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As filed with the Securities and Exchange Commission on February 8, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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NIKE, INC.
(Exact name of Registrant as specified in its charter)
Oregon 93-0584541
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
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One Bowerman Drive
Beaverton, Oregon 97005-6453
(503) 671-6453
(Address and telephone number of Registrant's principal executive offices)
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John F. Coburn III
Assistant General Counsel
One Bowerman Drive
Beaverton, Oregon 97005-6453
(503) 671-6453
(Name, address, including ZIP code, and telephone number, including area code,
of agent for service)
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Copies to:
Gregory K. Miller
Tracy K. Edmonson
Latham & Watkins
505 Montgomery Street, Suite 1900
San Francisco, California 94111-2562
(415) 391-0600
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement, as determined
by the Registrant.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Amount to be Offering Aggregate Offering Registration
Securities to be Registered Registered Price Per Unit(2) Price(2) Fee
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<S> <C> <C> <C> <C>
Debt Securities........ $300,000,000(1) 100% $300,000,000 $83,400.00
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</TABLE>
(1) Or, if any debt securities are issued at an original issue discount, such
greater principal amount as shall result in an aggregate offering price
equal to $300,000,000.
(2) Estimated solely for purposes of calculating the registration fee, which
is calculated in accordance with Rule 457(o).
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The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
included in this Registration Statement is a combined Prospectus which relates
to Registration Statement No. 333-15953, as amended, previously filed by the
Registrant on Form S-3. This Registration Statement also constitutes Post-
Effective Amendment No. 1 with respect to Registration Statement No. 333-
15953, as amended, pursuant to which $200,000,000 in securities remain to be
issued; a filing fee of $60,606.00 was previously paid with respect to such
$200,000,000 aggregate offering price of securities under such prior
registration statement.
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<PAGE>
SUBJECT TO COMPLETION, DATED FEBRUARY 8, 1999
The information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and it is not soliciting an offer to
buy these securities in any state where the offer or sale is not permitted.
$500,000,000
[LOGO APPEARS HERE]
NIKE, Inc.
Debt Securities
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We may from time to time sell up to $500,000,000 aggregate initial
offering price of our debt securities. These debt securities may consist of
notes, debentures or other types of debt. We will provide specific terms of
these debt securities in supplements to this prospectus. You should read this
prospectus and any prospectus supplement carefully before you invest.
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These securities have not been approved by the Securities and
Exchange Commission or any state securities commission, nor have these
organizations determined that this prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
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The date of this prospectus is , 1999.
<PAGE>
We have not authorized any dealer, salesman or other person to give
any information or to make any representation other than those contained or
incorporated by reference in this prospectus and the accompanying prospectus
supplement. You must not rely upon any information or representation not
contained or incorporated by reference in this prospectus or the accompanying
prospectus supplement as if we had authorized it. This prospectus and the
accompanying prospectus supplement are not an offer to sell or the solicitation
of an offer to buy any securities other than the registered securities to which
they relate. This prospectus and the accompanying prospectus supplement are not
an offer to sell or the solicitation of an offer to buy securities in any
jurisdiction to any person to whom it is unlawful to make an offer or
solicitation in that jurisdiction. The information contained in this prospectus
and the accompanying prospectus supplement is accurate as of the dates on their
covers. When we deliver this prospectus or a supplement or make a sale pursuant
to this prospectus, we are not implying that the information is current as of
the date of the delivery or sale.
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Table of Contents
<TABLE>
<CAPTION>
Page
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<S> <C>
The Company........................................................ 3
About this Prospectus.............................................. 3
Where You Can Find More Information................................ 3
Special Note Regarding Forward-Looking Statements.................. 4
Use of Proceeds.................................................... 6
Selected Financial Data............................................ 7
Description of Debt Securities..................................... 8
Plan of Distribution............................................... 18
Legal Matters...................................................... 18
Experts............................................................ 18
</TABLE>
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THE COMPANY
Our principal business activity involves the design, development
and worldwide marketing of high quality footwear, apparel, accessories and
equipment. We sell our products to approximately 18,000 retail accounts in the
United States and through a mix of independent distributors, licensees and
subsidiaries in approximately 110 countries around the world. Virtually all of
our products are manufactured by independent contractors. Most of our footwear
products are produced outside the United States, while our apparel products are
produced both in the United States and abroad.
We were incorporated in 1968 under the laws of the state of Oregon.
Our principal executive offices are located at One Bowerman Drive, Beaverton,
Oregon 97005-6453, and our telephone number is (503) 671-6453.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed
with the Securities and Exchange Commission utilizing a "shelf" registration
process. Under this shelf registration process, we may sell any combination of
the debt securities described in this prospectus in one or more offerings up to
a total dollar amount of $500,000,000. This prospectus provides you with a
general description of the securities we may offer. Each time we sell
securities, we will provide a prospectus supplement that will contain specific
information about the terms of that offering. The prospectus supplement may
also add, update or change information contained in this prospectus. You should
read both this prospectus and any prospectus supplement together with
additional information described under the next heading "Where You Can Find
More Information."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Commission. You can inspect and copy these reports,
proxy statements and other information at the public reference facilities of
the Commission in Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; 7
World Trade Center, Suite 1300, New York, New York 10048; and Suite 1400,
Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661-2511. You can
also obtain copies of these materials from the public reference section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Please call the Commission at 1-800-SEC-0330 for further information on
the public reference rooms. The Commission also maintains a web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with it (http://www.sec.gov).
You can inspect reports and other information we file at the office of the New
York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
We have filed a registration statement and related exhibits with
the Commission under the Securities Act of 1933, as amended. The registration
statement contains additional information about us and the debt securities. You
may inspect the registration statement and exhibits
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without charge at the office of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and you may obtain copies from the Commission at
prescribed rates.
The Commission allows us to "incorporate by reference" the
information we file with it, which means that we can disclose important
information to you by referring to those documents. The information
incorporated by reference is an important part of this prospectus, and
information that we file later with the Commission will automatically update
and supersede that information. We incorporate by reference the following
documents we filed with the Commission pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended (Commission file number 1-10635):
. Annual Report on Form 10-K for the year ended May 31, 1998
(including information specifically incorporated by reference
into our Form 10-K from our Proxy Statement for our 1998 Annual
Meeting of Shareholders);
. Quarterly Reports on Form 10-Q for the quarters ended August
31, 1998 and November 30, 1998;
. Current Report on Form 8-K filed on September 18, 1998
(regarding the earnings release for the first fiscal quarter
ended August 31, 1998 and providing international revenues on a
regional basis); and
. all documents filed by us with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this prospectus and before we stop offering the
debt securities (other than those portions of such documents
described in paragraphs (i), (k), and (l) of Item 402 of
Regulation S-K promulgated by the Commission).
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Investor Relations
NIKE, Inc.
One Bowerman Drive
Beaverton, Oregon 97005-6453
(503) 671-6453
You should rely only on the information incorporated by reference
or provided in this prospectus and any supplement. We have not authorized
anyone else to provide you with different information.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain written and oral statements in this prospectus, including
the documents that we incorporate by reference, are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements include, without limitation, any statement
that may predict, forecast, indicate or imply future results, performance or
achievements, and may contain the words "believe", "anticipate", "expect",
"estimate", "project", "will be", "will continue", "will result", or words or
phrases of similar meaning. Forward-looking statements involve risks and
uncertainties which may cause actual results to differ
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materially from the forward-looking statements. We detail the risks and
uncertainties from time to time in reports we file with the Commission,
including Forms 8-K, 10-Q, and 10-K, and include, among others, the following:
. international, national and local general economic and market
conditions;
. the size and growth of the overall athletic footwear, apparel,
and equipment markets;
. intense competition among designers, marketers, distributors
and sellers of athletic footwear, apparel and equipment for
consumers and endorsers;
. demographic changes;
. changes in consumer preferences;
. popularity of particular designs, categories of products and
sports;
. seasonal and geographic demand for our products;
. the size, timing and mix of purchases of our products;
. fluctuations and difficulty in forecasting operating results,
including, without limitation, the fact that advance "futures"
orders may not be indicative of future revenues due to the
changing mix of futures and at-once orders or due to changing
cancellation rates;
. our ability to sustain, manage or forecast our growth and
inventories;
. new product development and introduction;
. our ability to secure and protect trademarks, patents and other
intellectual property;
. performance and reliability of our products;
. our customer service;
. adverse publicity;
. the loss of significant customers or suppliers;
. our dependence on distributors;
. business disruptions;
. disruptions due to any Year 2000 noncompliance by us, our
suppliers or customers (or their suppliers or customers);
. increased costs of freight and transportation to meet delivery
deadlines;
. changes in our business strategy or development plans;
. general risks associated with doing business outside the United
States, including, without limitation, import duties, tariffs,
quotas and political and economic instability;
. changes in government regulations;
. any liability and other claims asserted against us;
. our ability to attract and retain qualified personnel; and
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. other factors referenced or incorporated by reference in this
prospectus and other filings with the Commission.
These risks are not exhaustive. Other sections of this prospectus
may include additional factors which could adversely impact our business and
financial performance. Moreover, we operate in a very competitive and rapidly
changing environment. New risk factors emerge from time to time and it is not
possible for our management to predict all risk factors, nor can we assess the
impact of all factors on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from
those contained in any forward-looking statements.
Investors should also be aware that while we communicate with
securities analysts from time to time, it is against our policy to disclose to
them any material non-public information or other confidential commercial
information. Accordingly, shareholders should not assume that we agree with any
statement or report issued by any analyst. Furthermore, we have a policy
against issuing or confirming financial forecasts or projections issued by
others. Thus, to the extent that reports issued by securities analysts contain
any projections, forecasts or opinions, these reports are not our
responsibility.
USE OF PROCEEDS
Unless we indicate otherwise in the applicable prospectus
supplement, we intend to use the net proceeds from the sale of the debt
securities for general corporate purposes, which may include, but are not
limited to, refinancing of debt, working capital, capital expenditures and
investments in subsidiaries.
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SELECTED FINANCIAL DATA
The selected consolidated financial data shown below for, and as of
the end of, each of the years in the five-year period ended May 31, 1998 have
been derived from our consolidated financial statements, which have been
audited by PricewaterhouseCoopers LLP, independent accountants, and which have
been incorporated in this prospectus by reference. The selected consolidated
financial data should be read in conjunction with our consolidated financial
statements, which are also incorporated in this prospectus by reference.
<TABLE>
<CAPTION>
Fiscal Year Ended May 31,
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1994 1995 1996 1997 1998
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(dollars in millions)
<S> <C> <C> <C> <C> <C>
Statement of Income Data:
Revenues................... $3,789.7 $4,760.8 $6,470.6 $9,186.5 $9,553.1
Gross margin............... 1,488.2 1,895.6 2,563.9 3,683.5 3,487.6
Gross margin as a
percentage of Revenues.... 39.3% 39.8% 39.6% 40.1% 36.5%
Selling, general and
administrative expenses... 974.1 1,209.8 1,588.6 2,303.7 2,623.8
Selling, general and
administrative expenses as
a percentage of Revenues.. 25.7% 25.4% 24.6% 25.1% 27.5%
Net income................. 298.8 399.7 553.2 795.8 399.6
Balance Sheet Data:
Cash and equivalents....... 518.8 216.1 262.1 445.4 108.6
Inventories................ 470.0 629.7 931.2 1,338.6 1,396.6
Working capital............ 1,208.4 938.4 1,259.9 1,964.0 1,828.8
Total assets............... 2,373.8 3,142.7 3,951.6 5,361.2 5,397.4
Short-term debt (1)........ 249.5 558.5 689.8 969.5 761.8
Long-term debt............. 12.4 10.6 9.6 296.0 379.4
Common shareholders'
equity.................... 1,740.9 1,964.7 2,431.4 3,155.9 3,261.6
Other Data:
Cash flow from operations.. 576.5 254.9 339.7 323.1 517.5
Ratio of earnings to fixed
charges (2)............... 18.45 17.66 16.51 16.55 6.89
Geographic Revenues:
United States.............. $2,432.7 $2,997.9 $3,964.7 $5,529.1 $5,452.5
Europe..................... 927.3 980.4 1,334.3 1,833.7 2,143.7
Asia/Pacific............... 283.4 515.6 735.1 1,245.2 1,255.7
Canada, Latin America and
other..................... 146.3 266.9 436.5 578.5 701.2
-------- -------- -------- -------- --------
Total Revenues............. $3,789.7 $4,760.8 $6,470.6 $9,186.5 $9,553.1
======== ======== ======== ======== ========
</TABLE>
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(1) Short-term debt consists of current portion of long-term debt, notes
payable and interest-bearing accounts payable.
(2) In accordance with the rules and regulations of the Commission, for
purposes of computing the ratios of earnings to fixed charges, earnings
represent income from operations before fixed charges and taxes, and fixed
charges represent interest on indebtedness, amortization of debt discount
and a share of rental expense which is deemed to be representative of the
interest factor.
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DESCRIPTION OF DEBT SECURITIES
This prospectus describes certain general terms and provisions of
our debt securities. When we offer to sell a particular series of debt
securities, we will describe the specific terms of the series in a supplement
to this prospectus. We will also indicate in the supplement whether the general
terms and provisions described in this prospectus apply to a particular series
of debt securities.
We may offer under this prospectus up to $500,000,000 aggregate
principal amount of debt securities, or if debt securities are issued at a
discount, or in a foreign currency or composite currency, such principal amount
as may be sold for an initial public offering price of up to $500,000,000. The
debt securities will represent our direct, unsecured obligations and will rank
equally with all of our other unsecured and unsubordinated indebtedness, unless
otherwise specified in the applicable prospectus supplement.
The debt securities offered hereby will be issued under an
indenture between us and The First National Bank of Chicago, as trustee. We
have summarized select portions of the indenture below. The summary is not
complete. We have filed a copy of the indenture as an exhibit to the
registration statement and you should read the indenture for provisions that
may be important to you. In the summary below, we have included references to
the section numbers of the indenture so that you can easily locate these
provisions. Capitalized terms used in the summary below have the meanings
specified in the indenture.
General
The terms of each series of debt securities will be established by
or pursuant to a resolution of our Board of Directors and detailed or
determined in the manner provided in an officers' certificate or by a
supplemental indenture. (Section 2.2) The particular terms of each series of
debt securities will be described in a prospectus supplement relating to the
series, including any pricing supplement.
We can issue an unlimited amount of debt securities under the
indenture that may be in one or more series with the same or various
maturities, at par, at a premium, or at a discount. We will set forth in a
prospectus supplement (including any pricing supplement) relating to any series
of debt securities being offered, the initial offering price, the aggregate
principal amount and the following terms of the debt securities:
. the title of the debt securities;
. the price or prices (expressed as a percentage of the aggregate
principal amount) at which we will sell the debt securities;
. any limit on the aggregate principal amount of the debt
securities;
. the date or dates on which we will pay the principal on the
debt securities;
. the rate or rates (which may be fixed or variable) per annum or
the method used to determine the rate or rates (including any
commodity, commodity index, stock exchange index or financial
index) at which the debt securities will bear interest, the
date or dates from which interest will accrue, the date or
dates on
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which interest will commence and be payable and any regular
record date for the interest payable on any interest payment
date;
. the place or places where principal of, premium, and interest
on the debt securities will be payable;
. the terms and conditions upon which we may redeem the debt
securities;
. any obligation we have to redeem or purchase the debt
securities pursuant to any sinking fund or analogous provisions
or at the option of a holder of debt securities;
. the dates on which and the price or prices at which we will
repurchase the debt securities at the option of the holders of
debt securities and other detailed terms and provisions of
these repurchase obligations;
. the denominations in which the debt securities will be issued,
if other than denominations of $1,000 and any integral multiple
thereof;
. whether the debt securities will be issued in the form of
certificated debt securities or global debt securities;
. the portion of principal amount of the debt securities payable
upon declaration of acceleration of the maturity date, if other
than the principal amount;
. the currency of denomination of the debt securities;
. the designation of the currency, currencies or currency units
in which payment of principal of, premium and interest on the
debt securities will be made;
. if payments of principal of, premium or interest on the debt
securities will be made in one or more currencies or currency
units other than that or those in which the debt securities are
denominated, the manner in which the exchange rate with respect
to these payments will be determined;
. the manner in which the amounts of payment of principal of,
premium or interest on the debt securities will be determined,
if these amounts may be determined by reference to an index
based on a currency or currencies other than that in which the
debt securities are denominated or designated to be payable or
by reference to a commodity, commodity index, stock exchange
index or financial index;
. any provisions relating to any security provided for the debt
securities;
. any addition to or change in the Events of Default described in
this prospectus or in the indenture with respect to the debt
securities and any change in the acceleration provisions
described in this prospectus or in the indenture with respect
to the debt securities;
. any addition to or change in the covenants described in this
prospectus or in the indenture with respect to the debt
securities;
. any other terms of the debt securities, which may modify or
delete any provision of the indenture as it applies to that
series; and
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. any depositaries, interest rate calculation agents, exchange
rate calculation agents or other agents with respect to the
debt securities. (Section 2.2)
We may issue debt securities that provide for an amount less than
their stated principal amount to be due and payable upon declaration of
acceleration of their maturity pursuant to the terms of the indenture. We will
provide you with information on the federal income tax considerations and other
special considerations applicable to any of these debt securities in the
applicable prospectus supplement.
If we denominate the purchase price of any of the debt securities
in a foreign currency or currencies or a foreign currency unit or units, or if
the principal of and any premium and interest on any series of debt securities
is payable in a foreign currency or currencies or a foreign currency unit or
units, we will provide you with information on the restrictions, elections,
general tax considerations, specific terms and other information with respect
to that issue of debt securities and such foreign currency or currencies or
foreign currency unit or units in the applicable prospectus supplement.
Payment of Interest and Exchange
Each debt security will be represented by either one or more global
securities registered in the name of The Depository Trust Company, as
Depositary (the "Depositary"), or a nominee of the Depositary (we will refer to
any debt security represented by a global debt security as a "book-entry debt
security"), or a certificate issued in definitive registered form (we will
refer to any debt security represented by a certificated security as a
"certificated debt security"), as described in the applicable prospectus
supplement. Except as described under "Global Debt Securities and Book-Entry
System" below, book-entry debt securities will not be issuable in certificated
form.
Certificated Debt Securities. You may transfer or exchange
certificated debt securities at the trustee's office or paying agencies in
accordance with the terms of the indenture. No service charge will be made for
any transfer or exchange of certificated debt securities, but we may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection with a transfer or exchange.
You may transfer certificated debt securities and the right to
receive the principal of, premium and interest on certificated debt securities
only by surrendering the old certificate representing those certificated debt
securities and either we or the trustee will reissue the old certificate to the
new holder or we or the trustee will issue a new certificate to the new holder.
Global Debt Securities and Book-Entry System. Each global debt
security representing book-entry debt securities will be deposited with, or on
behalf of, the Depositary, and registered in the name of the Depositary or a
nominee of the Depositary.
The Depositary has indicated it intends to follow the following
procedures with respect to book-entry debt securities.
Ownership of beneficial interests in book-entry debt securities
will be limited to persons that have accounts with the Depositary for the
related global debt security ("participants")
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or persons that may hold interests through participants. Upon the issuance of a
global debt security, the Depositary will credit, on its book-entry
registration and transfer system, the participants' accounts with the
respective principal amounts of the book-entry debt securities represented by
the global debt security beneficially owned by such participants. The accounts
to be credited will be designated by any dealers, underwriters or agents
participating in the distribution of the book-entry debt securities. Ownership
of book-entry debt securities will be shown on, and the transfer of the
ownership interests will be effected only through, records maintained by the
Depositary for the related global debt security (with respect to interests of
participants) and on the records of participants (with respect to interests of
persons holding through participants). The laws of some states may require that
certain purchasers of securities take physical delivery of such securities in
definitive form. These laws may impair the ability to own, transfer or pledge
beneficial interests in book-entry debt securities.
So long as the Depositary for a global debt security, or its
nominee, is the registered owner of that global debt security, the Depositary
or its nominee, as the case may be, will be considered the sole owner or holder
of the book-entry debt securities represented by such global debt security for
all purposes under the indenture. Except as described herein, beneficial owners
of book-entry debt securities will not be entitled to have securities
registered in their names, will not receive or be entitled to receive physical
delivery of a certificate in definitive form representing securities and will
not be considered the owners or holders of those securities under the
indenture. Accordingly, to exercise any rights of a holder under the indenture,
each person beneficially owning book-entry debt securities must rely on the
procedures of the Depositary for the related global debt security and, if that
person is not a participant, on the procedures of the participant through which
that person owns its interest.
We understand, however, that under existing industry practice, the
Depositary will authorize the persons on whose behalf it holds a global debt
security to exercise certain rights of holders of debt securities, and the
indenture provides that we, the trustee and our respective agents will treat as
the holder of a debt security the persons specified in a written statement of
the Depositary with respect to that global debt security for purposes of
obtaining any consents or directions required to be given by holders of the
debt securities pursuant to the indenture. (Section 2.14.6)
We will make payments of principal of, and premium and interest on
book-entry debt securities to the Depositary or its nominee, as the case may
be, as the registered holder of the related global debt security. (Section
2.14.5) NIKE, the trustee and any other agent of ours or agent of the trustee
will not have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in a
global debt security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
We expect that the Depositary, upon receipt of any payment of
principal of, premium or interest on a global debt security, will immediately
credit participants' accounts with payments in amounts proportionate to the
respective amounts of book-entry debt securities held by each participant as
shown on the records of the Depositary. We also expect that payments by
participants to owners of beneficial interests in book-entry debt securities
held through those participants will be governed by standing customer
instructions and customary practices, as is now the case with the
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securities held for the accounts of customers in bearer form or registered in
"street name", and will be the responsibility of those participants.
We will issue certificated debt securities in exchange for each
global debt security if the Depositary is at any time unwilling or unable to
continue as Depositary or ceases to be a clearing agency registered under the
Exchange Act, and a successor Depositary registered as a clearing agency under
the Exchange Act is not appointed by us within 90 days. In addition, we may at
any time and in our sole discretion determine not to have any of the book-entry
debt securities of any series represented by one or more global debt securities
and, in that event, we will issue certificated debt securities in exchange for
the global debt securities of that series. Global debt securities will also be
exchangeable by the holders for certificated debt securities if an Event of
Default with respect to the book-entry debt securities represented by those
global debt securities has occurred and is continuing. Any certificated debt
securities issued in exchange for a global debt security will be registered in
such name or names as the Depositary shall instruct the trustee. We expect that
such instructions will be based upon directions received by the Depositary from
participants with respect to ownership of book-entry debt securities relating
to such global debt security.
We have obtained the foregoing information in this section
concerning the Depositary and the Depositary's book-entry system from sources
we believe to be reliable, but we take no responsibility for the accuracy of
this information.
No Protection in the Event of a Change of Control
Unless we state otherwise in the applicable prospectus supplement,
the debt securities will not contain any provisions which may afford holders of
the debt securities protection in the event we have a change in control or in
the event of a highly leveraged transaction (whether or not such transaction
results in a change in control).
Covenants
Unless we state otherwise in (a) the applicable prospectus
supplement and in a supplement to the indenture, (b) a board resolution, or (c)
an officers' certificate delivered pursuant to the indenture, the debt
securities will not contain any restrictive covenants, including covenants
restricting us or any of our subsidiaries from incurring, issuing, assuming or
guarantying any indebtedness secured by a lien on any of our or our
subsidiaries' property or capital stock, or restricting us or any of our
subsidiaries from entering into any sale and leaseback transactions.
Consolidation, Merger and Sale of Assets
We may not consolidate with or merge into, or convey, transfer or
lease all or substantially all of our properties and assets to, any person (a
"successor person"), and we may not permit any person to merge into, or convey,
transfer or lease its properties and assets substantially as an entirety to us,
unless:
. the successor person is a corporation, partnership, trust or
other entity organized and validly existing under the laws of
any U.S. domestic jurisdiction and expressly assumes our
obligations on the debt securities and under the indenture;
12
<PAGE>
. immediately after giving effect to the transaction, no Event of
Default, and no event which, after notice or lapse of time, or
both, would become an Event of Default, shall have occurred and
be continuing under the indenture; and
. certain other conditions are met. (Section 5.1)
Events of Default
"Event of Default" means with respect to any series of debt
securities, any of the following:
. default in the payment of any interest upon any debt security
of that series when it becomes due and payable, and continuance
of that default for a period of 30 days (unless the entire
amount of such payment is deposited by us with the trustee or
with a paying agent prior to the expiration of the 30-day
period);
. default in the payment of principal of or premium on any debt
security of that series when due and payable;
. default in the deposit of any sinking fund payment, when and as
due in respect of any debt security of that series;
. default in the performance or breach of any other covenant or
warranty by us in the indenture (other than a covenant or
warranty that has been included in the indenture solely for the
benefit of a series of debt securities other than that series),
which default continues uncured for a period of 60 days after
we receive written notice from the trustee or we and the
trustee receive written notice from the holders of at least 25%
in principal amount of the outstanding debt securities of that
series as provided in the indenture;
. an event of default under any of our Debt (including a default
with respect to debt securities of any series other than that
series) or any Subsidiary, whether that Debt exists today or is
created at a later date, if
. the default results from our failure to pay the Debt when
it becomes due;
. the principal amount of the Debt, together with the
principal amount of any other Debt in default for failure
to pay principal at stated final maturity or the maturity
of which has been accelerated, totals $100 million or more
at any one time outstanding; and
. the Debt is not discharged or the acceleration is not
rescinded or annulled within 10 days after we receive
written notice as provided in the indenture;
. certain events of bankruptcy, insolvency or reorganization; and
. any other Event of Default provided with respect to debt
securities of that series that is described in the applicable
prospectus supplement accompanying this prospectus.
No Event of Default with respect to a particular series of debt
securities (except as to certain events of bankruptcy, insolvency or
reorganization) necessarily constitutes an Event of Default with respect to any
other series of debt securities. (Section 6.1) An Event of Default may
13
<PAGE>
also be an event of default under our bank credit agreements in existence from
time to time and under certain guaranties by us of any subsidiary indebtedness.
In addition, certain Events of Default or an acceleration under the indenture
may also be an event of default under some of our other indebtedness
outstanding from time to time.
If an Event of Default with respect to debt securities of any
series at the time outstanding occurs and is continuing, then the trustee or
the holders of not less than 25% in principal amount of the outstanding debt
securities of that series may, by written notice to us (and to the trustee if
given by the holders), declare to be due and payable immediately the principal
(or, if the debt securities of that series are discount securities, that
portion of the principal amount as may be specified in the terms of that
series) and premium of all debt securities of that series. In the case of an
Event of Default resulting from certain events of bankruptcy, insolvency or
reorganization, the principal (or such specified amount) and premium of all
outstanding debt securities will become and be immediately due and payable
without any declaration or other act by the trustee or any holder of
outstanding debt securities. At any time after a declaration of acceleration
with respect to debt securities of any series has been made, but before the
trustee has obtained a judgment or decree for payment of the money due, the
holders of a majority in principal amount of the outstanding debt securities of
that series may, subject to our having paid or deposited with the trustee a sum
sufficient to pay overdue interest and principal which has become due other
than by acceleration and certain other conditions, rescind and annul such
acceleration if all Events of Default, other than the non-payment of
accelerated principal and premium with respect to debt securities of that
series, have been cured or waived as provided in the indenture. (Section 6.2)
For information as to waiver of defaults see the discussion under "--
Modification and Waiver" below. We refer you to the prospectus supplement
relating to any series of debt securities that are discount securities for the
particular provisions relating to acceleration of a portion of the principal
amount of the discount securities upon the occurrence of an Event of Default
and the continuation of an Event of Default.
The indenture provides that the trustee will be under no obligation
to exercise any of its rights or powers under the indenture at the request of
any holder of outstanding debt securities, unless the trustee receives
indemnity satisfactory to it against any loss, liability or expense. (Section
7.1(e)) Subject to certain rights of the trustee, the holders of a majority in
principal amount of the outstanding debt securities of any series shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the trustee or exercising any trust or power conferred
on the trustee with respect to the debt securities of that series. (Section
6.12)
No holder of any debt security of any series will have any right to
institute any proceeding, judicial or otherwise, with respect to the indenture
or for the appointment of a receiver or trustee, or for any remedy under the
indenture, unless:
. that holder has previously given to the trustee written notice
of a continuing Event of Default with respect to debt
securities of that series; and
. the holders of at least 25% in principal amount of the
outstanding debt securities of that series have made written
request, and offered reasonable indemnity, to the trustee to
institute such proceeding as trustee, and the Trustee shall not
have received from the holders of a majority in principal
amount of the outstanding
14
<PAGE>
debt securities of that series a direction inconsistent with
that request and has failed to institute the proceeding within
60 days. (Section 6.7)
Notwithstanding the foregoing, the holder of any debt security
will have an absolute and unconditional right to receive payment of the
principal of, premium and any interest on that debt security on or after the
due dates expressed in that debt security and to institute suit for the
enforcement of payment. (Section 6.8)
The indenture requires us, within 90 days after the end of our
fiscal year, to furnish to the trustee a statement as to compliance with the
indenture. (Section 4.3) The indenture provides that the trustee may withhold
notice to the holders of debt securities of any series of any Default or Event
or Default (except in payment on any debt securities of that series) with
respect to debt securities of that series if it in good faith determines that
withholding notice is in the interest of the holders of those debt securities.
(Section 7.5)
Modification and Waiver
We and the trustee may modify and amend the indenture with the
consent of the holders of at least a majority in principal amount of the
outstanding debt securities of each series affected by the modifications or
amendments. We and the trustee may not make any modification or amendment
without the consent of the holder of each affected debt security then
outstanding if that amendment will:
. change the amount of debt securities whose holders must consent
to an amendment or waiver;
. reduce the rate of or extend the time for payment of interest
(including default interest) on any debt security;
. reduce the principal of or premium on or change the fixed
maturity of any debt security or reduce the amount of, or
postpone the date fixed for, the payment of any sinking fund or
analogous obligation with respect to any series of debt
securities;
. reduce the principal amount of discount securities payable upon
acceleration of maturity;
. waive a default in the payment of the principal of, premium or
interest on any debt security (except a rescission of
acceleration of the debt securities of any series by the
holders of at least a majority in aggregate principal amount of
the then outstanding debt securities of that series and a
waiver of the payment default that resulted from that
acceleration);
. make the principal of or premium or interest on any debt
security payable in currency other than that stated in the debt
security;
. make any change to certain provisions of the indenture relating
to, among other things, the right of holders of debt securities
to receive payment of the principal of, premium and interest on
those debt securities and to institute suit for the enforcement
of any payment and to waivers or amendments; or
15
<PAGE>
. waive a redemption payment with respect to any debt security or
change any of the provisions with respect to the redemption of
any debt securities. (Section 9.3)
Except for certain specified provisions, the holders of at least a
majority in principal amount of the outstanding debt securities of any series
may on behalf of the holders of all debt securities of that series waive our
compliance with provisions of the indenture. (Section 9.2) The holders of a
majority in principal amount of the outstanding debt securities of any series
may on behalf of the holders of all the debt securities of that series waive
any past default under the indenture with respect to that series and its
consequences, except a default in the payment of the principal of, premium or
any interest on any debt security of that series; provided, however, that the
holders of a majority in principal amount of the outstanding debt securities of
any series may rescind an acceleration and its consequences, including any
related payment default that resulted from the acceleration. (Section 6.13)
Defeasance of Debt Securities and Certain Covenants in Certain Circumstances
Legal Defeasance. The indenture provides that, unless otherwise
provided by the terms of the applicable series of debt securities, we may be
discharged from any and all obligations in respect of the debt securities of
any series (except for certain obligations to register the transfer or exchange
of debt securities of the series, to replace stolen, lost or mutilated debt
securities of the series, and to maintain paying agencies and certain
provisions relating to the treatment of funds held by paying agents). We will
be so discharged upon the deposit with the trustee, in trust, of money and/or
U.S. Government Obligations or, in the case of debt securities denominated in a
single currency other than U.S. Dollars, Foreign Government Obligations, that,
through the payment of interest and principal in accordance with their terms,
will provide money in an amount sufficient in the opinion of a nationally
recognized firm of independent public accountants to pay and discharge each
installment of principal, premium and interest on and any mandatory sinking
fund payments in respect of the debt securities of that series on the stated
maturity of such payments in accordance with the terms of the indenture and
those debt securities.
This discharge may occur only if, among other things, we have
delivered to the trustee an officers' certificate and an opinion of counsel
stating that we have received from, or there has been published by, the United
States Internal Revenue Service a ruling or, since the date of execution of the
indenture, there has been a change in the applicable United States federal
income tax law, in either case to the effect that holders of the debt
securities of such series will not recognize income, gain or loss for United
States federal income tax purposes as a result of the deposit, defeasance and
discharge and will be subject to United States federal income tax on the same
amount and in the same manner and at the same times as would have been the case
if the deposit, defeasance and discharge had not occurred. (Section 8.3)
Defeasance of Certain Covenants. The indenture provides that,
unless otherwise provided by the terms of the applicable series of debt
securities, upon compliance with certain conditions:
. we may omit to comply with the restrictive covenants contained
in Sections 4.2, 4.3 through 4.6 and Section 5.1 of the
indenture, as well as any additional
16
<PAGE>
covenants contained in a supplement to the indenture, a board
resolution or an officers' certificate delivered pursuant to
the indenture; and
. Events of Default under Section 6.1(e) of the indenture will
not constitute a Default or an Event of Default with respect to
the debt securities of that series.
The conditions include:
. depositing with the trustee money and/or U.S. Government
Obligations or, in the case of debt securities denominated in a
single currency other than U.S. Dollars, Foreign Government
Obligations, that, through the payment of interest and
principal in accordance with their terms, will provide money in
an amount sufficient in the opinion of a nationally recognized
firm of independent public accountants to pay principal,
premium and interest on and any mandatory sinking fund payments
in respect of the debt securities of that series on the stated
maturity of those payments in accordance with the terms of the
indenture and those debt securities; and
. delivering to the trustee an opinion of counsel to the effect
that the holders of the debt securities of that series will not
recognize income, gain or loss for United States federal income
tax purposes as a result of the deposit and related covenant
defeasance and will be subject to United States federal income
tax in the same amount and in the same manner and at the same
times as would have been the case if the deposit and related
covenant defeasance had not occurred. (Section 8.4)
Covenant Defeasance and Events of Default. In the event we
exercise our option not to comply with certain covenants of the indenture with
respect to any series of debt securities and the debt securities of that
series are declared due and payable because of the occurrence of any Event of
Default, the amount of money and/or U.S. Government Obligations or Foreign
Government Obligations on deposit with the trustee will be sufficient to pay
amounts due on the debt securities of that series at the time of their stated
maturity but may not be sufficient to pay amounts due on the debt securities
of that series at the time of the acceleration resulting from the Event of
Default. However, we will remain liable for those payments.
"Foreign Government Obligations" means, with respect to debt
securities of any series that are denominated in a currency other than U.S.
Dollars:
. direct obligations of the government that issued or caused to
be issued such currency for the payment of which obligations
its full faith and credit is pledged, which are not callable or
redeemable at the option of the issuer thereof; or
. obligations of a person controlled or supervised by or acting
as an agency or instrumentality of that government the timely
payment of which is unconditionally guaranteed as a full faith
and credit obligation by that government, which are not
callable or redeemable at the option of the issuer thereof.
17
<PAGE>
Governing Law
The indenture and the debt securities will be governed by, and
construed in accordance with, the internal laws of the State of New York.
(Section 10.10)
PLAN OF DISTRIBUTION
We may sell debt securities to or through underwriters and also may
sell debt securities directly to other purchasers or through agents.
We may distribute the debt securities from time to time in one or
more transactions:
. at a fixed price or prices, which may be changed;
. at market prices prevailing at the time of sale;
. at prices related to such prevailing market prices; or
. at negotiated prices.
In connection with the sale of debt securities, we, or the
purchasers of debt securities for whom the underwriters may act as agents, may
compensate underwriters in the form of discounts, concessions or commissions.
Underwriters may sell the debt securities to or through dealers, and those
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agent. Underwriters, dealers and agents participating in
the distribution of debt securities may be deemed to be underwriters under the
Securities Act, and any discounts or commissions they receive from us and any
profit they realize on resale of the debt securities may be deemed to be
underwriting discounts and commissions under the Securities Act. We will
describe in the applicable prospectus supplement any compensation we pay to
underwriters or agents in connection with the offering of debt securities, and
any discounts, concessions or commissions allowed by underwriters to
participating dealers.
We may enter into agreements to indemnify underwriters, dealers and
agents who participate in the distribution of debt securities against certain
liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
Latham & Watkins of San Francisco, California, and James C. Carter,
our General Counsel, each will issue an opinion about certain legal matters
with respect to the debt securities for NIKE. Any underwriters will be advised
about the other issues relating to any offering by their own legal counsel.
EXPERTS
The consolidated financial statements incorporated in this
Prospectus by reference to NIKE, Inc.'s Annual Report on Form 10-K for the
year ended May 31, 1998, have been so incorporated in reliance on the report
of PricewaterhouseCoopers LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
18
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The expenses to be paid by us in connection with the distribution
of the securities being registered are as set forth in the following table:
<TABLE>
<S> <C>
Securities and Exchange Commission Fee....................... $ 83,400
*Rating Agency Fees........................................... 60,000
*Legal Fees and Expenses...................................... 200,000
*Accounting Fees and Expenses................................. 50,000
*Printing Expenses............................................ 50,000
*Blue Sky Fees................................................ 5,000
*Trustee/Issuing & Paying Agent Fees and Expenses............. 5,000
*Miscellaneous................................................ 21,600
--------
Total....................................................... $475,000
========
</TABLE>
- --------
* Estimated
Item 15. Indemnification of Directors and Officers
The Oregon Business Corporation Act (the "OBCA") permits a
corporation to include in its articles of incorporation a provision
indemnifying a director if (a) the conduct of the individual was in good faith;
(b) the individual reasonably believed that the individual's conduct was in the
best interests of the corporation, or at least not opposed to its best
interests; and (c) in the case of any criminal proceeding, the individual had
no reasonable cause to believe the individual's conduct was unlawful. In
addition, the OBCA provides that, unless limited by its articles of
incorporation, a corporation shall indemnify a director who was wholly
successful, on the merits or otherwise, in the defense of any proceeding to
which the director was a party because of being a director of the corporation
against reasonable expenses incurred by the director in connection with the
proceedings. The Company's articles of incorporation do not limit such right of
indemnification. Section 60.411 of the OBCA also provides that a corporation
has the power to purchase and maintain insurance on behalf of an individual
against any liability asserted against or incurred by the individual who is or
was a director, officer, employee or agent of the corporation or who, while a
director, officer, employee or agent of the corporation, is or was serving at
the request of the corporation as a director, officer, partner, trustee,
employee or agent of another foreign or domestic corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, even if the
corporation had no power to indemnify the individual against such liability
under the provisions of Sections 60.391 or 60.394.
Article VIII of the Restated Articles of Incorporation of the
Company provides as follows:
A. The Corporation shall have the power to indemnify to the
fullest extent not prohibited by law any person who is made or
threatened to be made a party to, witness in, or otherwise
involved in, any action, suit or proceeding, whether
II-1
<PAGE>
civil, criminal, administrative, investigative, legislative,
formal or informal, internal or external or otherwise
(including an action, suit or proceeding by or in the right of
the Corporation) by reason of the fact that the person is or
was a director, officer, employee or agent of the Corporation
or a fiduciary within the meaning of the Employee Retirement
Income Security Act of 1974 with respect to any employee
benefit plan of the Corporation, or serves or served at the
request of the Corporation as a director, officer, employee or
agent or as a fiduciary of an employee benefit plan, of another
corporation, partnership, joint venture, trust, or other
enterprise. Any indemnification provided pursuant to this
Article VIII shall not be exclusive of any rights to which the
person indemnified may otherwise be entitled under any articles
of incorporation, bylaw, agreement, statute, policy of
insurance, vote of shareholders or Board of Directors, or
otherwise, which exists at or subsequent to the time such
person incurs or becomes subject to such liability and expense.
B. To the fullest extent not prohibited by law, no director of the
Corporation shall be personally liable to the Corporation or
its shareholders for monetary damages for conduct as a
director. No amendment or repeal of this Article VIII, nor the
adoption of any provision of these Restated Articles of
Incorporation inconsistent with this Article VIII, nor a change
in the law, shall adversely affect any right or protection that
is based upon this Paragraph B and pertains to conduct that
occurred prior to the time of such amendment, repeal, adoption
or change. No change in the law shall reduce or eliminate the
rights and protections set forth in this Paragraph B unless the
change in the law specifically requires such reduction or
elimination. If the Oregon Business Corporation Act is amended
after this Article VIII becomes effective to authorize
corporate action further eliminating or limiting the personal
liability of directors of the Corporation, then the liability
of directors of the Corporation shall be eliminated or limited
to the fullest extent not prohibited by the Oregon Business
Corporation Act as so amended.
Article 9 of the Company's Third Restated Bylaws (the "Company's
Bylaws") provides for indemnification of the Company's officers and directors
to the fullest extent permitted by law. However, the Company is not obligated
to make any indemnification in connection with (i) any claim made against any
director or officer for which payment is required to be made to or on behalf of
the director or officer under any insurance policy, except with respect to any
excess amount to which the director or officer is entitled beyond the amount of
payment under such insurance policy, or (ii) any proceeding initiated by the
director or officer, or any proceeding by the director or officer against the
Company or its directors, officers, employees or other persons entitled to be
indemnified by the Company, unless the Company is expressly required by law to
make the indemnification or certain other requirements are met. Article 9,
Section (k) of the Company's Bylaws provides that the Company may purchase
insurance on behalf of any person required or permitted to be indemnified
pursuant to Article 9 upon approval by the Company's Board of Directors.
The Company has entered into indemnity agreements with all
directors and executive officers of the Company relating to their positions as
such. The agreements provide generally that the
II-2
<PAGE>
Company will indemnify the party thereto for liability arising from third-party
proceedings, for proceedings by or in the right of the Company and otherwise to
the fullest extent not prohibited by law, subject to certain exclusions. The
Company also maintains liability insurance for directors and officers of the
Company acting within their capacities as such.
Item 16. Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
*1.01 Form of Underwriting Agreement.
4.01 Indenture, dated as of December 13, 1996, between NIKE, Inc. and The
First National Bank of Chicago, as Trustee.
*4.02 Form of Debt Security.
5.01 Opinion of James C. Carter.
5.02 Opinion of Latham & Watkins.
12.01 Statement regarding Computation of Ratios.
23.01 Consent of PricewaterhouseCoopers LLP.
23.02 Consent of James C. Carter (included in Exhibit 5.01).
23.03 Consent of Latham & Watkins (included in Exhibit 5.02).
24.01 Powers of Attorney (contained on Page II-5).
25.01 Statement of Eligibility of Trustee on Form T-1 of The First National
Bank of Chicago.
</TABLE>
- --------
* To be filed by amendment or by a report on Form 8-K Pursuant to Regulation S-
K, Item 601(b).
Item 17. Undertakings
(a)We hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i)To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
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<PAGE>
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that information required to be included in a post-effective
amendment by paragraphs (a)(1)(i) and (a)(1)(ii) above may be contained in
periodic reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) We hereby undertake that, for purposes of determining any liability under
the Securities Act of 1933, each filing of our annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
NIKE pursuant to the provisions described in this registration statement
above, or otherwise, we have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by us of expenses incurred or paid by a director, officer or
controlling person of NIKE in the successful defense of any action, suit or
proceeding) is asserted against us by such director, officer or controlling
person in connection with the securities being registered, we will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by us is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final adjudication
of such issue.
(j) We hereby undertake to file an application for the purpose of determining
the eligibility of the trustee to act under subsection (a) of Section 310
of the Trust indenture Act (the "Act") in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the
Act.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Beaverton, Oregon, on February 8, 1999.
NIKE, INC.
By /s/ Lindsay D. Stewart
---------------------------------
Lindsay D. Stewart
Vice President, Law and Corporate
Affairs
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below does hereby constitute and appoint Lindsay D. Stewart
with full power of substitution and full power to act without the other, his
true and lawful attorney-in-fact and agent to act for him in his name, place
and stead, in any and all capacities, to sign a registration statement on Form
S-3 and any or all amendments thereto (including without limitation any post-
effective amendments thereto), and any registration statement for the same
offering that is to be effective under Rule 462(b) of the Securities Act, and
to file each of the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about
the premises in order to effectuate the same as fully, to all intents and
purposes, as he might or could do in person, hereby ratifying and confirming
all that said attorney-in-fact and agent may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by each of the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Philip H. Knight Chairman of the Board and Chief February 8, 1999
- ------------------------ Executive Officer, and Director
Philip H. Knight
/s/ Robert E. Harold Interim Chief Financial Officer February 8, 1999
- ------------------------
Robert E. Harold
/s/ William J. Bowerman Director February 8, 1999
- ------------------------
William J. Bowerman
/s/ Thomas E. Clark Director February 8, 1999
- ------------------------
Thomas E. Clarke
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Jill K. Conway Director February 8, 1999
- --------------------------
Jill K. Conway
/s/ Ralph D. Denunzio Director February 8, 1999
- --------------------------
Ralph D. Denunzio
/s/ Richard K. Donahue Director February 8, 1999
- --------------------------
Richard K. Donahue
/s/ Delbert J. Hayes Director February 8, 1999
- --------------------------
Delbert J. Hayes
/s/ Douglas G. Houser Director February 8, 1999
- --------------------------
Douglas G. Houser
/s/ John E. Jaqua Director February 8, 1999
- --------------------------
John E. Jaqua
/s/ Kenichi Ohmae Director February 8, 1999
- --------------------------
Kenichi Ohmae
/s/ Charles W. Robinson Director February 8, 1999
- --------------------------
Charles W. Robinson
/s/ John R. Thompson, Jr. Director February 8, 1999
- --------------------------
John R. Thompson, Jr.
/s/ A. Michael Spence Director February 8, 1999
- --------------------------
A. Michael Spence
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
*1.01 Form of Underwriting Agreement.
4.01 Indenture, dated as of December 13, 1996, between NIKE, Inc. and The
First National Bank of Chicago, as Trustee.
*4.02 Form of Debt Security.
5.01 Opinion of James C. Carter.
5.02 Opinion of Latham & Watkins.
12.01 Statement regarding Computation of Ratios.
23.01 Consent of PricewaterhouseCoopers LLP.
23.02 Consent of James C. Carter (included in Exhibit 5.01).
23.03 Consent of Latham & Watkins (included in Exhibit 5.02).
24.01 Powers of Attorney (contained on Page II-5).
25.01 Statement of Eligibility of Trustee on Form T-1 of The First National
Bank of Chicago.
</TABLE>
- --------
* To be filed by amendment or by a report on Form 8-K Pursuant to Regulation S-
K, Item 601(b).
II-7
<PAGE>
EXHIBIT 4.01
- --------------------------------------------------------------------------------
NIKE, INC.
-------------------
INDENTURE
Dated as of December 13, 1996
-------------------
The First National Bank of Chicago
Trustee
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE...................... 1
SECTION 1.1 Definitions................................................ 1
SECTION 1.2 Other Definitions.......................................... 5
SECTION 1.3 Incorporation by Reference of Trust Indenture Act.......... 6
SECTION 1.4 Rules of Construction...................................... 6
ARTICLE II. THE SECURITIES................................................. 7
SECTION 2.1 Issuable in Series......................................... 7
SECTION 2.2 Establishment of Terms of Series of Securities............. 7
SECTION 2.3 Execution and Authentication............................... 9
SECTION 2.4 Registrar and Paying Agent................................. 10
SECTION 2.5 Paying Agent to Hold Money in Trust........................ 11
SECTION 2.6 Securityholder Lists....................................... 12
SECTION 2.7 Transfer and Exchange...................................... 12
SECTION 2.8 Mutilated, Destroyed, Lost and Stolen Securities........... 12
SECTION 2.9 Outstanding Securities..................................... 13
SECTION 2.10 Treasury Securities....................................... 14
SECTION 2.11 Temporary Securities...................................... 14
SECTION 2.12 Cancellation.............................................. 14
SECTION 2.13 Defaulted Interest........................................ 14
SECTION 2.14 Global Securities......................................... 15
SECTION 2.15 Cusip Numbers............................................. 16
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE III. REDEMPTION.................................................... 16
SECTION 3.1 Notice to Trustee.......................................... 16
SECTION 3.2 Selection of Securities to be Redeemed..................... 17
SECTION 3.3 Notice of Redemption....................................... 17
SECTION 3.4 Effect of Notice of Redemption............................. 18
SECTION 3.5 Deposit of Redemption Price................................ 18
SECTION 3.6 Securities Redeemed in Part................................ 18
ARTICLE IV. COVENANTS...................................................... 18
SECTION 4.1 Payment of Principal and Interest.......................... 18
SECTION 4.2 SEC Reports................................................ 18
SECTION 4.3 Compliance Certificate..................................... 18
SECTION 4.4 Stay, Extension and Usury Laws............................. 19
SECTION 4.5 Corporate Existence........................................ 19
SECTION 4.6 Taxes...................................................... 19
ARTICLE V. SUCCESSORS...................................................... 20
SECTION 5.1 When Company May Merge, Etc................................ 20
SECTION 5.2 Successor Corporation Substituted.......................... 20
ARTICLE VI. DEFAULTS AND REMEDIES.......................................... 20
SECTION 6.1 Events of Default.......................................... 20
SECTION 6.2 Acceleration of Maturity; Rescission and Annulment......... 22
SECTION 6.3 Collection of Indebtedness and Suits for Enforcement
by Trustee................................................. 23
</TABLE>
ii
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 6.4 Trustee May File Proofs of Claim........................... 24
SECTION 6.5 Trustee May Enforce Claims Without Possession
of Securities.............................................. 25
SECTION 6.6 Application of Money Collected............................. 25
SECTION 6.7 Limitation on Suits........................................ 26
SECTION 6.8 Unconditional Right of Holders to Receive Principal
and Interest............................................... 26
SECTION 6.9 Restoration of Rights and Remedies......................... 26
SECTION 6.10 Rights and Remedies Cumulative............................ 27
SECTION 6.11 Delay or Omission Not Waiver.............................. 27
SECTION 6.12 Control by Holders........................................ 27
SECTION 6.13 Waiver of Past Defaults................................... 28
SECTION 6.14 Undertaking for Costs..................................... 28
ARTICLE VII. TRUSTEE....................................................... 28
SECTION 7.1 Duties of Trustee.......................................... 28
SECTION 7.2 Rights of Trustee.......................................... 30
SECTION 7.3 Individual Rights of Trustee............................... 30
SECTION 7.4 Trustee's Disclaimer....................................... 31
SECTION 7.5 Notice of Defaults......................................... 31
SECTION 7.6 Reports by Trustee to Holders.............................. 31
SECTION 7.7 Compensation and Indemnity................................. 31
SECTION 7.8 Replacement of Trustee..................................... 32
SECTION 7.9 Successor Trustee by Merger, Etc........................... 33
SECTION 7.10 Eligibility; Disqualification............................. 33
SECTION 7.11 Preferential Collection of Claims Against Company......... 34
</TABLE>
iii
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE VIII. SATISFACTION AND DISCHARGE; DEFEASANCE....................... 34
SECTION 8.1 Satisfaction and Discharge of Indenture.................... 34
SECTION 8.2 Application of Trust Funds; Indemnification................ 35
SECTION 8.3 Legal Defeasance of Securities of any Series............... 36
SECTION 8.4 Covenant Defeasance........................................ 37
SECTION 8.5 Repayment to Company....................................... 39
ARTICLE IX. AMENDMENTS AND WAIVERS......................................... 39
SECTION 9.1 Without Consent of Holders................................. 39
SECTION 9.2 With Consent of Holders.................................... 40
SECTION 9.3 Limitations................................................ 40
SECTION 9.4 Compliance with Trust Indenture Act........................ 41
SECTION 9.5 Revocation and Effect of Consents.......................... 41
SECTION 9.6 Notation on or Exchange of Securities...................... 41
SECTION 9.7 Trustee Protected.......................................... 42
ARTICLE X. MISCELLANEOUS................................................... 42
SECTION 10.1 Trust Indenture Act Controls.............................. 42
SECTION 10.2 Notices................................................... 42
SECTION 10.3 Communication by Holders with Other Holders............... 43
SECTION 10.4 Certificate and Opinion as to Conditions Precedent........ 43
SECTION 10.5 Statements Required in Certificate or Opinion............. 43
SECTION 10.6 Rules by Trustee and Agents............................... 44
SECTION 10.7 Legal Holidays............................................ 44
</TABLE>
iv
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 10.8 No Recourse Against Others................................ 44
SECTION 10.9 Counterparts.............................................. 44
SECTION 10.10 Governing Laws........................................... 44
SECTION 10.11 No Adverse Interpretation of Other Agreements............ 45
SECTION 10.12 Successors............................................... 45
SECTION 10.13 Severability............................................. 45
SECTION 10.14 Table of Contents, Headings, Etc......................... 45
SECTION 10.15 Securities in a Foreign Currency or in ECU............... 45
SECTION 10.16 Judgment Currency........................................ 46
ARTICLE XI. SINKING FUNDS.................................................. 47
SECTION 11.1 Applicability of Article.................................. 47
SECTION 11.2 Satisfaction of Sinking Fund Payments with Securities..... 47
SECTION 11.3 Redemption of Securities for Sinking Fund................. 48
</TABLE>
v
<PAGE>
NIKE, INC.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of December 13, 1996
(S) 310(a)(1)........................................... 7.10
(a)(2)........................................... 7.10
(a)(3)........................................... Not Applicable
(a)(4)........................................... Not Applicable
(a)(5)........................................... 7.10
(b).............................................. 7.10
(S) 311(a).............................................. 7.11
(b).............................................. 7.11
(c).............................................. Not Applicable
(S) 312(a).............................................. 2.6
(b).............................................. 10.3
(c).............................................. 10.3
(S) 313(a).............................................. 7.6
(b)(1)........................................... 7.6
(b)(2)........................................... 7.6
(c)(1)........................................... 7.6
(d).............................................. 7.6
(S) 314(a).............................................. 4.2, 10.5
(b).............................................. Not Applicable
(c)(1)........................................... 10.4
(c)(2)........................................... 10.4
<PAGE>
(c)(3)........................................... Not Applicable
(d).............................................. Not Applicable
(e).............................................. 10.5
(f).............................................. Not Applicable
(S) 315(a).............................................. 7.1
(b).............................................. 7.5
(c).............................................. 7.1
(d).............................................. 7.1
(e).............................................. 6.14
(S) 316(a).............................................. 2.10
(a)(1)(A)........................................ 6.12
(a)(1)(B)........................................ 6.13
(b).............................................. 6.8
(S) 317(a)(1)........................................... 6.3
(a)(2)........................................... 6.4
(b).............................................. 2.5
(S) 318(a).............................................. 10.1
- ------------------------------
Note: This reconciliation and tie shall not, for any purpose, be
deemed to be part of the Indenture.
<PAGE>
Indenture dated as of December 13, 1996 between NIKE, Inc., an Oregon
corporation ("Company"), and The First National Bank of Chicago, a national
banking association ("Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Securities issued under
this Indenture.
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
-----------
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person, whether through the
ownership of voting securities or by agreement or otherwise.
"Agent" means any Registrar, Paying Agent or Service Agent.
"Authorized Newspaper" means a newspaper in an official language of
the country of publication customarily published at least once a day for at
least five days in each calendar week and of general circulation in the place in
connection with which the term is used. If it shall be impractical in the
opinion of the Trustee to make any publication of any notice required hereby in
an Authorized Newspaper, any publication or other notice in lieu thereof that is
made or given by the Trustee shall constitute a sufficient publication of such
notice.
"Bearer" means anyone in possession from time to time of a Bearer
Security.
"Bearer Security" means any Security that does not provide for the
identification of the Holder thereof.
"Board of Directors" means the Board of Directors of the Company or
any duly authorized committee thereof.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been adopted by the
Board of Directors or pursuant to authorization by the Board of Directors and to
be in full force and effect on the date of the certificate and delivered to the
Trustee.
<PAGE>
"Business Day" means, unless otherwise provided by Board Resolution,
Officers' Certificate or supplemental indenture hereto for a particular Series,
any day except a Saturday, Sunday or a legal holiday in The City of New York,
the City of Portland, Oregon, or the City of Chicago on which banking
institutions are authorized or required by law, regulation or executive order to
close.
"Company" means the party named as such above until a successor
replaces it and thereafter means the successor.
"Company Order" means a written order signed in the name of the
Company by two Officers, one of whom must be the Company's principal executive
officer, principal financial officer or principal accounting officer.
"Company Request" means a written request signed in the name of the
Company by its Chairman of the Board, a President or a Vice President, and by
its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered.
"Debt" of any person as of any date means, without duplication, all
indebtedness of such person in respect of borrowed money, including all
interest, fees and expenses owed in respect thereto (whether or not the recourse
of the lender is to the whole of the assets of such person or only to a portion
thereof), or evidenced by bonds, notes, debentures or similar instruments.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default.
"Depository" means, with respect to the Securities of any Series
issuable or issued in whole or in part in the form of one or more Global
Securities, the person designated as Depository for such Series by the Company,
which Depository shall be a clearing agency registered under the Exchange Act;
and if at any time there is more than one such person, "Depository" as used with
respect to the Securities of any Series shall mean the Depository with respect
to the Securities of such Series.
"Discount Security" means any Security that provides for an amount
less than the stated principal amount thereof to be due and payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.2.
"Dollars" means the currency of The United States of America.
"ECU" means the European Currency Unit as determined by the Commission
of the European Union.
2
<PAGE>
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Foreign Currency" means any currency or currency unit issued by a
government other than the government of The United States of America.
"Foreign Government Obligations" means with respect to Securities of
any Series that are denominated in a Foreign Currency, (i) direct obligations of
the government that issued or caused to be issued such currency for the payment
of which obligations its full faith and credit is pledged or (ii) obligations of
a person controlled or supervised by or acting as an agency or instrumentality
of such government the timely payment of which is unconditionally guaranteed as
a full faith and credit obligation by such government, which, in either case
under clauses (i) or (ii), are not callable or redeemable at the option of the
issuer thereof.
"Global Security" or "Global Securities" means a Security or
Securities, as the case may be, in the form established pursuant to Section 2.1
evidencing all or part of a Series of Securities, issued to the Depository for
such Series or its nominee, and registered in the name of such Depository or
nominee.
"Holder" or "Securityholder" means a person in whose name a Security
is registered or the holder of a Bearer Security.
"Indenture" means this Indenture as amended from time to time and
shall include the form and terms of particular Series of Securities established
or contemplated hereunder.
"Maturity," when used with respect to any Security or installment of
principal thereof, means the date on which the principal of such Security or
such installment of principal becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise.
"Officer" means the Chairman of the Board, any President, any Vice-
President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers,
one of whom must be the Company's principal executive officer, principal
financial officer or principal accounting officer.
"Opinion of Counsel" means a written opinion of legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company.
"person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
3
<PAGE>
"principal" of a Security means the principal of the Security plus,
when appropriate, the premium, if any, on the Security.
"Responsible Officer" when used with respect to the Trustee, means the
chairman or the vice-chairman of the board of directors or trustees, the
chairman or vice-chairman of the executive committee of the board of directors
or trustees, the president, any vice-president, the treasurer, the secretary,
any trust officer, any second or assistant vice-president or any officer or
assistant officer of the Trustee other than those specifically above mentioned
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of his knowledge of and familiarity with a particular
subject.
"SEC" means the Securities and Exchange Commission.
"Securities" means the debentures, notes or other debt instruments of
the Company of any Series authenticated and delivered under this Indenture.
"Series" or "Series of Securities" means each series of debentures,
notes or other debt instruments of the Company created pursuant to Sections 2.1
and 2.2 hereof.
"Significant Subsidiary" means (i) any direct or indirect Subsidiary
of the Company that would be a "significant subsidiary" as defined in Article 1,
Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act of 1933,
as amended, as such regulation is in effect on the date hereof, or (ii) any
group of direct or indirect Subsidiaries of the Company that, taken together as
a group, would be a "significant subsidiary" as defined in Article 1, Rule 1-02
of Regulation S-X, promulgated pursuant to the Securities Act of 1933, as
amended, as such regulation is in effect on the date hereof,
"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" of any specified person means any corporation of which at
least a majority of the outstanding stock having by the terms thereof ordinary
voting power for the election of directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned by such person, or
by one or more other Subsidiaries, or by such person and one or more other
Subsidiaries.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)
77aaa-77bbbb) as in effect on the date of this Indenture; provided, however,
-------- -------
that in the event the Trust Indenture Act
4
<PAGE>
of 1939 is amended after such date, "TIA" means, to the extent required by any
such amendment, the Trust Indenture Act as so amended.
"Trustee" means the person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each person who is then a Trustee hereunder, and
if at any time there is more than one such person, "Trustee" as used with
respect to the Securities of any Series shall mean the Trustee with respect to
Securities of that Series.
"U.S. Government Obligations" means securities which are (i) direct
obligations of The United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of The United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by The United States of America which are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation evidenced by such
depository receipt.
SECTION 1.2 Other Definitions.
-----------------
<TABLE>
<CAPTION>
DEFINED IN TERM SECTION
- ---------- ------------
<S> <C>
"Bankruptcy Law" 6.1
"Custodian" 6.1
"Event of Default" 6.1
"Journal" 10.15
"Judgment Currency" 10.16
"Legal Holiday" 10.7
"mandatory sinking fund payment" 11.1
"Market Exchange Rate" 10.15
"New York Banking Day" 10.16
"optional sinking fund payment" 11.1
"Paying Agent" 2.4
"Registrar" 2.4
"Required Currency" 10.16
"Service Agent" 2.4
"successor person" 5.1
</TABLE>
5
<PAGE>
SECTION 1.3 Incorporation by Reference of Trust Indenture Act.
--------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company and any
successor obligor upon the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
and not otherwise defined herein are used herein as so defined.
SECTION 1.4 Rules of Construction.
---------------------
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles;
(c) references to "generally accepted accounting principles" shall
mean generally accepted accounting principles in effect as of the time when
and for the period as to which such accounting principles are to be
applied;
(d) "or" is not exclusive;
(e) words in the singular include the plural, and in the plural
include the singular; and
(f) provisions apply to successive events and transactions.
6
<PAGE>
ARTICLE II.
THE SECURITIES
SECTION 2.1 Issuable in Series.
------------------
The aggregate principal amount of Securities that may be authenticated
and delivered under this Indenture is unlimited. The Securities may be issued
in one or more Series. All Securities of a Series shall be identical except as
may be provided in a Board Resolution, a supplemental indenture hereto or an
Officers' Certificate detailing the adoption of the terms thereof pursuant to
the Board Resolution, supplemental indenture hereto or Officers' Certificate. In
the case of Securities of a Series to be issued from time to time, the Board
Resolution, Officers' Certificate or supplemental indenture hereto may provide
for the method by which specified terms (such as interest rate, maturity date,
record date or date from which interest should accrue) are to be determined.
Securities may differ between Series in respect of any matters, provided that
all Series of Securities shall be equally and ratably entitled to the benefits
of the Indenture.
SECTION 2.2 Establishment of Terms of Series of Securities.
----------------------------------------------
At or prior to the issuance of any Securities within a Series, the
following shall be established (as to the Series generally, in the case of
Subsections 2.2.1 and 2.2.2 and either as to such Securities within the Series
or as to the Series generally in the case of Subsections 2.2.3 through 2.2.22)
by a Board Resolution, a supplemental indenture hereto or an Officers'
Certificate pursuant to authority granted under a Board Resolution:
2.2.1 the title of the Series (which shall distinguish the Securities
of that particular Series from the Securities of any other Series);
2.2.2 the price or prices (expressed as a percentage of the aggregate
principal amount thereof) at which the Securities of the Series will be issued;
2.2.3 any limit upon the aggregate principal amount of the Securities
of the Series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities of the Series pursuant
to Section 2.7, 2.8, 2.11, 3.6 or 9.6);
2.2.4 the date or dates on which the principal of the Securities of
the Series is payable;
2.2.5 the rate or rates (which may be fixed or variable) per annum
or, if applicable, the method used to determine such rate or rates (including,
but not limited to, any commodity, commodity index, stock exchange index or
financial index) at which the Securities of
7
<PAGE>
the Series shall bear interest, if any, the date or dates from which such
interest, if any, shall accrue, the date or dates on which such interest, if
any, shall commence and be payable and any regular record date for the interest
payable on any interest payment date;
2.2.6 the place or places where the principal of and interest, if
any, on the Securities of the Series shall be payable, or the method of such
payment, if by wire transfer, mail or other means;
2.2.7 the period or periods within which, the price or prices at
which and the terms and conditions upon which the Securities of the Series may
be redeemed, in whole or in part, at the option of the Company;
2.2.8 the obligation, if any, of the Company to redeem or purchase
the Securities of the Series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods within
which, the price or prices at which and the terms and conditions upon which
Securities of the Series shall be redeemed or purchased, in whole or in part,
pursuant to such obligation;
2.2.9 the dates, if any, on which and the price or prices at which
the Securities of the Series will be repurchased by the Company at the option of
the Holders thereof and other detailed terms and provisions of such repurchase
obligations;
2.2.10 if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which the Securities of the Series shall
be issuable;
2.2.11 the forms of the Securities of the Series in bearer or fully
registered form (and, if in fully registered form, whether the Securities will
be issuable as Global Securities);
2.2.12 if other than the principal amount thereof, the portion of the
principal amount of the Securities of the Series that shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.2;
2.2.13 the currency of denomination of the Securities of the Series,
which may be Dollars or any Foreign Currency, including, but not limited to, the
ECU, and if such currency of denomination is a composite currency other than the
ECU, the agency or organization, if any, responsible for overseeing such
composite currency;
2.2.14 the designation of the currency, currencies or currency units
in which payment of the principal of and interest, if any, on the Securities of
the Series will be made;
2.2.15 if payments of principal of or interest, if any, on the
Securities of the Series are to be made in one or more currencies or currency
units other than that or those in which such
8
<PAGE>
Securities are denominated, the manner in which the exchange rate with respect
to such payments will be determined;
2.2.16 the manner in which the amounts of payment of principal of or
interest, if any, on the Securities of the Series will be determined, if such
amounts may be determined by reference to an index based on a currency or
currencies other than that in which the Securities of the Series are denominated
or designated to be payable or by reference to a commodity, commodity index,
stock exchange index or financial index;
2.2.17 the provisions, if any, relating to any security provided for
the Securities of the Series;
2.2.18 any addition to or change in the Events of Default which
applies to any Securities of the Series and any change in the right of the
Trustee or the requisite Holders of such Securities to declare the principal
amount thereof due and payable pursuant to Section 6.2;
2.2.19 any addition to or change in the covenants set forth in
Article IV which applies to Securities of the Series;
2.2.20 any other terms of the Securities of the Series (which terms
shall not be inconsistent with the provisions of this Indenture, except as
permitted by Section 9.1, but which may modify or delete any provision of this
Indenture insofar as it applies to such Series); and
2.2.21 any depositories, interest rate calculation agents, exchange
rate calculation agents or other agents with respect to Securities of such
Series if other than those appointed herein.
All Securities of any one Series need not be issued at the same time
and may be issued from time to time, consistent with the terms of this
Indenture, if so provided by or pursuant to the Board Resolution, supplemental
indenture hereto or Officers' Certificate referred to above, and the authorized
principal amount of any Series may not be increased to provide for issuances of
additional Securities of such Series, unless otherwise provided in the Board
Resolution, supplemental indenture hereto or Officers' Certificate.
SECTION 2.3 Execution and Authentication.
----------------------------
Two Officers shall sign the Securities for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
9
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A Security shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall at any time, and from time to time, authenticate
Securities for original issue in the principal amount provided in the Board
Resolution, supplemental indenture hereto or Officers' Certificate, upon receipt
by the Trustee of a Company Order. If provided for in such procedures, such
Company Order may authorize authentication and delivery pursuant to oral or
electronic instructions from the Company or its duly authorized agent or agents,
which oral instructions shall be promptly confirmed in writing. Each Security
shall be dated the date of its authentication unless otherwise provided by a
Board Resolution, a supplemental indenture hereto or an Officers' Certificate.
The aggregate principal amount of Securities of any Series outstanding
at any time may not exceed any limit upon the maximum principal amount for such
Series set forth in the Board Resolution, supplemental indenture hereto or
Officers' Certificate delivered pursuant to Section 2.2, except as provided in
Section 2.8.
Prior to the issuance of Securities of any Series, the Trustee shall
have received and (subject to Section 7.2) shall be fully protected in relying
on: (a) the Board Resolution, supplemental indenture hereto or Officers'
Certificate establishing the form of the Securities of that Series or of
Securities within that Series and the terms of the Securities of that Series or
of Securities within that Series, (b) an Officers' Certificate complying with
Section 10.4, and (c) an Opinion of Counsel complying with Section 10.4.
The Trustee shall have the right to decline to authenticate and
deliver any Securities of such Series: (a) if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken; or (b) if the
Trustee in good faith by its board of directors or trustees, executive committee
or a trust committee of directors and/or vice-presidents shall determine that
such action would expose the Trustee to personal liability to Holders of any
then outstanding Series of Securities.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.
SECTION 2.4 Registrar and Paying Agent.
--------------------------
The Company shall maintain, with respect to each Series of Securities,
at the place or places specified with respect to such Series pursuant to Section
2.2, an office or agency where
10
<PAGE>
Securities of such Series may be presented or surrendered for payment ("Paying
Agent"), where Securities of such Series may be surrendered for registration of
transfer or exchange ("Registrar") and where notices and demands to or upon the
Company in respect of the Securities of such Series and this Indenture may be
served ("Service Agent"). The Registrar shall keep a register with respect to
each Series of Securities and to their transfer and exchange. The Company will
give prompt written notice to the Trustee of the name and address, and any
change in the name or address, of each Registrar, Paying Agent or Service Agent.
If at any time the Company shall fail to maintain any such required Registrar,
Paying Agent or Service Agent or shall fail to furnish the Trustee with the name
and address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate one or more co-
registrars, additional paying agents or additional service agents and may from
time to time rescind such designations; provided, however, that no such
-------- -------
designation or rescission shall in any manner relieve the Company of its
obligations to maintain a Registrar, Paying Agent and Service Agent in each
place so specified pursuant to Section 2.2 for Securities of any Series for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the name or address of any
such co-registrar, additional paying agent or additional service agent. The
term "Registrar" includes any co-registrar; the term "Paying Agent" includes any
additional paying agent; and the term "Service Agent" includes any additional
service agent.
The Company hereby appoints the Trustee the initial Registrar, Paying
Agent and Service Agent for each Series unless another Registrar, Paying Agent
or Service Agent, as the case may be, is appointed prior to the time Securities
of that Series are first issued.
SECTION 2.5 Paying Agent to Hold Money in Trust.
-----------------------------------
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust, for the benefit of
Securityholders of any Series of Securities, or the Trustee, all money held by
the Paying Agent for the payment of principal of or interest on the Series of
Securities, and will notify the Trustee of any default by the Company in making
any such payment. While any such default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee.
Upon payment over to the Trustee, the Paying Agent (if other than the Company or
a Subsidiary) shall have no further liability for the money. If the Company or
a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of Securityholders of any Series of Securities all
money held by it as Paying Agent.
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SECTION 2.6 Securityholder Lists.
--------------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders of each Series of Securities and shall otherwise comply with TIA
(S) 312(a). If the Trustee is not the Registrar, the Company shall furnish to
the Trustee at least ten days before each interest payment date and at such
other times as the Trustee may request in writing a list, in such form and as of
such date as the Trustee may reasonably require, of the names and addresses of
Securityholders of each Series of Securities.
SECTION 2.7 Transfer and Exchange.
---------------------
Where Securities of a Series are presented to the Registrar or a co-
registrar with a request to register a transfer or to exchange them for an equal
principal amount of Securities of the same Series, the Registrar shall register
the transfer or make the exchange if its requirements for such transactions are
met. To permit registrations of transfers and exchanges, the Trustee shall
authenticate Securities at the Registrar's request. No service charge shall be
made for any registration of transfer or exchange (except as otherwise expressly
permitted herein), but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer tax or similar governmental charge
payable upon exchanges pursuant to Sections 2.11, 3.6 or 9.6).
Neither the Company nor the Registrar shall be required (a) to issue,
register the transfer of, or exchange Securities of any Series for the period
beginning at the opening of business fifteen days immediately preceding the
mailing of a notice of redemption of Securities of that Series selected for
redemption and ending at the close of business on the day of such mailing, or
(b) to register the transfer of or exchange Securities of any Series selected,
called or being called for redemption as a whole or the portion being redeemed
of any such Securities selected, called or being called for redemption in part.
SECTION 2.8 Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same Series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and make available for delivery, in lieu of any such destroyed,
lost or stolen Security, a new Security of
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the same Series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any Series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that Series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.9 Outstanding Securities.
----------------------
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest on a Global Security
effected by the Trustee in accordance with the provisions hereof and those
described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.8, it ceases to be
outstanding until the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds on the Maturity of Securities of a Series money
sufficient to pay such Securities payable on that date, then on and after that
date such Securities of the Series cease to be outstanding and interest on them
ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate holds the Security.
In determining whether the Holders of the requisite principal amount
of outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of a
Discount Security that shall be deemed to be outstanding for
13
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such purposes shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon a declaration of acceleration
of the Maturity thereof pursuant to Section 6.2.
SECTION 2.10 Treasury Securities.
-------------------
In determining whether the Holders of the required principal amount of
Securities of a Series have concurred in any direction, waiver or consent,
Securities of a Series owned by the Company or an Affiliate shall be
disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities of a Series that the Trustee knows are so owned shall be so
disregarded.
SECTION 2.11 Temporary Securities.
--------------------
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities upon a Company
Order. Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee upon request shall authenticate definitive Securities of the same
Series and date of maturity in exchange for temporary Securities. Until so
exchanged, temporary securities shall have the same rights under this Indenture
as the definitive Securities.
SECTION 2.12 Cancellation.
------------
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for transfer,
exchange, payment, replacement or cancellation and shall destroy such canceled
Securities (subject to the record retention requirement of the Exchange Act) and
deliver a certificate of such destruction to the Company, unless the Company
otherwise directs. The Company may not issue new Securities to replace
Securities that it has paid or delivered to the Trustee for cancellation.
SECTION 2.13 Defaulted Interest.
------------------
If the Company defaults in a payment of interest on a Series of
Securities, it shall pay the defaulted interest, plus, to the extent permitted
by law, any interest payable on the defaulted interest, to the persons who are
Securityholders of the Series on a subsequent special record date. The Company
shall fix the record date and payment date. At least 30 days before the record
date, the Company shall mail to the Trustee and to each Securityholder of the
Series a notice that states the record date, the payment date and the amount of
interest to be paid. The Company may pay defaulted interest in any other lawful
manner.
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SECTION 2.14 Global Securities.
-----------------
2.14.1 Terms of Securities. A Board Resolution, a supplemental
-------------------
indenture hereto or an Officers' Certificate shall establish whether the
Securities of a Series shall be issued in whole or in part in the form of one or
more Global Securities and the Depository for such Global Security or
Securities.
2.14.2 Transfer and Exchange. Notwithstanding any provisions to the
---------------------
contrary contained in Section 2.7 of the Indenture and in addition thereto, any
Global Security shall be exchangeable pursuant to Section 2.7 of the Indenture
for securities registered in the names of Holders other than the Depository for
such Security or its nominee only if (i) such Depository notifies the Company
that it is unwilling or unable to continue as Depository for such Global
Security or if at any time such Depository ceases to be a clearing agency
registered under the Exchange Act, and, in either case, the Company fails to
appoint a successor Depository within 90 days of such event, (ii) the Company
executes and delivers to the Trustee an Officers' Certificate to the effect that
such Global Security shall be so exchangeable or (iii) an Event of Default with
respect to the Securities represented by such Global Security shall have
happened and be continuing. Any Global Security that is exchangeable pursuant
to the preceding sentence shall be exchangeable for Securities registered in
such names as the Depository shall direct in writing in an aggregate principal
amount equal to the principal amount of the Global Security with like tenor and
terms.
Except as provided in this Section 2.14.2, a Global Security may not
be transferred except as a whole by the Depository with respect to such Global
Security to a nominee of such Depository, by a nominee of such Depository to
such Depository or another nominee of such Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such a successor
Depository.
2.14.3 Legend. Any Global Security issued hereunder shall bear a
------
legend in substantially the following form:
"This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of the
Depository or a nominee of the Depository. This Security is exchangeable for
Securities registered in the name of a person other than the Depository or its
nominee only in the limited circumstances described in the Indenture, and may
not be transferred except as a whole by the Depository to a nominee of the
Depository, by a nominee of the Depository to the Depository or another nominee
of the Depository or by the Depository or any such nominee to a successor
Depository or a nominee of such a successor Depository."
2.14.4 Acts of Holders. The Depository, as a Holder, may appoint
---------------
agents and otherwise authorize participants to give or take any request, demand,
authorization, direction,
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notice, consent, waiver or other action which a Holder is entitled to give or
take under the Indenture.
2.14.5 Payments. Notwithstanding the other provisions of this
--------
Indenture, unless otherwise specified as contemplated by Section 2.2, payment of
the principal of and interest, if any, on any Global Security shall be made to
the person specified therein.
2.14.6 Consents, Declaration and Directions. Except as provided in
------------------------------------
Section 2.14.5, the Company, the Trustee and any Agent shall treat a person as
the Holder of such principal amount of outstanding Securities of such Series
represented by a Global Security as shall be specified in a written statement of
the Depositary with respect to such Global Security, for purposes of obtaining
any consents, declarations or directions required to be given by the Holders
pursuant to this Indenture.
SECTION 2.15 CUSIP Numbers.
-------------
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
--------
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other elements of
identification printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.
ARTICLE III.
REDEMPTION
SECTION 3.1 Notice to Trustee.
-----------------
The Company may, with respect to any Series of Securities, reserve the
right to redeem and pay the Series of Securities or may covenant to redeem and
pay the Series of Securities or any part thereof prior to the Stated Maturity
thereof at such time and on such terms as provided for in such Securities. If a
Series of Securities is redeemable and the Company wants or is obligated to
redeem prior to the Stated Maturity thereof all or part of the Series of
Securities pursuant to the terms of such Securities, it shall notify the Trustee
of the redemption date and the principal amount of Series of Securities to be
redeemed. The Company shall give the notice at least 45 days before the
redemption date (or such shorter notice as may be acceptable to the Trustee).
16
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SECTION 3.2 Selection of Securities to be Redeemed.
--------------------------------------
Unless otherwise indicated for a particular Series by a Board
Resolution, a supplemental indenture hereto or an Officers' Certificate, if less
than all the Securities of a Series are to be redeemed, the Trustee shall select
the Securities of the Series to be redeemed in any manner that the Trustee deems
fair and appropriate. The Trustee shall make the selection from Securities of
the Series outstanding not previously called for redemption. The Trustee may
select for redemption portions of the principal of Securities of the Series that
have denominations larger than $1,000. Securities of the Series and portions of
them it selects shall be in amounts of $1,000 or whole multiples of $1,000 or,
with respect to Securities of any Series issuable in other denominations
pursuant to Section 2.2.10, the minimum principal denomination for each Series
and integral multiples thereof. Provisions of this Indenture that apply to
Securities of a Series called for redemption also apply to portions of
Securities of that Series called for redemption.
SECTION 3.3 Notice of Redemption.
--------------------
Unless otherwise indicated for a particular Series by Board
Resolution, a supplemental indenture hereto or an Officers' Certificate, at
least 30 days but not more than 60 days before a redemption date, the Company
shall mail a notice of redemption by first-class mail to each Holder whose
Securities are to be redeemed and if any Bearer Securities are outstanding,
publish on one occasion a notice in an Authorized Newspaper.
The notice shall identify the Securities of the Series to be redeemed
and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Securities of the Series called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(e) that interest on Securities of the Series called for redemption
ceases to accrue on and after the redemption date; and
(f) any other information as may be required by the terms of the
particular Series or the Securities of a Series being redeemed.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.
17
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SECTION 3.4 Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed or published as provided in
Section 3.3, Securities of a Series called for redemption become due and payable
on the redemption date and at the redemption price. A notice of redemption may
not be conditional. Upon surrender to the Paying Agent, such Securities shall
be paid at the redemption price plus accrued interest to the redemption date.
SECTION 3.5 Deposit of Redemption Price.
---------------------------
On or before the redemption date, the Company shall deposit with the
Paying Agent money sufficient to pay the redemption price of and accrued
interest, if any, on all Securities to be redeemed on that date.
SECTION 3.6 Securities Redeemed in Part.
---------------------------
Upon surrender of a Security that is redeemed in part, the Trustee
shall authenticate for the Holder a new Security of the same Series and the same
maturity equal in principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE IV.
COVENANTS
SECTION 4.1 Payment of Principal and Interest.
---------------------------------
The Company covenants and agrees for the benefit of each Series of
Securities that it will duly and punctually pay the principal of and interest,
if any, on the Securities of that Series in accordance with the terms of such
Securities and this Indenture.
SECTION 4.2 SEC Reports.
-----------
The Company shall deliver to the Trustee within 15 days after it files
them with the SEC copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) which the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The
Company also shall comply with the other provisions of TIA (S) 314(a).
SECTION 4.3 Compliance Certificate.
----------------------
The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the
18
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signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and
further stating, as to each such Officer signing such certificate, that to the
best of his knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he may have knowledge).
The Company will, so long as any of the Securities are outstanding,
deliver to the Trustee, forthwith upon becoming aware of any Default or Event of
Default, an Officers' Certificate specifying such Default or Event of Default
and what action the Company is taking or proposes to take with respect thereto.
SECTION 4.4 Stay, Extension and Usury Laws.
------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law has been
enacted.
SECTION 4.5 Corporate Existence.
-------------------
Subject to Article V, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership or other existence of each Significant
Subsidiary in accordance with the respective organizational documents of each
Significant Subsidiary and the rights (charter and statutory), licenses and
franchises of the Company and its Significant Subsidiaries; provided, however,
-------- -------
that the Company shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any Significant
Subsidiary, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries taken as a whole and that the loss thereof is not adverse in
any material respect to the Holders.
SECTION 4.6 Taxes.
-----
The Company shall, and shall cause each of its Significant
Subsidiaries to, pay prior to delinquency all taxes, assessments and
governmental levies, except as contested in good faith and by appropriate
proceedings.
19
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ARTICLE V.
SUCCESSORS
SECTION 5.1 When Company May Merge, Etc.
---------------------------
The Company shall not consolidate with or merge into, or convey,
transfer or lease all or substantially all of its properties and assets to, any
person (a "successor person"), and may not permit any person to merge into, or
convey, transfer or lease its properties and assets substantially as an
entirety to, the Company, unless:
(a) the successor person (if any) is a corporation, partnership, trust
or other entity organized and validly existing under the laws of any U.S.
domestic jurisdiction and expressly assumes the Company's obligations on
the Securities and under this Indenture and
(b) immediately after giving effect to the transaction, no Default or
Event of Default, shall have occurred and be continuing.
The Company shall deliver to the Trustee prior to the consummation of
the proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
SECTION 5.2 Successor Corporation Substituted.
---------------------------------
Upon any consolidation or merger, or any sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.1, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor person has been named
as the Company herein; provided, however, that the predecessor Company in the
-------- -------
case of a sale, lease, conveyance or other disposition shall not be released
from the obligation to pay the principal of and interest, if any, on the
Securities.
ARTICLE VI.
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default.
-----------------
"Event of Default," wherever used herein with respect to Securities of
any Series, means any one of the following events, unless in the establishing
Board Resolution, supplemental
20
<PAGE>
indenture hereto or Officers' Certificate, it is provided that such Series shall
not have the benefit of said Event of Default:
(a) default in the payment of any interest on any Security of that
Series when it becomes due and payable, and continuance of such default for
a period of 30 days (unless the entire amount of such payment is deposited
by the Company with the Trustee or with a Paying Agent prior to the
expiration of such period of 30 days); or
(b) default in the payment of the principal of any Security of that
Series at its Maturity; or
(c) default in the deposit of any sinking fund payment, when and as
due in respect of any Security of that Series; or
(d) default in the performance or breach of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty that
has been included in this Indenture solely for the benefit of Series of
Securities other than that Series), which default continues uncured for a
period of 60 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in principal amount of the outstanding
Securities of that Series a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(e) a default under any Debt of the Company (including a default with
respect to Securities of any Series other than that Series) or any
Subsidiary, whether such Debt now exists or shall hereafter be created, if
(A) such default results from the failure to pay any such Debt when it
becomes due, (B) the principal amount of such Debt, together with the
principal amount of any other such Debt in default for failure to pay
principal at stated final maturity or the maturity of which has been so
accelerated, aggregates $100,000,000 or more at any one time outstanding,
and (C) such Debt is not discharged or such acceleration is not rescinded
or annulled within 10 days after written notice to the Company by the
holder or holders of such Debt in the manner provided for in the applicable
debt instrument; or
(f) the Company or any of its Significant Subsidiaries pursuant to or
within the meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in
an involuntary case,
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(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors,
or
(v) generally is unable to pay its debts as the same become due;
or
(g) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any of its Significant
Subsidiaries in an involuntary case,
(ii) appoints a Custodian of the Company or any of its
Significant Subsidiaries or for all or substantially all of its
property, or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries,
and the order or decree remains unstayed and in effect for 60 days; or
(h) any other Event of Default provided with respect to Securities of
that Series, which is specified in a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate, in accordance with Section
2.2.18.
No Event of Default with respect to a particular Series of Securities
(except with respect to subsections (f) and (g) above) necessarily constitutes
an Event of Default with respect to any other Series of Securities.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar
Federal or State law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
SECTION 6.2 Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default with respect to Securities of any Series at the
time outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the outstanding
Securities of that Series may declare the principal amount (or, if any
Securities of that Series are Discount Securities, such portion of the principal
amount as may be specified in the terms of such Securities) of all of the
Securities of that Series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) shall become
immediately due and payable. If an Event of Default specified in Section 6.1(f)
or (g) shall
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occur, the principal amount (or specified amount) of all outstanding Securities
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.
At any time after such a declaration of acceleration with respect to
any Series has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in principal amount of the outstanding
Securities of that Series, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all overdue interest, if any, on all Securities of that
Series,
(ii) the principal of any Securities of that Series which have
become due otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed therefor in such
Securities,
(iii) to the extent that payment of such interest is lawful,
interest upon any overdue principal and overdue interest at the rate
or rates prescribed therefor in such Securities, and
(iv) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(b) all Events of Default with respect to Securities of that Series,
other than the non-payment of the principal of Securities of that Series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 6.13.
No such rescission shall affect any subsequent Default or impair any right
consequent thereon.
SECTION 6.3 Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
- --------
The Company covenants that if
(a) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(b) default is made in the payment of principal of any Security at the
Maturity thereof, or
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(c) default is made in the deposit of any sinking fund payment when
and as due by the terms of a Security,
then, the Company will, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal and interest and, to the extent that payment of
such interest shall be legally enforceable, interest on any overdue principal or
any overdue interest, at the rate or rates prescribed therefor in such
Securities, and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or deemed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to any Securities of any Series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Securities of such
Series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 6.4 Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Securities and to file such
other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding,
and
24
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(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.5 Trustee May Enforce Claims Without Possession of Securities.
-----------------------------------------------------------
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 6.6 Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or interest,
upon presentation of the Securities and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section
7.7; and
Second: To the payment of the amounts then due and unpaid for
principal of and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities for principal and interest, respectively; and
Third: To the Company.
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SECTION 6.7 Limitation on Suits.
-------------------
No Holder of any Security of any Series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
Series;
(b) the Holders of not less than 25% in principal amount of the
outstanding Securities of that Series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the outstanding Securities of that Series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 6.8 Unconditional Right of Holders to Receive Principal and
-------------------------------------------------------
Interest.
--------
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Security on
the Stated Maturity or Stated Maturities expressed in such Security (or, in the
case of redemption, on the redemption date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
SECTION 6.9 Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such
26
<PAGE>
case, subject to any determination in such proceeding, the Company, the Trustee
and the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted.
SECTION 6.10 Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.8, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.11 Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 6.12 Control by Holders.
------------------
The Holders of a majority in principal amount of the outstanding
Securities of any Series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such Series, provided that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture,
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(c) subject to the provisions of Section 6.1, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible Officer of the Trustee, determine that the
proceeding so directed would involve the Trustee in personal liability.
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SECTION 6.13 Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in principal amount of the
outstanding Securities of any Series may on behalf of the Holders of all the
Securities of such Series waive any past Default hereunder with respect to such
Series and its consequences, except a Default) in the payment of the principal
of or interest on any Security of such Series (provided, however, that the
Holders of a majority in principal amount of the outstanding Securities of any
Series may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration). Upon any such waiver,
such Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
SECTION 6.14 Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the outstanding Securities of any Series, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of or interest on
any Security on or after the Stated Maturity or Stated Maturities expressed in
such Security (or, in the case of redemption, on or after the redemption date).
ARTICLE VII.
TRUSTEE
SECTION 7.1 Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use
the same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
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(i) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon Officers'
Certificates or Opinions of Counsel furnished to the Trustee and
conforming to the requirements of this Indenture; however, in the case
-------
of any such Officers' Certificates or Opinions of Counsel which by any
provisions hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine such Officers' Certificates and
Opinions of Counsel to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) This paragraph does not limit the effect of paragraph (b) of
this Section.
(ii) The Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts.
(iii) The Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it with respect to
Securities of any Series in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
outstanding Securities of such Series relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Securities of such Series.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraph (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money
held in trust by the Trustee need not be segregated from other funds except
to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to risk
its own funds or otherwise incur any financial liability in the performance
of any of its duties, or in the
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<PAGE>
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk is not reasonably assured to it.
(h) The Paying Agent, the Registrar and any authenticating agent shall
be entitled to the protections, immunities and standard of care as are set
forth in paragraphs (a), (b) and (c) of this Section with respect to the
Trustee.
SECTION 7.2 Rights of Trustee.
-----------------
(a) The Trustee may rely on and shall be protected in acting or
refraining from acting upon any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance
on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care. No
Depository shall be deemed an agent of the Trustee and the Trustee shall
not be responsible for any act or omission by any Depository.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
rights or powers.
(e) The Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by it in compliance with such
request or direction.
SECTION 7.3 Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate with the same rights
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it would have if it were not Trustee. Any Agent may do the same with like
rights. The Trustee is also subject to Sections 7.10 and 7.11.
SECTION 7.4 Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement in the Securities other than its authentication.
SECTION 7.5 Notice of Defaults.
------------------
If a Default or Event of Default occurs and is continuing with respect
to the Securities of any Series and if it is known to a Responsible Officer of
the Trustee, the Trustee shall mail to each Securityholder of the Securities of
that Series and, if any Bearer Securities are outstanding, publish on one
occasion in an Authorized Newspaper, notice of a Default or Event of Default
within 90 days after it occurs or, if later, after a Responsible Officer of the
Trustee has knowledge of such Default or Event of Default. Except in the case
of a Default or Event of Default in payment of principal of or interest on any
Security of any Series, the Trustee may withhold the notice if and so long as
its corporate trust committee or a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of
Securityholders of that Series.
SECTION 7.6 Reports by Trustee to Holders.
-----------------------------
Within 60 days after May 15 in each year, the Trustee shall transmit
by mail to all Securityholders, as their names and addresses appear on the
Security Register, and, if any Bearer Securities are outstanding, publish in an
Authorized Newspaper, a brief report dated as of such May 15, in accordance
with, and to the extent required under, TIA (S) 313.
A copy of each report at the time of its mailing to Securityholders of
any Series shall be filed with the SEC and each stock exchange on which the
Securities of that Series are listed. The Company shall promptly notify the
Trustee when Securities of any Series are listed on any stock exchange.
SECTION 7.7 Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel.
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The Company shall indemnify the Trustee (including the cost of
defending itself) against any loss, liability or expense incurred by it except
as set forth in the next paragraph in the performance of its duties under this
Indenture as Trustee or Agent. The Trustee shall notify the Company promptly of
any claim for which it may seek indemnity. The Company shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld. This indemnification shall
apply to officers, directors, employees, shareholders and agents of the Trustee.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee or by any officer, director, employee,
shareholder or agent of the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities of any Series on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Securities of that Series.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(f) or (g) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.8 Replacement of Trustee.
----------------------
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign with respect to the Securities of one or more
Series by so notifying the Company. The Holders of a majority in principal
amount of the Securities of any Series may remove the Trustee with respect to
that Series by so notifying the Trustee and the Company. The Company may remove
the Trustee with respect to Securities of one or more Series if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
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If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Securities may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee with respect to the Securities of any one or
more Series does not take office within 60 days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Company or the Holders of at
least 10% in principal amount of the Securities of the applicable Series may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee with respect to the Securities of any one or more
Series fails to comply with Section 7.10, any Securityholder of the applicable
Series may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee subject to the lien provided for in Section 7.7, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
with respect to each Series of Securities for which it is acting as Trustee
under this Indenture. A successor Trustee shall mail a notice of its succession
to each Securityholder of each such Series and, if any Bearer Securities are
outstanding, publish such notice on one occasion in an Authorized Newspaper.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the
Company's obligations under Section 7.7 hereof shall continue for the benefit of
the retiring trustee with respect to expenses and liabilities incurred by it
prior to such replacement.
SECTION 7.9 Successor Trustee by Merger, etc.
--------------------------------
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10 Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the
requirements of TIA (S) 310(a)(1), (2) and (5). The Trustee shall always have a
combined capital and surplus of at least $25,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
(S) 310(b).
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SECTION 7.11 Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated.
ARTICLE VIII.
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 8.1 Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon Company Order cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(a) either
(i) all Securities theretofore authenticated and delivered (other
than Securities that have been destroyed, lost or stolen and that have
been replaced or paid) have been delivered to the Trustee for
cancellation; or
(ii) all such Securities not theretofore delivered to the Trustee
for cancellation
(1) have become due and payable, or
(2) will become due and payable at their Stated
Maturity within one year, or
(3) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company, or
(4) are deemed paid and discharged pursuant to Section
8.3, as applicable;
and the Company, in the case of (1), (2) or (3) above, has deposited or caused
to be deposited with the Trustee as trust funds in trust an amount sufficient
for the purpose of paying and discharging the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for
principal and interest to the date of such deposit (in the case of Securities
which have become due
34
<PAGE>
and payable on or prior to the date of such deposit) or to the Stated Maturity
or redemption date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 7.7, and, if money shall
have been deposited with the Trustee pursuant to clause (a) of this Section or
if money or obligations shall have been deposited with or received by the
Trustee pursuant to Section 8.3, the obligations of the Trustee under Section
8.2 and Section 8.5 shall survive.
SECTION 8.2 Application of Trust Funds; Indemnification.
-------------------------------------------
(a) Subject to the provisions of Section 8.5, all money deposited with
the Trustee pursuant to Section 8.1, all money and U.S. Government
Obligations or Foreign Government Obligations deposited with the Trustee
pursuant to Section 8.3 or 8.4 and all money received by the Trustee in
respect of U.S. Government Obligations or Foreign Government Obligations
deposited with the Trustee pursuant to Section 8.3 or 8.4, shall be held in
trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as
the Trustee may determine, to the persons entitled thereto, of the
principal and interest for whose payment such money has been deposited with
or received by the Trustee or to make mandatory sinking fund payments or
analogous payments as contemplated by Sections 8.3 or 8.4.
(b) The Company shall pay and shall indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against U.S. Government
Obligations or Foreign Government Obligations deposited pursuant to
Sections 8.3 or 8.4 or the interest and principal received in respect of
such obligations other than any payable by or on behalf of Holders.
(c) The Trustee shall deliver or pay to the Company from time to time
upon Company Request any U.S. Government Obligations or Foreign Government
Obligations or money held by it as provided in Sections 8.3 or 8.4 which,
in the opinion of a nationally recognized firm of independent certified
public accountants expressed in a written certification thereof delivered
to the Trustee, are then in excess of the amount thereof which then would
have been required to be deposited for the purpose for which such U.S.
35
<PAGE>
Government Obligations or Foreign Government Obligations or money were
deposited or received. This provision shall not authorize the sale by the
Trustee of any U.S. Government Obligations or Foreign Government
Obligations held under this Indenture.
SECTION 8.3 Legal Defeasance of Securities of any Series.
--------------------------------------------
Unless this Section 8.3 is otherwise specified, pursuant to Section
2.2.20, to be inapplicable to Securities of any Series, the Company shall be
deemed to have paid and discharged the entire indebtedness on all the
outstanding Securities of any such Series on the 91st day after the date of the
deposit referred to in subparagraph (d) hereof, and the provisions of this
Indenture, as it relates to such outstanding Securities of any such Series,
shall no longer be in effect (and the Trustee, at the expense of the Company,
shall, at Company Request, execute proper instruments acknowledging the same),
except as to:
(a) the rights of Holders of Securities of such Series to receive,
from the trust funds described in subparagraph (d) hereof, (i) payment of
the principal of and each installment of principal of or interest on the
outstanding Securities of such Series on the Stated Maturity of such
principal or installment of principal or interest and (ii) the benefit of
any mandatory sinking fund payments applicable to the Securities of such
Series on the day on which such payments are due and payable in accordance
with the terms of this Indenture and the Securities of such Series;
(b) the Company's obligations with respect to such Securities of such
Series under Sections 2.4, 2.7 and 2.8; and
(c) the rights, powers, trust and immunities of the Trustee hereunder
and the duties of the Trustee under Section 8.2 and the duty of the Trustee
to authenticate Securities of such Series issued on registration of
transfer or exchange;
provided that, the following conditions shall have been satisfied:
(d) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for and
dedicated solely to the benefit of the Holders of such Securities (i) in
the case of Securities of such Series denominated in Dollars, cash in
Dollars (or such other money or currencies as shall then be legal tender in
the United States) and/or U.S. Government Obligations, or (ii) in the case
of Securities of such Series denominated in a Foreign Currency (other than
a composite currency), money and/or Foreign Government Obligations, which
through the payment of interest and principal in respect thereof, in
accordance with their terms, will provide (and without reinvestment and
assuming no tax liability will be imposed on such Trustee), not later than
one day before the due date of any payment of money, an amount in cash,
sufficient, in the opinion of a nationally recognized
36
<PAGE>
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge each installment of
principal (including mandatory sinking fund or analogous payments) of and
interest, if any, on all the Securities of such Series on the dates such
installments of interest or principal are due;
(e) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(f) no Default or Event of Default with respect to the Securities of
such Series shall have occurred and be continuing on the date of such
deposit or during the period ending on the 91st day after such date;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel to the effect that (i) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of execution of this Indenture,
there has been a change in the applicable Federal income tax law, in either
case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders of the Securities of such Series will not
recognize income, gain or loss for Federal income tax purposes as a result
of such deposit, defeasance and discharge and will be subject to Federal
income tax on the same amount and in the same manner and at the same times
as would have been the case if such deposit, defeasance and discharge had
not occurred;
(h) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of the Securities of such Series over any
other creditors of the company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company;
(i) such deposit shall not result in the trust arising from such
deposit constituting an investment company (as defined in the Investment
Company Act of 1940, as amended), or such trust shall be qualified under
such Act or exempt from regulation thereunder; and
(j) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the defeasance contemplated by this
Section have been complied with.
SECTION 8.4 Covenant Defeasance.
-------------------
Unless this Section 8.4 is otherwise specified pursuant to Section
2.2.20 to be inapplicable to Securities of any Series, on and after the 91st day
after the date of the deposit
37
<PAGE>
referred to in subparagraph (a) hereof, the Company may omit to comply with any
term, provision or condition set forth under Sections 4.2, 4.3, 4.4, 4.5, 4.6,
and 5.1 as well as any additional covenants contained in a supplemental
indenture hereto for a particular Series of Securities or a Board Resolution or
an Officers' Certificate delivered pursuant to Section 2.2.20 (and the failure
to comply with any such provisions shall not constitute a Default or Event of
Default under Section 6.1) and the occurrence of any event described in clause
(e) of Section 6.1 shall not constitute a Default or Event of Default hereunder,
with respect to the Securities of such Series, provided that the following
conditions shall have been satisfied:
(a) With reference to this Section 8.4, the Company has deposited or
caused to be irrevocably deposited (except as provided in Section 8.3) with
the Trustee as trust funds in trust, specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of such Securities (i)
in the case of Securities of such Series denominated in Dollars, cash in
Dollars (or such other money or currencies as shall then be legal tender in
the United States) and/or U.S. Government Obligations, or (ii) in the case
of Securities of such Series denominated in a Foreign Currency (other than
a composite currency), money and/or Foreign Government Obligations, which
through the payment of interest and principal in respect thereof, in
accordance with their terms, will provide (and without reinvestment and
assuming no tax liability will be imposed on such Trustee), not later than
one day before the due date of any payment of money, an amount in cash,
sufficient, in the opinion of a nationally recognized firm of independent
certified public accountants expressed in a written certification thereof
delivered to the Trustee, to pay principal and interest, if any, on and any
mandatory sinking fund in respect of the Securities of such Series on the
dates such installments of interest or principal are due;
(b) Such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(c) No Default or Event of Default with respect to the Securities of
such Series shall have occurred and be continuing on the date of such
deposit or during the period ending on the 91st day after such date;
(d) the Company shall have delivered to the Trustee an Opinion of
Counsel confirming that Holders of the Securities of such Series will not
recognize income, gain or loss for federal income tax purposes as a result
of such deposit and defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such deposit and defeasance had not occurred;
(e) the Company shall have delivered to the Trustee an Officers'
Certificate stating the deposit was not made by the Company with the intent
of preferring the Holders
38
<PAGE>
of the Securities of such Series over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company; and
(f) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the defeasance contemplated by
this Section have been complied with.
SECTION 8.5 Repayment to Company.
--------------------
The Trustee and the Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal and interest that remains
unclaimed for two years. After that, Securityholders entitled to the money must
look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person.
ARTICLE IX.
AMENDMENTS AND WAIVERS
SECTION 9.1 Without Consent of Holders.
--------------------------
The Company and the Trustee may amend or supplement this Indenture or
the Securities of one or more Series without the consent of any Securityholder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article V;
(c) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(d) to make any change that does not adversely affect the rights of
any Securityholder;
(e) to provide for the issuance of and establish the form and terms
and conditions of Securities of any Series as permitted by this Indenture;
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more Series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee; or
(g) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
39
<PAGE>
SECTION 9.2 With Consent of Holders.
-----------------------
The Company and the Trustee may enter into a supplemental indenture
with the written consent of the Holders of at least a majority in principal
amount of the outstanding Securities of each Series affected by such
supplemental indenture (including consents obtained in connection with a tender
offer or exchange offer for the Securities of such Series), for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying in
any manner the rights of the Securityholders of each such Series. Except as
provided in Section 6.13, the Holders of at least a majority in principal amount
of the outstanding Securities of each Series affected by such waiver by notice
to the Trustee (including consents obtained in connection with a tender offer or
exchange offer for the Securities of such Series) may waive compliance by the
Company with any provision of this Indenture or the Securities with respect to
such Series.
It shall not be necessary for the consent of the Holders of Securities
under this Section 9.2 to approve the particular form of any proposed
supplemental indenture or waiver, but it shall be sufficient if such consent
approves the substance thereof. After a supplemental indenture or waiver under
this section becomes effective, the Company shall mail to the Holders of
Securities affected thereby and, if any Bearer Securities affected thereby are
outstanding, publish on one occasion in an Authorized Newspaper, a notice
briefly describing the supplemental indenture or waiver. Any failure by the
Company to mail or publish such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture or waiver.
SECTION 9.3 Limitations.
-----------
Without the consent of each Securityholder affected, an amendment or
waiver may not:
(a) change the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(b) reduce the rate of or extend the time for payment of interest
(including default interest) on any Security;
(c) reduce the principal or change the Stated Maturity of any Security
or reduce the amount of, or postpone the date fixed for, the payment of any
sinking fund or analogous obligation;
(d) reduce the principal amount of Discount Securities payable upon
acceleration of the maturity thereof;
40
<PAGE>
(e) waive a Default or Event of Default in the payment of the
principal of or interest, if any, on any Security (except a rescission of
acceleration of the Securities of any Series by the Holders of at least a
majority in principal amount of the outstanding Securities of such Series
and a waiver of the payment default that resulted from such acceleration);
(f) make the principal of or interest, if any, on any Security payable
in any currency other than that stated in the Security;
(g) make any change in Sections 6.8, 6.13, 9.3 (this sentence), 10.15
or 10.16; or
(h) waive a redemption payment with respect to any Security or change
any of the provisions with respect to the redemption of any Securities.
SECTION 9.4 Compliance with Trust Indenture Act.
-----------------------------------
Every amendment to this Indenture or the Securities of one or more
Series shall be set forth in a supplemental indenture hereto that complies with
the TIA as then in effect.
SECTION 9.5 Revocation and Effect of Consents.
---------------------------------
Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Security is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of a Security if the Trustee receives the
notice of revocation before the date the amendment or waiver becomes effective.
Any amendment or waiver once effective shall bind every Securityholder
of each Series affected by such amendment or waiver unless it is of the type
described in any of clauses (a) through (g) of Section 9.3. In that case, the
amendment or waiver shall bind each Holder of a Security who has consented to it
and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security.
SECTION 9.6 Notation on or Exchange of Securities.
-------------------------------------
The Trustee may place an appropriate notation about an amendment or
waiver on any Security of any Series thereafter authenticated. The Company in
exchange for Securities of that Series may issue and the Trustee shall
authenticate upon request new Securities of that Series that reflect the
amendment or waiver.
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SECTION 9.7 Trustee Protected.
-----------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 7.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee shall sign all
supplemental indentures, except that the Trustee need not sign any supplemental
indenture that adversely affects its rights.
ARTICLE X.
MISCELLANEOUS
SECTION 10.1 Trust Indenture Act Controls.
----------------------------
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required or deemed to be included in this
Indenture by the TIA, such required or deemed provision shall control.
SECTION 10.2 Notices.
-------
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first-class
mail:
if to the Company:
NIKE, Inc.
One Bowerman Drive
Beaverton, Oregon 97005-6453
Attention: General Counsel
if to the Trustee:
The First National Bank of Chicago
One First National Plaza
Mail Suite #0126
Chicago, Illinois 60670
Attn: Corporate Trust Services Division
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
42
<PAGE>
Any notice or communication to a Securityholder shall be mailed by
first-class mail to his address shown on the register kept by the Registrar and,
if any Bearer Securities are outstanding, published in an Authorized Newspaper.
Failure to mail a notice or communication to a Securityholder of any Series or
any defect in it shall not affect its sufficiency with respect to other
Securityholders of that or any other Series.
If a notice or communication is mailed or published in the manner
provided above, within the time prescribed, it is duly given, whether or not the
Securityholder receives it.
If the Company mails a notice or communication to Securityholders, it
shall mail a copy to the Trustee and each Agent at the same time.
SECTION 10.3 Communication by Holders with Other Holders.
-------------------------------------------
Securityholders of any Series may communicate pursuant to TIA (S)
312(b) with other Securityholders of that Series or any other Series with
respect to their rights under this Indenture or the Securities of that Series or
all Series. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA (S) 312(c).
SECTION 10.4 Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 10.5 Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA (S) 314(a)(4)) shall comply with the provisions of TIA
(S) 314(e) and shall include:
(a) a statement that the person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
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(c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
SECTION 10.6 Rules by Trustee and Agents.
---------------------------
The Trustee may make reasonable rules for action by or a meeting of
Securityholders of one or more Series. Any Agent may make reasonable rules and
set reasonable requirements for its functions.
SECTION 10.7 Legal Holidays.
--------------
Unless otherwise provided by Board Resolution, Officers' Certificate
or supplemental indenture hereto for a particular Series, a "Legal Holiday" is
any day that is not a Business Day. If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for the intervening
period.
SECTION 10.8 No Recourse Against Others.
--------------------------
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Securityholder by accepting
a Security waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.
SECTION 10.9 Counterparts.
------------
This Indenture may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
SECTION 10.10 Governing Laws.
--------------
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE
AND THE SECURITIES.
44
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SECTION 10.11 No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 10.12 Successors.
----------
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
SECTION 10.13 Severability.
------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 10.14 Table of Contents, Headings, Etc.
--------------------------------
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 10.15 Securities in a Foreign Currency or in ECU.
------------------------------------------
Unless otherwise specified in a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate delivered pursuant to Section 2.2
of this Indenture with respect to a particular Series of Securities, whenever
for purposes of this Indenture any action may be taken by the Holders of a
specified percentage in aggregate principal amount of Securities of all Series
or all Series affected by a particular action at the time outstanding and, at
such time, there are outstanding Securities of any Series which are denominated
in a coin or currency other than Dollars (including ECUs), then the principal
amount of Securities of such Series which shall be deemed to be outstanding for
the purpose of taking such action shall be that amount of Dollars that could be
obtained for such amount at the Market Exchange Rate at such time. For purposes
of this Section 10.15, "Market Exchange Rate" shall mean the noon Dollar buying
rate in New York City for cable transfers of that currency as published by the
Federal Reserve Bank of New York; provided, however, in the case of ECUs, Market
-------- -------
Exchange Rate shall mean the rate of exchange determined by the Commission of
the European Union (or any successor thereto) as published in the Official
Journal of the European Union (such publication or any successor publication,
the "Journal"). If such Market Exchange Rate is not available for any reason
with respect to such currency, the Trustee shall use, in its sole discretion and
without liability on its part, such quotation
45
<PAGE>
of the Federal Reserve Bank of New York or, in the case of ECUs, the rate of
exchange as published in the Journal, as of the most recent available date, or
quotations or, in the case of ECUs, rates of exchange from one or more major
banks in The City of New York or in the country of issue of the currency in
question or, in the case of ECUs, in Luxembourg or such other quotations or, in
the case of ECUs, rates of exchange as the Trustee, upon consultation with the
Company, shall deem appropriate. The provisions of this paragraph shall apply in
determining the equivalent principal amount in respect of Securities of a Series
denominated in currency other than Dollars in connection with any action taken
by Holders of Securities pursuant to the terms of this Indenture.
All decisions and determinations of the Trustee regarding the Market
Exchange Rate or any alternative determination provided for in the preceding
paragraph shall be in its sole discretion and shall, in the absence of manifest
error, be conclusive to the extent permitted by law for all purposes and
irrevocably binding upon the Company and all Holders.
SECTION 10.16 Judgment Currency.
-----------------
The Company agrees, to the fullest extent that it may effectively do
so under applicable law, that (a) if for the purpose of obtaining judgment in
any court it is necessary to convert the sum due in respect of the principal of
or interest or other amount on the Securities of any Series (the "Required
Currency") into a currency in which a judgment will be rendered (the "Judgment
Currency"), the rate of exchange used shall be the rate at which in accordance
with normal banking procedures the Trustee could purchase in The City of New
York the Required Currency with the Judgment Currency on the day on which final
unappealable judgment is entered, unless such day is not a New York Banking Day,
then, to the extent permitted by applicable law, the rate of exchange used shall
be the rate at which in accordance with normal banking procedures the Trustee
could purchase in The City of New York the Required Currency with the Judgment
Currency on the New York Banking Day preceding the day on which final
unappealable judgment is entered and (b) its obligations under this Indenture to
make payments in the Required Currency (i) shall not be discharged or satisfied
by any tender, any recovery pursuant to any judgment (whether or not entered in
accordance with subsection (a)), in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in the
actual receipt, by the payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments, (ii) shall be enforceable
as an alternative or additional cause of action for the purpose of recovering in
the Required Currency the amount, if any, by which such actual receipt shall
fall short of the full amount of the Required Currency so expressed to be
payable, and (iii) shall not be affected by judgment being obtained for any
other sum due under this Indenture. For purposes of the foregoing, "New York
Banking Day" means any day except a Saturday, Sunday or a legal holiday in The
City of New York on which banking institutions are authorized or required by
law, regulation or executive order to close.
46
<PAGE>
ARTICLE XI.
SINKING FUNDS
SECTION 11.1 Applicability of Article.
------------------------
The provisions of this Article shall be applicable to any sinking fund
for the retirement of the Securities of a Series, except as otherwise permitted
or required by any form of Security of such Series issued pursuant to this
Indenture.
The minimum amount of any sinking fund payment provided for by the
terms of the Securities of any Series is herein referred to as a "mandatory
sinking fund payment" and any other amount provided for by the terms of
Securities of such Series is herein referred to as an "optional sinking fund
payment." If provided for by the terms of Securities of any Series, the cash
amount of any sinking fund payment may be subject to reduction as provided in
Section 11.2. Each sinking fund payment shall be applied to the redemption of
Securities of any Series as provided for by the terms of the Securities of such
Series.
SECTION 11.2 Satisfaction of Sinking Fund Payments with Securities.
-----------------------------------------------------
The Company may, in satisfaction of all or any part of any sinking
fund payment with respect to the Securities of such Series to be made pursuant
to the terms of such Securities (1) deliver outstanding Securities of such
Series to which such sinking fund payment is applicable (other than any of such
Securities previously called for mandatory sinking fund redemption) and (2)
apply as credit Securities of such Series to which such sinking fund payment is
applicable and which have been redeemed either at the election of the Company
pursuant to the terms of such Series of Securities (except pursuant to any
mandatory sinking fund) or through the application of permitted optional sinking
fund payments or other optional redemptions pursuant to the terms of such
Securities, provided that such Securities have not been previously so credited.
Such Securities shall be received by the Trustee, together with an Officers'
Certificate with respect thereto, not later than 15 days prior to the date on
which the Trustee begins the process of selecting Securities for redemption, and
shall be credited for such purpose by the Trustee at the price specified in such
Securities for redemption through operation of the sinking fund and the amount
of such sinking fund payment shall be reduced accordingly. If as a result of
the delivery or credit of Securities in lieu of cash payments pursuant to this
Section 11.2, the principal amount of Securities of such Series to be redeemed
in order to exhaust the aforesaid cash payment shall be less than $100,000, the
Trustee need not call Securities of such Series for redemption, except upon
receipt of a Company Order that such action be taken, and such cash payment
shall be held by the Trustee or a Paying Agent and applied to the next
succeeding sinking fund payment, provided, however, that the Trustee or such
--------- --------
Paying Agent shall from time to time upon receipt of a Company Order pay over
and deliver to the Company any cash payment so being held by the Trustee or such
Paying Agent upon delivery by the Company to the Trustee of Securities of that
Series purchased by the
47
<PAGE>
Company having an unpaid principal amount equal to the cash payment required to
be released to the Company.
SECTION 11.3 Redemption of Securities for Sinking Fund.
-----------------------------------------
Not less than 45 days (unless otherwise indicated in the Board
Resolution, supplemental indenture hereto or Officers' Certificate in respect of
a particular Series of Securities) prior to each sinking fund payment date for
any Series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that Series pursuant to the terms of that Series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that Series pursuant to Section 11.2, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
the Company shall thereupon be obligated to pay the amount therein specified.
Not less than 30 days (unless otherwise indicated in the Board Resolution,
Officers' Certificate or supplemental indenture in respect of a particular
Series of Securities) before each such sinking fund payment date the Trustee
shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 3.2 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 3.3. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 3.4, 3.5 and 3.6.
48
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed and attested, all as of the day and year first above written.
Attest: NIKE, INC.
By: /s/ Robert S. Falcone
-------------------------------
Robert S. Falcone
Chief Financial Officer
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ John R. Prendiville
-------------------------------
John R. Prendiville
Vice President
49
<PAGE>
EXHIBIT 5.01
February 8, 1999
NIKE, Inc.
One Bowerman Drive
Beaverton, Oregon 97005-6453
Re: Shelf Registration of $500,000,000
Aggregate Initial Offering Price of Debt Securities
---------------------------------------------------
Ladies and Gentlemen:
In connection with the registration statement on Form S-3 (the
"Registration Statement") filed on February 8, 1999 with the Securities and
Exchange Commission under the Securities Act of 1933, relating to the offering
from time to time, as set forth in the prospectus contained in the Registration
Statement (the "Prospectus") and as to be set forth in one or more supplements
to the Prospectus, by NIKE, Inc., an Oregon corporation (the "Company"), of Debt
Securities (the "Debt Securities") in one or more series at an aggregate initial
offering price of up to $500,000,000 or its equivalent in another currency or
composite currency, you have requested my opinion with respect to the matters
set forth below.
In my capacity as General Counsel of the Company in connection with
such registration, I am familiar with the proceedings taken and proposed to be
taken by the Company in connection with the authorization and issuance of the
Debt Securities, and for the purposes of this opinion, have assumed such
proceedings will be timely completed in the manner presently proposed. In
addition, I, or members of my staff, have made such legal and factual
examinations and inquiries, including an examination of originals or copies
certified or otherwise identified to my satisfaction of such documents,
corporate records and instruments, as I have deemed necessary or appropriate for
purposes of this opinion.
In my examination, I have assumed the genuineness of all signatures,
the authenticity of all documents submitted to me as originals, and the
conformity to authentic original documents of all documents submitted to me as
copies.
I am opining herein as to the effect on the subject transaction only
of the internal laws of the State of Oregon and I express no opinion with
respect to the applicability thereto, or the effect thereon, of the laws of any
other jurisdiction or as to any matters of municipal law or the laws of any
other local agencies within the State of Oregon.
Capitalized terms used herein without definition have the meanings
ascribed to them in the Registration Statement.
<PAGE>
NIKE, Inc.
February 8, 1999
Page 2
Subject to the foregoing and the other matters set forth herein, it is
my opinion that as of the date hereof the Debt Securities have been duly
authorized by all necessary corporate action of the Company.
I consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference to me contained under the heading
"Legal Matters" in the Prospectus included therein.
Very truly yours,
/s/ James C. Carter
James C. Carter, Esq.
General Counsel
<PAGE>
EXHIBIT 5.02
[LETTERHEAD OF LATHAM & WATKINS]
February 8, 1999
NIKE, Inc.
One Bowerman Drive
Beaverton, Oregon 97005-6453
Re: Shelf Registration of $500,000,000
Aggregate Initial Offering Price of Debt Securities
---------------------------------------------------
Ladies and Gentlemen:
In connection with the registration statement on Form S-3 (the "Registration
Statement") filed on February 8, 1999 with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Securities Act"),
relating to the offering from time to time, as set forth in the prospectus
contained in the Registration Statement (the "Prospectus") and as to be set
forth in one or more supplements to the Prospectus (each a "Prospectus
Supplement"), by NIKE, Inc., an Oregon corporation (the "Company"), of Debt
Securities (the "Debt Securities") in one or more series at an aggregate initial
offering price of up to $500,000,000 or its equivalent in another currency or
composite currency, you have requested our opinion with respect to the matters
set forth below.
In our capacity as your special counsel in connection with such registration,
we are familiar with the proceedings taken and proposed to be taken by the
Company in connection with the issuance of the Debt Securities, and for the
purposes of this opinion, have assumed such proceedings will be timely completed
in the manner presently proposed. In addition, we have made such legal and
factual examinations and inquiries, including an examination of originals or
copies certified or otherwise identified to our satisfaction of such
<PAGE>
NIKE, Inc.
February 8, 1999
Page 2
documents, corporate records and instruments, as we have deemed necessary or
appropriate for purposes of this opinion.
In our examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, and the conformity
to authentic original documents of all documents submitted to us as copies.
We are opining herein as to the effect on the subject transaction only of the
internal laws of the State of New York, and we express no opinion with respect
to the applicability thereto, or the effect thereon, of the laws of any other
jurisdiction or as to any matters of municipal law or the laws of any other
local agencies within the State of New York.
Capitalized terms used herein without definition have the meanings ascribed
to them in the Registration Statement.
Subject to the foregoing and the other matters set forth herein, it is our
opinion that, as of the date hereof: (a) when Debt Securities have been duly
established in accordance with the terms of the Indenture, duly authenticated by
the Trustee and duly executed and delivered on behalf of the Company against
payment therefor in accordance with the terms and provisions of the Indenture
and as contemplated by the Registration Statement, the Prospectus and the
related Prospectus Supplement(s); (b) when the Registration Statement and any
required post-effective amendment thereto have become effective under the
Securities Act; (c) assuming that the terms of the Debt Securities as executed
and delivered are as described in the Registration Statement, the Prospectus and
the related Prospectus Supplement(s); (d) assuming that the Debt Securities as
executed and delivered do not violate any law applicable to the Company or
result in a default under or breach of any agreement or instrument binding upon
the Company; (e) assuming that the Debt Securities as executed and delivered
comply with all requirements and restrictions, if any, applicable to the
Company, whether imposed by any court or governmental or regulatory body having
jurisdiction over the Company; and (f) assuming that the Debt Securities are
then issued and sold as contemplated in the Registration Statement, the
Prospectus and the related Prospectus Supplement(s), the Debt Securities will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms.
The opinion rendered in the paragraph above relating to the enforceability of
the Debt Securities is subject to the following exceptions, limitations and
qualifications: (i) the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to or
affecting the rights and remedies of creditors generally; (ii) the effect of
general principles of equity, whether enforcement is considered in a proceeding
in equity or law, and the discretion of the court before which any proceeding
therefor may be
<PAGE>
NIKE, Inc.
February 8, 1999
Page 3
brought; (iii) the unenforceability under certain circumstances under law or
court decisions of provisions providing for the indemnification of or
contribution to a party with respect to a liability where such indemnification
or contribution is contrary to public policy; (iv) we express no opinion
concerning the enforceability of the waiver of rights or defenses contained in
Section 4.4 of the Indenture; and (v) we express no opinion with respect to
whether acceleration of the Debt Securities may affect the collectibility of
that portion of the stated principal amount thereof which might be determined to
constitute unearned interest thereon.
We assume for purposes of this opinion that (i) the Company has been duly
incorporated and is validly existing as a corporation under the laws of the
State of Oregon, and has the corporate power and authority to issue and sell the
Debt Securities; (ii) the Debt Securities have been duly authorized by all
necessary corporate action by the Company; (iii) the Indenture has been duly
authorized by all necessary corporate action by the Company, has been duly
executed and delivered by the Company and constitutes the legally valid, binding
and enforceable obligation of the Company enforceable against the Company in
accordance with its terms; (iv) the Trustee is duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization; (v) the
Trustee is duly qualified to engage in the activities contemplated by the
Indenture; (vi) the Indenture has been duly authorized, executed and delivered
by the Trustee and constitutes the legally valid, binding and enforceable
obligation of the Trustee enforceable against the Trustee in accordance with its
terms; (vii) the Trustee is in compliance, generally and with respect to acting
as a trustee under the Indenture, with all applicable laws and regulations; and
(viii) the Trustee has the requisite organizational and legal power and
authority to perform its obligations under the Indenture.
We consent to your filing this opinion as an exhibit to the Registration
Statement and to the reference to our firm contained under the heading "Legal
Matters" in the Prospectus included therein.
Very truly yours,
/s/ Latham & Watkins
<PAGE>
EXHIBIT 12.01
NIKE, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Fiscal Year Ended May 31,
----------------------------------------------------------------------------------
1994 1995 1996 1997 1998
----------------------------------------------------------------------------------
(in millions)
<S> <C> <C> <C> <C> <C>
Net income $298.8 $399.7 $553.2 $ 795.8 $399.6
Income taxes 191.8 250.2 345.9 499.4 253.4
------ ------ ------ -------- ------
Income before income taxes 490.6 649.9 899.1 1,295.2 653.0
------ ------ ------ -------- ------
Add fixed charges
Interest expense (A) 15.5 24.5 40.4 55.1 66.5
Interest component of leases (B) 12.6 14.5 17.5 28.0 43.2
------ ------ ------ -------- ------
Total fixed charges 28.1 39.0 57.9 83.1 109.7
------ ------ ------ -------- ------
Earnings before income taxes and $518.4 $688.6 $956.1 $1,375.5 $756.2
fixed charges (C) ====== ====== ====== ======== ======
Ratio of earnings to total fixed 18.45 17.66 16.51 16.55 6.89
charges ====== ====== ====== ======== ======
</TABLE>
(A) Interest expense includes interest both expensed and capitalized.
(B) Interest component of leases includes one-third of rental expense, which
approximates the interest component of operating leases.
(C) Earnings before income taxes and fixed charges is exclusive of capitalized
interest.
<PAGE>
EXHIBIT 23.01
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement on Form S-3 of our report
dated June 30, 1998, appearing on page 22 of NIKE, Inc.'s Annual Report on Form
10-K for the year May 31, 1998. We also consent to the references to us under
the headings "Experts" and "Selected Financial Data" in such Prospectus.
However, it should be noted that PricewaterhouseCoopers LLP has not prepared or
certified such "Selected Financial Data."
PricewaterhouseCoopers LLP
Portland, Oregon
February 8, 1999
<PAGE>
EXHIBIT 25.01
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
---------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
---------------------------------
NIKE, INC.
(Exact name of obligor as specified in its charter)
Oregon 93-0584541
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
One Bowerman Drive
Beaverton, Oregon 97005-6453
(Address of principal executive offices) (Zip Code)
Debt Securities
(Title of Indenture Securities)
1
<PAGE>
Item 1. General Information. Furnish the following
--------------------
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C.;
Federal Deposit Insurance Corporation,
Washington, D.C.; The Board of Governors of
the Federal Reserve System, Washington D.C..
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate
trust powers.
Item 2. Affiliations With the Obligor. If the obligor
------------------------------
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
-----------------
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
2
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 22nd day of January,
1999.
The First National Bank of Chicago,
Trustee
/s/ Steven M. Wagner
By ___________________________________________
Steven M. Wagner
First Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S
WEST Capital Funding, Inc., filed with the Securities and Exchange Commission on
May 6, 1998 (Registration No. 333-51907-01).
3
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
January 22, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between NIKE, Inc.,
and The First National Bank of Chicago, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
/s/ Steven M. Wagner
By: ______________________________________
Steven M. Wagner
First Vice President
4
<PAGE>
EXHIBIT 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for September 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in thousands C400
RCFD BIL MIL THOU ----
------ -------------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A): RCFD
----
a. Noninterest-bearing balances and currency and
coin(1)....................................................... 0081 4,898,646 1.a
b. Interest-bearing balances(2).................................. 0071 4,612,143 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B,
column A)..................................................... 1754 0 2.a
b. Available-for-sale securities (from Schedule
RC-B, column D)............................................... 1773 9,817,318 2.b
3. Federal funds sold and securities purchased under agreements to
resell 1350 6,071,229 3.
4. Loans and lease financing receivables:
RCFD
----
a. Loans and leases, net of unearned income (from Schedule
RC-C)......................................................... 2122 26,327,215 4.a
b. LESS: Allowance for loan and lease losses..................... 3123 412,850 4.b
c. LESS: Allocated transfer risk reserve......................... 3128 0 4.c
RCFD
----
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c).......................... 2125 25,914,365 4.d
5. Trading assets (from Schedule RD-D).............................. 3545 6,924,064 5.
6. Premises and fixed assets (including capitalized leases)......... 2145 731,747 6.
7. Other real estate owned (from Schedule RC-M)..................... 2150 6,424 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)................................... 2130 153,385 8.
9. Customers' liability to this bank on acceptances outstanding..... 2155 352,324 9.
10. Intangible assets (from Schedule RC-M)........................... 2143 295,823 10.
11. Other assets (from Schedule RC-F)................................ 2160 2,193,803 11.
12. Total assets (sum of items 1 through 11)......................... 2170 61,971,271 12.
</TABLE>
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
---------------------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits
RCON
----
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1)..................................... 2200 20,965,124 13.a
(1) Noninterest-bearing(1)...................................... 6631 9,191,662 13.a1
(2) Interest-bearing............................................ 6636 11,773,462 13.a2
RCFN
----
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II)............................... 2200 15,912,956 13.b
(1) Noninterest bearing.......................................... 6631 475,182 13.b1
(2) Interest-bearing............................................. 6636 15,437,774 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,245,925 14
15. a. Demand notes issued to the U.S. Treasury...................... RCON 2840 359,381 15.a
b. Trading Liabilities(from Sechedule RC-D)...................... RCFD 3548 5,614,049 15.b
RCFD
16. Other borrowed money: ----
a. With original maturity of one year or less.................... 2332 4,603,402 16.a
b. With original maturity of more than one year................. A547 328,001 16.b
c. With original maturity of more than three years ............. A548 324,984 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding.......... 2920 352,324 18.
19. Subordinated notes and debentures................................ 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)........................... 2930 1,833,935 20.
21. Total liabilities (sum of items 13 through 20)................... 2948 56,940,081 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.................... 3838 0 23.
24. Common stock..................................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock)......... 3839 3,192,857 25.
26. a. Undivided profits and capital reserves........................ 3632 1,614,511 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities.................................................... 8434 27,815 26.b
27. Cumulative foreign currency translation adjustments.............. 3284 (4,851) 27.
28. Total equity capital (sum of items 23 through 27)................ 3210 5,031,190 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)............................ 3300 61,971,271 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
<TABLE>
<S> <C> <C> <C>
1. Indicate in the box at the right the number of the statement below
that best describes the most comprehensive level of auditing work
performed for the bank by independent external auditors as of any date Number
during 1996............................................................ RCFD 6724 NA M.1.
</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in 4 = Directors' examination of the bank
accordance with generally accepted auditing standards performed by other external auditors (may be required by
by a certified public accounting firm which submits a state chartering authority)
report on the bank
5 = Review of the bank's financial statements by external
2 = Independent audit of the bank's parent holding auditors
company conducted in accordance with generally
accepted auditing standards by a certified public 6 = Compilation of the bank's financial statements by
accounting firm which submits a report on the consolidated external auditors
holding company (but not on the bank separately)
7 = Other audit procedures (excluding tax
3 = Directors' examination of the bank conducted preparation work)
in accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by 8 = No external audit work
state chartering authority)
</TABLE>
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
