture w/USX Corporation - owned by Worthington Steel of
Michigan, Inc.
(8) 60% owned Joint Venture with Nissen, Sumitomo & Sumitomo Corp. of America
-owned by Worthington Custom Plastics, Inc.
(9) 33% Joint Venture - Owned by Worthington Steel of Michigan, Inc.
(10) 50% Joint Venture w/Armstrong Ventures, Inc. - Owned by The Worthington
Steel Company (DE)
(11) 50% Joint Venture with Hylsa S.A. de C.V. Owned by Worthington Industries
Mexico, S.A. de C.V.
(12) 52% Joint Venture - Owned by Worthington, S.A.
2
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Worthington Industries, Inc. of our report dated June 18, 1997, included in
the 1997 Annual Report of Shareholders of Worthington Industries, Inc.
Our audits also included the financial statement schedule of Worthington
Industries, Inc. listed in Item 14(a). This schedule is responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits. In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
We also consent to the incorporation by reference in the Registration Statements
(Form S-8 No. 33-57981) pertaining to the Worthington Industries, Inc. Deferred
Profit Sharing Plan; (Form S-8 No. 2-80094) pertaining to the Worthington
Industries, Inc. Amended 1980 Stock Option Plan; (Form S-3 No. 33-46470)
pertaining to the Worthington Industries, Inc. Dividend Reinvestment and Stock
Purchase Plan; (Form S-8 No. 33-38486) pertaining to the Worthington Industries,
Inc. 1990 Stock Option Plan; (Form S-8 No. 333-18099) pertaining to the
Worthington Steel Company (Malvern) Union Retirement Savings Plan; and (Form S-3
No. 333-03087) pertaining to Worthington Industries, Inc. Debt Securities of our
report dated June 18, 1997, with respect to the consolidated financial
statements incorporated herein by reference, and our report included in the
preceding paragraph with respect to the financial statement schedule included in
this Annual Report (Form 10-K) of Worthington Industries, Inc.
/s/ Ernst & Young LLP
Columbus, Ohio
August 26, 1997
<PAGE> 1
EXHIBIT 24
----------
POWERS OF ATTORNEY
------------------
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of Worthington Industries, Inc., a Delaware corporation, which is about
to file with the Securities and Exchange Commission, Washington, D.C., under the
provisions of the Securities Act of 1934, on Form 10-K constitutes and appoints
Donal H. Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and
lawful attorneys-in-fact and agents, with full power to act without the other,
for him and in his name, place and stead, in any and all capacities, to sign
such Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 29th
day of May, 1997.
/s/ Charles R. Carson
----------------------------------
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of Worthington Industries, Inc., a Delaware corporation, which is about
to file with the Securities and Exchange Commission, Washington, D.C., under the
provisions of the Securities Act of 1934, on Form 10-K constitutes and appoints
Donal H. Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and
lawful attorneys-in-fact and agents, with full power to act without the other,
for him and in his name, place and stead, in any and all capacities, to sign
such Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 29th
day of May, 1997.
/s/ William S. Dietrich, II
----------------------------------
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of Worthington Industries, Inc., a Delaware corporation, which is about
to file with the Securities and Exchange Commission, Washington, D.C., under the
provisions of the Securities Act of 1934, on Form 10-K constitutes and appoints
Donal H. Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and
lawful attorneys-in-fact and agents, with full power to act without the other,
for him and in his name, place and stead, in any and all capacities, to sign
such Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 29th
day of May, 1997.
/s/ John E. Fisher
----------------------------------
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of Worthington Industries, Inc., a Delaware corporation, which is
about to file with the Securities and Exchange Commission, Washington, D.C.,
under the provisions of the Securities Act of 1934, on Form 10-K constitutes
and appoints Donal H. Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his
true and lawful attorneys-in-fact and agents, with full power to act without
the other, for him and in his name, place and stead, in any and all capacities,
to sign such Annual Report and any or all amendments thereto, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agents or any of them or their or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
29th day of May, 1997.
/s/ John F. Havens
----------------------------------
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of Worthington Industries, Inc., a Delaware corporation, which is about
to file with the Securities and Exchange Commission, Washington, D.C., under the
provisions of the Securities Act of 1934, on Form 10-K constitutes and appoints
Donal H. Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and
lawful attorneys-in-fact and agents, with full power to act without the other,
for him and in his name, place and stead, in any and all capacities, to sign
such Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 29th
day of May, 1997.
/s/ Pete A. Klisares
----------------------------------
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of Worthington Industries, Inc., a Delaware corporation, which is about
to file with the Securities and Exchange Commission, Washington, D.C., under the
provisions of the Securities Act of 1934, on Form 10-K constitutes and appoints
Donal H. Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and
lawful attorneys-in-fact and agents, with full power to act without the other,
for him and in his name, place and stead, in any and all capacities, to sign
such Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 29th
day of May, 1997.
/s/ Katherine S. LeVeque
----------------------------------
<PAGE> 8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of Worthington Industries, Inc., a Delaware corporation, which is about
to file with the Securities and Exchange Commission, Washington, D.C., under the
provisions of the Securities Act of 1934, on Form 10-K constitutes and appoints
Donal H. Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and
lawful attorneys-in-fact and agents, with full power to act without the other,
for him and in his name, place and stead, in any and all capacities, to sign
such Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 29th
day of May, 1997.
/s/ Donal H. Malenick
----------------------------------
<PAGE> 9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of Worthington Industries, Inc., a Delaware corporation, which is about
to file with the Securities and Exchange Commission, Washington, D.C., under the
provisions of the Securities Act of 1934, on Form 10-K constitutes and appoints
Donal H. Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and
lawful attorneys-in-fact and agents, with full power to act without the other,
for him and in his name, place and stead, in any and all capacities, to sign
such Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 29th
day of May, 1997.
/s/ John H. McConnell
----------------------------------
<PAGE> 10
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of Worthington Industries, Inc., a Delaware corporation, which is about
to file with the Securities and Exchange Commission, Washington, D.C., under the
provisions of the Securities Act of 1934, on Form 10-K constitutes and appoints
Donal H. Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and
lawful attorneys-in-fact and agents, with full power to act without the other,
for him and in his name, place and stead, in any and all capacities, to sign
such Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 29th
day of May, 1997.
/s/ John P. McConnell
----------------------------------
<PAGE> 11
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of Worthington Industries, Inc., a Delaware corporation, which is about
to file with the Securities and Exchange Commission, Washington, D.C., under the
provisions of the Securities Act of 1934, on Form 10-K constitutes and appoints
Donal H. Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and
lawful attorneys-in-fact and agents, with full power to act without the other,
for him and in his name, place and stead, in any and all capacities, to sign
such Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 29th
day of May, 1997.
/s/ Robert B. McCurry
----------------------------------
<PAGE> 12
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of Worthington Industries, Inc., a Delaware corporation, which is about
to file with the Securities and Exchange Commission, Washington, D.C., under the
provisions of the Securities Act of 1934, on Form 10-K constitutes and appoints
Donal H. Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and
lawful attorneys-in-fact and agents, with full power to act without the other,
for him and in his name, place and stead, in any and all capacities, to sign
such Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 29th
day of May, 1997.
/s/ Charles D. Minor
----------------------------------
<PAGE> 13
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of Worthington Industries, Inc., a Delaware corporation, which is about
to file with the Securities and Exchange Commission, Washington, D.C., under the
provisions of the Securities Act of 1934, on Form 10-K constitutes and appoints
Donal H. Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and
lawful attorneys-in-fact and agents, with full power to act without the other,
for him and in his name, place and stead, in any and all capacities, to sign
such Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 29th
day of May, 1997.
/s/ Gerald B. Mitchell
----------------------------------
<PAGE> 14
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of Worthington Industries, Inc., a Delaware corporation, which is about
to file with the Securities and Exchange Commission, Washington, D.C., under the
provisions of the Securities Act of 1934, on Form 10-K constitutes and appoints
Donal H. Malenick, Donald G. Barger, Jr. and Dale T. Brinkman, his true and
lawful attorneys-in-fact and agents, with full power to act without the other,
for him and in his name, place and stead, in any and all capacities, to sign
such Annual Report and any or all amendments thereto, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents or any of them or their or his substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 29th
day of May, 1997.
/s/ James Petropoulos
----------------------------------
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-START> JUN-01-1994
<PERIOD-END> MAY-31-1995
<CASH> 1,893
<SECURITIES> 0
<RECEIVABLES> 233,271
<ALLOWANCES> 2,411
<INVENTORY> 206,550
<CURRENT-ASSETS> 474,853
<PP&E> 634,497
<DEPRECIATION> 275,918
<TOTAL-ASSETS> 964,299
<CURRENT-LIABILITIES> 191,672
<BONDS> 69,056
0
0
<COMMON> 965
<OTHER-SE> 607,177
<TOTAL-LIABILITY-AND-EQUITY> 964,299
<SALES> 1,565,675
<TOTAL-REVENUES> 1,565,675
<CGS> 1,310,184
<TOTAL-COSTS> 1,310,184
<OTHER-EXPENSES> 90,241
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,673
<INCOME-PRETAX> 197,552
<INCOME-TAX> 74,423
<INCOME-CONTINUING> 123,129
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 123,129
<EPS-PRIMARY> 1.28
<EPS-DILUTED> 1.28
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-START> JUN-01-1995
<PERIOD-END> MAY-31-1996
<CASH> 17,580
<SECURITIES> 0
<RECEIVABLES> 247,048
<ALLOWANCES> 2,792
<INVENTORY> 216,159
<CURRENT-ASSETS> 505,104
<PP&E> 848,775
<DEPRECIATION> 304,723
<TOTAL-ASSETS> 1,282,424
<CURRENT-LIABILITIES> 167,585
<BONDS> 315,522
0
0
<COMMON> 965
<OTHER-SE> 666,353
<TOTAL-LIABILITY-AND-EQUITY> 1,282,424
<SALES> 1,578,090
<TOTAL-REVENUES> 1,578,090
<CGS> 1,333,757
<TOTAL-COSTS> 1,333,757
<OTHER-EXPENSES> 101,829
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,687
<INCOME-PRETAX> 163,892
<INCOME-TAX> 62,919
<INCOME-CONTINUING> 100,973
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 100,973
<EPS-PRIMARY> 1.05
<EPS-DILUTED> 1.05
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-START> JUN-01-1996
<PERIOD-END> MAY-31-1997
<CASH> 7,212
<SECURITIES> 0
<RECEIVABLES> 270,736
<ALLOWANCES> 3,900
<INVENTORY> 296,888
<CURRENT-ASSETS> 594,128
<PP&E> 1,036,621
<DEPRECIATION> 345,594
<TOTAL-ASSETS> 1,561,186
<CURRENT-LIABILITIES> 246,794
<BONDS> 450,393
0
0
<COMMON> 968
<OTHER-SE> 714,550
<TOTAL-LIABILITY-AND-EQUITY> 1,561,186
<SALES> 1,911,720
<TOTAL-REVENUES> 1,911,720
<CGS> 1,634,191
<TOTAL-COSTS> 1,634,191
<OTHER-EXPENSES> 123,283
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,427
<INCOME-PRETAX> 150,532
<INCOME-TAX> 57,214
<INCOME-CONTINUING> 93,318
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 93,318
<EPS-PRIMARY> .97
<EPS-DILUTED> .97
</TABLE>
