TABLE OF CONTENTS
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Page No.
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PART I. FINANCIAL INFORMATION
______________________________
Item 1. Financial Statements
Consolidated Statement of Earnings for the Third 2
Quarter and Nine Months Ended October 2, 1994 and
October 3, 1993
Consolidated Statement of Financial Position at 3
October 2, 1994 and December 31, 1993
Consolidated Statement of Cash Flows for the Nine 4
Months Ended October 2, 1994 and October 3, 1993
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Results of 7
Operations, Cash Flow and Financial Condition
PART II. OTHER INFORMATION
___________________________
Item 6. Exhibits and Reports on Form 8-K 11
Index to Exhibits 13
<PAGE>
CUMMINS ENGINE COMPANY, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
FOR THE THIRD QUARTER AND NINE MONTHS ENDED
OCTOBER 2, 1994 AND OCTOBER 3, 1993
Unaudited
(Millions, Except per Share Amounts)
Third Quarter Nine Months
1994 1993 1994 1993
________ ______ ________ ________
NET SALES $1,155.5 $988.3 $3,459.6 $3,130.1
Cost of goods sold 861.4 748.9 2,597.2 2,379.1
________ ______ ________ ________
GROSS PROFIT 294.1 239.4 862.4 751.0
Selling & administrative expenses 161.2 139.1 470.6 425.1
Research & engineering expenses 59.5 49.9 169.9 151.5
Interest expense 4.6 9.0 13.7 27.7
Other (income) expense, net (3.1) .6 (3.8) 2.0
_________ ______ _________ ________
Earnings before income taxes 71.9 40.8 212.0 144.7
Provision for income taxes 10.0 - 29.3 14.6
Minority interest - .1 - .1
________ ______ ________ ________
NET EARNINGS 61.9 40.7 182.7 130.0
Preference stock dividends - 2.0 - 6.1
________ ______ ________ ________
EARNINGS AVAILABLE FOR COMMON
SHARES $ 61.9 $ 38.7 $ 182.7 $ 123.9
________ ______ ________ ________
________ ______ ________ ________
Primary earnings per common share $ 1.48 $ 1.11 $ 4.43 $ 3.54
Fully diluted earnings per common
share 1.48 1.06 4.43 3.37
Cash dividends declared per share .125 .025 .375 .075
<PAGE>
CUMMINS ENGINE COMPANY, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited
(Millions, Except per Share Amounts)
10/2/94 12/31/93
________ ________
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 167.6 $ 77.3
Receivables less allowances of $10.7 & $9.5 495.8 426.3
Inventories 541.8 440.2
Other current assets 141.8 127.9
________ ________
1,347.0 1,071.7
INVESTMENTS AND OTHER ASSETS 197.6 190.7
PROPERTY, PLANT & EQUIPMENT less accumulated
depreciation of $1,281.0 & $1,222.3 997.9 958.2
INTANGIBLES, DEFERRED TAXES & DEFERRED CHARGES 169.5 170.0
________ ________
TOTAL ASSETS $2,712.0 $2,390.6
________ ________
________ ________
LIABILITIES AND SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Loans payable $ 38.2 $ 13.4
Current maturities of long-term debt 31.8 32.6
Accounts payable 308.9 267.5
Other current liabilities 453.1 386.8
________ ________
832.0 700.3
________ ________
LONG-TERM DEBT 184.2 189.6
________ ________
OTHER LIABILITIES 686.7 679.6
________ ________
SHAREHOLDERS' INVESTMENT:
Convertible preference stock, no par value,
.2 shares outstanding - 112.2
Common stock, $2.50 par value, 43.7 & 40.6
shares issued 109.2 101.5
Additional contributed capital 924.5 822.8
Retained earnings 171.2 4.1
Common stock in treasury, at cost, 2.1 shares (67.3) (67.3)
Unearned ESOP compensation (55.0) (59.3)
Cumulative translation adjustments (73.5) (92.9)
________ ________
1,009.1 821.1
________ ________
TOTAL LIABILITIES & SHAREHOLDERS' INVESTMENT $2,712.0 $2,390.6
________ ________
________ ________
<PAGE>
CUMMINS ENGINE COMPANY, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited (Millions)
Nine Months Ended
10/2/94 10/3/93
_______ _______
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $182.7 $130.0
_______ _______
Adjustments to reconcile net earnings to
net cash from operating activities:
Depreciation and amortization 95.6 95.0
Accounts receivable (59.4) (69.8)
Inventories (93.2) (19.9)
Accounts payable and accrued expenses 96.7 ( 4.4)
Other 11.2 12.8
______ ______
Total adjustments 50.9 13.7
______ ______
Net cash provided by operating activities 233.6 143.7
______ ______
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment:
Additions (131.1) (101.0)
Disposals 4.5 4.9
Investments in and advances to affiliates
and unconsolidated companies (15.8) ( 4.8)
Acquisitions of new businesses, net of cash
acquired - 3.4
_______ _______
Net cash used for investing activities (142.4) (97.5)
_______ _______
NET CASH FLOWS FROM OPERATING & INVESTING
ACTIVITIES 91.2 46.2
______ ______
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings - 56.5
Payments on borrowings ( 8.4) (140.3)
Net borrowings under credit agreements 24.3 53.3
Dividend payments (15.6) ( 8.6)
Other ( 3.0) ( 5.9)
_______ _______
Net cash used for financing activities ( 2.7) (45.0)
_______ _______
EFFECT OF EXCHANGE RATE CHANGES ON CASH 1.8 .3
______ ______
NET CHANGE IN CASH & CASH EQUIVALENTS 90.3 1.5
Cash & cash equivalents at beginning of year 77.3 54.2
______ ______
CASH & CASH EQUIVALENTS AT END OF THE QUARTER $167.6 $ 55.7
______ ______
______ ______
<PAGE>
CUMMINS ENGINE COMPANY, INC., AND SUBSIDIARIES
______________________________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
__________________________________________
Unaudited
(Dollars in Millions, Unless Otherwise Stated)
NOTE 1. ACCOUNTING POLICIES: The CONSOLIDATED FINANCIAL STATEMENTS for
the interim periods ended October 2, 1994 and October 3, 1993 have been
prepared in accordance with the accounting policies described in the
Company's Annual Report to Shareholders and Form 10-K. Management
believes the statements include all adjustments of a normal recurring
nature necessary to present fairly the results of operations for the
interim periods. Inventory values at interim reporting dates are based
upon estimates of the annual adjustments for taking physical inventory and
for the change in cost of LIFO inventories.
NOTE 2. INCOME TAXES: Income tax expense is reported during the
interim reporting periods on the basis of the estimated annual effective
tax rate for the taxable jurisdictions in which the Company operates.
In the first nine months of both 1994 and 1993, the Company recognized
approximately $32 related to a reduction in its valuation allowance for
tax benefit carryforwards. In the third quarter of 1993, the tax
provision included a one-time credit of $4.4 resulting from the Omnibus
Budget Reconciliation Act of 1993. This legislation increased the US
corporate income tax rate from 34 percent to 35 percent resulting in a
$4.4 increase in the value of the future tax benefits represented by the
Company's net deferred tax assets. The current effect of the rate
increase is absorbed by the use of carryforward tax benefits.
NOTE 3. EARNINGS PER SHARE: Primary earnings per share of common stock
are computed by subtracting preference stock dividend requirements from
net earnings and dividing that amount by the weighted average number of
common shares outstanding during the period. The weighted average number
of shares, which assumes the exercise of certain stock options grated to
employees, was 41.7 million in the third quarter of 1994 and 41.3 million
in the first nine months of 1994. In the third quarter and first nine
months of 1993, the weighted average number of shares was 34.9 million and
35.0 million, respectively. Fully diluted earnings per share are computed
by dividing net earnings by the weighted average number of shares
outstanding assuming the exercise of stock options and conversion of debt
and preference stock to common stock.
NOTE 4. LONG-TERM DEBT: On September 16, 1994, the Company's $300
million revolving credit agreement was amended, lowering fees and interest
costs and extending the 3-year term that was entered in 1993 to a 5-year
term. There were no outstanding borrowings under the facility at October
2, 1994.
NOTE 5. PREFERENCE STOCK REDEMPTION: On January 24, 1994, the Company
called for redemption, at a price of $51.05 per depositary share, plus
accrued dividends, of its outstanding Convertible Exchangeable Preference
Stock, which had a face value of $112.2 at December 31, 1993. Holders
elected to covert their shares of preference stock into 2.9 million shares
of common stock prior to the redemption date.
NOTE 6. COMMON STOCK DIVIDEND AND STOCK REPURCHASE PROGRAM: On October
11, 1994, the Board of Directors increased the Company's quarterly common
stock dividend from 12.5 cents per share to 25 cents per share and
declared a quarterly common stock dividend of 25 cents per share payable
on December 15, 1994 to shareholders of record on December 1. The Board
also authorized repurchase by the Company of up to 2.5 million shares of
its common stock. At the Company's discretion, repurchases of the stock
will be made from time to time in the open market and through privately
negotiated transactions.
NOTE 7. ACQUISITION: On October 3, 1994, the Company announced the
acquisition of Power Group International (PGI) from 3i Group and Barclays.
PGI, based in Kent, England, is a developer and manufacturer of a broad
range of power generation equipment sold under the trade names of Petbow,
Auto Diesel and Agreba. The acquisition will be accounted for as a
purchase. Accordingly, PGI's results of operations will be included in
the Company's Consolidated Statement of Earnings effective in the fourth
quarter of 1994.
<PAGE>
CUMMINS ENGINE COMPANY, INC., AND SUBSIDIARIES
______________________________________________
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS,
CASH FLOW AND FINANCIAL CONDITION
______________________________________________________________
(Dollars in Millions, Unless Otherwise Stated)
OVERVIEW
________
The Company's net sales of $1.2 billion in the third quarter of
1994 were $167.2 higher than in the third quarter of 1993. This 17-
percent increase was attributable to continued strong demand in most of
the Company's markets. In the first nine months of 1994, the Company's
net sales were $3.5 billion, compared to $3.1 billion in the first nine
months of 1993.
The Company net earnings were $61.9, or $1.48 per share, in the third
quarter of 1994, compared to $40.7, or $1.11 per share, in the third
quarter of 1993. For the first nine months of 1994, net earnings were
$182.7, or $4.43 per share, compared to $130.0, or $3.54 per share, in the
first nine months of 1993.
RESULTS OF OPERATIONS
_____________________
The percentage relationships between net sales and other elements of
the Company's CONSOLIDATED STATEMENT OF EARNINGS for the comparative
reporting periods were:
Third Quarter Nine Months
Percent of Net Sales 1994 1993 1994 1993
____________________ _____ _____ _____ _____
Net sales 100.0 100.0 100.0 100.0
Cost of goods sold 74.5 75.8 75.1 76.0
_____ _____ _____ _____
Gross profit 25.5 24.2 24.9 24.0
Selling and administrative expenses 14.0 14.1 13.6 13.6
Research and engineering expenses 5.1 5.0 4.9 4.8
Interest expense .4 .9 .4 .9
Other (income) expense, net (.2) .1 (.1) .1
______ _____ ______ _____
Earnings before income taxes 6.2 4.1 6.1 4.6
Provision for income taxes .8 - .8 .4
_____ _____ _____ _____
Net earnings 5.4 4.1 5.3 4.2
_____ _____ _____ _____
_____ _____ _____ _____
NET SALES
_________
Sales for each of the Company's markets for the comparative reporting
periods were:
Third Quarter Nine Months
1994 1993 1994 1993
______ ______ ______ ______
Heavy-duty truck $ 353 $ 268 $1,042 $ 928
Midrange truck 136 156 370 343
Power generation 249 244 746 694
Bus and light commercial vehicles 138 73 441 337
Industrial products 122 98 388 349
Government 15 33 45 88
Marine 17 13 56 51
Fleetguard, Holset and Cummins
Electronics (a) 126 103 372 340
______ ______ ______ ______
Net sales $1,156 $ 988 $3,460 $3,130
______ ______ ______ ______
______ ______ ______ ______
(a) Excludes sales of McCord effective with the third quarter of 1993
Sales to the heavy-duty truck market in the third quarter of 1994 were
over 30 percent higher than in the third quarter of 1993. In the first
nine months of 1994, sales to this market were approximately 12 percent
higher than the 1993 level. Shipments of engines for heavy-duty trucks in
North America in the third quarter and first nine months of 1994 were 16
percent and 12 percent higher, respectively, than the comparable period of
1993. This market continues to operate at record levels, with current
projections for truck production to reach 205,000 units in 1994.
In the third quarter and first nine months of 1994, shipments of the
Company's heavy-duty truck engines for international markets were 48
percent and 30 percent higher, respectively, than in the comparable
periods of 1993. In the United Kingdom, the Company's largest market for
heavy-duty truck engines outside the United States, business conditions
continue to improve, with engine shipments in the third quarter of 1994
approximately 6 percent higher than in the third quarter of 1993.
Sales to the midrange truck market in the third quarter of 1994 were $20
lower than in the third quarter of 1993. However, sales to this market in
the first nine months of 1994 were $370, compared to $343 in the first
nine months of 1993, an increase of 8 percent. The increase in sales in
1994 has been due to higher engine shipments in both North American and
international markets.
Power generation sales in the third quarter of 1994 were $249, compared to
$244 in the third quarter of 1993. In the first nine months of 1994,
power generation sales were 7 percent higher than in the first nine months
of 1993. The increase in sales in 1994 was due to demand for industrial
generator sets, particularly in international markets, and for power units
in recreational vehicles. On October 3, 1994, the Company announced the
acquisition of Power Group International (PGI), a major developer and
manufacturer of a broad range of power generation equipment sold under the
trade names of Petbow, Auto Diesel and Agreba. PGI, based in Kent,
England, had sales of $86 in 1993.
Sales for bus and light commercial vehicles were $138 in the third quarter
of 1994, compared to $73 in the third quarter of 1993. In the first nine
months of 1994, sales for this market were over 30 percent higher than the
prior year's level. The increase in sales in 1994 was due primarily to
demand for midrange engines for the Chrysler Dodge Ram pickup truck.
During the third quarter of 1993, shipments of these engines were reduced
substantially due to Chrysler's changeover to its new T300 model.
Sales of industrial products, which traditionally are affected seasonally
in the third quarter, were 24 percent higher in the third quarter of 1994,
compared to the same quarter of 1993. The increase in sales was due to
improvements in both North American and international markets for
construction and agricultural equipment. Sales in the first nine months
of 1994 were 11 percent higher than the first nine months of 1993.
Engine shipments for all markets in the comparative reporting periods
were:
Third Quarter Nine Months
1994 1993 1994 1993
______ ______ _______ _______
Midrange engines 46,900 32,000 144,500 119,500
Heavy-duty engines 24,500 20,200 73,400 64,500
High-horsepower engines 2,100 2,300 6,600 6,500
______ ______ _______ _______
Total engine shipments 73,500 54,500 224,500 190,500
In the third quarter and first nine months of 1994, sales of filters,
turbochargers and electronic controls were 22 percent and 9 percent
higher, respectively, than the comparable periods of 1993. The increase
in sales of Fleetguard, Holset and Cummins Electronics during 1994 was due
primarily to demand worldwide for the Company's filter products, which
were approximately 15 percent higher in the third quarter of 1994,
compared to the third quarter of 1993, and increased demand for
turbochargers.
GROSS PROFIT
____________
In the third quarter and first nine months of 1994, the Company's gross
profit percentage was 25.5 percent and 24.9 percent of net sales,
respectively, compared to 24.2 percent and 24.0 percent in the comparative
periods of 1993. The key factor contributing to the improved margin in
1994 was the increase in demand for the Company's products in all key
domestic and international markets. The cost of product coverage
programs, which includes both warranty and extended coverage programs, was
2.0 percent of net sales in the third quarter of 1994, compared to 2.3
percent in the third quarter of 1993. When the Company introduces new
products, it typically uses higher accrual rates for these programs.
Actual claims experience for the 1994 products has confirmed that these
engines are performing well in the field. The Company adjusted its
accrual rates accordingly, resulting in lower product coverage expense in
the third quarter of 1994. In the first nine months of 1994, the cost of
product coverage programs was 2.4 percent of net sales, compared to 2.3
percent in the first nine months of 1993.
OPERATING EXPENSES
__________________
Selling and administrative expenses of $161.2 in the third quarter of 1994
and $470.6 in the first nine months of 1994 were $22.1 and $45.5 higher,
respectively, than the corresponding periods of 1993. The increase in
expenditures in 1994 was primarily attributable to variable operating
expenses related to the higher sales volumes. The increase of $9.6 and
$18.4 million in research and engineering expenses in the third quarter
and first nine months of 1994, compared to the respective periods of 1993,
was due to continued expenditures for fuel systems and for ongoing product
development.
INTEREST EXPENSE
________________
Interest expense was $4.6 in the third quarter of 1994 and $13.7 in the
first nine months of 1994, compared to $9.0 and $27.7 in the respective
periods of 1993. The decrease in interest expense in 1994 was due to the
Company's early retirement and redemption of debt obligations during 1993.
OTHER INCOME AND EXPENSE
________________________
Other income and expense includes a variety of items, such as translation,
interest income, earnings of unconsolidated companies and royalty income.
Income of $3.1 in the third quarter of 1994 was related to foreign
exchange gains, interest income and technical fees.
PROVISION FOR INCOME TAXES
__________________________
As disclosed in NOTE 2 to the CONSOLIDATED FINANCIAL STATEMENTS, the
Company reduced its valuation allowance for tax benefit carryforwards
approximately $32 in the first nine months of both 1994 and 1993. The tax
provision in the third quarter of 1993 included a one-time credit of $4.4
resulting from the Omnibus Budget Reconciliation Act of 1993.
CASH FLOW AND FINANCIAL CONDITION
_________________________________
Key elements of the CONSOLIDATED STATEMENT OF CASH FLOWS were:
First Nine Months
1994 1993
______ ______
Net cash provided by operating activities $233.6 $143.7
Net cash used for investing activities (142.4) (97.5)
______ ______
Net cash flows from operating and
investing activities 91.2 46.2
Net cash used for financing activities ( 2.7) (45.0)
Effect of exchange rate changes on cash 1.8 .3
______ _____
Net change in cash and cash equivalents $ 90.3 $ 1.5
______ _____
______ _____
The Company's cash reserves increased by $90.3 during the first nine
months of 1994 to $167.6. During the first nine months of 1994, the
Company generated cash flows from operating activities of $233.6, compared
to $143.7 in the first nine months of 1993, due to improved earnings and
net working capital requirements. Investing activities required net cash
resources of $142.4 for capital expenditures and investments in and
advances to affiliates and unconsolidated companies in the first nine
months of 1994.
As disclosed in NOTE 5 to the CONSOLIDATED FINANCIAL STATEMENTS, the
Company called for redemption of its preference stock on January 24, 1994.
In lieu of accepting the cash redemption price, holders elected to convert
their shares of preference stock into common stock of the Company.
Total indebtedness (including the guaranteed notes of the ESOP Trust) was
$254.2 million at the end of the third quarter of 1994. The Company's
debt-to-capital ratio was 20.1 percent at the end of the third quarter of
1994, compared to 22.3 percent at December 31, 1993. As disclosed in NOTE
4 to the CONSOLIDATED FINANCIAL STATEMENTS, the Company amended its $300
revolving credit agreement to extend the term to five years and to make
certain other changes.
On January 25, 1994, Moody's Investors Service upgraded the ratings of the
senior debt of the Company to investment grade (from Ba1 to Baa2).
Moody's stated that the action reflected the favorable intermediate-
term outlook for the Company's sales and operating performance as a result
of the Company's stronger and more diversified customer base, the
expansion of its international presence and better cost controls.
As disclosed in NOTE 6 to the CONSOLIDATED FINANCIAL STATEMENTS, on
October 11, 1994, the Board of Directors increased Cummins' quarterly
common stock dividend from 12.5 cents per share to 25 cents per share and
authorized repurchase by the Company of up to 2.5 million shares of its
common stock.
PART II. OTHER INFORMATION
___________________________
Item 6. Exhibits and Reports on Form 8-K:
__________________________________________
(a) See the Index to Exhibits on Page 13 for a list of exhibits filed
herewith.
(b) The Company was not required to file a Form 8-K during the third
quarter of 1994.
<PAGE>
SIGNATURES
__________
Pursuant to the requirements 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.
CUMMINS ENGINE COMPANY, INC.
By: /s/John McLachlan
~~~~~~~~~~~~~~~~~
John McLachlan
Vice President - Corporate Controller
(Chief Accounting Officer) October 28, 1994
<PAGE>
CUMMINS ENGINE COMPANY, INC., AND SUBSIDIARIES
______________________________________________
INDEX TO EXHIBITS
_________________
Page No.
________
3(b) By-laws of Cummins Engine Company, Inc., as
amended and restated effective as of
August 12, 1994 (filed herewith) 14
10(b) Five-year Performance Plan (filed herewith) 29
10(d) Supplemental Life Insurance and Deferred Income
Plan (filed herewith) 35
10(h) Key Executive Compensation Protection Plan
(filed herewith) 43
10(i) Excess Benefit Retirement Plan (filed herewith) 47
11 Schedule of Computation of Per Share Earnings
for the Third Quarter and Nine Months Ended
October 2, 1994 and October 3, 1993 (filed
herewith) 53
27 Financial Data Schedule 54
4(b) Amended and Restated Credit Agreement (filed
herewith) 55
CUMMINS ENGINE COMPANY, INC.
____________________________
EXHIBIT 3(b)
____________
BY-LAWS
_______
(As amended and restated effective as of August 12, 1994)
Article I. Meetings of Shareholders
____________________________________
Section 1.1. Annual Meetings. Annual meetings of the shareholders of
the Corporation shall be held each year on such date, at such hour
and at such place within or without the State of Indiana as shall be
designated by the Board of Directors. In the absence of such
designation, the meeting shall be held on the first Tuesday of April
of each year at the principal office of the Corporation at 11:00 a.m.
(local time). The Board of Directors may, by resolution, change the
date or time of such annual meeting. If the day fixed for any annual
meeting of shareholders shall fall on a legal holiday, then such
annual meeting shall be held on the first following business day that
is not a legal holiday.
Section 1.2. Special Meetings. Special meetings of the shareholders
of the Corporation may be called at any time only by the Board of
Directors or the Chairman of the Board.
Section 1.3. Proper Business. To be properly brought before an
annual meeting, business must be specified in the notice of the
meeting (or any supplement thereto) given by or at the direction of
the Board of Directors, otherwise properly brought before the meeting
by or at the direction of the Board of Directors, or otherwise
properly brought before the meeting by a shareholder. For business
to be properly brought before an annual meeting by a shareholder, the
shareholder must have given written notification thereof, either by
personal delivery or by United States mail, postage prepaid, to the
Secretary of the Corporation not later than 90 days in advance of the
Originally Scheduled Date of such meeting (provided, however, that if
the Originally Scheduled Date of such meeting is earlier than the
date specified in these By-Laws as the date of the annual meeting if
the Board of Directors does not determine otherwise, such written
notice may be so given and received not later than the close of
business on the 10th day following the date of the first public
disclosure, which may include any public filing by the Corporation
with the Securities and Exchange Commission, of the Originally
Schedule Date of such meeting). Any such notification by a
shareholder shall set forth as to each matter the shareholder
proposes to bring before the meeting (a) brief description of the
business described to be brought before the meeting and the reasons
for conducting such business at the meeting, (b) the name and address
of the shareholder proposing such business, (c) a representation that
the shareholder is a holder of record of stock of the Corporation
entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to propose such business, and (d) any
material interest of the shareholder in such business. To be
properly brought before a special meeting of shareholders called
pursuant to Section 1.2, business must be specified in the notice of
the meeting (or any supplement thereto) given by or at the direction
of the Board of Directors or must otherwise be properly brought
before the meeting by or at the direction of the Board of Directors.
No business shall be conducted at a meeting of shareholders except in
accordance with this paragraph, and the chairman of any meeting of
shareholders may refuse to permit any business to be brought before a
meeting without compliance with the foregoing procedures. For
purposes of these By-Laws, the "Originally Scheduled Date" of any
meeting of shareholders shall be the date such meeting is scheduled
to occur in the notice of such meeting first given to shareholders
regardless of whether any subsequent notice is given for such meeting
or the record date of such meeting is changed.
Section 1.4. Notices. A written notice, stating the date, time and
place of any meeting of the shareholders, and in the case of a
special meeting the purpose or purposes for which such meeting is
called, shall be delivered or mailed by the Secretary of the
Corporation, to each shareholder of record of the Corporation
entitled to notice of or to vote at such meeting no fewer than ten
(10) nor more than sixty (60) days before the date of the meeting.
Notice of shareholders' meetings, if mailed, shall be mailed, postage
prepaid, to each shareholder at the shareholder's address shown in
the Corporation's current record of shareholders.
Except as provided by the Indiana Business Corporation Law or the
Corporation's Restated Articles of Incorporation, notice of a meeting
of shareholders is required to be given only to shareholders entitled
to vote at the meeting; provided, however, notice of a meeting of
shareholders shall be given to shareholders not entitled to vote if a
purpose for the meeting is to vote on any amendment to the
Corporation's Restated Articles of Incorporation, a merger or share
exchange to which the Corporation would be a party, a sale of the
Corporation's assets, or dissolution of the Corporation.
A shareholder or the shareholder's proxy may at any time waive notice
of a meeting if the waiver is in writing and is delivered to the
Corporation for inclusion in the minutes or filing with the
Corporation's records. A shareholder's attendance at a meeting,
whether in person or by proxy, (a) waives objection to lack of notice
or defective notice of the meeting, unless the shareholder or the
shareholder's proxy at the beginning of the meeting objects to
holding the meeting or transacting business at the meeting, and (b)
waives objection to consideration of a particular matter at the
meeting that is not within the purpose or purposes described in the
meeting notice, unless the shareholder or the shareholder's proxy
objects to considering the matter when it is presented. Each
shareholder who has in the matter above provided waived notice or
objection to notice of a shareholders' meeting shall be conclusively
presumed to have been given due notice of such meeting, including the
purpose or purposes thereof.
If an annual or special shareholders' meeting is adjourned to a
different date, time or place, notice need not be given of the new
date, time or place if the new date, time or place is announced at
the meeting before adjournment, unless a new record date is or must
be established for the adjourned meeting.
Section 1.5. Voting. Except as otherwise provided by the Indiana
Business Corporation Law or the Corporation's Restated Articles of
Incorporation, each share of the capital stock of any class of the
Corporation that is outstanding at the record date established for
any annual or special meeting of shareholders and is outstanding at
the time of and represented in person or by proxy at the annual or
special meeting, shall entitle the record holder thereof, or the
record holder's proxy, to one (1) vote on each matter voted on at the
meeting.
Section 1.6. Quorum. Unless the Corporation's Restated Articles of
Incorporation or the Indiana Business Corporation Law provides
otherwise, at all meetings of shareholders a majority of the votes
entitled to be cast on a matter, represented in person or by proxy,
constitutes a quorum for action on the matter. Action may be taken
at a shareholders' meeting only on matters with respect to which a
quorum exists; provided, however, that any meeting of shareholders,
including annual and special meetings and any adjournments thereof,
may be adjourned to a later date although less than a quorum is
present. Once a share is represented for any purpose at a meeting,
it is deemed present for quorum purposes for the remainder of the
meeting and for any adjournment of that meeting unless a new record
date is or must be set for that adjourned meeting.
Section 1.7. Vote Required to Take Action. If a quorum exists as to
a matter to be considered at a meeting of shareholders, action on
such matter (other than the election of Directors) is approved if the
votes properly cast favoring the action exceed the votes properly
cast opposing the action, except as the Corporation's Restated
Articles of Incorporation or the Indiana Business Corporation Law
require a greater number of affirmative votes. Directors shall be
elected by a plurality of the votes properly cast.
Section 1.8. Record Date. Only such persons shall be entitled to
notice of or to vote, in person or by proxy, at any shareholders'
meeting as shall appear as shareholders upon the books of the
Corporation as of such record date as the Board of Directors shall
determine, which date may not be earlier than the date seventy (70)
days immediately preceding the meeting. In the absence of such
determination, the record date shall be the fiftieth (50th) day
immediately preceding the date of such meeting. Unless otherwise
provided by the Board of Directors, shareholders shall be determined
as of the close of business on the record date.
Section 1.9. Proxies. A shareholder's shares may be voted either in
person or by proxy. A shareholder may appoint a proxy to vote or
otherwise act for the shareholder (including authorizing the proxy to
receive, or to waive, notice of any shareholders' meetings within the
effective period of such proxy) by signing an appointment form,
either personally or by the shareholder's attorney-in-fact. An
appointment of a proxy is effective when received by the Secretary or
other officer or agent authorized to tabulate votes and is effective
for eleven (11) months unless a shorter or longer period is expressly
provided in the appointment form. The proxy's authority may be
limited to a particular meeting or may be general and authorize the
proxy to represent the shareholder at any meeting of shareholders
held within the time provided in the appointment form. Subject to
the Indiana Business Corporation Law and to any express limitation on
the proxy's authority appearing on the face of the appointment form,
the Corporation is entitled to accept the proxy's vote or other
action as that of the shareholder making the appointment.
Section 1.10. Organization. At every meeting of the shareholders,
the Chairman of the Board, or, in the Chairman's absence, a person
designated by the Chairman shall act as a chairman. The Secretary of
the Corporation shall act as secretary of such meeting or, in the
Secretary's absence, the chairman shall appoint a secretary.
Section 1.11. Voting Lists. At least five business days before each
meeting of shareholders, the officer or agent having charge of the
stock transfer books shall make a complete list of the shareholders
entitled to notice of a shareholders' meeting, arranged in
alphabetical order, with the address and number of shares so entitled
to vote held by each, which list shall be on file at the principal
office of the Corporation and subject to inspection by any
shareholder entitled to vote at the meeting. Such list shall be
produced and kept open at the time and place of the meeting and
subject to the inspection of any shareholder during the holding of
such meeting. The original stock register or transfer book, or a
duplicate thereof, kept in this state, shall be the only evidence as
to who are the shareholders entitled to examine such list or the
stock ledger or transfer book or to vote at any meeting of the
shareholders.
Section 1.12. Inspectors of Election. The Board of Directors may
appoint Inspectors of Election to serve at meetings of shareholders.
If, at the time of any meeting, any Inspector so appointed shall be
absent, the presiding officer may appoint an Inspector to serve in
place of the absent Inspector.
Section 1.13. Conduct of Meeting. At any meeting of shareholders of
the Corporation, the Chairman of the Board (or, in the absence of the
Chairman of the Board, such person designated by the Chairman
pursuant to Section 1.10 of these By-Laws) shall prescribe the order
of business to be conducted at the meeting and establish procedures
incident thereto.
Article II. Directors
______________________
Section 2.1. Number, Qualification and Terms. The business and
affairs of the Corporation shall be managed under the direction of a
Board of Directors. The number of Directors shall be fixed by
resolution of the Board of Directors from time to time. It shall be
the policy of the Corporation that no person seventy-two years of age
or more shall be elected to the Board of Directors. Any Director who
attains the age of seventy-two years during the Director's term of
office shall be eligible to remain a Director for the duration of the
term for which the Director was elected but shall not be eligible for
re-election. In recognition of the unique and continuing
contribution J. Irwin Miller has made and is making in the
development of the Corporation, this age limitation shall not apply
to J. Irwin Miller.
Each Director shall be elected for a term of office to expire at the
annual meeting of shareholders next following the Director's
election, except that each Director elected pursuant to Section 2.2
of this Article II shall hold office until the next annual meeting of
shareholders. Despite the expiration of a Director's term, the
Director shall continue to serve until the Director's successor is
elected and qualified, or until the earlier of the Director's death,
resignation, disqualification or removal, or until there is a
decrease in the number of Directors.
The Directors and each of them shall have no authority to bind the
Corporation except when acting as a Board.
Section 2.2. Vacancies. Any vacancy occurring in the Board of
Directors, from whatever cause arising, including an increase in the
number of Directors, shall be filled by selection of a successor by a
majority vote of the remaining members of the Board of Directors
(although less than a quorum) until the next annual meeting of the
shareholders.
Section 2.3. Quorum and Vote Required to Take Action. A majority of
the whole Board of Directors shall be necessary to constitute a
quorum for the transaction of any business, except the filling of
vacancies; provided that less than two Directors shall not constitute
a quorum. If a quorum is present when a vote is taken, the
affirmative vote of a majority of the Directors present shall be the
act of the Board of Directors, unless the act of a greater number is
required by the Indiana Business Corporation Law, the Corporation's
Restated Articles of Incorporation or these By-Laws.
Section 2.4. Regular Meetings. The Board of Directors shall meet
regularly, without notice, at such times and places as may be
specified from time to time by the Board of Directors or the Chairman
of the Board (but no fewer than one time annually) for the purpose of
transacting such business as properly may come before the meeting.
Section 2.5. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board, the President
or a majority of the Directors upon not less than twenty-four (24)
hours' notice given to each Director of the date, time and place of
the meeting, which notice need not specify the purpose or purposes of
the special meeting. Such notice may be communicated in person
(either in writing or orally), by telephone, telegraph, teletype or
other form of wire or wireless communication, or by mail, and shall
be effective at the earlier of the time of its receipt or, if mailed,
five (5) days after its mailing. Notice of any meeting of the Board
may be waived in writing at any time if the waiver is signed by the
Director entitled to the notice and is filed with the minutes or
corporate records. A Director's attendance at or participation in a
meeting waives any required notice to the Director of the meeting,
unless the Director at the beginning of the meeting (or promptly upon
the Director's arrival) objects to holding the meeting or transacting
business at the meeting and does not thereafter vote for or assent to
action taken at the meeting.
Section 2.6. Written Consents. Any action required or permitted to
be taken at any meeting of the Board of Directors may be taken
without a meeting if the action is taken by all members of the Board.
The action must be evidenced by one (1) or more written consents
describing the action taken, signed by each Director, and included in
the minutes or filed with the corporate records reflecting the action
taken. Action taken under this Section 2.6. is effective when the
last Director signs the consent, unless the consent specifies a
different prior or subsequent effective date, in which cases the
action is effective on or as of the specified date. A consent signed
under this Section 2.6 shall have the same effect as a unanimous
meeting vote of all members of the Board and may be described as such
in any document.
Section 2.7. Participation by Conference Telephone. The Board of
Directors may permit any or all Directors to participate in a regular
or special meeting by, or through the use of, any means of
communication, such as conference telephone, by which all Directors
participating may simultaneously hear each other during the meeting.
A Director participating in a meeting by such means shall be deemed
to be present in person at the meeting.
Section 2.8. Organization. At every meeting of the Board of
Directors, the Chairman of the Board, or in the Chairman's absence, a
person designated by the Chairman, shall act as chairman. The
Secretary of the Corporation shall act as secretary of such meeting
or, in the Secretary's absence, the Chairman shall appoint a
secretary.
Section 2.9. Resignation. A Director may resign at any time by
delivering written notice to the Chairman of the Board, the Secretary
of the Corporation, the Board of Directors, or such other officer as
the Board of Directors may designate, and such resignation shall
become effective upon such delivery unless the notice specifies a
later effective date.
Section 2.10. Compensation. Any Director who is also an officer of
the Corporation shall receive no separate compensation for serving as
Director. Each Director who is not an officer of the Corporation
shall be paid such compensation, by way of salary, fees for
attendance at meetings of the Board of Directors, special consulting
fees, or other remuneration, as shall be fixed from time to time by
resolution of the Board of Directors. Each Director shall be
reimbursed by the Corporation for travel expenses incurred in
attending such meetings.
Section 2.11. Nominations. Nominations for the election of Directors
may be made by the Board of Directors or by any shareholder entitled
to vote for the election of Directors who complies fully with the
requirements of these By-Laws. Any shareholder entitled to vote for
the election of Directors at a meeting may nominate a person or
persons for election as Directors only if written notice of such
shareholder's intent to make such nominations is given, either by
personal delivery or by United States mail, postage prepaid, to the
Secretary of the Corporation not later than 90 days in advance of the
Originally Scheduled Date of such annual meeting (provided, however,
that if the Originally Scheduled Date of such meeting is earlier than
the date specified in these By-Laws as the date of the annual meeting
if the Board of Directors does not determine otherwise, such written
notice may be so given and received not later than the close of
business on the 10th day following the date of the first public
disclosure, which may include any public filing by the Corporation
with the Securities and Exchange Commission, of the Originally
Scheduled Date of such meetings). Each such notice shall set forth
(a) the name and address of the shareholder who intends to make the
nomination and of the person or persons to be nominated; (b) a
representation that the shareholder is a holder of record of stock of
the Corporation entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to nominate the person or
persons specified in the notice; (c) a description of all
arrangements or understandings between the shareholder and each
nominee and any other person or persons (naming such person or
persons) pursuant to which the nomination or nominations are to be
made by the shareholder; (d) such other information regarding each
nominee proposed by such shareholder as would have been required to
be included in a proxy statement filed pursuant to the proxy rules of
the Securities and Exchange Commission had each nominee been
nominated, or intended to be nominated, by the Board of Directors;
and (e) the consent of each nominee to serve as a Director of the
Corporation if so elected. The chairman of any meeting of
shareholders to elect Directors and the Board of Directors may refuse
to acknowledge the nomination of any person not made in compliance
with the foregoing procedure. This Section 2.11 shall not affect the
right of the holders of either Preference or Preferred Stock to
nominate and elect Directors in the event such right arises.
Section 2.12. Vice Chairman of the Board. The Board of Directors
shall elect a Vice Chairman of the Board of Directors from among its
members. The Vice Chairman of the Board shall perform such duties
and functions as may be assigned to the Vice Chairman from time to
time by the Board of Directors.
Section 2.13. Chairman of the Executive Committee. The Board of
Directors shall elect a Chairman of the Executive Committee from
among the members of the Board of Directors. The Chairman of the
Executive Committee shall preside at meetings of the Executive
Committee, and shall perform such other duties and functions as may
be assigned to the Chairman of such Committee from time to time by
the Board of Directors.
Article III. Committees of the Board of Directors
__________________________________________________
Section 3.1. General.
(a) The Board of Directors may create one (1) or more committees and
appoint members of the Board of Directors to serve on them, by
resolution of the Board of Directors adopted by a majority of all the
Directors in office when the resolution is adopted. Each committee
may have one (1) or more members, and all the members of a committee
shall serve at the pleasure of the Board of Directors.
(b) To the extent specified by the Board of Directors in the
resolution creating a committee (as such resolution may be amended by
the Board of Directors from time to time), and except as otherwise
provided in the Indiana Business Corporation Law, each committee may
exercise all of the authority of the Board of Directors.
(c) Except to the extent inconsistent with the resolutions creating
a committee, the provisions of these By-Laws which govern meetings,
action without meetings, notice and waiver of notice, quorum and
voting requirements and telephone participation in meetings of the
Board of Directors, apply to each committee and its members as well.
(d) A member of a committee of the Board of Directors who is also an
officer of the Corporation shall receive no separate compensation for
serving as a member of such committee. Each member of a committee of
the Board of Directors who is not an officer of the Corporation shall
be paid such compensation for attendance at committee meetings as
shall be fixed from time to time by resolution of the Board of
Directors. Committee members shall be reimbursed by the Corporation
for travel expenses incurred in attending committee meetings.
Section 3.2 Executive Committee.
(a) The Board of Directors shall elect from its members an Executive
Committee consisting of not less than three members to serve at the
pleasure of the Board of Directors. During the intervals between the
meetings of the Board of Directors, the Executive Committee shall
possess and may exercise, except as described in Section 3.1(b) of
this Article III, all the power of the Board of Directors in the
management and direction of the business and affairs of the
Corporation. All Directors, including those Directors who are not
designated members of the Executive Committee, may attend meetings of
the Executive Committee. The Chairman of the Executive and Finance
Committee shall preside at all meetings of such Committee. The
Secretary of the Corporation, or, in the Secretary's absence, a
person appointed by the Chairman of the Executive Committee, shall
act as secretary of such Committee.
(b) The Executive Committee shall keep regular minutes of its
proceedings and all action by the Committee shall be reported to the
Board of Directors at its meeting next following the meeting of the
Committee.
Article IV. Officers
_____________________
Section 4.1. Designation and Selection. The Board of Directors shall
elect as officers of the Corporation a Chairman of the Board, a Chief
Executive Officer, a President, and a Chief Operating Officer. The
Chief Executive Officer shall appoint a Secretary and such other
officers of the Corporation as the Chief Executive Officer deems
appropriate, which appointments shall be presented to the Board of
Directors for ratification.
Section 4.2. Duties and Functions.
(a) Chairman of the Board. The Chairman of the Board shall be a
member of the Board of Directors and shall, when present, preside at
all meetings of the Board of Directors and of the shareholders. The
Chairman of the Board shall perform such other duties and functions
as may be assigned to the Chairman of the Board from time to time by
the Board of Directors.
(b) Chief Executive Officer. The Chief Executive Officer shall be a
member of the Board of Directors and shall perform such other duties
and functions as may be assigned from time to time by the Board of
Directors.
(c) President. The President shall be a member of the Board of
Directors and shall perform such other duties and functions as may be
assigned the President from time to time by the Board of Directors or
the Chief Executive Officer.
(d) Chief Operating Officer. The Chief Operating Officer shall be a
member of the Board of Directors and shall perform such other duties
as may be assigned from time to time by the Board of Directors or the
Chief Executive Officer.
(e) Secretary. The Secretary shall keep a record of proceedings at
all meetings of the Board of Directors and of the shareholders, shall
have custody of the corporate records and seal of the Corporation,
shall be responsible for authenticating records of the Corporation,
and shall perform such other duties and functions as may be assigned
to the Secretary from time to time by the Chairman of the Board.
(f) Other Officers. Each other officer appointed by the Chairman of
the Board shall have and perform such powers, duties and functions as
may be assigned to such officer from time to time by the Board of
Directors, the Chairman of the Board, the Chief Executive Officer,
the President, or the Chief Operating Officer.
Section 4.3. Removal. The Board of Directors may remove any officer
at any time with or without cause by resolution adopted by a majority
of the whole Board of Directors. An officer appointed by the
Chairman of the Board may also be removed at any time, with or
without cause, by the Chairman of the Board.
Section 4.4 Resignations. Any corporate officer may resign at any
time by delivering written notice thereof to the Board of Directors,
the Chairman of the Board or the Secretary. Such resignation shall
take effect at the time delivered unless a later time is specified
therein. The acceptance of such resignation shall not be necessary
to make it effective.
Section 4.5. Compensation. The Board of Directors shall fix the
salary and other compensation for officers of the Corporation who are
also Directors of the Corporation and may delegate to the Chairman of
the Board authority to fix salaries and other compensation of all
remaining officers of the Corporation.
Section 4.6. Special Authority. The Chairman of the Board or the
President, or other officers designated by either of them, shall have
authority to execute guarantees, indentures for monies borrowed by
the Corporation, appointments of powers of attorney and proxies to
act on behalf of the Corporation, instruments for the devise or
conveyance of real estate or creation of mortgages, bank forms
required to open, maintain or close bank accounts, and any other
written agreements to which the Corporation shall be a party which
pertain to the routine operation of the Corporation and are regularly
being made in the ordinary course of carrying on such operations.
Article V. Stock
_________________
Section 5.1. Execution. The certificates of stock of the Corporation
shall be signed by the President or a Vice President and the
Secretary; provided, however, that where such certificates are also
signed by a transfer agent or a registrar or both, the signature of
such corporate officers may be facsimiles. In case any officer,
transfer agent, or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be
such officer, transfer agent, or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as
if such person were such officer, transfer agent, or registrar at the
date of its issue.
Section 5.2. Contents. Each certificate shall state on its face the
name of the Corporation and that it is organized under the laws of
the State of Indiana, the name of the person to whom it is issued,
and the number and class of shares and the designation of the series,
if any, the certificate represents, and shall state conspicuously on
its front or back that the Corporation will furnish the shareholder,
upon the shareholder's written request and without charge, a summary
of the designations, relative rights, preferences and limitations
applicable to each class and the variations in rights, preferences
and limitations determined for each series (and the authority of the
Board of Directors to determine variations for future series).
Section 5.3. Transfer Agents and Registrars. The Corporation may
have one or more transfer agents and one or more registrars of its
shares, whose respective duties the Board of Directors may from time
to time define. No certificate for shares shall be valid until
countersigned by a transfer agent if the Corporation has a transfer
agent or until registered by a registrar if the Corporation has a
registrar.
Section 5.4. Transfers. Shares of stock shall be transferable on the
books of the Corporation by the person named in the certificate or by
such person's attorney upon surrender of the certificate properly
endorsed. The Corporation may deem and treat the person in whose
name shares of stock stand on the books of the Corporation as the
owner thereof for purposes of voting, dividends and all other
purposes.
Section 5.5. Stock Transfer Records. There shall be entered upon the
stock records of the Corporation the number of each certificate
issued, the name and address of the registered holder of such
certificate, the number, kind and class of shares represented by such
certificate, the date of issue, whether the shares are originally
issued or transferred, the registered holder from whom transferred
and such other information as is commonly required to be shown by
such records. The stock records of the Corporation shall be kept as
its principal office, unless the Corporation appoints a transfer
agent or registrar, in which case the Corporation shall keep at its
principal office a complete and accurate shareholders' list giving
the names and addresses of all shareholders and the number and class
of shares held by each. If a transfer agent is appointed by the
Corporation, shareholders shall give written notice of any changes in
their addresses from time to time to the transfer agent.
Section 5.6. Loss, Destruction or Mutilation of Certificates. The
holder of any shares of the capital stock of the Corporation shall
immediately notify the Corporation of any loss, destruction or
mutilation of the certificate therefor, and the Board of Directors
may, in its discretion, cause to be issued to the holder a new
certificate or certificates of stock, upon the surrender of the
mutilated certificate, or, in the case of loss or destruction, upon
satisfactory proof of such loss or destruction. The Board of
Directors may, in its discretion, require the holder of the lost or
destroyed certificate or the holder's legal representative to give
the Corporation a bond in such sum and in such form, and with such
surety or sureties as it may direct, to indemnify the Corporation,
its transfer agents and registrars, if any, against any claim that
may be made against them or any of them with respect to the capital
stock represented by the certificate or certificates alleged to have
been lost or destroyed, but the Board of Directors may, in its
discretion, refuse to issue a new certificate or certificates, save
upon the order of a court having jurisdiction in such matters.
Section 5.7. Form of Certificates. The form of the certificates for
shares of the capital stock of the Corporation shall conform to the
requirements of Section 5.2 of the By-Laws and be in such printed
form as shall from time to time be approved by resolution of the
Board of Directors.
Article VI. Indemnification of Directors and Officers
______________________________________________________
Section 6.1. Mandatory. The Corporation shall, to the fullest extent
permitted by Sections 1 through 13 of Indiana Code Ch. 23-1-37 as in
effect April 1, 1986, (i) indemnify any person who is or was a
Director or officer of the Corporation (and the heirs and legal
representatives thereof) against expenses (including attorneys'
fees), judgments, fines, and penalties and amounts paid in settlement
resulting from any action, suit or proceeding threatened or brought
against such person by reason of such person's serving in such
position or serving another enterprise in any capacity at the request
of the Corporation, and (ii) pay for or reimburse the reasonable
expenses incurred by such person in advance of the final disposition
of the action, suit or proceeding.
Section 6.2. Discretionary. Separate and apart from, and in addition
to, the mandatory indemnification required under Section 6.1 of this
Article, the Corporation may, in its sole discretion, provide for
indemnification of any person in accordance with the provisions of
Indiana Code Ch. 23-1-37, as from time to time amended, or
superseding statutory provisions.
Section 6.3. Other Capacity Service. Any Director or officer of the
Corporation serving in any capacity (i) another corporation, of which
a majority of the shares entitled to vote in the election of its
directors is held, directly or indirectly, by the Corporation, or
(ii) any employee benefit plan of the Corporation or of another
corporation described in Subsection (i) of this Section, shall be
deemed to be doing so at the request of the Corporation.
Section 6.4. Applicable Law. Any person entitled to be indemnified
as a matter of right pursuant to this Article VI may elect to have
the right to indemnification interpreted on the basis of the
applicable law in effect at the time of the occurrence of the event
or events giving rise to the action, suit or proceeding, to the
extent permitted by Indiana law, or on the basis of the applicable
law in effect at the time indemnification is sought.
Section 6.5. Rights. The right to be indemnified pursuant to this
Article VI (i) shall be a contract right of each individual entitled
to be indemnified hereunder, (ii) is intended to be retroactive and
shall be available with respect to events occurring prior to the
adoption hereof, and (iii) shall continue to exist with respect to
events occurring prior to any rescission or restrictive modification
of this Article VI.
Section 6.6. Claims. If a claim for indemnification pursuant to this
Article VI is not paid in full by the Corporation within ninety days
after a written request therefor has been received by the
Corporation, the claimant may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim
and, if successful in whole or in part, the claimant shall be
entitled also to be paid the expense of prosecuting such claim.
Neither the failure of the Corporation (including its Board of
Directors, special legal counsel or its shareholders) to have made a
determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances
because the claimant has met the applicable standard of conduct, nor
an actual determination by the Corporation (including its Board of
Directors, special legal counsel or its shareholders) that the
claimant had not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that the claimant had
not met the applicable standard of conduct.
Article VII. Miscellaneous
___________________________
Section 7.1. Indiana Business Corporation Law. The provisions of the
Indiana Business Corporation Law, as amended, applicable to all
matters relevant to, but not specifically covered by, these By-Laws
are hereby, by reference, incorporated in and made a part of these By-
Laws.
Section 7.2. Fiscal Year. The fiscal year of the Corporation shall
end on the 31st of December of each year.
Section 7.3. Control Share Act. The provisions of Chapter 42 of the
Indiana Business Corporation Law, Ind. Code 23-1-42-1 et seq., shall
not apply to control share acquisitions of shares of the Corporation.
Section 7.4. Seal. The Corporation shall have a corporate seal,
which shall have inscribed the name of the Corporation and the word
"INDIANA" around the outer edge and the words "CORPORATE SEAL" in the
center.
Section 7.5. Contracts and Other Instruments. Bonds, contracts,
deeds, leases and other obligations and instruments of the
Corporation may be signed in the name of and on behalf of the
Corporation by (i) officers or their designees, and (ii) agents of
the Corporation as may be specifically authorized by resolution of
the Board of Directors.
Section 7.6. Books and Records. Subject to the laws of the State of
Indiana, the books of account, records, documents and papers of the
Corporation may be kept at any place or places within or without the
State of Indiana.
Section 7.7. Amendments. These By-Laws may be rescinded, changed or
amended, and provisions hereof may be waived, at any meeting of the
Board of Directors by the affirmative vote of a majority of the
entire number of Directors at the time, except as otherwise required
by the Corporation's Restated Articles of Incorporation or by the
Indiana Business Corporation Law.
Section 7.8. Definition of Articles of Incorporation and Restated
Articles of Incorporation. The term "Articles of Incorporation" and
"Restated Articles of Incorporation" as used in these By-Laws mean
the Restated Articles of Incorporation of the Corporation as from
time to time in effect.
CUMMINS ENGINE COMPANY, INC.
____________________________
EXHIBIT 10(b)
_____________
FIVE-YEAR PERFORMANCE PLAN
__________________________
Effective as January 27, 1980
Amended as of December 10, 1985
Amended as of September 22, 1987
Amended as of January 12, 1989
The Five-year Performance Plan is hereby adopted by the Board of
Directors of Cummins Engine Company, Inc. (hereinafter called "the
Company"), with the objectives and upon the terms set forth herein.
1. Objectives:
__________
The objectives of the Plan are to:
(a) Serve as a balance to the short-term compensation provided by
base salary and bonus;
(b) Place emphasis on the medium-term performance of the Company
in direct relationship to its industry competitors;
(c) Strengthen the relationship between management and shareholder
interests by basing participation upon ownership of common stock of
the Company;
(d) Encourage participants to remain with the Company through
important business cycles.
Plan payments are intended to relate the varied influence
participating officers and key non-officers have in their
functional positions on the mid-term (5 year) operating results of
the Company. Calculation of the payout is intended to measure the
Company's internal performance (as measured by Return on Equity)
relative to a defined group of industry competitors over the same
mid-term period.
2. Definitions:
____________
(a) Average Net Worth -- Net worth of the Company as of January 1
plus net worth of the Company as of December 31, divided by two
(2).
(b) Base Salary -- The annualized salary of the participant in
effect on December 31 of the last year of each award cycle or the
year in which the participant joined the Company, whichever is
later.
(c) Compensation Committee -- The Committee of the Board of
Directors of the Company designated to review compensation of
officers, key non-officers and directors.
(d) Participants -- Officers or other employees designated
annually by the Compensation Committee.
(e) Plan -- The Five-year Performance Plan described herein.
(f) Award Cycle -- The five (5) year period upon which a
particular year's payout is calculated. A new cycle begins each
year as defined by the Company's fiscal year. Payout in any one
year is based upon actual results of the most recently completed
five (5) year period.
(g) Profit After Tax -- The profit after tax of the Company for
the calendar year as presented in the audited year-end statement
prepared for communication to shareholders.
(h) Return on Equity -- Profit after tax divided by average net
worth.
(i) Competitors -- Selected companies whose primary industry is
similar to Cummins. Those competitors are:
General Motors Dana
Ford Motor Company Fruehauf
Caterpillar Allis-Chalmers
Deere Paccar
Eaton Clark Equipment
(j) Takeover -- The occurrence of any of the following: (i) there
shall be consummated (A) any consolidation or merger of the Company
in which the Company is not the continuing or surviving corporation
or pursuant to which shares of the Company's common stock would be
converted in whole or in part into cash, other securities or other
property, other than a merger of the Company in which the holders
of the Company's common stock immediately prior to the merger have
substantially the same proportionate ownership of common stock of
the surviving corporation immediately after the merger, or (B) any
sale, lease, exchange or transfer (in one transaction or a series
of related transactions) of all or substantially all the assets of
the Company, or (ii) the stockholders of the Company shall approve
any plan or proposal for the liquidation or dissolution of the
Company, or (iii) any "person" (as such term is used in Sections
13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), other than the Company or a
subsidiary thereof or any employee benefit plan sponsored by the
Company or a subsidiary thereof or a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company, shall
become the beneficial owners (within the meaning of Rule 13d-3
under the Exchange Act) of securities of the Company representing
25 percent or more of the combined voting power of the Company's
then outstanding securities ordinarily (and apart from rights
accruing in special circumstances) having the right to vote in the
election of directors ("Voting Shares"), as a result of a tender or
exchange offer, open market purchases, privately negotiated
purchases or otherwise, or (iv) at any time during a period of two
(2) consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of the Company shall
cease for any reason to constitute at least a majority thereof,
unless the election or the nomination for election by the Company's
stockholders of each new director during such 2-year period was
approved by a vote of at least two-thirds (2/3) of the directors
then still in office who were directors at the beginning of such 2-
year period, or (v) any other event shall occur that would be
required to be reported in response to Item 6(e) (or any successor
provision) of Schedule 14A of Regulation 14A promulgated under the
Exchange Act.
3. Eligibility:
___________
The Compensation Committee shall determine each year the officers
and other employees of the Company who shall be Participants in the
Plan.
4. Target Award:
_____________
Participants in the Plan shall be assigned a Target Award for an
Award Cycle by the Compensation Committee, in its discretion, based
on the following criteria, and such other criteria as the
Compensation Committee may determine from time to time:
(a) Scope and breadth of the Participant's position;
(b) Effect on the Company's mid-term performance;
(c) Work relationships.
The Target Award for an Award Cycle shall be expressed as a
percentage of Base Salary.
The Target Award for a respective Award Cycle shall be the highest
such percentage approved for that Participant prior to the actual
payout for that Award Cycle. Target Awards for an Award Cycle thus
may be changed during the course of an Award Cycle (but prior to
the payout being made for such Award Cycle) based on the
Compensation Committee's evaluation of changes in the
aforementioned factors for each Participant.
The eligibility of new Participants and their levels of
participation, if any, in Award Cycles already begun shall be at
the discretion of the Compensation Committee.
5. Payout Formula:
_______________
The Payout Formula relates a Performance Index of the Company's
competitive performance over a five (5) year Award Cycle to a
Payout Factor designed to produce competitive cash accumulation
opportunities for Participants.
The Performance Index is derived from a comparison of the Company's
Return on Equity measured against the Return on Equity for the
Competitors over the same 5-year Award Cycle. For each Award
Cycle, the Company's Return on Equity is divided by the median
Return on Equity of its Competitors to arrive at a 5-year
Performance Index. In the event the Company has a year that
produces a negative Return on Equity, the Performance Index for
that year will equal zero. This index is then transposed to a 5-
year Payout Factor as contained in Exhibit A hereto. The Payout
Factor may be changed by the Compensation Committee in its
discretion. However, in the event of a Takeover, the provisions of
Section 8 shall apply in lieu of the provisions of this Section.
6. Payout Award:
_____________
The Payout Award shall be determined as follows:
Base Salary x Target Award for x Award Cycle
the Award Cycle Payout Factor
7. Plan Restrictions:
__________________
To strengthen the link between the Plan Participants and the
Shareholders, the following restrictions will be applicable:
(a) To be eligible to receive the Payout Award at the end of any
particular Award Cycle, a Participant is required to own on the
last day of such Award Cycle 500 shares of the Company's common
stock if the Participant was a Participant during any part of the
first year of such Award Cycle. If the Participant was not a
Participant during the first year of any respective Award Cycle,
then no stock ownership requirement exists to be eligible to
receive a payout for that Award Cycle. The foregoing common stock
ownership requirement shall be effective for Award Cycles ending
with the Company's 1985 fiscal year and thereafter, and such
requirement may be waived by the Compensation Committee if unusual
circumstances exist.
(b) Unless determined otherwise by the Compensation Committee,
Participants will be eligible to receive stock options under any
stock option plan of the Company in addition to any participation
under this Plan.
(c) The Company must have a positive return on equity when
averaged over a 5-year Award Cycle for any payout to occur.
8. Termination of Employment:
__________________________
(a) If a Participant's employment with the Company terminates
(except through retirement, disability or death), such Participant
will not receive a payout for any Award Cycle for which payment has
not been made where such Participant's employment and participation
in the Plan was for a period of 1 year or less. If a Participant's
employment so terminates during the second through the fifth years
of employment and participation in the Plan, the Compensation
Committee, in its discretion, shall determine whether the
Participant will receive a proportionate share payable at the end
of each of the Award Cycles initiated while such employee was
actively participating in the Plan.
(b) If a Participant retires, becomes disabled, or dies, the
Participant, or such Participant's estate, shall be entitled to
receive a share payable at the end of each of the Award Cycles
proportionate to the number of years such employee participated
during such cycle.
9. Performance Plan Payout:
________________________
Any payout under the Plan will be made after the audit of the
Company's financial statements and after Return on Equity for the
Company and the Competitors have been determined. In general, the
payout date will occur as soon as possible following the end of an
Award Cycle, but not later than June 30 following such Award Cycle.
10. Takeover:
_________
In the event of a Takeover, the provisions of Section 5 shall not
apply. An Award for each Award Cycle in progress shall be payable
in full upon the date of the Takeover and shall be determined for
each cycle as follows:
Base Salary x Target Award for x Award Cycle Payout Factor
the Award Cycle
x Award Cycle Percent
Completion Factor
The Payout Factor for all Payout Award calculations shall be
determined by averaging the high 3 Performance Indexes of the last
5 Award Cycles completed prior to the Takeover. If fewer than 5
Award Cycles have been completed, the highest Performance Index of
those cycles completed will be used. The appropriate Index is then
transposed to a Payout Factor as contained in Exhibit A hereto.
The Award Cycle Percent Completion Factor for each Payout Award
calculation shall be determined by dividing the number of days in
the particular cycle completed prior to the Takeover by the number
of days in a complete cycle, 1,825 days.
11. Notice:
_______
To the extent practicable, the Plan shall be communicated as early
as possible to each Participant in each Award Cycle to permit
maximum incentive to be generated by the Plan.
12. Term:
_____
The Plan will continue from year to year until terminated by the
Compensation Committee.
CUMMINS ENGINE COMPANY, INC.
____________________________
EXHIBIT 10(d)
_____________
SUPPLEMENTAL LIFE INSURANCE AND DEFERRED INCOME PLAN
____________________________________________________
Effective as of January 1, 1986
Amended as of September 22, 1967
Amended as of January 12, 1989
Amended as of February 14, 1989
Introduction
____________
Cummins Engine Company, Inc. (the "Company") has previously
determined that it is appropriate to establish a supplemental life
insurance and deferred income program (the "Program") for officers
and other key employees of the Company, so as to provide increased
protection and liquidity for the officers, key employees and their
families and to establish a mechanism to provide them with additional
retirement income. The Company has established a trust (the "Trust")
for the purpose of accumulating assets and holding title to property
intended to be used to provide benefits under the Program and certain
other benefit plans of the Company.
Article I. Definitions
_______________________
Section 1.1.
____________
"Change of Control" means the occurrence of any of the following:
(i) there shall be consummated (A) any consolidation or merger of the
Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Company's common stock
would be converted in whole or in part into cash, other securities or
other property, other than a merger of the Company in which the
holders of the Company's common stock immediately prior to the merger
have substantially the same proportionate ownership of common stock
of the surviving corporation immediately after the merger, or (B) any
sale, lease, exchange or transfer (in one transaction or a series of
related transactions) of all or substantially all the assets of the
Company, or (ii) the stockholders of the Company shall approve any
plan or proposal for the liquidation or dissolution of the Company,
or (iii) any "person" (as such term is used in Sections 13(d) (3) and
14(d)(2) of the Securities Exchange Act of 1934, as amended [the
"Exchange Act"]), other than the Company or a subsidiary thereof or
any employee benefit plan sponsored by the Company or a subsidiary
thereof or a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company, shall become the beneficial
owners (within the meaning of Rule 13d-3 under the Exchange Act) of
securities of the Company representing 25 percent or more of the
combined voting power of the Company's then outstanding securities
ordinarily (and apart from rights accruing in special circumstances)
having the right to vote in the election of directors ("Voting
Shares"), as a result of a tender or exchange offer, open market
purchases, privately negotiated purchases or otherwise, or (iv) at
any time during a period of two (2) consecutive years, individuals
who at the beginning of such period constituted the Board of
Directors of the Company shall cease for any reason to constitute at
least a majority thereof, unless the election or the nomination for
election by the Company's stockholders of each new director during
such 2-year period was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who were directors at the
beginning of such 2-year period, or (v) any other event shall occur
that would be required to be reported in response to Item 6(e) or any
successor provision) of Schedule 14A of Regulation 14A promulgated
under the Exchange Act.
Section 1.2.
____________
"Executive" means: (i) an individual who becomes an officer of the
Company prior to attainment of age 60 and who has elected to
participate in the Program in accordance with Article II or (ii) any
other employee of the Company who is from time to time designated by
the Board of Directors as an executive eligible to participate in the
Program and who has elected to participate in the Program in
accordance with Article II.
Section 1.3.
____________
"Joint Annuitant" means the spouse of an Executive who qualifies as
the Executive's Joint Annuitant under the Retirement Plan.
Section 1.4.
____________
"Program" means this plan, the Cummins Engine Company, Inc.
Supplemental Life Insurance and Deferred Income Program.
Section 1.5.
____________
"Retirement Plan" means the Cummins Engine Company, Inc. Retirement
Plan "A".
Section 1.6.
____________
"Supplemental Life Annuity" means the benefit payable to an Executive
hereunder.
Section 1.7.
____________
"Survivor Benefit" means the benefit payable to an Executive's Joint
Annuitant following the Executive's death after his retirement.
Section 1.8.
____________
"Trustee" means the Trustee at the time under the Trust.
Article II. Participation
__________________________
An Executive shall commence participation in the Program following
his execution of a form provided by the Company authorizing periodic
payroll deductions in amounts sufficient to pay the Executive's share
of the premiums on life insurance policies on the Executive's life.
From time to time the Executive shall also complete any forms
required by, and submit to any necessary physical examinations
requested by, an insurance carrier.
Article III. Insurance Policies
________________________________
Section 3.1.
____________
An Executive shall be covered by one or more insurance policies with
an aggregate face value of approximately three times the Executive's
base salary. All such policies shall be owned by the Trustee.
Additional policies will be purchased as the Executive's salary is
increased, except that no incremental policy will be purchased in a
face amount of less than $20,000, and salary increases after the
Executive attains age 55 shall not be taken into account.
Section 3.2.
____________
(a) The annual premium payable with respect to policies on the
Executive's life will be paid in part by the Executive, with any
remaining amount paid by the Trustee. The Executive shall be
required to pay only that portion of the premium equal to the amount
that would be included in the Executive's income for Federal income
tax purposes if the entire premium were paid by the Trustee for the
Company. Such amount shall be determined annually in accordance with
Internal Revenue Service rules and regulations.
(b) The Company's share of the annual premium shall be paid by the
Trustee from the assets of the Trust, including, in the discretion of
the Trustee, by borrowing against the value of any policies on the
life of the Executive.
Article IV. Death Benefits
___________________________
Upon the death of the Executive prior to his retirement from the
Company, the death benefits payable under the policies shall be paid
(a) to the Trustee to the extent and in the amount of the total
premiums paid by the Company and the Trustee, and not previously
reimbursed, under the policies on the life of the Executive and (b)
to the Executive's beneficiary, as designated on an appropriate
insurance company form, to the extent of the remainder; provided,
however, that in no event shall a death benefit payment be made to an
Executive's beneficiary in an amount greater than three times the
Executive's annual base salary at the time of his death or, if
earlier, upon his attainment of age 55.
Article V. Retirement Benefits
_______________________________
Section 5.1.
____________
An Executive who retires under the Retirement Plan on or after his
attainment of age 65 shall receive from the Trustee, beginning as of
the first day of the month following the Executive's retirement, in
monthly installments, a Supplemental Life Annuity in an annual amount
equal to 30 percent of the Executive's base pay in effect upon the
earlier of his attainment of age 55 or his date of retirement.
Section 5.2.
____________
Following the Executive's death after his retirement, a survivor
benefit equal to 50 percent of the monthly amount that had been
payable to the Executive shall be paid to the Executive's Joint
Annuitant; provided, however, that if the Executive had not received
retirement payments for at least 15 years prior to his death, his
Joint Annuitant shall be entitled to receive the same monthly benefit
that was payable to the Executive for the remainder of such 15-year
period. If the Executive should die prior to his receipt of benefits
for 15 years and without leaving a Joint Annuitant, or if his Joint
Annuitant should die before the expiration of such 15-year period, a
lump-sum payment of the commuted value of the remaining benefit due
to be paid over the 15-year period shall be paid to the Executive's
designated beneficiary or, if none, to his children per stirpes, or
to his estate if no descendants survive him.
Section 5.3.
____________
If an Executive becomes disabled and he is entitled to benefits under
the Company's Long-term Disability Plan, the Trustee shall pay all
insurance premiums under the policies for the duration of his
disability.
Section 5.4.
____________
If an Executive's retirement occurs prior to his attainment of age
65, but after satisfying the requirements for early retirement under
the Retirement Plan, he shall be entitled to receive early retirement
benefits under the Program as follows: (a) if the Executive is
eligible for unreduced benefits under the Retirement Plan, the
benefit that otherwise would be payable at age 65 pursuant to Section
5.1; (b) if the Executive's benefit under the Retirement Plan is
actuarially reduced because of early commencement, the benefit
otherwise payable under Section 5.1 shall be reduced by .5 percent
for each full month that benefits commence before the Executive's
attainment of age 65.
Article VI. Vested Benefits
____________________________
An Executive who leaves the employ of the Company prior to becoming
eligible for an early retirement benefit under the Retirement Plan
shall be entitled to a percentage of his Supplemental Life Annuity in
accordance with the following table:
Years of Service Percentage
________________ _________
Less than 5 0
5 25
6 40
7 55
8 70
9 85
10 100
The percentage of his Supplemental Life Annuity so determined shall
be payable to the Executive upon his attainment of age 65. At the
election of the Executive, early commencement of his benefit may
begin as of the first day of any month beginning after his attainment
of age 55, reduced as provided in Section 5.4.
Article VII. Accelerated Distribution
______________________________________
Immediately following a Change of Control, an Executive who is
entitled to benefits under the Plan, other than by reason of having
vested benefits pursuant to Article VI, shall become vested in 100
percent of his Supplemental Life Annuity and, notwithstanding
anything in Article V to the contrary, any Executive shall be
eligible to receive an amount equal to the actuarial equivalent lump-
sum value of the Supplemental Life Annuity accrued to the date of
such Change of Control and remaining to be paid under the Program.
The lump-sum equivalent of the Life Annuity benefit payable shall be
calculated assuming: (a) the interest rate used by the Pension
Benefit Guaranty Corporation in determining the value of immediate
benefits as of the immediately preceding January 1; (b) the mortality
tables in Attachment A; and (c) solely for the purpose of reducing
the benefit for early commencement, that the Executive, other than
one who is entitled to benefits pursuant to Article VI, has already
met the conditions for unreduced benefits under the Retirement Plan
at the earliest possible time, taking into consideration the
Executive's age and service with the Company.
Article VIII. Gross-up Payments
________________________________
If payment of the Supplemental Life Annuity pursuant to Article VII
(the "Lump Sum") causes the Lump Sum and any other payments made in
connection with a Change of Control (together with the Lump Sum, the
"Total Payments") to be subject to the tax (the "Excise Tax") imposed
by Section 4999 of the Code, the Company shall pay the Executive an
additional amount (the "Gross-up Payment") such that the net amount
retained by the Executive, after deduction of any Excise Tax paid or
payable (and not grossed-up under a similar provision of another plan
or program sponsored by the Company) on the Lump Sum and such other
Total Payments and any Federal, state and local income tax and Excise
Tax upon the payment provided for by this Article VIII, shall be
equal to the Lump Sum and such other Total Payments. If any of such
other Total Payments are subject to the Excise Tax without regard to
the Lump Sum, a Gross-up Payment shall be made, but shall only be
equal to the increase in the Excise Tax (plus any Federal, state and
local income tax and Excise Tax on such Gross-up Payment) arising
solely as a result of the Lump Sum.
For purposes of determining whether any of the payments described
above will be subject to the Excise Tax and the amount of such Excise
Tax, (i) any other payments or benefits received or to be received by
the Executive in connection with a Change of Control of the Company,
whether payable pursuant to the terms of the Program or any other
plan, arrangement or agreement with the Company, its successors, any
person whose actions result in a change in control of the Company or
any corporation affiliated (or which, is a result of the completion
of a transaction causing a change of control, will become affiliated)
with the Company within the meaning of Section 1504 of the Code shall
be treated as "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and all "excess parachute payments" within
the meaning of Section 280G(b)(1) shall be treated as subject to the
Excise Tax, unless in the opinion of tax counsel selected by the
Company's independent auditors and acceptable to the Executive the
payments (in whole or in part) do not constitute parachute payments,
or such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the
meaning of Section 280G(b)(4) of the Code either in their entirety or
in excess of the base amount within the meaning of Section 280G(b)(3)
of the Code, or are otherwise not subject to the Excise Tax; (ii) the
amount of the payments that shall be treated as subject to the Excise
Tax shall be equal to the lesser of (A) the total amount of the
payments or (B) the amount of excess parachute payments within the
meaning of Section 280G(b)(1) (after applying clause (i), above); and
(iii) the value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Company's independent auditors in
accordance with the principles of Sections 280G(d)(3) and (4) of the
Code. For purposes of determining the amount of the Gross-up
Payment, the Executive shall be deemed to pay Federal income taxation
in the calendar year in which the Gross-up Payment is to be made and
state and local income taxes at the highest marginal rate of taxation
in the state and locality of the Executive's residence on the date of
payment, net of the maximum reduction in Federal income taxes which
could be obtained from deduction of such state and local taxes. In
the event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder at the time of payment,
the Executive shall repay to the Company at the time that the amount
of such reduction in Excise Tax is finally determined the portion of
the Gross-up Payment attributable to such reduction (plus the portion
of the Gross-up Payment attributable to the Excise Tax and Federal
and state and local income tax imposed on the Gross-up Payment being
repaid by the Executive if such repayment results in a reduction in
Excise Tax and/or a Federal and state and local income tax deduction)
plus interest on the amount of such repayment at the rate provided in
Section 1274(d) of the Code. In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder at the
time of the Gross-up Payment (including by reason of any payment the
existence or amount of which cannot be determined at the time of the
Gross-up Payment), the Company shall make an additional Gross-up
Payment in respect of such excess (plus any interest payable with
respect to such excess) at the time that the amount of such excess is
finally determined.
Article IX. Miscellaneous
__________________________
Section 9.1.
____________
The Company shall be under only a contractual obligation to make
payments to an Executive, Joint Annuitant or other beneficiary
referred to herein when due, and then only to the extent such
payments are not made from the Trust.
Section 9.2.
____________
Nothing contained herein shall confer any right on an Executive to be
continued in the employ of the Company or shall affect the right of
the Executive to participate in and receive benefits under and in
accordance with any pension, profit-sharing, incentive compensation
or other benefit plan or program of the Company.
Section 9.3.
____________
This Program shall continue in force with respect to any Executive
until the completion of any payments due hereunder and shall be
binding upon any successor to substantially all the assets of the
Company. The Company may, however, at any time, amend the Program to
provide that no additional benefits shall accrue with respect to any
Executive under the Program; provided, however, that no such
amendment shall deprive any Executive, Joint Annuitant or other
beneficiary of any benefit that accrued under the Program prior to
such amendment. The Company may also, at any time, amend this
Program retroactively or otherwise if and to the extent that such
action is deemed appropriate in light of government regulations or
other legal requirements.
Section 9.4.
____________
No right or interest of an Executive, Joint Annuitant or other
beneficiary under this Program shall be subject to voluntary or
involuntary alienation, assignment or transfer of any kind.
Section 9.5.
____________
The administration of this Program shall be the responsibility of the
Vice President - Personnel of the Company, or such other person or
entity as the Company shall designate. Decisions of such
administrator of the Program shall be final and binding upon the
Company and upon Executives, Joint Annuitants and beneficiaries.
Section 9.6.
____________
This Program shall be construed, regulated and administered for all
purposes according to the laws of the State of Indiana and the United
States.
Section 9.7.
____________
This Program shall be effective as of January 1, 1986.
CUMMINS ENGINE COMPANY, INC.
____________________________
SCHEDULE 10(h)
______________
KEY EXECUTIVE COMPENSATION PROTECTION PLAN
__________________________________________
The purpose of this Plan is to assist Cummins Engine Company, Inc.
("Cummins") in retaining the services of its key executives and to
permit those key executives to concentrate on performing their duties
and to enable them to give advice on any takeover proposal without
undue concern regarding its potential impact on their personal
financial security and future.
The Cummins Board of Directors (the "Board") believes it is in the
best interests of Cummins and its stockholders that the Board be able
to rely upon each key executive continuing in his position and to be
available for advice by providing him with appropriate termination
protection to reduce the likelihood of his leaving Cummins to avoid a
sudden discharge in the event of a takeover.
1. Key Executives. "Participants" in this Plan shall consist of
those officers and other employees of Cummins and its subsidiaries
who are from time to time designated as key executives to
participate in this Plan by the Board. A Participant whom the Board
determines is no longer a key executive for purposes of this Plan
shall cease to be a Participant in this Plan when so notified of
such determination, except that no such determination shall be made,
and if made shall have no effect, (i) within two years after a
Change of Control (as hereinafter defined) or (ii) during any period
when Cummins has knowledge that a third person has taken steps
reasonably calculated to effect a Change of Control until, in the
opinion of the Board, such person has abandoned or terminated its
efforts to effect a Change of Control.
2. Change of Control. For purposes of this Plan, a "Change of
Control" shall be deemed to have taken place if there has been a
change in control of a nature that would be required to be reported
in response to Item 5(f) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934; provided
that, notwithstanding the foregoing, a Change of Control shall in
any event be deemed to have occurred if (i) any person is or becomes
the beneficial owner, directly or indirectly, of 25 percent or more
of the common stock of Cummins or (ii) during any period of 24
consecutive months, individuals who at the beginning of such period
constituted the Board cease for any reason to constitute at least a
majority of the Board unless the election of each new director, or
his or her nomination for election by the Cummins stockholders, was
approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of such period.
3. Termination. "Termination" shall mean (i) any voluntary or
involuntary termination by Cummins of the employment of any
Participant with Cummins for any reason other than death, disability
or Cause (as defined below), or (ii) voluntary or involuntary
termination by any Participant of his employment with Cummins for
any reason whatsoever, in the Participant's sole discretion, other
than a termination by Cummins for Cause, and in either case such
termination shall have occurred before the second anniversary of the
date of any Change of Control. The term "Cause" means fraud,
misappropriation or intentional material damage to the property or
business of Cummins or commission of a felony.
4. Termination Payments. In the event of the Termination of any
Participant, Cummins shall pay to such Participant and provide him
with the following:
(a) For a period of one year following the date of his
Termination, Cummins shall continue to pay such Participant his
salary on a monthly basis at the annual rate in effect immediately
prior to the date of his Termination or the effective date of the
Change of Control, whichever is higher, plus four quarterly bonus
payments in the amount of the Participant's Target Bonus payments
as calculated under, and payable at the times contemplated in,
Cummins' Target Bonus Plan in effect prior to the Change of Control
and adjusted as provided in the next two sentences. In making the
calculations under the Target Bonus Plan, the Participant's "Base
Salary" shall be the annual rate in effect immediately prior to the
date of his termination or the effective date of the Change of
Control, whichever is higher, the Participant's "Target Bonus
Percentage" shall be the percentage in effect for such Participant
immediately prior to the date of his Termination or the effective
date of the Change of Control, whichever is higher, and the
applicable "Bonus Factor" in each case shall be 1.0 without regard
to actual performance during the measurement period. To the extent
Participants in this Plan are also participants in Cummins Five
Year Performance Plan or its Restricted Unit Plan, such persons
shall be entitled to all benefits hereunder and thereunder in the
event of a Change of Control, provided, however, that any employee
participating in Cummins' Restricted Unit Plan shall have his
payments under this Plan reduced by any payments received by him
under the takeover provisions of the Restricted Unit Plan.
(b) For a period of one year following the date of his
Termination, such Participant shall continue to be treated as an
employee under the provisions of any Cummins stock option or other
incentive compensation arrangement existing on the effective date
of the Change of Control. In addition, such Participant shall
continue to be entitled to all benefits and service credits for
benefits under all pension, life insurance, medical, dental,
disability, financial advisory and other employee benefit plans,
programs and arrangements of Cummins as if he were still employed
during such period.
(c) If, despite the provisions of paragraph 4(b), benefits or
service credits under any employee benefit plan shall not be
payable or provided under any such plan to such Participant, or his
dependents, beneficiaries and estate, because he is no longer a
Cummins employee, Cummins itself shall, to the extent necessary,
pay or provide for payment of such benefits to such Participant,
his dependents, beneficiaries and estate.
(d) If, despite the provisions of paragraph 4(b) benefits or the
right to accrue further benefits under any stock option or other
long-term incentive compensation arrangement existing on the
effective date of the Change of Control shall not be provided under
any such arrangement to such Participant, or his dependents,
beneficiaries and estate, because he is no longer a Cummins
employee, Cummins shall, to the extent necessary, provide, pay or
provide for payment of such benefits to such Participant, his
dependents, beneficiaries and estate.
5. Severance Allowance. In the event of the Termination of any
Participant, he may elect, within 60 days after the date of such
Termination, to be paid a lump-sum severance allowance in lieu of
all termination payments provided in paragraph 4, in an amount which
is equal to the sum of the following:
(a) an amount equal to salary payments for 12 calendar months at
the monthly rate in effect immediately prior to the date of his
Termination or the effective date of the Change in Control,
whichever is higher; and
(b) an amount equal to four quarterly bonus payments in the amount
of the Participant's Target Bonus payments calculated in accordance
with the provisions of paragraph 4(a) above. To the extent
Participants in this Plan are also participants in Cummins' Five
Year Performance Plan or its Restricted Unit Plan, such persons
shall be entitled to all benefits hereunder and thereunder in the
event of a Change of Control, provided, however, that any employee
participating in Cummins' Restricted Unit Plan shall have his
payments under this plan reduced by any payments received by him
under the takeover provisions of the Restricted Unit Plan.
In the event that a Participant makes an election pursuant to this
paragraph 5 to receive a lump-sum severance allowance of the
aggregate amount determined pursuant to paragraphs (a) and (b),
then, in addition to such amount, he shall receive (i) in addition
to the benefits provided under any pension benefit plan and
supplemental pension plan maintained by Cummins, the pension
benefits he would have accrued under such pension benefit plan and
supplemental pension plan if he had remained in the employ of
Cummins for 12 calendar months after the date of his Termination,
which benefits will be paid concurrently with, and in addition to,
the benefits provided under such pension benefit plan and
supplemental pension plan, (ii) the right to receive and exercise
stock options and stock appreciation rights and to receive
restricted stock and grants thereof and performance awards and
similar incentive compensation benefits to which he would have been
entitled under all such plans maintained by Cummins if he had
remained in its employ for 12 calendar months after the date of his
Termination and (iii) the employee benefits (including, but not
limited to, coverage under any life insurance, medical, dental,
disability and financial advisory arrangements or programs) to
which he would have been entitled under all employee benefit plans,
programs or arrangements maintained by Cummins if he had remained
in its employ for 12 calendar months after the date of his
Termination, or the value of the amounts described in such clauses
(i), (ii) and (iii). The amount of the payments described in the
preceding sentence shall be determined and such payments shall be
distributed as soon as it is reasonably possible.
6. Legal Fees and Expenses. Cummins shall pay all legal fees and
expenses which any Participant may incur as a result of Cummins'
contesting the validity or enforceability of such Participant's
interpretation of this Plan.
7. Amendment or Termination of this Plan. The Board shall have
power at any time, in its discretion, to amend or terminate this
Plan in whole or in part, provided, however, that no amendment or
termination shall deprive any Participant of any rights or benefits
to which he is or may become entitled under this Plan by reason of
any Change of Control.
8. Withholding. Cummins may deduct from any amounts payable under
this Plan any taxes required by law to be withheld with respect to
such payments.
9. Reliance by Participants. All the foregoing severance and
benefit arrangements shall be communicated to each Participant in
this Plan and shall be generally described in filings with the
Securities and Exchange Commission and to the stockholders of
Cummins, all to the extent deemed necessary or desirable by Cummins,
in order that each Participant shall be deemed to have continued his
employment with Cummins hereafter in good faith reliance upon this
Plan.
CUMMINS ENGINE COMPANY, INC.
____________________________
EXHIBIT 10(i)
_____________
EXCESS BENEFIT RETIREMENT PLAN
______________________________
Effective as of March 1, 1984
Amended as of October 24, 1986
Amended as of January 12, 1989
Amended as of February 14, 1989
Purpose:
________
Section 415 of the Internal Revenue Code (the "Code"), as amended by
the Employee Retirement Income Security Act of 1974 (the "Act") and
the Tax Equity and Fiscal Responsibility Act of 1982 ("TEFRA"),
imposes certain dollar limitations on the annual retirement benefit
payable to an individual after December 31, 1982, and Section
401(a)(17) of the Code, as added by the Tax Reform Act of 1986 ("TRA")
imposes a dollar limitation on the annual compensation taken into
account for any purpose after December 31, 1988 under qualified
pension plans such as the Cummins Engine Company, Inc., and Affiliates
Retirement Plan "A" (the "Retirement Plan"). Cummins Engine Company,
Inc. ("Cummins") has amended the Retirement Plan to conform to the
benefit and compensation limitations of the Code, the Act, TRA and
TEFRA, and such amendments (the "Limitation Amendments") have reduced
the benefits that certain employees of Cummins and its Affiliates (as
such term is defined under the Retirement Plan) would otherwise be
entitled to receive under the Retirement Plan. Cummins and such
Affiliates have adopted this Plan so that eligible employees shall
receive retirement benefits in the same amounts they would have
received under the Retirement Plan were it not for the Limitation
Amendments.
Section 1. Definitions:
________________________
a) "Employee" is defined for the purpose of this Plan as that term
is defined under the Retirement Plan.
b) "Participants" is defined as any employee who has a current
accrued retirement benefit in excess of the benefit limitations of
Section 415 of the Code.
c) "Joint Annuitant" is defined for the purposes of this Plan as
that term is defined under the Retirement Plan.
d) "Plan" is defined as the Excess Benefit Retirement Plan of
Cummins Engine Company, Inc., as amended from time to time.
e) "Change of Control" means the occurrence of any of the
following:
(i) there shall be consummated (A) any consolidation or merger of
Cummins in which Cummins is not the continuing or surviving
corporation or pursuant to which shares of Cummins common stock
would be converted in whole or in part into cash, other securities
or other property, other than a merger of Cummins in which the
holders of Cummins common stock immediately prior to the merger have
substantially the same proportionate ownership of common stock of
the surviving corporation immediately after the merger, or (B) any
sale, lease, exchange or transfer (in one transaction or a series of
related transactions) of all or substantially all the assets of
Cummins, or
(ii) the stockholders of Cummins shall approve any plan or proposal
for the liquidation or dissolution of Cummins, or
(iii) any "person" (as such term is used in Sections 13(d)(3) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), other than Cummins or a subsidiary thereof or any
employee benefit plan sponsored by Cummins or a subsidiary thereof
or a corporation owned, directly or indirectly, by the stockholders
of Cummins in substantially the same proportions as their ownership
of stock of Cummins, shall become the beneficial owners (within the
meaning of Rule 13d-3 under the Exchange Act) of securities of
Cummins representing 25 percent or more of the combined voting power
of Cummins' then outstanding securities ordinarily (and apart from
rights accruing in special circumstances) having the right to vote
in the election of directors ("Voting Shares"), as a result of a
tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise, or
(iv) at any time during a period of two consecutive years,
individuals who, at the beginning of such period constituted the
Board of Directors of Cummins, shall cease for any reason to
constitute at least a majority thereof, unless the election or the
nomination for election by Cummins stockholders of each new director
during such 2-year period was approved by a vote of at lest two-
thirds of the directors then still in office who were directors at
the beginning of such 2-year period, or
(v) any other event shall occur that would be required to be
reported in response to Item 6(e) (or any successor provision) of
Schedule 14A of Regulation 14A promulgated under the Exchange Act.
Section 2. Benefits:
_____________________
a) Cummins will pay or cause to be paid to each Participant or the
Participant's Joint Annuitant, as the case may be, who is entitled
to receive payments under the Retirement Plan, an amount which is
equivalent to the excess, if any, of
(i) the amount such Participant or Joint Annuitant would have been
entitled to receive under the Retirement Plan for each calendar
year, taking into account all the provisions of the Retirement Plan
as are from time to time in effect and applicable to the Participant
or Joint Annuitant except for the Limitation Amendments, minus
(ii) the amount such Participant or Joint Annuitant was entitled to
receive under the Retirement Plan for such year taking into account
the Limitation Amendments. Payments hereunder shall be made at
approximately the same time as payments are made to the Participant
or Joint Annuitant under the Retirement Plan, except as provided in
Section 2(b) below.
b) If a Participant or Joint Annuitant is entitled to a benefit
pursuant to Section 2(a) hereof, Cummins shall pay to such
Participant or Joint Annuitant the amount determined as follows:
(i) If the benefit to which the Participant or the Participant's
Joint Annuitant is entitled:
(A) is less than $100 per month, the benefit will be paid in an
actuarially equivalent lump sum
(B) has an actuarially equivalent lump-sum value which is
greater than $100 per month, the benefit will be payable in the
same form as the Participant's or Joint Annuitant's Retirement
Plan benefit.
Cummins shall determine the times at which such payments shall
be made, but they shall commence not later than one year after
the commencement of benefits under the Retirement Plan and
shall thereafter be made at least annually and over the same
period that such payments would be made if they were paid under
the Retirement Plan. Notwithstanding the foregoing, on request
of the Participant or Joint Annuitant, Cummins may, in its sole
discretion, accelerate the remaining unpaid portion of such
payments into one or more payments having, in the aggregate, an
equivalent actuarial value.
(ii) All lump-sum equivalent benefits payable under this Plan will
be calculated using:
(A) the interest rate used by the Pension Benefit Guaranty
Corporation in determining the value of immediate benefits as of the
immediately preceding January 1, and
(B) the mortality tables in Attachment A.
c) Notwithstanding anything contained in this Section 2 to the
contrary, following a Change of Control, each Participant shall be
entitled to receive a lump-sum payment of the actuarial equivalent
of the benefits accrued and remaining unpaid as of the date of such
Change of Control, calculated using the assumptions referenced in
subsection (b)2. above. In addition, the accrued benefits of each
Participant (other than one who is a terminated vested participant
in the Retirement Plan) shall be calculated assuming, solely for the
purpose of computing benefits, including the reduction of Retirement
Plan benefits for early commencement, that the Participant has
already satisfied the conditions for unreduced benefits at the
earliest possible time, taking into consideration the Participant's
age and service with Cummins, its subsidiaries and affiliates.
d) If payment of a benefit pursuant to subsection (c) of this
Section 2 (the "Lump Sum") causes the Lump Sum and any other
payments made in connection with a Change of Control (together with
the Lump Sum, the "Total Payments") to be subject to the tax (the
"Excise Tax") imposed by Section 4999 of the Code, Cummins shall pay
the Participant an additional amount (the "Gross-up Payment") such
that the net amount retained by the Participant, after deduction of
any Excise Tax paid or payable (and not grossed-up under a similar
provision of another plan or program sponsored by Cummins) on the
Lump Sum and such other Total Payments and any Federal, state and
local income tax and Excise Tax upon the payment provided for by
this subsection (d), shall be equal to the Lump Sum and such other
Total Payments. If any of such other Total Payments are subject to
the Excise Tax without regard to the Lump Sum and such other Total
Payments. If any of such other Total Payments are subject to the
Excise Tax without regard to the Lump Sum, a Gross-up Payment shall
be made, but shall only be equal to the increase in the Excise Tax
(plus any Federal, state and local income tax and Excise Tax on such
Gross-up Payment) arising solely as a result of the Lump Sum.
For purposes of determining whether any of the payments described
above will be subject to the Excise Tax and the amount of such
Excise Tax,
(i) any other payments or benefits received or to be received by
the Participant in connection with a change in control of Cummins,
whether payable pursuant to the terms of this Plan or any other
plan, arrangement or agreement with Cummins, its successors, any
person whose actions result in a change in control of Cummins or any
corporation affiliated (or which, as a result of the completion of a
transaction causing a Change of Control, will become affiliated)
with Cummins within the meaning of Section 1504 of the Code shall be
treated as "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and all "excess parachute payments" within
the meaning of Section 280G(b)(1) shall be treated as subject to the
Excise Tax, unless in the opinion of tax counsel selected by
Cummins' independent auditors and acceptable to the Participant the
payments (in whole or in part) do not constitute parachute payments,
or such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the
meaning of Section 280G(b)(4) of the Code either in their entirety
or in excess of the base amount within the meaning of Section
280G(b)(3) of the Code, or are otherwise not subject to the Excise
Tax,
(ii) the amount of the payments that shall be treated as subject to
the Excise Tax shall be equal to the lesser of (A) the total amount
of the payments or (B) the amount of excess parachute payments
within the meaning of Section 280G(b)(1) (after applying clause (i),
above), and
(iii) the value of any non-cash benefits or any deferred payment or
benefit shall be determined by Cummins' independent auditors in
accordance with the principles of Section 280G(d)(3) and (4) of the
Code. For purposes of determining the amount of the Gross-up
Payment, the Participant shall be deemed to pay Federal income taxes
at the highest marginal rate of Federal income taxation in the
calendar year in which the Gross-up Payment is to be made and state
and local income taxes at the highest marginal rate of taxation in
the state and locality of the Participant's residence on the date of
payment, net of the maximum reduction in Federal income taxes which
could be obtained from deduction of such state and local taxes. In
the event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder at the time of payment,
the Participant shall repay to Cummins at the time that the amount
of such reduction in Excise Tax is finally determined the portion of
the Gross-up Payment attributable to such reduction (plus the
portion of the Gross-up Payment attributable to the Excise Tax and
Federal and state and local income tax imposed on the Gross-up
Payment being repaid by the Participant if such repayment results in
a reduction in Excise Tax and/or a Federal and state and local
income tax deduction) plus interest on the amount of such repayment
at the rate provided in Section 1274(d) of the Code. In the event
that the Excise Tax is determined to exceed the amount taken into
account hereunder at the time of the Gross-up Payment (including by
reasons of any payment the existence or amount of which cannot be
determined at the time of the Gross-up Payment), Cummins shall make
an additional Gross-up Payment in respect to such excess (plus any
interest payable with respect to such excess) at the time that the
amount of such excess is finally determined.
Section 3. Miscellaneous:
__________________________
a) Cummins shall be under only a contractual obligation to make
payments to the Participant or Joint Annuitant referred to herein
when due, and the method of making provision for the payment of such
benefits shall be solely in the discretion of the Plan Administrator
referred to in Section 3(g) hereof.
b) Nothing contained herein shall confer any right of an employee
to be continued in the employee of Cummins or an Affiliate or shall
affect the right of the employee to participate in and receive
benefits under and in accordance with any pension, profit sharing,
incentive compensation or other benefit plan or other benefit plan
or program of Cummins or an Affiliate.
c) This Plan shall continue in force with respect to any
Participant until the termination of the right of such Participant
or his Joint Annuitant to receive benefits under the Retirement
Plan, or, if later, the completion of any payments due under
Sections 2(b) or 2(c) hereof, and shall be binding upon any
successor to substantially all the assets of Cummins. Cummins may,
however, at any time, amend the Plan to provide that no additional
benefits shall accrue with respect to any Participant under the
Plan, provided, however, that no such amendment shall deprive any
Participant or Joint Annuitant of any benefit that accrued under the
Plan prior to such amendment. Cummins may also, at any time, amend
this Plan retroactively or otherwise if and to the extent that such
action is deemed appropriate in light of government regulations or
other legal requirements.
d) Cummins assumes no contractual obligation as to the continuance
of this Plan. Cummins may also, at any time, terminate the plan,
provided, however, that all benefits accrued under the Plan prior to
the termination date will be paid in an actuarially equivalent lump
sum.
e) No right or interest of a Participant or Joint Annuitant under
this Plan shall be subject to voluntary or involuntary alienation,
assignment or transfer of any kind.
f) Any elections to be made under this Plan shall be made in the
manner prescribed under equivalent provisions of the Retirement
Plan.
g) The administration of this Plan shall be the responsibility of
the Pension Policy Committee of Cummins, or such other person or
entity as Cummins shall designate. Decisions of such administrator
of the Plan shall be final and binding upon each Affiliate that
shall have adopted this Plan, employees of such Affiliates and the
Joint Annuitant of such employees.
h) If any payment to be made under this Plan is to be made on
account of an employee who was employed by an affiliate that shall
have adopted this Plan, the cost of such payment shall be borne in
such proportions as Cummins and such Affiliate shall agree.
This Plan shall be effective as of March 1, 1984.
CUMMINS ENGINE COMPANY, INC., AND SUBSIDIARIES
______________________________________________
EXHIBIT 11
__________
SCHEDULE OF COMPUTATION OF PER SHARE EARNINGS
FOR THE THIRD QUARTER ENDED OCTOBER 2, 1994 AND OCTOBER 3, 1993
(Millions, Except per Share Data)
Third Quarter Nine Months
_________________ _________________
Weighted Weighted
Average Net Average Net
Shares Earnings Shares Earnings
________ ________ ________ ________
1994
____
Shares outstanding & earnings
available for common stock
shareholders 41.6 $61.9 41.1 $182.7
Options .1 - .2 -
____ _____ ____ ______
Used in the determination of
primary and fully diluted
earnings per common share 41.7 $61.9 41.3 $182.7
____ _____ ____ ______
____ _____ ____ ______
Primary and fully diluted
earnings per share $1.48 $ 4.43
_____ ______
1993
____
Shares outstanding & earnings
available for common stock
shareholders 34.7 $38.7 34.6 $123.9
Options .2 - .4 -
____ _____ ____ ______
Used in the determination of
primary earnings per common
share 34.9 38.7 35.0 123.9
Liquid yield option notes 1.0 .9 1.0 2.6
Convertible preference stock 3.0 2.0 3.0 6.1
Other - (.4) - (1.2)
____ ______ ____ _______
Used in the determination of
fully diluted earnings per
common share 38.9 $41.2 39.0 $131.4
____ _____ ____ ______
____ _____ ____ ______
Earnings per share:
Primary $1.11 $ 3.54
Fully diluted $1.06 $ 3.37
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 9-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1993
<PERIOD-END> OCT-02-1994 DEC-31-1993
<CASH> 167,600,000 77,300,000
<SECURITIES> 0 0
<RECEIVABLES> 506,500,000 435,800,000
<ALLOWANCES> 10,700,000 9,500,000
<INVENTORY> 541,800,000 440,200,000
<CURRENT-ASSETS> 1,347,000,000 1,071,700,000
<PP&E> 2,278,900,000 2,180,500,000
<DEPRECIATION> 1,281,000,000 1,222,300,000
<TOTAL-ASSETS> 2,712,000,000 2,390,600,000
<CURRENT-LIABILITIES> 832,000,000 700,300,000
<BONDS> 184,200,000 189,600,000
<COMMON> 109,200,000 101,500,000
0 0
0 12,200,000
<OTHER-SE> 899,900,000 607,400,000
<TOTAL-LIABILITY-AND-EQUITY> 2,712,000,000 2,390,600,000
<SALES> 3,459,600,000 4,247,900,000
<TOTAL-REVENUES> 3,459,600,000 4,247,900,000
<CGS> 2,597,200,000 3,211,000,000
<TOTAL-COSTS> 640,500,000 788,800,000
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 2,400,000 5,400,000
<INTEREST-EXPENSE> 13,700,000 36,300,000
<INCOME-PRETAX> 212,000,000 205,000,000
<INCOME-TAX> 29,300,000 22,300,000
<INCOME-CONTINUING> 182,700,000 182,600,000
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 (5,500,000)
<CHANGES> 0 0
<NET-INCOME> 182,700,000 177,100,000
<EPS-PRIMARY> 4.43 4.79
<EPS-DILUTED> 4.43 4.63
</TABLE>
CUMMINS ENGINE COMPANY, INC.
____________________________
EXHIBIT 4(b)
____________
AMENDED AND RESTATED CREDIT AGREEMENT
_____________________________________
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of September 16,
1994, among CUMMINS ENGINE COMPANY, INC., an Indiana corporation (the
"Company"), the banks and other financial institutions listed in
Schedule I hereto (the "Banks") and MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, a New York banking corporation ("Morgan"), as administrative
agent for the Banks (in such capacity, the "Agent").
W I T N E S S E T H :
____________________
WHEREAS, the Company, the Banks listed as Existing Banks on
Schedule I hereto (the "Existing Banks") and the Agent are parties to
a Credit Agreement, dated as of June 4, 1993 (as amended, supplemented
or otherwise modified to the Effective Date (as defined below), the
"Existing Credit Agreement"); and
WHEREAS, the Company has requested the Banks to amend and
restate the Existing Credit Agreement (i) to extend the maturity of
the Existing Credit Agreement, (ii) to provide for the Banks to
continue to extend credit to the Company in order to enable it to
borrow revolving credit loans and (iii) to continue to provide a
procedure pursuant to which the Company may invite the Banks to bid on
an uncommitted basis on short-term borrowings by the Company scheduled
to mature within 180 days or six months of borrowing and in any event
on or prior to the Maturity Date; and
WHEREAS, the Banks are willing to amend and restate the
Credit Agreement, to continue to extend the credit and continue to
provide the procedure for uncommitted short-term borrowings requested
by the Company on the terms and conditions herein set forth;
NOW, THEREFORE, the Company, the Agent and the Banks amend
and restate the Existing Credit Agreement, effective as of the
Effective Date, as follows:
I. DEFINITIONS
As used in this Agreement, the following terms shall have the
meanings specified below:
"Acquiring Person" shall mean any person who is or becomes the
beneficial owner, directly or indirectly, of 10% or more of the
outstanding common stock of the Company.
"Adjusted CD Rate" shall mean, with respect to any Certificate of
Deposit Loan, an interest rate per annum (rounded upwards, if not
already a whole multiple of 1/16 of 1%, to the next higher 1/16
of 1%) equal to the sum of (a) a rate per annum equal to the
product of (i) the Fixed Certificate of Deposit Rate in effect
for the Interest Period applicable to such Loan and (ii)
Statutory Reserves, plus (b) the Assessment Rate. For purposes
hereof, the term "Fixed Certificate of Deposit Rate" shall mean
the arithmetic average (rounded upwards, if not already a whole
multiple of 1/16 of 1%, to the next higher 1/16 of 1%) of the
respective rates notified to the Agent by each of the Reference
Banks as the average rate bid at or about 10:00 a.m., New York
City time, on the first Business Day of the Interest Period
applicable to such Certificate of Deposit Loan by three New York
City negotiable certificate of deposit dealers of recognized
standing selected by such Reference Bank for the purchase at face
value of negotiable certificates of deposit of major United
States money center banks in a principal amount approximately
equal to such Reference Bank's portion of the principal amount of
the Standby Borrowing of which such Certificate of Deposit Loan
forms a part and with a maturity comparable to such Interest
Period.
"Affiliate" shall mean, when used with respect to a
specified person, another person that directly, or indirectly
through one or more intermediaries, controls or is controlled by
or is under common control with the person specified. For
purposes of the foregoing, the term "control" (including the
terms "controlling", "controlled by" and "under common control
with") shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or
policies of a person, whether through the ownership of voting
securities, by contract or otherwise.
"Agreement" shall mean this Amended and Restated Credit
Agreement, as amended, supplemented or otherwise modified from
time to time.
"Alternate Base Loan" shall mean any Loan with respect to
which the Company shall have selected an interest rate based on
the Alternate Base Rate in accordance with the provisions of
Article II.
"Alternate Base Rate" shall mean for any day, an interest
rate per annum (rounded upwards, if not already a whole multiple
of 1/16 of 1%, to the next higher 1/16 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the
Base CD Rate in effect on such day plus 1% and (c) the Federal
Funds Effective Rate in effect for such day plus 1/2 of 1%. For
purposes hereof, the term "Prime Rate" shall mean the rate of
interest per annum publicly announced by Morgan from time to time
as its prime rate in effect at its principal office in New York
City; each change in the Prime Rate shall be effective on the
date such change is announced as effective. "Base CD Rate" shall
mean the sum of (x) the product of (i) the Three-Month Secondary
CD Rate and (ii) Statutory Reserves and (y) the Assessment Rate.
"Three-Month Secondary CD Rate" shall mean, for any day, the
secondary market rate for three-month certificates of deposit
reported as being in effect on such day (or, if such day is not a
Business Day, the next preceding Business Day) by the Board
through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under current
practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such
day), or, if such rate shall not be so reported on such day or
such next proceeding Business Day, the average of the secondary
market quotations for three month certificates of deposit of
major money center banks in New York City received at 10:00 a.m.,
New York City time, on such day (or, if such day shall not be a
Business Day, on the next preceding Business Day) by Morgan from
three New York City negotiable certificate of deposit dealers of
recognized standing selected by it. "Federal Funds Effective
Rate" shall mean, for any day 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 on the next succeeding 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 the day of such transactions received by the Agent
from three Federal funds brokers of recognized standing selected
by it. For purposes of this Agreement, any change in the
Alternate Base Rate due to a change in the Prime Rate, the Base
CD Rate or the Federal Funds Effective Rate shall be effective on
the effective date of such change in the Prime Rate, the Base CD
Rate or the Federal Funds Effective Rate, respectively. If for
any reason the Agent shall have determined (which determination
shall be conclusive absent manifest error) that it is unable to
ascertain the Base CD Rate or the Federal Funds Effective Rate,
or both, for any reason, including the inability or failure of
the Agent to obtain sufficient quotations in accordance with the
terms hereof, the Alternate Base Rate shall be determined without
regard to clause (b) or (c), or both, of the first sentence of
this definition, as appropriate, until the circumstances giving
rise to such inability no longer exist.
"Applicable Margin" shall mean for each day and each type of
Standby Loan, the rate per annum set forth below under the
relevant column heading opposite the applicable ratings by
Standard & Poor's Ratings Group and/or Moody's Investors Service,
Inc. in effect on such day in respect of the Company's senior,
unsecured, non-credit enhanced, long-term debt:
Ratings LIBOR CD ABR
(S&P/ Margin Margin Margin
Moody's)
BB-/Ba3 1.500% 1.625% 1.000%
or below
(or unrated)
BB/Ba2 0.875 1.000 -0-
BB+/Ba1 0.750 0.875 -0-
BBB-/Baa3 0.375 0.500 -0-
BBB/Baa2 0.275 0.400 -0-
BBB+/Baa1 0.250 0.375 -0-
A-/A3 0.230 0.355 -0-
or higher
In the event that the ratings of Standards & Poor's Ratings Group
and Moody's Investors Service, Inc. ("Ratings") do not coincide
for any day and the Ratings differential is one level, the
applicable margin set forth above for the higher of such two
Ratings shall be the Applicable Margin in effect for such day.
In the event that the Ratings do not coincide for any day and the
Ratings differential is two levels or more, the applicable margin
set forth above for the midpoint of such two Ratings shall be the
Applicable Margin in effect for such day, provided, however, that
if there is no midpoint Rating, the applicable margin set forth
above for the higher of the intermediate levels shall be the
Applicable Margin in effect for such day. Any change in the
Applicable Margin shall be effective as of the date on which the
applicable rating agency announces the applicable change in
ratings.
"Approval Period" shall mean the period prior to and until 21
calendar days after the date on which a Change of Control shall
have occurred.
"Assessment Rate" shall mean for any date the annual rate
(rounded upwards, if not already a whole multiple of 1/16 of 1%,
to the next higher 1/16 of 1%) most recently estimated by the
Agent as the then current net annual assessment rate that will be
employed in determining amounts payable by Morgan to the Federal
Deposit Insurance Corporation ("FDIC") (or any successor) for
insurance by the FDIC (or such successor) of time deposits made
in dollars at its domestic offices.
"Attributable Value" of any Sale and Lease-Back Transaction
shall mean, at any time, an amount equal to the product of (i)
the greater of (A) the net proceeds of the sale of the property
subject thereto and (B) the fair market value of such property at
the time of such sale (as determined by the Board of Directors of
the Company or by an independent appraiser) and (ii) a fraction
the numerator of which equals the number of full years in the
term of the relevant lease remaining at such time and the
denominator of which equals the number of full years in the term
of such lease at such time, in each case computed without regard
to any renewal or extension options (other than those at the
option of the lessor) contained in such lease.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Borrowing" shall mean a Competitive Borrowing or a Standby
Borrowing.
"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York or the
State of Indiana) on which banks and the Federal Reserve Bank of
New York are open for business in New York City; provided,
however, that when used in connection with a LIBOR Loan, the term
"Business Day" shall also exclude any day on which banks are not
open for dealings in dollar deposits in the London Interbank
Market.
"Capital Lease Obligations" of any person shall mean the
obligations of such person to pay rent or other amounts under any
lease of (or other arrangement conveying the right to use) real
or personal property, or a combination thereof, which obligations
are required to be classified and accounted for as capital leases
on a balance sheet of such person under GAAP and, for the
purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time
determined in accordance with GAAP.
"CDC" shall mean Consolidated Diesel Company, a North Carolina
general partnership.
"CDI" shall mean Consolidated Diesel, Inc., a Delaware
corporation and wholly owned subsidiary of CDC.
"CDNC" shall mean Consolidated Diesel of North Carolina, Inc., a
North Carolina corporation and wholly owned subsidiary of CDI.
"CEHC" shall mean Cummins Engine Holding Company, Inc., an
Indiana corporation and wholly owned subsidiary of the Company
whose only purpose is and hereafter shall be to own and hold a
partnership interest in CDC.
"Certificate of Deposit Loan" shall mean any Standby Loan with
respect to which the Company shall have selected an interest rate
based on the Adjusted CD Rate in accordance with the provisions
of Article II.
"Change in Control" shall mean (i) any person or group of persons
within the meaning of Section 13(d)(3) of the Securities Exchange
Act of 1934, becomes the beneficial owner, directly or
indirectly, of 30% or more of the outstanding common stock of the
Company or (ii) individuals who constitute the Continuing
Directors cease for any reason to constitute at least a majority
of the Board of Directors of the Company (which, for the purpose
of this definition, shall not be deemed to mean any committee of
the Board of Directors of the Company); provided, however, that
in the case of either (i) or (ii) a Change of Control shall not
be deemed to have occurred if the event set forth in such (i) or
(ii) shall have been approved during the Approval Period by a
majority of the Continuing Directors.
"Closing Date" shall mean June 4, 1993.
"Code" shall mean the Internal Revenue Code of 1986, as the same
may be amended from time to time.
"Commitment" shall mean, with respect to each Bank, after giving
effect to Section 9.16, the commitment of such Bank hereunder as
set forth in Schedule I hereto, as such Bank's commitment may be
permanently terminated or reduced from time to time pursuant to
Section 2.6. The Commitments shall automatically and permanently
terminate on the Maturity Date.
"Competitive Bid" shall mean an offer by a Bank to make a
Competitive Loan pursuant to Section 2.2.
"Competitive Bid Rate" shall mean, as to any Competitive Bid made
by a Bank pursuant to Section 2.2(b), either the Competitive
Fixed Rate or the Competitive LIBO Rate, as the case may be,
offered by the Bank making such Competitive Bid.
"Competitive Bid Request" shall mean a request made pursuant to
Section 2.2 in the form of Exhibit A-1.
"Competitive Borrowing" shall mean a borrowing consisting of
concurrent Competitive Loans from each of the Banks whose
Competitive Bid as a part of such borrowing has been accepted by
the Company under the bidding procedure described in Section 2.2.
"Competitive Fixed Rate" shall mean, as to any Competitive Bid
made by a Bank pursuant to Section 2.2(b), the fixed rate of
interest offered by the Bank making such Competitive Bid.
"Competitive Fixed Rate Loan" shall mean any Competitive Loan
with respect to which the Company shall have selected a
Competitive Fixed Rate in accordance with the provisions of
Article II.
"Competitive LIBO Rate" shall mean, as to any Competitive Bid
made by a Bank pursuant to Section 2.2(b), the sum of (i) the
LIBO Rate determined for such Competitive Bid plus (or minus)
(ii) the margin above or (below) the LIBO Rate offered by the
Bank making such Competitive Bid.
"Competitive LIBO Rate Loan" shall mean any Competitive Loan with
respect to which the Company shall have selected an interest rate
based on the Competitive LIBO Rate in accordance with the
provisions of Article II.
"Competitive Loan" shall mean a Loan from a Bank to the Company
pursuant to the bidding procedure described in Section 2.2, the
interest rate applicable to which shall be either a Competitive
Fixed Rate or a Competitive LIBO Rate, as the case may be,
offered by such Bank, and accepted by the Company.
"Competitive Note" shall mean a promissory note of the Company in
the form of Exhibit D-1, executed and delivered as provided in
Section 2.8.
"Consolidated" shall mean, as applied to any financial or
accounting term with respect to any person, such term determined
on a consolidated basis in accordance with GAAP for such person
and all consolidated subsidiaries thereof.
"Consolidated Indebtedness" shall mean the Indebtedness of the
Company and its Subsidiaries, computed and Consolidated in
accordance with GAAP; provided, however, that the term
"Consolidated Indebtedness" shall in any event (i) exclude
Indebtedness of CDC and its subsidiaries to the extent that the
portion thereof attributable to the Company (through the
Company's interest in CDC) is less than $100,000,000 and (ii)
include Indebtedness of CDC and its subsidiaries to the extent
that the portion thereof attributable to the Company (through the
Company's interest in CDC) is in excess of $100,000,000 and (iii)
exclude Guarantees of the Company outstanding from time to time
in an aggregate amount not to exceed $85,000,000.
"Consolidated Net Income" for any period shall mean the net
earnings (loss) of the Company and its Subsidiaries for such
period, computed and Consolidated in accordance with GAAP, as set
forth in the Consolidated statement of earnings for such period
delivered by the Company pursuant to Section 5.4.
"Continuing Director" shall mean any member of the Board of
Directors of the Company who is not affiliated with an Acquiring
Person and who was a member of the Board of Directors of the
Company immediately prior to the time that the Acquiring Person
became an Acquiring Person and any successor to a Continuing
Director who is not affiliated with the Acquiring Person and is
recommended to succeed a Continuing Director by a majority of
Continuing Directors who are then members of the Board of
Directors of the Company.
"Default" shall have the meaning assigned to such term in Section
4.2(c).
"dollars" and the symbol "$" shall mean the lawful currency of the
United States of America.
"Eligible Assignee" shall have the meaning assigned to such term
in Section 9.4(c).
"Effective Date" shall mean the date on which the conditions set
forth in Section 4.1 are satisfied, which, unless otherwise
agreed by the parties hereto, shall be a date on or before
October 31, 1994.
"Environmental Laws": any and all foreign, Federal, state, local
or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, duly authorized, written requirements
of any Governmental Authority or other requirements of law
(including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human
health or the environment, as now or may at any time hereafter be
in effect.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that is a member of a group of which the Company is
a member and which is treated as a single employer under Section
414 of the Code.
"Events of Default" shall have the meaning assigned to such term
in Article VII.
"Facility Fee" shall have the meaning assigned to such term in
Section 2.5(a).
"Facility Fee Rate" shall mean for each day, the rate per annum
set forth below opposite the applicable ratings by Standard &
Poor's Ratings Group and/or Moody's Investors Service, Inc. in
effect on such day in respect of the Company's senior, unsecured,
non-credit enhanced, long-term debt:
Ratings
(S&P/ Facility
Moody's) Fee Rate
_______________________________________________________
BB-/Ba3 .500%
or below
(or unrated)
BB/Ba2 .375
BB+/Ba1 .375
BBB-/Baa3 .225
BBB/Baa2 .175
BBB+/Baa1 .150
A-/A3 .120
or higher
In the event that the Ratings do not coincide for any day and the
Ratings differential is one level, the Facility Fee Rate set
forth above for the higher of such two Ratings shall be the
Facility Fee Rate in effect for such day. In the event that the
Ratings do not coincide for any day and the Ratings differential
is two levels or more, the Facility Fee Rate set forth above for
the midpoint of such two Ratings shall be the Facility Fee Rate
in effect for such day, provided, however, that if there is no
midpoint Rating, the Facility Fee Rate set forth above for the
higher of the intermediate levels shall be the Facility Fee Rate
in effect for such day. Any change in the Facility Fee Rate
shall be effective as of the date on which the applicable rating
agency announces the applicable change in ratings.
"Financial Officer" of any person shall mean its chief financial
officer, principal accounting officer, treasurer or any assistant
treasurer.
"GAAP" shall mean generally accepted accounting principles as
described in the last paragraph of this Article I.
"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality
or regulatory body.
"Guarantee" of or by any person shall mean any obligation,
contingent or otherwise, of such person guaranteeing or having
the economic effect of guaranteeing any Indebtedness of any other
person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such person, direct
or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase
(or to advance or supply funds for the purchase of) any security
for the payment of such Indebtedness, (b) to purchase property,
securities or services for the purpose of assuring the owner of
such Indebtedness of the payment of such Indebtedness or (c) to
maintain working capital, equity capital or other financial
statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness; provided,
however, that, in the case of the Company and its Subsidiaries,
the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business.
"Indebtedness" of any person shall mean, without duplication, (a)
all obligations of such person for borrowed money or with respect
to deposits or advances of any kind, (b) all obligations of such
person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such person under conditional
sale or other title retention agreements relating to property or
assets purchased by such person, (d) all obligations of such
person issued or assumed as the deferred purchase price of
property or services, (e) all Indebtedness of others secured by
(or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such person, whether or not the
obligations secured thereby have been assumed, (f) all Guarantees
by such person of Indebtedness of others, (g) all Capital Lease
Obligations of such person, (h) any minimum pension liability
required to be reflected on such person's statement of financial
position pursuant to Statement of Financial Accounting Standards
No. 87, and (i) all obligations of such person as an account
party in respect of letters of credit and bankers' acceptances.
The Indebtedness of any person shall also include the
Indebtedness of any partnership in which such person is a general
partner, except to the extent that recourse against such general
partner (as a general partner) has been contractually waived or
limited. Notwithstanding the foregoing, the term "Indebtedness",
in respect of the Company and its Subsidiaries shall not include
(i) deferred compensation for officers and employees of the
Company or any of its Subsidiaries and (ii) trade payables
incurred in the ordinary course of business.
"Interest Payment Date" shall mean (i) with respect to any LIBOR
Loan, Certificate of Deposit Loan or Alternate Base Loan, the
last day of the Interest Period applicable thereto and, in the
case of a LIBOR Loan or a Certificate of Deposit Loan with an
Interest Period of 6 months or 180 days, respectively, the day
that would have been the Interest Payment Date for such Loan had
an Interest Period of 3 months or 90 days, respectively, been
applicable to such Loan and (ii) in the case of a Competitive
Loan, the last day of the Interest Period applicable thereto and;
if such Competitive Loan bears interest at the Competitive LIBO
Rate with an Interest Period of 6 months, the day that would have
been the Interest Payment Date for such Competitive Loan had an
Interest Period of 3 months been applicable to such Competitive
Loan.
"Interest Period" shall mean (i) as to any LIBOR Loan, the period
commencing on the date of such Loan and ending on the numerically
corresponding day (or if there is no corresponding day, the last
day) in the calendar month that is 1, 2, 3 or 6 months
thereafter, as the Company may elect, (ii) as to any Certificate
of Deposit Loan, a period of 30, 60, 90 or 180 days' duration, as
the Company may elect, commencing on the date of such Loan, (iii)
as to any Alternate Base Loan, the period commencing on the date
of such Loan and ending 30 days later or, if earlier, on the
Maturity Date or the date of prepayment of such Loan and (iv) as
to any Competitive Loan, the period commencing on the date of
such Loan and ending on the date specified in the Competitive Bid
in which the offer to make the Competitive Loan was extended,
which shall not be (x) in the case of a Competitive Fixed Rate
Loan, earlier than 7 days after the date of such Loan or later
than 180 days after the date of such Loan or (y) in the case of a
Competitive LIBO Rate Loan earlier than one month after the date
of such Loan (or, in either case, such other period as the
Company may request and the Agent approve); provided, however,
that (x) if any Interest Period would end on a day which shall
not be a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless, with respect to LIBOR
Loans and Competitive LIBO Rate Loans only, such next succeeding
Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business
Day, and (y) no Interest Period may be selected that ends later
than the Maturity Date. Interest shall accrue from and including
the first day of an Interest Period to but excluding the last day
of such Interest Period.
"LIBO Rate" shall mean the average (rounded upwards, if not
already a whole multiple 1/16 of 1%, to the next higher 1/16 of
1%) of the respective rates notified to the Agent by each of the
Reference Banks equal to the rate at which dollar deposits
approximately equal in principal amount to (i) such Reference
Bank's portion of the Standby Borrowing of which such LIBOR Loan
forms a part or (ii) in the case of a Competitive LIBO Rate Loan,
$5,000,000, as the case may be, and with a maturity equal to the
applicable Interest Period are offered to the London Branch of
such Reference Bank in immediately available funds in the London
Interbank Market for Eurodollars at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such
Interest Period.
"LIBOR Loan" shall mean any Standby Loan with respect to which the
Company shall have selected an interest rate based on the LIBO
Rate in accordance with the provisions of Article II.
"Lien" shall mean, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, encumbrance, charge or security
interest in or on such asset, (b) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or
title retention agreement relating to such asset and (c) in the
case of securities, any purchase option, call or similar right of
a third party with respect to such securities.
"Loan" shall mean a Competitive Loan (which Competitive Loan may
be made as a Competitive Fixed Rate Loan or a Competitive LIBO
Rate Loan, as permitted hereby) or a Standby Loan (which Standby
Loan may be made as a LIBOR Loan, a Certificate of Deposit Loan
or an Alternate Base Loan, as permitted hereby).
"Loan Documents" shall mean this Agreement, the Notes and any
other document or agreement entered into in connection herewith.
"Material Adverse Effect" shall mean (a) a material adverse effect
on the business, assets, operations, prospects or condition,
financial or otherwise, of the Company and the Subsidiaries taken
as a whole, (b) a material impairment of the ability of the
Company to perform any of its obligations under any Loan Document
or (c) a material impairment of the rights or benefits of the
Banks under any Loan Document.
"Maturity Date" shall mean September 15, 1999.
"Multiemployer Plan" shall mean a multiemployer plan as defined
in Section 4001(a)(3) of ERISA to which the Company 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.
"Note" shall mean a Competitive Note or a Standby Note of the
Company, executed and delivered as provided in Section 2.8.
"Other Taxes" shall have the meaning assigned to such term in
Section 2.20(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
"person" shall mean any natural person, corporation, trust,
association, company, partnership, joint venture or government,
or any agency or political subdivision thereof.
"Plan" shall mean any pension plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code and which is maintained for employees of the
Company or any ERISA Affiliate.
"Priority Indebtedness" shall mean, at any time, without
duplication, (i) the aggregate principal amount of all
Indebtedness of the Company and all the Subsidiaries then
outstanding which Indebtedness is secured by Liens on property
and assets of the Company or any Subsidiary (other than
Indebtedness described in clauses (b) through (k) of Section
6.1), (ii) the Attributable Value at such time of all Sale and
Lease-Back Transactions which are subject to Section 6.2 and
(iii) the aggregate principal amount of all Indebtedness of all
the Subsidiaries then outstanding (other than Indebtedness of
Subsidiaries payable to the Company or any wholly owned
Subsidiary).
"Reference Banks" shall mean Morgan, Chemical Bank and Bank of
America National Trust and Savings Association.
"Register" shall have the meaning given such term in Section
9.4(e).
"Regulation D" shall mean Regulation D of the Board, as the same
is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Regulation G" shall mean Regulation G of the Board, as the same
is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board, as from time
to time in effect, and all official rulings and interpretations
thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board, as from time
to time in effect, and all official rulings and interpretations
thereunder or thereof.
"Reportable Event" shall 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).
"Required Banks" shall mean, at any time, Banks having
Commitments representing at least 66-2/3% of the Total
Commitment; provided, however, that for purposes of the last
paragraph of Article VII, or if the Commitments shall have been
terminated, "Required Banks" shall mean Banks holding Loans
representing at least 66-2/3% of the aggregate principal amount
of the Loans outstanding (in each case only if there are Loans
then outstanding).
"Responsible Officer" of any corporation shall mean any executive
officer or financial officer of such corporation and any other
officer or similar official thereof responsible for the
administration of the obligations of such corporation in respect
of this Agreement.
"Sale and Lease-Back Transaction" shall have the meaning assigned
to such term in Section 6.2.
"Significant Subsidiary" shall mean any Subsidiary, including its
subsidiaries, which meets any of the following conditions:
(i) the Company's and the other Subsidiaries' investments in and
advances to such Subsidiary exceed 10% of the Consolidated total
assets of the Company as of the end of the most recently completed
fiscal year of the Company for which financial statements have been
delivered pursuant to Section 5.4(a);
(ii) the total assets (after intercompany eliminations) of such
Subsidiary exceed 10% of the Consolidated total assets of the Company
as of the end of the most recently completed fiscal year of the
Company for which financial statements have been delivered pursuant to
Section 5.4(a);
(iii) the net sales of such Subsidiary exceed 10% of the
Consolidated net sales of the Company for the most recently completed
fiscal year of the Company for which financial statements have been
delivered pursuant to Section 5.4(a);or
(iv) such Subsidiary is deemed to be a Significant Subsidiary pursuant
to Section 6.3(b)(i).
"Standby Borrowing" shall mean a borrowing consisting of
simultaneous Standby Loans from each of the Banks distributed
ratably among the Banks in accordance with their respective
Commitments.
"Standby Borrowing Request" shall mean a request made pursuant to
Section 2.3 in the form of Exhibit A-2.
"Standby Loan" shall have the meaning given such term in Section
2.1.
"Standby Note" shall mean a promissory note of the Company in the
form of Exhibit D-2, executed and delivered as provided in
Section 2.8.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including without limitation any
marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board and any other banking
authority to which any of the Banks is subject (a) with respect
to the LIBO Rate, for Eurocurrency Liabilities (as defined in
Regulation D), and (b) with respect to the Adjusted CD Rate or
the Base CD Rate (as such term is used in the definition of
"Alternate Base Rate"), for new negotiable non-personal time
deposits in dollars of over $100,000 with maturities
approximately equal to the applicable Interest Period. Such
reserve percentages shall include, without limitation, those
imposed under Regulation D. LIBOR Loans and Competitive LIBO
Rate Loans shall be deemed to constitute Eurocurrency Liabilities
and as such shall be deemed to be subject to such reserve
requirements without benefit of or credit for proration,
exceptions or offsets which may be available from time to time to
any Bank under Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in
any reserve percentage.
"subsidiary" shall mean, with respect to any person (herein
referred to as the "parent"), any corporation, association or
other business entity (i) of which securities or other ownership
interests representing more than 50% of the ordinary voting power
are, at the time any determination is being made, owned,
controlled or held by the parent or one or more subsidiaries of
the parent or (ii) which is, at the time any determination is
made, otherwise controlled (by contract or agreement or
otherwise) by the parent or one or more subsidiaries of the
parent.
"Subsidiary" shall mean any subsidiary of the Company; provided,
however, that CDC shall not be deemed to be a subsidiary of the
Company by reason solely of meeting the requirements of clause
(ii) in the definition of the term "subsidiary".
"Tangible Net Worth" shall mean, at any date, (i) the sum of the
Company's and its Consolidated Subsidiaries' capital stock,
additional contributed capital, earnings retained in the business
and any other account (less treasury stock) which, in accordance
with GAAP, constitutes Consolidated shareholders' investment
(which does not include minority interests of persons other than
the Company and the Subsidiaries in Subsidiaries); less (ii)(x)
to the extent included in the determination of consolidated total
assets of the Company, goodwill, research and development
expenses, trademarks, trade names, copyrights, patents, patent
applications and rights in any thereof, other similar
intangibles, deferred charges and any other items which are
treated as intangibles in accordance with GAAP (other than any
intangible assets reflected on the Company's statement of
financial position pursuant to paragraph 37 of Statement of
Financial Accounting Standards No. 87), (y) all write-ups
subsequent to April 4, 1993, in the book value of any asset owned
by the Company or its Subsidiaries (other than purchase
accounting adjustments in connection with assets acquired after
April 4, 1993); and (z) cash held in a sinking or other analogous
fund, established for the purpose of redeeming, retiring or
prepaying any capital stock; provided, however, that in
determining Tangible Net Worth the effect of any foreign currency
translation adjustments shall be excluded.
"Taxes" shall have the meaning assigned to such term in Section
2.20(a).
"Total Commitment" shall mean at any time the aggregate amount of
the Banks' Commitments as in effect at such time.
Transactions" shall have the meaning assigned to such term in
Section 3.2.
"type", when used in respect of any Loan or Borrowing, shall refer
to the Rate by reference to which interest on such Loan or on the
Loans comprising such Borrowing is determined. For purposes
hereof, "Rate" shall mean the Competitive Fixed Rate, the
Competitive LIBO Rate, the LIBO Rate, the Adjusted CD Rate and
the Alternate Base Rate.
"Withdrawal Liability" shall 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.
Except as otherwise expressly provided herein, all terms of
an accounting or financial nature shall be construed in accordance
with GAAP as in effect from time to time (provided, however, that, for
purposes of determining compliance with any covenant set forth in
Article VI, such terms shall be construed in accordance with GAAP as
in effect on the date of this Agreement applied on a basis consistent
with the application used in the Company's audited financial
statements referred to in Section 3.5 but with such changes therein as
shall be approved or concurred in by the Company's independent public
accountants) and all financial data submitted pursuant to this
Agreement shall be prepared in accordance with such principles and
practices, except as otherwise expressed herein. The definitions in
this Article I shall apply equally to both the singular and plural
forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter
forms. The words "include", "includes" and "including" as used in
this Agreement shall be deemed in each case to be followed by the
phrase "without limitation". The word "or" shall not be deemed to be
exclusive. Section, Schedule and Exhibit references are references to
Sections of, and Schedules and Exhibits to, this Agreement, unless
otherwise specified herein.
II. LOANS
1. Commitments. Subject to the terms and conditions and relying
upon the representations and warranties herein set forth, each Bank,
severally and not jointly, agrees to make standby revolving credit
loans ("Standby Loans") to the Company, at any time and from time to
time on and after the Closing Date and until the earlier of the
Maturity Date and the termination of the Commitment of such Bank in
accordance with the terms hereof, subject, however, to the conditions
that (i) at no time shall (A) the sum of (x) the outstanding aggregate
principal amount of all Standby Loans made by all Banks plus (y) the
outstanding aggregate principal amount of all Competitive Loans made
by all Banks exceed (B) the Total Commitment and (ii) at all times the
outstanding aggregate principal amount of all Standby Loans made by a
Bank shall equal the product of (x) the percentage which its
Commitment represents of the Total Commitment times (y) the
outstanding aggregate principal amount of all Standby Loans made by
all Banks. After giving effect to Section 9.16, each Bank's
Commitment is set forth opposite its name in Schedule I. Such
Commitments may be terminated or reduced from time to time pursuant to
Section 2.6.
Within the foregoing limits, the Company may borrow, repay,
prepay and reborrow hereunder, on and after the Closing Date and prior
to the Maturity Date, subject to the terms, provisions and limitations
set forth herein.
2. Competitive Bid Procedure. (a) In order to request
Competitive Bids, the Company shall hand deliver or telecopy to the
Agent a duly completed Competitive Bid Request in the form of Exhibit
A-1, to be received by the Agent not later than 10:00 a.m., New York
City time, five Business Days before a proposed Competitive Borrowing
with respect to that portion of such Competitive Bid Request which is
for Competitive LIBO Rate Loans or one Business Day before a proposed
Competitive Borrowing with respect to that portion of such Competitive
Bid Request which is for Competitive Fixed Rate Loans. A Competitive
Bid Request that does not conform substantially to the format of
Exhibit A-1 may be rejected in the Agent's sole discretion, and the
Agent shall promptly notify the Company of such rejection by
telecopier. Such request shall in each case refer to this Agreement
and specify (i) the date of the requested Competitive Borrowing (which
shall be a Business Day) and the aggregate principal amount thereof
(which shall not be less than $10,000,000 or greater than the Total
Commitment and shall be an integral multiple of $1,000,000), (ii) the
Interest Period with respect thereto (which may not end after the
Maturity Date) and (iii) the type of the requested Competitive
Borrowing. Promptly after its receipt of a Competitive Bid Request
that is not rejected as aforesaid, the Agent shall invite by
telecopier (in the form set forth in Exhibit B) the Banks to bid, on
the terms and conditions of this Agreement, to make Competitive Loans
pursuant to such Competitive Bid Request.
(a) Each Bank may, in its sole discretion, make a Competitive Bid
to the Company responsive to the Competitive Bid Request. Each
Competitive Bid by a Bank must be received by the Agent via
telecopier, in the form of Exhibit C hereto, not later than 10:00
a.m., New York City time, three Business Days prior to the Business
Day of a proposed Competitive Borrowing with respect to that portion
of the Competitive Bid which is for Competitive LIBO Rate Loans or on
the Business Day of a proposed Competitive Borrowing with respect to
that portion of the Competitive Bid which is for Competitive Fixed
Rate Loans. Competitive Bids that do not conform substantially to the
format of Exhibit C may be rejected by the Agent after conferring
with, and upon the instruction of, the Company, and the Agent shall
notify the Bank making such nonconforming bid of such rejection as
soon as practicable. Each Competitive Bid shall refer to this
Agreement and specify (i) the principal amount (which shall be in a
minimum principal amount of $5,000,000 and in an integral multiple of
$1,000,000 and which may equal (but not exceed) the entire principal
amount of the Competitive Borrowing requested by the Company) of the
Competitive Loan of the applicable type that the Bank is willing to
make to the Company and (ii) the Competitive Bid Rate (to the nearest
1/10,000 of 1%) at which the Bank is prepared to make the Competitive
Loan. A Competitive Bid submitted by a Bank pursuant to this
paragraph (b) shall be irrevocable.
(b) The Agent shall promptly notify the Company by telecopier of
all the Competitive Bids made, the Competitive Bid Rate and the
principal amount of each Competitive Loan in respect of which a
Competitive Bid was made and the identity of the Bank that made each
bid. The Agent shall send a copy of all Competitive Bids to the
Company for its records as soon as practicable after completion of the
bidding process set forth in this Section 2.2.
(c) The Company may in its sole and absolute discretion, subject
only to the provisions of this paragraph (d), accept or reject any
Competitive Bid referred to in paragraph (c) above. The Company shall
notify the Agent by telecopier whether and to what extent it has
decided to accept or reject any of or all the bids referred to in
paragraph (c) above, not later than 11:00 a.m., New York City time, on
the Business Day on which such Competitive Bids were due in accordance
with Section 2.2(b); provided, however, that (i) the failure by the
Company to give such notice shall be deemed to be a rejection of all
the bids referred to in paragraph (c) above, (ii) the Company shall
not accept a bid made at a particular Competitive Bid Rate if the
Company has decided to reject a bid made at a lower Competitive Bid
Rate, (iii) the aggregate amount of the Competitive Bids accepted by
the Company shall not exceed the principal amount specified in the
Competitive Bid Request for Competitive Loans of the applicable type,
(iv) if the Company shall accept a bid or bids made at a particular
Competitive Bid Rate but the amount of such bid or bids shall cause
the total amount of bids to be accepted by the Company to exceed the
amount specified in the Competitive Bid Request for Competitive Loans
of the applicable type, then the Company shall (notwithstanding the
minimum bid acceptance amount required by clause (vi) below) accept a
portion of such bid or bids in an aggregate amount equal to the amount
specified in the Competitive Bid Request for Competitive Loans of the
applicable type; (v) if the Company shall accept bids made at a
particular Competitive Bid Rate but shall be restricted by other
conditions hereof from borrowing the principal amount of Competitive
Loans specified in the Competitive Bid Request in respect of which
bids at such Competitive Bid Rate have been made or if the Company
shall accept bids made at a particular Competitive Bid Rate but the
aggregate amount of bids made at such rate shall exceed the amount
specified in the Competitive Bid Request for Competitive Loans of the
applicable type, then the Company shall accept a pro rata portion of
each bid made at such Competitive Bid Rate aggregating the portion of
Competitive Loans with respect to which bids at such rate have been
received; provided, however, that if the available principal amount of
Competitive Loans to be so allocated is not sufficient to enable
Competitive Loans to be so allocated to each such Bank in a minimum
principal amount of $5,000,000 and in integral multiples of
$1,000,000, the Company shall select the Banks to be allocated such
Competitive Loans in a principal amount of $5,000,000, but may round
allocations up to the next higher multiple of $1,000,000 if necessary;
and (vi) except as provided in clauses (iv) and (v) above, no bid
shall be accepted for a Competitive Loan unless such Competitive Loan
is in a minimum principal amount of $5,000,000 and an integral
multiple of $1,000,000 and is part of a Competitive Borrowing in a
minimum principal amount of $10,000,000. A notice given by the
Company pursuant to this paragraph (d) shall be irrevocable.
(d) The Agent shall promptly notify each bidding Bank whether or
not its Competitive Bid has been accepted (and if so, in what amount
and at what Competitive Bid Rate) by telecopier sent by the Agent, and
each successful bidder will thereupon become bound, subject to the
other applicable conditions hereof, to make the Competitive Loan in
respect of which its bid has been accepted.
(e) A Competitive Bid Request shall not be made within five
Business Days of the date of any other Competitive Bid Request, unless
the Company and the Agent shall mutually agree otherwise.
(f) If the Agent shall elect to submit a Competitive Bid in its
capacity as a Bank, it shall submit such bid directly to the Company
one quarter of an hour earlier than the latest time at which the other
Banks are required to submit their bids to the Agent pursuant to
paragraph (b) above.
(g) All notices required by this Section 2.2 and by Section 2.3
shall be given in accordance with Section 9.1.
3. Standby Borrowing Procedure. In order to effect a Standby
Borrowing, the Company shall give the Agent written or telecopier
notice, in the form of Exhibit A-2 hereto, (x) in the case of LIBOR
Loans, not later than 11:00 a.m., New York City time, three Business
Days before a proposed Standby Borrowing, (y) in the case of
Certificate of Deposit Loans, not later than 11:00 a.m., New York City
time, two Business Days before a proposed Standby Borrowing and (z) in
the case of Alternate Base Loans, not later than 11:00 a.m., New York
City time, on the Business Day of a proposed Standby Borrowing. Such
notice shall be irrevocable and shall in each case refer to this
Agreement and specify (a) whether the Standby Loans then being
requested are to be LIBOR Loans, Certificate of Deposit Loans or
Alternate Base Loans, (b) the date of such Standby Loans (which shall
be a Business Day) and the aggregate amount thereof (which shall not
be less than $10,000,000 and shall be an integral multiple of
$1,000,000) and (c) the Interest Period with respect thereto (which
shall not end later than the Maturity Date). If no Interest Period
with respect to any LIBOR Loan or Certificate of Deposit Loan is
specified in any such notice, then (i) in the case of a LIBOR Loan,
the Company shall be deemed to have selected an Interest Period of one
month's duration and (ii) in the case of a Certificate of Deposit
Loan, the Company shall be deemed to have selected an Interest Period
of 30 days' duration. If the type of Standby Loan is not specified in
such notice, the Company shall be deemed to have selected an Alternate
Base Loan. The Agent shall promptly advise the other Banks of any
notice given pursuant to this Section 2.3 and of each Bank's portion
of the requested Standby Borrowing by telecopier. Each Standby
Borrowing shall consist of Standby Loans of the same type made to the
Company as of the same day and having the same Interest Period.
4. Refinancings. The Company may refinance all or any part of
any Loan with a Loan of the same or a different type made pursuant to
Section 2.2 or Section 2.3, subject to the conditions and limitations
set forth in this Agreement, including refinancings of Competitive
Loans with Standby Loans and Standby Loans with Competitive Loans.
Any Loan or part thereof so refinanced shall be deemed to be repaid in
accordance with Section 2.8 with the proceeds of a new borrowing
hereunder and the proceeds of the new Loan, to the extent they do not
exceed the principal amount of the Loan being refinanced, shall not be
paid by the Banks to the Agent or by the Agent to the Company pursuant
to Section 2.7(c); provided, however, that (i) if the principal amount
extended by a Bank in a refinancing is greater than the principal
amount extended by such Bank in the Borrowing being refinanced, then
such Bank shall pay such difference to the Agent for distribution to
the Banks described in (ii) below, (ii) if the principal amount
extended by a Bank in the Borrowing being refinanced is greater than
the principal amount being extended by such Bank in the refinancing,
the Agent shall return the difference to such Bank out of amounts
received pursuant to (i) above and (iii) to the extent any Bank fails
to pay the Agent amounts due from it pursuant to (i) above, any Loan
or portion thereof being refinanced shall not be deemed repaid in
accordance with Section 2.8 to the extent of such failure and the
Company shall pay such amount to the Agent pursuant to Section 2.8.
5. Fees. (a) The Company agrees to pay to each Bank, though the
Agent, on each March 31, June 30, September 30 and December 31 and on
the Maturity Date, in immediately available funds, a facility fee (a
"Facility Fee"), calculated at a rate per annum equal to the Facility
Fee Rate in effect from time to time on the average daily amount of
the Commitment of such Bank, whether used or unused, during the
preceding quarter (or shorter period commencing with the Effective
Date or ending with the Maturity Date or any other date on which the
Commitment of such Bank shall be terminated). All Facility Fees shall
be computed on the basis of the actual number of days elapsed in a
year of 360 days. The Facility Fee due to each Bank shall commence to
accrue on the Effective Date and shall cease to accrue on the earlier
of the Maturity Date and the termination of the Commitment of such
Bank as provided herein.
(a) The Company agrees to pay to J.P. Morgan Securities Inc.
("JPMSI"), as arranger, for its own account, on the Effective Date the
arrangement fees in the amounts previously agreed to by the Company
and JPMSI in writing.
(b) The Company agrees to pay to the Agent for its own account the
administrative fees and competitive auction fees in the amounts and on
the dates previously agreed to by the Company and the Agent in
writing.
6. Termination and Reduction of Commitments. (a) Subject to
Section 2.12(b), the Company may permanently terminate, or from time
to time in part permanently reduce, the Total Commitment, in each case
upon at least five Business Days' prior written or telecopier notice
to the Agent; provided, however, the Company may not terminate or
partially reduce the Total Commitment at any time to an amount less
than the sum of all Loans then currently outstanding (after giving
effect to any prepayment of Standby Loans on such date). Such notice
shall specify the date and the amount of the termination or reduction
of the Total Commitment. Each partial reduction of the Total
Commitment shall be in a minimum aggregate principal amount of
$10,000,000 and in an integral multiple of $5,000,000. Each reduction
in the Commitments pursuant to this paragraph shall be made ratably
among the Banks in accordance with their respective Commitments.
(a) Simultaneously with any termination or reduction of Commitments
pursuant to this Section 2.6, the Company shall pay to the Agent for
the accounts of the Banks the Facility Fees on the amount of the Total
Commitment so terminated or reduced accrued through the date of such
termination or reduction.
7. Loans. (a) Each Borrowing made by the Company on any date
shall be (i) in the case of Competitive Loans, in an integral multiple
of $1,000,000 and in a minimum aggregate principal amount of
$10,000,000 and (ii) in the case of Standby Loans, in an integral
multiple of $1,000,000 and in a minimum aggregate principal amount of
$10,000,000. Competitive Loans shall be made by the Banks in
accordance with Section 2.2(d), and Standby Loans shall be made by the
Banks ratably in accordance with their respective Commitments on the
date of the Standby Borrowing; provided, however, that the failure of
any Bank to make any Loan shall not relieve any other Bank of its
obligation to lend hereunder.
(a) Each Standby Loan shall be a LIBOR Loan, a Certificate of
Deposit Loan or an Alternate Base Loan, as the Company may request
subject to and in accordance with Section 2.3. Each Bank may at its
option make any LIBOR Loan by causing a foreign branch or affiliate of
such Bank to make such Loan; provided, however, that any exercise of
such option shall not affect the obligation of the Company to repay
such Loan in accordance with the terms of the applicable Note and this
Agreement. Loans of more than one type may be outstanding at the same
time; provided, however, that the Company shall not be entitled to
request any Loan which, if made, would result in an aggregate of more
than six separate Standby Loans of any Bank or more than six separate
Competitive Loans of any Bank being outstanding hereunder at any one
time. For purposes of the foregoing, Loans having different Interest
Periods, regardless of whether they commence on the same date, shall
be considered separate Loans.
(b) Subject to Section 2.4, each Bank shall make its portion of
each Borrowing on the proposed date thereof by paying the amount
required to the Agent in New York, New York in immediately available
funds not later than 1:00 p.m., New York City time, and the Agent
shall by 3:00 p.m., New York City time, credit the amounts so received
to the general deposit account of the Company with the Agent or, if
Loans are not made on such date because any condition precedent to a
Borrowing herein specified shall not have been met, return the amounts
so received to the respective Banks as soon as practicable.
8. Notes. The Competitive Loans made to the Company by each Bank
shall be evidenced by a single Competitive Note duly executed on
behalf of the Company, dated the Effective Date, in substantially the
form attached hereto as Exhibit D-1, with the blanks appropriately
filled, payable to the order of such Bank in a principal amount equal
to the Total Commitment. The Standby Loans made to the Company by
each Bank shall be evidenced by a single Standby Note duly executed on
behalf of the Company, dated the Effective Date, in substantially the
form attached hereto as Exhibit D-2, with the blanks appropriately
filled, payable to the order of such Bank in a principal amount equal
to the Commitment of such Bank. The outstanding principal balance of
each Competitive Loan and Standby Loan, as evidenced by the relevant
Note, shall be payable on the last day of the Interest Period
applicable to such Loan. Each Note shall bear interest from the date
thereof on the outstanding principal balance thereof as set forth in
Section 2.9. Each Bank shall, and is hereby authorized by the Company
to, endorse on the schedule attached to the relevant Note held by such
Bank or on a continuation thereof or otherwise record in its internal
records an appropriate notation evidencing the date and amount of each
Competitive Loan or Standby Loan, as applicable, of such Bank, each
payment or prepayment of principal of any Competitive Loan or Standby
Loan, as applicable, and the other information provided for on such
schedule; provided, however, that the failure of any Bank to make such
a notation or any error therein shall not in any manner affect the
obligation of the Company to repay the Competitive Loans or Standby
Loans, as applicable, made by such Bank in accordance with the terms
of the relevant Note and this Agreement.
9. Interest on Loans. (a) Subject to the provisions of Section
2.10, each LIBOR Loan shall bear interest at a rate per annum
(computed on the basis of the actual number of days elapsed over a
year of 360 days) equal to the LIBO Rate for the Interest Period in
effect for such Loan, plus the Applicable Margin. Interest on each
LIBOR Loan shall be payable on each Interest Payment Date applicable
thereto. The applicable LIBO Rate for each Interest Period shall be
determined by the Agent, and such determination shall be conclusive
absent manifest error.
(a) Subject to the provisions of Section 2.10, each Certificate of
Deposit Loan shall bear interest at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of 360 days)
equal to the Adjusted CD Rate for the Interest Period in effect for
such Loan, plus the Applicable Margin. Interest on each Certificate
of Deposit Loan shall be payable on each Interest Payment Date
applicable thereto. The applicable Adjusted CD Rate for each Interest
Period shall be determined by the Agent, and such determination shall
be conclusive absent manifest error.
(b) Subject to the provisions of Section 2.10, each Alternate Base
Loan shall bear interest at a rate per annum (if the Alternate Base
Rate is based on the Prime Rate, computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as the case may
be, or, if the Alternate Base Rate is based on the Base CD Rate or the
Federal Funds Effective Rate, computed on the basis of the actual
number of days elapsed over a year of 360 days) equal to the Alternate
Base Rate, plus the Applicable Margin, if any. Interest on each Alter
nate Base Loan shall be payable on each Interest Payment Date
applicable thereto. The applicable Alternate Base Rate during each
Interest Period shall be determined by the Agent, and such
determination shall be conclusive absent manifest error.
(c) Subject to the provisions of Section 2.10, each Competitive
Loan shall bear interest at a rate per annum (computed on the basis of
the actual number of days elapsed over a year of 360 days) equal to
the Competitive Fixed Rate or Competitive LIBO Rate offered by the
Bank making such Competitive Loan and accepted by the Company pursuant
to Section 2.2. Interest on each Competitive Loan shall be payable on
each Interest Payment Date applicable thereto.
(d) If any Reference Bank shall for any reason no longer have a
Commitment or any Loans, such Reference Bank shall thereupon cease to
be a Reference Bank, and if, as a result, there shall only be one
Reference Bank remaining, the Agent (after consultation with the Banks
and with the approval of the Company) shall, by notice to the Company
and the Banks, designate another Bank as a Reference Bank so that
there shall at all times be at least two Reference Banks.
(e) Each Reference Bank shall use its reasonable best efforts to
furnish quotations of rates to the Agent as contemplated hereby. If
any of the Reference Banks shall be unable or shall otherwise fail to
supply such rates to the Agent upon its request, the rate of interest
shall, subject to the provisions of Section 2.11, be determined on the
basis of the quotations of the remaining Reference Banks or Reference
Bank.
10. Interest on Overdue Amounts. If the Company shall default in
the payment of the principal of or interest on any Loan or any other
amount becoming due hereunder, the Company shall on demand from time
to time pay interest, to the extent permitted by law, on such
defaulted amount from the date of such default (i) until the last day
of the then-current Interest Period, if any, with respect thereto at a
rate per annum equal to the higher of 2% above the rate that would
otherwise be applicable thereto and 2% above the Alternate Base Rate
and (ii) thereafter up to (but not including) the date of actual
payment (after as well as before judgment) at a rate per annum (if the
Alternate Base Rate is based on the Prime Rate, computed on the basis
of the actual number of days elapsed over a year of 365 or 366 days,
as the case may be, or, if the Alternate Base Rate is based on the
Base CD Rate or the Federal Funds Effective Rate, computed on the
basis of the actual number of days elapsed over a year of 360 days)
equal to the Alternate Base Rate plus 2% per annum.
11. Alternate Rate of Interest. (a) In the event, and on each
occasion, that on the day two Business Days prior to the commencement
of any Interest Period for a LIBOR Loan or a Competitive LIBO Rate
Loan, the Agent shall have determined that (i) deposits in the amount
of the requested principal amount of such LIBOR Loan or Competitive
LIBO Rate Loan are not generally available in the London Interbank
Market, (ii) the rate at which such deposits are being offered will
not adequately and fairly reflect the cost to any Bank of making or
maintaining such LIBOR Loan or Competitive LIBO Rate Loan during such
Interest Period, or (iii) reasonable means do not exist for
ascertaining the LIBO Rate, then the Agent, as soon as practicable
thereafter, shall give written or telecopier notice of such
determination to the Company and the Banks. In the event of any such
determination, any request by the Company for a LIBOR Loan or
Competitive LIBO Rate Loan shall be deemed to be a request for an
Alternate Base Loan until the circumstances giving rise to such notice
no longer exist. Each determination by the Agent under this Section
2.11(a) shall be conclusive absent manifest error.
(a) In the event, and on each occasion, that on or before the date
on which the Adjusted CD Rate for a Certificate of Deposit Loan is to
be determined, the Agent shall have determined that (i) such Adjusted
CD Rate cannot be determined for any reason, including the inability
of the Reference Banks to obtain sufficient bids in accordance with
the terms of the definition of Fixed Certificate of Deposit Rate, or
(ii) that the Adjusted CD Rate for such Certificate of Deposit Loan
will not adequately and fairly reflect the cost to any Bank of making
or maintaining such Certificate of Deposit Loan during such Interest
Period, then the Agent, as soon as practicable thereafter, shall give
written or telecopier notice of such determination to the Company and
the Banks. In the event of any such determination, any request by the
Company for a Certificate of Deposit Loan shall be deemed to be a
request for an Alternate Base Loan until the circumstances giving rise
to such notice no longer exist. Each determination by the Agent under
this Section 2.11(b) shall be conclusive absent manifest error.
12. Prepayment of Loans. (a) Prior to the Maturity Date, the
Company shall have the right at any time to prepay any Standby
Borrowing, in whole or in part, subject to the requirements of
Sections 2.15 and 2.16 but otherwise without premium or penalty, upon
at least three (or, if such prepayment is solely of Alternate Base
Rate Loans, one) Business Days' prior written or telecopier notice to
the Agent; provided, however, that each such partial prepayment shall
be in an integral multiple of $1,000,000 and in a minimum aggregate
principal amount of $5,000,000. The Company shall not have the right
to prepay any Competitive Loan without the consent of the Bank which
has made such Competitive Loan.
(a) On the date of any termination or reduction of the Total
Commitment pursuant to Section 2.6, the Company shall pay or prepay so
much of the Standby Loans as shall be necessary in order that the
aggregate principal amount of the Loans outstanding will not exceed
the Total Commitment following such termination or reduction. Any
such payment or prepayment shall be applied to such Borrowing or
Borrowings which are Standby Loans as the Company shall select. All
prepayments under this paragraph shall be subject to Sections 2.15 and
2.16.
(b) Each notice of prepayment shall specify the prepayment date and
the aggregate principal amount of each Borrowing or portion thereof to
be prepaid, shall be irrevocable and shall commit the Company to
prepay such Borrowing by the amount stated therein. All prepayments
under this Section 2.12 shall be accompanied by accrued interest on
the principal amount being prepaid to the date of prepayment.
13. Reserve Requirements; Change in Circumstances. (a) It is
understood that the cost to each Bank of making or maintaining any of
the Loans may fluctuate as a result of the applicability of, or
changes in, reserve requirements imposed by the Board, including
reserve requirements under Regulation D in connection with
Eurocurrency Liabilities (as defined in Regulation D) at the ratios
provided for in Regulation D from time to time. The Company agrees to
pay to each Bank from time to time, as provided in paragraph (d)
below, such amounts as shall be necessary to compensate such Bank for
the portion of the cost of making or maintaining LIBOR Loans and
Competitive LIBO Rate Loans resulting from any such reserve
requirements, it being understood that the rates of interest
applicable to LIBOR Loans and Competitive LIBO Rate Loans have been
determined on the assumption that no such reserve requirements exist
or will exist and that such rates do not reflect costs imposed on the
Banks in connection with such reserve requirements. It is agreed
that, for purposes of this paragraph (a), the LIBOR Loans and
Competitive LIBO Rate Loans made hereunder shall be deemed to
constitute Eurocurrency Liabilities (as defined in Regulation D) and
to be subject to the reserve requirements of Regulation D without
benefit of or credit for proration, exemptions or offsets which might
otherwise be available to the Banks from time to time under Regulation
D.
(a) Notwithstanding any other provision herein, if after the date
of this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof (whether or
not having the force of law) (i) shall change the basis of taxation of
payments to any Bank of the principal of or interest on any LIBOR
Loan, Certificate of Deposit Loan or Competitive Loan made by such
Bank or any fees or other amounts payable hereunder (other than (x)
taxes imposed on the overall net income of such Bank by the
jurisdiction in which such Bank has its principal office or under the
laws of which such Bank is organized or by any political subdivision
or taxing authority therein (or any tax which is enacted or adopted by
such jurisdiction, political subdivision or taxing authority as a
direct substitute for any such taxes) or (y) any tax, assessment, or
other governmental charge that would not have been imposed but for the
failure of such Bank to comply with any certification, information,
documentation or other reporting requirement which such Bank would
have been capable of complying with), (ii) shall 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 such Bank (except any reserve requirement reflected in the
Adjusted CD Rate), or (iii) shall impose on such Bank or the London
Interbank Market any other condition affecting this Agreement or any
LIBOR Loan, Certificate of Deposit Loan or Competitive Loan made by
such Bank, and the result of any of the foregoing shall be to increase
the cost to such Bank of making or maintaining any LIBOR Loan,
Certificate of Deposit Loan or Competitive Loan or to reduce the
amount of any sum received or receivable by such Bank hereunder
(whether of principal, interest or otherwise) in respect thereof by an
amount deemed in good faith by such Bank to be material, then the
Company shall pay such additional amount or amounts as will compensate
such Bank for such additional costs incurred or reduction to such Bank
upon demand by such Bank.
(b) If, after the date hereof, any Bank shall have determined that
the applicability of any law, rule, regulation or guideline adopted
pursuant to or arising out of the July 1988 report of the Basel
Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital
Standards", or the adoption after the date hereof of any other law,
rule, regulation or guideline regarding capital adequacy, or any
change in any of the foregoing or in the interpretation or
administration of any of the foregoing by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or any lending
office of such Bank) or any Bank's holding company with any request or
directive regarding capital adequacy (whether or not having the force
of law) of any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on such Bank's
capital or on the capital of such Bank's holding company, if any, as a
consequence of its obligations hereunder (including its Commitment) to
a level below that which such Bank or such Bank's holding company
could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's policies and the policies of
such Bank's holding company with respect to capital adequacy) by an
amount deemed by such Bank to be material, then the Company shall pay
to such Bank such additional amount or amounts as will compensate such
Bank or such Bank's holding company for any such reduction suffered.
(c) A certificate of a Bank setting forth in reasonable detail (i)
such amount or amounts as shall be necessary to compensate such Bank
(or participating banks or other entities pursuant to Section 9.4) as
specified in paragraph (a), (b) or (c) above, as the case may be, and
(ii) the calculation of such amount or amounts under clause (i) shall
be delivered to the Company and shall be conclusive absent manifest
error. The Company shall pay such Bank the amount shown as due on any
such certificate within 10 days after its receipt of the same.
(d) Failure on the part of any Bank to demand compensation for any
increased costs or reduction in amounts received or receivable or
reduction in return on capital with respect to any period shall not
constitute a waiver of such Bank's rights to demand compensation for
any increased costs or reduction in amounts received or receivable or
reduction in return on capital with respect to such period or any
other period. The protection of this Section 2.13 shall be available
to each Bank regardless of any possible contention of invalidity or
inapplicability of the law, rule, regulation, guideline or other
change or condition which shall have occurred or been imposed.
14. Change in Legality. (a) Notwithstanding anything to the
contrary herein contained, if any change in any law or regulation or
in the interpretation thereof by any governmental authority charged
with the administration or interpretation thereof shall make it
unlawful for any Bank to make or maintain any LIBOR Loan or
Competitive LIBO Rate Loan or to give effect to its obligations with
respect to LIBOR Loans or Competitive LIBO Rate Loans as contemplated
hereby, then, by written notice to the Company and to the Agent, such
Bank may:
(i) declare that LIBOR Loans will not thereafter be made by such
Bank hereunder, whereupon any subsequent request for a LIBOR Loan
shall, as to such Bank only, be deemed a request for an Alternate Base
Loan unless such declaration is subsequently withdrawn; and
(ii) require that all outstanding LIBOR Loans and Competitive
LIBO Rate Loans made by it be converted to Alternate Base Loans, in
which event (A) all such LIBOR Loans and Competitive LIBO Rate Loans
shall be automatically converted to Alternate Base Loans as of the
last day of the Interest Period then applicable thereto or, if so
required by law, as of the effective date of such notice as provided
in paragraph (b) below and (B) all payments and prepayments of
principal which would otherwise have been applied to repay the con
verted LIBOR Loans and Competitive LIBO Rate Loans shall instead be
applied to repay the Alternate Base Loans resulting from the
conversion of such LIBOR Loans and Competitive LIBO Rate Loans.
(b) For purposes of this Section 2.14, a notice to the Company by
any Bank pursuant to paragraph (a) above shall be effective on the
date of receipt thereof by the Company.
15. Indemnity. The Company shall indemnify each Bank against
any loss or reasonable expense which such Bank may sustain or incur as
a consequence of (v) any failure by the Company to fulfill on the date
of any borrowing hereunder the applicable conditions set forth in
Article IV, (w) any failure by the Company to borrow hereunder after a
notice of borrowing pursuant to Article II has been given or after
bids have been accepted, (x) any payment, prepayment or conversion of
a LIBOR Loan, Certificate of Deposit Loan or Competitive Loan required
by any other provision of this Agreement or otherwise made on a date
other than the last day of the applicable Interest Period, (y) any
default in the payment or prepayment of the principal amount of any
Loan or any part thereof or interest accrued thereon, as and when due
and payable (at the due date thereof, by notice of prepayment or
otherwise), and (z) the occurrence of any Event of Default, including
any loss or reasonable expense sustained or incurred or to be
sustained or incurred in liquidating or employing deposits from third
parties acquired to effect or maintain such Loan or any part thereof
as a LIBOR Loan, Certificate of Deposit Loan or Competitive Loan.
Such loss or reasonable expense shall include an amount equal to the
excess, if any, as reasonably determined by each Bank of (i) its cost
of obtaining the funds for the Loan being paid, prepaid or converted
or not borrowed (based on the LIBO Rate or the Adjusted CD Rate or, in
the case of a Competitive Fixed Rate Loan, the fixed rate of interest
applicable thereto) for the period from the date of such payment,
prepayment or conversion or failure to borrow to the last day of the
Interest Period for such Loan (or, in the case of a failure to borrow,
the Interest Period for the Loan which would have commenced on the
date of such failure to borrow) over (ii) the amount of interest (as
reasonably determined by such Bank) that would be capitalized by such
Bank in reemploying the funds so paid, prepaid or converted or not
borrowed for such period or Interest Period, as the case may be. A
certificate of each Bank setting forth any amount or amounts which
such Bank is entitled to receive pursuant to this Section 2.15 shall
be delivered to the Company and shall be conclusive, if made in good
faith, absent manifest error. The Company shall pay the relevant Bank
the amount shown as due on the relevant certificate within 10 days
after its receipt of the same.
16. Pro Rata Treatment. Except as permitted under Section 2.13(c)
and Section 2.14 with respect to interest, (i) each payment or
prepayment of principal and each payment of interest with respect to a
Competitive Borrowing (at a particular Competitive Bid Rate) or a
Standby Borrowing shall be made pro rata among the Banks in accordance
with the respective principal amounts of the Loans extended by each
Bank, if any, with respect to such Competitive Borrowing or Standby
Borrowing, and (ii) Standby Loans shall be made pro rata among the
Banks in accordance with their respective Commitments.
17. Sharing of Setoffs. Each Bank agrees that if it shall, through
the exercise of a right of banker's lien, setoff or counterclaim
against the Company, or pursuant to a secured claim under Section 506
of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Bank
under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means obtain payment (voluntary or
involuntary) in respect of the Notes held by it as a result of which
the unpaid principal portion of the Notes held by it shall be
proportionately less than the unpaid principal portion of the Notes
held by any other Bank, it shall be deemed to have simultaneously
purchased from such other Bank at face value a participation in the
Notes held by such other Bank, so that the aggregate unpaid principal
amount of the Notes and participations in Notes held by each Bank
shall be in the same proportion to the aggregate unpaid principal
amount of all Notes then outstanding as the principal amount of the
Notes held by it prior to such exercise of banker's lien, setoff or
counterclaim or other event was to the principal amount of all Notes
outstanding prior to such exercise of banker's lien, setoff or
counterclaim; provided, however, that if any such purchase or
purchases or adjustments shall be made pursuant to this section 2.17
and the payment giving rise thereto shall thereafter be recovered,
such purchase or purchases or adjustments shall be rescinded to the
extent of such recovery and the purchase price or prices or adjustment
restored without interest. The Company expressly consents to the
foregoing arrangements and agrees that any Bank holding a
participation in a Note deemed to have been so purchased may exercise
any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by the Company to such Bank as
fully as if such Bank had made a Loan directly to the Company in the
amount of such participation.
18. Payments. The Company shall make each payment hereunder and
under the Notes not later than 12:00 noon (New York City time) on the
day when due in lawful money of the United States (in freely
transferable dollars) to the Agent at its offices at 60 Wall Street,
New York, New York 10260 for the account of the Banks, in immediately
available funds.
19. Payments on Business Days. Except as set forth in the
definition of "Interest Period" as applied to LIBOR Loans and
Competitive LIBO Rate Loans, if any payment to be made hereunder or
under any Note becomes due and payable on a day other than a Business
Day, such payment may be made on the next succeeding Business Day and
such extension of time shall in such case be included in computing
interest, if any, in connection with such payment.
20. Taxes. (a) Any and all payments by the Company hereunder and
under the other Loan Documents shall be made, in accordance with
Sections 2.18 and 2.19, free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto,
excluding (i) taxes imposed on the Agent's or any Bank's income and
franchise taxes imposed on the Agent or any Bank by the United States
or any jurisdiction in which the Agent or such Bank has its principal
office or under the laws of which the Agent or such Bank is organized
or any political subdivision or taxing authority and (ii) United
States withholding taxes payable with respect to payments hereunder or
under the other Loan Documents under laws (including any statute,
treaty, ruling, determination or regulation) in effect on the Closing
Date or, with respect to any Eligible Assignee that becomes entitled
to the rights of a Bank hereunder, the date of the Assignment and
Acceptance pursuant to which it becomes so entitled (all such non-
excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Company
shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder to the Banks or the Agent (x) the sum payable
shall be increased by the amount necessary so that after making all
required deductions (including deductions applicable to additional
sums payable under this Section 2.20) such Bank or the Agent (as the
case may be) shall receive an amount equal to the sum it would have
received had no such deductions been made, (y) the Company shall make
such deductions and (z) the Company shall pay the full amount deducted
to the relevant taxing authority or other Governmental Authority in
accordance with applicable law. The Company shall not be required to
pay any amounts pursuant to clause (x) of the preceding sentence to
any Bank or Agent organized under the laws of a jurisdiction outside
the United States unless such Bank or the Agent has provided to the
Company, promptly upon receipt of written request from the Company, a
complete and valid Internal Revenue Service Form 1001 or 4224 or other
applicable certificate, form or document prescribed by the United
States Internal Revenue Service certifying as to such Bank's or the
Agent's entitlement to an exemption from, or reduction of, United
States withholding on payments to be made hereunder or under the other
Loan Documents.
(a) In addition, the Company agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder
or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement (hereinafter referred to as "Other Taxes").
(b) The Company shall indemnify each Bank and the Agent for the
full amount of Taxes and Other Taxes (including any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this
Section 2.20) paid by such Bank or the Agent, as the case may be, and
any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. Such indemnification shall
be made within 30 days after the date any Bank or the Agent, as the
case may be, makes written demand therefor. If a Bank or the Agent
shall become aware that it is entitled to receive a refund in respect
of Taxes or Other Taxes, or in respect of interest or penalties, it
shall promptly notify the Company of the availability of such refund
and shall, within 30 days after receipt of a request by the Company,
apply for such refund at the Company's expense. If any Bank or the
Agent receives a refund in respect of any Taxes or Other Taxes, or in
respect of interest or penalties, for which such Bank or the Agent has
received payment from the Company hereunder, it shall promptly notify
the Company of such refund and shall, within 30 days after receipt of
a request by the Company (or promptly upon receipt, if the Company has
requested application for such refund pursuant hereto), repay such
refund to the Company without interest (other than interest received
from the taxing authority); provided, however, that the Company, upon
the request of such Bank or the Agent, agrees to return such refund
(plus penalties, interest or other charges) to such Bank or the Agent
in the event such Bank or the Agent is required to repay such refund.
(c) Within 30 days after the date of any payment of Taxes or Other
Taxes withheld by the Company in respect of any payment to any Bank or
the Agent, the Company will furnish to the Agent, at its address
referred to in Section 10.1, the original or a certified copy of a
receipt evidencing payment thereof.
(d) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this
Section 2.20 shall survive the payment in full of principal and
interest hereunder and the termination of this Agreement.
(e) Any Bank claiming any additional amounts payable pursuant to
this Section 2.20 shall use its best efforts (consistent with legal
and regulatory restrictions) to file any certificate or document
requested by the Company or to change the jurisdiction of its
applicable lending office if the making of such a filing or change
would avoid the need for or reduce the amount of any such additional
amounts which may thereafter accrue and would not, in the sole
determination of such Bank, be otherwise disadvantageous to such Bank.
21. Tax Reports. (a) With respect to each Bank which is
organized under the laws of a jurisdiction outside the United States,
on the Closing Date or, with respect to each Eligible Assignee that
becomes entitled to the rights of a Bank hereunder, the date of the
Assignment and Acceptance pursuant to which it becomes so entitled,
and from time to time thereafter if requested by the Company or the
Agent or required by the Internal Revenue Service of the United
States, each such Bank shall provide the Agent and the Company with
the forms prescribed by the Internal Revenue Service of the United
States certifying as to its status for purposes of determining the
applicability of any exemption from United States withholding taxes
with respect to all payments to be made hereunder to such Bank or
other documents satisfactory to the Company and the Agent indicating
that all payments to be made hereunder to such Bank are subject to
such tax at a rate reduced by an applicable tax treaty. Unless the
Company and the Agent have received such forms or such documents
validly indicating that payments hereunder are not subject to United
States withholding tax or are subject to such tax at a rate reduced by
an applicable tax treaty, the Company or the Agent shall withhold
taxes from such payments at the applicable statutory rate in the case
of payments to or for any Bank organized under the laws of a
jurisdiction outside the United States.
(a) Any Bank that sells any participation pursuant to Section
9.4(b) shall give the Company and the Agent immediate notice of such
participation, setting forth the names of each of the participants,
the amounts of such participations and indicating the country of
residence of each of the participants. Notwithstanding any other
provision contained herein to the contrary, the Company and the Agent
shall be entitled to deduct and withhold United States withholding
taxes with respect to all payments to be made hereunder to or for such
Bank as may be required by United States law due to such
participations and neither the Company nor the Agent shall be required
to indemnify such Bank with respect to such deductions or withholdings
and such Bank shall indemnify and hold harmless the Company and the
Agent from and against any tax, interest, penalty or other expense
that the Company and the Agent may incur as a consequence of any
failure to withhold United States taxes applicable because of any
participation arrangement that is not fully disclosed to them as
required hereunder.
III. REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and to each of
the Banks that:
1. Organization; Powers. The Company and each Subsidiary (a) is
a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has all
requisite power and authority to own its property and assets and to
carry on its business as now conducted and as proposed to be
conducted, (c) is qualified to do business in every jurisdiction where
such qualification is required, except where the failure so to qualify
would not result in a Material Adverse Effect, and (d) has the
corporate power and authority to execute, deliver and perform its
obligations under each of the Loan Documents and each other agreement
or instrument contemplated thereby to which it is or will be a party
and to borrow hereunder.
2. Authorization. The execution, delivery and performance by
the Company of each of the Loan Documents and the borrowings hereunder
(collectively, the "Transactions") (a) have been duly authorized by
all requisite corporate and, if required, stockholder action and (b)
will not (i) violate (A) any provision of law, statute, rule or
regulation, or of the certificate or articles of incorporation or
other constitutive documents or by-laws of the Company or any
Subsidiary, (B) any order of any Governmental Authority or (C) any
provision of any indenture, agreement or other instrument to which the
Company or any Subsidiary is a party or by which any of them or any of
their property is or may be bound, (ii) be in conflict with, result in
a breach of or constitute (alone or with notice or lapse of time or
both) a default under any such indenture, agreement or other
instrument or (iii) result in the creation or imposition of any Lien
upon any property or assets of the Company or any Subsidiary.
3. Enforceability. This Agreement and the Notes and each other
Loan Document to which it is a party have been duly executed and
delivered by the Company and constitute legal, valid and binding
obligations of the Company enforceable against the Company in
accordance with their respective terms. The Loans and all other
obligations or liabilities of the Company hereunder shall not be subor
dinated in right of payment or in any other respect to any other
Indebtedness of the Company.
4. Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions,
except such as have been made or obtained and are in full force and
effect.
5. Financial Statements. The Company has heretofore furnished
to the Banks its Consolidated statements of financial position and
statements of earnings and cash flows (i) as of and for the fiscal
year ended December 31, 1993, audited by and accompanied by the
opinion of Arthur Andersen & Co., independent public accountants, and
(ii) as of and for the fiscal quarter and six month period ended July
3, 1994, certified by its chief financial officer. Such financial
statements present fairly the financial condition and results of
operations of the Company and its Consolidated Subsidiaries as of such
dates and for such periods. Such statements of financial position and
the notes thereto disclose all material liabilities, direct or
contingent, of the Company and its Consolidated Subsidiaries as of the
dates thereof. Such financial statements were prepared in accordance
with GAAP applied on a consistent basis. As of the Effective Date,
there has been no material adverse change in the financial condition
or in the operations of the Company and its Subsidiaries taken as a
whole since December 31, 1993.
6. Environmental Matters. As of the Effective Date, there are
no chemical substances, pollutants, contaminants or hazardous or toxic
substances, materials or wastes, whether solid, gaseous or liquid in
nature, at any premises owned, operated, controlled or used by the
Company or any of its Subsidiaries where the presence of such
substances has resulted or could result in a Material Adverse Effect
and neither the Company nor any of its Subsidiaries nor any of their
respective predecessors in interest have manufactured, processed,
distributed, used, treated, stored, disposed, transported or handled
any such substances, where such actions have resulted or could result
in a Material Adverse Effect. As of the Effective Date, there is no
ambient air, surface water, groundwater or land contamination within,
under or relating to any real property of the Company or any of its
Subsidiaries or other location geologically or hydrologically
connected to such properties and none of such properties has been used
for the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of any substance described in
the preceding sentence where such uses or contaminations have resulted
or could result in a Material Adverse Effect.
7. Title to Properties; Possession Under Leases. (a) The
Company and each of the Subsidiaries has good and marketable title to,
or valid leasehold interests in, all its material properties and
assets, except for minor defects in title that do not interfere with
its ability to conduct its business as currently conducted or to
utilize such properties and assets for their intended purposes. All
such material properties and assets are free and clear of Liens, other
than Liens expressly permitted by Section 6.1.
(a) The Company and each of the Subsidiaries has complied with all
obligations under all material leases to which it is a party and all
such leases are in full force and effect. The Company and each of the
Subsidiaries enjoys peaceful and undisturbed possession under all such
material leases.
8. Subsidiaries. Schedule 3.8 sets forth as of the Effective
Date a list of all Subsidiaries of the Company and the percentage
ownership interest of the Company therein.
9. Litigation; Compliance with Laws.
(a) As of the Effective Date, there are not any actions, suits or
proceedings at law or in equity or by or before any Governmental
Authority now pending or, to the knowledge of the Company, threatened
against or affecting the Company or any Subsidiary or any business,
property or rights of any such person (i) which involve any Loan
Document or the Transactions or (ii) as to which there is a reasonable
possibility of an adverse determination and which, if adversely
determined, could, individually or in the aggregate, result in a
Material Adverse Effect.
(b) Neither the Company nor any of the Subsidiaries is in violation
of any law, rule or regulation, or in default with respect to any
judgment, writ, injunction or decree of any Governmental Authority,
where such violation or default could result in a Material Adverse
Effect.
10. Agreements. (a) As of the Effective Date, neither the
Company nor any of the Subsidiaries is a party to any agreement or
instrument or subject to any corporate restriction that has resulted
or could result in a Material Adverse Effect.
(a) Neither the Company nor any of the Subsidiaries is in default
in any manner under any provision of any indenture or other agreement
or instrument evidencing Indebtedness, or any other material agreement
or instrument to which it is a party or by which it or any of its
properties or assets are or may be bound, where such default could
result in a Material Adverse Effect.
(b) Except as set forth in Schedule 3.10, neither the Company nor
any Subsidiary is a party to or is bound by the terms of (i) any
indenture or other agreement or instrument evidencing Indebtedness or
(ii) any certificate of designation or other certificate, agreement or
instrument relating to any capital stock, in either case which
contains a provision granting the holders thereof the right to require
the Company or any Subsidiary to buy all or any part of such
Indebtedness or capital stock (or any other provision having
substantially the same effect) other than sinking fund and conversion
provisions and provisions requiring repayment upon default.
11. Federal Reserve Regulations. The making of the Loans
hereunder and the use of the proceeds thereof as contemplated hereby
will not violate or be inconsistent with Regulation G, U or X.
12. Investment Company Act; Public Utility Holding Company Act.
Neither the Company nor any Subsidiary is (a) an "investment company"
as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a "holding company" as defined in, or subject to
regulation under, the Public Utility Holding Company Act of 1935.
13. Tax Returns. The Company and each Subsidiary has filed or
caused to be filed all Federal, state and local tax returns required
to have been filed by it and has paid or caused to be paid all taxes
shown to be due and payable on such returns or on any assessments
received by it, except taxes that are being contested in accordance
with Section 5.3.
14. Employee Benefit Plans. The Company and each of its ERISA
Affiliates is in compliance in all material respects with the
applicable provisions of ERISA and the regulations and published
interpretations thereunder. No Reportable Event has occurred as to
which the Company or any ERISA Affiliate was required to file a report
with the PBGC, and the present value of all benefit liabilities under
each Plan (based on those assumptions used to fund such Plan) did not,
as of the last annual valuation date applicable thereto, exceed by a
material amount the value of the assets of such Plan. Neither the
Company nor any ERISA Affiliate has incurred any Withdrawal Liability
that materially adversely affects the financial condition of the
Company and its ERISA Affiliates taken as a whole. Neither the
Company nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization or has been terminated, within
the meaning of Title IV of ERISA, and no Multiemployer Plan is
reasonably expected to be in reorganization or to be terminated, where
such reorganization has resulted or can reasonably be expected to
result in an increase in the contributions required to be made to such
Plan that would materially and adversely affect the financial
condition of the Company and its ERISA Affiliates taken as a whole.
15. No Material Misstatements. No information, report, financial
statement, exhibit or schedule furnished by or on behalf of the
Company to the Agent or any Bank in connection with the negotiation of
any Loan Document or included therein or delivered pursuant thereto
contained, contains or will contain any material misstatement of fact
or omitted, omits or will omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under
which they were, are or will be made, not misleading.
IV. CONDITIONS OF LENDING
1. Conditions to Initial Loans. The effectiveness of this
Agreement and the obligation of each Bank to make its initial Loan
hereunder is subject to the satisfaction of the following conditions
precedent:
(a) The Agent shall have received one or more counterparts of this
Agreement, executed by a duly authorized officer of each party hereto.
(b) The Agent shall have received for the account of each Bank a
Standby Note and a Competitive Note (which, in the case of each
Existing Bank, shall be delivered in exchange for such Existing Bank's
Notes issued under the Existing Credit Agreement) conforming to the
requirements hereof and executed by a duly authorized officer of the
Company, and the Agent shall promptly forward such new Notes to the
appropriate Banks and return the old Notes to the Company.
(c) The Agent shall have received, with a counterpart for each
Bank, a certificate of the Secretary or Assistant Secretary of the
Company dated the Effective Date, substantially in the form of Exhibit
E with appropriate insertions and attachments.
(d) The Agent shall have received, with a copy for each Bank, an
opinion of the General Counsel to the Company with respect to
paragraphs 1 through 3 and 5 through 9 of Exhibit G and of Cravath,
Swaine & Moore with respect to paragraph 4 of Exhibit G, each dated
the Effective Date and addressed to the Agent and the Banks, covering
the matters set forth in Exhibit G. Such opinion of the General
Counsel to the Company shall also cover such other matters incident to
the transactions contemplated by this Agreement as the Agent shall
reasonably require.
(e) The Agent shall have received all fees, if any, owing pursuant
to Section 2.5.
(f) All other documents and legal matters in connection with the
transactions contemplated by this Agreement shall be satisfactory in
form and substance to the Agent and its counsel.
2. Conditions to Each Loan. The obligations of each of the
Banks to make Loans on the date of each Borrowing hereunder, including
the initial Loans and each refinancing of any Loan with a new Loan as
contemplated by Section 2.4, shall be subject to the following
conditions precedent:
(a) The Agent shall have received a notice of such Borrowing as
required by Section 2.2 or Section 2.3, as applicable.
(b) The representations and warranties set forth in Article III
shall be true and correct in all material respects on and as of the
date of such Borrowing with the same effect as if made on and as of
such date, except to the extent that such representations and
warranties expressly relate to an earlier date.
(c) The Company shall be in compliance with all the terms and
provisions set forth herein on its part to be observed or performed,
and immediately before and after such borrowing no Event of Default or
event which upon notice or lapse of time or both would constitute an
Event of Default (a "Default") shall have occurred and be continuing.
The occurrence of the Effective Date and each Borrowing hereunder
shall be deemed to be a representation and warranty by the Company on
the date of such Borrowing as to the matters specified in paragraphs
(b) and (c) of this Section 4.2.
V. AFFIRMATIVE COVENANTS
The Company covenants and agrees with the Agent and each Bank that
so long as this Agreement shall remain in effect or the principal of
or interest on any Loan, any fees or any other expenses or amounts
payable under any Loan Document shall be unpaid, unless the Required
Banks shall otherwise consent in writing, the Company will, and will
cause each of the Subsidiaries to:
1. Existence; Businesses and Properties. (a) Do or cause to be
done all things necessary to preserve, renew and keep in full force
and effect its legal existence, except as otherwise expressly
permitted under Section 6.3.
(a) Do or cause to be done all things necessary to obtain,
preserve, renew, extend and keep in full force and effect the rights,
licenses, permits, franchises, authorizations, patents, copyrights,
trademarks and trade names material to the conduct of its business;
maintain and operate such business in substantially the manner in
which it is presently conducted and operated; comply in all material
respects with all applicable laws, rules, regulations and orders of
any Governmental Authority, whether now in effect or hereafter
enacted; and at all times maintain and preserve all property material
to the conduct of such business and keep such property in good repair,
working order and condition and from time to time make, or cause to be
made, all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the
business carried on in connection therewith may be properly conducted
at all times.
2. Insurance. Keep its insurable properties adequately insured
at all times by financially sound and reputable insurers; maintain
such other insurance, to such extent and against such risks, including
fire and other risks insured against by extended coverage, as is
customary with companies in the same or similar businesses, including
public liability insurance against claims for personal injury or death
or property damage occurring upon, in, about or in connection with the
use of any properties owned, occupied or controlled by it; and
maintain such other insurance as may be required by law.
3. Obligations and Taxes. Pay its Indebtedness and other
obligations promptly and in accordance with their terms and pay and
discharge promptly all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or in respect of
its property, before the same shall become delinquent or in default,
as well as all lawful claims for labor, materials and supplies or
otherwise which, if unpaid, might give rise to a Lien upon such
properties or any part thereof; provided, however, that such payment
and discharge shall not be required with respect to any such tax,
assessment, charge, levy or claim so long as the validity or amount
thereof shall be contested in good faith by appropriate proceedings
and the Company or such Subsidiary shall, to the extent required by
GAAP applied on a consistent basis, set aside on its books adequate
reserves with respect thereto.
4. Financial Statements, Reports, etc. In the case of the
Company, furnish to the Agent and each Bank:
(a) within 90 days after the end of each fiscal year, its
Consolidated statements of financial position and related statements
of earnings and cash flows, showing the financial condition of the
Company and its Consolidated Subsidiaries as of the close of such
fiscal year and the results of its operations and the operations of
such Subsidiaries during such year, all audited by Arthur Andersen &
Co. or other independent public accountants of recognized national
standing acceptable to the Required Banks and accompanied by an
opinion of such accountants (which shall not be qualified in any
material respect except with the consent of the Required Banks) to the
effect that such Consolidated financial statements fairly present the
financial condition and results of operations of the Company on a
Consolidated basis in accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year, its Consolidated statements of financial
position and related statements of earnings and cash flows, showing
the financial condition of the Company and its Consolidated
Subsidiaries as of the close of such fiscal quarter and the results of
its operations and the operations of such Subsidiaries during such
fiscal quarter and the then elapsed portion of the fiscal year, all
certified by one of its Financial Officers as fairly presenting the
financial condition and results of operations of the Company on a
Consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments;
(c) concurrently with any delivery of financial statements under
paragraph (a) or (b) above, a certificate of the accounting firm or
Financial Officer opining on or certifying such statements (which
certificate, when furnished by an accounting firm, may be limited to
accounting matters and disclaim responsibility for legal
interpretations) (i) certifying that no Event of Default or Default
has occurred or, if such an Event of Default or Default has occurred,
specifying the nature and extent thereof and any corrective action
taken or proposed to be taken with respect thereto and (ii) setting
forth computations in reasonable detail satisfactory to the Agent
demonstrating compliance with the covenants contained in Sections 6.6
and 6.7;
(d) promptly after the occurrence of any event or condition which
makes the information thereon inaccurate, incomplete or untrue, an
update to Schedule 3.8;
(e) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials
filed by it with the Securities and Exchange Commission, or any
governmental authority succeeding to any of or all the functions of
such Commission, or with any national securities exchange, or
distributed to its shareholders, as the case may be; and
(f) promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of the
Company or any Subsidiary, or compliance with the terms of any Loan
Document, as the Agent may reasonably request.
5. Litigation and Other Notices. Furnish to the Agent and each
Bank prompt written notice of the following:
(a) any Default or Event of Default, specifying the nature and
extent thereof and the corrective action (if any) proposed to be taken
with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any
Governmental Authority, against the Company or any Affiliate thereof
which, if adversely determined, could result in a Material Adverse
Effect; and
(c) any development that has resulted in, or could reasonably be
anticipated to result in, a Material Adverse Effect.
6. ERISA. (a) Comply in all material respects with the
applicable provisions of ERISA and (b) furnish to the Agent (i) as
soon as possible, and in any event within 30 days after any Respon
sible Officer of the Company or any ERISA Affiliate knows or has
reason to know that any Reportable Event has occurred that alone or
together with any other Reportable Event could reasonably be expected
to result in liability of the Company to the PBGC in an aggregate
amount exceeding $1,500,000, a statement of a Financial Officer of the
Company setting forth details as to such Reportable Event and the
action that the Company proposes to take with respect thereto,
together with a copy of the notice of such Reportable Event, if any,
given to the PBGC, (ii) promptly after receipt thereof, a copy of any
notice the Company or any ERISA Affiliate may receive from the PBGC
relating to the intention of the PBGC to terminate any Plan or Plans
(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) or to appoint a trustee to administer any such
Plan, (iii) within 10 days after a filing with the PBGC pursuant to
Section 412(n) of the Code of a notice of failure to make a required
installment or other payment with respect to a Plan, a statement of a
Financial Officer of the Company setting forth details as to such
failure and the action that the Company proposed to take with respect
thereto, together with a copy of such notice given to the PBGC and
(iv) promptly and in any event within 30 days after receipt thereof by
the Company or any ERISA Affiliate from the sponsor of a Multiemployer
Plan, a copy of each notice received by the Company or any ERISA
Affiliate concerning (A) the imposition of Withdrawal Liability by a
Multiemployer Plan in an amount exceeding $7,500,000 or (B) a
determination that a Multiemployer Plan is, or is expected to be,
terminated or in reorganization, both within the meaning of Title IV
of ERISA, and which, in each case, is expected to result in an
increase in annual contributions of the Company or an ERISA Affiliate
to such Multiemployer Plan in an amount exceeding $1,500,000.
7. Maintaining Records; Access to Properties and Inspections.
Maintain all financial records in accordance with GAAP and permit any
representatives designated by the Agent or any Bank to visit and
inspect the financial records and the properties of the Company or any
Subsidiary at reasonable times and as often as requested and to make
extracts from and copies of such financial records, and permit any
representatives designated by any Agent or any Bank to discuss the
affairs, finances and condition of the Company or any Subsidiary with
the officers thereof and independent accountants therefor.
8. Use of Proceeds. Use the proceeds of the Loans for its
general corporate purposes.
9. Compliance with Laws. (a) Comply with all applicable laws,
statutes, rules and regulations (including, without limitation, all
applicable Environmental Laws) and obtain and comply in all material
respects with and maintain any and all licenses, approvals,
notifications, registrations or permits required by applicable laws,
statutes, rules and regulations (including, without limitation, all
applicable Environmental Laws) except to the extent that failure to do
so could not be reasonably expected to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions, if any,
required under applicable Environmental Laws and promptly comply in
all material respects with all lawful orders and directives of all
Governmental Authorities regarding, in any such case, Environmental
Laws except to the extent that, in any such case, the same are being
contested in good faith by appropriate proceedings and the pendency of
such proceedings could not be reasonably expected to have a Material
Adverse Effect.
VI. NEGATIVE COVENANTS
The Company covenants and agrees with the Agent and each Bank
that, so long as this Agreement shall remain in effect or the
principal of or interest on any Loan, any fees or any other expenses
or amounts payable under any Loan Document shall be unpaid, unless the
Required Banks shall otherwise consent in writing, the Company will
not, and will not cause or permit any of the Subsidiaries to:
1. Negative Pledge. Create, incur, assume or permit to exist
any Lien on any property or assets (including stock or other
securities of Subsidiaries) now owned or hereafter acquired by it or
on any income or rights in respect of any thereof, except:
(a) Liens securing Indebtedness (other than Indebtedness described
in clauses (b) through (k) below) to the extent and only to the extent
that the aggregate amount of Priority Indebtedness shall not exceed
$200,000,000 at any time;
(b) Liens (including deposits) in connection with or to secure
performance of bids, tenders, contracts (other than contracts creating
or evidencing or executed in connection with the incurrence of
Indebtedness) or leases (other than Capital Lease Obligations) or to
secure statutory obligations, surety or appeal bonds or indemnity,
performance or similar bonds;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by the Company or any Subsidiary; provided,
however, that (i) such Lien is not created in contemplation of or in
connection with such acquisition and (ii) such Lien does not apply to
any other property or assets of the Company or any subsidiary;
(d) Liens for taxes not yet due or which are being contested in
compliance with Section 5.3;
(e) carriers', warehousemen's, mechanic's, materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business and securing obligations which are not due or which are being
contested in compliance with Section 5.3;
(f) pledges and deposits and other liens made in the ordinary
course of business in compliance with workmen's compensation,
unemployment insurance and other social security laws or regulations;
(g) zoning restrictions, easements, rights-of-way restrictions on
use of real property and other similar encumbrances incurred in the
ordinary course of business which, in the aggregate, are not
substantial in amount and do not materially detract from the value of
the real property subject thereto or interfere with the ordinary
conduct of the business of the Company or any of the Subsidiaries;
(h) Liens (including deposits) in connection with self-insurance;
(i) judgment or other similar Liens in connection with legal
proceedings, provided that the execution or other enforcement of such
liens is effectively stayed and the claims secured thereby are being
actively contested in good faith by appropriate proceedings;
(j) Liens arising in connection with advances or progress payments
under government contracts; and
(k) Liens on assets of Subsidiaries securing Indebtedness payable
to the Company or any wholly owned Subsidiary.
2. Sale and Lease-Back Transactions. Enter into any
arrangement, directly or indirectly, with any person whereby it shall
sell or transfer any property, real or personal, used or useful in its
business, whether now owned or hereafter acquired, and thereafter rent
or lease such property or other property which it intends to use for
substantially the same purpose or purposes as the property being sold
or transferred (a "Sale and Lease-Back Transaction"), unless, after
giving effect to such Sale and Lease-Back Transaction, the aggregate
amount of Priority Indebtedness shall not exceed $200,000,000, except
that the Company or any Subsidiary may enter into Sale and Lease-Back
Transactions without restriction if the equipment subject to such Sale
and Lease-Back Transaction was purchased by the Company or any
Subsidiary within six months of the date of such Sale and Leaseback
Transaction; provided, however, that an agreement characterized by the
parties thereto as a lease solely for income tax purposes and as to
which such parties have elected to have the provisions of the former
Section 168(f)(8) of the Internal Revenue Code of 1954 apply shall not
be considered a Sale and Lease-Back Transaction.
3. Mergers, Consolidations, and Sales of Assets. In the case of
the Company and any Significant Subsidiary, merge with or into or
consolidate with any other person, or sell, transfer, lease or
otherwise dispose of (in one transaction or in a series of
transactions) all or any substantial part of its assets (whether now
owned or hereafter acquired), except that (a) the Company and any
Significant Subsidiary may sell inventory or receivables in the
ordinary course of business and (b) if at the time thereof and
immediately after giving effect thereto no Event of Default or Default
has occurred and is continuing (i) any Significant Subsidiary may
merge with or into, or sell, transfer, lease or otherwise dispose of
all or any substantial part of its assets to the Company or a wholly
owned Subsidiary; provided, however, that such wholly owned Subsidiary
shall thereafter be deemed a Significant Subsidiary hereunder and (ii)
the Company or any Significant Subsidiary may merge with or into or
consolidate with any other person if the surviving corporation in such
merger or consolidation shall be the Company or such Significant
Subsidiary; provided, however, that in each case under clause (b)
above the Company shall have delivered to the Banks a certificate of a
Responsible Officer of the Company and an opinion of counsel for the
Company, each stating that such consolidation, merger, sale, transfer,
lease or other disposition complies with this Section 6.3 and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
4. Indebtedness of Subsidiaries. In the case of the
Subsidiaries, incur, create, assume or permit to exist any
Indebtedness if after giving effect thereto, Priority Indebtedness
would exceed $200,000,000.
5. Amendments of Certain Agreements. In any material respect,
amend, modify, supplement or waive any of the provisions of any
instrument evidencing or relating to any subordinated Indebtedness
unless such amendment, modification, supplement or waiver is approved
in writing by the Required Banks.
6. Tangible Net Worth. In the case of the Company, permit
Tangible Net Worth to be at any time less than the sum of (a)
$650,000,000 plus (b) an amount equal to 25% of the sum of the amounts
of Consolidated Net Income for each of the fiscal quarters commencing
with and including the quarter ended July 3, 1994 to and including the
most recent fiscal quarter ended prior to the date on which the
calculation of Tangible Net Worth is made (without including any
fiscal quarter in which such Consolidated Net Income is a negative
number).
7. Leverage. In the case of the Company, permit the ratio of
its Consolidated Indebtedness to the sum of its Consolidated
Indebtedness and Tangible Net Worth to be at any time equal to or
greater than 0.5 to 1.0.
8. Ownership of Significant Subsidiaries. Cease to maintain at
any time direct or indirect ownership of securities or other ownership
interests representing not less than the greater of (x) a majority of
the ordinary voting power of each Significant Subsidiary and (y) such
voting power as provides effective control of the policy and direction
of each Significant Subsidiary.
VII. EVENTS OF DEFAULT
In case of the happening of any of the following events (herein
called "Events of Default"):
(a) any representation or warranty made, or deemed made, in or in
connection with any Loan Document or the borrowings hereunder, or any
representation, warranty, statement or information contained in any
report, certificate, financial statement or other instrument furnished
in connection with or pursuant to any Loan Document, shall prove to
have been false or misleading in any material respect when so made,
deemed made or furnished;
(b) default shall be made in the payment of any principal of any
Loan when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment
(c) default shall be made in the payment of any interest on any
Loan or any fee or any other amount (other than an amount referred to
in (b) above) due under any Loan Document, when and as the same shall
become due and payable, and such default shall continue unremedied for
a period of five Business Days;
(d) default shall be made in the due observance or performance by
the Company or any Subsidiary of any covenant, condition or agreement
contained in Section 5.5(a) or (b), Section 5.8 or Article VI and such
default shall continue unremedied for a period of five Business Days
after the earlier of (i) a Responsible Officer of the Company becoming
aware thereof and (ii) notice thereof from the Agent or any Bank to
the Company;
(e) default shall be made in the due observance or performance by
the Company or any Subsidiary of any covenant, condition or agreement
contained in any Loan Document (other than those specified in (b), (c)
or (d) above) and such default shall continue unremedied for a period
of ten Business Days after notice thereof from the Agent or any Bank
to the Company;
(f) the Company or any Subsidiary shall (i) fail to pay any of its
Indebtedness in excess of $10,000,000 in the aggregate when due
(whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise) and such failure shall continue after the
applicable grace period, if any, specified in the agreement or
instrument relating to such Indebtedness, or (ii) fail to observe or
perform any term, covenant or condition on its part to be observed or
performed under any agreement or instrument relating to any such
Indebtedness, when required to be observed or performed, and such
failure shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such
failure is to accelerate, or permit the acceleration of, the maturity
of such Indebtedness or such Indebtedness has been accelerated and
such acceleration has not been rescinded; or any amount of
Indebtedness in excess of $10,000,000 shall be required to be prepaid,
defeased, purchased or otherwise acquired by the Company or any
Subsidiary (other than by a regularly scheduled required prepayment),
prior to the stated maturity thereof;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking
(i) relief in respect of the Company or any Subsidiary, or of a
substantial part of the property or assets of the Company or any
Subsidiary, under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal or state
bankruptcy, insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Company or any Subsidiary, or
for a substantial part of the property or assets of the Company or a
Subsidiary, or (iii) the winding-up or liquidation of the Company or
any Subsidiary; and such proceeding or petition shall continue
undismissed for 60 days, or an order or decree approving or ordering
any of the foregoing shall be entered;
(h) the Company or any Subsidiary shall (i) voluntarily commence
any proceeding or file any petition seeking relief under Title 11 of
the United States Code, as now constituted or hereafter amended, or
any other Federal or state bankruptcy, insolvency, receivership or
similar law, (ii) consent to the institution of, or fail to contest in
a timely and appropriate manner, any proceeding or the filing of any
petition described in (g) above, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Company or any Subsidiary, or
for a substantial part of the property or assets of the Company or any
subsidiary, (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) become unable, admit in
writing its inability or fail generally to pay its debts as they
become due or (vii) take any action for the purpose of effecting any
of the foregoing;
(i) one or more judgments for the payment of money in an aggregate
amount in excess of $10,000,000 shall be rendered against the Company,
any Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed;
(j) a Reportable Event or Reportable Events, or a failure to make a
required payment (within the meaning of Section 412(n)(1)(A) of the
Code) shall have occurred with respect to any Plan or Plans that
reasonably could be expected to result in liability of the Company to
the PBGC or to a Plan in an aggregate amount exceeding $7,500,000 and,
within 30 days after the reporting of any such Reportable Event to the
Agent or after the receipt by the Agent of the statement required
pursuant to Section 5.6(b)(iii), the Agent shall have notified the
Company in writing that (i) the Required Banks have made a
determination that, on the basis of such Reportable Event or
Reportable Events or the failure to make a required payment, there are
reasonable grounds (A) for the termination of such Plan or Plans by
the PBGC, (B) for the appointment by the appropriate United States
District Court of a trustee to administer such Plan or Plans or (C)
for the imposition of a lien in favor of a Plan and (ii) as a result
thereof an Event of Default exists hereunder; or a trustee shall be
appointed by a United States District Court to administer any such
Plan or Plans; or the PBGC shall institute proceedings to terminate
any such Plan or Plans;
(k) (i) the Company or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that it has incurred Withdrawal
Liability to such Multiemployer Plan, (ii) the Company or such ERISA
Affiliate does not have reasonable grounds for contesting such
Withdrawal Liability and is not in fact contesting such Withdrawal
Liability in a timely and appropriate manner, and (iii) the amount of
such Withdrawal Liability specified in such notice, when aggregated
with all other amounts required to be paid to Multiemployer Plans in
connection with Withdrawal Liabilities (determined as of the date or
dates of such notification), exceeds $7,500,000 or requires payments
exceeding $1,500,000 in any year;
(l) the Company or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV
of ERISA, if solely as a result of such reorganization or termination
the aggregate annual contributions of the Company and its ERISA
Affiliates to all Multiemployer Plans that are then in reorganization
or have been or are being terminated have been or will be increased
over the amounts required to be contributed to such Multiemployer
Plans for their most recently completed plan years by an amount
exceeding $1,500,000; or
(m) a Change in Control shall occur; or a change in control
allowing the holders of debt securities of the Company to have the
right to cause the repurchase by the Company of their debt securities
(as described in any Prospectus Supplement related to debt securities
of the Company issued pursuant to the Registration Statement filed
with the Securities and Exchange Commission on September 15, 1989)
shall occur;
then, and in every such event (other than an event referred to in
paragraph (m) above or an event with respect to the Company described
in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Agent may, and at the request of the
Required Banks shall, by notice to the Company, take either or both,
of the following actions, at the same or different times: (i)
terminate forthwith the Commitments and (ii) declare the Loans then
outstanding to be forthwith due and payable, whereupon the principal
of the Loans, together with accrued interest thereon and any unpaid
accrued fees and all other liabilities of the Company accrued
hereunder and under any other Loan Document, shall become forthwith
due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the
Company, anything contained herein or in any other Loan Document to
the contrary notwithstanding; and in any event referred to in
paragraph (m) above or any event with respect to the Company described
in paragraph (g) or (h) above, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together
with accrued interest thereon and any unpaid accrued fees and all
other liabilities of the Company accrued hereunder and under any other
Loan Document, shall automatically become due and payable, without
presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Company, anything contained
herein or in any other Loan Document to the contrary notwithstanding.
VIII. THE AGENT
In order to expedite the transactions contemplated by this
Agreement, Morgan Guaranty Trust Company of New York is hereby
appointed to act as Agent on behalf of the Banks. Each of the Banks
and each holder of any Note by its acceptance thereof hereby
irrevocably authorizes the Agent to take such actions on behalf of
such Bank or holder and to exercise such powers as are specifically
delegated to the Agent by the terms and provisions hereof, together
with such actions and powers as are reasonably incidental thereto.
The Agent is hereby expressly authorized by the Banks, without hereby
limiting any implied authority, (a) to receive on behalf of the Banks
all payments of principal of and interest on the Loans and all other
amounts due to the Banks hereunder and promptly to distribute to each
Bank its proper share of each payment so received; (b) to give notice
on behalf of each of the Banks to the Company of any Event of Default
of which the Agent has actual knowledge acquired in connection with
its agency hereunder; and (c) to distribute to each Bank copies of all
notices, financial statements and other materials delivered by the
Company pursuant to this Agreement as received by the Agent.
Neither the Agent nor any of its directors, officers, employees
or agents shall be liable as such for any action taken or omitted by
any of them except for its or his own gross negligence or wilful
misconduct, or be responsible for any statement, warranty or
representation herein or the contents of any document delivered in
connection herewith, or be required to ascertain or to make any
inquiry concerning the performance or observance by the Company of any
of the terms, conditions, covenants or agreements contained in any
Loan Document. The Agent shall not be responsible to the Banks or the
holders of the Notes for the due execution, genuineness, validity,
enforceability or effectiveness of this Agreement, the Notes or any
other Loan Documents or other instruments or agreements. The Agent
may deem and treat the payee of any Note as the owner thereof for all
purposes hereof until it shall have received from the payee of such
Note notice, given as provided herein, of the transfer thereof. The
Agent shall in all cases be fully protected in acting, or refraining
from acting, in accordance with written instructions signed by the
Required Banks and, except as otherwise specifically provided herein,
such instructions and any action or inaction pursuant thereto shall be
binding on all the Banks and each subsequent holder of any Note. The
Agent shall, in the absence of knowledge to the contrary, be entitled
to rely on any instrument or document believed by it in good faith to
be genuine and correct and to have been signed or sent by the proper
person or persons. Neither the Agent nor any of its directors,
officers, employees or agents shall have any responsibility to the
Company on account of the failure of or delay in performance or breach
by any Bank of any of its obligations hereunder or to any Bank on
account of the failure of or delay in performance or breach by any
other Bank or the Company of any of their respective obligations
hereunder or under any other Loan Document or in connection herewith
or therewith. The Agent may execute any and all duties hereunder by
or through agents or employees and shall be entitled to rely upon the
advice of legal counsel selected by it with respect to all matters
arising hereunder and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such
counsel.
The Banks hereby acknowledge that the Agent shall be under no
duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement unless it shall be
requested in writing to do so by the Required Banks.
Subject to the appointment and acceptance of a successor Agent as
provided below, the Agent may resign at any time by notifying the
Banks and the Company. Upon any such resignation, the Required Banks
shall have the right to appoint a successor. Upon the acceptance of
any appointment as the Agent hereunder by a successor agent, such
successor shall succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent and the retiring
Agent shall be discharged from its duties and obligations hereunder.
After an Agent's resignation hereunder, the provisions of this Article
and Section 9.5 shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was acting as
Agent.
With respect to the Loans made by it hereunder and the Notes
issued to it, the Agent in its individual capacity and not as Agent
shall have the same rights and powers as any other Bank and may
exercise the same as though it were not the Agent, and the Agent and
its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Company or any Subsidiary or
other Affiliate thereof as if it were not the Agent.
Each Bank agrees (i) to reimburse the Agent, on demand, in the
amount of its pro rata share (based on its Commitment hereunder at the
time of the event giving rise to such reimbursement, or if at such
time the Commitments have been terminated, based on its then
outstanding Loans) of any expenses incurred for the benefit of the
Banks by the Agent, including counsel fees and compensation of agents
and employees paid for services rendered on behalf of the Banks, which
shall not have been reimbursed by the Company and (ii) to indemnify
and hold harmless the Agent and any of its directors, officers,
employees or agents, on demand, in the amount of such pro rata share,
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 it in its capacity as Agent or any
of them in any way relating to or arising out of this Agreement or any
other Loan Document or any action taken or omitted by it or any of
them under this Agreement or any other Loan Document, to the extent
the same shall not have been reimbursed by the Company; provided,
however, that no Bank shall be liable to the Agent for any portion of
such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
gross negligence or wilful misconduct of the Agent or any of its
directors, officers, employees or agents.
Each Bank acknowledges that it has, independently and without
reliance upon the Agent or any other Bank 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 Bank also
acknowledges that it will, independently and without reliance upon the
Agent or any other Bank and based on such documents and information as
it shall from time to time deem appropriate, continue to make its own
decisions in taking or not taking action under or based upon this
Agreement or any other Loan Document, any related agreement or any
document furnished hereunder or thereunder.
IX. MISCELLANEOUS
1. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed or sent by telecopy, graphic scanning or other
telegraphic communications equipment of the sending party, as follows:
(a) if to the Company, to it at Cummins Engine Company, Inc., 500
Jackson Street, Box 3005, Columbus, Indiana 47202-3005, Attention of
Robert L. Fealy, Vice President-Treasurer (Telephone No. (812) 377-
3275; Telecopy No. (812) 377-1087);
(b) if to the Agent, to it at Morgan Guaranty Trust Company, 60
Wall Street, New York, New York 10260, Attention of Kit C. Wong
(Telephone No. (212) 648-7340; Telecopy No. (212) 648-5336); and
(c) if to a Bank, to it at its address (or telecopy number) set
forth in Schedule I.
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to
have been given on the date of receipt if delivered by hand or
overnight courier service or if sent by telecopier, graphic scanning
or other telegraphic communications equipment of the sender, or on the
date five Business Days after dispatch by certified or registered mail
if mailed, in each case delivered, sent or mailed (properly addressed)
to such party as provided in this Section 9.1 or in accordance with
the latest unrevoked direction from such party given in accordance
with this Section 9.1.
2. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Company herein and in the
certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the Agent and the Banks and
shall survive the making by the Banks of the Loans and the execution
and delivery to the Banks of the Notes evidencing such Loans,
regardless of any investigation made by the Agent or the Banks or on
their behalf, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement or any other Loan Document
is outstanding and unpaid and so long as the Commitments have not been
terminated.
3. Binding Effect. This Agreement shall become effective as of
the Effective Date when it shall have been executed by the Company and
the Agent and when the Agent shall have received copies hereof which,
when taken together, bear the signatures of each Bank, and thereafter
shall be binding upon and inure to the benefit of the Company, the
Agent and each Bank and their respective successors and permitted
assigns.
4. Successors and Assigns; Participations. (a) Whenever in this
Agreement any of the parties hereto is referred to, such reference
shall be deemed to include the successors and permitted assigns of
such party; and all covenants, promises and agreements by or on behalf
of the Company or the Banks that are contained in this Agreement shall
bind and inure to the benefit of their respective successors and
permitted assigns. The Company may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of
all the Banks, except that the Company may assign its rights and
obligations hereunder to the surviving corporation in a transaction
permitted under Section 6.3(b)(ii) without the prior written consent
of all the Banks.
(a) Each Bank may without the consent of the Company sell
participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment and the same portion of the Loans
owing to it and the Note or Notes held by it); provided, however, that
(i) such Bank's obligations under this Agreement shall remain
unchanged, (ii) such Bank shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the
participating banks or other entities shall be entitled to the cost
protection provisions contained in Section 2.13 and Section 2.15 and
(iv) the Company, the Agent and the other Banks shall continue to deal
solely and directly with such Bank in connection with such Bank's
rights and obligations under this Agreement; provided, however, that
each Bank shall retain the sole right and responsibility to enforce
the obligations of the Company relating to the Loans, including the
right to approve any amendment, modification or waiver of any provi
sion of this Agreement other than amendments, modifications or waivers
with respect to any fees payable hereunder or the amount of principal
or the rate of interest payable on, or the dates fixed for any payment
of principal of or interest on, the Loans.
(b) Each Bank may without the consent of the Company assign to an
Affiliate of such Bank and, with the consent of the Company to another
Bank or one or more additional banks or financial institutions (each,
an "Eligible Assignee"), all or a portion of its interests, rights and
obligations under this Agreement (including all or a portion of its
Commitment and the same portion of the Loans at the time owing to it
and the Note or Notes held by it); provided, however, that (i) each
such assignment shall be of a constant, and not a varying, percentage
of all the assigning Bank's rights and obligations under this
Agreement, (ii) in the case of a partial assignment, unless otherwise
agreed to by the Company, the amount of the Commitment of the
assigning Bank after giving effect to such assignment (determined as
of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Agent) shall be in a minimum principal
amount of $10,000,000 and an integral multiple of $1,000,000, (iii)
unless otherwise agreed to by the Company, the amount of the Commit
ment assigned to the assignee Bank shall be in a minimum principal
amount of $10,000,000 and an integral multiple of $1,000,000 and (iv)
the parties to each such assignment shall execute and deliver to the
Agent, for its acceptance and recording in the Register, an Assignment
and Acceptance in the form of Exhibit F, together with any Standby
Note or Standby Notes subject to such assignment and the assigning
Bank shall deliver a processing and recordation fee of $2,500 to the
Agent in connection therewith; provided, further, that if the Company
has reduced the Total Commitment pursuant to Section 2.6 hereof, the
minimum principal amount described in each of clause (ii) and (iii)
above shall also be reduced to an amount equal to 3-1/3% of the Total
Commitment at the time of any such assignment, rounded to the nearest
integral multiple of $1,000,000. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at
least five Business Days after the execution thereof (unless otherwise
agreed to by the Agent, the assignor Bank and the assignee Bank), (x)
the Eligible Assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder and (y) the assignor Bank thereunder
shall, to the extent provided in such Assignment and Acceptance, 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 Bank's rights and obligations under this Agreement,
such assigning Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, the
Bank assignor thereunder and the Eligible Assignee confirm to and
agree with each other and the other parties hereto as follows: (i)
other than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, such Bank assignor makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; (ii) such Bank
assignor makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Company
or the performance or observance of its obligation under this
Agreement or any other instrument or document furnished pursuant
hereto or thereto; (iii) such Eligible Assignee confirms that it has
received a copy of this Agreement together with copies of the most
recent financial statements delivered pursuant to Section 3.5 or 5.4
and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such Eligible Assignee will,
independently and without reliance upon the Agent, such Bank assignor
or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v)
such Eligible Assignee appoints and authorizes the Agent to take such
action as the Agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; (vi)
such Eligible Assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Bank and (vii) such
Eligible Assignee confirms that it is an Eligible Assignee as defined
above.
(d) The Agent shall maintain at its offices in New York City a copy
of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Banks and the
Commitment of, and principal amount of the Loans owing to, each Bank
from time to time (the "Register"). The entries in the Register shall
be conclusive, in the absence of manifest error, and the Company, the
Agent and the Banks may treat each person whose name is recorded in
the Register as a Bank hereunder for all purposes of this Agreement.
The Register shall be available for inspection by the Company or any
Bank at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank and an Eligible Assignee together with any Standby Note
or Standby Notes subject to such assignment, the written consent of
the Company to such assignment (if required hereby) and the fee
referred to in paragraph (c) above, the Agent shall, if such
Assignment and Acceptance has been completed and is precisely in the
form of Exhibit F hereto, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Banks and the Company. Within
five Business Days after receipt of such notice, the Company, at its
own expense, shall execute and deliver to the Agent in exchange for
the surrendered Standby Note or Standby Notes (x) a new Competitive
Note to the order of such Eligible Assignee in an amount equal to the
Total Commitment, and a new Standby Note or Standby Notes to the order
of such Eligible Assignee in an amount equal to its portion of the
Commitment assumed by it pursuant to such Assignment and Acceptance
and (y), if the assigning Bank has retained any Commitment hereunder,
a new Standby Note or Standby Notes to the order of the assigning Bank
in an amount equal to the Commitment retained by it hereunder. Such
new Standby Note or Standby Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered
Standby Note or Standby Notes and such new Standby Notes and
Competitive Note shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially the form of
Exhibit D-1 or D-2, as applicable, hereto. Canceled Standby Notes
shall be returned to the Company.
(f) Subject to Section 9.11 hereof, any Bank may, in connection
with any assignment or participation or proposed assignment or
participation pursuant to this Section 9.4, disclose to the assignee
or participant or proposed assignee or participant, any information
relating to the Company or the Subsidiaries furnished to such Bank by
or on behalf of the Company; provided, however, that prior to any such
disclosure, each such assignee or participant or proposed assignee or
participant shall agree to preserve the confidentiality of any
confidential information relating to the Company or the Subsidiaries
received from such Bank.
(g) Nothing herein shall prohibit any Bank from pledging or
assigning any Note to any Federal Reserve Bank in accordance with
applicable law.
5. Expenses; Indemnity. (a) The Company agrees to pay all
out-of-pocket expenses incurred by the Agent in connection with the
preparation of this Agreement and the other Loan Documents or in
connection with any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions hereby
contemplated shall be consummated) or incurred by the Agent or any
Bank in connection with the enforcement or protection of their rights
in connection with this Agreement and the other Loan Documents or in
connection with the Loans made or the Notes issued hereunder,
including the reasonable fees and disbursements of Simpson Thacher &
Bartlett, counsel for the Agent, and, in connection with any such
amendment, modification or waiver or any such enforcement or
protection, the fees and disbursements of any other counsel for the
Agent or any Bank. The Company further agrees that it shall indemnify
the Agent and the Banks from and hold them harmless against any
documentary taxes, assessments or charges made by any Governmental
Authority by reason of the execution and delivery of this Agreement or
any of the other Loan Documents.
(a) The Company agrees to indemnify each Agent, each Bank and its
directors, officers, employees and agents (each such person being
called an "indemnitee") against, and to hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel fees and expenses, incurred by
or asserted against any Indemnitee arising out of, in any way con
nected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument
contemplated thereby, the performance by the parties thereto of their
respective obligations thereunder or the consummation of the
transactions contemplated thereby, including, without limitation, any
of the foregoing losses relating to the violation of, noncompliance
with or liability under, any Environmental Law applicable to the
operations of the Company or any of its Subsidiaries, (ii) the use of
the proceeds of the Loans or (iii) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether
or not any Indemnitee is a party thereto; provided, however, that such
indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or
wilful misconduct of such Indemnitee.
(b) The provisions of this Section 9.5 shall remain operative and
in full force and effect regardless of the expiration of the term of
this Agreement, the consummation of the transactions contemplated
hereby, the repayment of any of the Loans, the invalidity or
unenforceability of any term or provision of this Agreement or any
other Loan Document or any investigation made by or on behalf of the
Agent or any Bank. All amounts due under this Section 9.5 shall be
payable on written demand therefor.
6. Right of Setoff. If an Event of Default shall have occurred
and be continuing and any Bank shall have requested the Agent to
declare the Loans immediately due and payable pursuant to Article VII,
each Bank, and each bank which is an Affiliate of such Bank, is hereby
authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Bank or Affiliate to or
for the credit or the account of the Company against any of and all
the obligations of the Company now or hereafter existing under this
Agreement and other Loan Documents held by such Bank, irrespective of
whether or not such Bank shall have made any demand under this
Agreement or such other Loan Document and although such obligations
may be unmatured. The rights of each Bank under this Section 9.6 are
in addition to other rights and remedies (including other rights of
setoff) which such Bank may have.
7. Applicable Law. THIS AGREEMENT, THE NOTES AND THE OTHER LOAN
DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.
8. Waivers; Amendments. (a) No failure or delay of the Agent
or any Bank in exercising any power or right hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and
remedies of the Agent and the Banks hereunder and under the other Loan
Documents are cumulative and exclusive of any rights or remedies which
they would otherwise have. No waiver of any provision of this Agree
ment or any other Loan Document or consent to any departure by the
Company therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) below, and then such waiver or
consent shall be effective only in the specific instance and for the
purpose for which given. No notice or demand on the Company in any
case shall entitle the Company to any other or further notice or
demand in similar or other circumstances. Each holder of any of the
Notes shall be bound by any amendment, modification, waiver or consent
authorized as provided herein, whether or not such Note shall have
been marked to indicate such amendment, modification, waiver or
consent.
(a) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in
writing entered into by the Company and the Required Banks; provided,
however, that no such agreement shall (i) change the principal amount
of, or extend or advance the maturity of or any date for the payment
of any principal of or interest on, any Loan, or waive or excuse any
such payment or any part thereof, or change the rate of interest on
any Loan, without the prior written consent of each holder of a Note
affected thereby, (ii) change the Commitment of any Bank or the
Facility Fees of any Bank without the prior written consent of such
Bank, (iii) amend or modify the provisions of Section 2.16, the
provisions of this Section 9.8 or the definition of the "Required
Banks", or (iv) waive any of the conditions specified in Section 4.1
or 4.2, without the prior written consent of each Bank; provided
further, however, that no such agreement shall amend, modify or
otherwise affect the rights or duties of the Agent hereunder without
the prior written consent of the Agent. Each Bank and each holder of
a Note shall be bound by any modification or amendment authorized by
this Section 9.8 regardless of whether its Note shall have been marked
to make reference thereto, and any consent by any Bank or holder of a
Note pursuant to this Section 9.8 shall bind any person subsequently
acquiring a Note from it, whether or not such Note shall have been so
marked.
9. Waiver of Jury Trial, etc. (a) Except as prohibited by law,
each party hereto hereby waives any right it may have to a trial by
jury in respect of any litigation directly or indirectly arising out
of, under or in connection with this Agreement, any document or
agreement entered into in connection herewith and any of the
transactions contemplated hereby or thereby.
(a) Except as prohibited by law, each party hereto hereby waives
any right it may have to claim or recover in any litigation referred
to in paragraph (a) of this Section 9.9 any special, indirect,
exemplary, punitive or consequential damages or any damages other
than, or in addition to, actual damages.
(b) Each party hereto (i) certifies that no representative, agent
or attorney of any other party has represented to it, expressly or
otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waivers and (ii)
acknowledges that it and the other parties hereto have been induced to
enter into this Agreement and the other Loan Documents, as applicable,
by, among other things, the mutual waivers and certifications in this
Section 9.9.
10. Jurisdiction; Consent to Service of Process. (a) The Company
hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court
sitting in New York City or Federal court of the United States of
America sitting in New York City, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to
this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of
any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court.
Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided
by law. Nothing in this Agreement shall affect any right that any
Agent or Bank may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against the
Company or its properties in the courts of any jurisdiction.
(a) The Company hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection
which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or
the other Loan Documents in any New York State or Federal court. Each
of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(b) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.1. Nothing in
this Agreement will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
11. Confidentiality. Unless otherwise required by applicable
law, rule or regulation, order of any court or administrative agency,
or otherwise by any governmental or regulatory authority, each of the
Banks and the Agent agrees to maintain the confidentiality, in its
communications with third parties and otherwise, of any information
regarding the Company or its Subsidiaries obtained in connection with
this Agreement which has been identified by the Company to the Banks
and the Agent as confidential in nature (the "Confidential Material");
provided, however, that the Confidential Material may be disclosed to
third parties to the extent such disclosure is (i) to a rating agency,
(ii) required in connection with the exercise of any remedy hereunder
or under any related documents, instruments and agreements, or
(iii) to any actual or proposed participant or assignee of all or part
of its rights hereunder, in each case which has agreed in writing to
be bound by the provisions of this Section; provided further, however,
that the Agreement may be disclosed to each Bank's and the Agent's
directors, officers, legal counsel and independent auditors; and
provided further, however, that neither the Banks nor the Agent shall
have any obligation of confidentiality in respect of any information
which may be generally available to the public or becomes available to
the public through no fault of such Bank or Agent. Notwithstanding
the foregoing, without the prior written consent of the Company, no
Bank may disclose to participants or potential participants
information which has been designated in writing by the Company to
such Bank as information which is (A) non-financial information which
is not necessary for participants and potential participants to
receive for purposes of initial and ongoing analysis of the
creditworthiness of the Company and its subsidiaries and of the
ability of the Company to perform its obligations under this Agreement
and the Notes and (B) product, design, pricing, marketing, business
strategy and similar information the disclosure of which to
competitors of the Company could have a material adverse effect on the
competitive position of the Company or its subsidiaries. The Company
agrees to be reasonable in its consideration of requests of Banks to
transmit to participants sensitive information covered by the
preceding sentence and in determining what information to designate as
sensitive information covered by the preceding sentence.
12. Entire Agreement. This Agreement and the other Loan
Documents constitute the entire contract between the parties relative
to the subject matter hereof. Any previous agreement among the
parties with respect to the subject matter hereof is superseded by
this Agreement and the other Loan Documents. Nothing in this
Agreement or in the other Loan Documents, expressed or implied, is
intended to confer upon any party other than the parties hereto any
rights, remedies, obligations or liabilities under or by reason of
this Agreement or the other Loan Documents.
13. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract, and shall
become effective as provided in Section 9.3.
15. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction of, or
to be taken into consideration in interpreting, this Agreement.
16. Purchase and Sale of Commitments on the Effective Date. (a)
On the Effective Date, each Bank listed as a Purchasing Bank on
Schedule 9.16 (each a "Purchasing Bank") shall purchase and assume the
aggregate amount set forth for such Purchasing Bank on Schedule 9.16
of Commitments and related rights and obligations of the Existing
Banks listed as Selling Banks on Schedule 9.16 (each a "Selling Bank")
and each Selling Bank shall sell and assign the aggregate amount of
Commitments and related rights and obligations of such Selling Bank
set forth for such Selling Bank on Schedule 9.16 to the Purchasing
Banks. All principal, interest, fees or other payments that would
otherwise be payable from and after the Effective Date to or for the
account of the Selling Banks pursuant to this Agreement and the
Standby Notes shall, instead, be payable to or for the account of the
Purchasing Banks and the Selling Banks, in accordance with their
respective interests as reflected in Schedule I.
_ (b) Such purchase and sale shall be made by each Purchasing
Bank paying to the Agent for the account of the Selling Banks an
amount equal to the product of (A) the aggregate amount of outstanding
Standby Loans on the Effective Date and (B) a fraction the numerator
of which is the aggregate amount of Commitments of the Selling Banks
being purchased by such Purchasing Bank and the denominator of which
is $300,000,000. On the Effective Date, the Agent shall pay to each
Selling Bank from the amounts received from the Purchasing Banks
pursuant to this paragraph (b) and in like funds as received by the
Agent an amount equal to the outstanding Standby Loans of such Selling
Bank being sold. In connection with such purchase and sale, the
Company shall reimburse and indemnify and hold harmless each Bank for
any expense or cost incurred or suffered by such Bank as a result of,
in the case of a Selling Bank, redeploying any proceeds of such sale
of LIBOR Loans, or, in the case of a Purchasing Bank, having to fund a
LIBOR Loan at non current LIBO rates.
(c) By executing and delivering this Agreement, each Selling
Bank and each Purchasing Bank confirm to and agree with each other and
the other parties hereto as follows: (i) other than the representation
and warranty that it is the legal and beneficial owner of the interest
being assigned hereby free and clear of any adverse claim, such
Selling Bank makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or
document furnished pursuant hereto; (ii) such Selling Bank makes no
representation or warranty and assumes no responsibility with respect
to the financial condition of the Company or the performance or
observance of its obligation under this Agreement or any other
instrument or document furnished pursuant hereto or thereto; (iii)
such Purchasing Bank confirms that it has received a copy of this
Agreement together with copies of the financial statements delivered
pursuant to Section 3.5 and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to
enter into this Agreement; (iv) such Purchasing Bank will,
independently and without reliance upon the Agent, any Selling Bank or
any other Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v)
such Selling Bank agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Bank; and (vi) from and after the
Effective Date, after giving effect to this Section 9.16, Bank of
America Illinois, formerly known as Continental Bank, shall have no
commitment or other obligations hereunder and shall cease to be a
party hereto.
IN WITNESS WHEREOF, the Company, the Agent and the Banks have
caused this Agreement to be duly executed by their respective
authorized officers as of the day and year first above written.
CUMMINS ENGINE COMPANY, INC.
By:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, individually and as
Agent,
By:
Title:
CHEMICAL BANK
By:
Title:
THE CHASE MANHATTAN BANK, N.A.
By:
Title:
THE BANK OF NOVA SCOTIA
By:
Title:
THE NORTHERN TRUST COMPANY
By:
Title:
THE BANK OF NEW YORK
By:
Title:
NBD BANK, N.A.
By:
Title:
CITICORP USA, INC.
By:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:
Title:
NATIONAL WESTMINSTER BANK PLC
By:
Title:
BANK OF AMERICA ILLINOIS, formerly known
as Continental Bank, in its capacity as
a
Selling Bank for purposes of Section
9.16 hereof,
By:
Title:
SCHEDULE I
Percentage
of Total
Commitment Commitment
Morgan Guaranty Trust Company $45,000,000 15.00%
of New York*
60 Wall Street
New York, N.Y. 10260
Telecopy: (212) 648-5336
Confirm: (212) 648-7340
Attention of: Kit C. Wong
Associate
Chemical Bank* $35,000,000 11.67%
270 Park Avenue
New York, N.Y. 10017
Telecopy: (212) 972-9854
Confirm: (212) 270-7853
Attention of: Rosemary Bradley
Vice President
The Chase Manhattan Bank, N.A.* $35,000,000 11.67%
1 Chase Manhattan Plaza, 3rd Floor
New York, N.Y. 10081
Telecopy: (212) 552-1457
Confirm: (212) 552-7674
Attention of: George Hansen
Vice President
Citicorp USA, Inc.* $35,000,000 11.67%
c/o Citicorp Securities, Inc.
399 Park Avenue
8th Floor, Zone 12
New York, New York 10043
Telecopy: (212)
Confirm: (212) 559-6482
Attention of: Robert J. Harrity, Jr.
Vice President
The Bank of Nova Scotia* $35,000,000 11.67%
Atlanta Agency
Suite 2700
600 Peachtree Street, N.E.
Atlanta, GA 30308
Telecopy: (404) 888-8998
Confirm: (404) 877-1558
Attention of: Ed Moussa,
Administrative Agent
Bank of America National $35,000,000 11.67%
Trust and Savings Association*
200 West Adams Street
Chicago, IL 60606
Telecopy: (312) 641-2350
Confirm: (312) 269-4662
Attention of: Hector J. Cuellar,
Vice President
The Bank of New York* $35,000,00 11.67%
One Wall Street
New York, N.Y. 10286
Telecopy: (212) 635-1208
Confirm: (212) 635-1166
Attention of: Bruce C. Miller,
Vice President
The Northern Trust Company* $15,000,000 5.00%
50 South LaSalle Street
Chicago, IL 60675
Telecopy: (312) 444-3508
Confirm: (312) 630-7946
Attention of: Biff Bowman,
Second Vice President
NBD Bank, N.A.* $15,000,000 5.00%
611 Woodward Avenue
Detroit, MI 48226
Telecopy: (313) 225-1671
Confirm: (313) 225-1314
Attention of: Scott C. Morrison,
Second Vice President
National Westminster Bank PLC $15,000,000 5.00%
33 North Dearborn Street
Chicago, Illinois 60602-3105
Telecopy: (312)
Confirm: (312) 621-1760
Attention of: Peter Blythe,
Vice President
Bank of America Illinois,
formerly known as
Continental Bank* $ -0- 0.0%
231 South LaSalle Street
Chicago, IL 60697
Telecopy: (312) 828-3864
Confirm: (312) 828-8518
Attention of: James R. Dolphin,
Vice President
____________ _______
Total $300,000,000 100%
Schedule 3.8
Page 1 of 3
CUMMINS ENGINE COMPANY, INC.
SUBSIDIARIES
Subsidiary/Joint Venture
Percentage of Ownership
All Components Engineering, Ltd. 100% by JLH
Atlas Crankshaft Corporation 100% by 14-15
Cadec Systems, Inc. 100% by CECO
Cal Disposition, Inc. 100% by CECO
C. E. Sonora S.A. de C.V. 100% by CEL
Combustion Technologies, Inc. 100% by CECO
Cummins Americas, Inc. 100% by CECO
Cummins Australia Pty. Limited 100% by CECO
Cummins Brasil S.A. Ltda. 99% by CIFC
Cummins Corporation 100% by CECO
Cummins de Colombia S.A. 100% by CECO
Cummins Diesel Deutschland GmbH 100% by CDSC
Cummins Diesel Export Limited 100% by CECO
Cummins Diesel of Canada Limited 100% by CECO
Cummins Diesel International Limited 100% by CIFC
Cummins Diesel Italia S.P.A. 100% by CDSC
Cummins Diesel Japan Ltd. 100% by CECO
Cummins Diesel N.V. 100% by CDSC
Cummins Diesel Sales Corporation 100% by CECO
Cummins Electronics Company, Inc. 100% by CECO
Cummins Engine Company Limited 100% by CUKL
Cummins Engine H.K. Limited 100% by CECO
Cummins Engine Holding Company, Inc. 100% by CECO
Cummins Engine Venture Corporation 100% by CECO
Cummins Engine (Singapore) PTE Ltd. 100% by CDSC
Cumins Financial, Inc. 100% by CECO
Cummins Great Lakes, Inc. 100% by CECO
Cummins International Finance 100% by CECO
Corporation
Cummins KH-12, Inc. 100% by CECO
Cummins Komatsu Engine Company 100% by CEVC
Cummins Korea, Ltd. 100% by CIFC
Cummins Mexicana, S.A. de C.V. 100% by CECO
Cummins Natural Gas Engines, Inc. 100% by CECO
Cummins Power Generation, Inc. 100% by CECO
Schedule 3.8
Page 2 of 3
Subsidiary/Joint Venture
Percentage of Ownership
Cummins Professional Training Center, 100% by CECO
Inc.
Cummins S.A. de C.V. 89% by CECO
Cummins U.K. Limited 100% by CIFC
Cummins Venture Corporation 100% by CECO
CUMZIM Pvt Ltd 51% by CECO
Dampers Iberica, S.A. 100% by HECL
Dampers, S.A. 100% by HECL
Diesel ReCon Industria e Commercio Ltda 3.9% by CBLA
96.1% by ICCL
Diesel ReCon de Mexico, S.A. de C.V. 100% by CECO
Dunlite Power Generation Pty. Ltd. 100% by OFHL
Fleetguard GmbH 1% by FIC
99% by CIFC
Fleetguard, Inc. 100% by CECO
Flestguard International Corporation 100% by FGI
Fleetguard Mexico S.A. de C.V. 100% by FIC
Holset Brasil Equipamentos 99% by CBLA
Automotives Ltda
Holset Engineering Company, Inc. 100% by CECO
Holset Engineering Company Limited 100% by CUKL
Holset Korea Ltd 51% by HECL
HPI Company 100% by CECO
Industria e Comercio Cummins Ltda. 50% by CBLA
50% by CIFC
J. L. Holdings Ltd. 100% by CUKL
Kompressorenban Bannewitz GmbH 100% by HECL
Kuss Corporation 100% by FGI
Lubricant Consultants, Inc. 75% by FGI
Markon Engineering Company Ltd. 100% by NIL
MHTC Corporation 92.6% by CECO
(formerly McCord Heat Transfer
Corporation)
Motores Cummins Diesel do Brazil, Ltda. 100% by CDIL
Newage Engineers Ltd. 100% by NHL
Newage Engineers Pty Ltd. 100% by NIL
Newage Equipment Ltd. 100% by NIL
Newage (Far East) Pte Ltd. 100% by NIL
Schedule 3.8
Page 3 of 3
Subsidiary/Joint Venture
Percentage of Ownership
Newage GmbH 100% by NIL
Newage Holdings Ltd. 100% by NIL
Newage International Limited 100% by CUKL
Newage Italia Sri 100% by NIL
Newage Ltd. (U.K.) 100% by NIL
Newage Ltd. (U.S.A) 100% by OFHL
Newage Machine Tools 100% by NIL
Newage Norge 100% by NIL
NWMW, Inc. 100% by CECO
Ona Corporation 100% by ONAN
Onan Canada Limited 100% by ONAN
Onan Corporation 100% by CECO
Onan Far East Limited 100% by ONAN
Onan Foreign Holdings, Ltd. 100% by ONAN
Onan FSC Ltd. 100% by ONAN
Onan International B.V. 100% by ONAN
Onan International Limited 100% by ONAN
PT Newage Engineers Indonesia 77% by NIL
Stamford Iberica 100% by NIL
Techniparts S.A. 100% by HECL
Turbo Europa, B.V. 100% by JLH
Williams Equine Products, Inc. 60% by NWMW
124747 Canada Limited 100% by NWMW
14-15 Corporation 100% by CECO
Schedule 3.10
Certain Agreements
1. Medium-term Notes, Series A
Schedule 9.16
Purchase and Sale of Commitments
Aggregate Amount of
Purchasing Banks: Commitments Purchased
National Westminster Bank PLC $15,000,000
The Bank of New York $10,000,000
Bank of America National Trust
and Savings Association $ 5,000,000
The Bank of Nova Scotia $ 5,000,000
Aggregate Amount of
Selling Banks: Commitments Sold
Bank of America Illinois,
formerly known as
Continental Bank $25,000,000
Chemical Bank $10,000,000
EXHIBIT A-1
FORM OF COMPETITIVE BID REQUEST
Morgan Guaranty Trust Company of New York,
as Agent for
the Banks referred to below,
60 Wall Street
New York, N.Y. 10260
Attention: [Date]
Dear Sirs:
The undersigned, Cummins Engine Company, Inc. (the "Company"),
refers to the Amended and Restated Credit Agreement dated as of
________ __, 1994 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among the Company, the Banks
named therein and Morgan Guaranty Trust Company of New York, as Agent.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement. The
Company hereby gives you notice pursuant to Section 2.2(a) of the
Credit Agreement that it requests a Competitive Borrowing under the
Credit Agreement, and, in that connection, sets forth below the terms
on which such Competitive Borrowing is requested to be made:
(A) Date of Competitive Borrowing
(which is a Business Day) _______________________
(B) Principal Amount of
Competitive Borrowing /1 _______________________
(C) Interest Period and the last
day thereof /2 _______________________
(D) Type of Borrowing /3 _______________________
Upon acceptance of any or all of the Loans offered by the Banks
in response to this request, the Company shall be deemed to have
represented and warranted that the conditions to lending specified in
Section 4.2(b) and (c) of the Credit Agreement have been satisfied.
Very truly yours,
CUMMINS ENGINE COMPANY, INC.,
by
_____________________________
Title: [Responsible Officer]
EXHIBIT A-2
FORM OF STANDBY BORROWING REQUEST
Morgan Guaranty Trust Company of New York,
as Agent for the Banks
referred to below,
60 Wall Street
New York, N.Y. 10260
Attention: [Date]
Dear Sirs:
The undersigned, Cummins Engine Company, Inc. (the "Company"),
refers to the Amended and Restated Credit Agreement dated as of
____ __, 1994 (as amended, supplemented or otherwise modified from
time to time the "Credit Agreement"), among the Company, the Banks
named therein and Morgan Guaranty Trust Company of New York, as Agent.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement. The
Company hereby gives you notice pursuant to Section 2.3 of the Credit
Agreement that it requests a Standby Borrowing under the Credit
Agreement, and, in that connection, sets forth below the terms on
which such Standby Borrowing is requested to be made:
(A) Date of Standby Borrowing
(which is a Business Day) __________________________
(B) Principal Amount of
Standby Borrowing/4 __________________________
(C) Interest rate basis/5 __________________________
(D) Interest Period and the last
day thereof/6 ___________________________
Upon acceptance of any or all of the Standby Loans offered by the
Banks in response to this request, the Company shall be deemed to have
represented and warranted that the conditions to lending specified in
Section 4.2(b) and (c) of the Credit Agreement have been satisfied.
Very truly yours,
CUMMINS ENGINE COMPANY, INC.,
by________________________
Title: [Responsible Officer]
EXHIBIT B
FORM OF NOTICE OF COMPETITIVE BID REQUEST
[Name of Bank]
[Address]
New York, New York
Attention: [Date]
Dear Sirs:
Reference is made to the Amended and Restated Credit Agreement
dated as of ____ __, 1994 (as amended, supplemented or otherwise
modified from time to time the "Credit Agreement"), among Cummins
Engine Company, Inc. (the "Company"), the Banks named therein and
Morgan Guaranty Trust Company of New York, as Agent. Capitalized
terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement. The Company
made a Competitive Bid Request on __________, 19__ pursuant to Section
2.2(a) of the Credit Agreement, and in that connection you are invited
to submit a Competitive Bid by [Date]/[Time]./7 Your Competitive Bid
must comply with Section 2.2(b) of the Credit Agreement and the terms
set forth below on which the Competitive Bid Request was made:
(A) Date of Competitive Borrowing _________________________
(B) Principal amount of
Competitive Borrowing _________________________
(C) Interest Period and the last
day thereof _________________________
(D) Type of requested competitive
Borrowing _________________________
Very truly yours,
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By_______________________
Title:
EXHIBIT C
FORM OF COMPETITIVE BID
Morgan Guaranty Trust Company of New York,
as Agent for the Banks
referred to below,
60 Wall Street
New York, New York 10260
Attention: [Date]
Dear Sirs:
The undersigned, [Name of Bank], refers to the Amended and
Restated Credit Agreement dated as of ____ __, 1994 (as amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Cummins Engine Company, Inc. (the "Company"), the
Banks named therein and Morgan Guaranty Trust Company of New York, as
Agent. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit
Agreement. The undersigned hereby makes a Competitive Bid pursuant to
Section 2.2(b) of the Credit Agreement, in response to the Competitive
Bid Request made by the Company on _____________, 19__, and in that
connection sets forth below the terms on which such Competitive Bid is
made:
(A) Principal Amount /8 _________________________
(B) Competitive Bid Rate /9 _________________________
(C) Interest Period
and last day thereof _________________________
The undersigned hereby confirms that it is prepared to extend
credit to the Company upon acceptance by the Company of this bid in
accordance with Section 2.2(d) of the Credit Agreement.
Very truly yours,
[NAME OF BANK],
by
________________________
Title:
EXHIBIT D-1
FORM OF COMPETITIVE NOTE
$300,000,000 New York, New York
[Effective Date]
FOR VALUE RECEIVED, the undersigned, CUMMINS ENGINE COMPANY,
INC., an Indiana corporation (the "Company"), hereby promises to pay
to the order of ______________ (the "Bank"), at the office of Morgan
Guaranty Trust Company of New York (the "Agent"), at 60 Wall Street,
New York, New York 10260, on (i) the last day of each Interest Period
as defined in the Amended and Restated Credit Agreement dated as of
September 16, 1994, among the Company, the Banks named therein and
Morgan Guaranty Trust Company of New York, as Agent (as the same may
be further amended, modified, extended or restated from time to time,
the "Credit Agreement"), the aggregate unpaid principal amount of all
Competitive Loans made by the Bank to the Company pursuant to Sections
2.1 and 2.2 of the Credit Agreement to which such Interest Period
applies and (ii) on the Maturity Date (as defined in the Credit
Agreement), the lesser of the principal sum of Three Hundred Million
Dollars ($300,000,000) and the aggregate unpaid principal amount of
all Competitive Loans made by the Bank to the Company pursuant to
Sections 2.1 and 2.2 of the Credit Agreement, in lawful money of the
United States of America in same day funds, and to pay interest from
the date hereof on such principal amount from time to time
outstanding, in like funds, at said office, at a rate or rates per
annum and payable on such dates as determined pursuant to the Credit
Agreement.
The Company promises to pay interest, on demand, on any overdue
principal and, to the extent permitted by law, overdue interest from
their due dates at a rate or rates determined as set forth in the
Credit Agreement.
The Company hereby waives diligence, presentment, demand, protest
and notice of any kind whatsoever. The non-exercise by the holder of
any of its rights hereunder in any particular instance shall not
constitute a waiver thereof in that or any subsequent instance.
All borrowings evidenced by this Competitive Note and all
payments and prepayments of the principal hereof and interest hereon
and the respective dates thereof shall be endorsed by the holder
hereof on the schedule attached hereto and made a part hereof, or on a
continuation thereof which shall be attached hereto and made a part
hereof, or otherwise recorded by such holder in its internal records;
provided, however, that any failure of the holder hereof to make such
a notation or any error in such notation shall not in any manner
affect the obligation of the Company to make payments of principal and
interest in accordance with the terms of this Competitive Note and the
Credit Agreement.
This Competitive Note is one of the Competitive Notes referred to
in the Credit Agreement which, among other things, contains provisions
for the acceleration of the maturity hereof upon the happening of
certain events, for optional prepayment of the principal hereof prior
to the maturity thereof and for the amendment or waiver of certain
provisions of the Credit Agreement, all upon the terms and conditions
therein specified.
THIS COMPETITIVE NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
CUMMINS ENGINE COMPANY, INC.
by _________________________
Title:
Loans and Payments
Unpaid Name of
Amount Payments Principal Person
and Type Maturity Balance Making
of Loan Date of Note Notation
Principal Interest
\
EXHIBIT D-2
FORM OF STANDBY NOTE
$[Amount of Bank's Commitment] New York, New York
{Effective Date]
FOR VALUE RECEIVED, the undersigned, CUMMINS ENGINE COMPANY,
INC., an Indiana corporation (the "Company"), hereby promises to pay
to the order of _____________________ (the "Bank"), at the office of
Morgan Guaranty Trust Company of New York (the "Agent"), at 60 Wall
Street, New York, New York 10260, on (i) the last day of each Interest
Period as defined in the Amended and Restated Credit Agreement dated
as of September 16, 1994, among the Company, the Banks named therein
and Morgan Guaranty Trust Company of New York as Agent (as the same
may be further modified, amended, extended or restated from time to
time, the "Credit Agreement"), the aggregate unpaid principal amount
of all Standby Loans made by the Bank to the Company pursuant to
Sections 2.1 and 2.3 of the Credit Agreement to which such Interest
Period applies and (ii) on the Maturity Date (as defined in the Credit
Agreement), the lesser of the principal sum of [amount of Bank's
Commitment] Dollars ($ ) and the aggregate unpaid principal
amount of all Standby Loans made by the Bank to the Company pursuant
to Sections 2.1 and 2.3 of the Credit Agreement, in lawful money of
the United States of America in same day funds, and to pay interest
from the date hereof on such principal amount from time to time
outstanding, in like funds, at said office, at a rate or rates per
annum and payable on such dates as determined pursuant to the Credit
Agreement.
The Company promises to pay interest, on demand, on any overdue
principal and, to the extent permitted by law, overdue interest from
their due dates at a rate or rates determined as set forth in the
Credit Agreement.
The Company hereby waives diligence, presentment, demand, protest
and notice of any kind whatsoever. The non-exercise by the holder of
any of its rights hereunder in any particular instance shall not
constitute a waiver thereof in that or any subsequent instance.
All borrowings evidenced by this Standby Note and all payments
and prepayments of the principal hereof and interest hereon and the
respective dates thereof shall be endorsed by the holder hereof on the
schedule attached hereto and made a part hereof, or on a continuation
thereof which shall be attached hereto and made a part hereof, or
otherwise recorded by such holder in its internal records; provided,
however, that any failure of the holder hereof to make such a notation
or any error in such notation shall not in any manner affect the
obligation of the Company to make payments of principal and interest
in accordance with the terms of this Standby Note and the Credit
Agreement.
This Standby Note is one of the Standby Notes referred to in the
Credit Agreement which, among other things, contains provisions for
the acceleration of the maturity hereof upon the happening of certain
events, for optional prepayment of the principal hereof prior to the
maturity thereof and for the amendment or waiver of certain provisions
of the Credit Agreement, all upon the terms and conditions therein
specified.
THIS STANDBY NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
CUMMINS ENGINE COMPANY, INC.
by _________________________
Title:
Loans and Payments
Unpaid Name of
Amount Payments Principal Person
and Type Maturity Balance Making
of Loan Date of Note Notation
Principal Interest
EXHIBIT E
CUMMINS ENGINE COMPANY, INC.
Secretary's Certificate
I, _______________, Secretary of Cummins Engine Company, Inc., an
Indiana corporation (the "Company"), hereby certify that:
17. Attached hereto as Exhibit A is a true and complete copy of the
By-Laws of the Company, and there have been no changes in, or
amendments to, such By-Laws since __________ __, 19__.
18. Attached hereto as Exhibit B is a true and complete copy of a
unanimous written consent duly adopted by the Executive Committee of
the Board of Directors of the Company on __________ __, 19__; such
consent has not been amended, rescinded or modified and has been in
full force and effect since its adoption to and including the date
hereof and is now in full force and effect; and the resolutions
included in such consent are the only resolutions adopted by this
Company's Board of Directors or any Committee thereof or the
shareholders of the Company, relating to the matters referred to
therein.
19. There have been no changes in or amendments to the Restated
Articles of Incorporation of the Company since __________ __, 19__,
and no other document relating to or affecting the Restated Articles
of Incorporation of the Company has been filed in the office of the
Secretary of State of the State of Indiana.
20. The following persons are now duly elected and qualified
officers of the Company, holding the offices indicated next to their
names below, and such officers have held such offices with the Company
at all times since __________ __, 19__, to and including the date
hereof, and the signatures appearing opposite their names below are
the true and genuine signatures of such officers:
Name Title Signature
___________________ _________________ ___________________
___________________ _________________ ___________________
IN WITNESS WHEREOF, I have hereunto signed my name and caused the
seal of the Company to be hereunto affixed as of the ____ day of
September, 1994.
______________________________
Secretary
I, _______________, _______________ of Cummins Engine Company,
Inc., do hereby certify that _______________ is the duly elected and
qualified Secretary of Cummins Engine Company, Inc., and the signature
set forth immediately preceding this certification is his true and
genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name and caused the
seal of the company to be hereunto affixed as of the ____ day of
September, 1994.
______________________________
(Seal)
EXHIBIT F
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated ___________, 19__
Reference is made to the Amended and Restated Credit Agreement
dated as of ____ __, 1994 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among Cummins
Engine Company, Inc., an Indiana corporation (the "Company"), the
Banks (as defined in the Credit Agreement) named therein and Morgan
Guaranty Trust Company of New York, as Agent. Capitalized terms used
herein and not otherwise defined shall have the meanings assigned to
such terms in the Credit Agreement.
____________ (the "Assignor") and _______________ (the
"Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, a __%
interest in and to all the Assignor's rights and obligations under the
Credit Agreement as of the Transfer Date (as defined below)
(including, without limitation, such percentage interest in the
Commitment of the Assignor on the Transfer Date and such percentage
interest in the Standby Loans [and Competitive Loans] owing to the
Assignor outstanding on the Transfer Date together with such
percentage interest in all unpaid interest with respect to such
Standby Loans [and Competitive Loans] and Facility Fees accrued to the
Transfer Date and such percentage interest in the Standby Note [and
the Competitive Note] held by the Assignor [excluding, however, any
interest in the Competitive Loans owing to the Assignor outstanding on
the Effective Date or in the unpaid interest with respect to such
Competitive Loans or in the Competitive Note held by the Assignor]).
2. The Assignor (i) represents that as of the date hereof, its
Commitment (without giving effect to assignments thereof which have
not yet become effective) is $______ and the outstanding balance of
its Standby Loans (unreduced by any assignments thereof which have not
yet become effective) is $_________ [and the outstanding balance of
its Competitive Loans (unreduced by any assignments thereof which have
not yet become effective) is $_________]; (ii) makes no representation
or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection
with the Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant
thereto, other than that it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free
and clear of any adverse claim; (iii) makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Company or the performance or observance by the
Company of any of its obligations under the Credit Agreement or any
other instrument or document furnished pursuant thereto and (iv)
attaches the Standby Note [and the Competitive Note] held by it and
requests that the Agent exchange such Note[s] for a new Standby Note
[and a new Competitive Note] payable to the Assignee in a principal
amount equal to [and respectively] [, and a new Standby
Note payable to the Assignor in a principal amount equal to
___________].
3. The Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (ii) confirms
that it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant to
Section 3.5 or 5.4 thereof and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision
to enter into this Assignment and Acceptance; (iii) agrees that it
will, independently and without reliance upon the Agent, the Assignor
or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit Agreement;
(iv) confirms that it is an Eligible Assignee; (v) appoints and
authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under the Credit Agreement as are delegated to
the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (vi) agrees that it will perform in
accordance with their terms all the obligations which by the terms of
the Credit Agreement are required to be performed by it as a Bank; and
(vii) agrees that it will keep confidential all information with
respect to the Company furnished to it by the Company or the Assignor
(other than information generally available to the public or otherwise
available to the Assignor on a nonconfidential basis) [; and (viii)
attaches the forms prescribed by the Internal Revenue Service of the
United States certifying as to the Assignee's exemption from United
States withholding taxes with respect to all payments to be made to
the Assignee under the Credit Agreement or such other documents as are
necessary to indicate that all such payments are subject to such tax
at a rate reduced by an applicable tax treaty]./10
4. The effective date for this Assignment and Acceptance shall
be (the "Transfer Date")./11 Following the execution of this
Assignment and Acceptance, it will be delivered to the Agent for accep
tance by it and the Company and recording by the Agent pursuant to
Section 9.4(c) of the Credit Agreement.
5. Upon such acceptance and recording, from and after the
Transfer Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Bank thereunder and
(ii) the Assignor shall, to the extent provided in this Assignment and
Acceptance, relinquish its rights and be released from its obligations
under the Credit Agreement.
6.. Upon such acceptance and recording, from and after the
Transfer Date, the Agent shall make all payments in respect of the
interest assigned hereby (including payments of principal, interest,
fees and other amounts) to the Assignee. The Assignor and Assignee
shall make all appropriate adjustments in payments for periods prior
to the Transfer Date by the Agent or with respect to the making of
this assignment directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
[NAME OF ASSIGNOR],
by___________________
Title:
[NAME OF ASSIGNEE],
by___________________
Title:
Accepted this day
of , 19
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Agent,
by______________________
Title:
CONSENTED TO
CUMMINS ENGINE COMPANY, INC.
by______________________
Title:
[Consent necessary if Assignee is
not an Affiliate of Assignor]
EXHIBIT G
21. The Company is a corporation duly organized, validly existing and
in good standing under the laws of its state of incorporation; the
Company is duly qualified as a foreign corporation and in good
standing in every other jurisdiction in which the failure to qualify
would adversely affect the businesses, assets, operations, prospects
or conditions (financial or otherwise) of the Company or would impair
the validity or enforceability of or the ability of the Company to
perform its obligations under the Credit Agreement and the Notes.
22.
22. Each of the Company and each Subsidiary has all requisite power
and authority to own its property and assets and to carry on its
business as now conducted and as proposed to be conducted, and in the
case of the Company, to execute, deliver and perform the Credit
Agreement and all transactions contemplated thereby, to execute and
deliver the Notes and make the contemplated borrowings thereunder.
23. The making and performance by the Company of the Credit Agreement
and the borrowings by the Company contemplated by the Notes, have been
duly authorized by all necessary corporate action (including any
necessary stockholder action) on the part of the Company and each
Subsidiary and will not (a) violate any provision of any law, rule or
regulation applicable to the Company or any Subsidiary, or (b) to the
best of such counsel's knowledge, violate any order, writ, judgment,
decree, determination or award having applicability to the Company or
any Subsidiary, or (c) violate any provision of the Certificate or
Articles of Incorporation or By-Laws of the Company or of any
Subsidiary, or (d) to the best of such counsel's knowledge, constitute
a default under any indenture or loan or credit agreement, or any
other agreement or instrument, to which the Company or any Subsidiary
is a party or by which any of them or their properties may be bound or
affected, or (e) result in, or require, the creation or imposition of
any Lien of any nature upon it with respect to any of the properties
now owned or hereafter acquired by the Company or any Subsidiary. To
the best of such counsel's knowledge, neither the Company nor any
Subsidiary is in default under or in violation of its Certificate or
Articles of Incorporation or other organizing document or its By-Laws
or any such law, rule, or regulation, order, writ, judgment, decree,
determination, award, indenture, agreement pertaining to borrowed
money or similar instrument.
24. The Credit Agreement and the Notes each constitute the legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as limited by (i)
applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and (ii) general principles of equity.
25. No authorization, consent, approval, license or exemption from,
nor any filing, declaration or registration with, any court,
governmental agency or regulatory authority (Federal, state or local),
including, without limitation, the Securities and Exchange Commission
(other than routine disclosure) or any public utility regulatory
agency, or with any securities exchange, is or will be required in
connection with the making and performance by the Company of the
Credit Agreement or the making of the Notes or the contemplated
borrowings thereunder.
26. There are no actions, suits or proceedings pending or, to the
best of such counsel's knowledge, threatened, against or affecting the
Company or any Subsidiary or any of their respective assets in any
court or before any arbitrator, commission, board, bureau or other
administrative agency which if, in any such case, adversely
determined, would be likely to have a material adverse effect on the
businesses, assets, operations, prospects or condition (financial or
otherwise) of the Company or of any Subsidiary or would impair the
validity or enforceability of or the ability of the Company to perform
its obligations under the Credit Agreement or any of the Notes.
27. Neither the Company nor any Subsidiary is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended,
or a "holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
28. The making of the Loans under the Credit Agreement and the use of
the proceeds thereof as contemplated by the Credit Agreement will not
violate or be inconsistent with any of the provisions of Regulation U,
Regulation G or Regulation X of the Board.
29. The indebtedness of the Company under the Credit Agreement and
the Notes constitutes "Senior Indebtedness" within the meaning of such
terms or any similar term as used in subordination provisions of any
subordinated Indebtedness of the Company.
30.
EXECUTION COPY
$300,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
among
CUMMINS ENGINE COMPANY, INC.,
THE BANKS NAMED HEREIN,
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Agent
Dated as of September 16, 1994
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS 1
ARTICLE II. LOANS 15
SECTION 2.1. Commitments 15
SECTION 2.2. Competitive Bid Procedure 15
SECTION 2.3. Standby Borrowing Procedure 17
SECTION 2.4. Refinancings 17
SECTION 2.5. Fees 18
SECTION 2.6. Termination and Reduction of Commitments 18
SECTION 2.7. Loans 19
SECTION 2.8. Notes 19
SECTION 2.9. Interest on Loans 20
SECTION 2.10. Interest on Overdue Amounts 21
SECTION 2.11. Alternate Rate of Interest 21
SECTION 2.12. Prepayment of Loans 21
SECTION 2.13. Reserve Requirements;Change in Circumstances 22
SECTION 2.14. Change in Legality 24
SECTION 2.15. Indemnity 24
SECTION 2.16. Pro Rata Treatment 25
SECTION 2.17. Sharing of Setoffs 25
SECTION 2.18. Payments 25
SECTION 2.19. Payments on Business Days 25
SECTION 2.20. Taxes 26
SECTION 2.21. Tax Reports 27
ARTICLE III. REPRESENTATIONS AND WARRANTIES 28
SECTION 3.1. Organization; Powers 28
SECTION 3.2. Authorization 28
SECTION 3.3. Enforceability 28
SECTION 3.4. Governmental Approvals 28
SECTION 3.5. Financial Statements 28
SECTION 3.6. Environmental Matters 29
SECTION 3.7. Title to Properties; Possession Under Leases 29
SECTION 3.8. Subsidiaries 29
SECTION 3.9. Litigation; Compliance with Laws. 29
SECTION 3.10. Agreements 30
SECTION 3.11. Federal Reserve Regulations 30
SECTION 3.12. Investment Company Act; Public Utility
Holding Company Act 30
SECTION 3.13. Tax Returns 30
SECTION 3.14. Employee Benefit Plans 30
SECTION 3.15. No Material Misstatements 31
ARTICLE IV. CONDITIONS OF LENDING 31
SECTION 4.1. Conditions to Initial Loans 31
SECTION 4.2. Conditions to Each Loan 32
ARTICLE V. AFFIRMATIVE COVENANTS 32
SECTION 5.1. Existence; Businesses and Properties 32
SECTION 5.2. Insurance. 33
SECTION 5.3. Obligations and Taxes 33
SECTION 5.4. Financial Statements, Reports, etc. 33
SECTION 5.5. Litigation and Other Notices 34
SECTION 5.6. ERISA 34
SECTION 5.7. Maintaining Records; Access to Properties
and Inspections 35
SECTION 5.8. Use of Proceeds 35
SECTION 5.9. Compliance with Laws 35
ARTICLE VI. NEGATIVE COVENANTS 35
SECTION 6.1. Negative Pledge 36
SECTION 6.2. Sale and Lease-Back Transactions 37
SECTION 6.3. Mergers, Consolidations, and Sales of Assets 37
SECTION 6.4. Indebtedness of Subsidiaries 37
SECTION 6.5. Amendments of Certain Agreements 37
SECTION 6.6. Tangible Net Worth 37
SECTION 6.7. Leverage 38
SECTION 6.8. Ownership of Significant Subsidiaries 38
ARTICLE VII. EVENTS OF DEFAULT 38
ARTICLE VIII. THE AGENT 41
ARTICLE IX. MISCELLANEOUS 43
SECTION 9.1. Notices 43
SECTION 9.2. Survival of Agreement 43
SECTION 9.3. Binding Effect 43
SECTION 9.4. Successors and Assigns; Participations 44
SECTION 9.5. Expenses; Indemnity 46
SECTION 9.6. Right of Setoff 47
SECTION 9.7. Applicable Law 47
SECTION 9.8. Waivers; Amendments 47
SECTION 9.9. Waiver of Jury Trial, etc. 48
SECTION 9.10. Jurisdiction; Consent to Service of Process 48
SECTION 9.11. Confidentiality. 49
SECTION 9.12. Entire Agreement 49
SECTION 9.13. Severability 50
SECTION 9.14. Counterparts 50
SECTION 9.15. Headings 50
SECTION 9.16. Purchase and Sale of Commitments on the
Effective Date 50
SCHEDULES
SCHEDULE I Commitments of the Banks
SCHEDULE 3.8 Subsidiaries
SCHEDULE 3.10 Certain Agreements
SCHEDULE 9.16 Purchase and Sale of Commitments
EXHIBITS
EXHIBIT A-1 Form of Competitive Bid Request
EXHIBIT A-2 Form of Standby Borrowing Request
EXHIBIT B Form of Notice of Competitive Bid Request
EXHIBIT C Form of Competitive Bid
EXHIBIT D-1 Form of Competitive Bid
EXHIBIT D-2 Form of Standby Note
EXHIBIT E Form of Secretary's Certificate
EXHIBIT F Form of Assignment and Acceptance
EXHIBIT G Form of Legal Opinion
_______________________________
*Existing Bank
*Existing Bank
*Existing Bank
1Not less than $10,000,000 or greater than the Total Commitment and in
integral multiples of $1,000,000.
2/Which shall end not later than the Maturity Date.
3/Indicate if Borrowing is to be of Competitive Fixed Rate Loans or
Competitive LIBO Rate Loans.
4/Not less than $10,000,000 and in integral multiples of $1,000,000.
5/LIBOR Loan, Certificate of Deposit Loan or Alternate Base Loan.
6/Which shall be subject to Section 2.6(d) and end not later than the
Maturity Date.
7/The Competitive Bid must be received by the Administrative Agent not
later than 10:00 a.m., New York City time, three Business Days
prior to a proposed Competitive LIBO Rate Borrowing or on the
Business Day of a proposed Competitive Fixed Rate Borrowing, as
the case may be.
8/Not less than $5,000,000 or greater than the available Total
Commitment and in integral multiples of $1,000,000. Multiple
bids will be accepted by the Administrative Agent.
9/To the nearest 1/10,000 of 1%.
10/If the Assignee is organized under the laws of a jurisdiction
outside the United States.
11/See Section 9.4(c). Such date shall be at least five Business Days
after the execution of this Assignment and Acceptance and
delivery thereof to the Administrative Agent unless otherwise
agreed to by the parties hereto.
