<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 20, 1997
REGISTRATION NO. 333-29571
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
FEDERAL-MOGUL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
MICHIGAN 33-0533580
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
26555 NORTHWESTERN HIGHWAY
SOUTHFIELD, MICHIGAN 48034
(810) 354-7700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DIANE L. KAYE, ESQ.
FEDERAL-MOGUL CORPORATION
26555 NORTHWESTERN HIGHWAY
SOUTHFIELD, MICHIGAN 48034
(810) 354-7700
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF AGENT FOR SERVICE)
Copies of Correspondence to:
ANDREW R. BROWNSTEIN, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
(212) 403-1000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration
Statement becomes effective.
------------------------
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
------------------------
A Registration Fee of $37,879 was previously paid with the filing of this
Registration Statement on June 19, 1997.
------------------------
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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
CROSS-REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K
SHOWING THE LOCATION IN THE PROSPECTUS OF THE
INFORMATION REQUIRED BY PART I OF FORM S-4
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ITEM NUMBER AND CAPTION LOCATION IN THE PROSPECTUS
----------------------------------------- -----------------------------------------
<S> <C> <C> <C>
A. Information About the Transaction
1. Forepart of Registration Statement and
Outside Front Cover Page of the
Prospectus............................... Front Cover Page of the Registration
Statement; Outside Front Cover Page of
the Prospectus
2. Inside Front and Outside Back Cover Pages
of the Prospectus........................ Inside Front Cover Page of the
Prospectus; Outside Back Cover Page of
the Prospectus
3. Risk Factors, Ratio of Earnings to Fixed
Charges and Other Information............ Summary; Risk Factors; Business; Selected
Financial Data; Ratio of Earnings to
Fixed Charges
4. Terms of the Transaction................. Summary; Risk Factors; Use of Proceeds;
The Exchange Offer; Description of the
New Notes; Certain United States Federal
Income Tax Consequences; Plan of
Distribution
5. Pro Forma Financial Information.......... Use of Proceeds; Selected Financial Data
6. Material Contracts with the Company Being
Acquired................................. *
7. Additional Information Required for
Reoffering by Persons and Parties Deemed
to be Underwriters....................... *
8. Interests of Named Experts and Counsel... Legal Matters; Experts
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.............................. *
B. Information About the Registrant
10. Information with Respect to S-3
Registrants.............................. Available Information; Summary; Risk
Factors; Use of Proceeds; Business; Ratio
of Earnings to Fixed Charges;
Capitalization; Selected Financial Data;
Directors and Executive Officers;
Executive Compensation; Security
Ownership of Certain Beneficial Owners
and Management; Certain Relationships and
Related Transactions
11. Incorporation of Certain Information by
Reference................................ Information Incorporated by Reference
12. Information With Respect to S-2 or S-3
Registrants.............................. *
13. Incorporation of Certain Information by
Reference................................ *
14. Information With Respect to Registrants
Other Than S-3 or S-2 Registrants........ *
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
ITEM NUMBER AND CAPTION LOCATION IN THE PROSPECTUS
----------------------------------------- -----------------------------------------
<S> <C> <C> <C>
C. Information About the Company Being Acquired
15. Information With Respect to S-3
Companies................................ *
16. Information with Respect to S-2 or S-3
Companies................................ *
17. Information With Respect to Companies
Other Than S-3 or S-2 Companies.......... *
D. Voting and Management Information
18. Information if Proxies, Consents or
Authorizations are to be Solicited....... *
19. Information if Proxies, Consents or
Authorizations are not to be Solicited,
or in an Exchange Offer.................. Directors and Executive Officers;
Executive Compensation; Security
Ownership of Certain Beneficial Owners
and Management; The Exchange Offer;
Certain Transactions
</TABLE>
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* Item is omitted because response is negative or item is inapplicable.
<PAGE> 4
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE OR OTHER JURISDICTION IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE OR OTHER
JURISDICTION.
PROSPECTUS
[FEDERAL-MOGUL CORPORATION LOGO]
OFFER TO EXCHANGE 8.80% SENIOR NOTES DUE 2007,
FOR ANY AND ALL EXISTING NOTES (AS DEFINED HEREIN)
THE EXCHANGE OFFER (AS DEFINED HEREIN) WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON SEPTEMBER 19, 1997, UNLESS EXTENDED. AS DESCRIBED HEREIN,
WITHDRAWAL RIGHTS WITH RESPECT TO THE EXCHANGE OFFER ARE EXPECTED TO EXPIRE AT
THE EXPIRATION OF THE EXCHANGE OFFER.
Federal-Mogul Corporation, a Michigan corporation ("Federal-Mogul" or the
"Company"), hereby offers (the "Exchange Offer"), upon the terms and subject to
the conditions set forth in this prospectus (this "Prospectus") and the
accompanying Letter of Transmittal (the "Letter of Transmittal"), to exchange up
to $125,000,000 aggregate principal amount of its 8.80% Senior Notes due 2007
(the "New Notes"), which have been registered under the Securities Act of 1933,
as amended (the "Securities Act"), pursuant to a Registration Statement (as
defined herein) of which this Prospectus is a part, for a like principal amount
of its issued and outstanding 8.80% Senior Notes due 2007 (the "Existing
Notes"). The New Notes and the Existing Notes are referred to herein as the
"Notes." The Existing Notes were originally issued and sold in a transaction
that was exempt from registration under the Securities Act under the exemption
provided in Section 4(2) of the Securities Act and resold to certain qualified
institutional buyers in reliance on, and subject to restrictions imposed
pursuant to, Rule 144A under the Securities Act ("Rule 144A"). The terms of the
New Notes are identical in all material respects to the terms of the Existing
Notes except that the New Notes do not contain terms with respect to interest
rate step-ups and the New Notes have been registered under the Securities Act
and will not bear legends restricting the transferability thereof. See
"Description of the New Notes." The Existing Notes have been, and the New Notes
will be, issued under the Indenture (the "Indenture"), dated as of August 12,
1994, between the Company and First Trust National Association ("First Trust" or
"Trustee"), as trustee and successor to Continental Bank. See "Description of
New Notes". There will be no proceeds to the Company from this offering;
however, pursuant to the Registration Agreement, dated April 23, 1997, by and
among the Company, Salomon Brothers Inc, Bear, Stearns & Co. Inc. and Chase
Securities Inc. (the "Registration Agreement"), the Company will bear certain
offering expenses.
The Exchange Offer is not conditioned upon any minimum number of Existing
Notes being tendered. The Exchange Offer will expire at 5:00 p.m., New York City
time, on September 19, 1997, unless extended (the "Expiration Date"). Subject to
the terms and conditions of the Exchange Offer, including the reservation of
certain rights by Federal-Mogul and the right of holders of Existing Notes to
withdraw tenders at any time prior to the acceptance thereof, any and all
Existing Notes validly tendered prior to the Expiration Date will be accepted on
or promptly after the Expiration Date. New Notes to be issued in exchange for
properly tendered Existing Notes will be delivered through the facilities of The
Depository Trust Company by the Exchange Agent (as defined herein) promptly
after the acceptance thereof. In the event that Federal-Mogul terminates the
Exchange Offer and does not accept for exchange any Existing Notes,
Federal-Mogul will promptly return the Existing Notes to the holders thereof.
See "The Exchange Offer."
(continued on next page)
------------------------
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF EXISTING NOTES IN ANY JURISDICTION IN
WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE SECURITIES AND BLUE SKY LAWS OF SUCH JURISDICTION.
------------------------
SEE "RISK FACTORS," COMMENCING ON PAGE 7, FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY HOLDERS OF NOTES.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS AUGUST 20, 1997.
<PAGE> 5
The Existing Notes were sold by the Company on April 23, 1997 (the
"Offering") in transactions not registered under the Securities Act in reliance
upon the exemption provided in Section 4(2) of the Securities Act. The Existing
Notes were subsequently resold to qualified institutional buyers in reliance
upon Rule 144A. Accordingly, the Existing Notes may not be reoffered, resold or
otherwise transferred in the United States unless registered under the
Securities Act or unless an applicable exemption from the registration
requirements of the Securities Act is available. The New Notes are being offered
hereunder in order to satisfy certain obligations of the Company under the
Registration Agreement. See "The Exchange Offer."
The New Notes will bear interest from April 23, 1997, the date of issuance
of the Existing Notes that are tendered in exchange for the New Notes (or the
most recent Interest Payment Date (as defined herein) to which interest on such
Notes has been paid), at a rate equal to 8.80% per annum. Interest on the New
Notes will be payable semi-annually on April 15 and October 15 of each year.
Based on interpretations by the Staff of the Securities and Exchange
Commission (the "Commission") as set forth in no-action letters issued to third
parties, Federal-Mogul believes the New Notes issued pursuant to the Exchange
Offer may be offered for resale, resold and otherwise transferred by any holder
thereof (other than any such holder that is a broker-dealer or an "affiliate" of
Federal-Mogul within the meaning of Rule 405 under the Securities Act) without
compliance with the registration and prospectus delivery provisions of the
Securities Act, provided that (i) such New Notes are acquired in the ordinary
course of business, (ii) at the time of the commencement of the Exchange Offer,
such holder has no arrangement with any person to participate in a distribution
of the New Notes and (iii) such holder is not engaged in, and does not intend to
engage in, a distribution of the New Notes. However, the Commission has not
considered the Exchange Offer in the context of a no-action letter, and,
therefore, there can be no assurance that the Staff of the Commission would make
a similar determination with respect to the Exchange Offer as in such other
circumstances. Each holder of Existing Notes that desires to participate in the
Exchange Offer will be required to make certain representations described in
"The Exchange Offer -- Terms of the Exchange Offer."
Each broker-dealer that receives New Notes for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. The Letter of Transmittal states
that, by so acknowledging and by delivering a prospectus, a broker-dealer will
not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be amended or supplemented from time
to time, may be used by a broker-dealer in connection with resales of New Notes
received in exchange for Existing Notes where such New Notes were acquired by
such broker-dealer as a result of market-making activities or other trading
activities. The Company has agreed that, starting on the Expiration Date and
ending on the close of business on the first anniversary of the Expiration Date,
it will make this Prospectus available to any broker-dealer for use in
connection with any such resale. See "Plan of Distribution."
The New Notes will be represented by one or more Global Notes (as defined
herein) registered in the name of a nominee of The Depository Trust Company, as
depositary (the "Depositary"). Beneficial interests in the Global Notes will be
shown on, and transfers thereof will be effected only through, records
maintained by the Depositary and its participants. Settlement for the New Notes
will be made in immediately available funds. The New Notes will trade in the
Depositary's Same-Day Funds Settlement System, and secondary market trading
activity in the New Notes will therefore settle in immediately available funds.
See "The Exchange Offer -- Book-Entry Transfer" and "Description of the New
Notes -- Same-Day Settlement and Payment."
There has not previously been any public market for the New Notes.
Federal-Mogul does not intend to list the New Notes on any securities exchange
or to seek approval for quotation through any automated quotation system. There
can be no assurance that an active market for the New Notes will develop. To the
extent that an active market for the New Notes does develop, the market value of
the New Notes will depend on market conditions, general economic conditions, the
Company's financial condition and other factors. Such conditions might cause the
New Notes, to the extent they are actively traded, to trade at a significant
discount from face value. See "Risk Factors -- Lack of Public Market for the New
Notes."
<PAGE> 6
AVAILABLE INFORMATION
Federal-Mogul is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information can be
inspected and copied at the principal office of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
following regional offices of the Commission: Citicorp Center, Suite 1400, 500
West Madison Street, Chicago, Illinois 60661-2511; and Seven World Trade Center,
13th Floor, New York, New York 10048. Copies of such material can be obtained by
mail from the Public Reference Section of the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates and
such material is contained on the worldwide web site maintained by the
Commission at http://www.sec.gov. Reports, proxy statements and other
information concerning Federal-Mogul can be inspected at the offices of the New
York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005 and the
Pacific Exchange, Stock and Options, Inc., 618 South Spring Street, Los Angeles,
California 90014, and 301 Pine Street, San Francisco, California 94104.
Federal-Mogul has filed with the Commission the Registration Statement
under the Securities Act, with respect to the New Notes offered hereby. As
permitted by the rules and regulations of the Commission, this Prospectus does
not contain all of the information included or incorporated by reference in the
Registration Statement and the exhibits and schedules thereto. Statements
contained in this Prospectus or in any document incorporated herein or therein
as to the contents of any contract or other document referred to herein or
therein and filed as an exhibit to, or incorporated by reference in, the
Registration Statement are not necessarily complete, and, in each instance,
reference is made to the copy of such contract or other document filed as an
exhibit to, or incorporated by reference in, the Registration Statement, each
such statement being qualified in all respects by such reference. For further
information with respect to Federal-Mogul and the Notes, reference is hereby
made to the Registration Statement and the exhibits and schedules thereto.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Federal-Mogul's Amended Annual Report on Form 10-K/A for its fiscal year
ended December 31, 1996, which was filed with the Commission pursuant to the
Exchange Act on August 18, 1997 (File No. 1-1511) and Federal-Mogul's Quarterly
Report on Form 10-Q, which was filed with the Commission pursuant to the
Exchange Act on May 14, 1997 and amended on August 19, 1997, and Form 10-Q which
was previously filed with the Commission pursuant to the Exchange Act on August
14, 1997 are incorporated herein by reference.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the New Notes shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing such documents. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (NOT INCLUDING EXHIBITS TO SUCH
DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE IN
SUCH DOCUMENTS) ARE AVAILABLE WITHOUT CHARGE UPON WRITTEN OR ORAL REQUEST
DIRECTED TO: MS. DIANE L. KAYE, VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY,
FEDERAL-MOGUL CORPORATION, 26555 NORTHWESTERN HIGHWAY, SOUTHFIELD, MICHIGAN
48034 (TELEPHONE: (810) 354-7700).
<PAGE> 7
SUMMARY
The following summary information is qualified in its entirety by the
detailed information and financial statements (including the notes thereto)
appearing elsewhere or incorporated by reference in this Prospectus.
THE COMPANY
Federal-Mogul, founded in 1899 and incorporated in Michigan in 1924, is a
global manufacturer and distributor of a broad range of precision parts,
primarily vehicular components for automobiles and light trucks, heavy duty
trucks, farm and construction vehicles and industrial products. The Company
manufactures engine bearings, sealing systems, fuel systems, lighting products,
pistons and chassis products. The Company engineers and manufactures products
for original equipment manufacturers ("OE" products), principally the major
automotive manufacturers in the United States and Europe, and also provides
these and related products to aftermarket customers worldwide. In 1996, the
Company's net sales were $2,033 million.
Federal-Mogul's principal executive offices are located at 26555
Northwestern Highway, Southfield, Michigan 48034. The telephone number of those
offices is (810) 354-7700.
RECENT DEVELOPMENTS
During the fourth quarter of 1996, the management of the Company undertook
an intensive review of the Company's business. On February 6, 1997, the Company
announced details of a restructuring plan and a writedown of assets held for
sale to fair value designed to improve the Company's cost structure, streamline
its operations and divest its underperforming assets, including its
international retail operations. The restructuring is intended to realign the
Company's growth strategy behind its core competencies of manufacturing,
engineering and distribution.
The components of the restructuring and writedown of assets held for sale
to fair value include: (i) the planned sale of 132 international retail
operations located in Australia, Chile, Ecuador, Panama, Puerto Rico, South
Africa and Venezuela; (ii) the planned sale or restructuring of approximately 30
wholesale international replacement operations in 10 countries; (iii) the
rationalization of European manufacturing operations involving the relocation of
product lines and workforce reductions; (iv) the consolidation of lighting
products in Juarez, Mexico, resulting in the closing of the Company's Leiters
Ford, Indiana manufacturing facility; (v) the consolidation or closure of North
American warehouse facilities; (vi) the consolidation of customer support
functions now housed in Southfield, Michigan and Phoenix, Arizona; (vii) the
consolidation of European aftermarket management functions located in Geneva,
Switzerland into the Wiesbaden, Germany manufacturing headquarters; and (viii)
the streamlining of administrative and operational staff functions worldwide.
In 1996, the Company recorded a restructuring charge of $57.6 million,
comprised of $42.8 million for employee severance and $14.8 million for exit
costs and consolidation of certain facilities. To reduce the carrying value of
assets held for sale to fair value, the Company recorded an additional charge of
$151.3 million related to impairment of goodwill and certain other assets and
costs associated with the international retail operations held for sale. The
Company also recorded special charges totaling $78.1 million in the third and
fourth quarters of 1996. In 1996, the international wholesale and retail
businesses to be sold or closed increased operating losses by approximately $9
million. Management believes that the operating results from these businesses
will not have a material impact on the Company's operating results in 1997. For
further information respecting the charges taken by the Company in 1996, see
"Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations -- Restructuring and Adjustment of Assets Held for Sale to Fair
Value" and Notes 2, 3, 4 and 5 of Notes to Consolidated Financial Statements
filed under "Item 8. Financial Statements and Supplementary Data" of the
Company's Annual Report on Form 10-K/A for its fiscal year ended December 31,
1996.
The Company is now redirecting its efforts and resources to expand its core
competencies in manufacturing and distribution by growing the manufacturing base
globally while capitalizing on the aftermarket
2
<PAGE> 8
distribution network. Some of the growth in connection with the new strategy is
expected to come through acquisitions which the Company will be exploring on an
ongoing basis.
THE NOTE OFFERING
THE EXISTING NOTES............ The Existing Notes were sold by the Company in
the Offering on April 23, 1997 (the "Issue
Date"), and were subsequently resold to
qualified institutional buyers pursuant to Rule
144A and to institutional investors that are
accredited investors in a manner exempt from
registration under the Securities Act.
REGISTRATION AGREEMENT........ In connection with the Offering, the Company
entered into the Registration Agreement, which
granted holders of the Notes certain exchange
and registration rights. The Exchange Offer is
intended to satisfy the obligations of the
Company with respect to such exchange and
registration rights, which, except for limited
instances involving the Initial Purchasers (as
defined in the Registration Rights Agreement)
or Holders (as defined in the Registration
Rights Agreement) who are not eligible to
participate in the Exchange Offer, terminate
upon the consummation of the Exchange Offer.
See "The Exchange Offer."
THE EXCHANGE OFFER
SECURITIES OFFERED............ $125,000,000 aggregate principal amount of
8.80% Notes due April 15, 2007.
THE EXCHANGE OFFER............ The New Notes are being offered in exchange for
an equal principal amount of Existing Notes. As
of the date hereof, $125,000,000 aggregate
principal amount of Existing Notes are
outstanding. The Existing Notes may be tendered
only in integral multiples of $1,000.
RESALE OF NEW NOTES........... Based on interpretations by the Staff of the
Commission as set forth in no-action letters
issued to third parties, the Company believes
that the New Notes issued pursuant to the
Exchange Offer may be offered for resale,
resold or otherwise transferred by any holder
thereof (other than any such holder that is a
broker-dealer or an "affiliate" of the Company
within the meaning of Rule 405 under the
Securities Act) without compliance with the
registration and prospectus delivery provisions
of the Securities Act, provided that (i) such
New Notes are acquired in the ordinary course
of business, (ii) at the time of the
commencement of the Exchange Offer, such holder
has no arrangement with any person to
participate in a distribution of the New Notes
and (iii) such holder is not engaged in, and
does not intend to engage in, a distribution of
the New Notes. By tendering the Existing Notes
in exchange for the New Notes, each holder will
represent to the Company that: (i) it is not
such an affiliate of the Company, (ii) any New
Notes to be received by it will be acquired in
the ordinary course of business and (iii) at
the time of the commencement of the Exchange
Offer it had no arrangement with any person to
participate in a distribution of the New Notes
and, if such holder is not a broker-dealer, it
is not engaged in, and does not intend to
engage in, a distribution of
3
<PAGE> 9
the New Notes. If a holder of Existing Notes is
unable to make the foregoing representations,
such holder may not rely on the applicable
interpretations of the Staff of the Commission
and must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with any secondary
resale transaction.
Each broker-dealer that receives New Notes for
its own account pursuant to the Exchange Offer
must acknowledge that it will deliver a
prospectus in connection with any resale of
such New Notes. The Letter of Transmittal
states that, by so acknowledging and by
delivering a prospectus, a broker-dealer will
not be deemed to admit that it is an
"underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be
amended or supplemented from time to time, may
be used by a broker-dealer in connection with
resales of the New Notes received in exchange
for the Existing Notes where such New Notes
were acquired by such broker-dealer as a result
of market-making activities or other trading
activities. The Company has agreed that,
starting on the Expiration Date and ending on
the close of business on the (first anniversary
of) the Expiration Date, it will make this
Prospectus available to any broker-dealer for
use in connection with any such resale. See
"Plan of Distribution."
To comply with the securities laws of certain
jurisdictions, it may be necessary to qualify
for sale or to register the New Notes prior to
offering or selling such New Notes. The Company
has agreed, pursuant to the Registration
Agreement and subject to certain specified
limitations therein, to register or qualify the
New Notes for offer or sale under the
securities or "blue sky" laws of such
jurisdictions as may be necessary to permit the
holders of New Notes to trade the New Notes
without any restrictions or limitations under
the securities laws of the several states of
the United States.
CONSEQUENCES OF FAILURE TO
EXCHANGE EXISTING NOTES..... Upon consummation of the Exchange Offer,
subject to certain limited exceptions, holders
of Existing Notes who do not exchange their
Existing Notes for New Notes in the Exchange
Offer will no longer be entitled to
registration rights and will not be able to
offer or sell their Existing Notes, unless such
Existing Notes are subsequently registered
under the Securities Act (which, subject to
certain limited exceptions, the Company will
have no obligation to do), except pursuant to
an exemption from, or in a transaction not
subject to, the Securities Act and applicable
state securities laws. See "The Exchange
Offer -- Terms of the Exchange Offer" and
"-- Consequences of Failure to Exchange."
EXPIRATION DATE............... 5:00 p.m., New York City time, on September 19,
1997, unless the Exchange Offer is extended, in
which case the term "Expiration Date" means the
latest date and time to which the Exchange
Offer is extended.
INTEREST ON THE NEW NOTES..... The New Notes will accrue interest at rate of
8.80% per annum from April 23, 1997, the Issue
Date of the Existing Notes. Interest
4
<PAGE> 10
on the New Notes is payable on April 15 and
October 15 of each year.
CONDITIONS TO THE EXCHANGE
OFFER......................... The Exchange Offer is not conditioned upon any
minimum principal amount of Existing Notes
being tendered for exchange. However, the
Exchange Offer is subject to certain customary
conditions, which may be waived by the Company.
See "The Exchange Offer -- Conditions." Except
for the requirements of applicable United
States federal and state securities laws, there
are no United States federal or state
regulatory requirements to be complied with or
obtained by the Company in connection with the
Exchange Offer.
PROCEDURES FOR TENDERING
EXISTING NOTES.............. Each holder of Existing Notes wishing to accept
the Exchange Offer must complete, sign and date
the Letter of Transmittal, or a facsimile
thereof, in accordance with the instructions
contained herein and therein, and mail or
otherwise deliver such Letter of Transmittal,
or such facsimile, together with any other
required documentation to the Exchange Agent at
the address set forth herein and effect a
tender of Existing Notes pursuant to the
procedures for book-entry transfer as provided
for herein. See "The Exchange
Offer -- Procedures for Tendering" and
"-- Book-Entry Transfer."
GUARANTEED DELIVERY
PROCEDURES.................... Holders of Existing Notes who wish to tender
their Existing Notes and who cannot deliver
their Existing Notes and a properly completed
Letter of Transmittal or any other documents
required by the Letter of Transmittal to the
Exchange Agent prior to the Expiration Date may
tender their Existing Notes according to the
guaranteed delivery procedures set forth under
"The Exchange Offer -- Guaranteed Delivery
Procedures."
WITHDRAWAL RIGHTS............. Tenders of Existing Notes may be withdrawn at
any time prior to 5:00 p.m., New York City
time, on the Expiration Date. To withdraw a
tender of Existing Notes, a written or
facsimile transmission notice of withdrawal
must be received by the Exchange Agent at its
address set forth under "The Exchange Offer --
Exchange Agent" prior to 5:00 p.m., New York
City time, on the Expiration Date.
ACCEPTANCE OF EXISTING NOTES
AND DELIVERY OF NEW NOTES... Subject to certain conditions, any and all
Existing Notes that are properly tendered in
the Exchange Offer prior to 5:00 p.m., New York
City time, on the Expiration Date will be
accepted for exchange. The New Notes issued
pursuant to the Exchange Offer will be
delivered promptly following the Expiration
Date. See "The Exchange Offer -- Terms of the
Exchange Offer."
CERTAIN UNITED STATES TAX
CONSEQUENCES................ The exchange of Existing Notes for New Notes
will not constitute a taxable exchange for
United States federal income tax purposes. See
"Certain United States Federal Income Tax
Consequences."
EXCHANGE AGENT................ First Trust National Association is serving as
exchange agent (the "Exchange Agent") in
connection with the Exchange Offer.
5
<PAGE> 11
FEES AND EXPENSES............. All expenses incident to the Company's
consummation of the Exchange Offer and
compliance with the Registration Agreement will
be borne by the Company. See "The Exchange
Offer -- Fees and Expenses."
USE OF PROCEEDS............... There will be no cash proceeds payable to
Federal-Mogul from the issuance of the New
Notes pursuant to the Exchange Offer. The
proceeds from the sale of the Existing Notes
were used to repay indebtedness of the Company,
including borrowings under the Company's
Revolving Credit and Competitive Advance
Facility Agreement (the "Credit Facility"),
dated as of June 30, 1994, as amended, bearing
interest at 6 1/2%, and certain other
indebtedness of the Company. See "Use of
Proceeds."
SUMMARY OF TERMS OF NEW NOTES
The Exchange Offer relates to the exchange of up to $125,000,000 aggregate
principal amount of Existing Notes for up to an equal aggregate principal amount
of New Notes. The New Notes will be entitled to the benefits of the same
Indenture that governs the Existing Notes and that will govern the New Notes.
The form and terms of the New Notes are identical in all material respects to
the form and terms of the Existing Notes, except that the New Notes do not
contain terms with respect to interest rate step-up provisions and the New Notes
have been registered under the Securities Act and will not bear legends
restricting the transferability thereof. See "Description of the New Notes."
NEW NOTES..................... $125,000,000 in aggregate principal amount of
8.80% Notes due 2007.
MATURITY DATE................. April 15, 2007.
INTEREST...................... The New Notes will bear interest from April 23,
1997, the date of issuance of the Existing
Notes that are tendered in exchange for the New
Notes or the most recent Interest Payment Date
(as defined herein) to which interest on such
Notes has been paid, at a rate equal to 8.80%
per annum.
INTEREST PAYMENT DATES........ April 15, and October 15, commencing on April
23, 1997.
RANKING....................... The New Notes will rank equally with all other
unsecured and unsubordinated indebtedness of
the Company. See "Description of the New
Notes."
6
<PAGE> 12
RISK FACTORS
Prospective investors should consider carefully the specific factors set
forth below, as well as the other information set forth elsewhere in this
Prospectus before investing in the New Notes.
RESTRUCTURING
In 1996, the Company recorded a charge of $151.3 million related to
impairment of good will and certain other assets and costs associated with the
international retail operations held for sale, a restructuring charge of $57.6
million, and special charges of $78.1 million as described under "Recent
Developments." These charges substantially reduced the Company's shareholders'
equity.
Although the Company's management believes that its restructuring plan (as
discussed under "Recent Developments") will improve the Company's cost
structure, streamline its operations and permit the divestiture of
underperforming assets, there can be no assurance that the actions contemplated
by the restructuring plan will be completed in a timely manner or achieve the
expected results.
In addition, the Company may record additional charges in the future,
further reducing the Company's shareholders' equity. There can be no assurance
as to either the amounts or timing of such additional charges, if any.
LEVERAGE
The Company is substantially leveraged. As of June 30, 1997, the Company
had total long-term debt of $279.7 million and shareholders' equity of $335.0
million, producing a total capitalization of $614.7 million, so that total
long-term debt as a percentage of total capitalization was approximately 46%.
The Company's leverage may have consequences, including the following: (i)
the ability of the Company to obtain additional financing for working capital,
capital expenditures and debt service requirements or other purposes may be
impaired; (ii) the Company may be more highly leveraged than companies with
which it competes, which may place it at a competitive disadvantage; (iii)
because certain of the Company's obligations bear interest at floating rates, an
increase in interest rates could adversely affect the Company's ability to
service its debt obligations; and (iv) the Company may be more vulnerable in the
event of a downturn or disruption in its business or in the economy generally.
If the Company is unable to generate sufficient cash flow to service its debt
obligations, it will have to adopt one or more alternatives, such as reducing or
delaying planned expansion and capital expenditures, selling assets,
restructuring debt or obtaining additional equity capital. There can be no
assurance that any of these strategies could be effected on satisfactory terms.
These and other factors could have an adverse effect on the marketability, price
and future value of the Notes and the Company's ability to pay the interest
thereon and the principal amount thereof.
CYCLICAL NATURE OF AUTOMOTIVE INDUSTRY
The Company's principal operations are directly related to domestic and
foreign automotive vehicle production. Automobile sales and production are
cyclical and can be affected by the strength of a country's general economy. In
addition, automobile production and sales can be affected by labor relations
issues, regulatory requirements, trade agreements and other factors. A decline
in automotive sales and production could result in a decline in the Company's
results of operations or a deterioration in the Company's financial condition.
INTERNATIONAL OPERATIONS AND FOREIGN CURRENCY RISK
The Company has manufacturing and distribution facilities for its products,
principally in the United States, Europe, Latin America, Mexico and Canada.
Certain of these products, primarily engine bearings and oil seals, are sold to
international original equipment manufacturers and vehicular aftermarket
customers.
7
<PAGE> 13
International operations are subject to certain risks inherent in carrying
on business abroad, including expropriation and nationalization, currency
exchange rate fluctuations and currency controls, and export and import
restrictions. The likelihood of such occurrences and their potential effect on
the Company vary from country to country and are unpredictable.
FRAUDULENT CONVEYANCE
If a court in a lawsuit brought by an unpaid creditor or representative of
creditors, such as a trustee in bankruptcy, or the Company as a
debtor-in-possession, were to determine under relevant United States federal or
state fraudulent conveyance statutes that the Company did not receive fair
consideration or reasonably equivalent value for incurring indebtedness,
including the New Notes and the Existing Notes, and that, at the time of such
incurrence, the Company (i) was insolvent, (ii) was rendered insolvent by reason
of such incurrence or grant, (iii) was engaged in a business or transaction for
which the assets remaining with the Company constituted unreasonably small
capital or (iv) intended to incur, or believed that it would incur, debts beyond
its ability to pay such debts as they matured, then such court, subject to
applicable statutes of limitation, could void the Company's obligations under
the New Notes and the Existing Notes, subordinate the New Notes and the Existing
Notes to other indebtedness of the Company or take other action detrimental to
the holders of the New Notes and the Existing Notes.
The measure of insolvency for these purposes will depend upon the governing
law of the relevant jurisdiction. Generally, however, a company will be
considered insolvent for these purposes if the sum of that company's debts is
greater than the fair value of all of that company's property or if the present
fair salable value of that company's assets is less than the amount that will be
required to pay its probable liability on its existing debts as they become
absolute and matured. Moreover, regardless of solvency, a court could void an
incurrence of indebtedness, including the New Notes and the Existing Notes, if
it determined that such transaction was made with the intent to hinder, delay or
defraud creditors. In addition, a court could subordinate indebtedness,
including the New Notes and the Existing Notes, to the claims of all existing
and future creditors on similar grounds. The Company believes that, after giving
effect to the Offering and the Exchange Offer, the Company is, as of the date of
this Prospectus, (i) neither insolvent nor rendered insolvent by the incurrence
of indebtedness in connection with the Offering and the Exchange Offer, (ii) in
possession of sufficient capital to run its business effectively and (iii)
incurring debts within its ability to pay as the same mature or become due. See
"Description of the New Notes."
LACK OF PUBLIC MARKET FOR THE NEW NOTES
The Existing Notes are currently owned by a relatively small number of
beneficial owners. The Existing Notes have not been registered under the
Securities Act or any state securities laws and, unless so registered and to the
extent not exchanged for the New Notes, may not be offered or sold except
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable state securities
laws.
The New Notes will constitute a new issue of securities for which there is
currently no active trading market. If the New Notes are traded after their
initial issuance, they may trade at a discount from their initial offering
price, depending upon prevailing interest rates, the market for similar
securities, and other factors, including general economic conditions and the
financial condition of the Company. Although the New Notes will generally be
permitted to be resold or otherwise transferred by nonaffiliates of the Company
without compliance with the registration and prospectus delivery requirements of
the Securities Act, the Company does not intend to apply for a listing or
quotation of the New Notes on any securities exchange or stock market. The
Initial Purchasers have informed the Company that they currently intend to make
a market in the New Notes. However, the Initial Purchasers are not obligated to
do so, and any such market making may be discontinued at any time without
notice. In addition, such market-making activity will be subject to the limits
imposed under the Exchange Act. See "The Exchange Offer." Accordingly, there can
be no assurance as to the development or liquidity of any market for the New
Notes, or, in the case of non-tendering Holders of Existing Notes, the trading
market for the Existing Notes following the Exchange Offer. If no trading market
8
<PAGE> 14
develops or is maintained, holders of New Notes may experience difficulty in
reselling New Notes or may be unable to sell them.
The liquidity of, and trading market for, the Existing Notes or the New
Notes also may be adversely affected by general declines in the market for
similar securities. Such a decline may adversely affect such liquidity and
trading markets independent of the financial performance of, and prospects for,
the Company.
USE OF PROCEEDS
There will be no cash proceeds payable to Federal-Mogul from the issuance
of the New Notes pursuant to the Exchange Offer. The proceeds from the sale of
the Existing Notes were used to repay indebtedness of the Company, including
borrowings under the Credit Facility and certain other indebtedness of the
Company.
9
<PAGE> 15
BUSINESS
The following table sets forth the Company's net sales by market segment
and geographic region as a percentage of total net sales for the periods
indicated.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Original Equipment
Americas.................................................. 22% 22% 22%
International............................................. 9 % 9 % 8 %
Aftermarket
United States and Canada.................................. 37% 39% 43%
International............................................. 30% 27% 21%
Other(1)
United States and Canada.................................. -- 1 % 4 %
International............................................. 2 % 2 % 2 %
--- --- ---
100% 100% 100%
</TABLE>
- ---------------
(1) Sales of these products -- air bearing spindles, heavy-wall bearings and
precision forged powdered metal parts -- are accounted for by the Company
primarily as OE sales for financial reporting purposes. The precision forged
powdered metal parts operation was sold in April 1995. In January 1997, the
Company sold its heavy-wall bearing division in Germany and Brazil.
MANUFACTURED PRODUCTS
The Company manufactures the following vehicular and industrial components:
ENGINE BEARINGS -- The Company manufactures engine bearings, bushings
and washers, including bimetallic and trimetallic journal bearings (main,
connecting rod, thrust and tilting pad), bimetallic and trimetallic
bushings and washers, valve plates and labyrinth seals. These products are
used in automotive and light truck, heavy duty, industrial, marine,
agricultural, and power generation applications. These products are
marketed under the brand names Federal-Mogul(R) and Glyco(R).
SEALING SYSTEMS -- The Company manufactures a line of sealing products
consisting of oil seals, high technology precision gaskets, valve stem
seals, air conditioning compression seals, crankshaft seal carrier
assemblies and unipistons. Sealing products are used in the automotive and
light truck, heavy duty truck, agricultural, off-highway, railroad and
industrial applications. These products are marketed under the brand names
National(R), Bruss(R), Mather(R), and Seal Technology Systems(R) (STS).
LIGHTING PRODUCTS -- The Company manufactures lighting and safety
products consisting of clearance marker lamps, front, side and rear signal
lamps, stop, tail and turn lights, emergency lighting, turn signal switches
and backup lamps. Lighting products are used in automotive, medium through
heavy duty truck and trailer, off-road, industrial and emergency
applications. These products are marketed under the brand name
Signal-Stat(R).
FUEL SYSTEMS -- The Company manufactures a full line of fuel pumps
including mechanical fuel pumps, diesel lift pumps, electric fuel pumps,
electric fuel modules and hanger assemblies. Fuel systems are used in
automotive and light truck, marine, agricultural and industrial
applications. These products are marketed under the brand name Carter(R).
PISTONS -- The Company manufactures cast aluminum pistons for
automotive, light duty diesel and aircooled engines. They are marketed
under the brand name Sterling(R).
CHASSIS PRODUCTS -- The Company manufactures chassis products
including clutch bearings, kingpins and universal joints for automotive and
light truck applications. They are marketed under the brand name
Federal-Mogul(R).
10
<PAGE> 16
ORIGINAL EQUIPMENT
The Company supplies OE customers with a wide variety of precision
engineered parts including engine bearings, oil seals and fuel systems. The
Company manufactures all of the products that it sells to OE customers.
Customers consist primarily of automotive, heavy duty vehicle and farm and
industrial equipment manufacturers. In 1996, approximately 11% of the Company's
net sales were to the three major automotive manufacturers in the United States,
with General Motors Corporation accounting for approximately 5% of the Company's
net sales, Ford Motor Company accounting for approximately 4% of the Company's
net sales and Chrysler Corporation accounting for approximately 2% of the
Company's net sales. In addition, the Company sells OE products to most of the
major automotive manufacturers headquartered outside the United States. The
Company's Glyco facility in Germany sells OE products to Volkswagen,
Daimler-Benz and BMW. The Company also sells Federal-Mogul engine bearings to
Renault and Peugeot in France and to Fiat in Italy. In addition, the Company
sells a small amount of OE products to certain Japanese manufacturers, including
Nissan-Mexico, certain Toyota operations in the United States and Komatsu in
Japan.
REPLACEMENT
The Company supplies a wide variety of replacement products, including
engine and transmission products (engine bearings, pistons, piston rings,
valves, camshafts, valve lifters, valvetrain parts, timing components and engine
kits, bushings and washers), ball and roller bearings, sealing devices (gaskets
and oil seals and other high performance specialty seals), lighting and
electrical components, and automotive fuel pumps, water pumps, oil pumps and
related systems. The Company also sells steering and suspension parts which
include such items as tie-rod ends, ball joints, idler and pitman arms, center
links, constant velocity parts, rack and pinion assemblies, coil springs,
universal joints, engine mounts and alignment products.
Federal-Mogul sells replacement products under its own brand names such as
Federal-Mogul(R), Glyco(R), National(R), Mather(R), Carter(R), Sterling(R),
Signal-Stat(R) and Seal Technology Systems(R) (STS), as well as under brand
names for which it has long-term licenses such as TRW(R) and Sealed Power(R). It
also packages its products under third-party private brand labels such as
NAPA(R) and CARQUEST(R).
The Company's replacement business supplies approximately 150,000 part
numbers to almost 10,000 customers. The Company's customers are located in more
than 90 countries around the world. For 1996, aftermarket net sales in the
United States and Canada represented 56% of total aftermarket net sales, with
net sales outside of the United States and Canada representing 44% of such
sales.
Domestic customers include industrial bearing distributors, distributors of
heavy duty vehicular parts, machine shops, retail parts stores and independent
warehouse distributors who redistribute products to local parts suppliers called
"jobbers". Internationally, the Company sells replacement products to jobbers,
local retail parts stores and independent warehouse distributors. Replacement
sales to jobbers and local retail parts stores comprise a larger proportion of
total international aftermarket sales than of total domestic aftermarket sales.
The Company's North American distribution centers in Jacksonville, Alabama,
LaGrange, Indiana, and Maysville, Kentucky (the "Distribution Centers"), serve
as the hubs of the Company's domestic replacement distribution network. Products
are shipped from these Distribution Centers to service centers in the United
States and Canada. For Latin American sales, products are shipped through a
facility in Fort Lauderdale, Florida to seven international regional
distribution centers and six Latin American branches. For European sales,
products are shipped through Federal-Mogul's facility in Kontich, Belgium.
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company are its elected officers, other than
its assistant officers. Set forth below are the names, ages (at March 1, 1997),
positions and offices held, and a brief account of the business experience
during the past five years of each executive officer.
11
<PAGE> 17
R. A. SNELL (55). Mr. Snell has served as Chairman, Chief Executive
Officer and President and as a director of the Company since November 1996. He
also serves as Chairman of the Executive and Finance Committee of the Board of
Directors of the Company and as a member of the Pension Committee of the Board
of Directors of the Company. Mr. Snell was previously employed by Tenneco, Inc.,
from November 1987 to November 1996, most recently having served as President
and Chief Executive Officer of Tenneco Automotive from September 1993 until he
was employed by the Company. From 1989 to 1993, he served as Senior Vice
President and General Manager of Tenneco Automotive's Walker Manufacturing
Company operation. He first became an executive officer of the Company in 1996.
A. C. JOHNSON (48). Mr. Johnson has served as Executive Vice President of
the Company since February 1997; Vice President and President, Operations of the
Company from April 1996 to February 1997; Vice President and President,
Worldwide Operations of the Company from January 1996 to April 1996; Vice
President and President, Worldwide Manufacturing Operation of the Company from
February 1995 until January 1996; Vice President, Powertrain
Operations -- Americas of the Company from December 1993 until February 1995;
Vice President and General Manager -- Seal Operations of the Company, from
November 1992 to December 1993; General Manager -- Oil Seal Operations of the
Company, from January 1990 to November 1992. He first became an executive
officer in 1993.
T. W. RYAN (50). Mr. Ryan has served as Senior Vice President and Chief
Financial Officer since February 1997. Prior thereto, Chief Financial Officer of
the Company of Tenneco Automotive, a division of Tenneco, Inc. from January 1995
to February 1997; and as Vice President, Treasurer and Controller of A.O. Smith
Corporation from March 1985 to January 1995. He first became an executive
officer in 1997.
K. W. BAIRD (35). Mr. Baird has served as Vice President -- Distribution
and Logistics of the Company since July 1996. Prior thereto, Mr. Baird was
employed by the Company as Vice President -- Worldwide Aftermarket Operations of
the Company from October 1995 to July 1996; Plant Manager of the Company's
Frankfort, Indiana, and Van Wert, Ohio plants from September 1993 to October
1995; and Product Line Manager for the Company's Van Wert, Ohio and Summerton,
South Carolina plants from September 1990 to September 1993. He first became an
executive officer in 1996.
D. A. BOZYNSKI (43). Mr. Bozynski has served as Vice President and
Treasurer of the Company since April 1996. Prior thereto, Mr. Bozynski was
employed by Unisys Corporation as Vice President and Assistant Treasurer from
October 1994 to April 1996; Vice President, Finance -- Lines of Business from
April 1993 to September 1993; and Vice President, Corporate Business Analysis,
from March 1992 to April 1993. He first became an executive officer in 1996.
J. B. CARANO (47). Mr. Carano has served as Vice President and General
Manager -- Latin America of the Company since 1995; Vice President and
Controller of the Company, December 1992 to March 1995; International
Distribution Manager -- Port Everglades, Florida of the Company, from February
1990 to November 1992. He first became an executive officer in 1992.
R. F. EGAN (50). Mr. Egan has served as Vice President, Distributor
Sales -- Aftermarket of the Company since October 1996; Vice President,
Automotive Sales -- Aftermarket of the Company from December 1993 to October
1996; Vice President, Automotive Sales -- Worldwide Aftermarket Operation of the
Company, November 1992 to December 1993; National Sales Manager, Automotive
Aftermarket -- Worldwide Aftermarket Operation of the Company, from May 1985 to
November 1992. He first became an executive officer in 1993.
C. B. GRANT (52). Mr. Grant has served as Vice President -- Corporate
Development of the Company since December 1992; Vice President and Controller of
the Company, May 1988 to December 1992. He first became an executive officer in
1985.
D. L. KAYE (46). Ms. Kaye has served as Vice President, General Counsel
and Secretary of the Company since April 1995. Prior thereto, Divisional
Counsel, Buick Motor Division and Cadillac Motor Car Division, General Motors
Corporation from April 1990 to April 1995. She first became an executive officer
in 1995.
R. P. RANDAZZO (53). Mr. Randazzo has served as Vice President -- Human
Resources of the Company since January 1997. Prior thereto, Senior Vice
President -- Human Resources of Nextel Communi-
12
<PAGE> 18
cations, Inc. from December 1994 to December 1996, and Senior Vice President,
Human Resources -- Americas Region of Asea Brown Boveri, Inc., from December
1990 to December 1994. He first became an executive officer in 1997.
M. L. SCHULTZ (49). Mr. Schultz has served as Vice President and General
Manager -- North American Aftermarket Sales and Marketing of the Company since
December 1995; Vice President, Marketing -- Worldwide Aftermarket of the Company
from December 1994 to December 1995; Eastern Zone Sales Manager of the Company
from November 1992 to December 1994. Mr. Schultz was Vice President of Sales,
North America for TRW, Inc. before joining the Company in 1992. He first became
an executive officer in 1995.
W. A. SCHMELZER (56). Mr. Schmelzer has served as Vice President and Group
Executive -- Engine and Transmission Products of the Company since April 1995;
Vice President and Group Executive -- E & T Products of the Company from April
1993 to April 1995; Vice President and Group Executive -- Engine and
Transmission Products Group, Europe of the Company from January 1992 to April
1993. He first became an executive officer in 1992.
K. P. SLABY (45). Mr. Slaby has served as Vice President and Controller of
the Company since April 1996. Prior thereto, Manager -- Financial Operation for
the global silicones business of General Electric Company from November 1990 to
April 1996. He first became an executive officer in 1996.
J. J. ZAMOYSKI (50). Mr. Zamoyski has served as Vice President and General
Manager -- Europe of the Company since April 1996; prior thereto, Vice President
and General Manager, Worldwide Aftermarket Operation -- International of the
Company from November 1993 to April 1996 and; General Manager, Worldwide
Aftermarket -- Distribution and Logistics of the Company from August 1991 to
November 1993. He first became an executive officer in 1980.
Generally, officers and directors of the Company are elected at the time of
the annual meeting of shareholders but the Board of Directors of the Company
also elects officers at various other times during the year. Each officer holds
office until his or her successor is elected or appointed or until his or her
resignation or removal.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges for
the Company and its consolidated subsidiaries for each of the last five years.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
- ----------------------------------------
1996 1995 1994 1993 1992
- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
N/A(1) .9x (2) 4.0x 2.6x 1.3x
</TABLE>
The following table sets forth the ratios of earnings to fixed charges for
the Company and its consolidated subsidiaries for each of the last two first
quarters.
<TABLE>
<CAPTION>
QUARTERS ENDED MARCH 31, QUARTERS ENDED JUNE 30,
- ------------------------ ------------------------
1997 1996 1997 1996
- ---- ---- ---- ----
<S> <C> <C> <C>
2.7 2.2 3.9 2.8
</TABLE>
For purposes of computing the ratios of earnings to fixed charges, earnings
are determined by adding back fixed charges to earnings from continuing
operations (including equity in net earnings of unconsolidated subsidiaries)
before taxes on income and excluding undistributed earnings from less than 50%
owned affiliates. Fixed charges consist of interest expense, amortization of
debt issue costs and the interest portion of rent expense.
The Company incurred restructuring charges, adjustments of assets held for
sale and reengineering, severance and other related charges of $19.2 million,
$92.6 million and $220.3 million in 1993, 1995 and 1996, respectively. Excluding
such charges, the ratio of earnings to fixed charges for 1993, 1995 and 1996
would have been 3.2x, 2.8x and .9x, respectively.
- ---------------
(1) Not applicable as 1996 earnings were inadequate to cover fixed charges by
$188.8 million.
(2) 1995 earnings were inadequate to cover fixed charges by $3.3 million.
13
<PAGE> 19
SELECTED FINANCIAL DATA
The following selected consolidated financial data should be read in
conjunction with the Consolidated Financial Statements and the notes thereto
included in the Company's Annual Report on Form 10-K/A for the year ended
December 31, 1996 and the Company's Quarterly Report on Form 10-Q and amended
Form 10-Q/A for the period ended March 31, 1997 and the Form 10-Q for the period
ended June 30, 1997, incorporated herein by reference.
FIVE-YEAR FINANCIAL SUMMARY
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
--------- --------- --------- --------- ---------
(MILLIONS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
(AS RESTATED)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA
Net sales..................................... $ 2,032.7 $ 1,999.8 $ 1,889.5 $ 1,575.5 $ 1,264.0
Costs and expenses(1)(2)(3)................... (2,258.0) (2,000.7) (1,795.5) (1,523.1) (1,262.4)
Other income (expense)........................ (3.4) (2.4) (2.5) 4.0 7.3
Income tax (expense) benefit.................. 22.4 (2.5) (31.8) (19.5) (6.4)
--------- --------- --------- --------- ---------
Earnings (loss) before cumulative effect of
accounting change........................... (206.3) (5.8) 59.7 36.9 2.5
Cumulative effect of accounting change(4)..... -- -- -- -- (88.1)
--------- --------- --------- --------- ---------
Net earnings (loss)........................... (206.3) (5.8) 59.7 36.9 (85.6)
Preferred stock dividends, net of related tax
benefits.................................... (8.7) (8.9) (9.0) (9.1) (4.6)
--------- --------- --------- --------- ---------
Net earnings (loss) available for common
shares...................................... $ (215.0) $ (14.7) $ 50.7 $ 27.8 $ (90.2)
========= ========= ========= ========= =========
COMMON SHARE SUMMARY (PRIMARY)
Average shares and equivalents outstanding
(thousands)................................. 35,105 34,988 35,062 27,342 22,390
Earnings (loss) per share:
Before cumulative effect of accounting
change...................................... $ (6.12) $ (.42) $ 1.45 $ 1.02 $ (.09)
Cumulative effect of accounting change(4)..... -- -- -- -- (3.93)
--------- --------- --------- --------- ---------
Net earnings (loss) per share................. (6.12) (.42) 1.45 1.02 (4.02)
========= ========= ========= ========= =========
Dividends paid per share...................... $ .48 $ .48 $ .48 $ .48 $ .48
========= ========= ========= ========= =========
CONSOLIDATED BALANCE SHEET DATA
Total assets.................................. $ 1,455.2 $ 1,701.1 $ 1,481.7 $ 1,300.2 $ 1,108.1
Short-term debt(5)............................ 280.1 111.9 74.0 39.2 69.4
Long-term debt................................ 209.6 481.5 319.4 382.5 350.6
Shareholders' equity.......................... 318.5 550.3 588.5 366.0 229.0
OTHER FINANCIAL INFORMATION
Net cash provided from (used by) operating
activities.................................. $ 149.0 $ (34.7) $ 24.3 $ 43.5 $ 57.2
Expenditures for property, plant, equipment,
and other long term assets.................. 54.2 78.5 74.9 60.0 40.2
Depreciation and amortization expense......... 63.7 61.0 55.7 50.7 46.7
</TABLE>
- ---------------
(1) For 1996, includes $57.6 million for a restructuring charge, $151.3 million
for adjustment of assets held for sale to fair value and $11.4 million
relating to reengineering and other related charges in 1996.
(2) For 1995, includes $26.9 million for restructuring charges, $51.8 million
for adjustment of assets held for sale to fair value and $13.9 million
relating to reengineering and other related charges in 1995.
(3) Includes $19.2 million for restructuring charges in 1993 and a special
charge of $14.0 million in 1992.
(4) The Company changed its method of accounting for postretirement benefits
other than pensions effective in 1992.
(5) Includes current maturities of long-term debt. (See Note 10 to the
Consolidated Financial Statements.)
(6) As discussed in Note 18 to the Consolidated Financial Statements, the
Company has restated its previously issued financial statements for the
correction of certain items. The corrections are primarily for the
collectibility of accounts receivable, provisions for customer incentive
programs, the recognition of vendor rebates and the recognition of federal
income tax credits.
14
<PAGE> 20
TWO-YEAR QUARTERLY FINANCIAL SUMMARY
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- ---------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA
Net sales............................................. $ 481.8 $ 536.4 $ 967.4 $1,058.3
Costs and expenses.................................... (447.9) (510.0) (908.9) (1,013.1)
Other income (expense)................................ .5 (1.6) (1.6) (3.4)
Income tax (expense) benefit.......................... (5.9) (9.0) (14.5) (15.4)
-------- -------- -------- --------
Earnings Before Extraordinary Item.................... 28.5 15.8 (42.4) 26.4
Extraordinary Item.................................... (2.6) -- (2.6) --
Net earnings.......................................... 25.9 15.8 39.8 26.4
Preferred stock dividends, net of related tax
benefits............................................ (2.1) (2.2) (4.3) (4.4)
-------- -------- -------- --------
Net earnings available for common shares.............. $ 23.8 $ 13.6 $ 35.5 $ 22.0
======== ======== ======== ========
COMMON SHARE SUMMARY (PRIMARY)
Average shares and equivalents outstanding
(thousands)......................................... 35,414 35,099 35,297 35,081
Net earnings per share before extraordinary item...... .74 .39 1.08 .63
Extraordinary Item.................................... (.07) -- (.07) --
Net earnings per share................................ $ .67 $ .39 $ 1.01 $ .63
======== ======== ======== ========
Dividends paid per share.............................. $ .12 $ .12 $ .24 $ .24
======== ======== ======== ========
</TABLE>
CONSOLIDATED BALANCE SHEET DATA
<TABLE>
<CAPTION>
DECEMBER
JUNE 30, 31,
1997 1996
--------- ----------
<S> <C> <C>
Total assets............................................................ $1,300.1 $1,455.2
Short-term debt(1)...................................................... 66.9 280.1
Long-term debt.......................................................... 279.7 209.6
Shareholders' equity.................................................... 335.0 318.5
</TABLE>
OTHER FINANCIAL INFORMATION
<TABLE>
<CAPTION>
SIX MONTHS ENDED
----------------------
JUNE 30, JUNE 30,
1997 1996
---------- ----------
<S> <C> <C>
Net cash provided from operating activities............................ $ 89.8 $ 72.3
Expenditures for property, plant, equipment, and other long term
assets............................................................... 20.8 24.2
Depreciation and amortization expense.................................. 27.3 30.6
</TABLE>
- ---------------
(1) Includes current maturities of long-term debt. (See Note 10 to the
Consolidated Financial Statements.)
15
<PAGE> 21
THE EXCHANGE OFFER
The summary herein of certain provisions of the Registration Agreement does
not purport to be complete and reference is made to the provisions of the
Registration Agreement, which has been filed as an exhibit to the Registration
Statement and a copy of which is available as set forth under "Available
Information."
TERMS OF THE EXCHANGE OFFER
GENERAL
The Existing Notes were sold by the Company on April 23, 1997, pursuant to
the Purchase Agreement, dated April 17, 1997, between the Company and the
Initial Purchasers, and were subsequently resold by the Initial Purchasers to
qualified institutional buyers pursuant to Rule 144A.
In connection with the Offering, the Company entered into the Registration
Agreement and the Initial Purchasers and their respective assignees became
entitled to the benefits of the Registration Agreement.
Pursuant to the Registration Agreement the Company has agreed, for the
benefit of the holders from time to time of the Notes (including the Initial
Purchasers), that it will, at its cost, (i) within 60 days after the closing of
the sale of the Notes (the "Closing"), file a registration statement (the
"Registration Statement") with the Commission with respect to the Exchange Offer
to exchange the Existing Notes for the New Notes with terms identical in all
material respects to the Existing Notes (except that the New Notes will not
contain terms with respect to registration rights or transfer restrictions, and
the interest rate step-up provisions will be modified or eliminated, as
appropriate, (ii) use its best efforts to cause such Registration Statement to
be declared effective under the Securities Act within 120 days of the Closing,
and (iii) consummate the Exchange Offer of the New Notes in exchange for
surrender of the Existing Notes within 180 days of the date of the Registration
Agreement. For each Existing Note surrendered to the Company pursuant to the
Exchange Offer, the holder of such Existing Note will receive a New Note having
a principal amount equal to that of the surrendered Existing Note. Interest on
each New Note will accrue from the last Interest Payment Date on which interest
was paid on the Existing Note surrendered in exchange therefor, or, if no
interest has been paid on such Existing Note, from the date of its original
issue. Under existing Commission interpretations, the New Notes would, in
general, be freely transferable after the Exchange Offer without further
registration under the Securities Act; provided that, in the case of
broker-dealers, a prospectus meeting the requirements of the Securities Act is
delivered as required. The Company has agreed that, for a period of one year
after consummation of the Exchange Offer, it will make available a prospectus
meeting the requirements of the Securities Act to any broker-dealer for use in
connection with any resale of any such New Notes acquired as described below. A
broker-dealer which delivers such a prospectus to purchasers in connection with
such resales will be subject to certain of the civil liability provisions under
the Securities Act, and will be bound by the provisions of the Registration
Agreement (including certain indemnification and contribution rights and
obligations).
Each holder of Existing Notes that wishes to exchange such Existing Notes
for New Notes in the Exchange Offer will be required to make certain
representations, including representations (i) that any New Notes to be received
by it shall be acquired in the ordinary course of its business, (ii) that at the
time of the consummation of the Exchange Offer it has no arrangement or
understanding with any person to participate in the distribution (within the
meaning of the Securities Act) of the New Notes and (iii) that it is not an
"affiliate," as defined in Rule 405 of the Securities Act, of the Company, or if
it is an affiliate, it will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable.
If the holder is not a broker-dealer, it will be required to represent that
it is not engaged in, and does not intend to engage in, the distribution of the
New Notes. If the holder is a broker-dealer that will receive New Notes for its
own account in exchange for Notes that were acquired as a result of
market-making activities or other trading activities, it will be required to
acknowledge that it will deliver a prospectus in connection with any resale of
such New Notes.
In the event that the Company determines, upon advice of counsel, that
applicable laws, rules or regulations or applicable interpretations of the staff
of the Commission do not permit the Company to effect
16
<PAGE> 22
such an Exchange Offer, or if, for any other reason, the Exchange Offer is not
consummated within 180 days of the date of the Registration Agreement, the
Company will, at its cost, (i) as promptly as practicable (but in no event more
than 30 days after so required), file a shelf registration statement (a "Shelf
Registration Statement") with the Commission covering resales of the Notes, (ii)
use its best efforts to cause such Shelf Registration Statement to be declared
effective under the Securities Act and (iii) maintain such Shelf Registration
Statement continuously effective under the Securities Act for a period of two
years or such shorter period ending when all resales of Notes covered by such
Shelf Registration Statement have been made. The Company will, in the event of
filing such a Shelf Registration Statement, provide to each holder of the Notes
copies of the prospectus which is a part of such Shelf Registration Statement,
notify each such holder when such Shelf Registration Statement for the Notes has
become effective and take certain other actions as are required to permit
unrestricted resales of the Notes. A holder of Notes that sells such Notes
pursuant to a Shelf Registration Statement generally will be required to be
named as a selling security holder in the related prospectus and to deliver a
prospectus to purchasers, will be subject to certain of the civil liability
provisions under the Securities Act in connection with such sales and will be
bound by the provisions of the Registration Agreement which are applicable to
such a holder (including certain indemnification and contribution rights and
obligations).
If (i) the Registration Statement is not filed with the Commission on or
prior to the 60th day following the Closing, (ii) the Registration Statement is
not declared effective on or prior to the 120th day following the Closing, or
(iii) the Exchange Offer is not consummated or the Shelf Registration Statement
is not declared effective on or prior to the 180th day following the Closing,
interest in addition to the stated interest on the Notes ("Additional Interest")
will accrue from and including the next day following each of (a) such 60-day
period, in the case of clause (i) above, (b) such 120-day period, in the case of
clause (ii) above and (c) such 180-day period, in the case of clause (iii)
above. In each case, such Additional Interest will be payable at a rate per
annum equal to 0.25% of the principal amount of the Outstanding Notes (as
defined in the Registration Agreement). The aggregate amount of Additional
Interest payable pursuant to the foregoing provisions will in no event exceed
0.50% per annum of the principal amount of the Outstanding Notes. Upon (1) the
filing of the Registration Statement after the 60-day period described in clause
(i) above, (2) the effectiveness of the Registration Statement after the 120-day
period described in clause (ii) above or (3) the consummation of the Exchange
Offer or the effectiveness of the Shelf Registration Statement, as the case may
be, after the 180-day period described in clause (iii) above, the Additional
Interest attributable to the occurrence of any event described in such clause
(i), (ii) or (iii) will cease to accrue from the date of such filing,
effectiveness or consummation, as the case may be.
In the event that a Shelf Registration Statement is declared effective, if
the Company fails to keep such Shelf Registration Statement continuously
effective or generally usable for resales for the period required by the
Registration Agreement, then from the next day following such time as the Shelf
Registration Statement is no longer effective or usable until the earliest of
(i) the date that the Shelf Registration Statement is again deemed effective or
is usable, (ii) the date that is the second anniversary of the Closing, and
(iii) the date as of which all of the Notes are sold pursuant to the Shelf
Registration Statement, Additional Interest will accrue at a rate per annum
equal to 0.25% of the principal amount of the Outstanding Notes, except that
Additional Interest will cease to accrue during any Registration Suspension
Period (as defined in the Registration Agreement).
The summary herein of certain provisions of the Registration Agreement does
not purport to be complete and is subject to, and is qualified in its entirety
by reference to, all the provisions of the Registration Agreement, a copy of
which is available upon request to the Company.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS; TERMINATION
The term "Expiration Date" shall mean September 19, 1997, unless the
Company, in its sole discretion, extends the Exchange Offer, in which case the
term "Expiration Date" shall mean the latest date to which the Exchange Offer is
extended. Notwithstanding any extension of the Exchange Offer, if the Exchange
Offer is not consummated by October 20, 1997, the interest rate borne by the
Existing Notes will increase as provided in the Existing Notes.
17
<PAGE> 23
To extend the Expiration Date, the Company will notify the Exchange Agent
of any extension by oral or written notice and will notify the holders of the
Existing Notes by means of a press release or other public announcement prior to
9:00 A.M., New York City time, on the next business day after the previously
scheduled Expiration Date. Such announcement may state that the Company is
extending the Exchange Offer for a specified period of time.
The Company reserves the right (i) to delay acceptance of any Existing
Notes, to extend the Exchange Offer or to terminate the Exchange Offer and not
permit acceptance of Existing Notes not previously accepted if any of the
conditions set forth herein under "-- Conditions" shall have occurred and shall
not have been waived by the Company, by giving oral or written notice of such
delay, extension or termination to the Exchange Agent, or (ii) to amend the
terms of the Exchange Offer in any manner deemed by it to be advantageous to the
holders of the Existing Notes. Any such delay in acceptance, extension,
termination or amendment will be followed as promptly as practicable by oral or
written notice thereof to the Exchange Agent. If the Exchange Offer is amended
in a manner determined by the Company to constitute a material change, the
Company will promptly disclose such amendment in a manner reasonably calculated
to inform the holders of the Existing Notes of such amendment.
Without limiting the manner in which the Company may choose to make public
announcement of any delay, extension, amendment or termination of the Exchange
Offer, the Company shall have no obligations to publish, advertise, or otherwise
communicate any such public announcement, other than by making a timely release
to an appropriate news agency.
INTEREST ON THE NEW NOTES
The New Notes will accrue interest at the rate of 8.80% per annum from the
last Interest Payment Date on which interest was paid on the Existing Notes, or,
if no interest has been paid on such Existing Notes, from the Issue Date of the
Existing Notes. Interest on the New Notes is payable on April 15 and October 15
of each year.
PROCEDURES FOR TENDERING
To tender in the Exchange Offer, a holder must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal, and mail or otherwise
deliver such Letter of Transmittal or such facsimile, together with any other
required documents, to the Exchange Agent prior to 5:00 p.m., New York City
time, on the Expiration Date. In addition, either (i) a timely confirmation of a
book-entry transfer (a "Book-Entry Confirmation") of such Existing Notes into
the Exchange Agent's account at The Depositary (the "Book-Entry Transfer
Facility") pursuant to the procedure for book-entry transfer described below,
must be received by the Exchange Agent prior to the Expiration Date or (ii) the
holder must comply with the guaranteed delivery procedures described below. THE
METHOD OF DELIVERY OF LETTERS OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO
THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE HOLDERS. IF SUCH DELIVERY
IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY INSURED, WITH
RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE TIMELY DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION
DATE. NO LETTERS OF TRANSMITTAL OR OTHER REQUIRED DOCUMENTS SHOULD BE SENT TO
THE COMPANY. Delivery of all documents must be made to the Exchange Agent at its
address set forth below. Holders may also request their respective brokers,
dealers, commercial banks, trust companies or nominees to effect such tender for
such holders.
The tender by a holder of Existing Notes will constitute an agreement
between such holder and the Company in accordance with the terms and subject to
the conditions set forth herein and in the Letter of Transmittal. Any beneficial
owner whose Existing Notes are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee and who wishes to tender should
contact such registered holder promptly and instruct such registered holder to
tender on his behalf.
18
<PAGE> 24
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by any member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an "eligible guarantor" institution within the meaning of Rule
17Ad-15 under the Exchange Act (each an "Eligible Institution") unless the
Existing Notes tendered pursuant thereto are tendered for the account of an
Eligible Institution.
If the Letter of Transmittal is signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations, or
others acting in a fiduciary or representative capacity, such person should so
indicate when signing, and unless waived by the Company, evidence satisfactory
to the Company of their authority to so act must be submitted with the Letter of
Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt) and withdrawal of the tendered Existing Notes will be determined by the
Company, in its sole discretion, which determination will be final and binding.
The Company reserves the absolute right to reject any and all Existing Notes not
properly tendered or any Existing Notes which, if accepted, would, in the
opinion of counsel for the Company, be unlawful. The Company also reserves the
absolute right to waive any irregularities or conditions of tender as to
particular Existing Notes. The Company's interpretation of the terms and
conditions of the Exchange Offer (including the instructions in the Letter of
Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Existing Notes must be
cured within such time as the Company shall determine. Neither the Company, the
Exchange Agent nor any other person shall be under any duty to give notification
of defects or irregularities with respect to tenders of Existing Notes, nor
shall any of them incur any liability for failure to give such notification.
Tenders of Existing Notes will not be deemed to have been made until such
irregularities have been cured or waived. Any Existing Notes received by the
Exchange Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned without cost to
such holder by the Exchange Agent, unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the Expiration Date.
In addition, the Company reserves the right, in its sole discretion,
subject to the provisions of the Indenture, to purchase or make offers for any
Existing Notes that remain outstanding subsequent to the Expiration Date or, as
set forth under "-- Conditions," to terminate the Exchange Offer in accordance
with the terms of the Registration Agreement, and to the extent permitted by
applicable law, purchase Existing Notes in the open market, in privately
negotiated transactions or otherwise. The terms of any such purchases or offers
could differ from the terms of the Exchange Offer.
ACCEPTANCE OF EXISTING NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES
Upon satisfaction or waiver of all of the conditions to the Exchange Offer,
all Existing Notes properly tendered will be accepted promptly after the
Expiration Date, and the New Notes will be issued promptly after acceptance of
the Existing Notes. See "-- Conditions." For purposes of the Exchange Offer,
Existing Notes shall be deemed to have been accepted as validly tendered for
exchange when, as and if the Company has given oral or written notice thereof to
the Exchange Agent.
In all cases, issuance of New Notes for Existing Notes that are accepted
for exchange pursuant to the Exchange Offer will be made only after timely
receipt by the Exchange Agent of a Book-Entry Confirmation of such Existing
Notes into the Exchange Agent's account at the Book-Entry Transfer Facility, a
properly completed and duly executed Letter of Transmittal and all other
required documents. If any tendered Existing Notes are not accepted for any
reason set forth in the terms and conditions of the Exchange Offer, such
unaccepted or such nonexchanged Existing Notes will be credited to an account
maintained with such Book-Entry Transfer Facility as promptly as practicable
after the expiration or termination of the Exchange Offer.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Existing Notes at the Book-Entry Transfer Facility for purposes of the
Exchange Offer within two business days after the date of this Prospectus. Any
financial institution that is a participant in the Book-Entry Transfer
Facility's systems
19
<PAGE> 25
may make book-entry delivery of Existing Notes by causing the Book-Entry
Transfer Facility to transfer such Existing Notes into the Exchange Agent's
account at the Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for transfer. However, the Letter of Transmittal
(or facsimile) thereof with any required signature guarantees and any other
required documents must, in any case, be transmitted to and received by the
Exchange Agent at one of the addresses set forth under "-- Exchange Agent" on or
prior to the Expiration Date or the guaranteed delivery procedures described
below must be complied with.
GUARANTEED DELIVERY PROCEDURES
If the procedures for book-entry transfer cannot be completed on a timely
basis, a tender may be effected if (i) the tender is made through an Eligible
Institution, (ii) prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof) and Notice of Guaranteed Delivery,
substantially in the form provided by the Company (by facsimile transmission,
mail or hand delivery), setting forth the name and address of the holder of
Existing Notes and the amount of Existing Notes tendered, stating that the
tender is being made thereby and guaranteeing that within three New York Stock
Exchange, Inc. ("NYSE") trading days after the date of execution of the Notice
of Guaranteed Delivery, a Book-Entry Confirmation and any other documents
required by the Letter of Transmittal will be deposited by the Eligible
Institution with the Exchange Agent, and (iii) a Book-Entry Confirmation and all
other documents required by the Letter of Transmittal are received by the
Exchange Agent within three NYSE trading days after the date of execution of the
Notice of Guaranteed Delivery.
WITHDRAWAL OF TENDERS
Tenders of Existing Notes may be withdrawn at any time prior to 5:00 p.m.,
New York City time, on the Expiration Date.
For a withdrawal to be effective, a written notice of withdrawal must be
received by the Exchange Agent prior to 5:00 p.m., New York City time, on the
Expiration Date at one of the addresses set forth under "-- Exchange Agent." Any
such notice of withdrawal must specify the name and number of the account at the
Book-Entry Transfer Facility from which the Existing Notes were tendered,
identify the principal amount of the Existing Notes to be withdrawn, and specify
the name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Existing Notes and otherwise comply with the
procedures of such Book-Entry Transfer Facility. All questions as to the
validity, form and eligibility (including time of receipt) of such notice will
be determined by the Company, whose determination shall be final and binding on
all parties. Any Existing Notes so withdrawn will be deemed not to have been
validly tendered for exchange for purposes of the Exchange Offer. Any Existing
Notes which have been tendered for exchange but which are not exchanged for any
reason will be credited to an account maintained with such Book-Entry Transfer
Facility for the Existing Notes as soon as practicable after withdrawal,
rejection of tender or termination of the Exchange Offer. Properly withdrawn
Existing Notes may be retendered by following one of the procedures described
under "-- Procedures for Tendering" and "-- Book-Entry Transfer" at any time on
or prior to the Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, Existing Notes will
not be required to be accepted for exchange, nor will New Notes be issued in
exchange for any Existing Notes, and the Company may terminate or amend the
Exchange Offer as provided herein before the acceptance of such Existing Notes,
if, because of any change in law, or applicable interpretations thereof by the
Commission, the Company determines that it is not permitted to effect the
Exchange Offer. The Company has no obligation to, and will not knowingly, permit
acceptance of tenders of Existing Notes from affiliates of the Company or from
any other holder or holders who are not eligible to participate in the Exchange
Offer under applicable law or interpretations thereof by the Staff of the
Commission, or if the New Notes to be received by such holder or holders of
Existing Notes in the Exchange Offer, upon receipt, will not be tradable by such
holder without
20
<PAGE> 26
restriction under the Securities Act and the Exchange Act and without material
restrictions under the "blue sky" or securities laws of substantially all of the
states of the United States.
EXCHANGE AGENT
First Trust National Association has been appointed as Exchange Agent for
the Exchange Offer. Questions and requests for assistance and requests for
additional copies of this Prospectus or of the Letter of Transmittal should be
directed to the Exchange Agent addressed as follows:
<TABLE>
<S> <C>
By Mail: (New York depository only): By Hand: (all others):
First Trust of New York First Trust National Association
100 Wall Street, 20th Floor Fourth Floor -- Bond Drop Window
New York, NY 10005 180 East Fifth Street
Attention: Cathy Donohue St. Paul, MN 55101
By Registered Certified or Overnight Mail: By First Class Mail:
First Trust National Association First Trust National Association
Attn: Specialized Finance P.0. Box 64485
180 East Fifth Street St. Paul, MN 55101
St. Paul, MN 55101
By Facsimile:
(For Eligible Institutions Only)
(612) 244-1537
Telephone Number
(800) 934-6802 Bondholder Services
</TABLE>
FEES AND EXPENSES
The expenses of soliciting tenders pursuant to the Exchange Offer will be
borne by the Company. The principal solicitation for tenders pursuant to the
Exchange Offer is being made by mail; however, additional solicitations may be
made by telegraph, telephone, telecopy or in person by officers and regular
employees of the Company.
The Company will not make any payments to brokers, dealers or other persons
soliciting acceptances of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
the Exchange Agent for its reasonable out-of-pocket expenses in connection
therewith. The Company may also pay brokerage houses and other custodians,
nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them
in forwarding copies of this Prospectus and related documents to the beneficial
owners of the Existing Notes, and in handling or forwarding tenders for
exchange.
The expenses to be incurred in connection with the Exchange Offer will be
paid by the Company, including fees and expenses of the Exchange Agent and the
Trustee, and accounting, legal, printing and related fees and expenses.
The Company will pay all transfer taxes, if any, applicable to the exchange
of Existing Notes pursuant to the Exchange Offer. If, however, New Notes or
Existing Notes for principal amounts not tendered or accepted for exchange are
to be registered or issued in the name of any person other than the registered
holder of the Existing Notes tendered, or if tendered Existing Notes are
registered in the name of any person other than the person signing the Letter of
Transmittal, or if a transfer tax is imposed for any reason other than the
exchange of Existing Notes pursuant to the Exchange Offer, then the amount of
any such transfer taxes (whether imposed on the registered holder or any other
persons) will be payable by the tendering holder. If satisfactory evidence of
payment of such taxes or exemption therefrom is not submitted with the Letter of
Transmittal, the amount of such transfer taxes will be billed directly to such
tendering holder.
21
<PAGE> 27
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of Existing Notes who do not exchange their Existing Notes for New
Notes pursuant to the Exchange Offer will continue to be subject to the
restrictions on transfer of such Existing Notes as set forth in the legend
thereon as a consequence of the issuance of the Existing Notes pursuant to
exemptions from, or in transactions not subject to, the registration
requirements of the Securities Act and applicable state securities laws. In
general, the Existing Notes may not be registered under the Securities Act,
except pursuant a transaction not subject to, the Securities Act and applicable
state securities laws. The Company does not currently anticipate that it will
register the Existing Notes under the Securities Act. To the extent that
Existing Notes are tendered and accepted in the Exchange Offer, the trading
market for untendered and tendered but unaccepted Existing Notes could be
adversely affected.
DIRECTORS AND EXECUTIVE OFFICERS
The information required by this item appears (i) under "Nominees for
Election as Directors" on pages 1 through 5 of the Company's definitive Proxy
Statement, dated March 19, 1997, relating to its 1997 Annual Meeting of
Shareholders (the "1997 Proxy Statement") (except for the information appearing
on page 5 under "Compensation of Directors"), which information is incorporated
herein by reference; (ii) under "Information on Securities -- Compliance with
Section 16(a) of the Exchange Act" on page 21 of the 1997 Proxy Statement, which
information is incorporated herein by reference; and (iii) under "Business
Executive -- Officers of the Company."
EXECUTIVE COMPENSATION
The information required by this item appears under "Information on
Executive Compensation" on pages 11 through 18 of the 1997 Proxy Statement
(excluding the information appearing under "Certain Related Transactions" and
"Compensation Committee Report on Executive Compensation" in the 1997 Proxy
Statement) and under "Compensation of Directors" on page 5 of the 1997 Proxy
Statement, and is incorporated herein by reference.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The information with respect to security ownership of certain beneficial
owners and management appears under "Information on Securities -- Stock
Ownership of Management" and "-- Other Beneficial Owners" on pages 19 and 20,
respectively, of the 1997 Proxy Statement and is incorporated herein by
reference.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information with respect to certain relationships and related
transactions appears under "Certain Related Transactions" on pages 14 and 15 of
the 1997 Proxy Statement and is incorporated herein by reference.
22
<PAGE> 28
DESCRIPTION OF THE NEW NOTES
The New Notes will be issued under the Indenture under which the Existing
Notes were issued. The Indenture does not limit the aggregate principal amount
of debt securities that may be issued thereunder ("Debt Securities") and
provides that Debt Securities may be issued thereunder from time to time in one
or more series. The following summary of certain provisions of the New Notes and
the Indenture does not purport to be complete and is subject, and is qualified
in its entirety by reference, to all the provisions of the Indenture, including
the definitions therein of certain terms. Wherever particular Sections, Articles
or defined terms of the Indenture are referred to, it is intended that such
Sections, Articles or defined terms shall be incorporated by reference herein.
Section and Article references used herein are references to the Indenture.
Capitalized terms not otherwise defined herein shall have the meanings given to
them in the Indenture.
GENERAL
The New Notes will constitute a single series of Debt Securities under the
Indenture, will be limited to an aggregate principal amount of $125,000,000 and
will mature on April 15, 2007. The New Notes will rank equally with all other
unsecured and unsubordinated indebtedness of the Company. The New Notes will
bear interest at the rate per annum set forth on the cover page of this
Prospectus from April 23, 1997 or from the most recent Interest Payment Date to
which interest has been paid or provided for, payable semiannually in arrears on
April 15 and October 15 of each year, beginning October 15, 1997, to the Persons
in whose names the New Notes are registered at the close of business on the
April 1 or October 1, as the case may be, next preceding such Interest Payment
Date. Principal of and interest on the New Notes will be payable at the office
or agency of the Company maintained for such purpose in the Borough of
Manhattan, the City of New York, except that, at the option of the Company,
interest may be paid by mailing a check to the address of the Person entitled
thereto as it appears in the Security Register. Interest on the New Notes will
be computed on the basis of a 360-day year of twelve 30-day months.
CHANGE OF CONTROL
Neither the Indenture nor the New Notes contain provisions that afford the
Holders of the New Notes protection in the event of a takeover, recapitalization
or similar restructuring involving the Company which could adversely affect the
New Notes.
FORM, EXCHANGE AND TRANSFER
The New Notes initially will be represented by a Note in global form (the
"Global Note"), which will be deposited upon issuance with First Trust as
custodian for the Depositary in New York, New York, and registered in the name
of DTC or its nominee, for credit to an account of a direct or indirect
participant in DTC, as described below. Except as described under "-- Global
Notes", the Global Note may be transferred, in whole and not in part, only to
another nominee of DTC or to a successor of DTC or its nominee. Beneficial
interests in the Global Note may not be exchanged for Notes in certificated form
except in the limited circumstances described under "-- Global Notes."
Certified New Notes will be issued only in fully registered form, without
coupons, and in denominations of $100,000 and integral multiples of $1,000 in
excess thereof. (Section 302) If certificated New Notes are issued under the
circumstances described under "-- Global Notes," then, at the option of the
Holder, subject to the terms of the Indenture, Notes will be exchangeable for
other Notes of any authorized denomination and of a like tenor and aggregate
principal amount. (Section 305)
If certificated New Notes are issued under the circumstances described
under "-- Global Notes," then, subject to the terms of the Indenture, Notes may
be presented for exchange as provided above or for registration of transfer
(duly endorsed or with the form of transfer endorsed thereon, duly executed) at
the office of the Security Registrar or at the office of any transfer agent
designated by the Company for such purpose.
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No service charge will be made for any registration of transfer or exchange
of Notes, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. (Section 305)
Such transfer or exchange will be effected upon the Security Registrar or such
transfer agent, as the case may be, being satisfied with the documents of title
and identity of the person making the request. The Company has appointed the
Trustee as Security Registrar. The Company, may at any time, designate
additional transfer agents or rescind the designation of any transfer agent or
approve a change in the office through which any transfer agent acts, except
that the Company will be required to maintain a transfer agent in the City of
New York. (Section 1002)
CERTAIN COVENANTS OF THE COMPANY
The following restrictions apply to the Notes.
Limitation on Liens. So long as the Notes shall be Outstanding, the
Company will not create or assume, and will not permit any Restricted Subsidiary
to create or assume, any notes, bonds, debentures or other similar evidences of
Indebtedness secured by any mortgage, pledge, security interest or lien (any
such mortgage, pledge, security interest or lien being referred to herein as a
"Mortgage" or "Mortgages") of or upon any Principal Property owned by the
Company or by any Restricted Subsidiary or on shares of capital stock or
evidence of Indebtedness of any Restricted Subsidiary, whether owned at the date
of the Indenture or thereafter acquired, without making effective provision, and
the Company in such case will make or cause to be made effective provision,
whereby all Notes (together with, if the Company shall so determine, any other
Indebtedness of the Company or such Restricted Subsidiary, whether then existing
or thereafter created which is not subordinated to the Notes) shall be secured
by such a Mortgage equally and ratably with (or prior to) any and all other
Indebtedness thereby secured, provided, however, that the foregoing shall not
apply to any of the following:
(i) Mortgages on any Principal Property, shares of stock or
Indebtedness of any corporation existing at the time such corporation
becomes a Subsidiary;
(ii) Mortgages on any Principal Property, shares of stock or
Indebtedness acquired, constructed or improved by the Company or any
Restricted Subsidiary after the date of the Indenture which are created or
assumed prior to, or contemporaneously with, such acquisition,
construction, or improvement or within 365 days after the acquisition,
completion of construction or improvement or commencement of commercial
operation of such property, to secure or provide for the payment of all or
any part of the purchase price or the cost of such construction or
improvement thereof, or, in addition to Mortgages contemplated by clause
(iii) below, Mortgages on any Principal Property, shares of stock or
Indebtedness existing at the time of acquisition thereof (including
acquisition through merger or consolidation);
(iii) Mortgages on any Principal Property or shares of stock or
Indebtedness acquired from a corporation which is merged with or into the
Company or a Restricted Subsidiary;
(iv) Mortgages on any Principal Property, shares of stock or
Indebtedness to secure Indebtedness to the Company or to a Restricted
Subsidiary;
(v) Mortgages on any Principal Property, shares of stock or
Indebtedness in favor of the United states of America or any state thereof
or the Commonwealth of Puerto Rico, or any department, agency or
instrumentality or political subdivision of the United States of America or
any State thereof or The Commonwealth of Puerto Rico, to secure partial,
progress, advance or other payments, or to secure any Indebtedness incurred
for the purpose of financing all or any part of the cost of acquiring,
constructing or improving the Principal Property, shares of stock or
Indebtedness subject to such Mortgages (including Mortgages incurred in
connection with pollution control, industrial revenue, Title XI maritime
financings or similar financings), or other Mortgages in connection with
the issuance of tax-exempt industrial revenue bonds;
(vi) Mortgages existing as of the date of the Indenture;
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(vii) Mortgages for taxes, assessments or other government charges,
the validity of which are being contested in good faith by appropriate
proceedings and materialmen's, mechanics' and other like Mortgages, or
deposits to obtain the release of such Mortgages;
(viii) Mortgages created or deposits made to secure the payment of
workers' compensation claims or the performance of, or in connection with,
tenders, bids, leases, public or statutory obligations, surety and appeal
bonds, contracts, performance and return-of-money bonds or to secure (or in
lieu of) surety or appeal bonds and Mortgages made in the ordinary course
of business for similar purposes; and
(ix) any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any Mortgage referred to
in the foregoing clauses (i) to (viii), inclusive; provided, however, that
such extension, renewal or replacement shall be limited to all or a part of
the property, shares of stock or Indebtedness which secured the Mortgage so
extended, renewed or replaced (plus improvements on such property).
Notwithstanding the foregoing, the Company or any Restricted Subsidiary may
create or assume Mortgages in addition to those permitted by the immediately
preceding paragraph, and renew, extend or create such Mortgages, provided that
at the time of such creation, assumption, renewal or replacement, and after
giving effect thereto, the aggregate amount of all Indebtedness so secured by
such a Mortgage as provided above (not including Indebtedness excluded as
provided in clauses (i) through (ix) of the immediately preceding paragraph),
plus all Attributable Debt of the Company and its Restricted Subsidiaries in
respect of Sale and Lease-Back Transactions (as defined herein) which would not
be permitted by either clause (i) or (ii) of the first paragraph under
"-- Limitation on Sale and Lease-Back Transactions", would not exceed 20% of
Consolidated Assets. (Section 1009)
Limitation on Sale and Lease-Back Transactions. So long as the Notes shall
be Outstanding, the Company will not, nor will it permit any Restricted
Subsidiary to, enter into any arrangement with any Person (other than the
Company or any Restricted Subsidiary) providing for the leasing by the Company
or a Restricted Subsidiary of any Principal Property owned by the Company or
such Restricted Subsidiary (except for leases for a term of not more than three
years), which property has been or is to be sold or transferred by the Company
or such Restricted Subsidiary to such person on the security of such Principal
Property more than 365 days after the acquisition thereof or the completion of
construction and commencement of full operation thereof (a "Sale and Lease-Back
Transaction"), unless either (i) the Company or such Restricted Subsidiary would
be entitled, pursuant to such covenant, to incur Indebtedness secured by a
Mortgage on the Principal Property to be leased back equal in amount to the
Attributable Debt with respect to such Sale and Lease-Back Transaction without
equally and ratably securing the Notes, or (ii) the Company shall, and, in any
such case, the Company covenants that it will, apply or cause to be applied an
amount equal to the greater of the net proceeds or the fair value (as determined
by the Board of Directors of the Company) of the property so sold to the
purchase of Principal Property or to the retirement (other than any mandatory
retirement), within 365 days of the effective date of any such Sale and
Lease-Back Transaction, of Notes or other Funded Indebtedness; provided,
however, that any such retirement of Notes shall be made in accordance with the
Indenture; and provided, further, that the amount to be applied to such
retirement of Notes or other Funded Indebtedness shall be reduced by an amount
equal to the sum of (a) an amount equal to the principal amount of any Notes
delivered within 365 days after the effective date of such Sale and Lease-Back
Transaction to the Trustee for retirement and cancellation, and (b) the
principal amount of other Funded Indebtedness voluntarily retired by the Company
within such 365-day period, excluding, in each case, retirements pursuant to
mandatory sinking fund or prepayment provisions and payments at Maturity.
Notwithstanding the foregoing,
(i) the Company or any Restricted Subsidiary may enter into Sale and
Lease-Back Transactions in addition to any permitted by the immediately
preceding paragraph and without any obligation to retire any Notes or other
Indebtedness; provided that at the time of entering into such Sale and
Lease-Back Transaction and after giving effect thereto, Attributable Debt
resulting from such Sale and Lease-Back Transaction, plus the aggregate
amount of all Indebtedness secured by a Mortgage (not including
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Indebtedness excluded as provided in clauses (i) through (ix) under
"-- Limitation on Liens"), does not exceed 20% of Consolidated Assets; and
(ii) the Company or any Restricted Subsidiary may, at any time, enter
into a Sale and Lease-Back Transaction with respect to its plant located in
Mooresville, Indiana. (Section 1010)
CERTAIN DEFINITIONS
"Attributable Debt", when used in connection with a Sale and Lease-Back
Transaction, shall mean, as of any particular time, the lesser of (i) the fair
value (as determined by the Board of Directors) of the property subject to such
arrangement and (ii) the then present value (computed by discounting at the
Composite Rate) of the obligation of a lessee for net rental payments during the
remaining term of any lease in respect of such property (including any period
for which such lease has been extended or may, at the option of the lessor, be
extended). The term "net rental payments" under any lease for any period shall
mean the sum of the rental payments required to be paid in such period by the
lessee thereunder, not including, however, any amounts required to be paid by
such lessee (whether or not designated as rental or additional rental) on
account of maintenance and repairs, insurance, taxes, assessments, water rates
or similar charges required to be paid by such lessee thereunder or any amounts
required to be paid by such lessee thereunder contingent upon the amount of
sales, maintenance and repairs, insurance, taxes, assessments, water rates or
similar charges.
"Consolidated Assets" means the Company's assets, determined in accordance
with GAAP and consolidated for financial reporting purposes in accordance with
GAAP, such assets to be valued at book value.
"Funded Indebtedness" means all Indebtedness of the Company and its
Restricted Subsidiaries maturing by its terms more than one year after, or which
is renewable or extendable at the option of the Company for a period ending more
than one year after, the date as of which Funded Indebtedness is being
determined.
"GAAP" means such accounting principles as are generally accepted in the
United States at the date of the Indenture.
"Indebtedness" means, without duplication, (i) all obligations in respect
of borrowed money or for the deferred purchase or acquisition price of property
(including all types of real, personal, tangible, intangible or mixed property)
or services (excluding trade accounts payable, deferred taxes and accrued
liabilities which arise in the ordinary course of business) which are, in
accordance with GAAP, includible as a liability on a balance sheet consolidated
for financial reporting purposes in accordance with GAAP, (ii) all amounts
representing the capitalization of rental obligations in accordance with GAAP,
and (iii) all Contingent Obligations (as defined herein) with respect to the
foregoing; for purposes of clause (iii), "Contingent Obligation" means, as to
any Person, any obligation of such Person guaranteeing or in effect guaranteeing
any Indebtedness, leases, dividends or other obligations ("primary obligations")
of any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase Property, securities or services primarily for the purpose of assuring
the beneficiary of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (d) otherwise to assure or
hold harmless the beneficiary of such primary obligation against loss in respect
thereof; provided, however, that the term "Contingent Obligation" shall not
include the endorsement of instruments for deposit or collection in the ordinary
course of business. The term "Contingent Obligation" shall also include the
liability of a general partner in respect of the primary obligations of a
partnership in which it is a general partner. The amount of any Contingent
Obligation of a Person shall be deemed to be an amount equal to the principal
amount of the primary obligation in respect to which such Contingent Obligation
is made.
"Principal Property" shall mean the principal manufacturing facilities
owned by the Company or a Restricted Subsidiary located in the United States,
except such as the Board of Directors, in its good faith
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opinion, reasonably determines is not significant to the business, financial
condition and earnings of the Company and its consolidated Subsidiaries taken as
a whole, as evidenced by a Board Resolution, and except for (i) any and all
personal property including, without limitation, (a) motor vehicles and other
rolling stock, and (b) office furnishings and equipment and information and
electronic data processing equipment, (ii) any property financed through
obligations issued by a state, territory or possession of the United States, or
any political subdivision or instrumentality of the foregoing, or (iii) any real
property held for development or sale.
"Restricted Subsidiary" means any consolidated Subsidiary that owns any
Principal Property.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
EVENTS OF DEFAULT
The following events will constitute an "Event of Default" under the
Indenture with respect to the Notes: (i) failure to pay principal of or any
premium on any Note when due; (ii) failure to pay any interest on any Note when
due, and such failure continues for 30 days; (iii) failure to deposit any
sinking fund payment, when due, in respect of any Debt Security of that series
(in the case of any subordinated debt securities which may be issued under a
separate indenture which may be entered into between the Company and the Trustee
(the "Subordinated Indenture"), whether or not such deposit is prohibited by the
subordination provisions); (iv) failure to perform any other covenant of the
Company in the Indenture or such Note (other than a covenant included in the
Indenture solely for the benefit of a series other than the Notes), continued
for 60 days after written notice has been given by the Trustee, or the Holders
of at least 10% in principal amount of the Outstanding Notes, as provided in the
Indenture; (v) a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company (including a default with respect
to Debt Securities of any series other than the Notes), or under any mortgage,
indenture or instrument (including the Indenture) under which there may be
issued or by which there may be secured or evidenced any indebtedness for money
borrowed by the Company or any consolidated Subsidiary, whether such
indebtedness now exists or shall hereafter be created, which default shall have
resulted in such indebtedness becoming or being declared due and payable prior
to the date on which it would otherwise have become due and payable, without
such indebtedness having been discharged, or such acceleration having been
rescinded or annulled, within a period of 10 days after there shall have been
given, by registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 10% in principal amount of
the Outstanding Notes a written notice specifying such default and requiring the
Company to cause such indebtedness to be discharged or cause such acceleration
to be rescinded or annulled, and stating that such notice is a "Notice of
Default" under the Indenture; and (vi) certain events involving bankruptcy,
insolvency or reorganization. (Section 501)
If an Event of Default (other than an Event of Default described in clause
(vi) above) with respect to the Notes at the time Outstanding shall occur and be
continuing, either the Trustee or the Holders of at least 25% in aggregate
principal amount of the Outstanding Notes by notice as provided in the Indenture
may declare the principal amount of the Notes to be due and payable immediately.
If an Event of Default described in clause (vi) above with respect to the Notes
at the time Outstanding shall occur, the principal amount of all the Notes will
automatically, and without any action by the Trustee or any Holder, become
immediately due and payable. After any such acceleration, but before a judgment
or decree based on acceleration, the Holders of a majority in aggregate
principal amount of the Outstanding Notes may, under certain circumstances,
rescind and annul such acceleration if all Events of Default, other than the
non-payment of accelerated principal (or other specified amount), have been
cured or waived as provided in the Indenture. (Section 502) For information as
to waiver of defaults, see "-- Modification and Waiver."
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers
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under the Indenture at the request or direction of any of the Holders, unless
such Holders shall have offered to the Trustee reasonable indemnity. (Section
603) Subject to such provisions for the indemnification of the Trustee, the
Holders of a majority in aggregate principal amount of the Outstanding Notes
will 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 Notes. (Section 512)
No Holder of a Note will have any right to institute any proceeding with
respect to the Indenture, or for the appointment of a receiver or a trustee, or
for any other remedy thereunder, unless (i) such Holder has previously given to
the Trustee written notice of a continuing Event of Default with respect to the
Notes, (ii) the Holders of at least 25% in aggregate principal amount of the
Outstanding Notes have made written request, and such Holder or Holders have
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and (iii) the Trustee has failed to institute such proceeding, and has
not received from the Holders of a majority in aggregate principal amount of the
Outstanding Notes a direction inconsistent with such request, within 60 days
after such notice, request and offer. (Section 507) However, such limitations do
not apply to a suit instituted by a Holder of a Note for the enforcement of
payment of the principal of or any premium or interest on such Note on or after
the applicable due date specified in such Note. (Section 508)
The Company will be required to furnish to the Trustee annually a statement
by certain of its officers as to whether or not the Company, to their knowledge,
is in default in the performance or observance of any of the terms, provisions
and conditions of the Indenture and, if so, specifying all such known defaults.
(Section 1004)
PAYMENT
All moneys paid by the Company to a Paying Agent for the payment of the
principal of or any premium or interest on any Note which remain unclaimed at
the end of two years after such principal, premium or interest has become due
and payable will be repaid to the Company, and the Holder of such Note
thereafter may look only to the Company for payment thereof. (Section 1003)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of the Holders of any of the Outstanding
Notes, may consolidate with or merge into, or convey, transfer or lease its
properties and assets substantially as an entirety to, any Person, and may
permit any Person to merge into, or convey, transfer or lease its properties and
assets substantially as an entirety to, the Company, provided (i) that any
successor Person must be a corporation, partnership or trust organized and
validly existing under the laws of any domestic jurisdiction and must assume the
Company's obligations on the Notes and under the Indenture, (ii) that, after
giving effect to the transaction, no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of Default, shall have
occurred and be continuing and (iii) that certain other conditions are met. Upon
any consolidation or merger into any other Person or any conveyance, transfer or
lease of the Company's assets substantially as an entirety to any Person, the
successor Person will succeed to, and be substituted for, the Company under the
Indenture, and the Company, except in the case of a lease, will be relieved of
all obligations and covenants under the Indenture and the Notes to the extent it
was the predecessor Person. (Article Eight)
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture affecting the Notes may be
made by the Company and the Trustee under the Indenture only with the consent of
the Holders of a majority in aggregate principal amount of the Outstanding
Notes; provided, however, that no such modification or amendment may, without
the consent of each Holder of such Note affected thereby, (i) change the Stated
Maturity of the principal of, or any installment of principal of or interest on,
any such Note, (ii) reduce the principal amount of, or any premium or interest
on, any such Note, (iii) reduce the amount of principal of any Note payable upon
acceleration of the maturity thereof, (iv) change the place or currency of
payment of principal of, or any premium or interest on, any such Note, (v)
impair the right to institute suit for the enforcement of any
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payment on or with respect to any such Note, (vi) reduce the percentage in
principal amount of Outstanding Notes, the consent of whose Holders is required
for modification or amendment of the Indenture, (vii) reduce the percentage in
principal amount of Outstanding Notes necessary for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults or (viii)
modify such provisions with respect to modification and waiver. (Section 902)
The Holders of a majority in principal amount of the Outstanding Notes may
waive compliance by the Company with certain restrictive provisions of the
Indenture and, if applicable, such Notes. (Section 1008) The Holders of a
majority in principal amount of the Outstanding Notes may waive any past default
under the Indenture, except a default in the payment of principal, premium or
interest and certain covenants and provisions of the Indenture and, if
applicable, such Notes which may not be amended without the consent of the
Holder of each Note affected. (Section 513)
DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that the Company may elect either (i) to defease and
be discharged from any and all of its obligations with respect to the Notes
(except for the obligations to exchange or register the transfer of the Notes,
to replace temporary or mutilated, destroyed, lost or stolen Notes, to maintain
an office or agency with respect to the Notes and to hold moneys for payment in
trust) ("defeasance") or (ii) to be released from its obligations with respect
to the Notes concerning certain restrictive covenants which are subject to
covenant defeasance ("covenant defeasance"), and the occurrence of certain
Events of Default, which are described above in clause (iv) (with respect to
such restrictive covenants) and clause (v) under "-- Events of Default," shall
no longer be an Event of Default, in each case, upon deposit with the Trustee
(or other qualifying trustee), in trust for such purpose, money or U.S.
Government Obligations, or both, which, through the payment of principal and
interest in respect thereof in accordance with their terms, will provide money
in an amount sufficient to pay the principal of and any premium and interest on
the Notes.
As a condition to defeasance or covenant defeasance, the Company must
deliver to the Trustee an Opinion of Counsel (as specified in the Indenture) to
the effect that Holders of the Notes will not recognize gain or loss for United
States federal income tax purposes as a result of such defeasance or covenant
defeasance and will be subject to United States federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such defeasance or covenant defeasance had not occurred. The Company may
exercise its defeasance option with respect to the Notes notwithstanding its
prior exercise of its covenant defeasance option. If the Company exercises its
defeasance option, payment of the Notes may not be accelerated because of an
Event of Default. If the Company exercises its covenant defeasance option,
payment of the Notes may not be accelerated by reference to the covenants noted
under clause (ii) above. In the event that the Company omits to comply with its
remaining obligations with respect to the Notes under the Indenture after
exercising its covenant defeasance option and the Notes are declared due and
payable because of the occurrence of any Event of Default, the amount of money
and U.S. Government Obligations on deposit in the defeasance trust may be
insufficient to pay amounts due on the Notes at the time of the acceleration
resulting from such Event of Default. However, the Company will remain liable in
respect of such payments. (Article Thirteen)
GOVERNING LAW
The Indenture is, and the Notes will be governed by and construed in
accordance with, the law of the State of New York, without regard to principles
of conflicts of laws. (Section 112)
REGARDING THE TRUSTEE
First Trust is the Trustee under the Indenture and the Subordinated
Indenture. The Trustee may be deemed to have a conflicting interest and may be
required to resign as Trustee if, at the time of a default under the Indenture
or the Subordinated Indenture, it is a creditor of the Company. In addition, the
Trustee will be required to resign as Trustee under the Indenture and the
Subordinated Indenture if at the time of default under either the Indenture or
the Subordinated Indenture, Notes or other debt securities have been issued
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under either the Indenture or the Subordinated Indenture. The Trustee or its
affiliates perform certain commercial banking services for the Company in the
ordinary course of business.
Notices should be directed to the Trustee at One Illinois Center, 111 East
Wacker Drive, Suite 3000, Chicago, Illinois 60601, Attn: Corporate Trust
Division.
GLOBAL NOTES
Notwithstanding any provision of the Indenture or the Notes, no Global Note
may be exchanged in whole or in part for Notes registered, and no transfer of a
Global Note, in whole or in part, may be registered, in the name of any Person
other than the Depositary for such Global Note or any nominee of such Depositary
unless (i) the Depositary has notified the Company that it is unwilling or
unable to continue as Depositary for such Global Note or has ceased to be
qualified to act as such as required by the Indenture, (ii) there shall have
occurred and be continuing an Event of Default with respect to the Notes
represented by such Global Note or (iii) there shall exist such circumstances,
if any, in addition to or in lieu of those described above as may be described
in the Final Offering Memorandum. All securities issued in exchange for a Global
Note or any portion thereof will be registered in such names as the Depositary
may direct. (Sections 204 and 305)
As long as the Depositary or its nominee is the registered Holder of a
Global Note, the Depositary or such nominee, as the case may be, will be
considered the sole owner and holder of such Global Note and the Notes
represented thereby for all purposes under the Notes and the Indenture. Except
in the limited circumstances referred to above, owners of beneficial interests
in a Global Note will not be entitled to have such Global Note or any Notes
represented thereby registered in their names, will not receive or be entitled
to receive physical delivery of certificated Notes in exchange therefor and will
not be considered to be the owners or Holders of such Global Note or any Notes
represented thereby for any purpose under the Notes or the Indenture. All
payments of principal of and any premium and interest on a Note will be made to
the Depositary or its nominee, as the case may be, as the Holder thereof. The
laws of some jurisdictions require that certain purchasers of securities take
physical delivery of such securities in definitive form. These laws may impair
the ability to transfer beneficial interests in a Global Note.
Ownership of beneficial interests in a Global Note will be limited to
institutions that have accounts with the Depositary or its nominee
("participants") and to persons that may hold beneficial interests through
participants. In connection with the issuance of any Global Note, it is expected
that the Depositary will credit, on its book-entry registration and transfer
system, the respective principal amounts of Notes represented by the Global Note
to the accounts of participants. The accounts to be credited shall initially be
designated by the Initial Purchasers. Ownership of beneficial interests in a
Global Note will be shown only on, and the transfer of those ownership interests
will be effected only through, records maintained by the Depositary (with
respect to participants' interests) or any such participant (with respect to
interests of persons held by such participants on their behalf). Payments of
principal of and any premium and interest on individual Notes represented by a
Global Note will be made to the Depositary or its nominee, as the case may be,
as the Holder of the Global Note. Payments, transfers, exchanges and other
matters relating to beneficial interests in a Global Note may be subject to
various policies and procedures adopted by the Depositary from time to time.
None of the Company, the Trustee or any agent of the Company or the Trustee will
have any responsibility or liability for any aspect of the Depositary's or any
participant's records relating to, or for payments made on account of,
beneficial interests in a Global Note, or for maintaining, supervising or
reviewing any records relating to such beneficial interests.
The Company expects that the Depositary, upon receipt of principal, premium
or interest in respect of a Global Note, will credit immediately participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of such Global Note as shown on the records of
the Depositary. The Company also expects that payments by participants to owners
of beneficial interests in such Global Note held through such participants will
be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers and registered in "street
name" and will be the responsibility of such participants.
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The Company understands that the Depositary will take any action to be
taken by a Holder of Notes only at the direction of one or more participants to
whose accounts interests in the Global Notes are credited and only in respect of
such portion of the aggregate principal amount of Notes as to which such
participant or participants has or have given such direction.
If the Depositary is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by the Company within 90
days, the Company will issue individual Notes in exchange for the Global Note or
Notes representing such Notes. In addition, the Company may, at any time and in
its sole discretion, determine not to have any Notes represented by one or more
Global Notes, and, in such event, will issue individual Notes in exchange for
the Global Note or Notes representing such Notes. In any such instance, an owner
of a beneficial interest in a Global Note will be entitled to physical delivery
of individual Notes represented by such Global Note equal in principal amount to
such beneficial interest and to have such Notes registered in its name.
Individual Notes so issued will be issued as certificated Notes in authorized
denominations. (Section 305)
The Depositary has advised the Company and the Initial Purchasers as
follows: The Depositary is a limited-purpose trust Company organized under New
York Banking Law, a "banking organization" within the meaning of New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. The Depositary was created to hold securities for its participants and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. The Depositary's participants include securities
brokers and dealers (including the Initial Purchasers), banks, trust companies,
clearing corporations, and certain other organizations, some of which (and/or
their representatives) own the Depositary. Access to the Depositary's book-entry
system is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes was made by the Initial Purchasers in immediately
available funds. All payments of principal and interest will be made by the
Company in immediately available funds or the equivalent.
The Notes cleared in the Depositary's Same-Day Funds Settlement System
until maturity and secondary market trading activity in the Notes that is
effected through the Depositary is required by the Depositary to settle in
immediately available funds.
ABSENCE OF A PUBLIC MARKET FOR THE NOTES
Prior to the Exchange Offer, there has been no public market for the Notes.
If such a market were to develop, the New Notes could trade at prices that may
be higher or lower than their principal amount. Federal-Mogul does not intend to
apply for listing of the New Notes on any securities exchange or for quotation
of the New Notes on The Nasdaq National Market or otherwise. Federal-Mogul has
been advised by the Initial Purchasers that they currently intend to make a
market in the New Notes, as permitted by applicable laws and regulations, after
consummation of the Exchange Offer. The Initial Purchasers are not obligated,
however, to make a market in the New Notes, and any such market making activity
may be discontinued at any time, without notice, at the sole discretion of the
Initial Purchasers. There can be no assurance as to the liquidity of the public
market for the New Notes or that any active public market for the New Notes will
develop or continue. If an active public market does not develop or continue,
the market price and liquidity of the New Notes may be adversely affected.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary describes the principal United States federal income
tax consequences to holders of the exchange of the Existing Notes for New Notes
pursuant to the Exchange Offer. This summary is intended to address the
beneficial owners of Notes that are citizens or residents of the United States,
corporations, partnerships or other entities created or organized in or under
the laws of the United States or any State or the District of Columbia, or
estates or trusts that are not foreign estates or trusts for United States
federal income tax purposes, in each case, that hold the Notes as capital
assets.
The exchange of Existing Notes for New Notes pursuant to the Exchange Offer
will not constitute a taxable exchange for United States federal income tax
purposes. As a result, a holder of an Existing Note whose Existing Note is
accepted in the Exchange Offer will not recognize gain or loss on the exchange.
A tendering holder's tax basis in the New Notes received pursuant to the
Exchange Offer will be the same as such holder's tax basis in the Existing Notes
surrendered therefor. A tendering holder's holding period for the New Notes
received pursuant to the Exchange Offer will include its holding period for the
Existing Notes surrendered therefor.
ALL HOLDERS OF EXISTING NOTES ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS
REGARDING THE UNITED STATES FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF THE
EXCHANGE OF EXISTING NOTES FOR NEW NOTES, AND OF THE OWNERSHIP AND DISPOSITION
OF NEW NOTES RECEIVED IN THE EXCHANGE OFFER IN LIGHT OF THEIR OWN PARTICULAR
CIRCUMSTANCES.
DESCRIPTION OF CERTAIN FEDERAL INCOME TAX
CONSEQUENCES OF AN INVESTMENT IN THE EXCHANGE NOTES
The following is a summary of the material United States federal income tax
consequences of the acquisition, ownership and disposition of the Existing Notes
or the New Notes by a United States Holder (as defined below). This summary
deals only with the United States Holders that will hold the Existing Notes or
the New Notes as capital assets. The discussion does not cover all aspects of
federal taxation that may be relevant to, or the actual tax effect that any of
the matters described herein will have on, the acquisition, ownership or
disposition of the Existing Notes or the New Notes by particular investors, and
does not address state, local, foreign or other tax laws. In particular, this
summary does not discuss all of the tax considerations that may be relevant to
certain types of investors subject to special treatment under the federal income
tax laws (such as banks, insurance companies, investors liable for the
alternative minimum tax, individual retirement accounts and other tax-deferred
accounts, tax-exempt organizations, dealers in securities or currencies,
investors that will hold the Existing Notes or the New Notes as part of
straddles, hedging transactions or conversion transactions for federal tax
purposes or investors whose functional currency is not United States Dollars).
Furthermore, the discussion below is based on provisions of the Internal Revenue
Code of 1986, as amended, and regulations, rulings, and judicial decisions
thereunder as of the date hereof, and such authorities may be repealed, revoked
or modified so as to result in U.S. federal income tax consequences different
from those discussed below. PERSONS CONSIDERING THE PURCHASE, OWNERSHIP, OR
DISPOSITION OF NEW NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE
U.S. FEDERAL INCOME TAX CONSEQUENCES IN LIGHT OF THEIR PARTICULAR SITUATIONS AS
WELL AS ANY CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR
INTERNATIONAL TAXING JURISDICTION.
As used herein, the term "United States Holder" means a beneficial owner of
the Existing Notes or the New Notes that is (i) a citizen or resident of the
United States for United States federal income tax purposes, (ii) a corporation
created or organized under the laws of the United States or any State thereof,
(iii) a person or entity that is otherwise subject to United States federal
income tax on a net income basis in respect of income derived from the Existing
Notes or the New Notes, or (iv) a partnership to the extent the interest therein
is owned by a person who is described in clause (i), (ii) or (iii) of this
paragraph.
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INTEREST
Interest (including any Additional Interest) paid on an Existing Note or a
New Note will be taxable to a United States Holder as ordinary income at the
time it is received or accrued, depending on the holder's method of accounting
for tax purposes.
PURCHASE, SALE, EXCHANGE, RETIREMENT AND REDEMPTION OF THE EXCHANGE NOTES
In general (with certain exceptions described below) a United States
Holder's tax basis in a New Note will equal the price paid for the Existing
Notes for which such New Note was exchanged pursuant to the Exchange Offer. A
United States Holder generally will recognize gain or loss on the sale,
exchange, retirement, redemption or other disposition of an Existing Note or a
New Note (or portion thereof) equal to the difference between the amount
realized on such disposition and the United States Holder's tax basis in the
Existing Note or the New Note (or portion thereof). Except to the extent
attributable to accrued but unpaid interest, gain or loss recognized on such
disposition of an Existing Note or a New Note will be capital gain or loss.
Under the "Taxpayer Relief Act of 1997" (the "Taxpayer Act") the maximum rate
applicable to long-term capital gains of individuals has been reduced to 20%.
However, the Taxpayer Act also extends the holding period for long-term capital
gains to 18 months for capital assets disposed of after July 28, 1997. Gain on
capital assets held between 12 months and 18 months are subject to tax at a
maximum rate of 28%. Any such gain will generally be United States source gain.
BOND PREMIUM
If a United States Holder acquires a New Note or has acquired an Existing
Note, in each case, for an amount more than its redemption price, the Holder may
elect to amortize such bond premium on a yield to maturity basis. Once made,
such an election applies to all bonds (other than bonds the interest on which is
excludable from gross income) held by the United States Holder at the beginning
of the first taxable year to which the election applies or thereafter acquired
by the United States Holder, unless the IRS consents to a revocation of the
election. The basis of a New Note will be reduced by any amortizable bond
premium taken as a deduction.
MARKET DISCOUNT
The purchase of a New Note or the purchase of an Existing Note other than
at original issue may be affected by the market discount provisions of the Code.
These rules generally provide that, subject to a statutorily defined de minimis
exception, if a United States Holder purchases a New Note (or purchased an
Existing Note) at a "market discount," as defined below, and thereafter
recognizes gain upon a disposition of the New Note (including dispositions by
gift or redemption), the lesser of such gain (or appreciation, in the case of a
gift) or the portion of the market discount that has accrued ("accrued market
discount") while the Exchange Note (and its predecessor Existing Note, if any)
was held by such United States Holder will be treated as ordinary interest
income at the time of disposition rather than as capital gain. For a New Note or
an Existing Note, "market discount" is the excess of the stated redemption price
at maturity over the tax basis immediately after its acquisition by a United
States Holder. Market discount generally will accrue ratably during the period
from the date of acquisition to the maturity date of the New Note, unless the
United States Holder elects to accrue such discount on the basis of the constant
yield method. Such an election applies only to the New Note with respect to
which it is made and is irrevocable.
In lieu of including the accrued market discount income at the time of
disposition, a United States Holder of a New Note acquired at a market discount
(or acquired in exchange for an Existing Note acquired at a market discount) may
elect to include the accrued market discount in income currently either ratably
or using the constant yield method. Once made, such an election applies to all
other obligations that the United States Holder purchases at a market discount
during the taxable year for which the election is made and in all subsequent
taxable years of the United States Holder, unless the Internal Revenue Service
consents to a revocation of the election. If an election is made to include
accrued market discount in income currently, the basis of a New Note (or, where
applicable, a predecessor Existing Note) in the hands of the United States
Holder will be increased by the accrued market discount thereon as it is
includible in income. A United States Holder of a market discount New Note who
does not elect to include market discount in income currently
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<PAGE> 39
generally will be required to defer deductions for interest on borrowings
allocable to such New Note, if any, in an amount not exceeding the accrued
market discount on such New Note until the maturity or disposition of such New
Note.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Payments of interest (including any Additional Interest) and principal on,
and the proceeds of sale or other disposition of the Existing Notes or the New
Notes payable to a United States Holder may be subject to information reporting
requirements and backup withholding at a rate of 31% will apply to such payments
if the United States Holder fails to provide an accurate taxpayer identification
number or to report all interest and dividends required to be shown on its
federal income tax returns. Certain United States Holders (including, among
others, corporations) are not subject to backup withholding. United States
Holders should consult their tax advisors as to their qualification for
exemption from backup withholding and the procedure for obtaining such an
exemption.
PLAN OF DISTRIBUTION
Each broker-dealer that receives the New Notes for its own account pursuant
to the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of the New Notes received in exchange for the Existing
Notes where such Existing Notes were acquired as a result of market-making
activities or other trading activities. The Company has agreed that, starting on
the Expiration Date and ending on the close of business on the first anniversary
of the Expiration Date, it will make this Prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any such
resale.
The Company will not receive any proceeds from any sale of the New Notes by
broker-dealers. The New Notes received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the New Notes or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Securities. Any
broker-dealer that resells New Securities that were received by it for its own
account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such New Securities may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit of any
such resale of New Securities and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that by acknowledging that it will deliver
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act.
For a period of one year after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer (including the expenses of one counsel for the
holders of the Securities) other than commissions or concessions of any brokers
or dealers and will indemnify the holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
The validity of the New Notes will be passed upon by Diane L. Kaye, Esq.,
Vice President, General Counsel and Secretary of Federal-Mogul. Ms. Kaye owns
and holds options to purchase approximately 27,000 shares of Common Stock of
Federal-Mogul.
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EXPERTS
The consolidated financial statements of Federal-Mogul as of December 31,
1996 and 1995 and for each of the three years in the period ended December 31,
1996 incorporated in this prospectus by reference from Federal-Mogul's Annual
Report on Form 10-K/A for the year ended December 31, 1996 have been audited by
Ernst & Young LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
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======================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS AND THE ACCOMPANYING LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE EXCHANGE AGENT. NEITHER THIS PROSPECTUS NOR THE
ACCOMPANYING LETTER OF TRANSMITTAL, NOR BOTH TOGETHER, CONSTITUTE 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 SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS, NOR THE ACCOMPANYING LETTER OF TRANSMITTAL, NOR
BOTH TOGETHER, NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR THEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AT ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 1
Incorporation of Certain Documents by
Reference........................... 1
Summary............................... 2
The Company........................... 2
Recent Developments................... 2
The Note Offering..................... 3
The Exchange Offer.................... 3
Summary of Terms of New Notes......... 6
Risk Factors.......................... 7
Use of Proceeds....................... 9
Business.............................. 10
Ratio of Earnings to Fixed Charges.... 13
Selected Financial Data............... 14
The Exchange Offer.................... 16
Directors and Executive Officers...... 22
Executive Compensation................ 22
Security Ownership of Certain
Beneficial Owners and Management.... 22
Certain Relationships and Related
Transactions........................ 22
Description of the New Notes.......... 23
Certain United States Federal Income
Tax Consequences.................... 32
Plan of Distribution.................. 34
Legal Matters......................... 34
Experts............................... 35
</TABLE>
======================================================
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[FEDERAL-MOGUL CORPORATION LOGO]
OFFER TO EXCHANGE
8.80% SENIOR NOTES DUE 2007
WHICH HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933,
AS AMENDED,
FOR ANY AND ALL OUTSTANDING
8.80% SENIOR NOTES DUE 2007
--------------------
PROSPECTUS
--------------------
AUGUST 20 , 1997
======================================================
<PAGE> 42
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Federal-Mogul is incorporated under the laws of the State of Michigan.
Sections 561 through 571 of the Michigan Business Corporation Act, as amended
(the "MBCA"), Article VII of Federal-Mogul's Certificate of Incorporation, as
amended, and Article IV of Federal-Mogul's By-Laws, as amended, provide for the
indemnification of officers, directors and other persons against certain
judgments, expenses, fines and amounts paid by the director or officer in
settlement of claims brought against them by third persons or by or in the right
of the corporation if those directors and officers acted in good faith and in a
manner reasonably believed to be in, or not opposed to, the best interests of
the corporation or its shareholders. Set forth below is the text of Sections 561
through 571 of the MBCA, the text of Article VII of Federal-Mogul's Certificate
of Incorporation, and the text of Article IV of Federal-Mogul's By-Laws.
Sections 561 through 571 of the MBCA provide as follows:
"450.1561 INDEMNIFICATION FOR EXPENSES, JUDGMENTS, FINES AND SETTLEMENTS;
PLEA OF NOLO CONTENDERE, EFFECT. --A corporation shall have power to indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative or investigative and whether formal or informal, other
than an action by or in the right of the corporation, by reason of the fact that
he or she is or was a director, officer, employee or agent of the corporation,
or 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 or other enterprise, whether for profit or
not, against expenses, including attorneys' fees, judgments, penalties, fines
and amounts paid in settlement actually and reasonably incurred by him or her in
connection with such action, suit or proceeding if the person acted in good
faith and in a manner he or she reasonably believed to be in or not opposed to
the best interests of the corporation or its shareholders, and with respect to
any action or proceeding, if the person had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit, or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, does not, of itself, create a presumption that the person did
not act in good faith and in a manner which he or she reasonably believed to be
in or not opposed to the best interests of the corporation or its shareholders,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his or her conduct was unlawful. (Last amended by Ch. 1, L. '87,
eff. 3-1-87.)
450.1562 INDEMNIFICATION FOR EXPENSE INCURRED FOR DEFENSE OR SETTLEMENT OF
LITIGATION; NEGLIGENCE OR MISCONDUCT; EXTENT OF INDEMNIFICATION. --A
corporation has the power to indemnify a person who was or is a party or is
threatened to be made a party to a threatened, pending, or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he or she is or was a director, officer, employee, or
agent of the corporation, or 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, or other enterprise,
whether for profit or not, against expenses, including attorneys' fees, and
amounts paid in settlement actually and reasonably incurred by the person in
connection with the action or suit, if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to the best
interests of the corporation or its shareholders. Indemnification shall not be
made for a claim, issue, or matter in which the person has been found liable to
the corporation except to the extent authorized in section 564c. (Last amended
by Act 121, L. '89, eff. 10-1-89.)
450.1563 SUCCESS IN DEFENSE OF LITIGATION. --To the extent that a
director, officer, employee, or agent of a corporation has been successful on
the merits or otherwise in defense of an action, suit, or proceeding referred to
in section 561 or 562, or in defense of a claim, issue, or matter in the action,
suit, or proceeding, he or she shall be indemnified against actual and
reasonable expenses, including attorneys' fees, incurred by him or her in
connection with the action, suit, or proceeding and an action, suit, or
proceeding
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brought to enforce the mandatory indemnification provided in this subsection.
(Last amended by Act 121, L. '89, eff. 10-1-89.)
450.1564 PAYMENT OF EXPENSES IN ADVANCE OF FINAL DISPOSITION OF
PROCEEDINGS. --(Repealed by Act 121, L. '89, eff. 10-1-89.)
450.1564A [DETERMINING PERMISSIBILITY OF INDEMNIFICATION AND
REASONABLENESS OF EXPENSES]. --(1) An indemnification under section 561 or 562,
unless ordered by the court, shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee, or agent is proper in the circumstances because he or she has
met the applicable standard of conduct set forth in sections 561 and 562 and
upon an evaluation of the reasonableness of expenses and amounts paid in
settlement. This determination and evaluation shall be made in any of the
following ways:
(a) By a majority vote of a quorum of the board consisting of
directors who are not parties or threatened to be made parties to the
action, suit, or proceeding.
(b) If a quorum cannot be obtained under subdivision (a), by majority
vote of a committee duly designated by the board and consisting solely of 2
or more directors not at the time parties or threatened to be made parties
to the action, suit, or proceeding.
(c) By independent legal counsel in a written opinion, which counsel
shall be selected in 1 of the following ways:
(i) By the board or its committee in the manner prescribed in
subdivision (a) or (b).
(ii) If a quorum of the board cannot be obtained under subdivision
(a) and a committee cannot be designated under subdivision (b), by the
board.
(d) By all independent directors who are not parties or threatened to
be made parties to the action, suit, or proceeding.
(e) By the shareholders, but shares held by directors, officers,
employees, or agents who are parties or threatened to be made parties to
the action, suit, or proceeding may not be voted.
(2) In the designation of a committee under subsection (1)(b) or in the
selection of independent legal counsel under subsection (1)(c)(ii), all
directors may participate.
(3) If a person is entitled to indemnification under section 561 or 562 for
a portion of expenses, including reasonably attorneys' fees, judgments,
penalties, fines, and amounts paid in settlement, but not for the total amount,
the corporation may indemnify the person for the portion of the expenses,
judgments, penalties, fines, or amounts paid in settlement for which the person
is entitled to be indemnified. (Added by Act 121, L. '89, eff. 10-1-89.)
450.1564B [ADVANCEMENT OF REASONABLE EXPENSES PRIOR TO FINAL DISPOSITION;
CONDITIONS]. --(1) A corporation may pay or reimburse the reasonable expenses
incurred by a director, officer, employee, or agent who is a party or threatened
to be made a party to an action, suit, or proceeding in advance of final
disposition of the proceeding if all of the following apply:
(a) The person furnishes the corporation a written affirmation of his
or her good faith belief that he or she has met the applicable standard of
conduct set forth in sections 561 and 562.
(b) The person furnishes the corporation a written undertaking,
executed personally or on his or her behalf, to repay the advance if it is
ultimately determined that he or she did not meet the standard of conduct.
(c) A determination is made that the facts then known to those making
the determination would not preclude indemnification under this act.
(2) The undertaking required by subsection (1)(b) must be an unlimited
general obligation of the person but need not be secured.
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<PAGE> 44
(3) Determinations and evaluations under this section shall be made in the
manner specified in section 564a. (Last amended by P.A. 91, L. '93, eff.
10-1-93.)
450.1564C [APPLICATION TO COURT FOR INDEMNIFICATION]. --A director,
officer, employee, or agent of the corporation who is a party or threatened to
be made a party to an action, suit, or proceeding may apply for indemnification
to the court conducting the proceeding or to another court of competent
jurisdiction. On receipt of an application, the court after giving any notice it
considers necessary may order indemnification if it determines that the person
is fairly and reasonably entitled to indemnification in view of all the relevant
circumstances, whether or not he or she met the applicable standard of conduct
set forth in sections 561 and 562 or was adjudged liable as described in section
562, but if he or she was adjudged liable, his or her indemnification is limited
to reasonable expenses incurred. (Added by Act 121, L. '89, eff. 10-1-89.)
450.1565 NONEXCLUSIVITY OF STATUTE; RIGHTS OF OTHER PERSONS; CONTINUATION
OF RIGHTS. --(1) The indemnification or advancement of expenses provided under
sections 561 to 564c is not exclusive of other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the articles of
incorporation, bylaws, or a contractual agreement. The total amount of expenses
advanced or indemnified from all sources combined shall not exceed the amount of
actual expenses incurred by the person seeking indemnification or advancement of
expenses.
(2) The indemnification provided for in sections 561 to 565 continues as to
a person who ceases to be a director, officer, employee, or agent and shall
inure to the benefit of the heirs, personal representatives, and administrators
of the person. (Last amended by P.A. 91, L. '93, eff. 10-1-93.)
450.1567 INSURANCE AGAINST LIABILITY. --A corporation shall have power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee, or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, partner, trustee,
employee, or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him or her and incurred
by him or her in any such capacity or arising out of his or her status as such,
whether or not the corporation would have power to indemnify him or her against
liability under section 561 to 565. (Last amended by Act 121, L. '89, eff.
10-1-89.)
450.1569 CORPORATION; CONSTRUCTION OF REFERENCES TO. --For purposes of
sections 561 to 567, "corporation" include all constituent corporations absorbed
in a consolidation or merger and the resulting or surviving corporation, so that
a person who is or was a director, officer, partner, trustee, employee, or agent
of such constituent corporation or is or was serving at the request of the
constituent corporation as a director, officer, employee or agent of another
foreign or domestic corporation, partnership, joint venture, trust, or other
enterprise whether for profit or not shall stand in the same position under the
provisions of this section with respect to the resulting or surviving
corporation as the person would if he or she had served the resulting or
surviving corporation in the same capacity. (Last amended by Ch. 1, L. '87, eff.
3-1-87.)
450.1571 [DEFINITIONS]. --For the purposes of sections 561 to 567:
(a) "Fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan.
(b) "Other enterprises" shall include employee benefit plans.
(c) "Serving at the request of the corporation" shall include any
service as a director, officer, employee, or agent of the corporation which
imposes duties on, or involves services by, the director, officer,
employee, or agent with respect to an employee benefit plan, its
participants, or its beneficiaries.
(d) A person who acted in good faith and in a manner he or she
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be considered to have acted
in a manner "not opposed to the best interests of the corporation or its
shareholders" as referred to in sections 561 and 562. (Last amended by P.A.
91, L. '93, eff. 10-1-93.)"
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<PAGE> 45
Article VII of the Certificate of Incorporation of Federal-Mogul, as
amended, provides as follows:
"A director of the Corporation shall not be personally liable for the
Corporation or its Shareholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to the Corporation or its Shareholders, (ii)
for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law, (iii) a violation of Section
551(1) of the Michigan Business Corporation Act, or (iv) for any
transaction from which the director derived any improper personal benefit.
If the Michigan Business Corporation Act is amended after approval by the
Shareholders of this provision to authorize corporate action further
eliminating or limiting the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or limited
to the fullest extent permitted by the Michigan Business Corporation Act,
as so amended."
Article IV of the By-Laws of Federal-Mogul, as amended, provide as follows:
"INDEMNIFICATION OF DIRECTORS,
OFFICERS, EMPLOYEES AND AGENTS
Section 1. Non-Derivative Actions. Subject to all of the other provisions
of this Article IV, the Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to or called a witness in any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (whether formal or informal) and any
appeal thereof (other than an action by or in the right of the Corporation) by
reason of the fact that the person is, was or agreed to become a director or
officer of the Corporation, or 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 or
other enterprise, whether for profit or not, against expenses (including
attorneys' fees), judgments, penalties, fines, and amounts paid in settlement
actually and reasonably incurred by him or her in connection with such action,
suit or proceeding if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of the
Corporation or its shareholders, and with respect to any criminal action or
proceeding, if the person had no reasonable cause to believe his or her conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which the person reasonably believed to be in
or not opposed to the best interests of the Corporation or its shareholders,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his or her conduct was unlawful.
Section 2. Derivative Actions. Subject to all of the provisions of this
Article IV, the Corporation shall indemnify any person who was or is a party to
or is threatened to be made a party to, or called as a witness in any
threatened, pending or completed action or suit and any appeal thereof by or in
the right of the Corporation to procure a judgment in its favor by reason of the
fact that the person is or was a director or officer of the Corporation, or 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 or other enterprise, whether for profit or
not, against expenses (including actual and reasonable attorneys' fees) and
amounts paid in settlement incurred by the person in connection with such action
or suit if the person acted in good faith and in a manner the person reasonably
believed to be in or not opposed to the best interests of the Corporation or its
shareholders. However, indemnification shall not be made for any claim, issue or
matter in which such person has been found liable to the Corporation unless and
only to the extent that the court in which such action or suit was brought has
determined upon application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnification for the expenses which the court considers proper.
Section 3. Expenses or Successful Defense. To the extent that a person
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Sections 1, 2, 8 or 13 of these Bylaws, or in defense
of any claim, issue or matter in the action, suit or proceeding, the person
shall be indemnified against expenses (including actual and reasonable
attorneys' fees) incurred by such person in
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<PAGE> 46
connection with the action, suit or proceeding and any action, suit or
proceeding brought to enforce the mandatory indemnification provided by this
Section 3.
Section 4. Definition. For the purposes of Sections 1, 2 and 13, "other
enterprises" shall include employee benefit plans; "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
"serving at the request of the Corporation" shall include any service as a
director, officer, employee, or agent of the Corporation which imposes duties
on, or involves services by, the director or officer with respect to an employee
benefit plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner the person reasonably believed to be in the interest of
the participants and beneficiaries of an employee benefit plan shall be
considered to have acted in a manner "not opposed to the best interests of the
Corporation or its shareholders" as referred to in Sections 1 and 2.
Section 5. Contract Right; Limitation on Indemnity. This Article IV shall
be applicable to all proceedings commenced or continuing after its adoption,
whether such arise out of events, acts or omissions which occurred prior or
subsequent to such adoption, and shall continue as to a person who has ceased to
be a director, officer or a person serving at the request of the Corporation as
a director, trustee, fiduciary, employee, agent or officer of another
corporation, partnership, joint venture, trust or other person. This Article IV
shall be deemed to be a contract between the Corporation and each person who, at
any time that this Article IV is in effect, serves or agrees to serve in any
capacity which entitles him or her to indemnification hereunder and any repeal
or other modification of this Article IV or any repeal or modification of the
Michigan Business Corporation Act or any other applicable law shall not limit
any rights of indemnification for proceedings then existing or later arising out
of events, acts or omissions occurring prior to such repeal or modification for
proceedings commenced after such repeal or modification to enforce this Article
IV with regard to proceedings arising out of acts, omissions or events occurring
prior to such repeal or modification. The right to indemnification conferred in
this Article IV shall apply to services of a director or officer as an employee
or agent of the Corporation as well as in such person's capacity as a director
or officer. Except as provided in Sections 3 and 6 of these Bylaws, the
Corporation shall have no obligations under this Article IV to indemnify any
person in connection with any proceeding, or part thereof, initiated by such
person without authorization by the Board of Directors.
Section 6. Right of Claimant to Bring Suit. If a claim under Sections 1,
2, 8 or 13 of this Article is not paid in full by the Corporation within thirty
days after a written claim has been received by the Corporation, the claimant
may at any time thereafter bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful in whole or in part, the claimant
shall be entitled to be paid also the expense of prosecuting such claim. It
shall be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the Corporation) that indemnification of the claimant is prohibited
by applicable law, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, its General Counsel or its shareholders)
to have made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances, nor an actual
determination by the Corporation (including its Board of Directors, independent
legal counsel, its General Counsel or its shareholders) that indemnification of
the claimant is prohibited by applicable law, shall be a defense to the action
or create a presumption that indemnification of the claimant is prohibited by
applicable law.
Section 7. Proportionate Indemnity. If a person is entitled to
indemnification under Sections 1, 2 or 13 of these Bylaws for a portion of
expenses, including attorneys' fees, judgments, penalties, fines, and amounts
paid in settlements, but not for the total amount thereof, the Corporation shall
indemnify the person for the portion of the expenses, judgments, penalties,
fines, or amounts paid in settlement for which the person is entitled to be
indemnified.
Section 8. Expense Advance. Expenses incurred in defending a civil or
criminal action, suit or proceeding and any appeal thereof described in Sections
1, 2 or 13 of these Bylaws shall be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding; provided, however, that if
required by the Michigan Business Corporation Act, such expenses shall not be
paid by the Corporation unless
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<PAGE> 47
the Corporation receives an undertaking by or on behalf of the person involved
to repay the expenses if it is ultimately determined that the person is not
entitled to be indemnified by the Corporation.
Section 9. Non-Exclusivity of Rights. The indemnification or advancement
of expenses provided under this Article IV is not exclusive of other rights to
which a person seeking indemnification or advancement of expenses may be
entitled under any statute, provision of the Corporation's Articles of
Incorporation, contractual arrangement, vote of the shareholders or
disinterested directors or otherwise. However, the total amount of expenses
advanced or indemnified from all sources combined shall not exceed the amount of
actual expenses incurred by the person seeking indemnification or advancement of
expenses.
Section 10. Indemnification of Employees and Agents of the
Corporation. The Corporation may, to the extent authorized from time to time by
the Board of Directors, or by written opinion of the General Counsel with
respect to agents and employees of the Corporation not serving on its Executive
Council or Advisory Board or their equivalents, grant rights to indemnification
and to the advancement of expenses to any employee or agent of the Corporation
to the fullest extent of the provisions of this Article IV with respect to the
indemnification and advancement of expenses of directors and officers of the
Corporation.
Section 11. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, partner, trustee, employee or agent of another
Corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against the person and incurred by him or her in any such
capacity or arising out of his or her status as such, whether or not the
Corporation would have power to indemnify the person against such liability
under these Bylaws of the State of Michigan.
Section 12. No Liability if Determination Made in Good Faith. Neither the
Corporation nor its directors or officers nor any person acting on its behalf
shall be liable to anyone for any determination as to the existence or absence
of conduct which would provide a basis for making or refusing to make any
payment under this Article IV or for taking or omitting to take any other action
under this Article, in reliance upon the advice of counsel.
Section 13. Scope of Indemnity; Changes in Michigan Law. Notwithstanding
any of the other provisions in this Article IV, each person who was or is a
party or is threatened to be made a party to or called as a witness in any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (whether formal or informal) and any
appeal thereof (hereinafter a "proceeding"), by reason of the fact that the
person is, was or agreed to become a director or officer of the Corporation, or
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 or other enterprise, whether for profit or
not, whether the basis of such proceeding is alleged action in an official
capacity as a director, officer, employee, trustee, or agent or in any other
capacity while serving as a director, officer, employee, trustee, or agent,
shall be indemnified and held harmless by the Corporation to the fullest extent
authorized by the Michigan Business Corporation Act, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment), against all expenses (including attorneys' fees and other expenses
of litigation), judgments, fines, penalties and amounts paid in settlement
actually and reasonably incurred by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director,
officer, employee, trustee, or agent and shall inure to the benefit of his or
her heirs, executors and administrators; provided, however, that, except as
provided in Sections 3 and 6 hereof, the Corporation shall indemnify any such
person seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation.
Section 14. Severability. If any portion of this Article IV shall be
invalidated or held to be unenforceable on any ground by any court of competent
jurisdiction, the decision of which shall not have been reversed on appeal, such
invalidity or unenforceability shall not affect the other provisions hereof, and
this Article shall be construed in all respects as if such invalid or
unenforceable provisions had been omitted therefrom."
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<PAGE> 48
As permitted by Section 567 of the MBCA and as authorized by the Board of
Directors of Federal-Mogul pursuant to Section 11 of Article IV of the By-Laws
of Federal-Mogul, as amended, Federal-Mogul has purchased and maintains
insurance providing for reimbursement to elected directors and officers, subject
to certain exceptions, of amounts they may be legally obligated to pay,
including, but not limited, to damages, judgments, settlements, costs and
attorneys' fees (but not including fines, penalties or matters not insurable
under the law), as a result of claims and legal actions instituted against them
to recover for their acts while serving as directors or officers.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) List of Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ -----
<C> <C> <S>
3.1 -- The Company's Second Restated Articles of Incorporation, as amended. (Filed as
Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1992, and incorporated herein by reference.)
3.2 -- The Company's By-laws, as amended. (Filed as Exhibit 3.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1995, and
incorporated herein by reference.)
4.1 -- Rights Agreement between the Company and National Bank of Detroit, as Rights
Agent with The Bank of New York, as successor Rights Agent (the "Rights
Agreement"). (Filed as Exhibit 1 to the Company's Registration Statement on Form
8-A, dated November 7, 1988, and incorporated herein by reference.)
4.2 -- Amendment, dated July 25, 1990, to the Rights Agreement. (Filed as Exhibit 4.5
to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
1990, and incorporated herein by reference.)
4.3 -- Amendment, dated September 23, 1992, to the Rights Agreement. (Filed as Exhibit
4.4 to the Company's Annual Report on Form 10-K for the year ended December 31,
1992 (the "1992 10-K"), and incorporated herein by reference.)
4.4 -- Amendment, dated January 1, 1993, to the Rights Agreement. (Filed as Exhibit
10.30 to the Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1993, and incorporated herein by reference.)
4.5 -- Reference is made to Exhibits 10.11, 10.12 and 10.13 hereto, which contain
provisions defining the rights of holders of certain long-term debt securities
of the Company. Other instruments defining the rights of holders of the
long-term debt securities of the Company and any of its subsidiaries for which
consolidated or unconsolidated financial statements are required to be filed
have not been filed because, in each case, the total amount of long-term debt
permitted thereunder does not exceed 10% of the Company's consolidated assets
and the Company hereby agrees to furnish such instruments to the Securities and
Exchange Commission upon its request.
4.6 -- Indenture, dated as of August 12, 1994, between the Company and First Trust
National Association, as trustee and successor to Continental Bank. (Filed as
Exhibit 4.14 to the Company's Form 8-K dated August 19, 1994.)
4.7 -- Form of New Note. (Previously filed with the Registration Statement on Form S-4
filed on June 19, 1997.)
5.1 -- Opinion of Diane L. Kaye, Esq. (Filed herewith.)
10.1* -- The Company's 1976 Stock Option Plan, as last amended. (Filed as Exhibit 10.1 to
the Company's Annual Report on Form 10-K for the year ended December 31, 1994
(the "1994 10-K"), and incorporated herein by reference.)
10.2* -- The Company's 1984 Stock Option Plan as last amended. (Filed as Exhibit 10.2 to
the 1994 10-K, and incorporated herein by reference.)
</TABLE>
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<PAGE> 49
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ --------------------------------------------------------------------------------
<C> <C> <S>
10.3* -- The Company's 1977 Supplemental Compensation Plan, as amended and restated.
(Filed as Exhibit 10.27 to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1994, and incorporated herein by reference.)
10.4* -- The Company's Supplemental Compensation Retirement Trust Agreement. (Filed as
Exhibit 10.4 to the 1994 10-K, and incorporated herein by reference.)
10.5* -- Form of Executive Severance Agreement between the Company and certain executive
officers. (Filed as exhibit 10.5 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1996 (the "1996 10-K"), and incorporated herein by
reference.)
10.6* -- Amended and Restated Deferred Compensation Plan for Corporate Directors. (Filed
as Exhibit 10.7 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1990 (the "1990 10-K"), and incorporated herein by reference.)
10.7* -- Supplemental Executive Retirement Plan, as amended. (Filed as Exhibit 10.10 to
the 1992 10-K, and incorporated herein by reference.)
10.8* -- Description of Umbrella Excess Liability Insurance for the Senior Management
Team. (Filed as Exhibit 10.11 to the 1990 10-K, and incorporated herein by
reference.)
10.9* -- Federal-Mogul Corporation 1989 Performance Incentive Stock Plan, as amended.
(Filed as Exhibit 10.14 to the 1994 10-K, and incorporated herein by reference.)
10.10 -- Supply Agreement, dated as of October 20, 1992, between the Company, TRW Inc.
and the TRW Subsidiaries (as defined therein). (Filed as Exhibit 10.15 to the
1992 10-K, and incorporated herein by reference.)
10.11 -- Note Agreement, dated December 1, 1990, between the Company and various
financial institutions listed therein (the "Note Agreement"). (Filed as Exhibit
10.17 to the Company's Annual Report on Form 10-K for the year ended December
31, 1991, and incorporated herein by reference.)
10.12 -- First Amendment, dated as of December 11, 1992, to the Note Agreement. (Filed as
Exhibit 10.27 to the 1992 10-K, and incorporated herein by reference.)
10.13 -- Second Amendment, dated as of July 14, 1995, to the Note Agreement. (Filed as
Exhibit 10.29 to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1995, and incorporated herein by reference.)
10.14 -- Pooling and Servicing Agreement, dated as of June 1, 1992 (the "Pooling and
Servicing Agreement"), among Federal-Mogul Funding Corporation ("FMFC"), as
Seller, the Company, as Servicer, and The Chase Manhattan Bank (formerly named
Chemical Bank), as Trustee. (Filed as Exhibit 10.21 to the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1993, and incorporated
herein by reference.)
10.15 -- Series 1992-1 Supplement, dated as of June 1, 1992, to the Pooling and Servicing
Agreement. (Filed as Exhibit 10.22 to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1992, and incorporated herein by reference.)
10.16 -- Series 1993-1 Supplement, dated as of March 1, 1993, to the Pooling and
Servicing Agreement. (Filed as Exhibit 10.29 to the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1993, and incorporated herein by
reference.)
10.17 -- Receivables Purchase Agreement, dated as of June 1, 1992, between the Company
and FMFC. (Filed as Exhibit 10.23 to the 1992 10-K, and incorporated herein by
reference.)
10.18* -- Federal-Mogul Corporation Executive Loan Program. (Filed as Exhibit 10.26 to the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1994,
and incorporated herein by reference.)
10.19* -- Federal-Mogul Corporation Non-Employee Director Stock Plan. (Filed as Exhibit 4
to the Company's Registration Statement on Form S-8 (Registration No. 33-54301),
and incorporated herein by reference.)
</TABLE>
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<PAGE> 50
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ --------------------------------------------------------------------------------
<C> <C> <S>
10.20 -- Revolving Credit and Competitive Advance Facility Agreement, dated as of June
30, 1994, among the Company, the Lenders (as defined therein), Chemical Bank, as
Administrative Agent and as CAF Advance Agent, and the Co-Agents (as defined
therein) (the "Revolving Credit Agreement"). (Filed as Exhibit 4.11 to
Pre-Effective Amendment No. 1 to the Company's Registration Statement on Form
S-3 (Registration No. 33-54717), and incorporated herein by reference.)
10.21 -- First Amendment, dated as of December 18, 1995, to the Revolving Credit
Agreement. (Filed as Exhibit 10.28 to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1996, and incorporated herein by
reference.)
10.22 -- Second Amendment, dated as of October 21, 1996, to the Revolving Credit
Agreement. (Filed as Exhibit 10.29 to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1996, and incorporated herein by
reference.)
10.23* -- Employment Agreement, dated as of December 1, 1996, between the Company and R.A.
Snell. (Filed as Exhibit 10.25 to the 1996 10-K, and incorporated herein by
reference.)
10.24* -- Severance Agreement, dated as of December 27, 1996, between the Company and D.J.
Gormley. (Filed as Exhibit 10.24 to the 1996 10-K, and incorporated herein by
reference.)
10.25* -- Severance Agreement, dated as of December 1, 1996, between the Company and W.G.
Smith. (Filed as Exhibit 10.25 to the 1996 10-K, and incorporated herein by
reference.)
10.26 -- Registration Agreement, dated April 23, 1997 among the Company, Salomon
Brothers, Inc, Bear, Stearns & Co. Inc. and Chase Securities Inc. (Previously
filed with the Registration Statement on Form S-4 filed on June 19, 1997.)
10.27 -- Purchase Agreement, dated April 23, 1997, among the Company, Salomon Brothers,
Inc, Bear, Stearns & Co. Inc. and Chase Securities Inc. (Previously filed with
the Registration Statement on Form S-4 filed on June 19, 1997.)
10.28* -- Federal-Mogul Corporation 1997 Long-Term Incentive Plan, as adopted by the
shareholders of the Company on April 23, 1997. (Filed as Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997,
and incorporated herein by reference.)
10.29* -- Executive Severance Agreement, dated as of February 21, 1997, between the
Company and Thomas W. VanHimbergen. (Filed as Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1997, and
incorporated herein by reference.)
10.30 -- Third Amendment, dated as of January 13, 1997, to Revolving Credit Agreement.
(Filed as Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997, and incorporated herein by reference.)
10.31 -- Form of Amended and Restated Pooling and Servicing Agreement (Filed as Exhibit
10.4 to the Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1997, and incorporated herein by reference.)
10.32 -- Form of Series 1997-1 Supplement to the Pooling and Servicing Agreement. (Filed
as Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997, and incorporated herein by reference.)
10.33 -- Form of Amended and Restated Receivables Purchase Agreement between the Company
and FMFC. (Filed as Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1997, and incorporated herein by reference.)
10.34 -- Form of Certificate Purchase Agreement among FMFC, as Seller, Falcon Asset
Securitization Corporation, as Purchaser, the Liquidity Providers Named Therein,
as Liquidity Providers, and The First National Bank of Chicago, as Program
Agent. (Filed as Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1997, and incorporated herein by reference.)
</TABLE>
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<PAGE> 51
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ --------------------------------------------------------------------------------
<C> <C> <S>
11.1 -- Statement Re Computation of Per Share Earnings for the Three Months Ended June
30, 1997. (Filed herewith.)
11.2 -- Statement Re Computation of Per Share Earnings for the Six Months Ended June 30,
1997. (Filed herewith.)
12 -- Statement Re Computation of ratios. (Filed herewith.)
23.1 -- Consent of Ernst & Young LLP. (Filed herewith.)
23.2 -- Consent of Diane L. Kaye, Esq. (Contained in the opinion filed as Exhibit 5.1
hereto).
24 -- Powers of Attorney. (Contained in the Signature Page in Part II of the
Registration Statement.)
25 -- Statement of eligibility of Trustee. (Filed herewith.)
99.1 -- Form of Letter of Transmittal for the 8.80% Senior Notes due 2007. (Filed
herewith.)
99.2 -- Certification of Taxpayer Identification Number on Substitute Form W-9. (Filed
herewith.)
99.3 -- Form of Notice of Guaranteed Delivery. (Filed herewith.)
</TABLE>
- ---------------
* Denotes management contract or compensatory plan or arrangement.
ITEM 22. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's 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.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(c) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through the
date of responding to the request.
(d) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
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<PAGE> 52
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Federal-Mogul
Corporation has caused this Registration Statement on Form S-4 to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Southfield, State of Michigan, on the 20th day of August, 1997.
FEDERAL-MOGUL CORPORATION
By /s/ Thomas W. Ryan
------------------------------------
Thomas W. Ryan
Senior Vice President and
Chief Financial Officer
POWER OF ATTORNEY
Each of the undersigned whose signature appears below hereby constitutes
and appoints Thomas W. Ryan and Diane L. Kaye, and each of them acting alone,
his true and lawful attorneys-in-fact and agents, with full power and
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, under the Securities Act of 1993.
Pursuant to the requirements of this Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<C> <S> <C>
/s/ RICHARD A. SNELL Chairman of the Board, Chief August 20, 1997
- ------------------------------------------ Executive Officer, President
Richard A. Snell and Director
(Principal Executive Officer)
/s/ THOMAS W. RYAN Senior Vice President and August 20, 1997
- ------------------------------------------ Chief Financial Officer
Thomas W. Ryan (Principal Financial Officer)
/s/ KENNETH P. SLABY Vice President and Controller August 20, 1997
- ------------------------------------------ (Principal Accounting Officer)
Kenneth P. Slaby
/s/ JOHN J. FANNON Director August 20, 1997
- ------------------------------------------
John J. Fannon
/s/ RODERICK M. HILLS Director August 20, 1997
- ------------------------------------------
Roderick M. Hills
/s/ ANTONIO MADERO Director August 20, 1997
- ------------------------------------------
Antonio Madero
/s/ ROBERT S. MILLER, JR. Director August 20, 1997
- ------------------------------------------
Robert S. Miller, Jr.
/s/ JOHN C. POPE Director August 20, 1997
- ------------------------------------------
John C. Pope
/s/ DR. HUGO MICHAEL SEKYRA Director August 20, 1997
- ------------------------------------------
Dr. Hugo Michael Sekyra
</TABLE>
II-11
<PAGE> 53
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ --------------------------------------------------------------------------------
<C> <C> <S>
3.1 -- The Company's Second Restated Articles of Incorporation, as amended. (Filed as
Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1992, and incorporated herein by reference.)
3.2 -- The Company's By-laws, as amended. (Filed as Exhibit 3.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1995, and
incorporated herein by reference.)
4.1 -- Rights Agreement between the Company and National Bank of Detroit, as Rights
Agent with The Bank of New York, as successor Rights Agent (the "Rights
Agreement"). (Filed as Exhibit 1 to the Company's Registration Statement on Form
8-A, dated November 7, 1988, and incorporated herein by reference.)
4.2 -- Amendment, dated July 25, 1990, to the Rights Agreement. (Filed as Exhibit 4.5
to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
1990, and incorporated herein by reference.)
4.3 -- Amendment, dated September 23, 1992, to the Rights Agreement. (Filed as Exhibit
4.4 to the Company's Annual Report on Form 10-K for the year ended December 31,
1992 (the "1992 10-K"), and incorporated herein by reference.)
4.4 -- Amendment, dated January 1, 1993, to the Rights Agreement. (Filed as Exhibit
10.30 to the Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1993, and incorporated herein by reference.)
4.5 -- Reference is made to Exhibits 10.11, 10.12 and 10.13 hereto, which contain
provisions defining the rights of holders of certain long-term debt securities
of the Company. Other instruments defining the rights of holders of the
long-term debt securities of the Company and any of its subsidiaries for which
consolidated or unconsolidated financial statements are required to be filed
have not been filed because, in each case, the total amount of long-term debt
permitted thereunder does not exceed 10% of the Company's consolidated assets
and the Company hereby agrees to furnish such instruments to the Securities and
Exchange Commission upon its request.
4.6 -- Indenture, dated as of August 12, 1994, between the Company and First Trust
National Association, as trustee and successor to Continental Bank. (Filed as
Exhibit 4.14 to the Company's Form 8-K dated August 19, 1994.)
4.7 -- Form of New Note. (Previously filed under the Registration Statement and Form
S-4 filed on June 19, 1997.)
5.1 -- Form of Opinion of Diane L. Kaye, Esq. (Filed herewith.)
10.1* -- The Company's 1976 Stock Option Plan, as last amended. (Filed as Exhibit 10.1 to
the Company's Annual Report on Form 10-K for the year ended December 31, 1994
(the "1994 10-K"), and incorporated herein by reference.)
10.2* -- The Company's 1984 Stock Option Plan as last amended. (Filed as Exhibit 10.2 to
the 1994 10-K, and incorporated herein by reference.)
10.3* -- The Company's 1977 Supplemental Compensation Plan, as amended and restated.
(Filed as Exhibit 10.27 to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1994, and incorporated herein by reference.)
10.4* -- The Company's Supplemental Compensation Retirement Trust Agreement. (Filed as
Exhibit 10.4 to the 1994 10-K, and incorporated herein by reference.)
10.5* -- Form of Executive Severance Agreement between the Company and certain executive
officers. (Filed as exhibit 10.5 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1996 (the "1996 10-K"), and incorporated herein by
reference.)
10.6* -- Amended and Restated Deferred Compensation Plan for Corporate Directors. (Filed
as Exhibit 10.7 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1990 (the "1990 10-K"), and incorporated herein by reference.)
</TABLE>
<PAGE> 54
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ --------------------------------------------------------------------------------
<C> <C> <S>
10.7* -- Supplemental Executive Retirement Plan, as amended. (Filed as Exhibit 10.10 to
the 1992 10-K, and incorporated herein by reference.)
10.8* -- Description of Umbrella Excess Liability Insurance for the Senior Management
Team. (Filed as Exhibit 10.11 to the 1990 10-K, and incorporated herein by
reference.)
10.9* -- Federal-Mogul Corporation 1989 Performance Incentive Stock Plan, as amended.
(Filed as Exhibit 10.14 to the 1994 10-K, and incorporated herein by reference.)
10.10 -- Supply Agreement, dated as of October 20, 1992, between the Company, TRW Inc.
and the TRW Subsidiaries (as defined therein). (Filed as Exhibit 10.15 to the
1992 10-K, and incorporated herein by reference.)
10.11 -- Note Agreement, dated December 1, 1990, between the Company and various
financial institutions listed therein (the "Note Agreement"). (Filed as Exhibit
10.17 to the Company's Annual Report on Form 10-K for the year ended December
31, 1991, and incorporated herein by reference.)
10.12 -- First Amendment, dated as of December 11, 1992, to the Note Agreement. (Filed as
Exhibit 10.27 to the 1992 10-K, and incorporated herein by reference.)
10.13 -- Second Amendment, dated as of July 14, 1995, to the Note Agreement. (Filed as
Exhibit 10.29 to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1995, and incorporated herein by reference.)
10.14 -- Pooling and Servicing Agreement, dated as of June 1, 1992 (the "Pooling and
Servicing Agreement"), among Federal-Mogul Funding Corporation ("FMFC"), as
Seller, the Company, as Servicer, and The Chase Manhattan Bank (formerly named
Chemical Bank), as Trustee. (Filed as Exhibit 10.21 to the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1993, and incorporated
herein by reference.)
10.15 -- Series 1992-1 Supplement, dated as of June 1, 1992, to the Pooling and Servicing
Agreement. (Filed as Exhibit 10.22 to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1992, and incorporated herein by reference.)
10.16 -- Series 1993-1 Supplement, dated as of March 1, 1993, to the Pooling and
Servicing Agreement. (Filed as Exhibit 10.29 to the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1993, and incorporated herein by
reference.)
10.17 -- Receivables Purchase Agreement, dated as of June 1, 1992, between the Company
and FMFC. (Filed as Exhibit 10.23 to the 1992 10-K, and incorporated herein by
reference.)
10.18* -- Federal-Mogul Corporation Executive Loan Program. (Filed as Exhibit 10.26 to the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1994,
and incorporated herein by reference.)
10.19* -- Federal-Mogul Corporation Non-Employee Director Stock Plan. (Filed as Exhibit 4
to the Company's Registration Statement on Form S-8 (Registration No. 33-54301),
and incorporated herein by reference.)
10.20 -- Revolving Credit and Competitive Advance Facility Agreement, dated as of June
30, 1994, among the Company, the Lenders (as defined therein), Chemical Bank, as
Administrative Agent and as CAF Advance Agent, and the Co-Agents (as defined
therein) (the "Revolving Credit Agreement"). (Filed as Exhibit 4.11 to
Pre-Effective Amendment No. 1 to the Company's Registration Statement on Form
S-3 (Registration No. 33-54717), and incorporated herein by reference.)
10.21 -- First Amendment, dated as of December 18, 1995, to the Revolving Credit
Agreement. (Filed as Exhibit 10.28 to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1996, and incorporated herein by
reference.)
10.22 -- Second Amendment, dated as of October 21, 1996, to the Revolving Credit
Agreement. (Filed as Exhibit 10.29 to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1996, and incorporated herein by
reference.)
10.23* -- Employment Agreement, dated as of December 1, 1996, between the Company and R.A.
Snell. (Filed as Exhibit 10.25 to the 1996 10-K, and incorporated herein by
reference.)
</TABLE>
<PAGE> 55
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ --------------------------------------------------------------------------------
<C> <C> <S>
10.24* -- Severance Agreement, dated as of December 27, 1996, between the Company and D.J.
Gormley. (Filed as Exhibit 10.24 to the 1996 10-K, and incorporated herein by
reference.)
10.25* -- Severance Agreement, dated as of December 1, 1996, between the Company and W.G.
Smith. (Filed as Exhibit 10.25 to the 1996 10-K, and incorporated herein by
reference.)
10.26 -- Registration Agreement, dated April 23, 1997 among the Company, Salomon
Brothers, Inc, Bear, Stearns & Co. Inc. and Chase Securities Inc. (Previously
filed under the Registration Statement and Form S-4 filed on June 19, 1997.)
10.27 -- Purchase Agreement, dated April 23, 1997, among the Company, Salomon Brothers,
Inc, Bear, Stearns & Co. Inc. and Chase Securities Inc. (Previously filed under
the Registration Statement and Form S-4 filed on June 19, 1997.)
10.28* -- Federal-Mogul Corporation 1997 Long-Term Incentive Plan, as adopted by the
shareholders of the Company on April 23, 1997. (Filed as Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997,
and incorporated herein by reference.)
10.29* -- Executive Severance Agreement, dated as of February 21, 1997, between the
Company and Thomas W. VanHimbergen. (Filed as Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1997, and
incorporated herein by reference.)
10.30 -- Third Amendment, dated as of January 13, 1997, to Revolving Credit Agreement.
(Filed as Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997, and incorporated herein by reference.)
10.31 -- Form of Amended and Restated Pooling and Servicing Agreement (Filed as Exhibit
10.4 to the Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1997, and incorporated herein by reference.)
10.32 -- Form of Series 1997-1 Supplement to the Pooling and Servicing Agreement. (Filed
as Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997, and incorporated herein by reference.)
10.33 -- Form of Amended and Restated Receivables Purchase Agreement between the Company
and FMFC. (Filed as Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1997, and incorporated herein by reference.)
10.34 -- Form of Certificate Purchase Agreement among FMFC, as Seller, Falcon Asset
Securitization Corporation, as Purchaser, the Liquidity Providers Named Therein,
as Liquidity Providers, and The First National Bank of Chicago, as Program
Agent. (Filed as Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1997, and incorporated herein by reference.)
11.1 -- Statement Re Computation of Per Share Earnings for the Three Months Ended June
30, 1997. (Filed herewith.)
11.2 -- Statement Re Computation of Per Share Earnings for the Six Months Ended June 30,
1997. (Filed herewith.)
12 -- Statement Re Computation of ratios. (Filed herewith.)
23.1 -- Consent of Ernst & Young LLP. (Filed herewith.)
23.2 -- Consent of Diane L. Kaye, Esq. (Contained in the opinion filed as Exhibit 5.1
hereto.)
24 -- Power of Attorney. (Contained on the signature pages of Part II of this
Registration Statement.)
25 -- Statement of eligibility of Trustee. (Filed herewith.)
99.1 -- Form of Letter of Transmittal for the 8.80% Senior Notes due 2007.
99.2 -- Certification of Taxpayer Identification Number on Substitue Form W-9. (Filed
herewith.)
99.3 -- Notice of Guaranteed Delivery. (Filed herewith.)
</TABLE>
- ---------------
* Denotes management contract or compensatory plan or arrangement.
<PAGE> 1
EXHIBIT 5.1
OPINION
OF
DIANE L. KAYE, ESQ.
[FEDERAL-MOGUL CORPORATION LOGO]
August 20, 1997
Board of Directors
Federal-Mogul Corporation
Registration Statement on Form S-4
Lady and Gentlemen:
I am Vice President, General Counsel and Secretary of Federal-Mogul
Corporation, a Michigan corporation ("Federal-Mogul"), and, in that capacity, I
am familiar with the Restated Certificate of Incorporation and the By-Laws of
Federal-Mogul, as amended, and with its corporate proceedings and records,
including the minutes of meetings of its Board of Directors and of committees of
its Board of Directors.
I also am familiar with the Registration Statement of Federal-Mogul on Form
S-4 to be filed on or about the date hereof with the Securities and Exchange
Commission (the "Registration Statement"), registering, under the Securities Act
of 1933, as amended (the "Act"), $125,000,000 aggregate principal amount of
8.80% Notes due 2007, of Federal-Mogul (the "New Notes") for issuance under the
Act in exchange for a like principal amount of its issued and outstanding 8.80%
Senior Notes due 2007 (the "Existing Notes"), in accordance with the exchange
offer set forth in the Registration Statement (the "Exchange Offer"). The New
Notes are to be issued under an indenture, dated as of August 12, 1994, as
amended and supplemented, between Federal-Mogul and First Trust National
Association, as Trustee and successor to Continental Bank (the "Indenture"). I
also am familiar with the corporate proceedings taken by Federal-Mogul relating
to the foregoing.
Based upon the foregoing and having regard for legal considerations I deem
relevant, it is my opinion that:
1. Federal-Mogul is a corporation validly existing and in good
standing under the laws of the State of Michigan.
2. Federal-Mogul has the lawful corporate power to create and issue
the New Notes; and duly and validly has taken all corporate action
necessary to authorize the execution and delivery of the Indenture.
3. The New Notes, when duly authorized, executed and authenticated in
accordance with the provisions of the Indenture, and when issued and
exchanged for the New Notes in accordance with the Exchange Offer the
provisions of the Indenture, will be valid and legally binding obligations
of Federal-Mogul, enforceable in accordance with their respective terms,
subject to general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law) or by bankruptcy,
insolvency, moratorium, reorganization or other laws relating to or
affecting the enforcement of creditors' rights generally.
I hereby consent to the use of my name in the Registration Statement as
counsel for Federal-Mogul who has passed upon the legality of the Notes being
registered by the Registration Statement and as having prepared this opinion,
and to the use of this opinion as a part (Exhibit 5) of the Registration
Statement.
Sincerely,
/S/ DIANE L. KAYE
<PAGE> 1
EXHIBIT 11.1 -- STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
FEDERAL-MOGUL CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
PRIMARY FULLY DILUTED
--------------- ---------------
FOR THE THREE MONTHS ENDED JUNE 30, 1997 1996 1997 1996
- ------------------------------------------------------------ ----- ----- ----- -----
<S> <C> <C> <C> <C>
EARNINGS: (IN MILLIONS)
Net earnings before extraordinary item.................... $28.5 $15.8 $28.5 $15.8
Series C preferred dividend requirements.................. (.6) (.6) -- --
Series D preferred dividend requirements.................. (1.5) (1.6) -- --
Additional required ESOP contribution (1)................. -- -- (.5) (.4)
----- ----- ----- -----
Net earnings before extraordinary item, as adjusted....... 26.4 13.6 28.0 15.4
Extraordinary item -- loss on early retirement of debt, 2.6 -- 2.6 --
net of applicable tax benefit..........................
----- ----- ----- -----
Net earnings available for common and equivalent shares... $23.8 $13.6 $25.4 $15.4
===== ===== ===== =====
WEIGHTED AVERAGE SHARES: (IN MILLIONS)
Common shares outstanding................................. 35.2 35.1 35.2 35.1
Dilutive stock options outstanding........................ .2 -- .3 --
Conversion of Series C preferred stock (3)................ -- -- 1.7 1.7
Contingent issuance of common stock to satisfy the -- -- -- .7
redemption price guarantee (2)(4)......................
Conversion of Series D preferred stock (3)................ -- -- 4.4 4.4
----- ----- ----- -----
Common and equivalent shares outstanding.................. 35.4 35.1 41.6 41.9
----- ----- ----- -----
PER COMMON AND EQUIVALENT SHARE:
Net earnings before extraordinary item.................... $ .74 $ .39 $ .67 $ .36
Extraordinary item -- loss on early retirement of debt, (.07) -- (.06) --
net of applicable tax benefit..........................
----- ----- ----- -----
Net earnings.............................................. $ .67 $ .39 $ .61 $ .36
===== ===== ===== =====
</TABLE>
- ---------------
(1) Amount represents the additional after-tax contribution that would be
necessary to meet the ESOP debt service requirements under an assumed
conversion of the Series C preferred stock.
(2) Calculations consider the June 30, 1997 common stock market price in
accordance with the Emerging Issues Task Force Abstract No. 89-12.
(3) Amount represents the weighted average number of common shares issued
assuming conversion of preferred stock outstanding.
(4) Amount represents the additional number of common shares that would be
issued in order to satisfy the Series C preferred stock redemption price
guarantee. This calculation considers only the number of preferred shares
held by the ESOP that have been allocated to participants' accounts as of
June 30 of the respective year.
<PAGE> 1
EXHIBIT 11.2 -- STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
FEDERAL-MOGUL CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
PRIMARY FULLY DILUTED
--------------- ---------------
FOR THE SIX MONTHS ENDED JUNE 30, 1997 1996 1997 1996
- ------------------------------------------------------------ ----- ----- ----- -----
<S> <C> <C> <C> <C>
EARNINGS: (IN MILLIONS)
Net earnings before extraordinary item.................... $42.4 $26.4 $42.4 $26.4
Series C preferred dividend requirements.................. (1.2) (1.3) -- --
Series D preferred dividend requirements.................. (3.1) (3.1) -- (3.1)
Additional required ESOP contribution (1)................. -- -- (1.0) (.9)
----- ----- ----- -----
Net earnings before extraordinary item, as adjusted....... 38.1 22.0 41.4 22.4
Extraordinary item -- loss on early retirement of debt, 2.6 -- 2.6 --
net of applicable tax benefit..........................
----- ----- ----- -----
Net earnings available for common and equivalent shares... $35.5 $22.0 $38.8 $22.4
===== ===== ===== =====
WEIGHTED AVERAGE SHARES: (IN MILLIONS)
Common shares outstanding................................. 35.1 35.1 35.1 35.1
Dilutive stock options outstanding........................ .2 -- .3 --
Conversion of Series C preferred stock (3)................ -- -- 1.7 1.7
Contingent issuance of common stock to satisfy the -- -- -- .7
redemption price guarantee (2)(4)......................
Conversion of Series D preferred stock (3)................ -- -- 4.4 --
----- ----- ----- -----
Common and equivalent shares outstanding.................. 35.3 35.1 41.5 37.5
----- ----- ----- -----
PER COMMON AND EQUIVALENT SHARE:
Net earnings before extraordinary item.................... $1.08 $ .63 $ .99 $ .59
Extraordinary item -- loss on early retirement of debt, (.07) -- (.06) --
net of applicable tax benefit..........................
----- ----- ----- -----
Net earnings.............................................. $1.01 $ .63 $ .93 $ .59
===== ===== ===== =====
</TABLE>
- ---------------
(1) Amount represents the additional after-tax contribution that would be
necessary to meet the ESOP debt service requirements under an assumed
conversion of the Series C preferred stock.
(2) Calculations consider the June 30, 1997 common stock market price in
accordance with the Emerging Issues Task Force Abstract No. 89-12.
(3) Amount represents the weighted average number of common shares issued
assuming conversion of preferred stock outstanding.
(4) Amount represents the additional number of common shares that would be
issued in order to satisfy the Series C preferred stock redemption price
guarantee. This calculation considers only the number of preferred shares
held by the ESOP that have been allocated to participants' accounts as of
June 30 of the respective year.
<PAGE> 1
EXHIBIT 12
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges for
the Company and its consolidated subsidiaries for each of the last five years.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
- ----------------------------------------
1996 1995 1994 1993 1992
- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
N/A(1) .9x (2) 4.0x 2.6x 1.3x
</TABLE>
The following table sets forth the ratios of earnings to fixed charges for
the Company and its consolidated subsidiaries for each of the last two first
quarters and the last two second quarters.
<TABLE>
<CAPTION>
QUARTER ENDED QUARTER ENDED
MARCH 31, JUNE 30,
- ----------------- -----------------
1997 1996 1997 1996
- ---- ---- ---- ----
<S> <C> <C> <C>
2.7 2.2 3.9 2.8
</TABLE>
For purposes of computing the ratios of earnings to fixed charges, earnings
are determined by adding back fixed charges to earnings from continuing
operations (including equity in net earnings of unconsolidated subsidiaries)
before taxes on income and excluding undistributed earnings from less than 50%
owned affiliates. Fixed charges consist of interest expense, amortization of
debt issue costs and the interest portion of rent expense.
The Company incurred restructuring charges, adjustments of assets held for
sale and reengineering, severance and other related charges of $19.2 million,
$92.6 million and $220.3 million in 1993, 1995 and 1996, respectively. Excluding
such charges, the ratio of earnings to fixed charges for 1993, 1995 and 1996
would have been 3.2x, 2.8x and .9x, respectively.
- ---------------
(1) Not applicable as 1996 earnings were inadequate to cover fixed charges by
$188.8 million.
(2) 1995 earnings were inadequate to cover fixed charges by $3.3 million.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement
of Federal-Mogul Corporation on Form S-4, of our report dated January 27, 1997
except for Note 18 as to which the date is August 18, 1997 with respect to the
financial statements and schedule of Federal - Mogul Corporation included in the
Annual Report on Form 10-K/A of Federal-Mogul Corporation for the year ended
December 31, 1996, and to the references to us under the heading "Experts," in
the Prospectus, which is part of this Registration Statement.
/s/ Ernst & Young LLP
Detroit, Michigan
August 20, 1997
<PAGE> 1
Exhibit 25
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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)
-----------------
FIRST TRUST NATIONAL ASSOCIATION
(Exact Name of Trustee as Specified in its Charter)
36-4046888
(I.R.S. Employer Identification No.)
111 E. WACKER DRIVE, SUITE 3000
CHICAGO, ILLINOIS 60601
(Address of Principal Executive Officer) (Zip Code)
-----------------
DAVID S. VICK
FIRST TRUST NATIONAL ASSOCIATION
111 E. WACKER DRIVE, SUITE 3000
CHICAGO, ILLINOIS 60601
Telephone: (312) 228-9415
(Name, Address, and Telephone Number of Agent for Service)
-----------------
FEDERAL MOGUL CORPORATION
(Exact Name of Obligor as Specified in its Charter)
MICHIGAN 33-0533580
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
WORLD HEADQUARTERS
26555 NORTHWESTERN HIGHWAY
SOUTHFIELD, MICHIGAN 48034
(Address of Principal Executive Offices) (Zip Code)
8.80% SENIOR NOTES DUE 2007
(Title of Indenture Securities)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE> 2
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 the Currency, Washington, D.C.
(B) Whether it is authorized to exercise Corporate Trust Powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee.
ITEM 3. VOTING SECURITIES OF THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF VOTING SECURITIES
OF THE TRUSTEE:
As of August 20, 1997
Col. A Col. B
------- -------
Amount
Title of Class Outstanding
------------------------------------------------ ------------
Not applicable by virtue of response to Item 13.
ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES.
IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY
OTHER SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, FURNISH THE FOLLOWING INFORMATION:
(A) Title of the Securities outstanding under each such other Indenture.
Not applicable by virtue of response to Item 13.
(B) A brief statement of the facts relied upon as a basis for the claim
that no conflicting interest within the meaning of Section 310(b)(1) of the Act
arises as a result of the Trusteeship under any such other Indenture, including
a statement as to how the Indenture Securities will rank as compared with the
Securities issued under such other Indenture.
Not applicable by virtue of response to Item 13.
<PAGE> 3
ITEM 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS
WITH THE OBLIGOR OR UNDERWRITERS.
IF THE TRUSTEE OR ANY OF THE DIRECTORS OR EXECUTIVE OFFICERS OF THE TRUSTEE
IS A DIRECTOR, OFFICER, PARTNER, EMPLOYEE, APPOINTEE, OR REPRESENTATIVE OF THE
OBLIGOR OR OF ANY UNDERWRITER FOR THE OBLIGOR, IDENTIFY EACH SUCH PERSON HAVING
ANY SUCH CONNECTION AND STATE THE NATURE OF EACH SUCH CONNECTION.
Not applicable by virtue of response to Item 13.
ITEM 6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE
OBLIGOR OR ITS OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF THE TRUSTEE
OWNED BENEFICIALLY BY THE OBLIGOR AND EACH DIRECTOR, PARTNER AND EXECUTIVE
OFFICER OF THE OBLIGOR.
As of August 20, 1997
Col. A Col. B Col. C Col. D
- ------------------------ -------- ------------- ----------------------
Percentage of Voting
Amount Securities Represented
Title of Owned by Amount Given on
Name of Owner Class Beneficially Col. C
- ------------------------ --------- ------------- ----------------------
Not applicable by virtue of response to Item 13.
ITEM 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR
OFFICIALS.
FURNISH THE FOLLOWINGS INFORMATION AS TO THE VOTING SECURITIES OF THE
TRUSTEE OWNED BENEFICIALLY BY EACH UNDERWRITER FOR THE OBLIGOR AND EACH
DIRECTOR, PARTNER, AND EXECUTIVE OFFICER OF EACH SUCH UNDERWRITER.
As of August 20, 1997
Col. A Col. B Col. C Col. D
- ------------------------ --------- ------------ -----------------------
Percentage of Voting
Amount Securities Represented
Title of Owned by Amount Given in
Name of Owner Class Beneficially Col. C
- ------------------------ --------- ------------- -----------------------
Not applicable by virtue of response to Item 13.
<PAGE> 4
ITEM 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO SECURITIES OF THE OBLIGOR OWNED
BENEFICIALLY OR HELD AS COLLATERAL SECURITY FOR OBLIGATIONS IN DEFAULT BY THE
TRUSTEE:
<TABLE>
<CAPTION> As of August 20, 1997
<C> <C> <C> <C>
Col. Col. B Col. C Col. D
-------------- -------- ------------------------- -------------------
Whether
the
Securities
are Amount Owned Beneficially
Voting or or Held as Collateral Percent of Class
Nonvoting Security for Obligations Represented by Amount
Title of Class Securities in Default Given in Col. C
-------------- ---------- ------------------------- ---------------------
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT ANY SECURITIES OF AN UNDERWRITER FOR THE OBLIGOR,
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF SUCH
UNDERWRITER ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
<TABLE>
<CAPTION>
As of August 20, 1997
<C> <C> <C> <C>
Col. A Col. B Col. C Col. D
- --------------------------------- ------------ ---------------------- ----------------
Amount Owned
Beneficially or Held Percent of Class
as Collateral Security Represented by
Amount for Obligations in Amount Given
Name of Issuer and Title of Class Outstanding Default by Trustee in Col. C
- --------------------------------- ----------- --------------------- ---------------
</TABLE>
Not applicable by virtue of response to Item 13.
ITEM 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF CERTAIN
AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT VOTING SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE OF
THE TRUSTEE(1) OWNS 10 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR
OR(2) IS AN AFFILIATE, OTHER THAN A SUBSIDIARY, OF THE OBLIGOR, FURNISH
THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF SUCH PERSON.
<TABLE>
<CAPTION>
As of August 20, 1997
<C> <C> <C> <C>
Col. A Col. B Col. C Col. D
- --------------------------------- ------------ ---------------------- ----------------
Amount Owned
Beneficially or Held Percent of Class
as Collateral Security Represented by
Amount for Obligations in Amount Given
Name of Issuer and Title of Class Outstanding Default by Trustee in Col. C
- --------------------------------- ----------- --------------------- ---------------
</TABLE>
Not applicable by virtue of response to Item 13.
<PAGE> 5
ITEM 11. OWNERSHIP OF HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A PERSON
OWNING 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR.
As of August 20, 1997
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT ANY SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE OF THE
TRUSTEE, OWNS 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR,
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF SUCH PERSON
ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
Col. A Col. B Col. C Col. D
___________________ ___________ ______________ _________________
Amount Owned
Beneficially
or Held
as Collateral
Security for Percent of Class
Obligations Represented by
Name of Issuer and Amount in Default Amount Given
Title of Class Outstanding by Trustee in Col. C
__________________ ___________ ______________ ________________
Not applicable by virtue of response to Item 13.
ITEM 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
EXCEPT AS NOTED IN THE INSTRUCTIONS, IF THE OBLIGOR IS INDEBTED TO THE
TRUSTEE, FURNISH THE FOLLOWING INFORMATION:
As of August 20, 1997
Col. A Col. B Col. C
Nature of Indebtedness Amount Outstanding Date Due
______________________ __________________ ________
Not applicable by virtue of response to Item 13.
ITEM 13. DEFAULTS BY THE OBLIGOR.
(A) State whether there is or has been a default with respect to the
Securities under this Indenture. Explain the nature of any such default.
There is not nor has there been a default with respect to the
securities under this Indenture.
(B) If the Trustee is a Trustee under another Indenture under which any
other Securities, or Certificates of Interest or participation in any other
Securities, of the Obligor are outstanding, or is Trustee for more than one
outstanding Series of Securities under the Indenture, state whether there has
been a default under any such Indenture or Series, identify the Indenture or
Series affected, and explain the nature of any such default.
There is not nor has there been a default with respect to the
securities under this Indenture. The trustee is not a trustee under other
indentures under which any other securities or certificates of interest or
participation in any other securities of the obligor are outstanding.
ITEM 14. AFFILIATIONS WITH THE UNDERWRITERS.
IF ANY UNDERWRITER IS AN AFFILIATE OF THE TRUSTEE OF THE TRUSTEES,
DESCRIBE EACH SUCH AFFILIATION.
Not applicable by virtue of response to Item 13.
ITEM 15. FOREIGN TRUSTEE.
IDENTIFY THE ORDER OR RULE PURSUANT TO WHICH THE FOREIGN TRUSTEE IS
AUTHORIZED TO ACT AS SOLE TRUSTEE UNDER INDENTURES QUALIFIED OR TO BE QUALIFIED
UNDER THE ACT.
Not applicable.
<PAGE> 6
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 First Trust National
Association as now in effect, incorporated herein by reference to Exhibit 1
to T-1; Registration No. 333-19025.
2. A copy of the certificate of authority to commence business,
incorporated herein by reference to Exhibit 2 to T-1, Registration No.
33-64175.
3. A copy of the certificate of authority to exercise corporate trust
powers, incorporated herein by reference to Exhibit 3 to T-1, Registration
No. 33-64175.
4. A copy of the existing By-Laws of First Trust National Association
as now in effect, incorporated herein by reference to Exhibit 4 to T-1,
Registration No. 333-26727.
5. Not applicable by virtue of response to Item 13.
6. The consent of the trustee required by Section 321(b) of the Trust
Indenture Act of 1939, incorporated herein by reference to Exhibit 6 to T-1;
Registration No. 33-64175.
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, filed herewith.
8. Not applicable.
9. Not applicable.
<PAGE> 7
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, First Trust National Association, 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, as of 20th day of August, 1997.
FIRST TRUST NATIONAL ASSOCIATION
By /s/ David S. Vick
___________________________________________
David S. Vick
Vice President and Assistant Secretary
<PAGE> 8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR JUNE 30, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC --BALANCE SHEET
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A): RCON
a. Noninterest-bearing balances and currency and coin (1)......................... 0081 53,059 1.a
b. Interest-bearing balance(2).................................................... 0071 0 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)................... 1753 3,215 2.b
3. Federal funds sold and securities purchased under agreements to resell............ 1350 0 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RCON
RC-C)....................................................... 2122 0 4.a
b. LESS: Allowance for loan and lease losses................... 3123 0 4.b
c. LESS: Allocated transfer risk reserve....................... 3128 0 4.c
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c)........................ 2125 0 4.d
5. Trading assets.................................................................... 3545 0 5.
6. Premises and fixed assets (including capitalized leases).......................... 2145 115 6.
7. Other real estate owned (from Schedule RC-N)...................................... 2150 0 7.
8. Investment in unconsolidated subsidiaries and associated companies (from Schedule
RC-M)............................................................................. 2130 0 8.
9. Customers' liability to this bank on acceptances outstanding...................... 2155 0 9.
10. Intangible assets (from Schedule RC-M)............................................ 2143 49,565 10.
11. Other assets (from Schedule RC-F)................................................. 2160 3,367 11.
12. Total assets (sum of items 1 through 11).......................................... 2170 109,321 12.
</TABLE>
_______________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 9
<TABLE>
<CAPTION>
Schedule RC -- Continued DOLLAR AMOUNTS IN THOUSANDS
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
RCON
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E) 2200 0 13.a
RCON
(1) Noninterest-bearing (1)............................................. 6631 0 13.a.1
(2) Interest-bearing.................................................... 6636 0 13.a.2
b. In foreign offices. Edge and Agreement subsidiaries, and IBFs...........
(1) Noninterest-bearing.................................................
(2) Interest-bearing....................................................
14. Federal funds purchased and securities sold under agreements to
repurchase................................................................. 2800 0 14.
15. a. Demand notes issued to the U.S. Treasury................................ 2840 0 15.a
b. Trading liabilities..................................................... 3548 0 15.b
16. Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
a. With a remaining maturity of one year or less........................... 2332 0 16.a
b. With a remaining maturity of more than one year through three years..... A547 0 16.b
c. With a remaining maturity of more than three years...................... A548 0 16.c
17. Net applicable
18. Bank's liability on acceptances executed and outstanding................... 2920 0 18.
19. Subordinated notes and debentures (2)...................................... 3200 0 19.
20. Other liabilities (from Schedule RC-G)..................................... 2930 2,024 20.
21. Total liabilities (sum of items 13 through 20)............................. 2948 2,024 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.............................. 3838 0 23.
24. Common stock............................................................... 3230 1,000 24.
25. Surplus (exclude all surplus related to preferred stock) 3839 106,712 25.
26. a. Undivided profits and capital reserves.................................. 3632 (415) 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities................................................................. 8434 0 26.b
27. Cumulative foreign currency translation adjustments........................
28. Total equity capital (sum of items 23 through 27).......................... 3210 107,297 28
29. Total liabilities and equity capital (sum of items 21 and 28).............. 3300 109,321 29.
Memorandum
To be reported only with the March Report of Condition.
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 during 1996....... 6724 N/A M.1
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ---------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited life preferred stock and related surplus.
<PAGE> 1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
FEDERAL MOGUL CORPORATION
OFFER TO EXCHANGE
8.80% SENIOR NOTES DUE 2007
FOR ANY AND ALL OF THE OUTSTANDING
8.80% SENIOR NOTES DUE 2007
THIS EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 18, 1997
UNLESS THE OFFER IS EXTENDED
FIRST TRUST NATIONAL ASSOCIATION
(THE "EXCHANGE AGENT")
By Mail, Hand or Overnight Courier:
<TABLE>
<S> <C>
By Hand: (New York depository only) By Hand: (All Others)
First Trust of New York First Trust National Association
100 Wall Street, 20th Floor Fourth Floor -- Bond Drop Window
New York, NY 10005 180 East Fifth Street
Attention: Cathy Donohue St. Paul, MN 55101
By Registered, Certified or Overnight Mail: By First Class Mail:
First Trust National Association First Trust National Association
Attn: Specialized Finance P.O. Box 64485
180 East Fifth Street St. Paul, MN 55101
St. Paul, MN 55101
</TABLE>
By Facsimile:
(For Eligible Institutions Only)
(612) 244-1537
Telephone Number
(800) 934-6802 Bondholder Services
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONES LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS
LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL
IS COMPLETED.
<PAGE> 2
The undersigned hereby acknowledges receipt of the Prospectus dated August
19, 1997 (the "Prospectus") of Federal-Mogul Corporation (the "Company") and
this Letter of Transmittal, which together constitute the Company's offer (the
"Exchange Offer") to exchange $1,000 principal amount of its 8.80% Senior Notes
due 2007 (the "Exchange Notes"), which have been registered under the Securities
Act of 1933, as amended (the "Securities Act"), pursuant to a Registration
Statement of which the Prospectus is a part, for each $1,000 principal amount of
its outstanding 8.80% Senior Notes due 2007 (the "Notes"), respectively. The
term "Expiration Date" shall mean 5:00 p.m., New York City time, on September
18, 1997 unless the Company, in its reasonable judgment, extends the Exchange
Offer, in which case the term shall mean the latest date and time to which the
Exchange Offer is extended. Capitalized terms used but not defined herein have
the meaning given to them in the Prospectus.
YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE
INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS
AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT.
List on the next page the Notes to which this Letter of Transmittal
relates. If the space indicated is inadequate, the Certificate of Registration
Numbers and Principal Amounts should be listed on a separately signed schedule
affixed hereto.
- --------------------------------------------------------------------------------
DESCRIPTION OF SENIOR NOTES TENDERED HEREBY
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES)
OF REGISTERED OWNER(S)
(PLEASE FILL IN)
------------------------------------------------------------------------------------------------------------------------------
CERTIFICATE AGGREGATE
OR PRINCIPAL AMOUNT PRINCIPAL
REGISTRATION REPRESENTED AMOUNT
NUMBER(S)* BY NOTES TENDERED**
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
Total
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by Book Entry Holders.
** Unless otherwise indicated, the Holder will be deemed to have tendered the
Full Aggregate Principal Amount represented by such Notes. All Tenders must
be in integral multiples of $1,000.
================================================================================
This Letter of Transmittal is to be used (i) if certificates of Notes are
to be forwarded herewith, (ii) if delivery of Notes is to be made by book-entry
transfer to an account maintained by the Exchange Agent at The Depository Trust
Company (the "Depository"), pursuant to the procedures set forth in "The
Exchange Offer -- Procedures for Tendering Notes" in the Prospectus or (iii) if
tender of the Notes is to be made according to the guaranteed delivery
procedures described in the Prospectus under the caption "The Exchange
Offer -- Guaranteed Delivery Procedures." See Instruction 2. DELIVERY OF
DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE
EXCHANGE AGENT.
The term "Holder" with respect to the Exchange Offer means any person in
whose name Notes are registered on the books of the Company or any other person
who has obtained a properly completed bond power from the registered holder. The
undersigned has completed, executed and delivered this Letter of Transmittal to
indicate the action the undersigned desires to take with respect to the Exchange
Offer. Holders who wish to tender their Notes must complete this letter in its
entirety.
2
<PAGE> 3
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE
TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE DEPOSITORY AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution
- --------------------------------------------------------------------------------
[ ] The Depository Trust Company
Account Number
- --------------------------------------------------------------------------------
Transaction Code Number
- --------------------------------------------------------------------------------
Holders whose Notes are not immediately available or who cannot deliver
their Notes and all other documents required hereby to the Exchange Agent on or
prior to the Expiration Date must tender their Notes according to the guaranteed
delivery procedure set forth in the Prospectus under the caption "The Exchange
Offer -- Guaranteed Delivery Procedures." See Instruction 2.
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s)
- --------------------------------------------------------------------------------
Name of Eligible Institution that Guaranteed Delivery
----------------------------------------------------------------
If delivery by book-entry transfer:
Account Number
- --------------------------------------------------------------------------------
Transaction Code Number
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
3
<PAGE> 4
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the principal amount of the Notes
indicated above. Subject to, and effective upon, the acceptance for exchange of
such Notes tendered hereby, the undersigned hereby exchanges, assigns and
transfers to, or upon the order of, the Company all right, title and interest in
and to such Notes as are being tendered hereby, including all rights to accrued
and unpaid interest thereon as of the Expiration Date. The undersigned hereby
irrevocably constitutes and appoints the Exchange Agent the true and lawful
agent and attorney-in-fact of the undersigned (with full knowledge that said
Exchange Agent acts as the agent of the Company in connection with the Exchange
Offer) to cause the Notes to be assigned, transferred and exchanged. The
undersigned represents and warrants that it has full power and authority to
tender, exchange, assign and transfer the Notes and to acquire Exchange Notes
issuable upon the exchange of such tendered Notes, and that when the same are
accepted for exchange, the Company will acquire good and unencumbered title to
the tendered Notes, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim.
The undersigned represents to the Company that (i) the Exchange Notes
acquired pursuant to the Exchange Offer are being obtained in the ordinary
course of business of the person receiving such Exchange Notes, whether or not
such person is the undersigned, and (ii) neither the undersigned not any such
other person has an arrangement or understanding with any person to participate
in the distribution of such Exchange Notes. If the undersigned or the person
receiving the Exchange Notes covered hereby is a broker-dealer that is receiving
the Exchange Notes for its own account in exchange for Notes that were acquired
as a result of market-making activities or other trading activities, the
undersigned acknowledges that it or such other person will deliver a prospectus
in connection with any resale of such Exchange Notes; however, by so
acknowledging and by delivering a prospectus, the undersigned will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
The undersigned and any such other person acknowledges that, if they are
participating in the Exchange Offer for the purpose of distributing the Exchange
Notes, (i) they cannot rely on the position of the staff of the Securities and
Exchange Commission enunciated in Exxon Capital Holdings Corporation (available
April 13, 1989), Morgan Stanley & Co., Inc. (available June 5, 1991) or similar
no-action letters and, in the absence of an exemption therefrom, must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with the resale transaction and (ii) failure to comply with such
requirements in such instance could result in the undersigned or any such other
person incurring liability under the Securities Act for which such persons are
not indemnified by the Company. If the undersigned or the person receiving the
Exchange Notes covered by this letter is an affiliate (as defined under Rule 405
of the Securities Act) of the Company, the undersigned represents to the Company
that the undesigned understands and acknowledges that such Exchange Notes may
not be offered for resale, resold or otherwise transferred by the undersigned or
such other person without registration under the Securities Act or an exemption
therefrom.
The undersigned also warrants that it will, upon request, execute and
deliver any additional documents deemed by the Exchange Agent or the Company to
be necessary or desirable to complete the exchange, assignment and transfer of
tendered Notes or transfer ownership of such Notes on the account books
maintained by a book-entry facility. The undersigned further agrees that
acceptance of any tendered Notes by the Company and the issuance of Exchange
Notes in exchange therefor shall constitute performance in full by the Company
of its obligations under the Registration Rights Agreement and that the Company
shall have no further obligations or liabilities thereunder for the registration
of the Notes or the Exchange Notes.
The Exchange Offer is subject to certain conditions set forth in the
Prospectus under the caption "The Exchange Offer -- Conditions." The undersigned
recognizes that as a result of these conditions (which may be waived, in whole
or in part, by the Company), as more particularly set forth in the Prospectus,
the Company may not be required to exchange any of the Notes tendered hereby
and, in such event, the Notes not exchanged will be returned to the undesigned
at the address shown below the signature of the undersigned.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Tendered Notes may be withdrawn at any time
prior to the Expiration Date.
4
<PAGE> 5
Unless otherwise indicated in the box entitled "Special Registration
Instructions" or the box entitled "Special Delivery Instructions" in this Letter
of Transmittal, certificates for all Exchange Notes delivered in exchange for
tendered Notes, and any Notes delivered herewith but not exchanged, will be
registered in the name of the undersigned and shall be delivered to the
undersigned at the address shown below the signature of the undersigned. If an
Exchange Note is to be issued to a person other than the person(s) signing this
Letter of Transmittal, or if the Exchange Note is to be mailed to someone other
than the person(s) signing this Letter of Transmittal or to the person(s)
signing this Letter of Transmittal at an address different than the address
shown on this Letter of Transmittal, the appropriate boxes of this Letter of
Transmittal should be completed. If Notes are surrendered by Holder(s) that have
completed either the box entitled "Special Registration Instructions" or the box
entitled "Special Delivery Instructions" in this Letter of Transmittal,
signature(s) on this Letter of Transmittal must be guaranteed by an Eligible
Institution (defined in Instruction 4).
------------------------------------------------------------
SPECIAL REGISTRATION
INSTRUCTIONS
To be completed ONLY if the Exchange Notes are to be issued in the
name of someone other than the undersigned.
Name:
----------------------------------------------------
Address:
-------------------------------------------------
------------------------------------------------------------
Book-Entry Transfer Facility Account:
------------------
------------------------------------------------------------
Employee Identification or Social Security Number:
------------------------------------------------------------
(PLEASE PRINT OR TYPE)
============================================================
SPECIAL DELIVERY
INSTRUCTIONS
To be completed ONLY if the Exchange Notes are to be sent to someone
other than the undersigned, or to the undersigned at an address other than
that shown under "Description of Notes Tendered Hereby."
Name: ------------------------------------------------------------
Address: -----------------------------------------------------------
------------------------------------------------------------
(PLEASE PRINT OR TYPE)
------------------------------------------------------------
5
<PAGE> 6
REGISTERED HOLDER(S) OF NOTES SIGN HERE)
(IN ADDITION, COMPLETE SUBSTITUTE FORM W-9 BELOW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF REGISTERED HOLDER(S))
Must be signed by registered holder(s) exactly as name(s) appear(s) on the
Notes or on a security position listing as the owner of the Notes or by
person(s) authorized to become registered holder(s) by properly completed bond
powers transmitted herewith. If signature is by attorney-in-fact, trustee,
executor, administrator, guardian, officer of a corporation or other person
acting in a fiduciary capacity, please provide the following information.
(Please print or type):
Name and Capacity (full title):
--------------------------------------------------------
Address (including zip code):
---------------------------------------------------------
Area Code and Telephone Number:
-----------------------------------------------------
Taxpayer Identification or Social Security No.:
---------------------------------------------
Dated:
- ------------------------------------
SIGNATURE GUARANTEE
(IF REQUIRED -- SEE INSTRUCTION 4)
Authorized Signature:
----------------------------------------------------------------
(SIGNATURE OF REPRESENTATIVE OF SIGNATURE GUARANTOR)
Name and Title:
-------------------------------------------------------------------
Name of Plan:
---------------------------------------------------------------------
Area Code and Telephone Number:
-----------------------------------------------------
(PLEASE PRINT OR TYPE)
Dated:
- ------------------------------------
6
<PAGE> 7
<TABLE>
<C> <S> <C>
- -------------------------------------------------------------------------------------------------------------------
PAYOR'S NAME: FIRST TRUST NATIONAL ASSOCIATION
===================================================================================================================
SUBSTITUTE PART I -- Please provide your TIN in the --------------------------------------
FORM W-9 box at right and certify by signing and Social Security Number
dating below. or
--------------------------------------
Employer Identification Number
(If awaiting TIN write "Applied For")
------------------------------------------------------------------------------------
DEPARTMENT OF THE TREASURY PART II -- For Payees exempt from backup withholding, see the enclosed Guidelines
INTERNAL REVENUE SERVICE for Certification of Taxpayer Identification Number on Substitute Form W-9 and
complete as instructed therein.
------------------------------------------------------------------------------------
CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or
a Taxpayer Identification Number has not been issued to me) and either (a) I have
mailed or delivered an application to receive a Taxpayer Identification Number
to the appropriate Internal Revenue Service ("IRS") or Social Security
Administration office or (b) I intend to mail or deliver an application in the
near future. I understand that if I do not provide a Taxpayer Identification
Number within 60 days, 31% of all reportable payments made to me thereafter
PAYER'S REQUEST FOR will be withheld until I provide a number, and
TAXPAYER IDENTIFICATION (2) I am not subject to backup withholding either because (a) I am exempt from
NUMBER (TIN) backup withholding, (b) I have not been notified by the IRS that I am subject to
backup withholding as a result of a failure to report all interest or
dividends, or (c) the IRS has notified me that I am no longer subject to backup
withholding.
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup withholding you received
another notification from the IRS that you are no longer subject to backup
withholding, do not cross out item (2). (Also see instructions in the enclosed
Guidelines.)
Signature ------------------------------------------ Date ------------------, 1997
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
7
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND
CONDITIONS OF THE EXCHANGE OFFER
1. Delivery of this Letter of Transmittal and Certificates. All physically
delivered Notes or confirmations of any book-entry transfer to the Exchange
Agent's account at a book-entry transfer facility of Notes tendered by
book-entry transfer, as well as a properly completed and duly executed copy of
this Letter of Transmittal or facsimile thereof, and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
at any of its addresses set forth herein on or prior to the Expiration Date (as
defined in the Prospectus). The method of delivery of this Letter of
Transmittal, the Notes and any other required documents is at the election and
risk of the Holder, and except as otherwise provided below, the delivery will be
deemed made only when actually received by the Exchange Agent. If such delivery
is by mail, it is suggested that registered mail with return receipt requested,
properly insured, be used.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering Holders, by execution of this Letter of Transmittal (or
facsimile thereof), shall waive any right to receive notice of the acceptance of
the Notes for exchange.
Delivery to an address other than as set forth herein, or instructions via
a facsimile number other than the ones set forth herein, will not constitute a
valid delivery.
2. Guaranteed Delivery Procedures. Holders who wish to tender their Notes,
but whose Notes are not immediately available and thus cannot deliver their
Notes, the Letter of Transmittal or any other required documents to the Exchange
Agent (or comply with the procedures for book-entry transfer) on or prior to the
Expiration Date, may effect a tender if:
(a) the tender is made through a member firm of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc., a commercial bank or trust company having an office or correspondent
in the United States or an "eligible guarantor institution" within the
meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution");
(b) prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the Holder, the registration
number(s) of such Notes and the principal amount of Notes tendered, stating
that the tender is being made thereby and guaranteeing that, within three
New York Stock Exchange trading days after the Expiration Date, the Letter
of Transmittal (or facsimile thereof), together with the Notes (or a
confirmation of book-entry transfer of such Notes into the Exchange Agent's
account at the Depository) and any other documents required by the Letter
of Transmittal, will be deposited by the Eligible Institution with the
Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as all tendered Notes in proper form for
transfer (or a confirmation of book-entry transfer of such Notes into the
Exchange Agent's account at the Depository) and all other documents
required by the Letter of Transmittal, are received by the Exchange Agent
within three New York Stock Exchange trading days after the Expiration
Date.
Any Holder who wishes to tender Notes pursuant to the guaranteed delivery
procedures described above must ensure that the Exchange Agent receives the
Notice of Guaranteed Delivery relating to such Notes prior to the Expiration
Date. Failure to complete the guaranteed delivery procedures outlined above will
not, of itself, affect the validity or effect a revocation of any Letter of
Transmittal form properly completed and executed by a Holder who attempted to
use the guaranteed delivery procedures.
3. Partial Tenders; Withdrawals. If less than the entire principal amount
of Notes evidenced by a submitted certificate is tendered, the tendering Holder
should fill in the principal amount tendered in the column entitled "Principal
Amount Tendered" of the box entitled "Description of Notes Tendered Hereby." A
newly issued Note for the principal amount of Notes submitted but not tendered
will be sent to such Holder as soon as practicable after the Expiration Date.
All Notes delivered to the Exchange Agent will be deemed to have been tendered
in full unless otherwise indicated.
Notes tendered pursuant to the Exchange Offer may be withdrawn at any time
prior to the Expiration Date, after which tenders of Notes are irrevocable. To
be effective, a written telegraphic or facsimile transmission notice of
8
<PAGE> 9
withdrawal must be timely received by the Exchange Agent. Any such notice of
withdrawal must (i) specify the name of the person having deposited the Notes to
be withdrawn (the "Depositor"), (ii) identify the Notes to be withdrawn
(including the registration number(s) and principal amount of such Notes or, in
the case of Notes transferred by book-entry transfer, the name and number of the
account at the Depository to be credited), (iii) be signed by the Holder in the
same manner as the original signature on this Letter of Transmittal (including
any required signature guarantees) or be accompanied by documents of transfer
sufficient to have the Trustee with respect to the Notes register the transfer
of such Notes into the name of the person withdrawing the tender and (iv)
specify the name in which any such Notes are to be registered, if different from
that of the Depositor. All questions as to the validity, form and eligibility
(including time of receipt) of such notices will be determined by the Company,
whose determination shall be final and binding on all parties. Any Notes so
withdrawn will be deemed not to have been validly tendered for purposes of the
Exchange Offer and no Exchange Notes will be issued with respect thereto unless
the Notes so withdrawn are validly retendered. Any Notes which have been
tendered but which are not accepted for exchange, will be returned to the Holder
thereof without cost to such Holder, or will be credited to an account
maintained with the Depository, as soon as practicable after withdrawal,
rejection of tender or termination of Exchange Offer.
4. Signature on this Letter of Transmittal; Written Instruments and
Endorsements; Guarantee of Signatures. If this Letter of Transmittal is signed
by the registered Holder(s) of the Notes tendered hereby, the signature must
correspond with the name(s) as written on the face of the certificates without
alteration or enlargement or any change whatsoever. If this Letter of
Transmittal is signed by a participant in the Depository, the signature must
correspond with the name as it appears on the security position listing as the
owner of the Notes.
If any of the Notes tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If a number of Notes registered in different names is tendered, it will be
necessary to complete, sign and submit as many separate copies of this Letter of
Transmittal as there are different registrations of Notes.
Signatures on this Letter of Transmittal or on a notice of withdrawal, as
the case may be, must be guaranteed by an Eligible Institution unless the Notes
tendered hereby are tendered (i) by a registered Holder who has not completed
the box entitled "Special Registration Instructions" or "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution.
If this Letter of Transmittal is signed by the registered Holder or Holders
of Notes (which term, for the purposes described herein, shall include a
participant in the Depository whose name appears on a security listing as the
owner of the Notes) listed and tendered hereby, no endorsements of the tendered
Notes or separate written instruments of transfer or exchange are required. In
any other case, the registered Holder (or acting Holder) must either properly
endorse the Notes or transmit properly completed bond powers with this Letter of
Transmittal (in either case, executed exactly as the name(s) of the registered
Holder(s) appear(s) on the Notes, and, with respect to a participant in the
Depository whose name appears on a security position listing as the owner of
Notes, exactly as the name of the participant appears on such security position
listing), with the signature on the Notes or bond power guaranteed by an
Eligible Institution (except where the Notes are tendered for the account of an
Eligible Institution).
If this Letter of Transmittal, any certificates or separate written
instruments of transfer or exchange are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, such persons should so
indicate when signing, and, unless waived by the Company, proper evidence
satisfactory to the Company of their authority to so act must be submitted.
5. Special Registration and Delivery Instructions. Tendering Holders
should indicate, in the applicable box, the name and address (or account at the
Depository) in which the Exchange Notes or substitute Notes for principal
amounts not tendered or not accepted for exchange are to be issued (or
deposited), if different from the names and addresses or accounts of the person
signing this Letter of Transmittal. In the case of issuance in a different name,
the employer identification number or social security number of the person named
must also be indicated and the tendering Holder should complete the applicable
box.
If no instructions are given, the Exchange Notes (and any Notes not
tendered or not accepted) will be issued in the name of and sent to the acting
Holder of the Notes or deposited at such Holder's account at the Depository.
9
<PAGE> 10
6. Transfer Taxes. The Company shall pay all transfer taxes, if any,
applicable to the transfer and exchange of Notes to it or its order pursuant to
the Exchange Offer. If a transfer tax is imposed for any other reason other than
the transfer and exchange of Notes to the Company or its order pursuant to the
Exchange Offer, the amount of any such transfer taxes (whether imposed on the
registered Holder or any other person) will be payable by the tendering Holder.
If satisfactory evidence of payment of such taxes or exception therefrom is not
submitted herewith, the amount of such transfer taxes will be collected from the
tendering Holder by the Exchange Agent.
Except as provided in this Instruction 6, it will not be necessary for
transfer stamps to be affixed to the Notes listed in this Letter of Transmittal.
7. Waiver of Conditions. The Company reserves the right, in its reasonable
judgment, to waive, in whole or in part, any of the conditions to the Exchange
Offer set forth in the Prospectus.
8. Mutilated, Lost, Stolen or Destroyed Notes. Any Holder whose Notes have
been mutilated, lost, stolen or destroyed should contact the Exchange Agent at
the address indicated above for further instructions.
9. Requests for Assistance or Additional Copies. Questions relating to the
procedure for tendering as well as requests for additional copies of the
Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent
at the address and telephone numbers(s) set forth above. In addition, all
questions relating to the Exchange Offer, as well as requests for assistance or
additional copies of the Prospectus and this Letter of Transmittal, may be
directed to Federal-Mogul Corporation, 26555 Northwestern Highway, Southfield,
Michigan 48034, telephone (810) 354-7700.
10. Validity and Form. All questions as to the validity, form, eligibility
(including time of receipt), acceptance of tendered Notes and withdrawal of
tendered Notes will be determined by the Company in its sole discretion, which
determination will be final and binding. The Company reserves the absolute right
to reject any and all Notes not properly tendered or any Notes the Company's
acceptance of which would, in the opinion of counsel for the Company, be
unlawful. The Company also reserves the right, in its reasonable judgment, to
waive any defects, irregularities or conditions of tender as to particular
Notes. The Company's interpretation of the terms and conditions of the Exchange
Offer (including the instructions in this Letter of Transmittal) will be final
and binding on all parties. Unless waived, any defects or irregularities in
connection with tenters of Notes must be cured within such time as the Company
shall determine. Although the Company intends to notify Holders of defects or
irregularities with respect to tenders of Notes, neither the Company, the
Exchange Agent nor any other person shall incur any liability for failure to
give such notification. Tenders of Notes will not be deemed to have been made
until such defects or irregularities have been cured or waived. Any Notes
received by the Exchange Agent that are not properly tendered and as to which
the defects or irregularities have not been cured or waived will be returned by
the Exchange Agent to the tendering Holder as soon as practicable following the
Expiration Date.
IMPORTANT TAX INFORMATION
Under federal income tax law, a Holder tendering Notes is required to
provide the Exchange Agent with such Holder's correct TIN on Substitute Form W-9
above. If such Holder is an individual, the TIN is the Holder's social security
number. The Certificate of Awaiting Taxpayer Identification Number should be
completed if the tendering Holder has not been issued a TIN and has applied for
a number or intends to apply for a number in the near future. If the Exchange
Agent is not provided with the correct TIN, the Holder may be subject to a $50
penalty imposed by the Internal Revenue Service. In addition, payments that are
made to such Holder with respect to tendered Notes may be subject to backup
withholding of 31%.
Certain Holders (including, among others, all domestic corporations and
certain foreign individuals and foreign entities) are not subject to these
backup withholding and reporting requirements. In order for a foreign individual
to qualify as an exempt recipient, such individual must submit a statement,
signed under penalties of perjury, attesting to such individual's exempt status.
Forms of such statements can be obtained from the Depositary. See the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional instructions.
If backup withholding applies, the Exchange Agent is required to withhold
31% of any amounts otherwise payable to the Holder. Backup withholding is not an
additional tax. Rather, the tax liability of persons subject to backup
withholding
10
<PAGE> 11
will be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained from the Internal Revenue
Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a Holder with
respect to Notes tendered for exchange, the Holder is required to notify the
Exchange Agent of his or her correct TIN by completing the form herein
certifying that the TIN provided on Substitute Form W-9 is correct (or that such
Holder is awaiting a TIN) and that (i) each Holder is exempt, (ii) such Holder
has not been notified by the Internal Revenue Service that he or she is subject
to backup withholding as a result of failure to report all interest or dividends
or (iii) the Internal Revenue Service has notified such Holder that he or she is
no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE EXCHANGE AGENT
Each Holder is required to give the Exchange Agent the social security
number or employer identification number of the record Holder(s) of the Notes.
If Notes are in more than one name or are not in the name of the actual Holder,
consult the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 for additional guidance on which number to report.
If the tendering Holder has not been issued a TIN and has applied for a number
or intends to apply for a number in the near future, the stockholder should
write "Applied For" in the space provided for in the TIN in Part I, and sign and
date the Substitute Form W-9. If "Applied For" is written in Part I and the
Depositary is not provided with a TIN within 60 days, the Depositary will
withhold 31% of all payments of the purchase price to such stockholder until a
TIN is provided to the Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE THEREOF (TOGETHER WITH
NOTES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS)
OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR
PRIOR TO THE EXPIRATION DATE.
11
<PAGE> 1
EXHIBIT 99.2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<C> <S> <C>
- ---------------------------------------------------------
GIVE THE SOCIAL SE-
FOR THIS TYPE OF ACCOUNT: CURITY
NUMBER OF--
=========================================================
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
- ---------------------------------------------------------
1. Individual The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, the
first individual on
the account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-
trust account (grantor is trustee(1)
also trustee)
b. So-called trust account that The actual owner(1)
is not a legal or valid trust
under State law
5. Sole proprietorship The owner(3)
- ---------------------------------------------------------
6. Sole proprietorship The owner(3)
7. A valid trust, estate, or The legal entity(4)
pension trust
8. Corporate The corporation
9. Association, club, religious, The organization
charitable, educational, or
other tax-exempt organization
account
10. Partnership The partnership
11. A broker or registered nominee The broker or
nominee
12. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State
or local government, school
district, or prison) that
receives agricultural program
payments
- ---------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a social security number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter you business or
"doing business as" name. You may use either your social security number or
your employer identification number (if you have one).
(4) List first and circle the name of the legal trust, estate or pension trust.
(Do not furnish the taxpayer identification number of the personal
representative or trustee unless the legal entity itself is not designated
in the account title.)
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
12
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5. Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding include the following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), an individual
retirement plan or a custodial account under section 403(b)(7) if the
account satisfies the requirements of section 401(f)(2).
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
political subdivision or instrumentality thereof.
- A foreign government or any political subdivision, agency or instrumentality
thereof.
- An international organization or any agency or instrumentality thereof.
- A dealer in securities or commodities registered in the U.S. or a possession
of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An entity registered at all times during the tax year under the Investment
Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one non-resident alien partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Section 404(k) payments made by an ESOP.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to non-resident aliens.
- Payments on tax-free convenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Mortgage interest paid to you.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" IN PART II OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the number whether or not recipients are required
to file tax returns. Beginning January 1, 1993, payers must generally withhold
31% of taxable interest, dividend, and certain other payments to a payee who
does not furnish a taxpayer identification number to a payer. Certain penalties
may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
underpayment attributable to that failure unless there is a clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false state with no reasonable basis which results in no imposition of
backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE
13
<PAGE> 1
EXHIBIT 99.3
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
8.80% SENIOR NOTES DUE 2007
(INCLUDING THOSE IN BOOK-ENTRY FORM)
OF
FEDERAL-MOGUL CORPORATION
This form or one substantially equivalent hereto must be used to accept the
Exchange Offer of Federal-Mogul Corporation (the "Company") made pursuant to the
Prospectus, dated August 19, 1997 (the "Prospectus"), if certificates for the
outstanding 8.80% Senior Subordinated Notes Due 2007 of the Company (the "Old
Notes") are not immediately available or if the procedure for book-entry
transfer cannot be completed on a timely basis or time will not permit all
required documents to reach the Exchange Agent prior to 5:00 p.m., New York
time, on the Expiration Date of the Exchange Offer. Such form may be delivered
or transmitted by telegram, telex, facsimile transmission, mail or hand delivery
to First Trust National Association (the "Exchange Agent") as set forth below.
In addition, in order to utilize the guaranteed delivery procedure to tender Old
Notes pursuant to the Exchange Offer, a completed, signed and dated Letter of
Transmittal (or facsimile thereof) as well as all tendered Notes in proper form
for transfer (or a confirmation of book-entry transfer of such Notes into the
Exchange Agent's account at the Depository Trust Company) and all other
documents required by the Letter of Transmittal must also be received by the
Exchange Agent within three New York Stock Exchange trading days after the
Expiration Date. Capitalized terms not defined herein are defined in the
Prospectus.
FIRST TRUST NATIONAL ASSOCIATION, EXCHANGE AGENT
<TABLE>
<S> <C>
BY Hand: (New York depository only) BY Hand: (All Others)
First Trust of New York First Trust National Association
100 Wall Street, 20th Floor Fourth Floor -- Bond Drop Window
New York, NY 10005 180 East Fifth Street
Attention: Cathy Donohue St. Paul, MN 55101
By Registered, Certified or Overnight Mail: By First Class Mail:
First Trust National Association First Trust National Association
Attn: Specialized Finance P.O. Box 64485
180 East Fifth Street St. Paul, MN 55101
St. Paul, MN 55101
</TABLE>
By Facsimile:
(For Eligible Institutions Only)
(612) 244-1537
Telephone Number
(800) 934-6802 Bondholder Services
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL
NOT CONSTITUTE A VALID DELIVERY.
<PAGE> 2
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to the
Company the principal amount of Old Notes set forth below, pursuant to the
guaranteed delivery procedure described in "The Exchange Offer -- Guaranteed
Delivery Procedures" section of the Prospectus.
Principal Amount of Old Notes Tendered: (1)
$
- ------------------------------------------------------------
(1) Must be in denominations of principal amount of $1,000 and any integral
multiple thereof
Certificate Nos. (if available):
- --------------------------------------------------------------------------------
Total Principal Amount Represented by Certificate(s):
$
- --------------------------------------------------------------------------------
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned.
PLEASE SIGN HERE
<TABLE>
<S> <C>
x
- ---------------------------------------------------------------- ---------------------------------
x
- ---------------------------------------------------------------- ---------------------------------
SIGNATURE(S) OF OWNER(S) OR AUTHORIZED SIGNATORY DATE
</TABLE>
Area Code and Telephone Number:
-----------------------------------------------
2
<PAGE> 3
Must be signed by the holder(s) of Old Notes as their name(s) appear(s) on
certificates for Old Notes or on a security position listing, or by person(s)
authorized to become registered holder(s) by endorsement and documents
transmitted with this Notice of Guaranteed Delivery. If signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer or other
person acting in a fiduciary or representative capacity, such person must set
forth his or her full title below. If Old Notes will be delivered by book-entry
transfer to The Depository Trust Company, provide account number.
Please print name(s) and address(es)
<TABLE>
<S> <C>
Name(s) -------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Capacity: -------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Address(es): -------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Account Number: -------------------------------------------------------------------------------------
</TABLE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a financial institution (including most banks, savings and
loan associations and brokerage houses) that is a participant in the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Program or the Stock Exchanges Medallion Program, hereby guarantees
that the undersigned will deliver to the Exchange Agent the certificates
representing the old Notes being tendered hereby or confirmation of book-entry
transfer of such Old Notes into the Exchange Agent's account at The Depository
Trust Company, in proper form for transfer, together with any other documents
required by the Letter of Transmittal within three New York Stock Exchange
trading days after the Expiration Date.
<TABLE>
<S> <C>
Name of Firm
---------------------------------------- Authorized Signature
---------------------------------
Address
- ----------------------------------------------
Name
----------------------------------------------
(PLEASE TYPE OR PRINT)
- ---------------------------------------------- Title
----------------------------------------------
Area Code & Date
----------------------------------------------
Telephone No.
----------------------------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES OF OLD NOTES WITH THIS FORM. CERTIFICATES OF OLD
NOTES SHOULD BE SENT ONLY WITH A COPY OF THE PREVIOUSLY EXECUTED LETTER
OF TRANSMITTAL.
3
