<PAGE> 1
As filed with the Securities and Exchange Commission January 4, 1996
Registration No. 33-63855
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
PRE-EFFECTIVE AMENDMENT
NO. 1 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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FERRO CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Ohio 34-0217820
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
--------------------
D. Thomas George
Treasurer
Ferro Corporation
1000 Lakeside Avenue 1000 Lakeside Avenue
Cleveland, Ohio 44114 Cleveland, Ohio 44114
(216) 641-8580 (216) 641-8580
(Address, including zip code and (Name, address, including zip code,
telephone number, including area code, and telephone number, including area
of registrant's principal executive code, of agent for service)
offices)
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with a copy to:
Mary Ann Jorgenson, Esq.
Squire, Sanders & Dempsey
4900 Society Center
127 Public Square
Cleveland, Ohio 44114
(216) 479-8500
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Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement, as determined in
light of market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement from the same offering. / / __________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
(Calculation of Registration Fee Table on following page.)
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Class of Amount to be Registered(1) Proposed Maximum Offering Proposed Maximum Amount of Registration
Securities to be Registered Price Per Unit(1)(2) Aggregate Offering Fee
Price(1)(2)
<S> <C> <C> <C> <C>
Debt Securities(3)
Common Stock, par value
$1.00 per share(4)
Preferred Stock, without
par value(5)
Warrants(6)
Stock Purchase Contracts(7)
Stock Purchase Units(8)
Depositary Shares(9)
Total $300,000,000 $300,000,000 $103,449(10)
</TABLE>
(1) Not specified as to each class of Securities to be registered pursuant
to General Instruction II.D of Form S-3. In no event will the
aggregate initial offering price of the Securities issued under this
Registration Statement exceed $300,000,000 or the equivalent thereof
in one or more foreign currencies or composite currencies, including
European currency units. Securities registered hereby may be sold
separately, together or in units with other Securities registered
hereunder.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933. The
proposed maximum offering price per unit will be determined from time
to time by the registrant in connection with the issuance by the
registrant of the Securities registered hereunder.
(3) Subject to note (1) above, there is being registered hereunder an
indeterminate principal amount of Debt Securities as may be sold from
time to time by the registrant, including sales upon the exercise of
the Warrants. If any Debt Securities are being issued at an original
issue discount, then the offering price shall be in such greater
principal amount as shall result in an aggregate initial offering not
to exceed $300,000,000, less the dollar amount of any Securities
previously issued hereunder.
(4) Subject to note (1) above, there is being registered hereunder an
indeterminate number of shares of Common Stock as may be sold, from
time to time, by the registrant. There is also being registered
hereunder an indeterminate number of shares of Common Stock as shall
be issuable under the Stock Purchase Contracts and Stock Purchase
Units or upon conversion or exchange of Debt Securities or Depositary
Shares or Preferred Stock registered hereunder or upon exercise of
Warrants registered hereunder, as the case may be.
(5) Subject to note (1) above, there is being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold, from
time to time, by the registrant. There is also being registered
hereunder an indeterminate number of shares of Preferred Stock as
shall be issuable upon conversion or exchange of Debt Securities or
Depositary Shares registered hereunder or upon exercise of Warrants
registered hereunder, as the case may be.
(6) Subject to note (1) above, there is being registered hereunder an
indeterminate amount and number of Warrants, representing rights to
purchase Debt Securities and/or Common Stock and/or Preferred Stock
registered hereunder.
<PAGE> 3
(7) Subject to Note (1) above, there is being registered hereunder an
indeterminate amount and number of Stock Purchase Contracts,
representing rights to purchase Common Stock and/or Preferred Stock
registered hereunder.
(8) Subject to note (1) above, there is being registered hereunder an
indeterminate amount and number of Stock Purchase Units, representing
ownership of Stock Purchase Contracts and debt obligations of the
United States of America or agencies or instrumentalities thereof.
(9) Subject to note (1) above, there is being registered hereunder an
indeterminate number of Depositary Shares to be evidenced by
depositary receipts issued pursuant to a Deposit Agreement. In the
event the registrant elects to offer to the public fractional
interests in shares of Preferred Stock registered hereunder,
depositary receipts will be distributed to those persons purchasing
such fractional interests and the shares of Preferred Stock will be
issued to the depositary under the Deposit Agreement.
(10) The registration fee was paid by the registrant in connection with the
initial filing of this Registration Statement on October 31, 1995.
THIS 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 THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<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 IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAW OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JANUARY 4, 1996
________________________________________________________________________________
PROSPECTUS
________________________________________________________________________________
$300,000,000
FERRO CORPORATION
DEBT SECURITIES
COMMON STOCK
PREFERRED STOCK
WARRANTS
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
DEPOSITARY SHARES
Ferro Corporation (the "Company") may offer from time to time (a) unsecured
debt securities (the "Debt Securities") consisting of debentures, notes and/or
other evidences of indebtedness, which may be either senior or subordinated,
(b) shares of its Common Stock, $1.00 par value per share (the "Common Stock"),
(c) shares of its Serial Preferred Stock, without par value (the "Preferred
Stock"), which may be issued in the form of depositary shares evidenced by
depositary receipts (the "Depositary Shares") and which may be convertible into
or exchangeable for Common Stock issued hereunder, (d) warrants to purchase
Debt Securities, Common Stock or Preferred Stock (the "Warrants"), (e) Stock
Purchase Contracts ("Stock Purchase Contracts") to purchase Common Stock and/or
Preferred Stock, and (f) Stock Purchase Units ("Stock Purchase Units"), each
representing ownership of a Stock Purchase Contract and debt obligations of the
United States of America or agencies or instrumentalities thereof securing the
holder's obligation to purchase Common Stock and/or Preferred Stock under the
Stock Purchase Contract, with an aggregate initial public offering price of up
to $300,000,000, on terms to be determined at the time or times of offering.
The Debt Securities, Common Stock, Preferred Stock, Warrants, Stock Purchase
Contracts, Stock Purchase Units and Depositary Shares (collectively, the
"Securities") may be offered, separately or together, in separate classes or
series, in amounts, at prices and on terms to be set forth in one or more
supplements to this Prospectus (each, a "Prospectus Supplement").
The specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in the applicable Prospectus Supplement and
will include, where applicable and without limitation: (a) in the case of Debt
Securities, the specific title, aggregate principal amount, currency, form
(which may be registered or bearer, or certificated or global), ranking as
senior or subordinated debt, authorized denominations, maturity, rate (or
manner of calculation thereof) and time of payment of interest, terms of
redemption at the option of the Company or repayment at the option of the
holder, terms for sinking fund payments, terms for conversion into Common
Stock, Preferred Stock or other Company securities, additional covenants and
any initial public offering price; (b) in the case of Common Stock, the number
of shares and any initial public offering price; (c) in the case of Preferred
Stock, the number of shares, the specific title, any dividend, liquidation,
redemption, sinking fund, conversion or exchange or other rights and any
initial public offering price; (d) in the case of Warrants, the duration,
offering
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price, exercise price and detachability, (e) in the case of Stock Purchase
Contracts, the designation and number of shares of Common Stock or Preferred
Stock issuable thereunder, the purchase price of the Common Stock or Preferred
Stock, the date or dates on which the Common Stock or Preferred Stock is
required to be purchased by the holders of the Stock Purchase Contracts, any
periodic payments required to be made by the Company to the holders of the
Stock Purchase Contract or vice versa, and the terms of the offering and sale
thereof; (f) in the case of Stock Purchase Units, the specific terms of the
Stock Purchase Contracts and any debt obligations securing the holder's
obligation to purchase Common Stock or Preferred Stock under the Stock Purchase
Contracts, and the terms of the offering and sale thereof; and (h) in the case
of the Depositary Shares, the fraction of a share of Preferred Stock
represented by one Depositary Share. The Prospectus Supplement will also
contain information, where applicable, about certain United States federal
income tax and other considerations relating to the Securities covered thereby.
The Securities may be offered by the Company directly to one or more
purchasers, through agents designated from time to time by the Company, or to
or through underwriters or dealers. If any agents or underwriters are involved
in the sale of any of the Securities, their names, and any applicable purchase
price, fee, commission or discount arrangement between or among them, will be
set forth, or will be calculable from the information set forth, in the
applicable Prospectus Supplement. See "Plan of Distribution." No Securities
may be sold without delivery of the applicable Prospectus Supplement describing
the method and terms of the offering of such class or series of Securities.
_____________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR 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 __________, 1996.
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No person has been authorized to give any information or to make any
representation other than those contained in this Prospectus and any
accompanying Prospectus Supplement in connection with the offering described
herein and therein, and, if given or made, such other information or
representation must not be relied upon as having been authorized by the Company
or by any underwriter, dealer or agent. Neither this Prospectus nor any
Prospectus Supplement shall constitute an offer to sell or a solicitation of an
offer to buy any securities offered hereunder in any jurisdiction to any person
to whom it is unlawful to make such offer or solicitation or sale in such
jurisdiction. Neither the delivery of this Prospectus or any Prospectus
Supplement nor any sale made hereunder implies that there has been no change in
the affairs of the Company at any time subsequent to the date hereof or that
the information herein is correct as of any time subsequent to its date.
AVAILABLE INFORMATION
The Company is subject to the information 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 Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by the Company with the Commission can
be inspected and copied at 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the following regional offices of the Commission: 7 World Trade Center, New
York, New York 10048, and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. Such material can also be inspected at the offices
of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York
10005, on which Exchange the Common Stock of the Company is listed.
The Company has filed with the Commission a Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the Securities offered hereby. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
portions of which are omitted as permitted by the rules and regulations of the
Commission. For further information with respect to the Company and the
Securities, reference is made to the Registration Statement. Statements
contained therein concerning any document filed as an exhibit to the
Registration Statement are not necessarily complete, and in each instance
reference is made to the copy of such document filed as an exhibit to the
Registration Statement for a full statement of the provisions thereof. Each
such statement in the Prospectus is qualified in all respects by such
reference. The Registration Statement may be inspected, without charge, at the
Commission's principal office at 450 Fifth Street, N.W., Washington, D.C.
20459, and copies thereof may also be obtained from the Commission upon the
payment of prescribed fees.
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company (Commission File No.
1-584) with the Commission are incorporated herein by reference and made a part
hereof:
(a) Annual Report on Form 10-K for the fiscal year ended December
31, 1994.
(b) Quarterly Reports on Form 10-Q for the quarters ended March
31, 1995, June 30, 1995 and September 30, 1995.
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form S-8 (Registration No.
33-12397) filed March 2, 1987, and any amendments or reports
filed for the purpose of updating such description.
(d) The description of the Company's Common Stock Rights contained
in the Company's Registration Statement on Form 8-A filed
March 27, 1986, as amended by the Company's Current Report on
Form 8-K dated April 6, 1989.
(e) The description of the Company's Preferred Stock contained in
the Company's Registration Statement on Form S-8 (Registration
No. 33-28520) filed May 3, 1989.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act, after the date of this Prospectus and prior to
the termination of the offering of the Securities hereby, 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 all or a portion of which is incorporated or deemed to be incorporated
by reference herein, shall be deemed to be modified or superseded for the
purposes of this Prospectus to the extent that a statement contained herein, or
in a Prospectus Supplement, 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 such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus has been delivered, upon written or oral request of such
person, a copy of any or all of the documents which have been incorporated
herein by reference, other than exhibits to such documents (unless such
exhibits are specifically incorporated by reference to such documents).
Requests for such copies should be directed to the Office of the Treasurer,
Ferro Corporation, 1000 Lakeside Avenue, Cleveland, Ohio 44114-1183, telephone
(216) 641-8580.
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<PAGE> 8
THE COMPANY
The Company produces specialty materials through the application of
organic and inorganic chemistry for sale to various industries throughout the
world. It operates principal manufacturing facilities on all six major
continents. The Company produces a variety of specialty coatings, colors,
chemicals, ceramics, plastics and related products and services. The Company's
most important product is frit, which is produced for use in porcelain enamels
and ceramic glazes.
Most of the products produced by the Company are classified as
specialty materials, rather than commodities, because they are formulated or
designed to perform a specific and important function in the manufacturing
processes of the Company's customers or in their end products. These specialty
materials are not sold in the high volume normally associated with commodity
businesses.
The Company's specialty materials require a high degree of technical
service on an individual customer basis. The value of these specialty
materials stems not just from their raw material composition, but from the
result and performance they achieve in actual use.
Ferro Corporation was incorporated in Ohio in 1919. Its principal
executive offices are located at 1000 Lakeside Avenue, Cleveland, Ohio
44114-1183 and its telephone number is (216) 641-8580.
USE OF PROCEEDS
Except as otherwise described in the applicable Prospectus Supplement,
the Company intends to use the net proceeds from the sale of the Securities for
general corporate purposes, which may include capital expenditures,
acquisitions and reductions of other indebtedness of the Company. Funds not
required immediately for such purposes may be invested temporarily in
short-term marketable securities.
RATIO OF EARNINGS TO FIXED CHARGES AND TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
Nine Months
Ended Years ended December 31,
September 30, ------------------------
1995 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Historical ratio of earnings
to fixed charges . . . . . . . . 5.82 6.74 5.21(1) 9.99 2.51(2) 3.27(2)
Historical ratio of earnings
to combined fixed charges and
preferred stock dividends. . . . 4.58 4.95 3.74(1) 6.93 1.80(2) 2.59(2)
</TABLE>
________________________
1 In 1993, the Company adopted changes in accounting required by the
Financial Accounting Standards Board. Prior to the accounting changes,
the ratio of earnings to fixed charges for 1993 would have been 8.36 and
the ratio of earnings to combined fixed charges and preferred stock
dividends for 1993 would have been 6.01.
2 Included in 1991 is a pretax restructuring charge of $45.3 million. A
pretax litigation charge of $12.0 million is included in 1990. Excluding
these charges, the ratio of earnings to fixed charges and the ratio of
earnings to combined fixed charges and preferred stock dividends for 1991
would have been 6.16 and 4.42, respectively, and for 1990 would have been
3.91 and 3.10, respectively.
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For the purposes of computing these ratios, "earnings" consist of
income before income taxes and fixed charges (as reported in the Company's
consolidated statement of income). "Fixed charges" consist of interest
(including both amounts expended and amounts capitalized) and the interest
portion of rental expense.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be general unsecured obligations of the
Company and will constitute either senior debt securities ("Senior Debt
Securities") or subordinated debt securities ("Subordinated Debt Securities").
The Debt Securities will be issued under one or more indentures, each dated as
of the date of or a date prior to the issuance of the Debt Securities to which
it relates. Senior Debt Securities and Subordinated Debt Securities may be
issued under separate indentures (respectively, a "Senior Indenture" and a
"Subordinated Indenture"), in each case between the Company and a trustee
("Trustee"), in a form filed as an exhibit to the Registration Statement of
which this Prospectus is a part. The Senior Indenture and the Subordinated
Indenture are sometimes hereinafter referred to collectively as the
"Indentures" or individually as an "Indenture". The Indentures relating to the
Debt Securities do not limit the amount of Debt Securities that may be issued
thereunder and provide that Debt Securities may be issued thereunder from time
to time in one or more series as from time to time authorized by the Company.
The particular terms of the Debt Securities offered by any Prospectus
Supplement (the "Offered Debt Securities") will be described in the Prospectus
Supplement relating to such Offered Debt Securities (the "Applicable Prospectus
Supplement"). The following summaries under this heading relating to Debt
Securities and the Indentures are summaries of the anticipated provisions
thereof, do not purport to be complete and are qualified in their entirety by
reference to the Indentures, the Debt Securities and the Applicable Prospectus
Supplement.
Capitalized terms used herein and not defined shall have the meanings
assigned to them in the Indentures.
General
Unless otherwise indicated in the Applicable Prospectus Supplement,
principal of, premium, if any, and interest, if any, on the Debt Securities
will be payable, and the transfer of Debt Securities will be registrable, at
the office or agency to be maintained by the Company in Cleveland, Ohio and at
any other office or agency maintained by the Company for such purpose.
(Sections 301, 305 and 1002) The Debt Securities will be issued only in fully
registered form without coupons and, unless otherwise indicated in the
Applicable Prospectus Supplement, in denominations of $1,000 or integral
multiples thereof. (Section 302) No service charge will be made for any
registration of transfer or exchange of the Debt Securities, but the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge imposed in connection therewith. (Section 305)
The Applicable Prospectus Supplement will describe the following terms
of the Offered Debt Securities: (1) the title of the Offered Debt Securities
and whether such Offered Debt Securities are to be Senior Debt Securities or
Subordinated Debt Securities; (2) any limit on the aggregate principal amount
of the Offered Debt Securities; (3) the price or prices (generally expressed as
a percentage of the aggregate principal amount thereof) at which the Offered
Debt Securities will be issued; (4) the Person to whom any interest on the
Offered Debt Securities shall be payable, if other than the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest; (5) the date or
dates on which the principal of the Offered Debt Securities is payable; (6) the
rate or rates at which the Offered Debt Securities shall bear interest, if any,
the date or dates from which any such interest shall accrue, the Interest
Payment Dates on which any such interest shall be payable and the Regular
Record Date for the interest payable on any Interest Payment Date; (7) the
place or places where the principal of and any premium and interest on the
Offered Debt Securities shall be payable; (8) the period or periods within
which, the price or prices at which and the terms and conditions upon which the
Offered Debt Securities may be redeemed, in whole or in part, at the option of
the Company; (9) the obligation, if any, of the Company to redeem or purchase
the Offered Debt Securities pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions upon
which the Offered Debt Securities shall be redeemed or purchased, in whole or
in part, pursuant to such obligation; (10) if other than denominations of
$1,000 and any
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<PAGE> 10
integral multiple thereof, the denominations in which the Offered Debt
Securities shall be issuable; (11) the currency, currencies or currency units
in which payment of the principal of and any premium and interest on any
Offered Debt Securities shall be payable if other than the currency of the
United States of America; (12) if the amount of payments of principal of or any
premium or interest on any Offered Debt Securities may be determined with
reference to an index or formula, the manner in which such amounts shall be
determined; (13) if the principal of or any premium or interest on any Offered
Debt Securities is to be payable, at the election of the Company or a Holder
thereof, in one or more currencies or currency units other than that or those
in which the Securities are stated to be payable, the currency, currencies or
currency units in which payment of the principal of and any premium and
interest on the Offered Debt Securities as to which such election is made shall
be payable, and the periods within which and the terms and conditions upon
which such election is to be made; (14) if other than the principal amount
thereof, the portion of the principal amount of the Offered Debt Securities
which shall be payable upon declaration of acceleration of the Maturity
thereof; (15) the applicability of the provisions described under "Defeasance
and Covenant Defeasance"; (16) if the Offered Debt Securities will be issuable
only in the form of a Book-Entry Security as described under "Book-Entry Debt
Securities," the Depository or its nominee with respect to the Offered Debt
Securities and the circumstances under which the Book-Entry Security may be
registered for transfer or exchange or authenticated and delivered in the name
of a Person other than the Depository or its nominee; and (17) any other terms
of the Offered Debt Securities. (Section 301)
The Debt Securities may be issued as Original Issue Discount Debt
Securities to be offered and sold at a substantial discount below their stated
principal amount. Federal income tax consequences and other special
considerations applicable to any such Original Issue Discount Debt Securities
will be described in the Applicable Prospectus Supplement. "Original Issue
Discount Debt Securities" means any Debt Security which provides for an amount
less than the principal amount thereof to be due and payable upon the
declaration of acceleration of the Maturity thereof upon the occurrence of an
Event of Default and the continuation thereof. (Section 101) In addition,
pursuant to regulations issued under the Internal Revenue Code (the
"Regulations"), Debt Securities that have interest reset dates that would cause
any accrual period to be longer than one year would be subject to the original
issue discount rules of the Internal Revenue Code and the Regulations, whether
or not such Debt Securities are Original Issue Discount Debt Securities.
Book-Entry Debt Securities
The Debt Securities of a series may be issued in the form of one or
more Book-Entry Securities that will be deposited with a Depository or its
nominee identified in the Applicable Prospectus Supplement. In such a case,
one or more Book-Entry Securities will be issued in a denomination or aggregate
denominations equal to the portion of the aggregate principal amount of
Outstanding Debt Securities of the series to be represented by such Book-Entry
Security or Securities. Unless and until it is exchanged in whole or in part
for Debt Securities in definitive registered form, a Book-Entry Security may
not be registered for transfer or exchange except as a whole by the Depository
for such Book-Entry Security to a nominee of such Depository and except in the
circumstances described in the Applicable Prospectus Supplement. (Sections 204
and 205)
The specific terms of the depository arrangement with respect to any
portion of a series of Debt Securities to be represented by a Book-Entry
Security will be described in the Applicable Prospectus Supplement.
Certain Covenants of the Company
Subsidiaries. The term "Subsidiary" will be defined as a corporation
more than 50% of the outstanding voting Stock of which is owned directly or
indirectly by the Company and/or one or more Subsidiaries. The term "Domestic
Subsidiary" will be defined as a Subsidiary substantially all the fixed assets
of which are located, or substantially all the business of which is carried on,
within the United States, or which owns or leases any Principal Domestic
Manufacturing Property, but such term excludes any Subsidiary the principal
business of which is the financing or ownership of the operations of the
Company or its Subsidiaries outside the United States (but such Subsidiary is
excluded only so long as it neither owns nor leases any Principal Domestic
Manufacturing Property). (Section 101)
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<PAGE> 11
Restrictions on Secured Debt and Limitations on Liens. If the Company
or any Domestic Subsidiary shall incur, issue, assume or guarantee any debt
secured by a Mortgage on any Principal Domestic Manufacturing Property of the
Company or any Domestic Subsidiary or on any shares of stock or Debt of any
Domestic Subsidiary, the Company will secure, or cause such Domestic Subsidiary
to secure, the Outstanding Debt Securities, and any other Debt of the Company
or such Domestic Subsidiary which may be then outstanding and entitled to the
benefit of a covenant similar in effect to this covenant, equally and ratably
with (or prior to) such secured Debt, unless after giving effect thereto the
aggregate amount of all such secured Debt together with all Attributable Debt
of the Company and its Domestic Subsidiaries in respect of sale and leaseback
transactions involving Principal Domestic Manufacturing Properties would not
exceed 10% of the Consolidated Net Tangible Assets of the Company and its
consolidated Subsidiaries. For the purpose of providing such equal and ratable
security, the principal amount of Outstanding Debt Securities of any series of
Original Issue Discount Securities shall be such portion of the principal
amount as specified in the terms of that series that would be payable upon
acceleration of the Maturity thereof at the time of such determination. This
restriction will not apply to, and there shall be excluded in computing secured
Debt for the purpose of such restriction, Debt secured by (a) Mortgages on
property of, or on any shares of stock or Debt of, any corporation existing at
the time such corporation becomes a Domestic Subsidiary, (b) Mortgages in favor
of the Company or a Domestic Subsidiary, (c) Mortgages in favor of governmental
bodies of the United States or any State or Puerto Rico or any other country or
any political subdivision thereof to secure partial, progress or advance
payments pursuant to any contract or statute, (d) Mortgages on property, shares
of stock or Debt, purchase money Mortgages and construction Mortgages existing
at or incurred within 120 days of the time of acquisition thereof (including
acquisition through merger or consolidation), (e) Mortgages securing
obligations issued by a State, territory or possession of the United States,
any political subdivision of any of the foregoing, or the District of Columbia,
or any instrumentality of the foregoing to finance the acquisition or
construction of property, and on which the interest is not includable in gross
income of the Holder under the Internal Revenue Code, and (f) certain
extensions, renewals or replacements of Mortgages referred to in the foregoing
clauses (a) through (e) inclusive. (Section 1008) The Indentures will not
restrict the incurrence of unsecured Debt by the Company or its Subsidiaries.
"Principal Domestic Manufacturing Property" will be defined to include
any facility (together with the land on which it is erected and fixtures
comprising a part thereof) used primarily for manufacturing, processing or
warehousing of the Company's products and located in the United States, owned
or leased by the Company or a Subsidiary and having a gross book value in
excess of 1% of Consolidated Net Tangible Assets, other than any such facility
or portion thereof (i) which is financed by certain governmental obligations
the interest on which is excludable from gross income of the holder thereof
pursuant to the provisions of Section 103(a) of the Internal Revenue Code or
Section 745 of Title 48 of the United States code or (ii) which in the opinion
of the Board of Directors of the Company is not of material importance to the
total business conducted by the Company and its Subsidiaries as an entirety.
"Consolidated Net Tangible Assets" will be defined as the aggregate amount of
all assets (after deducting intangible assets and the amount of all current
liabilities) of the Company and its consolidated Subsidiaries. "Mortgage" will
be defined as any mortgage, pledge, lien, security interest, conditional sale
or other title retention agreement or similar encumbrance. "Attributable Debt"
will be defined to mean the total net amount of rent (discounted at the rate of
1% per annum over the weighted average Yield to Maturity of the Outstanding
Debt Securities compounded semi-annually) required to be paid during the
remaining term of any lease. (Section 101)
Restrictions on Sale and Leaseback Transactions. Neither the Company
nor any Domestic Subsidiary may, after the effective date of the Indentures,
enter into any sale and leaseback transaction involving any Principal Domestic
Manufacturing Property which has been or is to be sold or transferred, more
than 120 days after the acquisition thereof or the completion of construction
and commencement of full operations thereof, unless (a) the Company or such
Domestic Subsidiary could create Debt secured by a Mortgage on such property as
described under "Restrictions on Secured Debt and Limitations on Liens" in an
amount equal to the Attributable Debt with respect to the sale and leaseback
transaction without equally and ratably securing the Outstanding Debt
Securities or (b) the Company, within 120 days, applies to the retirement of
its Funded Debt which is pari passu (as defined in the Indentures) with the
Outstanding Securities an amount equal to the greater of (i) the net proceeds
of the sale of the Principal Domestic Manufacturing Property leased pursuant to
such arrangement or (ii) the fair market value
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of the Principal Domestic Manufacturing Property so leased (subject to credits
for certain voluntary retirements of Funded Debt). (Section 1009) "Funded
Debt" will be defined as indebtedness for money borrowed having a maturity at
or being renewable or extendible to a date more than 12 months from the date of
determination. (Section 101) This restriction will not apply to any sale and
leaseback transaction (a) between the Company and a Domestic Subsidiary,
between Domestic Subsidiaries, or between a Domestic Subsidiary and a Foreign
Subsidiary, or (b) involving the taking back of a lease for a period of three
years or less. (Section 1009)
Events of Default
Any one of the following events will constitute an Event of Default
under each Indenture with respect to Securities of any series: (a) failure to
pay any interest on any Debt Security of that series when due, continued for 30
days; (b) failure to pay principal of or any premium on any Debt Security of
that series when due; (c) failure to deposit any sinking fund payment, when
due, in respect of any Debt Security of that series; (d) failure to perform, or
breach of any covenant or warranty of the Company in such Indenture (other than
a covenant included in such Indenture solely for the benefit of a series of
Debt Securities thereunder other than that series) continued for 90 days after
written notice as provided in such Indenture; (e) or default under indebtedness
for money borrowed in an aggregate principal amount exceeding $10,000,000 under
an instrument to which the Company or any Domestic Subsidiary is a party as an
obligor or by which either is bound, which default shall have resulted in such
indebtedness becoming due and payable prior to the date on which it would
otherwise be due and payable, without such default being cured or such
indebtedness having been discharged within ten days after written notice as
provided in each Indenture; (f) certain events in bankruptcy, insolvency or
reorganization of the Company; or (g) any other Event of Default provided with
respect to Debt Securities of that series. (Section 501)
If any Event of Default with respect to the Debt Securities of any
series at the time Outstanding occurs and is continuing, either the Trustee or
the Holders of at least 25 percent in aggregate principal amount of the
Outstanding Debt Securities of that series may declare the principal amount
(or, if the Debt Securities of that series are Original Issue Discount Debt
Securities, such portion of the principal amount as may be specified in the
terms thereof) of all the Debt Securities of that series to be due and payable
immediately. At any time after a declaration of acceleration with respect to
Debt Securities of any series has been made, but before a judgment or decree
based on acceleration has been obtained, the Holders of a majority in aggregate
principal amount of Outstanding Debt Securities of that series may, under
certain circumstances, rescind and annul such acceleration. (Section 502)
Reference is made to the Applicable Prospectus Supplement relating to
any series of Offered Debt Securities that are Original Issue Discount Debt
Securities for the particular provisions relating to acceleration of the Stated
Maturity of a portion of the principal amount of such series of Original Issue
Discount Debt Securities upon the occurrence of an Event of Default and the
continuation thereof.
Each Indenture provides that, subject to the duty of the Trustee
during default to act with the required standard of care, the Trustee will be
under no obligation to exercise any of its rights or powers under such
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 and to
certain other conditions, the Holders of a majority in aggregate principal
amount of the Outstanding Debt Securities of any series 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 Debt Securities of that series. (Section 512)
No Holder of any series of Debt Securities will have any right to
institute any proceeding with respect to any Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default and unless the Holders of at
least 25 percent in principal amount of the Outstanding Debt Securities of that
series shall have made written request, and offered reasonable indemnity, to
the Trustee to institute such proceeding as trustee, and the Trustee shall not
have received from the Holders of a majority in aggregate principal amount of
the Outstanding Debt Securities of that series a direction inconsistent with
such request and shall have failed to institute such proceeding within 60 days.
(Section 507) However, such
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limitations do not apply to a suit instituted by a Holder of a Debt Security
for enforcement of payment of the principal of and premium, if any, or
interest, if any, on such Debt Security on or after the respective due dates
expressed in such Debt Security. (Section 508)
The Company is required to furnish to the Trustee annually a statement
as to the performance by the Company of certain of its obligations under each
Indenture and as to any default in such performance. (Section 1004)
Modification and Waiver
Modifications and amendments of each Indenture may be made by the
Company and the Trustee with the consent of the Holders of not less than the
majority in aggregate principal amount of the Outstanding Debt Securities of
each series issued under such Indenture and affected by the modification or
amendments; provided, however, that no such modification or amendment may,
without the consent of the Holders of all Debt Securities affected thereby, (i)
change the Stated Maturity of the principal of, or any installment of principal
of or interest on, any Debt Security; (ii) reduce the principal amount of, or
the premium, if any, or interest on, any Debt Security (including in the case
of an Original Issue Discount Debt Security the amount payable upon
acceleration of the maturity thereof); (iii) change the place or currency of
payment of principal of, premium, if any, or interest on any Debt Security;
(iv) impair the right to institute suit for the enforcement of any payment on
any Debt Security on or after the Stated Maturity thereof (or in the case of
redemption, on or after the Redemption Date); or (v) reduce the percentage in
principal amount of Outstanding Debt Securities of any series, the consent of
whose Holders is required for modification or amendment of the Indentures or
for waiver of compliance with certain provisions of the Indentures or for
waiver of certain defaults. (Section 902)
The Holders of at least a majority in aggregate principal amount of
the Outstanding Debt Securities of any series may, on behalf of all Holders of
that series, waive compliance by the Company with certain restrictive
provisions of each Indenture. (Section 1010) The Holders of not less than a
majority in aggregate principal amount of the Outstanding Debt Securities of
any series may, on behalf of all Holders of that series, waive any past default
under each Indenture, except a default in the payment of principal, premium or
interest and in respect of a covenant or provision of such Indenture that
cannot be modified or amended without the consent of the Holder of each
Outstanding Debt Security of such series affected thereby. (Section 513)
Consolidation, Merger and Sale of Assets
The Company may not consolidate with or merge into any other Person or
transfer or lease its assets substantially as an entirety to any Person and may
not permit any Person to merge into or consolidate with the Company or transfer
or lease its assets substantially as an entirety to the Company, unless (i) any
successor or purchaser is a corporation, partnership, or trust organized under
the laws of the United States of America, any State or the District of
Columbia, and any such successor or purchaser expressly assumes the Company's
obligations on the Debt Securities under a supplemental Indenture, (ii)
immediately after giving effect to the transaction no Event of Default, and no
event which, after notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing, (iii) if properties or assets
of the Company become subject to a Mortgage not permitted by the Indentures,
the Company or such successor Person, as the case may be, takes such steps as
shall be necessary effectively to secure the Securities equally and ratably
with (or prior to) all indebtedness secured thereby, and (iv) the Company has
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel
stating compliance with these provisions. (Section 801)
Defeasance and Covenant Defeasance
The Indentures provide, unless otherwise indicated in the Applicable
Prospectus Supplement with respect to the Offered Debt Securities, that the
Company, at the Company's option, (a) will be discharged from any and all
obligations in respect of the Debt Securities of any series (except for certain
obligations to register the transfer of or exchange of Debt Securities of such
series, replace stolen, lost or mutilated Debt Securities of such series,
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maintain paying agencies and hold moneys for payment in trust) or (b) need not
comply with certain restrictive covenants of the Indentures, including those
described under "Certain Covenants of the Company," and the occurrence of an
event described in clause (d) under "Events of Default" shall no longer be an
Event of Default, in each case, if the Company deposits, in trust, with the
Trustee money or U.S. Government Obligations, which through the payment of
interest thereon and principal thereof in accordance with their terms will
provide money, in an amount sufficient to pay all the principal of (and
premium, if any) and interest on the Debt Securities of such series on the
dates such payments are due (which may include one or more redemption dates
designated by the Company) in accordance with the terms of the Debt Securities
of such series. Such a trust may only be established if, among other things,
(i) no Event of Default or event which with the giving of notice or lapse of
time, or both, would become an Event of Default under the Indentures shall have
occurred and be continuing on the date of such deposit, (ii) such deposit will
not cause the Trustee to have any conflicting interest with respect to other
securities of the Company, and (iii) the Company shall have delivered an
Opinion of Counsel to the effect that the Holders will not recognize income,
gain or loss for Federal income tax purposes as a result of such deposit or
defeasance and will be subject to Federal income tax in the same manner as if
such defeasance had not occurred. In the event the Company omits to comply
with its remaining obligations under each Indenture after a defeasance of the
Indentures with respect to the Debt Securities of any series as described under
clause (b) above and the Debt Securities of such series 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 with the Trustee may be insufficient
to pay amounts due on the Debt Securities of such series at the time of the
acceleration resulting from such Event of Default. However, the Company will
remain liable in respect of such amounts. (Article Thirteen)
Provisions Applicable to Subordinated Debt Securities
The Subordinated Debt Securities will be subordinate and junior in
right of payment, as set forth in the Subordinated Indenture, to the prior
payment in full of all Senior Indebtedness of the Company. (Section 1401)
"Senior Indebtedness" is defined in the Subordinated Indenture as the principal
(including sinking fund payments) of, and premium, if any, and interest on any
indebtedness, whether outstanding at the date of the Subordinated Indenture or
thereafter created, incurred or assumed, which is for (a) money borrowed by the
Company, (b) indebtedness of the Company evidenced by notes, debentures, bonds,
securities or other instruments of indebtedness for the payment of which the
Company is responsible or liable, by guarantees or otherwise, (c) obligations
of the Company evidencing the purchase price for acquisitions by the Company or
a subsidiary other than in the ordinary course of business, (d) money borrowed
by others and assumed or guaranteed by the Company, (e) capitalized lease
obligations of the Company, and (f) renewals, extensions, refundings,
amendments and modifications of any indebtedness, of the kind described in the
foregoing clauses or of the instruments creating or evidencing such
indebtedness, unless, in each case, by the terms of the instruments evidencing
such indebtedness or such renewal, extension, refunding, amendment or
modification, it is provided that such indebtedness is not senior in rights of
payment to the Subordinated Debt Securities. (Section 101)
In the event of any distribution of assets of the Company upon its
dissolution, winding up, liquidation or reorganization, the holders of Senior
Indebtedness shall first be paid in full in respect of principal, premium, if
any, and interest before any such payments are made on account of the
Subordinated Debt Securities. (Section 1403) In addition, in the event that
(a) Subordinated Debt Securities or any other debt securities issued under the
Subordinated Indenture are declared due and payable because of an Event of
Default (other than the circumstances described in the preceding sentence) or
(b) any default by the Company has occurred and is continuing in the payment of
principal, premium, if any, sinking funds or interest on any Senior
Indebtedness, then no payment shall be made on account of principal, premium,
if any, sinking funds or interest on the Subordinated Debt Securities until all
such payments due in respect of such Senior Indebtedness shall have been paid
in full. (Section 1402)
By reason of such subordination, creditors of the Company who are
holders of Senior Indebtedness may, subject to any subordination provisions
that may be applicable to such creditors, recover more ratably than holders of
the Subordinated Debt Securities.
If this Prospectus is being delivered in connection with a series of
Subordinated Debt Securities, the accompanying Prospectus Supplement or the
information incorporated herein by reference will set forth the
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approximate amount of Senior Indebtedness outstanding as of the most recent
practicable date and any limitation on the issuance of additional Senior
Indebtedness.
Concerning the Trustee
The Trustee under each Indenture will be identified in the Applicable
Prospectus Supplement. The Trustee may perform services for the Company in the
ordinary course of business.
Under the Indentures, the Trustee is required to transmit annual
reports to all Holders regarding its eligibility and qualifications as Trustee
under the Indentures and certain related matters. (Section 703)
DESCRIPTION OF CAPITAL STOCK
The description of the Company's capital stock set forth below does
not purport to be complete and is qualified in its entirety by reference to the
Company's Amended Articles of Incorporation (the "Articles of Incorporation")
and Code of Regulations (the "Regulations").
General
Under the Articles of Incorporation of the Company, the total number
of shares of all classes of stock that the Company has authority to issue is
152,000,000, consisting of 150,000,000 shares of Common Stock, par value $1.00
per share, and 2,000,000 shares of Preferred Stock, without par value. In
1989, the Company established a series of Preferred Stock called Series A ESOP
Convertible Preferred Stock ("Series A Preferred Stock") and authorized the
issuance of 1,762,500 shares of such stock to National City Bank, trustee for
the Company's Employee Stock Ownership Plan. At September 30, 1995, the
Company had 27,344,105 shares of Common Stock and 1,388,443 shares of Preferred
Stock issued and outstanding. The Common Stock is listed on the New York Stock
Exchange under the symbol "FOE".
Each share of outstanding Common Stock represents ownership of one
right ("Right") under the terms of a Shareholder Rights Plan maintained by the
Company. Each Right entitles its holders to buy one share of the Company's
Common Stock upon the occurrence of certain events. See "Certain Antitakeover
Provisions - Shareholder Rights Plan" for a description of the Rights and the
Shareholder Rights Plan.
Common Stock
The holders of Common Stock are entitled to one vote per share on all
matters presented to shareholders. Subject to any preferential rights of
outstanding series of Preferred Stock, the holders of Common Stock are entitled
to such distributions as may be declared from time to time by the Board of
Directors from funds available therefor, and upon liquidation are entitled to
receive pro rata all assets of the Company available for distribution to such
holders. A procedure for invoking cumulative voting for the election of
directors is provided by the statutory law of Ohio. All shares of Common Stock
issued in the offering will be fully paid and non assessable and the holders
thereof will not have preemptive rights. As described above, one Right will be
issued along with each share of Common Stock issued in the offering.
Preferred Stock
The Articles of Incorporation provide that all shares of Preferred
Stock shall be of equal rank and shall be identical except with respect to
those matters that may be fixed by the Board of Directors. The Board is
authorized to provide for the issuance of such Preferred Stock in one or more
series and to determine such matters as the annual dividend rate, conversion
rights, redemption rights and prices, the terms of any sinking funds
established for the purchase or redemption of Preferred Stock, the amounts
payable to holders in the event of a voluntary liquidation, dissolution or
winding up of the Company and restrictions on issuance. In the event of
involuntary
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liquidation, dissolution or winding up of the Company's affairs, the Preferred
Stock will be entitled to a liquidation preference of $25.00 per share, plus
accrued and unpaid dividends. The holders of shares of Preferred Stock will
not be entitled to any preemptive right to purchase or have offered to them any
shares or other securities of the Company whether now or hereafter authorized.
The Board is not authorized to establish the voting rights of
Preferred Stock. Holders of Preferred Stock are generally entitled to one vote
for each share of such stock upon all matters presented to the shareholders,
plus special voting rights in the event of a default in the payment of
preferred dividends. If the Company is in default in the payment of six (6)
full quarterly dividends (whether or not consecutive), the holders of Preferred
Stock shall be entitled to vote for the election of two additional directors of
the Company, who shall remain in office until such dividends in arrears are
paid (the "Preferred Director Rights"). The vote of the holders of at least
two-thirds of the outstanding shares of Preferred Stock will be necessary to
effect (i) any amendment, alteration or repeal of any of the provisions of the
Articles of Incorporation or of the Regulations of the Company which affects
adversely the voting powers, rights or preferences of the holders of Preferred
Stock (certain types of amendments being deemed not adverse for this purpose),
or (ii) the authorization or creation of, or the increase in the authorized
amount of, any shares of any class, or any security convertible into shares of
any class, ranking prior to the Preferred Stock, or (iii) the purchase or
redemption of less than all the Preferred Stock then outstanding (except in
accordance with a stock purchase offer made to all holders of Preferred Stock)
when any dividends or sinking fund obligations on the Preferred Stock are in
arrears.
The vote of the holders of at least a majority of the outstanding
shares of Preferred Stock will be necessary to effect (i) the sale, lease or
conveyance by the Company of all or substantially all of its property or
business, or its consolidation with or merger into any other corporation,
unless the resulting corporation will have no shares authorized or outstanding
ranking prior to or on a parity with the Preferred Stock except the same number
with the same rights and preferences as those of the Company authorized and
outstanding immediately preceding such consolidation or merger, and each holder
of Preferred Stock immediately prior thereto receives the same number of
shares, with the same rights and preferences, of the resulting corporation, or
(ii) the authorization of any shares ranking on a parity with the Preferred
Stock or an increase in the authorized number of shares of Preferred Stock.
The Company believes that the ability of the Board of Directors to
issue one or more classes or series of Preferred Stock provides the Company
with increased flexibility in structuring possible future financings and
acquisitions, and in meeting other corporate needs which might arise. The
authorized shares of Preferred Stock, as well as shares of Common Stock, are
available for issuance without further action by the Company's shareholders,
unless such action is required by applicable law or the rules of any stock
exchange or automated quotation system on which the Company's securities may be
listed or traded.
The issuance of any such series of Preferred Stock may have an adverse effect
on the rights of holders of Common Stock.
The terms of the Preferred Stock offered by any Prospectus Supplement
will be set forth in the applicable Prospectus Supplement. Among the terms
which would be specified in the applicable Prospectus Supplement are the
following: (i) the annual dividend rate, if any, or the means by which such
dividend rate may be calculated (including without limitation the possibility
that the rate of such dividends may bear an inverse relationship to some index
or standard) and the date or dates from which such dividends shall accrue and
the date or dates on which such dividends shall be paid and whether such
dividends shall be cumulative; (ii) the price at which and the terms and
conditions on which the share of such series of Preferred Stock may be
redeemed, including the period of time during which such share may be redeemed,
any premium to be paid over and above the par value of such shares of Preferred
Stock, whether and to what extent accumulated dividends on such shares of
Preferred Stock will be paid upon the redemption of such shares; (iii) the
liquidation preference, if any, over and above the par value of such shares of
Preferred Stock and whether and to what extent the holders of such shares of
Preferred Stock shall be entitled to accumulated dividends in the event of the
voluntary or involuntary liquidation, dissolution or winding-up of the affairs
of the Company; (iv) whether the share of Preferred Stock shall be subject to
the operation of a retirement or sinking fund and, if so, a description of the
operation of such retirement or sinking fund; (v) the terms
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and conditions, if any, on which the shares of Preferred Stock may be
convertible into, or exchangeable for, shares of any other class or classes of
stock of the Company, including the price or rate of conversion or exchange and
the method for effecting such conversion or exchange, provided that no shares
of Preferred Stock will be convertible into shares of a class that has superior
rights or preferences as to dividends or distribution of assets of the Company
upon the voluntary or involuntary dissolution or liquidation of the Company;
and (vi) other preferences, rights, qualifications or restrictions or material
terms of such shares of Preferred Stock.
Transfer Agent and Registrar
The Transfer Agent and Registrar for the Common Stock and Preferred
Stock is National City Bank.
DESCRIPTION OF DEPOSITARY SHARES
The Company may, at its option, elect to offer fractional shares of
Preferred Stock, rather than full shares of Preferred Stock. In the event such
option is exercised, the Company will issue receipts for Depositary Shares,
each of which will represent a fraction (to be set forth in the Prospectus
Supplement relating to the Preferred Stock) of a share of such Preferred Stock.
The shares of Preferred Stock represented by Depositary Shares will be
deposited under a Deposit Agreement (the "Deposit Agreement") between the
Company and a bank or trust company selected by the Company having its
principal office in the United States and having a combined capital and surplus
of at least $50,000,000 (the "Depositary"). Subject to the terms of the
Deposit Agreement, each owner of a Depositary Share will be entitled, in
proportion to the applicable fraction of a share of Preferred Stock represented
by such Depositary Share, to all the rights and preferences of the Preferred
Stock represented thereby (including dividend, voting, redemption, conversion
and liquidation rights).
The applicable Prospectus Supplement will describe the terms of any
Depositary Shares. The description in the Prospectus Supplement will not
purport to be complete and will be qualified in its entirety by reference to
the Deposit Agreement.
CERTAIN ANTITAKEOVER PROVISIONS
The Articles of Incorporation and the Regulations contain certain
provisions that could make more difficult the acquisition of the Company by
means of a tender offer, a proxy contest or otherwise. These provisions are
expected to discourage certain types of coercive takeover practices and
inadequate takeover bids and to encourage persons seeking to acquire control of
the Company to negotiate first with the Board of Directors. The Company
believes that the benefits of these provisions outweigh the potential
disadvantages of discouraging such proposals because, among other things,
negotiation of such proposals might result in an improvement of their terms.
The description set forth below is intended as a summary only and is qualified
in its entirety by reference to the Articles of Incorporation and the
Regulations, which have been incorporated by reference as exhibits to the
Registration Statement of which this Prospectus is a part, and the laws of the
State of Ohio.
Classified Board of Directors
The Regulations provide that the Board of Directors is divided into
three classes of directors, each consisting of not less than three nor more
than five directors and with the classes serving staggered three-year terms.
The classification of directors has the effect of making it more difficult for
shareholders to change the composition of the Board of Directors. The Company
believes, however, that the longer time required to elect a majority of a
classified Board of Directors helps to ensure continuity and stability of the
Company's management and policies.
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The classification provisions could also have the effect of
discouraging a third party from accumulating large blocks of the Company's
stock or attempting to obtain control of the Company, even though such an
attempt might be beneficial to the Company and its shareholders. Accordingly,
shareholders could be deprived of certain opportunities to sell their shares of
Common Stock at a higher market price than might otherwise be the case.
Number of Directors; Filling Vacancies
The Regulations provide that the number of directors shall be not less
than nine nor more than fifteen as may be determined by the vote of the
shareholders at any annual meeting or special meeting called for the purpose of
electing directors. In addition to the authority of shareholders to fix or
change the number of directors, the Board may change the number of directors
and may fill any director's office that is created by an increase in the number
of directors; provided, however, the Board may not change the number of
directors by more than two from the number authorized by the shareholders at
the last annual or special meeting. In no event may the directors fix the
numbers of directors at less than nine nor more than fifteen. The Regulations
provide that any vacancies may be filled by a vote of a majority of the
remaining directors, though less than a quorum.
Special Meetings
The Regulations provide that the call by shareholders of a special
meeting of shareholders shall require that holders of 25% of the outstanding
shares of the Company participate in such call. This provision may have the
effect of delaying consideration of a shareholder proposal until the next
annual meeting.
Shareholder Rights Plan
The Company maintains a Shareholder Rights Plan under which, until the
occurrence of certain events, each share of outstanding Common Stock represents
ownership of one right ("Right"). The Rights become exercisable only if a
person or group acquires 20% or more of the Common Stock (10% under certain
circumstances) or commences a tender or exchange offer upon consummation of
which such person or group would control 20% or more of the Common Stock. Each
Right entitles holders to buy, from the Company, one share of its Common Stock
at an exercise price of $20.00 per share. The Rights, which do not entitle the
holders to the right to vote or receive dividends, expire on April 9, 1996.
Rights may be redeemed by the Company at $.022 per Right at any time until the
fifteenth day following public announcement that a person or group has acquired
20% or more of the voting power, unless such period is extended by the Board of
Directors while the Rights are redeemable.
If any person becomes the owner of 20% or more of the Common Stock
(10% under certain circumstances), or if the Company is the surviving
corporation in a merger with a 20% or more stockholder and its Common Stock is
not changed or converted, or if a 20% or more stockholder engages in certain
self-dealing transactions with the Company, then each Right not owned by such
person or related parties will entitle its holder to purchase one share of
Common Stock at a purchase price of 20% of the then current market price of the
Common Stock.
In the event the Company engages in a merger or other business
combination transaction in which the Company is not the surviving corporation
or the Company is the surviving corporation but its Common Stock is changed or
exchanged or 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right shall have the right to receive, upon
exercise thereof at the then current exercise price of the Right, that number
of shares of common stock of the surviving company which at the time of the
transaction would have a market value of two times the exercise price of the
Right.
DESCRIPTION OF WARRANTS
The Company has no Warrants outstanding. The Company may issue
Warrants for the purchase of Debt Securities, Common Stock or Preferred Stock.
Warrants may be issued independently of or together with any other Securities
offered by an applicable Prospectus Supplement and may be attached to or
separate from such Securities.
-15-
<PAGE> 19
Warrants may be issued under a Warrant Agreement (each, a Warrant Agreement")
to be entered into between the Company and a warrant agent specified in the
applicable Prospectus Supplement (the Warrant Agent"). The Warrant Agent will
act solely as an agent of the Company in connection with the Warrants of a
particular series and will not assume any obligation or relationship of agency
or trust for or with any holders or beneficial owners of Warrants. The
following sets forth certain general terms and provisions of the Warrants.
Further terms of the Warrants and the applicable Warrant Agreement will be set
forth in the applicable Prospectus Supplement.
The applicable Prospectus Supplement will describe the terms of the
Warrants in respect of which this Prospectus is being delivered, including,
where applicable, the following: (1) the title of such Warrants; (2) the
aggregate number of such Warrants; (3) the price or prices at which such
Warrants will be issued; (4) the designation, number and terms of the Debt
Securities and/or shares of Common Stock or Preferred Stock purchasable upon
exercise of such Warrants; (5) the designation and terms of the other
Securities, if any, with which such Warrants are issued and the number of such
Warrants issued with each such Security; (6) the date, if any, on and after
which such Warrants and the related Debt Securities and/or Common Stock or
Preferred Stock, if any, will be separately transferable; (7) the price at
which Debt Securities and/or each share of Common Stock or Preferred Stock
purchasable upon exercise of such Warrants may be purchased and provisions, if
any, for changes to or adjustments in the exercise price; (8) the date on which
the right to exercise such Warrants shall commence and the date on which such
right shall expire; (9) the minimum or maximum amount of such Warrants which
may be exercised at any one time; (10) information with respect to book-entry
procedures, if any; (11) a discussion of certain federal income tax
considerations; and (12) any other terms of such Warrants, including terms,
procedures and limitations relating to the transferability, exchange and
exercise of such Warrants.
DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, including contracts
obligating holders to purchase from the Company, and the Company to sell to the
holders, a specified number of shares of Common Stock or Preferred Stock at a
future date or dates. The price per share of Preferred Stock or Common Stock
may be fixed at the time the Stock Purchase Contracts are issued or may be
determined by reference to a specific formula set forth in the Stock Purchase
Contracts. The Stock Purchase Contracts may be issued separately or as a part
of units ("Stock Purchase Units"), each consisting of a Stock Purchase Contract
and debt obligations of the United States of America or agencies or
instrumentalities thereof securing the holders' obligations to purchase the
Preferred Stock or the Common Stock under the Stock Purchase Contracts. The
Stock Purchase Contracts may require the Company to make periodic payments to
the holders of the Stock Purchase Units or vice versa, and such payments may be
unsecured or prefunded on a specified basis. The Stock Purchase Contracts may
require holders to secure their obligations thereunder in a specified manner.
The applicable Prospectus Supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units. The description in the Prospectus
Supplement will not purport to be complete and will be qualified in its
entirety by reference to the Stock Purchase Contracts, and, if applicable,
collateral arrangements and depositary arrangements, relating to such Stock
Purchase Contracts or Stock Purchase Units.
PLAN OF DISTRIBUTION
The Company may sell the Securities to one or more underwriters for public
offering and sale by them or may sell the Securities to investors directly or
through agents. Any such underwriter or agent involved in the offer and sale
of the Securities will be named in the applicable Prospectus Supplement.
Underwriters may offer and sell the Securities at a fixed price or prices,
which may be changed, at prices related to the prevailing market prices at the
time of sale, or at negotiated prices. The Company also may, from time to
time, authorize underwriters acting as the Company's agents to offer and sell
the Securities upon the terms and conditions as will be set forth in the
applicable Prospectus Supplement. In connection with the sale of the
-16-
<PAGE> 20
Securities, underwriters may be deemed to have received compensation from the
Company in the form of underwriting discounts or commissions and may also
receive commissions from purchasers of Securities for whom they act as agent.
Underwriters may sell Securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions from the
underwriters and/or commissions from the purchasers for whom they act as
agents.
Any underwriting compensation paid by the Company to underwriters or
agents in connection with the offering of Securities and any discounts,
concessions or commissions allowed by underwriters to participating dealers
will be set forth in the applicable Prospectus Supplement. Underwriters,
dealers and agents participating in the distribution of Securities may be
deemed to be underwriters, and any discounts and commissions received by them
and any profit realized by them on resale of the Securities may be deemed to be
underwriting discounts and commissions under the Securities Act. Underwriters,
dealers and agents may be entitled, under agreements entered into with the
Company, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters, dealers or agents to solicit offers by certain
institutions to purchase Securities from the Company at the public offering
price set forth in such Prospectus Supplement pursuant to delayed delivery
contracts providing for payment and delivery on a future date. Institutions
with whom delayed delivery contracts may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational
and charitable institutions, and other institutions, but will in all cases be
subject to the approval of the Company. The applicable Prospectus Supplement
will set forth the commission payable for solicitation of such offers.
Certain of the underwriters and their affiliates may be customers of,
engage in transactions with and perform services for the Company and its
subsidiaries in the ordinary course of business.
LEGAL MATTERS
Certain legal matters in connection with the Securities to be offered
hereby, including their legality, will be passed upon for the Company by
Squire, Sanders & Dempsey, Cleveland, Ohio. Mark A. Cusick, Esq., a partner in
such firm, is Secretary of the Company.
EXPERTS
The consolidated financial statements of the Company at December 31, 1994
and 1993 and for each of the three years in the period ended December 31, 1994,
appearing in its Annual Report on Form 10-K for the fiscal year ended December
31, 1994 and incorporated by reference herein and in the Registration Statement
in reliance upon the report of KPMG Peat Marwick LLP, independent public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in auditing and accounting. To the extent that KPMG Peat
Marwick LLP audits and reports on the consolidated financial statements of the
Company issued at future dates, and consents to the use of their report
thereon, such consolidated financial statements also will be incorporated by
reference in the Registration Statement in reliance upon their report and said
authority.
-17-
<PAGE> 21
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
<TABLE>
<CAPTION>
Item 16. Exhibits.
<S> <C> <C>
(1a) -- Form of Underwriting Agreement for Debt Securities, Common Stock, Preferred Stock
and Warrants.
(4a)** -- Form of Senior Indenture (Form of Senior Debt Security included therein).
(4b)** -- Form of Subordinated Indenture (Form of Subordinated Debt Security included therein).
(4c)** -- Form of Common Stock Certificate.
(4d)** -- Form of Preferred Stock Certificate.
(4e) -- Form of Warrant Agreement for Debt Securities.
(4e-1) -- Form of Warrant Agreement for Equity Securities.
(4f) -- Form of Purchase Contract Agreement.
(4f-1) -- Form of Pledge Agreement.
(4g)** -- Eleventh Amended Articles of Incorporation (filed as Exhibit 3 to the Company's Quarterly Report on Form
10-Q for the three months ended September 30, 1989, which Exhibit is hereby incorporated by reference
herein).
(4h)** -- Certified Amendment to the Eleventh Amended Articles of Incorporation (filed as Exhibit 3(b) to the
Company's Annual Report on Form 10-K for the year ended December 31, 1994, which Exhibit is hereby
incorporated by reference herein).
(4i)** -- Rights Agreement dated as of March 21, 1986 between the Company and National City Bank, as Rights Agent
(filed as Exhibit 1.2 to the Registration Statement on Form 8-A filed on March 27, 1986, which Exhibit is
hereby incorporated by reference herein).
(4j)** -- Amendment No. 1 to Rights Agreement dated as of March 31, 1989 between the Company and National City Bank,
as Rights Agent (filed as Exhibit 1 to the Company's Current Report on Form 8-K dated April 6, 1989, which
Exhibit is hereby incorporated by reference herein).
(4k) -- Form of Deposit Agreement (including form of Depositary Share).
(5) -- Opinion of Squire, Sanders & Dempsey regarding the legality of the Securities being registered.
(12a) -- Computation of Ratio of Earnings to Fixed Charges.
(12b) -- Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.
(23a)** -- Consent of KPMG Peat Marwick LLP.
(23b) -- Consent of Squire, Sanders & Dempsey (included in Exhibit 5).
(24)** -- Power of Attorney.
(25) -- Statement of Eligibility and Qualification on Form T-1
under the Trust Indenture Act of 1939, as amended, of
the Trustee.
(27) -- Financial Data Schedule.
</TABLE>
- --------------
** Previously filed.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
II-1
<PAGE> 22
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
provided, however, that paragraphs 1(i) and 1(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) 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.
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 provisions described under Item 15
above 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 Act 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
theretofore 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 Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Ferro
Corporation certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
Pre-Effective Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Cleveland,
State of Ohio, on this 4th day of January, 1996.
FERRO CORPORATION
By: /s/ Albert C. Bersticker
-------------------------------------
Albert C. Bersticker, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
*/s/ Albert C. Bersticker President and Chief January 4, 1996
- ---------------------------------- Executive Officer
Albert. C. Bersticker and Director
(Principal Executive
Officer)
*/s/ Hector R. Ortino Executive Vice President January 4, 1996
- ---------------------------------- and Chief Financial-
Hector R. Ortino Administrative Officer and
Director (Principal
Financial Officer)
*/s/ Gary H. Ritondaro Vice President, Finance January 4, 1996
- ---------------------------------- (Principal Accounting
Gary H. Ritondaro Officer)
*/s/ Sandra Harden Austin Director January 4, 1996
- ----------------------------------
Sandra Harden Austin
</TABLE>
II-3
<PAGE> 24
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
*/s/ Paul S. Brentlinger Director January 4, 1996
- ----------------------------------
Paul S. Brentlinger
*/s/ Glenn R. Brown Director January 4, 1996
- ----------------------------------
Glenn R. Brown
*/s/ Werner F. Bush Director January 4, 1996
- ----------------------------------
Werner F. Bush
*/s/ William E. Butler Director January 4, 1996
- ----------------------------------
William E. Butler
*/s/ A. James Freeman Director January 4, 1996
- ----------------------------------
A. James Freeman
*/s/ John C. Morley Director January 4, 1996
- ----------------------------------
John C. Morley
*/s/ Adolph Posnick Director January 4, 1996
- ----------------------------------
Adolph Posnick
*/s/ Rex A. Sebastian Director January 4, 1996
- ----------------------------------
Rex A. Sebastian
*/s/ Dennis W. Sullivan Director January 4, 1996
- ----------------------------------
Dennis W. Sullivan
</TABLE>
* Gary H. Ritondaro, by signing his name hereto does hereby sign this
document pursuant to powers of attorney duly executed by the other
persons indicated, filed with the Securities and Exchange Commission,
on behalf of such other persons, all in the capacities and on the date
stated, such persons including a majority of the directors of the
Company.
/s/ Gary H. Ritondaro
----------------------------------------
Gary H. Ritondaro, Attorney-in-Fact
II-4
<PAGE> 25
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
- ------ -------
<S> <C> <C>
(1a) -- Form of Underwriting Agreement for Debt Securities, Common Stock, Preferred Stock and
Warrants.
(4a)** -- Form of Senior Indenture (Form of Senior Debt Security included therein).
(4b)** -- Form of Subordinated Indenture (Form of Subordinated Debt Security included therein).
(4c)** -- Form of Common Stock Certificate.
(4d)** -- Form of Preferred Stock Certificate.
(4e) -- Form of Warrant Agreement for Debt Securities.
(4e-1) -- Form of Warrant Agreement for Equity Securities.
(4f) -- Form of Purchase Contract Agreement.
(4f-1) -- Form of Pledge Agreement.
(4g)** -- Eleventh Amended Articles of Incorporation (filed as Exhibit 3 to the Company's Quarterly Report on Form 10-Q
for the three months ended September 30, 1989, which Exhibit is hereby incorporated by reference herein).
(4h)** -- Certified Amendment to the Eleventh Amended Articles of Incorporation (filed as Exhibit 3(b) to the Company's
Annual Report on Form 10-K for the year ended December 31, 1994, which Exhibit is hereby incorporated by
reference herein).
(4i)** -- Rights Agreement dated as of March 21, 1986 between the Company and National City Bank, as Rights Agent (filed
as Exhibit 1.2 to the Registration Statement on Form 8-A filed on March 27, 1986, which Exhibit is hereby
incorporated by reference herein).
(4j)** -- Amendment No. 1 to Rights Agreement dated as of March 31, 1989 between the Company and National City Bank, as
Rights Agent (filed as Exhibit 1 to the Company's Current Report on Form 8-K dated April 6, 1989, which Exhibit
is hereby incorporated by reference herein).
(4k) -- Form of Deposit Agreement (including form of Depositary Share).
(5) -- Opinion of Squire, Sanders & Dempsey regarding the validity of the Securities being registered.
(12a) -- Computation of Ratio of Earnings to Fixed Charges.
(12b) -- Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.
(23a)** -- Consent of KPMG Peat Marwick, LLP.
(23b) -- Consent of Squire, Sanders & Dempsey (included in Exhibit 5).
</TABLE>
II-5
<PAGE> 26
<TABLE>
<S> <C> <C>
(24)** -- Power of Attorney.
(25) -- Statement of Eligibility and Qualification on Form T-1 under the Trust Indenture Act of 1939, as amended, of the
Trustee.
(27) -- Financial Data Schedule.
</TABLE>
- --------------
**Previously filed.
II-6
<PAGE> 1
EXHIBIT (1a)
FERRO CORPORATION
DEBT SECURITIES
COMMON STOCK
PREFERRED STOCK
WARRANTS
UNDERWRITING AGREEMENT
1. Introductory. Ferro Corporation, an Ohio corporation
("Company"), proposes to issue and sell from time to time certain of its debt
securities, preferred stock and common stock ("Equity Securities") and warrants
to purchase debt securities or Equity Securities registered under the
registration statement referred to in Section 2(a) ("Registered Securities").
The Registered Securities constituting debt securities will be issued under a
senior indenture, dated as of ______________________, 19____, between the
Company and _________________, as Trustee, or a subordinated indenture, dated as
of ____________, 19__, between the Company and __________________________, as
Trustee (each hereinafter called an "Indenture"). The debt securities, including
debt securities issuable upon exercise of warrants, if any, may be issued in one
or more series, which series may vary as to interest rates, maturities,
redemption provisions, selling prices and other terms with all such terms for
any particular series of the debt securities being determined at the time of
sale. The Registered Securities constituting preferred stock, including
preferred stock purchasable upon exercise of warrants, if any, may be issued in
one or more series, which series may vary as to dividend rates, redemption
provisions, selling prices and other terms. The Registered Securities
constituting warrants will be issued pursuant to one or more warrant agreements
(each hereinafter called a "Warrant Agreement") between the Company and the
Warrant Agent identified in such Warrant Agreement. Particular series or
offerings of Registered Securities will be sold pursuant to a Terms Agreement
referred to in Section 3, for resale in accordance with terms of offering
determined at the time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "Securities". The firm or firms which agree to purchase the
Securities are hereinafter referred to as the "Underwriters" of such Securities,
and the representative or representatives of the Underwriters, if any, specified
in a Terms Agreement referred to in Section 3 are hereinafter referred to as the
"Representatives"; provided, however, that if the Terms Agreement does not
specify any representative of the Underwriters, the term "Representatives", as
used in this Agreement (other than in Sections 2(b), 5(c) and 6 and the second
sentence of Section 3), shall mean the Underwriters.
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 33-63855), including a
prospectus, relating to the Registered Securities has been filed with the
Securities and Exchange Commission ("Commission") and has become effective. Such
registration statement, as amended at the time of any Terms Agreement referred
to in Section 3, is hereinafter referred to as the "Registration Statement", and
the prospectus included in such Registration Statement, as supplemented as
contemplated by Section 3 to reflect the terms of the Securities (if they are
debt securities, preferred stock or warrants) and the terms of the offering of
the Securities, as first filed with the Commission pursuant to and in accordance
with Rule 424(b) ("Rule 424(b)") under the
<PAGE> 2
Securities Act of 1933 ("Act"), including all material incorporated by reference
therein, is hereinafter referred to as the "Prospectus".
(b) On the effective date of the registration statement
relating to the Registered Securities, such registration statement conformed in
all respects to the requirements of the Act, the Trust Indenture Act of 1939
("Trust Indenture Act") and the rules and regulations of the Commission ("Rules
and Regulations") and did not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and on the date of each Terms
Agreement referred to in Section 3, the Registration Statement and the
Prospectus will conform in all respects to the requirements of the Act, the
Trust Indenture Act and the Rules and Regulations, and neither of such documents
will include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, except that the foregoing does not apply to statements
in or omissions from any of such documents based upon written information
furnished to the Company by any Underwriter through the Representatives, if any,
specifically for use therein.
3. Purchase and Offering of Securities. The obligation of the
Underwriters to purchase the Securities will be evidenced by an agreement or
exchange of other written communications ("Terms Agreement") at the time the
Company determines to sell the Securities. The Terms Agreement will incorporate
by reference the provisions of this Agreement, except as otherwise provided
therein, and will specify the firm or firms which will be Underwriters, the
names of any Representatives, the principal amount or number of shares or
warrants to be purchased by each Underwriter, the purchase price to be paid by
the Underwriters and (if the Securities are debt securities, preferred stock or
warrants) the terms of the Securities not already specified (in the Indenture,
in the case of Securities that are debt securities), including, but not limited
to, the Indenture under which the debt securities and warrants to purchase debt
securities will be sold, interest rate (if debt securities), dividend rate (if
preferred stock), maturity (if debt securities), any redemption provisions and
any sinking fund requirements, the Warrant Agreement pursuant to which the
warrants will be issued and whether any of the Securities may be sold to
institutional investors pursuant to Delayed Delivery Contracts (as defined
below). The Terms Agreement will also specify the time and date of delivery and
payment (such time and date, or such other time not later than seven full
business days thereafter as the Representatives and the Company agree as the
time for payment and delivery, being herein and in the Terms Agreement referred
to as the "Closing Date"), the place of delivery and payment and any details of
the terms of offering that should be reflected in the prospectus supplement
relating to the offering of the Securities. The obligations of the Underwriters
to purchase the Securities will be several and not joint. It is understood that
the Underwriters propose to offer the Securities for sale as set forth in the
Prospectus.
If the Terms Agreement provides for sales of Securities pursuant to
delayed delivery contracts, the Company authorizes the Underwriters to solicit
offers to purchase Securities pursuant to delayed delivery contracts
substantially in the form of Annex I attached hereto ("Delayed Delivery
Contracts") with such changes therein as the Company may authorize or approve.
Delayed Delivery Contracts are to be with institutional investors, including
commercial and savings banks, insurance companies, pension funds, investment
companies and educational and charitable institutions. On the Closing Date the
Company will pay, as compensation, to the Representatives for the accounts of
the Underwriters, the fee set forth in such Terms Agreement in respect of the
principal amount or number of shares or warrants of Securities to be sold
pursuant to Delayed Delivery Contracts ("Contract Securities"). The Underwriters
will not have any responsibility in respect of the validity or the performance
of Delayed Delivery Contracts. If the Company executes and delivers Delayed
Delivery Contracts, the Contract Securities will be deducted from the Securities
to be purchased by the several
- 2 -
<PAGE> 3
Underwriters and the aggregate principal amount or number of shares or warrants
of Securities to be purchased by each Underwriter will be reduced pro rata in
proportion to the principal amount or number of shares or warrants of Securities
set forth opposite each Underwriter's name in such Terms Agreement, except to
the extent that the Representatives determine that such reduction shall be
otherwise than pro rata and so advise the Company. The Company will advise the
Representatives not later than the business day prior to the Closing Date of the
principal amount or number of shares or warrants of Contract Securities.
If the Securities are Equity Securities, the certificates for the
Securities delivered to the Underwriters on the Closing Date will be in
definitive form, and if the Securities are debt securities, the Securities
delivered to the Underwriters on the Closing Date will be in definitive fully
registered form, in each case in such denominations and registered in such names
as the Underwriters may request.
4. Certain Agreements of the Company. The Company agrees with the
several Underwriters that it will furnish to counsel for the Underwriters, one
signed copy of the registration statement relating to the Registered Securities,
including all exhibits, in the form it became effective and of all amendments
thereto and that, in connection with each offering of Securities:
(a) The Company will file the Prospectus with the
Commission pursuant to and in accordance with Rule 424(b)(2) (or, if applicable
and if consented to by the Representatives, subparagraph (5)) not later than the
second business day following the execution and delivery of the Terms Agreement.
(b) The Company will advise the Representatives promptly
of any proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Representatives a reasonable opportunity to
comment on any such proposed amendment or supplement; and the Company will also
advise the Representatives promptly of the filing of any such amendment or
supplement and of the institution by the Commission of any stop order
proceedings in respect of the Registration Statement or of any part thereof and
prior to execution of the Terms Agreement by the Company and the Representatives
will use its reasonable efforts to prevent the issuance of any such stop order
and to obtain as soon as possible its lifting, if issued, and on or after the
date of execution of the Terms Agreement by the Company and the Representatives
and through the Closing Date thereunder will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its lifting,
if issued.
(c) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs as a
result of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, or if it is necessary at any time to amend the
Prospectus to comply with the Act, the Company will promptly prepare and file
with the Commission an amendment or supplement which will correct such statement
or omission or an amendment which will effect such compliance. Neither the
Representatives' consent to, nor the Underwriters' delivery of, any such
amendment or supplement shall constitute a waiver of any of the conditions set
forth in Section 5.
(d) As soon as practicable, but not later than 16 months,
after the date of each Terms Agreement, the Company will make generally
available to its security holders an earnings statement covering a period of at
least 12 months beginning after the later of (i) the effective date of the
registration statement relating to the Registered Securities, (ii) the effective
date of the most recent post-effective amendment to the Registration Statement
to become effective prior
- 3 -
<PAGE> 4
to the date of such Terms Agreement or (iii) the date of the Company's most
recent Annual Report on Form 10-K filed with the Commission prior to the date of
such Terms Agreement, which will satisfy the provisions of Section 11(a) of the
Act.
(e) The Company will furnish to the Representatives copies
of the Registration Statement, including all exhibits, any related preliminary
prospectus, any related preliminary prospectus supplement, the Prospectus and
all amendments and supplements to such documents, in each case as soon as
available and in such quantities as are reasonably requested.
(f) The Company will arrange for the qualification of the
Securities for sale and (if the Securities are debt securities, preferred stock
or warrants) the determination of their eligibility for investment under the
laws of such jurisdictions as the Representatives designate and will continue
such qualifications in effect so long as required for the distribution.
(g) During the period of five years after the date of any
Terms Agreement, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, if any, as soon as practicable after
the end of each fiscal year, a copy of its annual report to stockholders for
such year; and the Company will furnish to the Representatives (i) as soon as
available, a copy of each report and any definitive proxy statement of the
Company filed with the Commission under the Securities Exchange Act of 1934 or
mailed to stockholders, except reports relating to the Company's employee
benefit plans, and (ii) from time to time, such other information concerning the
Company as the Representatives may reasonably request.
(h) The Company will pay all expenses incident to the
performance of its obligations under this Agreement and will reimburse the
Underwriters (if and to the extent incurred by them) for any filing fees or
other expenses (including fees and disbursements of counsel) incurred by them in
connection with qualification of the Registered Securities for sale (if the
Securities are debt securities, preferred stock or warrants) any determination
of their eligibility for investment under the laws of such jurisdictions as the
Representatives may designate and the printing of memoranda relating thereto for
any fees charged by investment rating agencies for the rating of the Securities
(if they are debt securities, preferred stock or warrants), for any applicable
filing fee of the National Association of Securities Dealers, Inc. relating to
the Registered Securities, and for expenses incurred in printing and
distributing the Prospectus, any preliminary prospectuses, any preliminary
prospectus supplements or any other amendments or supplements to the Prospectus
to the Underwriters.
(i) If the Securities are debt securities, preferred stock
or warrants, the Company will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file with the Commission a
registration statement under the Act relating to United States
dollar-denominated debt securities issued or guaranteed by the Company and
having a maturity of more than one year from the date of issue (if the
Securities are debt securities) or any series of preferred stock issued or
guaranteed by the Company (if the Securities are preferred stock), or publicly
disclose the intention to make any such offer, sale, pledge, disposal or filing,
without the prior written consent of the Representatives for a period beginning
at the time of execution of the Terms Agreement and ending 30 days after the
Closing Date.
5. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Securities
will be subject to the accuracy of the representations and warranties on the
part of the Company herein, to the accuracy of the statements of Company
officers made pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions
precedent:
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<PAGE> 5
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of KPMG Peat Marwick, LLP confirming that they are independent public
accountants within the meaning of the Act and the applicable published Rules and
Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements and
schedules examined by them and included in the prospectus
contained in the registration statement relating to the
Registered Securities, as amended at the date of such letter,
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations;
(ii) they have made a review of any unaudited financial
statements included in such prospectus in accordance with
standards established by the American Institute of Certified
Public Accountants, as indicated in their report or reports
attached to such letter;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial
statements of the Company, inquiries of officials of the
Company who have responsibility for financial and accounting
matters and other specified procedures, nothing came to their
attention that caused them to believe that the unaudited
financial statements, if any, included in such Prospectus do
not comply as to form in all material respects with the
applicable accounting requirements of the Act and the related
published Rules and Regulations are not in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements included in such prospectus; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in such Prospectus (in each
case to the extent that such dollar amounts, percentages and
other financial information are derived from the general
accounting records of the Company and its subsidiaries subject
to the internal controls of the Company's accounting system or
are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement
with such results, except as otherwise specified in such
letter.
All financial statements and schedules included in material
incorporated by reference into such prospectus shall be deemed included in such
prospectus for purposes of this subsection.
(b) The Prospectus shall have been filed with the
Commission in accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no proceedings for
that purpose shall have been instituted or, to the knowledge of the Company or
any Underwriter, shall be contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement,
there shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties of
the Company or its subsidiaries which, in the judgment of a majority in interest
of the Underwriters including any Representatives, materially impairs the
investment quality of the Securities or the Registered Securities; (ii) any
downgrading in the
- 5 -
<PAGE> 6
rating of any debt securities of the Company by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities or preferred stock of
the Company (other than an announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of such rating); (iii)
any suspension or limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on such exchange,
or any suspension of trading of any securities of the Company on any exchange or
in the over-the-counter market; (iv) any banking moratorium declared by Federal,
New York or Ohio authorities; or (v) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of war by
Congress or any other substantial national or international calamity or
emergency if, in the judgment of a majority in interest of the Underwriters
including any Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and payment for
the Securities.
(d) The Representatives shall have received an opinion,
dated the Closing Date, of Squire, Sanders & Dempsey, counsel for the Company,
to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of
Ohio, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus;
(ii) If the Securities are debt securities, the Indenture has
been duly authorized, executed and delivered by the Company
and has been duly qualified under the Trust Indenture Act; the
Securities have been duly authorized; the Securities other
than any Contract Securities have been duly executed,
authenticated, issued and delivered; the Indenture and the
Securities other than any Contract Securities constitute, and
any Contract Securities, when executed, authenticated, issued
and delivered in the manner provided in the Indenture and sold
pursuant to Delayed Delivery Contracts, will constitute, valid
and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
and the Securities other than any Contract Securities conform,
and any Contract Securities, when so issued and delivered and
sold will conform, to the description thereof contained in the
Prospectus;
(iii) If the Securities are preferred stock, the Securities
have been duly authorized; the Securities other than any
Contract Securities have been validly issued and are fully
paid and nonassessable; any Contract Securities, when issued,
delivered and sold pursuant to Delayed Delivery Contracts,
will be validly issued, fully paid and non-assessable; and the
Securities other than any Contract Securities conform, and any
Contract Securities, when so issued, delivered and sold, will
conform, to the description thereof contained in the
Prospectus; and the stockholders of the Company have no
preemptive rights with respect to the Securities;
(iv) If the Securities are common stock, the Securities and
all other outstanding shares of the common stock of the
Company have been duly authorized and validly issued, are
fully paid and nonassessable and conform to the description
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<PAGE> 7
thereof contained in the Prospectus; and the stockholders of
the Company have no preemptive rights with respect to the
Securities;
(v) If the Securities are warrants, the Securities are in a
form contemplated by the applicable Warrant Agreement and (if
the Securities are warrants to purchase debt securities) the
applicable Indenture; the Securities have been duly
authorized, executed and delivered by the Company and assuming
such Securities have been duly countersigned by the Warrant
Agent or (if the Securities are warrants to purchase debt
securities) have been duly authenticated as specified in the
applicable Indenture, and delivered against payment therefor
in accordance with their terms, will constitute valid and
legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
and entitled to the benefits of the applicable Warrant
Agreement and applicable Indenture; and the Contract
Securities may be exercised to purchase the securities for
which they are exercisable in accordance with their terms and
the terms of the applicable Warrant Agreement;
(vi) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is
required for the consummation of the transactions contemplated
by the Terms Agreement (including the provisions of this
Agreement) in connection with the issuance or sale of the
Securities by the Company, except such as have been obtained
and made under the Act and such as may be required under state
securities laws;
(vi) The Registration Statement has become effective under the
Act, the Prospectus was filed with the Commission pursuant to
the subparagraph of Rule 424(b) specified in such opinion on
the date specified therein, and, to the best of the knowledge
of such counsel, no stop order suspending the effectiveness of
the Registration Statement or any part thereof has been issued
and no proceedings for that purpose have been instituted or
are pending or contemplated under the Act, and the
registration statement relating to the Registered Securities,
as of its effective date, the Registration Statement and the
Prospectus, as of the date of the Terms Agreement, and any
amendment or supplement thereto, as of its date, complied as
to form in all material respects with the requirements of the
Act, the Trust Indenture Act and the Rules and Regulations;
the statements contained in the Prospectus under the headings
"Description of Debt Securities," "Description of Capital
Stock" and "Description of Warrants" and the description
therein of the terms of the Securities insofar as such
statements and description constitute summaries of documents
or matters referred to therein are accurate in all material
respects and fairly present the information required to be
shown; it being understood that such counsel need express no
opinion as to the financial statements or other financial data
contained in the Registration Statement or the Prospectus; and
(vii) The Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company.
(e) The Representatives shall have received an opinion,
dated the Closing Date, of Leonard D. Young, Director- Legal Affairs of the
Company, to the effect that:
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<PAGE> 8
(i) To the best of his knowledge, the Company is duly
qualified to do business as a foreign corporation in good
standing in each of the several states of the United States in
which the failure to so qualify would have a material adverse
effect on the business, financial condition or results of
operations of the Company and its subsidiaries considered as
one enterprise:
(ii) The execution, delivery and performance of the Indenture,
the Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts and the issuance
and sale of the Securities and compliance with the terms and
provisions thereof will not result in a breach or violation of
any of the terms and provisions of, or constitute a default
under, any statute, any rule, regulation or order of any
governmental agency or body or any court having jurisdiction
over the Company or any material subsidiary of the Company or
any of their material properties or any material agreement or
instrument to which the Company or any such subsidiary is a
party or by which the Company or any such subsidiary is bound
or to which any of the material properties of the Company or
any such subsidiary is subject, or the charter or by-laws of
the Company or any such subsidiary, and the Company has full
power and authority to authorize, issue and sell the
Securities as contemplated by the Terms Agreement (including
the provisions of this Agreement); and
(iii) He has no reason to believe that the registration
statement relating to the Registered Securities, as of its
effective date, the Registration Statement or the Prospectus,
as of the date of the Terms Agreement, or any amendment or
supplement thereto, as of its date, contained any untrue
statement of a material fact or omitted to state any material
thereto fact required to be stated therein or necessary to
make the statements therein not misleading; the descriptions
in the Registration Statement and Prospectus of statutes,
legal and governmental proceedings and contracts and other
documents are accurate and fairly present the information
required to be shown; and he does not know of any legal or
governmental proceedings required to be described in the
Prospectus which are not described as required or of any
contracts or documents of a character required to be described
in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement which are not described
and filed as required; it being understood that he need
express no opinion as to the financial statements or other
financial data contained in the Registration Statement or the
Prospectus.
(f) The Representatives shall have received from
________________________, counsel for the Underwriters, such opinion or
opinions, dated the Closing Date, with respect to the incorporation of the
Company, the validity of the Securities, the Registration Statement, the
Prospectus and other related matters as the Representatives may require, and the
Company shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters. In rendering such
opinion, ______________________ may rely as to the incorporation of the Company
upon the opinion of Squire, Sanders & Dempsey referred to above.
(g) The Representatives shall have received a certificate,
dated the Closing Date, of the President or any Vice- President and a principal
financial or accounting officer of the Company in which such officers, to the
best of their knowledge after reasonable investigation, shall state that the
representations and warranties of the Company in this Agreement are true and
correct, that the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date, that no stop order
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<PAGE> 9
suspending the effectiveness of the Registration Statement or of any part
thereof has been issued and no proceedings for that purpose have been instituted
or are contemplated by the Commission and that, subsequent to the date of the
most recent financial statements in the Prospectus, there has been no material
adverse change in the financial position or results of operation of the Company
and its subsidiaries taken as a whole except as set forth in or contemplated by
the Prospectus or as described in such certificate.
(h) The Representatives shall have received a letter,
dated the Closing Date, of KPMG Peat Marwick LLP which reconfirms the matters
set forth in their letter delivered pursuant to subsection (a) of this Section
and states in effect that:
(i) in their opinion, any financial statements or
schedules examined by them and included in the Prospectus and
not covered by their letter delivered pursuant to subsection
(a) of this Section comply in form in all material respects
with the applicable accounting requirements of the Act and the
related published Rules and Regulations;
(ii) they have made a review of any unaudited financial
statements included in the Prospectus and not covered by their
letter delivered pursuant to subsection (a) of this Section in
accordance with standards established by the American
Institute of Certified Public Accountants, as indicated in
their report or reports attached to such letter.
(iii) on the basis of the review referred to in (ii) above,
a reading of the latest available interim financial statements
of the Company, inquiries of officials of the Company who have
responsibility for financial and accounting matters and other
specified procedures, nothing came to their attention that
caused them to believe that:
(A) the unaudited financial statements, if any,
included in the Prospectus and not covered by their letter
delivered pursuant to subsection (a) of this Section do not
comply in form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations or are not in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included in the Prospectus;
(B) the unaudited capsule information, if any,
included in the Prospectus does not agree with the amounts set
forth in the unaudited consolidated financial statements from
which it was derived or was not determined on a basis
substantially consistent with that of the audited financial
statements included in the Prospectus;
(C) at the date of the latest balance sheet read
by such accountants, or at a subsequent specified date not more
than five days prior to the Closing Date, there was any
reduction in the capital stock or any increase in short-term
indebtedness or long-term debt of the Company and consolidated
subsidiaries or, at the date of the latest available balance
sheet read by such accountants, there was any decrease in
consolidated net current assets or net assets, as compared with
amount shown on the latest sheet included in the Prospectus; or
(D) for the period from the date of the latest
income statement included in the Prospectus to the closing date
of the latest available income statement read
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<PAGE> 10
by such accountants there were any decreases, as compared with
the corresponding period of the previous year and with the
period of corresponding length ended the date of the latest
income statement included in the Prospectus, in consolidated
net sales, net operating income, income before extraordinary
items or net income or in the ratio of earnings to fixed
charges;
except in all cases set forth in clauses (C) and (D) above for
charges, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such
letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information included in the Prospectus and not
covered by their letter delivered pursuant to subsection (a) of
this Section (in each case to the extent that such dollar
amounts, percentages and other financial information are
derived from the general accounting records of the Company and
its subsidiaries subject to the internal controls of the
Company's accounting system or are derived directly from such
records by analysis or computation) with the results obtained
from inquiries, a reading of such general accounting records
and other procedures specified in such letter and have found
such dollar amounts, percentages and other financial
information to be in agreement with such results, except as
otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus for the
purposes of this subsection.
The Company will furnish the Representatives with such conformed
copies of such opinions, certificates, letters and documents as they reasonably
request.
6. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus or preliminary prospectus supplement, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement in or omission
or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives, if any, specifically for use therein.
(b) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus or preliminary
prospectus supplement, or arise
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<PAGE> 11
out of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives, if
any, specifically for use therein, and will reimburse any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party other than
Squire, Sanders & Dempsey if such indemnifying party is the Company), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. Any indemnified party
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the employment of
such counsel has been specifically authorized by the indemnifying party, or (ii)
the named parties to any such action (including any impleaded parties) include
both such indemnified party and the indemnifying party and such indemnified
party shall have been advised by such counsel that there may be one or more
legal defenses available to it which are different from or additional to those
available to the indemnifying party.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other from the offering
of the Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of
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<PAGE> 12
this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company, to each officer of the
Company who has signed the Registration Statement and to each person, if any,
who controls the Company within the meaning of the Act.
7. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Securities under the Terms Agreement
and the aggregate principal amount (if debt securities) or number of shares (if
preferred stock or common stock) or number of warrants of Securities that such
defaulting Underwriter or Underwriters agreed but failed to purchase does not
exceed 10% of the total principal amount (if debt securities) or number of
shares (if preferred stock or common stock) or number of warrants of Securities,
the Representatives may make arrangements satisfactory to the Company for the
purchase of such Securities by other persons, including any of the Underwriters,
but if no such arrangements are made by the Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments under the Terms Agreement (including the provisions of this
Agreement), to purchase the Securities that such defaulting Underwriters agreed
but failed to purchase. If any Underwriter or Underwriters so default and the
aggregate principal amount (if debt securities) or number of shares (if
preferred stock or common stock) or number of warrants of Securities with
respect to which such default or defaults occur exceeds 10% of the total
principal amount (if debt securities) or number of shares (if preferred stock or
common stock) or number of warrants of Securities and arrangements satisfactory
to the Representatives and the Company for the purchase of such Securities by
other persons are not made within 36 hours after such default, the Terms
Agreement will terminate without liability on the part of any non-defaulting
Underwriter or the Company, except as provided in Section 8. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default. The respective commitments of the
several Underwriters for the purposes of this Section shall be determined
without regard to reduction in the respective Underwriters' obligations to
purchase principal amounts (if debt securities) or numbers of shares (if
preferred stock) or number of warrants of the Securities set forth opposite
their names in the Terms Agreement as a result of Delayed Delivery Contracts
entered into by the Company.
The foregoing obligations and agreements set forth in this Section will
not apply if the Terms Agreement specifies that such obligations and agreements
will not apply.
8. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and
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<PAGE> 13
of the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation, or statement
as to the results thereof, made by or on behalf of any Underwriter, the Company
or any of their respective representatives, officers or directors or any
controlling person, and will survive delivery of and payment for the Securities.
If the Terms Agreement is terminated pursuant to Section 7 or if for any reason
the purchase of the Securities by the Underwriters is not consummated, the
Company shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 4 and the respective obligations of the Company and the
Underwriters pursuant to Section 6 shall remain in effect. If the purchase of
the Securities by the Underwriters is not consummated for any reason other than
solely because of the termination of this Agreement pursuant to Section 7 or the
occurrence of any event specified in clause (iii), (iv) or (v) of Section 5(c),
the Company will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Securities.
9. Notices. All communications hereunder will be in writing and,
if sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to them at their addresses furnished to the Company in writing for the
purpose of communications hereunder or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at 1000 Lakeside Avenue, Cleveland,
Ohio 44114, Attention: Treasurer.
10. Successors. This Agreement will inure to the benefit of and be
binding upon the Company and such Underwriters as are identified in the Terms
Agreement and their respective successors and the officers and directors and
controlling persons referred to in Section 6, and no other person will have any
right or obligation hereunder.
11. Counterparts. The Terms Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
12. Applicable Law. This Agreement and the Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
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<PAGE> 14
ANNEX I
(Three copies of this Delayed Delivery Contract
should be signed and returned to the address
shown below so as to arrive not later
than 9:00 A.M., New York time, on , 19__*.)
DELAYED DELIVERY CONTRACT
[Insert date of initial public offering]
Ferro Corporation
c/o_______________________
_____________________________
_____________________________
Attention:___________________
Gentlemen:
The undersigned hereby agrees to purchase from Ferro Corporation, an
Ohio corporation ("Company"), and the Company agrees to sell to the undersigned,
[If one delayed closing, insert--as of the date hereof, for delivery on
________________, 19___ ("Delivery Date"),]
[warrants to purchase][$]_____________________[shares]
principal amount of the Company's [Insert title of securities] ("Securities"),
offered by the Company's Prospectus dated ________________, 19___ and a
Prospectus Supplement dated _______________________, 19___ relating thereto,
receipt of copies of which is hereby acknowledged, at --____% of the principal
amount thereof plus accrued interest, if any, --$_______ per share plus accrued
dividends, if any, and on the further terms and conditions set forth in this
Delayed Delivery Contract ("Contract").
[If two or more delayed closings, insert the following:
The undersigned will purchase from the Company as of the date hereof,
for delivery on the dates set forth below, Securities in the -- principal --
amounts set forth below:
- ---------------------
* Insert date which is third full business day prior to Closing Date
under the Terms Agreement.
- 14 -
<PAGE> 15
<TABLE>
<CAPTION>
[PRINCIPAL AMOUNT]
[NUMBER
DELIVERY DATE OF SHARES [WARRANTS]]
------------- ---------------------
<S> <C>
_____________ _____________________
_____________ _____________________
</TABLE>
Each of such delivery dates is hereinafter referred to as a Delivery Date.]
Payment for the Securities that the undersigned has agreed to purchase
for delivery on-the--each--Delivery Date shall be made to the Company or its
order by certified or official bank check in New York Clearing House (next day)
funds at the office of ___________________ at ___.M. on--the--such Delivery Date
upon delivery to the undersigned of the Securities to be purchased by the
undersigned--for delivery on such Delivery Date-in definitive [If debt issue,
insert fully registered] form and in such denominations and registered in such
names as the undersigned may designate by written or telegraphic communication
addressed to the Company not less than five full business days prior
to--the--such--Delivery Date.
It is expressly agreed that the provisions for delayed delivery and
payment are for the sole convenience of the undersigned; that the purchase
hereunder of Securities is to be regarded in all respects as a purchase as of
the date of this Contract; that the obligation of the Company to make delivery
of and accept payment for, and the obligation of the undersigned to take
delivery of and make payment for, Securities on--the--each--Delivery Date shall
be subject only to the conditions that (1) investment in the Securities shall
not at--the--such--Delivery Date be prohibited under the laws of any
jurisdiction in the United States to which the undersigned is subject and (2)
the Company shall have sold to the Underwriters the total--principal
amount--number of shares--of the Securities less the--principal amount--number
of shares--thereof covered by this and other similar Contracts. The undersigned
represents that its investment in the Securities is not, as of the date hereof,
prohibited under the laws of any jurisdiction to which the undersigned is
subject and which governs such investment.
Promptly after completion of the sale to the Underwriters the Company
will mail or deliver to the undersigned at its address set forth below notice to
such effect, accompanied by-- a copy--copies--of the opinion[s] of counsel for
the Company delivered to the Underwriters in connection therewith.
This Contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that the acceptance of any such Contract is in the
Company's sole discretion and, without limiting the foregoing, need not be on a
first-come, first-served basis. If this Contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance below and mail or
deliver one of the counterparts hereof to the undersigned at its address set
forth
- 15 -
<PAGE> 16
below. This will become a binding contract between the Company and the
undersigned when such counterpart is so mailed or delivered.
Yours very truly,
-------------------------------
(Name of Purchaser)
By
-----------------------------
-------------------------------
(Title of Signatory)
-------------------------------
-------------------------------
(Address of Purchaser)
Accepted, as of the above date.
FERRO CORPORATION
By
-------------------------------
[Insert Title]
- 16 -
<PAGE> 17
FERRO CORPORATION
("COMPANY")
DEBT SECURITIES
TERMS AGREEMENT
_________________, 19__
To: Ferro Corporation
1000 Lakeside Avenue
Cleveland, Ohio 44114
Attention: D. Thomas George
Dear Sirs:
[On behalf of the several Underwriters named in Schedule A hereto and
for their respective accounts, we--We] offer to purchase, on and subject to the
terms and conditions of the Underwriting Agreement filed as an exhibit to the
Company's registration statement on Form S-3 (No. 33-63855) ("Underwriting
Agreement"), the following securities ("Securities") on the following terms:
TITLE: [__%][Floating Rate]--Notes--Debentures--Bonds--Due
PRINCIPAL AMOUNT: $ .
SPECIFIED CURRENCY: .
INTEREST: [__% per annum, from __________, 19__, payable semiannually
on __________ and __________, commencing __________, 19__, to holders
of record on the preceding __________ or __________, as the case may
be.] [Zero coupon.]
MATURITY: .
OPTIONAL REDEMPTION:
SINKING FUND:
DELAYED DELIVERY CONTRACTS: [None.] [Delivery Date[s] shall be
__________, 19__. Underwriters' fee is __% of the principal amount of
the Contract Securities.]
PURCHASE PRICE: __% of principal amount, plus accrued interest[, if
any,] from __________, 19__.
EXPECTED REOFFERING PRICE: __% of principal amount, subject to change
by the undersigned.
- 17 -
<PAGE> 18
CLOSING: _____ A.M. on __________, 19__, at ______________________,
in New York Clearing House (next day) funds.
[NAME[S] AND ADDRESS[ES] OF [REPRESENTATIVE[S]]:]
The respective principal amounts of the Securities to be purchased by
each of the several Underwriters are set forth opposite their names in Schedule
A hereto.
[If appropriate, insert--It is understood that we may, with your
consent, amend this offer to add additional Underwriters and reduce the
aggregate principal amount to be purchased by the Underwriters listed in
Schedule A hereto by the aggregate principal amount to be purchased by such
additional Underwriters.]
The provisions of the Underwriting Agreement are incorporated herein by
reference. [If appropriate, insert--, except that the obligations and agreements
set forth in Section 7 ("Default of Underwriters") of the Underwriting Agreement
shall not apply to the obligations of the Underwriters to purchase the above
Securities].
The Securities will be made available for checking and packaging at the
office of _______________________________ at least 24 hours prior to the Closing
Date.
[Please signify your acceptance of our offer by signing the enclosed
response to us in the space provided and returning it to us.]
[Please signify your acceptance of the foregoing by return wire not
later than ______ P.M. today.]
Very truly yours,
[Insert Name[s] of Underwriter[s]]
By
-------------------------------------------
[Insert title]
- 18 -
<PAGE> 19
SCHEDULE A
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL
- ----------- AMOUNT
---------
<S> <C>
$
---------
Total................................ $
=========
</TABLE>
- 19 -
<PAGE> 20
To: [Insert Name of Underwriter[s] and address]
We accept the offer contained in your [letter] [wire] dated
_______________, 19__, relating to $____ million principal amount of our [Insert
title of Securities]. We also confirm that, to the best of our knowledge after
reasonable investigation, the representations and warranties of the undersigned
in the Underwriting Agreement filed as an exhibit to the undersigned's
registration statement on Form S-3 (No. 33-63855) ("Underwriting Agreement") are
true and correct, no stop order suspending the effectiveness of the Registration
Statement (as defined in the Underwriting Agreement) or of any part thereof has
been issued and no proceedings for that purpose have been instituted or, to the
knowledge of the undersigned, are contemplated by the Securities and Exchange
Commission and, subsequent to the respective dates of the most recent financial
statements in the Prospectus (as defined in the Underwriting Agreement), there
has been no material adverse change in the financial position or results of
operation of the undersigned and its subsidiaries except as set forth in or
contemplated by the Prospectus.
Very truly yours,
FERRO CORPORATION
By
------------------------------------
[Insert title]
- 20 -
<PAGE> 21
FERRO CORPORATION
("COMPANY")
COMMON STOCK
PREFERRED STOCK
TERMS AGREEMENT
___________________, 19__
To: Ferro Corporation
1000 Lakeside Avenue
Cleveland, Ohio 44114
Attention: D. Thomas George
Dear Sirs:
[On behalf of the several Underwriters named in Schedule A hereto and
for their respective accounts, we--We] offer to purchase, on and subject to the
terms and conditions of the Underwriting Agreement filed as an exhibit to the
Company's registration statement on Form S-3 (No. 33-63855) ("Underwriting
Agreement"), the following securities ("Securities") on the following terms:
TITLE: _______________________________________________________________
NUMBER OF SHARES: ___________________________________________________.
DIVIDEND RATE: ______________________________________________________.
OPTIONAL REDEMPTION: _________________________________________________
SINKING FUND: ________________________________________________________
LISTING: [None.] [Stock Exchange.] [The Nasdaq Stock Market.]
DELAYED DELIVERY CONTRACTS: [None.] [Delivery Date[s] shall be
__________, 19__. Underwriters' fee is ____% of the principal amount of
the Contract Securities.]
PURCHASE PRICE: $________ per share [If preferred stock issue,
insert--plus accrued dividends[, if any,] from __________ 19__].
EXPECTED REOFFERING PRICE: $________ per share, subject to change by
the undersigned.
CLOSING: ______ A.M. on __________, 19__, at __________, in New York
Clearing House (next day) funds.
- 21 -
<PAGE> 22
UNDERWRITER[S']['S] COMPENSATION: $ ________ payable to the
[Representative[s] for the proportionate accounts of the] Underwriter[s] on
the Closing Date.
[NAME[S] AND ADDRESS[ES] OF [REPRESENTATIVE[S]]:]
The respective principal amounts of the Securities to be purchased by
each of the several Underwriters are set forth opposite their names in Schedule
A hereto.
[If appropriate, insert--It is understood that we may, with your
consent, amend this offer to add additional Underwriters and reduce the
aggregate principal amount to be purchased by the Underwriters listed in
Schedule A hereto by the aggregate principal amount to be purchased by such
additional Underwriters.]
The provisions of the Underwriting Agreement are incorporated herein by
reference. [If appropriate, insert--, except that the obligations and agreements
set forth in Section 7 ("Default of Underwriters") of the Underwriting Agreement
shall not apply to the obligations of the Underwriters to purchase the above
Securities].
The Securities will be made available for checking and packaging at the
office of _______________________________ at least 24 hours prior to the Closing
Date.
[Please signify your acceptance of our offer by signing the enclosed
response to us in the space provided and returning it to us.]
[Please signify your acceptance of the foregoing by return wire not
later than ______ P.M. today.]
Very truly yours,
[Insert Name[s] of Underwriter[s]]
By
----------------------------------------------
[Insert title]
- 22 -
<PAGE> 23
SCHEDULE A
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL
- ----------- AMOUNT
---------
<S> <C>
$
---------
Total................................ $
=========
</TABLE>
- 23 -
<PAGE> 24
To: [Insert Name of Underwriter[s] and address]
We accept the offer contained in your [letter] [wire] dated __________
_______________, 19__, relating to the purchase of ________________ number of
shares of our [Insert title of Securities]. We also confirm that, to the best of
our knowledge after reasonable investigation, the representations and warranties
of the undersigned in the Underwriting Agreement filed as an exhibit to the
undersigned's registration statement on Form S-3 (No. 33-63855) ("Underwriting
Agreement") are true and correct, no stop order suspending the effectiveness of
the Registration Statement (as defined in the Underwriting Agreement) or of any
part thereof has been issued and no proceedings for that purpose have been
instituted or, to the knowledge of the undersigned, are contemplated by the
Securities and Exchange Commission and, subsequent to the respective dates of
the most recent financial statements in the Prospectus (as defined in the
Underwriting Agreement), there has been no material adverse change in the
financial position or results of operation of the undersigned and its
subsidiaries except as set forth in or contemplated by the Prospectus.
Very truly yours,
FERRO CORPORATION
By
---------------------------------------
[Insert title]
- 24 -
<PAGE> 25
FERRO CORPORATION
("COMPANY")
WARRANTS
TERMS AGREEMENT
___________________, 19__
To: Ferro Corporation
1000 Lakeside Avenue
Cleveland, Ohio 44114
Attention: D. Thomas George
Dear Sirs:
[On behalf of the several Underwriters named in Schedule A hereto and
for their respective accounts, we--We] offer to purchase, on and subject to the
terms and conditions of the Underwriting Agreement filed as an exhibit to the
Company's registration statement on Form S-3 (No. 33-63855) ("Underwriting
Agreement"), the following securities ("Securities") on the following terms:
TITLE: _______________________________________________________________
NUMBER OF WARRANTS: __________________________________________________.
WARRANT AGENT: _______________________________________________________.
EXERCISE PRICE: ______________________________________________________
EXPIRATION DATE: _____________________________________________________
SPECIFIED CURRENCY: __________________________________________________
DELAYED DELIVERY CONTRACTS: [None.] [Delivery Date[s] shall be
__________, 19__ . Underwriters' fee is ____% of the principal amount
of the Contract Securities.]
MATURITY: ____________________________________________________________
INTEREST RATE: _______________________________________________________
EXPECTED REOFFERING PRICE: $________ per share, subject to change by
the undersigned.
LISTING REQUIREMENT:
CLOSING: ____ A.M. on __________, 19____, at __________, in New York
Clearing House (next day) funds.
- 25 -
<PAGE> 26
UNDERWRITER[S']['S] COMPENSATION: $ ________ payable to the
[Representative[s] for the proportionate accounts of the] Underwriter[s] on
the Closing Date.
ADDITIONAL TERMS OF WARRANTS AND WARRANT SECURITIES:
[NAME[S] AND ADDRESS[ES] OF [REPRESENTATIVE[S]]:]
The respective principal amounts of the Securities to be purchased by
each of the several Underwriters are set forth opposite their names in Schedule
A hereto.
[If appropriate, insert--It is understood that we may, with your
consent, amend this offer to add additional Underwriters and reduce the
aggregate principal amount to be purchased by the Underwriters listed in
Schedule A hereto by the aggregate principal amount to be purchased by such
additional Underwriters.]
The provisions of the Underwriting Agreement are incorporated herein by
reference. [If appropriate, insert--, except that the obligations and agreements
set forth in Section 7 ("Default of Underwriters") of the Underwriting Agreement
shall not apply to the obligations of the Underwriters to purchase the above
Securities].
The Securities will be made available for checking and packaging at the
office of _______________________________ at least 24 hours prior to the Closing
Date.
[Please signify your acceptance of our offer by signing the enclosed
response to us in the space provided and returning it to us.]
[Please signify your acceptance of the foregoing by return wire not
later than ______ P.M. today.]
Very truly yours,
[Insert Name[s] of Underwriter[s]]
By
------------------------------------------------
[Insert title]
- 26 -
<PAGE> 27
SCHEDULE A
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL
- ----------- AMOUNT
---------
<S> <C>
$
---------
Total................................ $
=========
</TABLE>
- 27 -
<PAGE> 28
To: [Insert Name of Underwriter[s] and address]
We accept the offer contained in your [letter] [wire] dated
_______________, 19__, relating to the purchase of ________________ warrants to
purchase [______ principal amount][______ shares] of our [Insert title of
Securities]. We also confirm that, to the best of our knowledge after reasonable
investigation, the representations and warranties of the undersigned in the
Underwriting Agreement filed as an exhibit to the undersigned's registration
statement on Form S-3 (No. 33-63855) ("Underwriting Agreement") are true and
correct, no stop order suspending the effectiveness of the Registration
Statement (as defined in the Underwriting Agreement) or of any part thereof has
been issued and no proceedings for that purpose have been instituted or, to the
knowledge of the undersigned, are contemplated by the Securities and Exchange
Commission and, subsequent to the respective dates of the most recent financial
statements in the Prospectus (as defined in the Underwriting Agreement), there
has been no material adverse change in the financial position or results of
operation of the undersigned and its subsidiaries except as set forth in or
contemplated by the Prospectus.
Very truly yours,
FERRO CORPORATION
By
---------------------------------
[Insert title]
- 28 -
<PAGE> 1
EXHIBIT (4e)
Form of Warrant Agreement for Debt Securities
FERRO CORPORATION
AND
______________________
AS WARRANT AGENT
WARRANT AGREEMENT
DATED AS OF ____________________, 199__
<PAGE> 2
TABLE OF CONTENTS(1)
Page
----
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
ISSUANCE, EXECUTION AND COUNTERSIGNATURE
OF WARRANT CERTIFICATES
Section 1.1 Issuance of Warrant Certificates . . . . . . . . . . . . . . . . 1
Section 1.2 Form of Warrant Certificates . . . . . . . . . . . . . . . . . . 1
Section 1.3 Execution and Authentication of Warrant Certificates . . . . . . 2
Section 1.4 Temporary Warrant Certificates . . . . . . . . . . . . . . . . . 2
Section 1.5 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.6 Definition on Holder . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS
Section 2.1 Warrant Price . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.2 Duration of Warrants . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.3 Exercise of Warrants . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III
OTHER TERMS OF WARRANTS
Section 3.1 Call of Warrants by the Company . . . . . . . . . . . . . . . . . 4
ARTICLE IV
{REGISTRATION,} EXCHANGE, TRANSFER AND
SUBSTITUTION OF WARRANT CERTIFICATES
Section 4.1 {Registration,} Exchange and Transfer of Warrant Certificates . . 5
Section 4.2 Mutilated, Destroyed, Lost or Stolen Warrant Certificates . . . . 5
Section 4.3 Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . 6
Section 4.4 Cancellation of Warrant Certificates . . . . . . . . . . . . . . 6
- ----------------------------------
(1) The Table of Contents is not a part of the Warrant Agreement.
<PAGE> 3
ARTICLE V
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
Page
----
Section 5.1 No Rights as Holders of Warrant Debt Securities Conferred
by Warrants or Warrant Certificates . . . . . . . . . . . . . . 7
Section 5.2 Holder of Warrant Certificate May Enforce Rights . . . . . . . . . 7
ARTICLE VI
CONCERNING THE WARRANT AGENT
Section 6.1 Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 6.2 Conditions of Warrant Agent's Obligations . . . . . . . . . . . . 7
Section 6.3 Resignation, Removal and Appointment of Successor . . . . . . . . 9
ARTICLE VII
MISCELLANEOUS
Section 7.1 Consolidations and Mergers of the Company and
Sales, Leases and Conveyances Permitted Subject to
Certain Conditions . . . . . . . . . . . . . . . . . . . . . . 10
Section 7.2 Rights and Duties of Successor Corporation . . . . . . . . . . . 10
Section 7.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 7.4 Notice and Demands to the Company and Warrant Agent . . . . . . 10
Section 7.5 Notices to Warrantholders . . . . . . . . . . . . . . . . . . . 10
Section 7.6 Addresses . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.8 Delivery of Prospectus . . . . . . . . . . . . . . . . . . . . 11
Section 7.9 Obtaining of Governmental Approvals . . . . . . . . . . . . . . 11
Section 7.10 Persons Having Rights under Warrant Agreement . . . . . . . . 11
Section 7.11 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.13 Inspection of Agreement . . . . . . . . . . . . . . . . . . . 12
Testimonium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Exhibit A - Form of Warrant Certificate
<PAGE> 4
THIS WARRANT AGREEMENT, dated as of ______________, 19__, between Ferro
Corporation, a corporation duly organized and existing under the laws of the
State of Ohio (the "Company") and _______________, a {corporation} {national
banking association} organized and existing under the laws of _______________,
as Warrant Agent (herein called the "Warrant Agent").
WHEREAS, the Company has entered into an Indenture (the "Indenture)
dated as of ____________, 19__ with {_________________________} as trustee (such
trustee, and any successors to such trustee, herein called the "Trustee"),
providing for the issuance from time to time, in one or more series, of its
{Senior} {Subordinated} Debt Securities; and
WHEREAS, the Company proposes to sell {IF OFFERED DEBT SECURITIES AND
WARRANTS -- {title of Debt Securities being offered} (the "Offered Debt
Securities") with} warrant certificates (such warrant certificates and other
warrant certificates issued pursuant to this Agreement herein called the
"Warrant Certificates") evidencing one or more warrants ("Warrants" or,
individually, a "Warrant") representing the right to purchase {title of Debt
Securities purchasable through exercise of Warrants} (the "Warrant Debt
Securities"); and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, exchange, exercise and replacement of the Warrant Certificates, and in
this Agreement wishes to set forth, among other things, the form and provisions
of the Warrant Certificates and the terms and conditions on which they may be
issued, exchanged, exercised and replaced;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
ISSUANCE, EXECUTION AND COUNTERSIGNATURE
OF WARRANT CERTIFICATES
Section 1.1 Issuance of Warrant Certificates. {IF WARRANTS ALONE --
Upon issuance, each Warrant Certificate shall evidence one or more Warrants.} IF
OFFERED DEBT SECURITIES AND WARRANTS -- Warrant Certificates shall be
{initially} issued in units with the Offered Debt Securities and shall {not} be
separately transferable {before _________, 19__ (the "Detachable Date")}. Each
such unit shall consist of a Warrant Certificate or Certificates evidencing an
aggregate of ______ Warrants for each $__________ principal amount of Offered
Debt Securities.} Each Warrant evidenced thereby shall represent the right,
subject to the provisions contained herein and therein, to purchase Warrant Debt
Securities in the aggregate principal amount of $_____________.
Section 1.2 Form of Warrant Certificates. The Warrant Certificates
(including the Form{s} of Exercise {and Assignment} to be set forth on the
reverse thereof) shall be in substantially the form set forth in Exhibit A
hereto, shall be printed, lithographed or engraved on steel engraved borders (or
in any other manner determined by the officers executing such Warrant
Certificates, with the execution thereof by such officers conclusively
evidencing such determination) and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities exchange on which the
Warrant Certificates may be listed or as
- 1 -
<PAGE> 5
may, consistently herewith, be determined by the officers executing such Warrant
Certificates, with the execution thereof by such officers conclusively
evidencing such determination.
Section 1.3 Execution and Authentication of Warrant Certificates. The
Warrant Certificates shall be executed on behalf of the Company by its Chairman,
its Chief Executive Officer, its President or one of its Vice Presidents (any
reference to a Vice President of the Company herein shall be deemed to include
any Vice President of the Company whether or not designated by a number or a
word or words added before or after the title "Vice President") under its
corporate seal reproduced thereon attested to by its Treasurer or Secretary or
one of its Assistant Treasurers or Assistant Secretaries. The signature of any
of these officers on the Warrant Certificates may be manual or facsimile.
Warrant Certificates evidencing the right to purchase an aggregate
principal amount not exceeding $_______________ of Warrant Debt Securities
(except as provided in Sections 1.4, 2.3(c), 4.1 and 4.2) may be executed by the
Company and delivered to the Warrant Agent upon the execution of this Warrant
Agreement or from time to time thereafter. The Warrant Agent shall, upon receipt
of Warrant Certificates duly executed on behalf of the Company, authenticate
Warrant Certificates evidencing Warrants representing the right to purchase up
to $_____________ aggregate principal amount of Warrant Debt Securities and
shall deliver such Warrant Certificates to or upon the order of the Company.
Subsequent to such original issuance of the Warrant Certificates, the Warrant
Agent shall authenticate a Warrant Certificate only if the Warrant Certificate
is issued in exchange or substitution for one or more previously authenticated
Warrant Certificates (IF REGISTERED WARRANTS -- or in connection with their
transfer), as hereinafter provided.
Each Warrant Certificate shall be dated the date of its authentication
by the Warrant Agent.
No Warrant Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose, and no Warrant evidenced
thereby shall be exercisable, until such Warrant Certificate has been
authenticated by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by the Company shall be
conclusive evidence, and the only evidence, that the Warrant Certificate so
authenticated has been duly issued hereunder.
Warrant Certificates bearing the manual or facsimile signatures of
individuals who were at the time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Warrant
Certificates or did not hold such offices at the date of such Warrant
Certificates.
Section 1.4 Temporary Warrant Certificates. Pending the preparation of
definitive Warrant Certificates, the Company may execute, and upon the order of
the Company the Warrant Agent shall authenticate and deliver, temporary Warrant
Certificates which are printed, lithographed, typewritten, mimeographed or
otherwise produced, substantially of the tenor of the definitive Warrant
Certificates in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Warrant Certificates may determine, with the execution thereof by
such officers conclusively evidencing such determination.
If temporary Warrant Certificates are issued, the Company will cause
definitive Warrant Certificates to be prepared without unreasonable delay. After
the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for
- 2 -
<PAGE> 6
definitive Warrant Certificates upon surrender of the temporary Warrant
Certificates at the corporate trust office of the Warrant Agent {or ____________
____________}, without charge to the Holder (as defined in Section 1.6 below).
Upon surrender for cancellation of any one or more temporary Warrant
Certificates the Company shall execute and the Warrant Agent shall authenticate
and deliver in exchange therefor definitive Warrant Certificates representing
the same aggregate number of Warrants. Until so exchanged, the temporary Warrant
Certificates shall in all respects be entitled to the same benefits under this
Agreement as definitive Warrant Certificates.
Section 1.5 Payment of Taxes. The Company will pay all stamp taxes and
other duties, if any, to which, under the laws of the United States of America
or any State or political subdivision thereof, this Agreement or the original
issuance of the Warrant Certificates may be subject.
Section 1.6 Definition of Holder. The term "Holder" as used herein
shall mean {IF OFFERED DEBT SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE --, prior to the Detachable Date, the registered owner of the Offered
Debt Security to which such Warrant Certificate was initially attached, and,
after such Detachable Date,} {if bearer Warrants, the bearer of such Warrant
Certificates } {if registered Warrants, the person in whose name at the time
such Warrant Certificate shall be registered upon the books to be maintained by
the Warrant Agent for that purpose pursuant to Section 4.1}. {IF OFFERED DEBT
SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE -- Prior to the
Detachable Date, the Company will, or will cause the registrar of the Offered
Debt Securities to, make available to the Warrant Agent current information as
to Holders of the Offered Debt Securities.}
ARTICLE II
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS
Section 2.1 Warrant Price.(2) During the period from ______________,
19___ through and including _____________, 19___, each Warrant shall entitle the
Holder thereof, subject to the provisions of this Agreement, to purchase from
the Company the principal amount of Warrant Debt Securities stated in the
Warrant Certificate at the exercise price of ____% of the principal amount
thereof {plus accrued amortization, if any, of the original issue discount of
the Warrant Debt Securities} {plus accrued interest, if any, from the most
recent date from which interest shall have been paid on the Warrant Debt
Securities, or, if no interest shall have been paid on the Warrant Debt
Securities, from _____________, 19___}. {In each case, the original issue
discount ($_______________ for each $1,000 principal amount of Warrant Debt
Securities) will be amortized at a _____% annual rate, computed on a{n}
{semi-}annual basis {using a 360-day year consisting of twelve 30-day months}.}
Such exercise price of each Warrant is referred to in this Agreement as the
"Exercise Price."
Section 2.2 Duration of Warrants. Any Warrant evidenced by a Warrant
Certificate may be exercised at any time, as specified herein, on or after {the
date thereof} {____________, 19___} and at or before the close of business on
____________, 19___ (the "Expiration Date"). Each Warrant not exercised at or
before the close of business on the
- ----------------------------------
(2) Complete and modify the provisions of this Section as appropriate
to reflect the exact terms of the Warrants and the Warrant Debt
Securities.
- 3 -
<PAGE> 7
Expiration Date shall become void, and all rights of the Holder of the
Warrant Certificate evidencing such Warrant under this Agreement or otherwise
shall cease.
Section 2.3 Exercise of Warrants. (a) During the period specified in
Section 2.2, any whole number of Warrants may be exercised by surrendering the
Warrant Certificate evidencing such Warrants at the place or at the places set
forth in the Warrant Certificate, with the purchase form set forth in the
Warrant Certificate duly executed, accompanied by payment in full, in lawful
money of the United States of America, {in case or by certified check or
official bank check in New York Clearing House funds}.} {by surrender of the
{specified aggregate amount of {identified securities}} {by bank wire transfer
in immediately available funds}, of the Exercise Price for each Warrant
exercised. The date on which payment in full of the Exercise Price for a Warrant
and the duly executed and completed Warrant Certificate are received by the
Warrant Agent shall be deemed to be the date on which such Warrant is exercised.
The Warrant Agent shall deposit all funds received by it as payment for the
exercise of Warrants to the account of the Company maintained with it for such
purpose and shall advise the Company by telephone at the end of each day on
which such a payment is received of the amount so deposited to its account. The
Warrant Agent shall promptly confirm such telephonic advice to the Company in
writing.
(b) The Warrant Agent shall from time to time, as promptly as
practicable after the exercise of any Warrants in accordance with the terms and
conditions of this Agreement and the Warrant Certificates, advise the Company
and the Trustee of (i) the number of Warrants so exercised, (ii) the
instructions of each Holder of the Warrant Certificates evidencing such Warrants
with respect to delivery of the Warrant Debt Securities to which such Holder is
entitled upon such exercise, and instructions of such Holder as to delivery of
Warrant Certificates evidencing the balance, if any, of the Warrants remaining
after such exercise, and (iii) such other information as the Company or the
Trustee shall reasonably require.
(c) As soon as practicable after the exercise of any Warrants, the
Company shall issue, pursuant to the Indenture, in authorized denominations, to
or upon the order of the Holder of the Warrant Certificate evidencing such
Warrants, the Warrant Debt Security or Warrant Debt Securities to which such
Holder is entitled in fully registered form, registered in such name or names as
may be directed by such Holder; and, if fewer than all of the Warrants evidenced
by such Warrant Certificate were exercised, the Company shall execute and an
authorized officer of the Warrant Agent shall manually authenticate and deliver
a new Warrant Certificate evidencing the number of Warrants remaining
unexercised.
(d) The Company shall not be required to pay any stamp or other tax or
other governmental charge required to be paid in connection with any transfer
involved in the issue of the Warrant Debt Securities; and in the event that any
such transfer is involved, the Company shall not be required to issue or deliver
any Warrant Debt Securities until such tax or other charge shall have been paid
or it has been established to the Company's satisfaction that no such tax or
other charge is due.
ARTICLE III
OTHER TERMS OF WARRANTS
Section 3.1 { Call of Warrants by the Company.(3) IF WARRANTS ISSUED
HEREUNDER ARE CALLABLE BY THE COMPANY -- The Company shall have the right
- ----------------------------------
(3) Complete and modify the provisions of this Section as appropriate to
reflect the exact terms of the Warrants.
- 4 -
<PAGE> 8
to call and repurchase any or all Warrants on or after _______, 19__ (the "Call
Date") and upon the occurrence of {discuss events or circumstances under which
Company may call the Warrants} (the "Call Terms") at a price of $___________ per
Warrant (the "Call Price"). Notice of such Call Price, Call Date and Call Terms
shall be given to registered holders of Warrants in the manner provided in
Section 7.5.}
ARTICLE IV
{REGISTRATION,} EXCHANGE, TRANSFER AND
SUBSTITUTION OF WARRANT CERTIFICATES
Section 4.1 { Registration,} Exchange and Transfer of Warrant
Certificates. {IF REGISTERED WARRANTS -- The Warrant Agent shall keep, at its
corporate trust office {and at __________________}, books in which, subject to
such reasonable regulations as it may prescribe, it shall register Warrant
Certificates and transfers of outstanding Warrant Certificates}.
{IF OFFERED DEBT SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE -- Prior to the Detachable Date, a Warrant Certificate may be
exchanged or transferred only together with the Offered Debt Security to which
such Warrant Certificate was initially attached, and only for the purpose of
effecting, or in conjunction with, an exchange or transfer of such Offered Debt
Security. Additionally, on or prior to the Detachable Date, each transfer or
exchange of an Offered Debt Security {on the register of the Offered Debt
Securities} shall operate also to transfer or exchange the Warrant Certificate
or Certificates to which such Offered Debt Security was initially attached.
After the Detachable Date, upon} {IF OFFERED DEBT SECURITIES AND WARRANTS WHICH
ARE IMMEDIATELY DETACHABLE OR IF WARRANTS ALONE - Upon} surrender at the
corporate trust office of the Warrant Agent {or _______________________} of
Warrant Certificates properly endorsed {or accompanied by appropriate
instruments of transfer} and accompanied by written instructions for {transfer
or} exchange, all in a form satisfactory to the Company and the Warrant Agent,
such Warrant Certificates may be exchanged for other Warrant Certificates {IF
REGISTERED WARRANTS -- or may be transferred in whole or in part}; provided that
Warrant Certificates issued in exchange for {or upon transfer of} surrendered
Warrant Certificates shall evidence the same aggregate number of Warrants as the
Warrant Certificates so surrendered. No service charge shall be made for any
exchange {or transfer} of Warrant Certificates, but the Company may require
payment of a sum sufficient to cover any stamp or other tax or governmental
charge that may be imposed in connection with any such exchange {or transfer}.
Whenever any Warrant Certificates are so surrendered for exchange {or transfer},
the Company shall execute and an authorized officer of the Warrant Agent shall
manually authenticate and deliver to the person or persons entitled thereto a
Warrant Certificate or Warrant Certificates as so requested. The Warrant Agent
shall not be required to effect any exchange {or transfer} which would result in
the issuance of a Warrant Certificate evidencing a fraction of a Warrant or a
number of full Warrants and a fraction of a Warrant. All Warrant Certificates
issued upon any exchange {or transfer} of Warrant Certificates issued upon any
exchange {or transfer} of Warrant Certificates shall evidence the same
obligations, and be entitled to the same benefits under this Agreement, as the
Warrant Certificates surrendered for such exchange {or transfer}.
Section 4.2 Mutilated, Destroyed, Lost or Stolen Warrant Certificates.
If any mutilated Warrant Certificate is surrendered to the Warrant Agent, the
Company shall execute and an officer of the Warrant Agent shall manually
authenticate and deliver in exchange therefor a new Warrant Certificate of like
tenor and bearing a number not
- 5 -
<PAGE> 9
contemporaneously outstanding. If there shall be delivered to the Company and
the Warrant Agent (i) evidence to their satisfaction of the destruction, loss or
theft of any Warrant Certificate and of the ownership thereof and (ii) such
security or indemnity as may be required by them to save each of them and any
agent of either of them harmless, then, in the absence of notice to the Company
or the Warrant Agent that such Warrant Certificate has been acquired by a bona
fide purchaser, the Company shall execute and upon its request an officer of the
Warrant Agent shall manually authenticate and deliver, in lieu of any such
destroyed, lost or stolen Warrant Certificate, a new Warrant Certificate of like
tenor and bearing a number not contemporaneously outstanding. Upon the issuance
of any new Warrant Certificate under this Section, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Warrant Agent) connected therewith. Every new Warrant
Certificate issued pursuant to this Section in lieu of any destroyed, lost or
stolen Warrant Certificate shall evidence an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Warrant
Certificate shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Agreement equally and proportionately with any and all
other Warrant Certificates duly issued hereunder. The provisions of this Section
are exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Warrant Certificates.
Section 4.3 Persons Deemed Owners. {IF OFFERED DEBT SECURITIES AND
WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE -- Prior to the Detachable Date,
the Company, the Warrant Agent and all other persons may treat the registered
owner of any Offered Debt Security as the owner of the Warrant Certificates
initially attached thereto for any purpose and as the person entitled to
exercise the rights represented by the Warrants evidenced by such Warrant
Certificates, any notice to the contrary notwithstanding. After the Detachable
Date,} {IF REGISTERED WARRANTS -- and prior to due presentment of a Warrant
Certificate for registration of transfer, the} {IF OFFERED DEBT SECURITIES AND
WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR WARRANTS ALONE -- The} Company, the
Warrant Agent and all other persons may treat the Holder as the owner thereof
for any purpose and as the person entitled to exercise the rights represented by
the Warrants evidenced thereby, any notice to the contrary notwithstanding.
Section 4.4 Cancellation of Warrant Certificates. Any Warrant
Certificate surrendered for exchange {,______ transfer} or exercise of the
Warrants evidenced thereby shall, if surrendered to the Company, be delivered to
the Warrant Agent, and {IF WARRANT CERTIFICATES ARE ISSUED IN BEARER FORM --
except as provided below,} all Warrant Certificates surrendered or so delivered
to the Warrant Agent shall be promptly cancelled by it and shall not be reissued
and, except as expressly permitted by this Agreement, no Warrant Certificate
shall be issued hereunder in lieu or in exchange thereof. {IF WARRANT
CERTIFICATES ARE ISSUED IN BEARER FORM -- Warrant Certificates delivered to the
Warrant Agent in exchange for Warrant Certificates of other denominations may be
retained by the Warrant Agent for reissue as authorized hereunder.} The Company
may at any time deliver to the Warrant Agent for cancellation any Warrant
Certificates previously issued hereunder which the Company may have acquired in
any manner whatsoever, and all Warrant Certificates so delivered shall be
promptly cancelled by the Warrant Agent. All cancelled Warrant Certificates held
by the Warrant Agent shall be disposed of, as instructed by the Company, subject
to applicable law.
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<PAGE> 10
ARTICLE V
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
Section 5.1 No Rights as Holders of Warrant Debt Securities Conferred
by Warrants or Warrant Certificates. No Warrant Certificate or Warrant evidenced
thereby shall entitle the Holder thereof to any of the rights of a Holder of the
Warrant Debt Securities, including, without limitation, the right to receive the
payment of principal of (or premium if any) or interest, if any, on the Warrant
Debt Securities or to enforce any of the covenants in the Indenture.
Section 5.2 Holder of Warrant Certificate May Enforce Rights.
Notwithstanding any of the provisions of this Agreement, any Holder of any
Warrant Certificate, without the consent of the Warrant Agent, the Trustee, the
holder of any Warrant Debt Securities or the Holder of any other Warrant
Certificate, may, on its own behalf and for its own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce or otherwise in respect of its right to exercise the Warrant
or Warrants evidenced by his or her Warrant Certificate in the manner provided
in the Warrant Certificates and in this Agreement.
ARTICLE VI
CONCERNING THE WARRANT AGENT
Section 6.1 Warrant Agent. The Company hereby appoints
__________________ as Warrant Agent of the Company in respect of the Warrants
and the Warrant Certificates upon the terms and subject to the conditions herein
set forth, and _________________ hereby accepts such appointment. The Warrant
Agent shall have the power and authority granted to and conferred upon it in the
Warrant Certificates and hereby and such further power and authority to act on
behalf of the Company as the Company may hereafter grant to or confer upon it.
All of the terms and provisions with respect to such power and authority
contained in the Warrant Certificates are subject to and governed by the terms
and provisions hereof.
Section 6.2 Conditions of Warrant Agent's Obligations. The Warrant
Agent accepts its obligations herein set forth, upon the terms and conditions
hereof, including the following, to all of which the Company agrees and to all
of which the rights hereunder of the Holders from time to time of the Warrant
Certificates shall be subject:
(a) Compensation and Indemnification. The Company agrees promptly to
pay the Warrant Agent the compensation to be agreed upon with the Company for
all services rendered by the Warrant Agent and to reimburse the Warrant Agent
for reasonable out-of-pocket expenses (including reasonable counsel fees)
incurred by the Warrant Agent in connection with the services rendered hereunder
by the Warrant Agent. The Company also agrees to indemnify the Warrant Agent
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on the part of the Warrant Agent, arising out of
or in connection with its acting as such Warrant Agent hereunder, including the
reasonable costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance at any time of its powers or
duties hereunder. The obligations of the Company under this subsection (a) shall
survive the exercise of the Warrant Certificates and the resignation or removal
of the Warrant Agent.
- 7 -
<PAGE> 11
(b) Agent for the Company. In acting under this Warrant Agreement and
in connection with the Warrant Certificates, the Warrant Agent is acting solely
as agent of the Company and does not assume any obligation or relationship of
agency or trust for or with any of the owners or Holders of the Warrant
Certificates.
(c) Counsel. The Warrant Agent may consult with counsel, which may
include counsel for the Company, and the written advice of such counsel shall be
full and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.
(d) Documents. The Warrant Agent shall be protected and shall incur no
liability for or in respect of any action taken or omitted by it in reliance
upon any notice, direction, consent, certificate, affidavit, statement or other
paper or document reasonably believed by it to be genuine and to have been
presented or signed by the proper parties.
(e) Certain Transactions. The Warrant Agent, any of its officers,
directors and employees, or any other agent of the Company, in its individual or
any other capacity, may become the owner of, or acquire any interest in, any
Warrant Certificates, with the same rights that it would have if it were not
such Warrant Agent, officer, director, employee or other agent, and, to the
extent permitted by applicable law, it may engage or be interested in any
financial or other transaction with the Company and may act on, or as
depositary, trustee or agent for, any committee or body of holders of Warrant
Debt Securities or other obligations of the Company as freely as if it were not
such Warrant Agent, officer, director, employee or other agent. Nothing in this
Warrant Agreement shall be deemed to prevent the Warrant Agent from acting as a
Trustee under the Indenture.
(f) No Liability for Interest. The Warrant Agent shall not be under any
liability for interest on any monies at any time received by it pursuant to any
of the provisions of this Agreement or of the Warrant Certificates unless
otherwise agreed to in writing by the Company and the Warrant Agent and except
for the negligence of the Warrant Agent.
(g) No Liability for Invalidity. The Warrant Agent shall not
incur any liability with respect to the validity of this Agreement or any of
the Warrant Certificates.
(h) No Responsibility for Representations. The Warrant Agent shall not
be responsible for any of the recitals or representations contained herein or in
the Warrant Certificate (except as to the Warrant Agent's Certificate or
Authentication thereon), all of which are made solely by the Company.
(i) No Implied Obligations. The Warrant Agent shall be obligated to
perform such duties as are herein and in the Warrant Certificates specifically
set forth and no implied duties or obligations shall be read into this Agreement
or the Warrant Certificates against the Warrant Agent. The Warrant Agent shall
not be under any obligation to take any action hereunder which may tend to
involve it any expense or liability, the payment of which within a reasonable
period of time is not, in its reasonable opinion, assured to it. The Warrant
Agent shall not be accountable or under any duty or responsibility for the use
by the Company of any of the Warrant Certificates authenticated by the Warrant
Agent and delivered by it to the Company pursuant to this Agreement or for the
application by the Company of the proceeds of the Warrant Certificates or any
exercise of the Warrants evidenced thereby. The Warrant Agent shall have no duty
or responsibility in case of any default by the Company in the performance of
its covenants or agreements contained herein or in the Warrant Certificates or
in the Warrant Debt Securities or in the case of the receipt of any written
demand from a Holder of a Warrant Certificate with respect to such default,
including without limiting the generality of the foregoing, any duty or
responsibility to
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<PAGE> 12
initiate or attempt to initiate any proceeding at law or otherwise or, except as
provided in Section 7.4 hereof, to make any demand upon the Company.
Section 6.3 Resignation, Removal and Appointment of Successor. (a) The
Company agrees, for the benefit of the Holders from time to time of the Warrant
Certificates, that there shall at all times be a Warrant Agent hereunder until
all of the Warrant Certificates are no longer exercisable.
(b) The Warrant Agent may at any time resign as such agent by giving
written notice to the Company of such intention on its part, specifying the date
on which it desires its resignation to become effective; provided that, without
the consent of the Company, such date shall not be less than three months after
the date on which such notice is given. The Warrant Agent hereunder may be
removed at any time by the filing with it of an instrument in writing signed by
or on behalf of the Company and specifying such removal and the date on which
the Company expects such removal to become effective. Such resignation or
removal shall take effect upon the appointment by the Company of a successor
Warrant Agent (which shall be a bank or trust company organized and doing
business under the laws of the United States of America, any State thereof or
the District of Columbia and authorized under such laws to exercise corporate
trust powers) by an instrument in writing filed with such successor Warrant
Agent and the acceptance of such appointment by such successor Warrant Agent
pursuant to Section 6.3(d).
(c) In case at any time the Warrant Agent shall resign, or be removed,
or shall become incapable of acting, or shall be adjudged bankrupt or insolvent,
or shall file a voluntary petition in bankruptcy or make an assignment for the
benefit of its creditors or consent to the appointment of a receiver or
custodian of all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or if a receiver
or custodian of it or of all or any substantial part of its property shall be
appointed, or if an order of any court shall be entered approving any petition
filed by or against it under the provisions of any applicable bankruptcy or
similar law, or if any public officer shall have taken charge or control of the
Warrant Agent or of its property or affairs, a successor Warrant Agent,
qualified as aforesaid, shall be appointed by the Company by an instrument in
writing, filed with the successor Warrant Agent. Upon the appointment as
aforesaid of a successor Warrant Agent and acceptance by the latter of such
appointment, the Warrant Agent so superseded shall cease to be Warrant Agent
hereunder.
(d) Any successor Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company an instrument
accepting such appointment hereunder, and thereupon such successor Warrant
Agent, without any further act, deed or conveyance, shall become vested with all
the authority, rights, powers, trusts, immunities, duties and obligations of
such predecessor, upon payment of its charges and disbursements then unpaid,
shall thereupon become obligated to transfer, deliver and pay over, and such
successor Warrant Agent shall be entitled to receive, all monies, securities and
other property on deposit with or held by such predecessor, as Warrant Agent
hereunder.
(e) Any corporation into which the Warrant Agent hereunder may be
merged or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the
Warrant Agent, provided that it shall be qualified as aforesaid, shall be the
successor Warrant Agent under this Agreement without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
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<PAGE> 13
ARTICLE VII
MISCELLANEOUS
Section 7.1 Consolidations and Mergers of the Company and Sales, Leases
and Conveyances Permitted Subject to Certain Conditions. To the extent permitted
in the Indenture, the Company may consolidate with, or sell or convey all or
substantially all of its assets to, or merge with or into any other corporation.
Section 7.2 Rights and Duties of Successor Corporation. In case of any
such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein, and the predecessor corporation, except in the event of a
lease, shall be relieved of any further obligation under this Agreement and the
Warrants. Such successor corporation thereupon may cause to be signed, and may
issue either in its own name or in the name of the Company, any or all of the
Warrant Debt Securities issuable pursuant to the terms hereof. All the Warrant
Debt Securities so issued shall in all respects have the same legal rank and
benefit under the Indenture as the Warrant Debt Securities theretofore or
thereafter issued in accordance with the terms of this Agreement and the
Indenture.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Warrant Debt Securities thereafter to be issued as may be appropriate.
Section 7.3 Amendment. This Agreement may be amended by the parties
hereto, without the consent of the Holder of any Warrant Certificate, for the
purpose of curing any ambiguity, or of curing, correcting or supplementing any
defective provision contained herein, or making such provisions in regard to
matters or questions arising under this Agreement as the Company may deem
necessary or desirable; provided that such action shall not adversely affect the
interests of the Holders of the Warrant Certificates in any material respect.
Any amendment or supplement to this Agreement or the Warrants that has a
material adverse effect on the interests of Holders of any series of Warrants
shall require the written consent of Holders of a majority of the then
outstanding Warrants of such series. The consent of each Holder of a Warrant
affected shall be required for any amendment pursuant to which the Warrant Price
would be increased or the number of Debt Securities purchasable upon exercise of
Warrants would be decreased. The Warrant Agent may, but shall not be obligated
to, enter into any amendment to this Agreement which affects the Warrant Agent's
own rights, duties or immunities under this Agreement or otherwise.
Section 7.4 Notice and Demands to the Company and Warrant Agent. If the
Warrant Agent shall receive any notice or demand addressed to the Company by the
Holder of a Warrant Certificate pursuant to the provisions of the Warrant
Certificates, the Warrant Agent shall promptly forward such notice or demand to
the Company.
Section 7.5 Notices to Warrantholders. Pursuant to Sections 3.1 {add
other sections as applicable}, the Company shall cause written notice of such
Call Price, Call Date and Call Terms {reference other items as applicable}, as
the case may be, to be given as soon as practicable to the Warrant Agent and to
each of the registered holders of the Warrant Certificates by first class mail,
postage prepaid, at such holder's address appearing on the Warrant Register. In
addition to the written notice referred to in the preceding sentence, the
Company shall make a public announcement in a daily morning newspaper of general
circulation in __________ of such Call Price, Call Date, and Call Terms
{reference other
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<PAGE> 14
items as applicable}, as the case may be, at least once a week for two
successive weeks prior to the implementation of such terms.
Section 7.6 Addresses. Any communications from the Company to the
Warrant Agent with respect to this Agreement shall be addressed to __________,
Attention: _______________, and any communications from the Warrant Agent to the
Company with respect to this Agreement shall be addressed to Ferro Corporation,
1000 Lakeside Avenue, Cleveland, Ohio 44114, Attention: Treasurer (or such other
address as shall be specified in writing by the Warrant Agent or by the
Company).
Section 7.7 Governing Law. This Agreement and each Warrant Certificate
issued hereunder shall be governed by and construed in accordance with the laws
of the State of Ohio.
Section 7.8 Delivery of Prospectus. The Company will furnish to the
Warrant Agent sufficient copies of a prospectus, appropriately supplemented,
relating to the Warrant Debt Securities (the "Prospectus"), and the Warrant
Agent agrees that, upon the exercise of any Warrant Certificate, the Warrant
Agent will deliver to the person designated to receive Warrant Debt Securities,
prior to or concurrently with the delivery of such Securities, a Prospectus.
Section 7.9 Obtaining of Governmental Approvals. The Company will from
time to time take all action which may be necessary to obtain and keep effective
any and all permits, consents and approvals of governmental agencies and
authorities and securities acts filings under United States Federal and State
laws (including, without limitation, to the extent required, the maintenance of
the effectiveness of a registration statement in respect of the Warrant Debt
Securities under the Securities Act of 1933, as amended, which may be or become
required in connection with the exercise of the Warrant Certificates and the
original issuance and delivery of the Warrant Debt Securities.
Section 7.10 Persons Having Rights Under Warrant Agreement. Nothing in
this agreement expressed or implied and nothing that may be inferred from any of
the provisions hereof is intended, or shall be construed, to confer upon, or
give to, any person or corporation other than the Company, the Warrant Agent and
the Holders of the Warrant Certificates any right, remedy or claim under or by
reason of this Agreement or of any covenant, condition, stipulation, promise or
agreement hereof; and all covenants, conditions, stipulations, promises and
agreements contained in this Agreement shall be for the sole and exclusive
benefit of the Company and the Warrant Agent and their successors and of the
Holders of the Warrant Certificates.
Section 7.11 Headings. The Article and Section headings herein and the
Table of Contents are for convenience of reference only and shall not affect the
construction hereof.
Section 7.12 Counterparts. This Agreement may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original;
but such counterparts shall together constitute but one and the same instrument.
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<PAGE> 15
Section 7.13 Inspection of Agreement. A copy of this Agreement shall be
available at all reasonable times at the principal corporate trust office of the
Warrant Agent {and at ______________} for inspection by the Holder of any
Warrant Certificate. The Warrant Agent may require such Holder to submit its
Warrant Certificate for inspection by it.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, and their respective corporate seal to be hereunto affixed and
attested, all as of the day and year first above written.
FERRO CORPORATION
By
---------------------------
{SEAL}
Attest:
- ----------------------------------------
{NAME OF WARRANT AGENT}
By
---------------------------
{SEAL}
Attest:
- ----------------------------------------
{Assistant Secretary}
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<PAGE> 16
EXHIBIT A
{FORM OF WARRANT CERTIFICATE}
{Face}
FORM OF LEGEND IF OFFERED {Prior to _____________, this
DEBT SECURITIES WITH Warrant Certificate may be
WARRANTS WHICH ARE NOT transferred or exchanged
IMMEDIATELY DETACHABLE: if and only if the {Title
of Offered Debt Security}
to which it was initially
attached is so transferred
or exchanged.}
FORM OF LEGEND IF WARRANTS {Prior to ______________,
ARE NOT IMMEDIATELY Warrants evidenced by this
EXERCISABLE: Warrant Certificate cannot
be exercised.}
EXERCISABLE ONLY IF AUTHENTICATED BY THE WARRANT
AGENT AS PROVIDED HEREIN
VOID AFTER THE CLOSE OF BUSINESS ON ___________, 19__
FERRO CORPORATION
Warrant Certificate representing
Warrants to purchase
{Title of Warrant Debt Securities}
as described herein
----------------------
No. ______________ Warrants
This certifies that {the bearer is the} {______________________________
or registered assigns is the registered} owner of the above indicated number of
Warrants, each Warrant entitling such {bearer {IF OFFERED DEBT SECURITIES AND
WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE - -, subject to the bearer
qualifying as a "Holder" of this Warrant Certificate, as hereinafter defined}
{registered owner} to purchase, at any time {after the close of business on
________________, 19__, and} on or before the close of business on ____________,
19__, $___________ principal amount of {Title of Warrant Debt Securities} (the
"Warrant Debt Securities") of Ferro Corporation (the "Company"), issued or to be
issued under the Indenture (as hereinafter defined), on the following basis.*
{During the period from _____________, 19__ through and including _____________,
19__, each Warrant shall entitle the Holder thereof, subject to the provisions
of the Warrant Agreement (as defined below), to purchase from the Company the
principal amount of Warrant Debt Securities stated above in this Warrant
Certificate at the exercise price of ____% of the principal amount thereof {plus
accrued amortization, if any, of the original issue discount of the Warrant Debt
Securities} {plus accrued interest, if any, from the most recent date from which
interest shall have been paid on the Warrant Debt Securities or, if no interest
shall have been paid on the Warrant Debt Securities, from
- ----------------------------------
* Complete and modify the following provisions as appropriate to reflect the
terms of the Warrants and the Warrant Debt Securities.
<PAGE> 17
__________, 19__}; {in each case, the original issue discount ($__________ for
each $1,000 principal amount of Warrant Debt Securities) will be amortized at a
___% annual rate, computed on a{n} {semi-} annual basis {, using a 360-day year
consisting of twelve 30-day months} {(the "Exercise Price")}. The Holder of this
Warrant Certificate may exercise the Warrants evidenced hereby, in whole or in
part, by surrendering this Warrant Certificate, with the purchase form set forth
hereon duly completed, accompanied {by payment in full, in lawful money of the
United States of America, {in cash or by certified check or official bank check
in New York Clearing House funds} {by bank wire transfer in immediately
available funds}} {by surrender of the {specified aggregate principal amount of
{identified securities}}, the Exercise Price for each Warrant exercised, to the
Warrant Agent (as hereinafter defined) at the corporate trust office of {name of
Warrant Agent}, or its successor as warrant agent (the "Warrant Agent") {or at
______________,} at the addresses specified on the reverse hereof and upon
compliance with and subject to the conditions set forth herein and in the
Warrant Agreement. This Warrant Certificate may be exercised only for the
purchase of Warrant Debt Securities in the principal amount of {$1,000} or any
integral multiple thereof.
The term "Holder" as used herein shall mean {IF OFFERED DEBT
SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE --, prior to
_____________, 19__, (the "Detachable Date"), the registered owner of the
Company's {title of Offered Debt Securities} to which such Warrant Certificate
was initially attached, and after such Detachable Date,} {the bearer of such
Warrant Certificate} {the person in whose name at the time such Warrant
Certificate shall be registered upon the books to be maintained by the Warrant
Agent for that purpose pursuant to Section 4.1 of the Warrant Agreement}.
Any whole number of Warrants evidenced by this Warrant Certificate
may be exercised to purchase Warrant Debt Securities in registered form. Upon
any exercise of fewer than all of the Warrants evidenced by this Warrant
Certificate, there shall be issued to the {bearer} {registered owner} hereof a
new Warrant Certificate evidencing the number of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of _____________, 19__ (the "Warrant Agreement")
between the Company and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
provisions the Holder of this Warrant Certificate consents by acceptance hereof.
Copies of the Warrant Agreement are on file at the above-mentioned office at the
Warrant Agent {and at _________________}.
The Warrant Debt Securities to be issued and delivered upon the
exercise of warrants evidenced by this Warrant Certificate will be issued under
and in accordance with an Indenture (the "Indenture"), dated as of
___________________, between the Company and __________________________________
___________________________, as trustee (such trustee, and any successors to
such trustee, the "Trustee") and will be subject to the terms and provisions
contained in the Warrant Debt Securities and in the Indenture. Copies of the
Indenture, including the form of the Warrant Debt Securities, are on file at the
corporate trust office of the Trustee {and at ___________________}.
{IF OFFERED DEBT SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE - - Prior to _____________, 19__ (the "Detachable Date"), this
Warrant Certificate may be exchanged or transferred only together with the
{title of Offered Debt Security} (the "Offered Debt Security"} to which this
Warrant Certificate was initially attached, and only for the purpose of
effecting, or in conjunction with, an exchange or transfer of such Offered Debt
Security. Additionally, on or prior to the Detachable Date each transfer of such
Offered Debt Security on the register of the Offered
A - 2
<PAGE> 18
Debt Securities shall operate also to transfer this Warrant Certificate. After
the Detachable Date, this} {IF OFFERED DEBT SECURITIES AND WARRANTS WHICH ARE
IMMEDIATELY DETACHABLE OR WARRANTS ALONE -- This} Warrant Certificate, and all
rights hereunder, may be transferred {IF BEARER WARRANTS -- by delivery and the
Company and the Warrant Agent may treat the bearer hereof as the owner for all
purposes} {IF REGISTERED WARRANTS -- when surrendered at the corporate trust
office of the Warrant Agent {or ____________} by the registered owner or his
assigns, in person or by an attorney duly authorized in writing, in the manner
and subject to the limitations provided in the Warrant Agreement}.
{IF OFFERED DEBT SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE -- Except as provided in the immediately preceding paragraph, after}
{IF OFFERED DEBT SECURITIES AND WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR
WARRANTS ALONE -- After} authentication by the Warrant Agent and prior to the
expiration of this Warrant Certificate, this Warrant Certificate may be
exchanged at the corporate trust office at the Warrant Agent {or at
____________} for Warrant Certificates representing the same aggregate number of
Warrants.
This Warrant Certificate shall not entitle the {bearer} {registered
owner} hereof to any of the rights of a {registered} {holder} of the Warrant
Debt Securities, including, without limitation, the right to receive payments of
principal (and premium, if any) or interest, if any, on the Warrant Debt
Securities or to enforce any of the covenants of the Indenture.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Warrant Certificate shall not be valid or obligatory for any
purpose until authenticated by the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate
to be duly executed under its corporate seal.
Dated: ______________
FERRO CORPORATION
By:
------------------------------------
Attest:
- ------------------------------
Certificate of Authentication
This is one of the Warrant Certificates referred to in the
within-mentioned Warrant Agreement.
- ------------------------------
As Warrant Agent
By:
--------------------------
Authorized Signature
A - 3
<PAGE> 19
{FORM OF WARRANT CERTIFICATE}
{REVERSE}
(Instructions for Exercise of Warrants)
To exercise any Warrants evidenced hereby, the Holder of this
Warrant Certificate must pay {in cash or by certified check or official bank
check in New York Clearing House funds or by bank wire transfer in immediately
available funds}, the Exercise Price in full for each of the Warrants exercised,
to _____________________, Corporate Trust Department, ______________, Attn:
___________________ {or ______________________}, which payment should specify
the name of the Holder of this Warrant Certificate and the number of Warrants
exercised by such Holder. In addition, the Holder of this Warrant Certificate
should complete the information required below and present in person or mail by
registered mail this Warrant Certificate to the Warrant Agent at the addresses
set forth below.
{FORM OF EXERCISE}
{To be executed upon exercise of Warrants.}
The undersigned hereby irrevocably elects to exercise _______
Warrants, represented by this Warrant Certificate, to purchase $__________
principal amount of the {Title of Warrant Debt Securities} (the "Warrant Debt
Securities") of Ferro Corporation and represents that he has tendered payment
for such Warrant Debt Securities {in cash or by certified check or official bank
check in New York Clearing House funds or by bank wire transfer in immediately
available funds} to the order of Ferro Corporation, c/o Treasurer, in the amount
of $__________ in accordance with the terms hereof. The undersigned requests
that said principal amount of Warrant Debt Securities be in fully registered
form, in the authorized denominations, registered in such names and delivered,
all as specified in accordance with the instructions set forth below.
If said principal amount of Warrant Debt Securities is less than
all of the Warrant Debt Securities purchasable hereunder, the undersigned
requests that a new Warrant Certificate representing the remaining balance of
the Warrants evidenced hereby be issued and delivered to the undersigned unless
otherwise specified in the instructions below.
Dated:
Name ____________________________
- ------------------------------
(Insert Social Security or Other
Identifying Number of Holder) Address _________________________
_________________________________
Signature
------------------------
{If registered warrant --
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant Certificate and must bear
a signature guarantee by a bank,
trust company or member broker of
the New York, Chicago or Pacific
Stock Exchange.)}
A - 4
<PAGE> 20
This Warrant may be exercised at the following addresses:
By hand at _____________________________________
_____________________________________
_____________________________________
_____________________________________
By mail at _____________________________________
_____________________________________
_____________________________________
_____________________________________
(Instructions as to form and delivery of Warrant Debt Securities and/or Warrant
Certificates):
{FORM OF ASSIGNMENT}
(TO BE EXECUTED TO TRANSFER THE WARRANT CERTIFICATE)
FOR VALUE RECEIVED _______________________ hereby sells, assigns
and transfers unto
------------------------------------
(Please print name and
address including zip code)
Please insert social security or
other identifying number
- ----------------------------------
________________________________________________________________________________
the right represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint _______________________, Attorney, to
transfer said Warrant Certificate on the books of the Warrant Agent with full
power of substitution.
Dated: _______________________
----------------------------------------
Signature
(Signature must conform in all respects
to name of holder as specified on the
face of this Warrant Certificate and
must bear a signature guarantee by a
bank, trust company or member broker of
the New York, Chicago or Pacific Stock
Exchange)
Signature Guaranteed:
- ----------------------------------
A - 5
<PAGE> 1
EXHIBIT (4e-1)
Form of Warrant Agreement for Equity Securities
FERRO CORPORATION
AND
_____________________
AS WARRANT AGENT
WARRANT AGREEMENT
DATED AS OF ____________________, 199__
<PAGE> 2
<TABLE>
TABLE OF CONTENTS(1)
<CAPTION>
Page
----
<S> <C>
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
ISSUANCE, EXECUTION AND COUNTERSIGNATURE
OF WARRANT CERTIFICATES
Section 1.1 Issuance of Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Form of Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.3 Execution and Authentication of
Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.4 Temporary Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.5 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.6 Definition on Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS
Section 2.1 Warrant Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.2 Duration of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.3 Exercise of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.4 Reservation of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III
OTHER TERMS OF WARRANTS
Section 3.1 Call of Warrants by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.2 Adjustment of Exercise Price and Number of Shares Purchasable
or Number of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE IV
REGISTRATION, EXCHANGE, TRANSFER AND
SUBSTITUTION OF WARRANT CERTIFICATES
Section 4.1 Registration, Exchange and Transfer
of Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.2 Mutilated, Destroyed, Lost or Stolen
Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.3 Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.4 Cancellation of Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
__________________________________
(1) The Table of Contents is not a part of the Warrant Agreement.
<PAGE> 3
<TABLE>
<CAPTION>
ARTICLE V
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
Page
----
<S> <C>
Section 5.1 No Rights as Stockholders Conferred
by Warrants or Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.2 Holder of Warrant Certificate May Enforce Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE VI
CONCERNING THE WARRANT AGENT
Section 6.1 Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.2 Conditions of Warrant Agent's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6.3 Resignation, Removal and Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VII
MISCELLANEOUS
Section 7.1 Consolidations and Mergers of the Company and
Sales, Leases and Conveyances Permitted Subject to
Certain Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7.2 Rights and Duties of Successor Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7.4 Notice and Demands to the Company and Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 7.5 Notices to Warrantholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 7.6 Addresses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7.8 Delivery of Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7.9 Obtaining of Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7.10 Persons Having Rights under Warrant Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7.11 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 7.13 Inspection of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Testimonium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
Exhibit A - Form of Warrant Certificate
<PAGE> 4
THIS WARRANT AGREEMENT, dated as of ______________, 19__, between
Ferro Corporation, a corporation duly organized and existing under the laws of
the State of Ohio (the "Company") and _______________, a {corporation}
{national banking association} organized and existing under the laws of
_______________, as Warrant Agent (herein called the "Warrant Agent").
WHEREAS, the Company proposes to sell {IF OFFERED EQUITY SECURITIES
AND WARRANTS -- {title of Equity Securities being offered} (the "Offered Equity
Securities") with} warrant certificates (such warrant certificates and other
warrant certificates issued pursuant to this Agreement herein called the
"Warrant Certificates") evidencing one or more warrants ("Warrants" or,
individually, a "Warrant") representing the right to purchase shares of {Common
Stock} {Preferred Stock} (the "Equity Securities"); and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, exchange, exercise and replacement of the Warrant Certificates, and
in this Agreement wishes to set forth, among other things, the form and
provisions of the Warrant Certificates and the terms and conditions on which
they may be issued, exchanged, exercised and replaced;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
ISSUANCE, EXECUTION AND COUNTERSIGNATURE
OF WARRANT CERTIFICATES
Section 1.1 Issuance of Warrant Certificates. {IF WARRANTS ALONE --
Upon issuance, each Warrant Certificate shall evidence one or more Warrants.} IF
OFFERED EQUITY SECURITIES AND WARRANTS -- Warrant Certificates shall be
{initially} issued in units with the Offered Equity Securities and shall {not}
be separately transferable {before _________, 19__ (the "Detachable Date")}.
Each such unit shall consist of a Warrant Certificate or Certificates evidencing
an aggregate of ______ Warrants. Each Warrant evidenced thereby shall represent
the right, subject to the provisions contained herein and therein, to purchase
one share of {Common Stock} {Preferred Stock}.
Section 1.2 Form of Warrant Certificates. The Warrant Certificates
(including the Form{s} of Exercise {and Assignment} to be set forth on the
reverse thereof) shall be in substantially the form set forth in Exhibit A
hereto, shall be printed, lithographed or engraved on steel engraved borders
(or in any other manner determined by the officers executing such Warrant
Certificates, with the execution thereof by such officers conclusively
evidencing such determination) and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as may
be required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities exchange on which the
Warrant Certificates may be listed or as may, consistently herewith, be
determined by the officers executing such Warrant Certificates, with the
execution thereof by such officers conclusively evidencing such determination.
Section 1.3 Execution and Authentication of Warrant Certificates.
The Warrant Certificates shall be executed on behalf of the Company by its
Chairman, its Chief Executive
- 1 -
<PAGE> 5
Officer, its President or one of its Vice Presidents (any reference to a Vice
President of the Company herein shall be deemed to include any Vice President
of the Company whether or not designated by a number or a word or words added
before or after the title "Vice President") under its corporate seal reproduced
thereon attested to by its Treasurer or Secretary or one of its Assistant
Treasurers or Assistant Secretaries. The signature of any of these officers on
the Warrant Certificates may be manual or facsimile.
Warrant Certificates evidencing the right to purchase a number of
shares of {Common Stock} {Preferred Stock} having an aggregate liquidation
value not exceeding $_______________ (except as provided in Sections 1.4,
2.3(c), 4.1 and 4.2) may be executed by the Company and delivered to the
Warrant Agent upon the execution of this Warrant Agreement or from time to time
thereafter. The Warrant Agent shall, upon receipt of Warrant Certificates duly
executed on behalf of the Company, authenticate Warrant Certificates evidencing
Warrants representing the right to purchase a number of shares of {Common
Stock} {Preferred Stock} having an aggregate liquidation value not exceeding
$_____________ and shall deliver such Warrant Certificates to or upon the order
of the Company. Subsequent to such original issuance of the Warrant
Certificates, the Warrant Agent shall authenticate a Warrant Certificate only
if the Warrant Certificate is issued in exchange or substitution for one or
more previously authenticated Warrant Certificates (IF REGISTERED WARRANTS --
or in connection with their transfer), as hereinafter provided.
Each Warrant Certificate shall be dated the date of its authentication
by the Warrant Agent.
No Warrant Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose, and no Warrant evidenced
thereby shall be exercisable, until such Warrant Certificate has been
authenticated by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by the Company shall be
conclusive evidence, and the only evidence, that the Warrant Certificate so
authenticated has been duly issued hereunder.
Warrant Certificates bearing the manual or facsimile signatures of
individuals who were at the time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such Warrant
Certificates or did not hold such offices at the date of such Warrant
Certificates.
Section 1.4 Temporary Warrant Certificates. Pending the preparation
of definitive Warrant Certificates, the Company may execute, and upon the order
of the Company the Warrant Agent shall authenticate and deliver, temporary
Warrant Certificates which are printed, lithographed, typewritten, mimeographed
or otherwise produced, substantially of the tenor of the definitive Warrant
Certificates in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Warrant Certificates may determine, with the execution thereof
by such officers conclusively evidencing such determination.
If temporary Warrant Certificates are issued, the Company will cause
definitive Warrant Certificates to be prepared without unreasonable delay.
After the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates at the corporate trust office
of the Warrant Agent {or ____________}, without charge to the Holder (as
defined in Section 1.6 below). Upon surrender for cancellation of any one or
more temporary Warrant Certificates the Company shall execute and the Warrant
Agent shall authenticate and deliver in exchange therefor definitive Warrant
Certificates representing the
- 2 -
<PAGE> 6
same aggregate number of Warrants. Until so exchanged, the temporary Warrant
Certificates shall in all respects be entitled to the same benefits under this
Agreement as definitive Warrant Certificates.
Section 1.5 Payment of Taxes. The Company will pay all stamp taxes
and other duties, if any, to which, under the laws of the United States of
America or any State or political subdivision thereof, this Agreement or the
original issuance of the Warrant Certificates may be subject.
Section 1.6 Definition of Holder. The term "Holder" as used herein
shall mean {IF OFFERED EQUITY SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE --, prior to the Detachable Date, the registered owner of the
Offered Equity Security to which such Warrant Certificate was initially
attached, and, after such Detachable Date,} {the person in whose name at the
time such Warrant Certificate shall be registered upon the books to be
maintained by the Warrant Agent for that purpose pursuant to Section 4.1}. {IF
OFFERED EQUITY SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE --
Prior to the Detachable Date, the Company will, or will cause the registrar of
the Offered Equity Securities to, make available to the Warrant Agent current
information as to Holders of the Offered Equity Securities.}
ARTICLE II
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS
Section 2.1 Warrant Price.(2) During the period set forth in Section
2.2, each Warrant shall entitle the Holder thereof, subject to the provisions
of this Agreement, to purchase from the Company one share of {Common Stock}
{Preferred Stock} at the exercise price of $__________. Such exercise price of
each Warrant is referred to in this Agreement as the "Exercise Price."
Section 2.2 Duration of Warrants. Any Warrant evidenced by a Warrant
Certificate may be exercised at any time, as specified herein, on or after {the
date thereof} {____________, 19___} and at or before the close of business on
____________, 19___ (the "Expiration Date"). Each Warrant not exercised at or
before the close of business on the Expiration Date shall become void, and all
rights of the Holder of the Warrant Certificate evidencing such Warrant under
this Agreement or otherwise shall cease.
Section 2.3 Exercise of Warrants. (a) During the period specified in
Section 2.2, any whole number of Warrants may be exercised by surrendering the
Warrant Certificate evidencing such Warrants at the place or at the places set
forth in the Warrant Certificate, with the purchase form set forth in the
Warrant Certificate duly executed, accompanied by payment in full, in lawful
money of the United States of America, {in cash or by certified check or
official bank check in New York Clearing House funds} {by bank wire transfer in
immediately available funds}, of the Exercise Price for each Warrant exercised.
The date on which payment in full of the Exercise Price for a Warrant and the
duly executed and completed Warrant Certificate are received by the Warrant
Agent shall be deemed to be the date on which such Warrant is exercised. The
Warrant Agent shall deposit all funds received by it as payment for the
exercise of Warrants to the account of the Company maintained with it for such
purpose and shall advise the Company by telephone at the end of each day on
__________________________________
(2) Complete and modify the provisions of this Section as appropriate to
reflect the exact terms of the Warrants.
- 3 -
<PAGE> 7
which such a payment is received of the amount so deposited to its account.
The Warrant Agent shall promptly confirm such telephonic advice to the Company
in writing.
(b) The Warrant Agent shall from time to time, as promptly as
practicable after the exercise of any Warrants in accordance with the terms and
conditions of this Agreement and the Warrant Certificates, advise the Company
of (i) the number of Warrants so exercised, (ii) the instructions of each
Holder of the Warrant Certificates evidencing such Warrants with respect to
delivery of the certificate or certificates representing shares of {Common
Stock} {Preferred Stock} to which such Holder is entitled upon such exercise,
and instructions of such Holder as to delivery of Warrant Certificates
evidencing the balance, if any, of the Warrants remaining after such exercise,
and (iii) such other information as the Company shall reasonably require.
(c) As soon as practicable after the exercise of any Warrants, the
Company shall issue, to or upon the order of the Holder of the Warrant
Certificate evidencing such Warrants, a certificate or certificates
representing the number of shares of {Common Stock} {Preferred Stock} to which
such Holder is entitled in such name or names as may be directed by such
Holder; and, if fewer than all of the Warrants evidenced by such Warrant
Certificate were exercised, the Company shall execute and an authorized officer
of the Warrant Agent shall manually authenticate and deliver a new Warrant
Certificate evidencing the number of Warrants remaining unexercised.
(d) The Company shall not be required to pay any stamp or other
tax or other governmental charge required to be paid in connection with any
transfer involved in the issuance of the {Common Stock} {Preferred Stock}; and
in the event that any such transfer is involved, the Company shall not be
required to issue or deliver any shares of {Common Stock} {Preferred Stock}
until such tax or other charge shall have been paid or it has been established
to the Company's satisfaction that no such tax or other charge is due.
Section 2.4 Reservation of Shares. For the purpose of enabling
it to satisfy any obligation to issue shares of {Common Stock} {Preferred
Stock} upon exercise of the Warrants, the Company will, at all times through
the close of business on the Expiration Date, reserve and keep available, free
from preemptive rights and out of its aggregate authorized but unissued shares
of {Common Stock} {Preferred Stock}, the number of shares of {Common Stock}
{Preferred Stock}, the number of shares of {Common Stock} {Preferred Stock}
deliverable upon the exercise of all outstanding Warrants.
The Company covenants that all shares of {Common Stock} {Preferred
Stock} issued upon the exercise of the Warrants will, upon issuance in
accordance with the terms of this Agreement, be fully paid and nonassessable
and free from all taxes, liens, charges and security interests created by or
imposed upon the Company with respect to the issuance and holding thereof.
ARTICLE III
OTHER TERMS OF WARRANTS
Section 3.1 {Call of Warrants by the Company.(3) IF WARRANTS
ISSUED HEREUNDER ARE CALLABLE BY THE COMPANY -- The Company shall have the right
to call and repurchase any or all Warrants on or after _______, 19__ (the "Call
Date") and
__________________________________
(3) Complete and modify the provisions of this Section as appropriate to
reflect the exact terms of the Warrants.
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upon the occurrence of {discuss events or circumstances under which Company may
call the Warrants} (the "Call Terms") at a price of $___________ per Warrant
(the "Call Price"). Notice of such Call Price, Call Date and Call Terms shall
be given to registered holders of Warrants in the manner provided in Section
7.5.}
Section 3.2 Adjustment of Exercise Price and Number of Shares
Purchasable or Number of Warrants. The Exercise Price, the number of shares of
{Common Stock} {Preferred Stock} purchasable upon the exercise of each Warrant
and the number of Warrants outstanding are subject to adjustment from time to
time upon the occurrence of the events enumerated in this Section 3.2.
(a) If the Company shall (i) pay a dividend in or make a distribution
of shares of its capital stock, whether shares of {Common Stock} {Preferred
Stock} or shares of its capital stock of any other class, (ii) subdivide its
outstanding shares of {Common Stock} {Preferred Stock} , (iii) combine its
outstanding shares of {Common Stock} {Preferred Stock} into a smaller number of
shares of {Common Stock} {Preferred Stock} or (iv) issue any shares of its
capital stock in a reclassification of the {Common Stock} {Preferred Stock}
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation), the number of
shares of {Common Stock} {Preferred Stock} purchasable upon exercise of each
Warrant immediately prior thereto shall be adjusted so that the holder of each
Warrant shall be identified to receive the kind and number of shares of {Common
Stock} {Preferred Stock} or other securities of the Company which such holder
would have owned or have been entitled to receive after the happening of any of
the events described above, had such Warrant been exercised immediately prior
to the happening of such event or any record date with respect thereto. An
adjustment made pursuant to this paragraph (a) shall become effective
immediately after the effective date of such event, retroactive to immediately
after the record date, if any, for such event.
(b) If the Company shall issue rights, options or warrants to all
holders of its outstanding {Common Stock} {Preferred Stock}, without any charge
to such holders, entitling them to subscribe for or purchase shares of {Common
Stock} {Preferred Stock} at a price per share that is lower than the market
price per share of {Common Stock} {Preferred Stock} (as defined in paragraph
(e) below) at the record date mentioned below, the number of shares of {Common
Stock} {Preferred Stock} thereafter purchasable upon the exercise of each
Warrant shall be determined by multiplying the number of shares of {Common
Stock} {Preferred Stock} theretofore purchasable upon exercise of each Warrant
by a fraction, of which the numerator shall be (i) the number of shares of
{Common Stock} {Preferred Stock} outstanding on the date of issuance of such
rights, options or warrants plus the number of additional shares of {Common
Stock} {Preferred Stock} offered for subscription or purchase, and of which the
denominator shall be (ii) the number of shares of {Common Stock} {Preferred
Stock} outstanding on the date of issuance of such rights, options or warrants
plus the number of shares which the aggregate offering price of the total
number of shares of {Common Stock} {Preferred Stock} so offered would purchase
at the market price per share of {Common Stock} {Preferred Stock} at such
record date. Such adjustment shall be made whenever such rights, options or
warrants are issued, and shall become effective retroactive to immediately
after the record date for the determination of stockholders entitled to receive
such rights, options or warrants.
(c) If the Company shall distribute to all holders of its shares of
{Common Stock} {Preferred Stock} evidences of its indebtedness or assets
(excluding cash dividends or distributions payable out of capital surplus and
dividends or distributions referred to in paragraph (a) above) or rights,
options or warrants or convertible or exchangeable securities containing the
right to subscribe for or purchase shares of {Common Stock} {Preferred Stock}
(excluding those referred to in paragraph (b) above), then in each case the
number of
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shares of {Common Stock} {Preferred Stock} thereafter purchasable upon the
exercise of each Warrant shall be determined by multiplying the number of
shares of {Common Stock} {Preferred Stock} theretofore purchasable upon the
exercise of each Warrant, by a fraction, of which the numerator shall be (i)
the then current market price per share of {Common Stock} {Preferred Stock} (as
defined in paragraph (e) below) on the date of such distribution, and of which
the denominator shall be (ii) the then current market price per share of
{Common Stock} {Preferred Stock} less the then fair value (as determined by the
Board of Directors of the Company, whose determination shall be conclusive) of
the portion of the assets or evidences of indebtedness so distributed or of
such subscription rights, options or warrants or convertible or exchangeable
securities applicable to one share of {Common Stock} {Preferred Stock}. Such
adjustment shall be made whenever any such distribution is made, and shall
become effective on the date of distribution retroactive to immediately after
the record date for the determination of stockholders entitled to receive such
distribution.
(d) In the event of any capital reorganization or any
reclassification of the {Common Stock} {Preferred Stock} (except as provided in
paragraphs (a) through (c) above, any holder of Warrants upon exercise thereof
shall be entitled to receive, in lieu of the {Common Stock} {Preferred Stock}
to which he or she would have become entitled upon exercise immediately prior
to such reorganization or reclassification, the shares (of any class or
classes) or other securities or property of the Company that he or she would
have been entitled to receive at the same aggregate Exercise Price upon such
reorganization or reclassification if his or her Warrants had been exercised
immediately prior thereto.
(e) For the purpose of any computation under paragraphs (b) and (c)
of this Section 3.2, the current or closing market price per share of {Common
Stock} {Preferred Stock} at any date shall be deemed to be the average of the
daily closing prices for _____ consecutive trading days commencing
________________ trading days before the date of such computation. The closing
price for each day shall be {the last sale price} for such day, in either case
as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange (the "NYSE") or if the {Common Stock} {Preferred Stock} is not listed
on the NYSE, then on the principal United States national securities exchange
on which the {Common Stock} {Preferred Stock} is listed or quoted. If the
{Common Stock} {Preferred Stock} is not listed or quoted on any United States
national securities exchange, then the current or closing market price per
share of {Common Stock} {Preferred Stock} shall be determined by the Board of
Directors of the Company in good faith.
(f) Whenever the number of shares of {Common Stock} {Preferred Stock}
purchasable upon the exercise of each Warrant is adjusted as herein provided,
the Exercise Price payable upon the exercise of each Warrant shall be adjusted
by multiplying such Exercise Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of shares purchasable upon
the exercise of each Warrant immediately prior to such adjustment, and of which
the denominator shall be the number of shares to purchasable immediately
thereafter.
(g) The Company may elect, on or after the date of any adjustment
required by paragraphs (a) through (d) of this Section 3.2, to adjust the
number of Warrants in substitution for an adjustment in the number of shares of
{Common Stock} {Preferred Stock} purchasable upon the exercise of a Warrant.
Each of the Warrants outstanding after such adjustment of the number of
Warrants shall be exercisable for the same number of shares of {Common Stock}
{Preferred Stock} as immediately prior to such adjustment. Each Warrant held
of record prior to such adjustment of the number of Warrants shall become that
number of Warrants (calculated to the nearest hundredth) obtained by dividing
the Exercise Price in effect prior to adjustment of the Exercise Price by the
Exercise Price in effect after
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<PAGE> 10
adjustment of the Exercise Price. The Company shall notify the holders of
Warrants, in the same manner as provided in the first paragraph of Section 7.5,
of its election to adjust the number of Warrants, indicating the record date
for the adjustment, and, if known at the time, the amount of the adjustment to
be made. This record date may be the date on which the Exercise Price is
adjusted or any day thereafter. Upon each adjustment of the number of Warrants
pursuant to this paragraph (g) the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Warrants on such record date
Warrant Certificates evidencing, subject to paragraph (h), the additional
Warrants to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Warrant
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Warrant Certificates
evidencing all the Warrants to be issued, executed and registered in the manner
specified in Section 1 (and which may bear, at the option of the Company, the
adjusted Exercise Price) and shall be registered in the names of the holders of
record of Warrant Certificates on the record date specified in the notice.
(h) The Company shall not be required to issue fractions of Warrants
on any distribution of Warrants to holders of Warrant Certificates pursuant to
paragraph (g) or to distribute Warrant Certificates that evidence fractional
Warrants. In lieu of such fractional Warrants, there shall be paid to the
registered holders of the Warrant Certificates with regard to which such
fractional Warrants would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a full Warrant on the trading day
immediately prior to the date on which such fractional Warrant would have been
otherwise issuable (the "Valuation Date"). For purposes of this paragraph (h),
the current market value of a Warrant shall be the aggregate closing market
price on the Valuation Date (determined as set forth in paragraph (e)) of all
shares of {Common Stock} {Preferred Stock} issuable upon exercise of one
Warrant plus the fair value (as determined by the Board of Directors of the
Company, whose determination shall be conclusive) of any other assets or
securities purchasable upon exercise of one Warrant less the Exercise Price of
one Warrant.
(i) Notwithstanding any adjustment pursuant to Section 3.2 in the
number of shares of {Common Stock} {Preferred Stock} purchasable upon the
exercise of a Warrant, the Company shall not be required to issue fractions of
shares of {Common Stock} {Preferred Stock} upon exercise of the Warrants or to
distribute certificates which evidence fractional shares. In lieu of
fractional shares, there shall be paid to the registered holders of Warrant
Certificates at the time such Warrant Certificates are exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of a share of {Common Stock} {Preferred Stock}. For purposes of this
paragraph (i), the current market value of a share of Preferred Stock shall be
the closing market price (determined as set forth in paragraph (e)) of a share
of {Common Stock} {Preferred Stock} for the trading day immediately prior to
the date of such exercise.
ARTICLE IV
REGISTRATION, EXCHANGE, TRANSFER AND
SUBSTITUTION OF WARRANT CERTIFICATES
Section 4.1 Registration, Exchange and Transfer of Warrant
Certificates. The Warrant Agent shall keep, at its corporate trust office {and
at __________________}, books in which, subject to such reasonable regulations
as it may prescribe, it shall register Warrant Certificates and transfers of
outstanding Warrant Certificates.
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<PAGE> 11
{IF OFFERED EQUITY SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE -- Prior to the Detachable Date, a Warrant Certificate may be
exchanged or transferred only together with the Offered Equity Security to
which such Warrant Certificate was initially attached, and only for the purpose
of effecting, or in conjunction with, an exchange or transfer of such Offered
Equity Security. Additionally, on or prior to the Detachable Date, each
transfer or exchange of an Offered Equity Security {on the register of the
Offered Equity Securities} shall operate also to transfer or exchange the
Warrant Certificate or Certificates to which such Offered Equity Security was
initially attached. After the Detachable Date, upon} {IF OFFERED EQUITY
SECURITIES AND WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR IF WARRANTS ALONE -
Upon} surrender at the corporate trust office of the Warrant Agent {or _______
_________________} of Warrant Certificates properly endorsed {or accompanied by
appropriate instruments of transfer} and accompanied by written instructions
for {transfer or} exchange, all in a form satisfactory to the Company and the
Warrant Agent, such Warrant Certificates may be exchanged for other Warrant
Certificates {IF REGISTERED WARRANTS -- or may be transferred in whole or in
part}; provided that Warrant Certificates issued in exchange for {or upon
transfer of} surrendered Warrant Certificates shall evidence the same aggregate
number of Warrants as the Warrant Certificates so surrendered. No service
charge shall be made for any exchange {or transfer} of Warrant Certificates,
but the Company may require payment of a sum sufficient to cover any stamp or
other tax or governmental charge that may be imposed in connection with any
such exchange {or transfer}. Whenever any Warrant Certificates are so
surrendered for exchange {or transfer}, the Company shall execute and an
authorized officer of the Warrant Agent shall manually authenticate and deliver
to the person or persons entitled thereto a Warrant Certificate or Warrant
Certificates as so requested. The Warrant Agent shall not be required to
effect any exchange {or transfer} which would result in the issuance of a
Warrant Certificate evidencing a fraction of a Warrant or a number of full
Warrants and a fraction of a Warrant. All Warrant Certificates issued upon any
exchange {or transfer} of Warrant Certificates issued upon any exchange {or
transfer} of Warrant Certificates shall evidence the same obligations, and be
entitled to the same benefits under this Agreement, as the Warrant Certificates
surrendered for such exchange {or transfer}.
Section 4.2 Mutilated, Destroyed, Lost or Stolen Warrant
Certificates. If any mutilated Warrant Certificate is surrendered to the
Warrant Agent, the Company shall execute and an officer of the Warrant Agent
shall manually authenticate and deliver in exchange therefor a new Warrant
Certificate of like tenor and bearing a number not contemporaneously
outstanding. If there shall be delivered to the Company and the Warrant Agent
(i) evidence to their satisfaction of the destruction, loss or theft of any
Warrant Certificate and of the ownership thereof and (ii) such security or
indemnity as may be required by them to save each of them and any agent of
either of them harmless, then, in the absence of notice to the Company or the
Warrant Agent that such Warrant Certificate has been acquired by a bona fide
purchaser, the Company shall execute and upon its request an officer of the
Warrant Agent shall manually authenticate and deliver, in lieu of any such
destroyed, lost or stolen Warrant Certificate, a new Warrant Certificate of
like tenor and bearing a number not contemporaneously outstanding. Upon the
issuance of any new Warrant Certificate under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Warrant Agent) connected therewith.
Every new Warrant Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Warrant Certificate shall evidence an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Warrant Certificate shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all other Warrant Certificates duly issued
hereunder. The provisions of this Section are exclusive and shall preclude (to
the
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<PAGE> 12
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Warrant Certificates.
Section 4.3 Persons Deemed Owners. {IF OFFERED EQUITY SECURITIES AND
WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE -- Prior to the Detachable Date,
the Company, the Warrant Agent and all other persons may treat the owner of any
Offered Equity Security as the owner of the Warrant Certificates initially
attached thereto for any purpose and as the person entitled to exercise the
rights represented by the Warrants evidenced by such Warrant Certificates, any
notice to the contrary notwithstanding. After the Detachable Date, and prior
to due presentment of a Warrant Certificate for registration of transfer, the
Company, the Warrant Agent and all other persons may treat the Holder as the
owner thereof for any purpose and as the person entitled to exercise the rights
represented by the Warrants evidenced thereby, any notice to the contrary
notwithstanding.
Section 4.4 Cancellation of Warrant Certificates. Any Warrant
Certificate surrendered for exchange {, transfer} or exercise of the Warrants
evidenced thereby shall, if surrendered to the Company, be delivered to the
Warrant Agent, and all Warrant Certificates surrendered or so delivered to the
Warrant Agent shall be promptly cancelled by it and shall not be reissued and,
except as expressly permitted by this Agreement, no Warrant Certificate shall
be issued hereunder in lieu or in exchange thereof. The Company may at any
time deliver to the Warrant Agent for cancellation any Warrant Certificates
previously issued hereunder which the Company may have acquired in any manner
whatsoever, and all Warrant Certificates so delivered shall be promptly
cancelled by the Warrant Agent. All cancelled Warrant Certificates held by the
Warrant Agent shall be destroyed by it unless by written order the Company
requests their return to it.
ARTICLE V
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
Section 5.1 No Rights as Stockholders Conferred by Warrants or
Warrant Certificates. No Warrant Certificate or Warrant evidenced thereby
shall entitle the Holder thereof to any of the rights of a stockholder,
including, without limitation, the right to reserve dividends.
Section 5.2 Holder of Warrant Certificate May Enforce Rights.
Notwithstanding any of the provisions of this Agreement, any Holder of any
Warrant Certificate, without the consent of the Warrant Agent, any stockholder
or the Holder of any other Warrant Certificate, may, on its own behalf and for
its own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company suitable to enforce or otherwise in respect of
its right to exercise the Warrant or Warrants evidenced by his or her Warrant
Certificate in the manner provided in the Warrant Certificates and in this
Agreement.
ARTICLE VI
CONCERNING THE WARRANT AGENT
Section 6.1 Warrant Agent. The Company hereby appoints
__________________ as Warrant Agent of the Company in respect of the Warrants
and the Warrant Certificates upon the terms and subject to the conditions
herein set forth, and _________________ hereby accepts such appointment. The
Warrant Agent shall have the power and authority granted to
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<PAGE> 13
and conferred upon it in the Warrant Certificates and hereby and such further
power and authority to act on behalf of the Company as the Company may
hereafter grant to or confer upon it. All of the terms and provisions with
respect to such power and authority contained in the Warrant Certificates are
subject to and governed by the terms and provisions hereof.
Section 6.2 Conditions of Warrant Agent's Obligations. The Warrant
Agent accepts its obligations herein set forth, upon the terms and conditions
hereof, including the following, to all of which the Company agrees and to all
of which the rights hereunder of the Holders from time to time of the Warrant
Certificates shall be subject:
(a) Compensation and Indemnification. The Company agrees promptly
to pay the Warrant Agent the compensation to be agreed upon with the Company
for all services rendered by the Warrant Agent and to reimburse the Warrant
Agent for reasonable out-of-pocket expenses (including reasonable counsel
fees) incurred by the Warrant Agent in connection with the services rendered
hereunder by the Warrant Agent. The Company also agrees to indemnify the
Warrant Agent for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Warrant
Agent, arising out of or in connection with its acting as such Warrant Agent
hereunder, including the reasonable costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance
at any time of its powers or duties hereunder. The obligations of the Company
under this subsection (a) shall survive the exercise of the Warrant
Certificates and the resignation or removal of the Warrant Agent.
(b) Agent for the Company. In acting under this Warrant Agreement
and in connection with the Warrant Certificates, the Warrant Agent is acting
solely as agent of the Company and does not assume any obligation or
relationship of agency or trust for or with any of the owners or Holders of the
Warrant Certificates.
(c) Counsel. The Warrant Agent may consult with counsel, which
may include counsel for the Company, and the written advice of such counsel
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(d) Documents. The Warrant Agent shall be protected and shall
incur no liability for or in respect of any action taken or omitted by it in
reliance upon any notice, direction, consent, certificate, affidavit, statement
or other paper or document reasonably believed by it to be genuine and to have
been presented or signed by the proper parties.
(e) Certain Transactions. The Warrant Agent, any of its officers,
directors and employees, or any other agent of the Company, in its individual
or any other capacity, may become the owner of, or acquire any interest in, any
Warrant Certificates, with the same rights that it would have if it were not
such Warrant Agent, officer, director, employee or other agent, and, to the
extent permitted by applicable law, it may engage or be interested in any
financial or other transaction with the Company and may act on, or as
depositary, trustee or agent for, any committee or body of holders of
securities or other obligations of the Company as freely as if it were not such
Warrant Agent, officer, director, employee or other agent.
(f) No Liability for Interest. The Warrant Agent shall not be
under any liability for interest on any monies at any time received by it
pursuant to any of the provisions of this Agreement or of the Warrant
Certificates unless otherwise agreed to in writing by the Company and the
Warrant Agent and except for the negligence of the Warrant Agent.
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<PAGE> 14
(g) No Liability for Invalidity. The Warrant Agent shall not
incur any liability with respect to the validity of this Agreement or any of
the Warrant Certificates.
(h) No Responsibility for Representations. The Warrant Agent
shall not be responsible for any of the recitals or representations contained
herein or in the Warrant Certificate (except as to the Warrant Agent's
Certificate or Authentication thereon), all of which are made solely by the
Company.
(i) No Implied Obligations. The Warrant Agent shall be obligated
to perform such duties as are herein and in the Warrant Certificates
specifically set forth and no implied duties or obligations shall be read into
this Agreement or the Warrant Certificates against the Warrant Agent. The
Warrant Agent shall not be under any obligation to take any action hereunder
which may tend to involve it any expense or liability, the payment of which
within a reasonable period of time is not, in its reasonable opinion, assured
to it. The Warrant Agent shall not be accountable or under any duty or
responsibility for the use by the Company of any of the Warrant Certificates
authenticated by the Warrant Agent and delivered by it to the Company pursuant
to this Agreement or for the application by the Company of the proceeds of the
Warrant Certificates or any exercise of the Warrants evidenced thereby. The
Warrant Agent shall have no duty or responsibility in case of any default by
the Company in the performance of its covenants or agreements contained herein
or in the Warrant Certificates or in the case of the receipt of any written
demand from a Holder of a Warrant Certificate with respect to such default,
including without limiting the generality of the foregoing, any duty or
responsibility to initiate or attempt to initiate any proceeding at law or
otherwise or, except as provided in Section 7.4 hereof, to make any demand upon
the Company.
Section 6.3 Resignation, Removal and Appointment of Successor. (a)
The Company agrees, for the benefit of the Holders from time to time of the
Warrant Certificates, that there shall at all times be a Warrant Agent
hereunder until all of the Warrant Certificates are no longer exercisable.
(b) The Warrant Agent may at any time resign as such agent by
giving written notice to the Company of such intention on its part, specifying
the date on which it desires its resignation to become effective; provided
that, without the consent of the Company, such date shall not be less than
three months after the date on which such notice is given. The Warrant Agent
hereunder may be removed at any time by the filing with it of an instrument in
writing signed by or on behalf of the Company and specifying such removal and
the date on which the Company expects such removal to become effective. Such
resignation or removal shall take effect upon the appointment by the Company of
a successor Warrant Agent (which shall be a bank or trust company organized and
doing business under the laws of the United States of America, any State
thereof or the District of Columbia and authorized under such laws to exercise
corporate trust powers) by an instrument in writing filed with such successor
Warrant Agent and the acceptance of such appointment by such successor Warrant
Agent pursuant to Section 6.3(d).
(c) In case at any time the Warrant Agent shall resign, or be
removed, or shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or shall file a voluntary petition in bankruptcy or make an
assignment for the benefit of its creditors or consent to the appointment of a
receiver or custodian of all or any substantial part of its property, or shall
admit in writing its inability to pay or meet its debts as they mature, or if a
receiver or custodian of it or of all or any substantial part of its property
shall be appointed, or if an order of any court shall be entered approving any
petition filed by or against it under the provisions of any applicable
bankruptcy or similar law, or if any public officer shall have taken charge or
control of the Warrant Agent or of its property or affairs, a successor
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<PAGE> 15
Warrant Agent, qualified as aforesaid, shall be appointed by the Company by an
instrument in writing, filed with the successor Warrant Agent. Upon the
appointment as aforesaid of a successor Warrant Agent and acceptance by the
latter of such appointment, the Warrant Agent so superseded shall cease to be
Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company an instrument
accepting such appointment hereunder, and thereupon such successor Warrant
Agent, without any further act, deed or conveyance, shall become vested with
all the authority, rights, powers, trusts, immunities, duties and obligations
of such predecessor, upon payment of its charges and disbursements then unpaid,
shall thereupon become obligated to transfer, deliver and pay over, and such
successor Warrant Agent shall be entitled to receive, all monies, securities
and other property on deposit with or held by such predecessor, as Warrant
Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder may be
merged or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the
Warrant Agent, provided that it shall be qualified as aforesaid, shall be the
successor Warrant Agent under this Agreement without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Consolidations and Mergers of the Company and Sales,
Leases and Conveyances Permitted Subject to Certain Conditions. The Company
may consolidate with, or sell or convey all or substantially all of its assets
to, or merge with or into any other corporation, provided that in any such
case, either the Company shall be the continuing corporation, or the
corporation (if other than the Company) formed by such consideration or into
which the Company is merged or the corporation which acquired by purchase or
conveyance all or substantially all of the assets of the Company shall
expressly assume the obligations of the Company hereunder.
Section 7.2 Rights and Duties of Successor Corporation. In case of
any such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it
had been named herein, and the predecessor corporation, except in the event of
a lease, shall be relieved of any further obligation under this Agreement and
the Warrants. Such successor corporation thereupon may cause to be signed, and
may issue either in its own name or in the name of the Company, any or all of
the shares of {Common Stock} {Preferred Stock} issuable pursuant to the terms
hereof.
Section 7.3 Amendment. This Agreement may be amended by the parties
hereto, without the consent of the Holder of any Warrant Certificate, for the
purpose of curing any ambiguity, or of curing, correcting or supplementing any
defective provision contained herein, or making such provisions in regard to
matters or questions arising under this Agreement as the Company may deem
necessary or desirable; provided that such action shall not adversely affect
the interests of the Holders of the Warrant Certificates in any material
respect. Any amendment or supplement to this Agreement or the Warrants that
has a material adverse effect on the interests of Holders of any series of
Warrants shall require the written consent of Holders of a majority of the then
outstanding Warrants of such series.
- 12 -
<PAGE> 16
The consent of each Holder of a Warrant affected shall be required for any
amendment pursuant to which the Warrant Price would be increased or the number
of shares of {Common Stock} {Preferred Stock} purchasable upon exercise of
Warrants would be decreased. The Warrant Agent may, but shall not be obligated
to, enter into any amendment to this Agreement which affects the Warrant
Agent's own rights, duties or immunities under this Agreement or otherwise.
Section 7.4 Notice and Demands to the Company and Warrant Agent. If
the Warrant Agent shall receive any notice or demand addressed to the Company
by the Holder of a Warrant Certificate pursuant to the provisions of the
Warrant Certificates, the Warrant Agent shall promptly forward such notice or
demand to the Company.
Section 7.5 Notices to Warrantholders. Upon any adjustment of the
number of shares purchasable upon exercise of each Warrant, the Exercise Price
or the number of Warrants outstanding pursuant to Section 3.2, the Company
within ___________ calendar days thereafter shall (i) cause to be filed with
the Warrant Agent a certificate of a firm of independent public accountants of
recognized standing selected by the Company (who may be the regular auditors of
the Company) setting forth the Exercise Price and either the number of shares
of {Common Stock} {Preferred Stock} and other securities or assets purchasable
upon exercise of each Warrant or the additional number of Warrants to be issued
for each previously outstanding Warrant, as the case may be, after such
adjustment and setting forth in reasonable detail the method of calculation and
the facts upon which such adjustment are made, which certificate shall be
conclusive evidence of the correctness of the matters set forth therein, and
(ii) cause to be given to each of the registered holders of the Warrant
Certificates at such holder's address appearing on the Warrant Register written
notice of such adjustments by first-class mail, postage prepaid. Where
appropriate, such notice may be given in advance and included as part of the
notice required to be mailed under the provisions of this Section 7.5.
Pursuant to Sections 3.1 {add other sections as applicable}, the
Company shall cause written notice of such Call Price, Call Date and Call Terms
{reference other items as applicable}, as the case may be, to be given as soon
as practicable to the Warrant Agent and to each of the registered holders of
the Warrant Certificates by first class mail, postage prepaid, at such holder's
address appearing on the Warrant Register. In addition to the written notice
referred to in the preceding sentence, the Company shall make a public
announcement in a daily morning newspaper of general circulation in
________________ of such Call Price, Call Date, and Call Terms {reference other
items as applicable}, as the case may be, at least once a week for two
successive weeks prior to the implementation of such terms.
If:
(a) the Company shall declare any dividend payable in any securities
upon its shares of {Common Stock} {Preferred Stock} or make any distribution
(other than a cash dividend) to the holders of its shares of {Common Stock}
{Preferred Stock}; or
(b) the Company shall offer to the holders of its shares of {Common
Stock} {Preferred Stock} any additional shares of {Common Stock} {Preferred
Stock} or securities convertible into shares of {Common Stock} {Preferred
Stock} or any right to subscribe thereto; or
(c) there shall be a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation, merger, or sale of all
substantially all of its property, assets, and business as an entirety);
- 13 -
<PAGE> 17
then the Company shall (i) cause written notice of such event to be filed with
the Warrant Agent and shall cause written notice of such event to be given to
each of the registered holders of the Warrant Certificates at such holder's
address appearing on the Warrant Register, by first-class mail, postage
prepaid, and (ii) make a public announcement in a daily newspaper of general
circulation in ______________________ of such event, such giving of notice and
publication to be completed at least _________ calendar days prior to the date
fixed as a record date or the date of closing the transfer books for the
determination of the stockholders entitled to such dividend, distribution, or
subscription rights, or for the determination of stockholders entitled to vote
on such proposed dissolution, liquidation or winding up. Such notice shall
specify such record date or the date of closing the transfer books, as the case
may be. The failure to give the notice required by this Section 7.5 or any
defect therein shall not affect the legality or validity of any distribution,
right, warrant, dissolution, liquidation or winding up or the vote upon or any
other action taken in connection therewith.
Section 7.6 Addresses. Any communications from the Company to the
Warrant Agent with respect to this Agreement shall be addressed to __________,
Attention: _______________, and any communications from the Warrant Agent to
the Company with respect to this Agreement shall be addressed to Ferro
Corporation, 1000 Lakeside Avenue, Cleveland, Ohio 44114, Attention: Treasurer
(or such other address as shall be specified in writing by the Warrant Agent or
by the Company).
Section 7.7 Governing Law. This Agreement and each Warrant
Certificate issued hereunder shall be governed by and construed in accordance
with the laws of the State of Ohio.
Section 7.8 Delivery of Prospectus. The Company will furnish to the
Warrant Agent sufficient copies of a prospectus, appropriately supplemented,
relating to the {Common Stock} {Preferred Stock} (the "Prospectus"), and the
Warrant Agent agrees that, upon the exercise of any Warrant Certificate, the
Warrant Agent will deliver to the person designated to receive a certificate
representing shares of {Common Stock} {Preferred Stock}, prior to or
concurrently with the delivery of such securities, a Prospectus.
Section 7.9 Obtaining of Governmental Approvals. The Company will
from time to time take all action which may be necessary to obtain and keep
effective any and all permits, consents and approvals of governmental agencies
and authorities and securities acts filings under United States Federal and
State laws (including, without limitation, to the extent required, the
maintenance of the effectiveness of a registration statement in respect of the
{Common Stock} {Preferred Stock} under the Securities Act of 1933, as amended,
which may be or become required in connection with the exercise of the Warrant
Certificates and the original issuance and delivery of the {Common Stock}
{Preferred Stock}.
Section 7.10 Persons Having Rights Under Warrant Agreement. Nothing in
this agreement expressed or implied and nothing that may be inferred from any of
the provisions hereof is intended, or shall be construed, to confer upon, or
give to, any person or corporation other than the Company, the Warrant Agent and
the Holders of the Warrant Certificates any right, remedy or claim under or by
reason of this Agreement or of any covenant, condition, stipulation, promise or
agreement hereof; and all covenants, conditions, stipulations, promises and
agreements contained in this Agreement shall be for the sole and exclusive
benefit of the Company and the Warrant Agent and their successors and of the
Holders of the Warrant Certificates.
Section 7.11 Headings. The Article and Section headings herein and the
Table of Contents are for convenience of reference only and shall not affect the
construction hereof.
- 14 -
<PAGE> 18
Section 7.12 Counterparts. This Agreement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original; but such counterparts shall together constitute but one and the same
instrument.
Section 7.13 Inspection of Agreement. A copy of this Agreement shall
be available at all reasonable times at the principal corporate trust office of
the Warrant Agent {and at ______________} for inspection by the Holder of any
Warrant Certificate. The Warrant Agent may require such Holder to submit its
Warrant Certificate for inspection by it.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, and their respective corporate seal to be hereunto affixed
and attested, all as of the day and year first above written.
FERRO CORPORATION
By
---------------------------------
{SEAL}
Attest:
- ---------------------------------------
{Assistant Secretary}
{NAME OF WARRANT AGENT}
By
---------------------------------
{SEAL}
Attest:
- ---------------------------------------
{Assistant Secretary}
- 15 -
<PAGE> 19
EXHIBIT A
{FORM OF WARRANT CERTIFICATE}
{Face}
FORM OF LEGEND IF OFFERED {Prior to _____________, this
EQUITY SECURITIES WITH Warrant Certificate may be
WARRANTS WHICH ARE NOT transferred or exchanged
IMMEDIATELY DETACHABLE: if and only if the {Title
of Offered Equity Security}
to which it was initially
attached is so transferred
or exchanged.}
FORM OF LEGEND IF WARRANTS {Prior to ______________,
ARE NOT IMMEDIATELY Warrants evidenced by this
EXERCISABLE: Warrant Certificate cannot
be exercised.}
EXERCISABLE ONLY IF AUTHENTICATED BY THE WARRANT
AGENT AS PROVIDED HEREIN
VOID AFTER THE CLOSE OF BUSINESS ON ___________, 19__
FERRO CORPORATION
Warrant Certificate representing
Warrants to purchase
{Title of Equity Security}
as described herein
No. ______________ Warrants
This certifies that ______________________________ or registered
assigns is the registered owner of the above indicated number of Warrants, each
Warrant entitling such registered owner to purchase, at any time {after the
close of business on ________________, 19_, and} on or before the close of
business on _____________, 19__, one share of the {Common Stock} {Preferred
Stock} (the "Equity Securities") of Ferro Corporation (the "Company"), on the
following basis.* During such period, each Warrant shall entitle the Holder
thereof, subject to the provisions of the Warrant Agreement (as defined below),
to purchase from the Company one share of {Title of Equity Securities} at the
exercise price of $____ (the "Exercise Price"). The Holder of this Warrant
Certificate may exercise the Warrants evidenced hereby, in whole or in part, by
surrendering this Warrant Certificate, with the purchase form set forth hereon
duly completed, accompanied by payment in full, in lawful money of the United
States of America, {in cash or by certified check or official bank check in New
York Clearing House funds or by bank wire transfer in immediately available
funds}, the Exercise Price for each Warrant exercised, to the Warrant Agent (as
hereinafter defined) at the corporate trust office of {name of Warrant Agent},
or its successor, as warrant agent (the "Warrant Agent") {or at
______________,} at the addresses specified on ________________________________.
* Complete and modify the following provisions as appropriate to reflect the
terms of the Warrants.
<PAGE> 20
the reverse hereof and upon compliance with and subject to the conditions set
forth herein and in the Warrant Agreement.
The term "Holder" as used herein shall mean {IF OFFERED EQUITY
SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE - -, prior to
_____________, 19__, (the "Detachable Date"), the registered owner of the
Company's {title of Offered Equity Security} to which such Warrant Certificate
was initially attached, and after such Detachable Date,} the person in whose
name at the time such Warrant Certificate shall be registered upon the books to
be maintained by the Warrant Agent for that purpose pursuant to Section 4.1 of
the Warrant Agreement.
Any whole number of Warrants evidenced by this Warrant Certificate
may be exercised to purchase shares of {title of Equity Security}. Upon any
exercise of fewer than all of the Warrants evidenced by this Warrant
Certificate, there shall be issued to the registered owner hereof a new Warrant
Certificate evidencing the number of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance with
the Warrant Agreement dated as of _____________, 19__ (the "Warrant Agreement")
between the Company and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
provisions the Holder of this Warrant Certificate consents by acceptance
hereof. Copies of the Warrant Agreement are on file at the above-mentioned
office at the Warrant Agent {and at _________________}.
{IF OFFERED EQUITY SECURITIES AND WARRANTS WHICH ARE NOT
IMMEDIATELY DETACHABLE - - Prior to _____________, 19__ (the "Detachable
Date"), this Warrant Certificate may be exchanged or transferred only together
with the {title of Offered Equity Security} (the "Offered Equity Security"} to
which this Warrant Certificate was initially attached, and only for the purpose
of effecting, or in conjunction with, an exchange or transfer of such Offered
Equity Security. Additionally, on or prior to the Detachable Date each
transfer of such Offered Equity Security on the register of the Offered Equity
Securities shall operate also to transfer this Warrant Certificate. After the
Detachable Date, this} {IF OFFERED EQUITY SECURITIES AND WARRANTS WHICH ARE
IMMEDIATELY DETACHABLE OR WARRANTS ALONE -- This} Warrant Certificate, and all
rights hereunder, may be transferred when surrendered at the corporate trust
office of the Warrant Agent {or ____________} by the registered owner or his
assigns, in person or by an attorney duly authorized in writing, in the manner
and subject to the limitations provided in the Warrant Agreement.
{IF OFFERED EQUITY SECURITIES AND WARRANTS WHICH ARE NOT
IMMEDIATELY DETACHABLE -- Except as provided in the immediately preceding
paragraph, after} {IF OFFERED EQUITY SECURITIES AND WARRANTS WHICH ARE
IMMEDIATELY DETACHABLE OR WARRANTS ALONE -- After} authentication by the
Warrant Agent and prior to the expiration of this Warrant Certificate, this
Warrant Certificate may be exchanged at the corporate trust office of the
Warrant Agent {or at ____________} for Warrant Certificates representing the
same aggregate number of Warrants.
This Warrant Certificate shall not entitle the registered owner
hereof to any of the rights of a stockholder, including, without limitation,
the right to receive dividends.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
A - 2
<PAGE> 21
This Warrant Certificate shall not be valid or obligatory for any
purpose until authenticated by the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed under its corporate seal.
Dated: ______________
FERRO CORPORATION
By:
--------------------------------
Attest:
- -----------------------------
Certificate of Authentication
This is one of the Warrant Certificates referred to in the
within-mentioned Warrant Agreement.
- ------------------------------
As Warrant Agent
By:
---------------------------
Authorized Signature
A - 3
<PAGE> 22
{FORM OF WARRANT CERTIFICATE}
{REVERSE}
(Instructions for Exercise of Warrants)
To exercise any Warrants evidenced hereby, the Holder of this
Warrant Certificate must pay {in cash or by certified check or official bank
check in New York Clearing House funds or by bank wire transfer in immediately
available funds}, the Exercise Price in full for each of the Warrants
exercised, to _____________________, Corporate Trust Department,
______________, Attn: ___________________ {or ______________________}, which
payment should specify the name of the Holder of this Warrant Certificate and
the number of Warrants exercised by such Holder. In addition, the Holder of
this Warrant Certificate should complete the information required below and
present in person or mail by registered mail this Warrant Certificate to the
Warrant Agent at the addresses set forth below.
{FORM OF EXERCISE}
{To be executed upon exercise of Warrants.}
The undersigned hereby irrevocably elects to exercise Warrants,
represented by this Warrant Certificate, to purchase _______ shares of the
{Common Stock} {Preferred Stock} (the "Equity Securities") of Ferro Corporation
and represents that he or she has tendered payment for such shares of {title of
Equity Security} {in cash or by certified check or official bank check in New
York Clearing House funds or by bank wire transfer in immediately available
funds} to the order of Ferro Corporation, c/o Treasurer, in the amount of
$__________ in accordance with the terms hereof. The undersigned requests that
said shares of {title of Equity Securities} be registered in such names and
delivered, all as specified in accordance with the instructions set forth
below.
If said number of shares of {title of Equity Security} is less
than all of the shares of {title of Equity Security} purchasable hereunder, the
undersigned requests that a new Warrant Certificate representing the remaining
balance of the Warrants evidenced hereby be issued and delivered to the
undersigned unless otherwise specified in the instructions below.
Dated: _________________________ Name
-------------------------------
- --------------------------------
(Insert Social Security or Other Address
Identifying Number of Holder) ----------------------------
----------------------------
Signature
--------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of the Warrant
Certificate and must bear a
signature guarantee by a bank, trust
company or member broker of the New
York, Chicago or Pacific Stock
Exchange.)
A - 4
<PAGE> 23
This Warrant may be exercised at the following addresses:
By hand at _____________________________________
_____________________________________
_____________________________________
_____________________________________
By mail at _____________________________________
_____________________________________
_____________________________________
_____________________________________
(Instructions as to form and delivery of {title of Equity Security} and/or
Warrant Certificates):
{FORM OF ASSIGNMENT}
(TO BE EXECUTED TO TRANSFER THE WARRANT CERTIFICATE)
FOR VALUE RECEIVED _______________________ hereby sells, assigns
and transfers unto
-------------------------------------
(Please print name and
address including zip code)
Please insert social security or
other identifying number
- -----------------------------------
________________________________________________________________________________
_____________________________________________________ the right represented by
the within Warrant Certificate and does hereby irrevocably constitute and
appoint _______________________, Attorney, to transfer said Warrant Certificate
on the books of the Warrant Agent with full power of substitution.
Dated:_______________________
------------------------------------
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Warrant Certificate and must bear a
signature guarantee by a bank, trust
company or member broker of the New
York, Chicago or Pacific Stock
Exchange)
Signature Guaranteed:
- ----------------------------------
A - 5
<PAGE> 1
EXHIBIT (4f)
FORM OF
PURCHASE CONTRACT AGREEMENT
FERRO CORPORATION
AND
____________________________
DATED AS OF ________________
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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PAGE
<S> <C>
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 102. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 103. Form of Documents Delivered to Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 104. Acts of Holders; Record Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 105. Notices, etc, to Agent and the Company . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 107. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 108. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 109. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 110. Benefits of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 111. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 112. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 113. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 114. Inspection of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE TWO
Security Certificate Forms
Section 201. Forms of Security Certificates Generally . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 202. Form of Agent's Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE THREE
The Securities
Section 301. Title and Terms; Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 302. Rights and Obligations Evidenced by the Security Certificates . . . . . . . . . . . . . . 10
Section 303. Execution, Authentication, Delivery and Dating . . . . . . . . . . . . . . . . . . . . . . 11
Section 304. Temporary Security Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 305. Registration; Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . . 12
Section 306. Mutilated, Destroyed, Lost and Stolen Security Certificates . . . . . . . . . . . . . . . 13
Section 307. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 308. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 309. Securities Not Separable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE FOUR
The Treasury Notes
Section 401. Payment Interest; Rights to Interest Preserved . . . . . . . . . . . . . . . . . . . . . . 15
Section 402. Transfer of Treasury Notes Upon Occurrence of Termination Event . . . . . . . . . . . . . 16
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
ARTICLE FIVE
The Purchase Contracts
Section 501. Purchase of Shares of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 502. Contract Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 503. Deferral of Payment Dates For Contract Fee . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 504. Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 505. Issuance of Shares of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 506. Adjustment of Settlement Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 507. Notice of Adjustments and Certain Other Events . . . . . . . . . . . . . . . . . . . . . . 24
Section 508. Termination Event; Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 509. Early Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 510. No Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 511. Charges and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE SIX
Remedies
Section 601. Unconditional Right of Holders to Receive Contract Fee . . . . . . . . . . . . . . . . . . 27
Section 602. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 603. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 604. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 605. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 606. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE SEVEN
The Agent
Section 701. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 702. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 703. Certain Rights of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 704. Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . . . . . . . . 30
Section 705. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 706. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 707. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 708. Corporate Agent Required; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 709. Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . . . . 31
Section 710. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 711. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . . 32
Section 712. Preservation of Information; Communications to Holders . . . . . . . . . . . . . . . . . . 32
Section 713. No Obligations of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 714. Tax Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE EIGHT
Supplemental Agreements
Section 801. Supplemental Agreements Without Consent of Holders . . . . . . . . . . . . . . . . . . . . 34
Section 802. Supplemental Agreements with Consent of Holders . . . . . . . . . . . . . . . . . . . . . 34
Section 803. Execution of Supplemental Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 804. Effect of Supplemental Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 805. Reference to Supplemental Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
</TABLE>
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<PAGE> 4
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<CAPTION>
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ARTICLE NINE
Consolidation, Merger, Sale or Conveyance
Section 901. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 902. Rights and Duties of Successor Corporation . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 903. Opinion of Counsel to Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE TEN
Covenants
Section 1001. Performance Under Purchase Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 1003. Company to Reserve Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 1004. Covenants as to Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 1005. Statements of Officers of the Company as to Default . . . . . . . . . . . . . . . . . . . 37
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
EXHIBIT A Form of Security Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
</TABLE>
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<PAGE> 5
PURCHASE CONTRACT AGREEMENT, dated as of ________________, 199___,
between FERRO CORPORATION, an Ohio corporation (the "Company"), and
_______________________________, acting as purchase contract agent for the
Holders of Securities from time to time (the "Agent").
RECITALS
A. The Company has duly authorized the execution and delivery of
this Agreement and the Security Certificates evidencing the
Securities.
B. All things necessary to make the Company's obligations under
the Securities, when the Security Certificates are executed by
the Company and authenticated, executed on behalf of the
Holders and delivered by the Agent, as in this Agreement
provided, the valid obligations of the Company, and to
constitute these presents a valid agreement of the Company, in
accordance with its terms, have been done.
WITNESSETH: For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the
singular; and
(2) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not
to any particular Article, Section or other subdivision.
"Act" when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent" means the Person named as the "Agent" in the first paragraph
of this instrument until a successor Agent shall have become such pursuant to
the applicable provisions of this Agreement, and thereafter "Agent" shall mean
the Person who is then the Agent hereunder.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
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<PAGE> 6
"Applicable Market Value" has the meaning specified in Section 501.
"Board of Directors" means the board of directors of the Company or a
duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such certification and
delivered to the Agent.
"Business Day" means any day that is not a Saturday, Sunday or a day
on which the NYSE or banking institutions or trust companies in the City of New
York are authorized or obligated by law or executive order to be closed.
"Closing Price" has the meaning specified in Section 501.
"Collateral Agent" means ________________, as Collateral Agent under
the Pledge Agreement until a successor Collateral Agent shall have become such
pursuant to the applicable provisions of the Pledge Agreement, and thereafter
"Collateral Agent" shall mean the Person who is then the Collateral Agent
thereunder.
"Common Stock" means the Common Stock, par value $1.00 per share, of
the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"Contract Fee" means the fee payable by the Company in respect of each
Purchase Contract, equal to ___% per annum of the Stated Amount, accruing from
________________, 199___, computed on the basis of the actual number of days
elapsed in a year of 365 or 366 days, as the case may be, plus any additional
fees accrued pursuant to Section 503.
"Corporate Trust Office" means the principal office of the Agent in
____________________________________, at which at any particular time its
corporate trust business shall be administered, which office at the date hereof
is located at ________________.
"Current Market Price" has the meaning specified in Section 506(a)(8).
"Depositary" means a clearing agency registered under the Exchange Act
that is designated to act as Depositary for the Securities as contemplated by
Section 305.
"Early Settlement" has the meaning specified in Section 509(a).
"Early Settlement Amount" has the meaning specified in Section 509(a).
"Early Settlement Date" has the meaning specified in Section 509(a).
"Early Settlement Rate" has the meaning specified in Section 509(b).
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time.
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"Excess Treasury Notes" has the meaning specified in Section 402.
"Expiration Date" has the meaning specified in Section 104.
"Expiration Time" has the meaning specified in Section 506(a)(6).
"Final Settlement Date" means ________________, 199___.
"Final Settlement Fund" has the meaning specified in Section 505.
"Global Security Certificate" means a Security Certificate that
evidences all or part of the Securities and is registered in the name of a
Depositary or a nominee thereof.
"Holder," when used with respect to a Security Certificate (or a
Security), means a Person in whose name the Security evidenced by such Security
Certificate (or the Security Certificate evidencing such Security) is
registered in the Security Register.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by its Chairman of the Board, any Vice
Chairman, its President or a Vice President and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the Agent.
"NYSE" has the meaning specified in Section 501.
"Officer's Certificate" means a certificate signed by the Chairman of
the Board, any Vice Chairman, the President or any Vice President and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company and delivered to the Agent.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company.
"Outstanding Securities" means, as of the date of determination, all
Securities evidenced by then Outstanding Security Certificates, except:
(i) If a Termination Event has occurred, Securities for which the
underlying Treasury Notes have been theretofore deposited with
the Agent in trust for the Holders of such Securities; and
(ii) On and after the applicable Early Settlement Date, Securities
as to which the Holder has elected to effect Early Termination
of the related Purchase Contracts;
provided, however, that in determining whether the Holders of the requisite
number of Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Securities owned by the Company or any
Affiliate of the Company shall be disregarded and deemed not to be outstanding,
except that, in determining whether the Agent shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Securities which the Agent knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as outstanding if the pledgee establishes to the satisfaction of the
Agent the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any Affiliate of the Company.
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<PAGE> 8
"Outstanding Security Certificates" means, as of the date of
determination, all Security Certificates theretofore authenticated, executed
and delivered under this Agreement, except:
(i) Security Certificates theretofore cancelled by the Agent or
delivered to the Agent for cancellation; and
(ii) Security Certificates in exchange for or in lieu of which
other Security Certificates have been authenticated, executed
on behalf of the Holder and delivered pursuant to this
Agreement, other than any such Security Certificate in respect
of which there shall have been presented to the Agent proof
satisfactory to it that such Security Certificate is held by a
bona fide purchaser in whose hands the Securities evidenced by
such Security Certificate are valid obligations of the
Company.
"Payment Date" means each ______________________ and
______________________, commencing ________________, 19___.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Pledge" means the pledge under the Pledge Agreement of the Treasury
Notes constituting a part of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, among the Company, the Collateral Agent and the Agent, on its own
behalf and as attorney-in-fact for the Holders from time to time of the
Securities.
"Predecessor Security Certificate" of any particular Security
Certificate means every previous Security Certificate evidencing all or a
portion of the rights and obligations of the Holder under the Securities
evidenced thereby; and, for the purposes of this definition, any Security
Certificate authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security Certificate shall be
deemed to evidence the same rights and obligations of the Holder as the
mutilated, destroyed, lost or stolen Security Certificate.
"Purchase Contract," when used with respect to any Security, means the
contract obligating the Company to sell and the Holder of such Security to
purchase Common Stock on the terms and subject to the conditions set forth in
Article Five hereof.
"Purchased Shares" has the meaning specified in Section 506(a)(6).
"Record Date" for the interest and Contract Fees payable on any
Payment Date means the ________________ or ________________________ (whether or
not a Business Day), as the case may be, next preceding such Payment Date.
"Reorganization Event" has the meaning specified in Section 506(b).
"Responsible Officer," when used with respect to the Agent, means any
officer of the Agent assigned by the Agent to administer its corporate trust
matters.
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<PAGE> 9
"Security" means the collective rights and obligations of a Holder of
a Security Certificate in respect of Treasury Notes with a principal amount
equal to the Stated Amount, subject to the Pledge thereof, and a Purchase
Contract.
"Security Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Securities specified on
such certificate.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Settlement Rate" has the meaning specified in Section 501.
"Stated Amount" means $___________.
"Termination Date" means the date, if any, on which a Termination
Event occurs.
"Termination Event" means the occurrence of any of the following
events: (i) at any time on or prior to the Final Settlement Date, a decree or
order by a court having jurisdiction in the premises shall have been entered
adjudging the Company a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization of the Company under the United States
Bankruptcy Code or any other similar applicable Federal or State law, and,
unless such decree or order shall have been entered within 60 days prior to the
Final Settlement Date, such decree or order shall have continued undischarged
and unstayed for a period of 60 days; or (ii) a decree or order of a court
having jurisdiction in the premises for the appointment of a receiver or
liquidator or trustee or assignee in bankruptcy or insolvency of the Company or
of its property, or for the winding up or liquidation of its affairs, shall
have been entered, and, unless such decree or order shall have been entered
within 60 days prior to the Final Settlement Date, such decree or order shall
have continued undischarged and unstayed for a period of 60 days, or (iii) at
any time on or prior to the Final Settlement Date the Company shall institute
proceedings to be adjudicated a bankrupt, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer or consent
seeking reorganization under the United States Bankruptcy Code or any other
similar applicable Federal or State law, or shall consent to the filing of any
such petition, or shall consent to the appointment of a receiver or liquidator
or trustee or assignee in bankruptcy or insolvency of it or of its property, or
shall make an assignment for the benefit of creditors, or shall admit in
writing its inability to pay its debts generally as they become due.
"Threshold Appreciation Price" has the meaning specified in Section
501.
"TIA" means the Trust Indenture Act of 1939, as amended, or any
successor statute.
"Trading Day" has the meaning specified in Section 501.
"Treasury Notes" means ____% United States Treasury Notes due
______________, 19____.
"Underwriting Agreement" means the Underwriting Agreement dated
________________, 199___ between the Company and ________________________, as
representative of the several Underwriters named therein.
"Vice President" means any vice president, whether or not designated
by a number or a word or words added before or after the title "vice
president."
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SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action under any
provision of this Agreement, the Company shall furnish to the Agent an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Agreement relating to the proposed action have been complied with
and an Opinion of Counsel stating that, in the opinion of such counsel, all
such conditions precedent, if any, have been complied with, except that in the
case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Agreement relating
to such particular application or request, no additional certificate or opinion
need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO AGENT.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
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<PAGE> 11
SECTION 104. ACTS OF HOLDERS; RECORD DATES.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to
be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor
signed by such Holders in person or by agent duly appointed in
writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or
instruments are delivered to the Agent and, where it is hereby
expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this
Agreement and (subject to Section 701) conclusive in favor of
the Agent and the Company, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a
witness of such execution or by a certificate of a notary
public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting
in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient
proof of his authority. The fact and date of the execution of
any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner
which the Agent deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security
shall bind every future Holder of the same Security and the
Holder of every Security Certificate evidencing such Security
issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything
done, omitted or suffered to be done by the Agent or the
Company in reliance thereon, whether or not notation of such
action is made upon such Security Certificate.
(e) The Company may set any day as a record date for the purpose
of determining the Holders of Outstanding Securities entitled
to give, make or take any request, demand, authorization,
direction, notice, consent, waiver or other action provided or
permitted by this Agreement to be given, made or taken by
Holders of Securities. If any record date is set pursuant to
this paragraph, the Holders of Outstanding Securities on such
record date, and no other Holders, shall be entitled to take
the relevant action, whether or not such Holders remain
Holders after such record date; provided that no such action
shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite number
of Outstanding Securities on such record date. Nothing in this
paragraph shall be construed to prevent the Company from
setting a new record date for any action for which a record
date has previously been set pursuant to this paragraph
(whereupon the record date previously set shall automatically
and with no action by any Person be cancelled and of no
effect), and nothing in this paragraph shall be construed to
render ineffective any action taken by Holders of the
requisite number of Outstanding Securities on the date such
action is taken. Promptly after any
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<PAGE> 12
record date is set pursuant to this paragraph, the Company, at
its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date
to be given to the Agent in writing and to each Holder of
Securities in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to time
may change the Expiration Date to any earlier or later day; provided that no
such change shall be effective unless notice of the proposed new Expiration
Date is given to the Agent in writing, and to each Holder of Securities in the
manner set forth in Section 106, on or prior to the existing Expiration Date.
If an Expiration Date is not designated with respect to any record date set
pursuant to this Section, the Company shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
SECTION 105. NOTICES, ETC., TO AGENT AND THE COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Agreement to
be made upon, given or furnished to, or filed with,
(1) the Agent by any Holder or by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first class postage prepaid,
to the Agent at ________________________, Attention: Stock
Transfer Department, or at any other address previously
furnished in writing by the Agent to the Holders and the
Company, or
(2) the Company by the Agent or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first class postage prepaid,
to the Company at 1000 Lakeside Avenue, Cleveland, Ohio 44114,
Attention: Treasurer, or at any other address previously
furnished in writing to the Agent by the Company.
SECTION 106. NOTICE TO HOLDERS; WAIVER.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for
the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Agreement provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Agent, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be
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<PAGE> 13
made with the approval of the Agent shall constitute a sufficient notification
for every purpose hereunder.
SECTION 107. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 108. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Agreement by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 109. SEPARABILITY CLAUSE.
In case any provision in this Agreement or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
SECTION 110. BENEFITS OF AGREEMENT.
Nothing in this Agreement or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefits or any legal or equitable right, remedy
or claim under this Agreement. The Holders from time to time shall be
beneficiaries of this Agreement and shall be bound by all of the terms and
conditions hereof and of the Securities evidenced by their Security
Certificates by their acceptance of delivery thereof.
SECTION 111. GOVERNING LAW.
This Agreement and the Securities shall be governed by and construed
in accordance with the laws of the State of __________________.
SECTION 112. LEGAL HOLIDAYS.
In any case where any Payment Date, any Early Settlement Date or the
Final Settlement Date shall not be a Business Day, then (notwithstanding any
other provision of this Agreement or of the Securities) payment in respect of
interest on Treasury Notes or Contract Fees shall not be made, Purchase
Contracts shall not be performed and Early Settlement shall not be effected on
such date, but such payments shall be made, or the Purchase Contracts shall be
performed or Early Settlement effected, as applicable, on the next succeeding
Business Day with the same force and effect as if made on such Payment Date,
Early Settlement Date or Final Settlement Date, as the case may be; provided,
that no interest shall accrue or be payable by the Company or any Holder for
the period from and after any such Payment Date, Early Settlement Date or Final
Settlement Date, as the case may be.
SECTION 113. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which, when so executed, shall be deemed an original, but all such counterparts
shall together constitute one and the same instrument.
SECTION 114. INSPECTION OF AGREEMENT.
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<PAGE> 14
A copy of this Agreement shall be available at all reasonable times at
the Corporate Trust Office for inspection by any Holder.
ARTICLE TWO
SECURITY CERTIFICATE FORMS
SECTION 201. FORMS OF SECURITY CERTIFICATES GENERALLY.
The Security Certificates (including the form of Purchase Contracts
forming part of the Securities evidenced thereby) shall be in substantially the
form set forth in Exhibit A hereto, with such letters, numbers or other marks
of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Securities are listed or Depositary therefor,
or as may, consistently herewith, be determined by the officers of the Company
executing such Security Certificates, as evidenced by their execution of the
Security Certificates.
The definitive Security Certificates shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers of the Company executing the Security
Certificates, consistent with the provisions of this Agreement, as evidenced by
their execution thereof.
Every Global Security Certificate authenticated, executed on behalf of
the Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS SECURITY CERTIFICATE IS A GLOBAL SECURITY CERTIFICATE WITHIN THE MEANING
OF THE PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY CERTIFICATE MAY
NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY CERTIFICATE REGISTERED, AND
NO TRANSFER OF THIS SECURITY CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED,
IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
AGREEMENT.
SECTION 202. FORM OF AGENT'S CERTIFICATE OF AUTHENTICATION.
The form of the Agent's certificate of authentication of the
Securities shall be in substantially the form set forth on the form of the
Security Certificates.
ARTICLE THREE
THE SECURITIES
SECTION 301. TITLE AND TERMS; DENOMINATIONS.
The aggregate number of Securities evidenced by Security Certificates
authenticated, executed on behalf of the Holders and delivered hereunder is
limited to ________________ (subject to increase up to a maximum of
________________ to the extent the overallotment option of the underwriters
under the Underwriting Agreement is exercised), except for Security
Certificates authenticated, executed and delivered upon registration of
transfer of, in exchange for, or in lieu of, other Security Certificates
pursuant to Section 304, 305, 306, 509 or 805.
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<PAGE> 15
The Security Certificates shall be issuable only in registered form
and only in denominations of a single Security and any integral multiple
thereof.
SECTION 302. RIGHTS AND OBLIGATIONS EVIDENCED BY THE SECURITY CERTIFICATES.
Each Security Certificate shall evidence the number of Securities
specified therein, with each such Security representing the ownership by the
Holder thereof of Treasury Notes with a principal amount equal to the Stated
Amount, subject to the Pledge of such Treasury Notes by such Holder pursuant to
the Pledge Agreement, and the rights and obligations of the Holder under one
Purchase Contract. Prior to the purchase, if any, of shares of Common Stock
under the Purchase Contracts, the Securities shall not entitle the Holders to
any of the rights of a holder of shares of Common Stock, including, without
limitation, the right to vote or receive any dividends or other payments or to
consent or to receive notice as stockholders in respect of the meetings of
stockholders or for the election of directors of the Company or for any other
matter, or any other rights whatsoever as stockholders of the Company, except
to the extent otherwise expressly provided in this Agreement.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Upon the execution and delivery of this Agreement, and at any time and
from time to time thereafter, the Company may deliver Security Certificates
executed by the Company to the Agent for authentication, execution on behalf of
the Holders and delivery, together with its Issuer Order for authentication of
such Security Certificates, and the Agent in accordance with such Issuer Order
shall authenticate, execute on behalf of the Holder and deliver such Security
Certificates.
The Security Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its Vice Chairman of the Board, its President or
one of its Vice Presidents, under its corporate seal reproduced thereon
attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Security Certificates may be manual or facsimile.
Security Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such Security
Certificates or did not hold such offices at the date of such Security
Certificates.
No Purchase Contract underlying a Security evidenced by a Security
Certificate shall be valid until such Security Certificate has been executed on
behalf of the Holder by the manual signature of an authorized signatory of the
Agent, as such Holder's attorney-in-fact. Such signature by an authorized
signatory of the Agent shall be conclusive evidence that the Holder of such
Security Certificate has entered into the Purchase Contracts underlying the
Securities evidenced by such Security Certificate.
Each Security Certificate shall be dated the date of its
authentication.
No Security Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on
such Security Certificate a certificate of authentication substantially in the
form provided for herein executed by an authorized signatory of the Agent by
manual signature, and such certificate upon any Security Certificate shall be
conclusive evidence, and the only evidence, that such Security Certificate has
been duly authenticated and delivered hereunder.
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SECTION 304. TEMPORARY SECURITY CERTIFICATES.
Pending the preparation of definitive Security Certificates, the
Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holders, and deliver, in lieu of such
definitive Security Certificates, temporary Security Certificates which are in
substantially the form set forth in Exhibit A hereto, with such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required by
the rules of any securities exchange on which the Securities are listed, or as
may, consistently herewith, be determined by the officers of the Company
executing such Security Certificates, as evidenced by their execution of the
Security Certificates.
If temporary Security Certificates are issued, the Company will cause
definitive Security Certificates to be prepared without unreasonable delay.
After the preparation of definitive Security Certificates, the temporary
Security Certificates shall be exchangeable for definitive Security
Certificates upon surrender of the temporary Security Certificates at the
Corporate Trust Office, at the expense of the Company and without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Security
Certificates, the Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and deliver in exchange
therefor, one or more definitive Security Certificates of authorized
denominations and evidencing a like number of Securities as the temporary
Security Certificate or Security Certificates so surrendered. Until so
exchanged, the temporary Security Certificates shall in all respects evidence
the same benefits and the same obligations with respect to the Securities
evidenced thereby as definitive Security Certificates.
SECTION 305. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
The Agent shall keep at the Corporate Trust Office a register (the
register maintained in such office being herein referred to as the "Security
Register") in which, subject to such reasonable regulations as it may
prescribe, the Agent shall provide for the registration of Security
Certificates and of transfers of Security Certificates (the Agent, in such
capacity, the "Security Registrar").
Upon surrender for registration of transfer of any Security
Certificate at the Corporate Trust Office, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on behalf of
the designated transferee or transferees, and deliver, in the name of the
designated transferee or transferees, one or more new Security Certificates of
any authorized denominations and evidencing a like number of Securities.
At the option of the Holder, Security Certificates may be exchanged
for other Security Certificates, of any authorized denominations and evidencing
a like number of Securities, upon surrender of the Security Certificates to be
exchanged at the Corporate Trust Office. Whenever any Security Certificates are
so surrendered for exchange, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver the Security Certificates which the Holder making the exchange is
entitled to receive.
All Security Certificates issued upon any registration of transfer or
exchange of a Security Certificate shall evidence the ownership of the same
number of Securities and be entitled to the same benefits and subject to the
same obligations, under this Agreement as the Securities evidenced by the
Security Certificate surrendered upon such registration of transfer or
exchange.
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Every Security Certificate presented or surrendered for registration
of transfer or for exchange shall (if so required by the Agent) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Agent duly executed, by the Holder thereof
or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Security Certificate, but the Company and the Agent may require
payment from the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Security Certificates, other than any exchanges
pursuant to Sections 306 and 805 not involving any transfer. Notwithstanding
the foregoing, the Company shall not be obligated to execute and deliver to the
Agent, and the Agent shall not be obligated to authenticate, execute on behalf
of the Holder and deliver any Security Certificate presented or surrendered for
registration of transfer or for exchange on or after the Final Settlement Date
or the Termination Date. In lieu of delivery of a new Security Certificate,
upon satisfaction of the applicable conditions specified above in this Section
and receipt of appropriate registration or transfer instructions from such
Holder, the Agent shall (i) if the Final Settlement Date has occurred, deliver
the shares of Common Stock issuable in respect of the Purchase Contracts
forming a part of the Securities evidenced by such Security Certificate, or
(ii) if a Termination Event shall have occurred prior to the Final Settlement
Date, transfer the principal amount of the Treasury Notes evidenced thereby, in
each case subject to the applicable conditions and in accordance with the
applicable provisions of Article Five hereof.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only
to Global Security Certificates:
(1) Each Global Security Certificate authenticated and executed on
behalf of the Holders under this Agreement shall be registered
in the name of the Depositary designated for such Global
Security Certificate or a nominee thereof and delivered to
such Depositary or a nominee thereof or custodian therefor,
and each such Global Security Certificate shall constitute a
single Security Certificate for all purposes of this
Agreement.
(2) Notwithstanding any other provision in this Agreement, no
Global Security Certificate may be exchanged in whole or in
part for Security Certificates registered, and no transfer of
a Global Security Certificate in whole or in part may be
registered, in the name of any Person other than the
Depositary for such Global Security Certificate or a nominee
thereof unless (A) such Depositary (i) has notified the
Company that it is unwilling or unable to continue as
Depositary for such Global Security Certificate or (ii) has
ceased to be a clearing agency registered under the Exchange
Act or (b) there shall have occurred and be continuing a
default by the Company in respect to its obligations under one
or more Purchase Contracts.
(3) Subject to Clause (2) above, any exchange of a Global Security
Certificate for other Security Certificates may be made in
whole or in part, and all Security Certificates issued in
exchange for a Global Security Certificate or any portion
thereof shall be registered in such names as the Depositary
for such Global Security Certificate shall direct.
(4) Every Security Certificate authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of,
a Global Security Certificate or any portion thereof, whether
pursuant to this Section, Section 304, 306, 509 or 805 or
otherwise, shall be authenticated, executed on behalf of the
Holders and
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delivered in the form of, and shall be, a Global Security
Certificate, unless such Security Certificate is registered in
the name of a Person other than the Depositary for such Global
Security Certificate or a nominee thereof.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITY CERTIFICATES.
If any mutilated Security Certificate is surrendered to the Agent, the
Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver in exchange
therefor, a new Security Certificate, evidencing the same number of Securities
and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i) evidence
to their satisfaction of the destruction, loss or theft of any Security
Certificate, and (ii) such security or indemnity as may be required by them to
save each of them and any agent of any of them harmless, then, in the absence
of notice to the Company or the Agent that such Security Certificate has been
acquired by a bona fide purchaser, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver to the Holder, in lieu of any such destroyed, lost or stolen Security
Certificate, a new Security Certificate, evidencing the same number of
Securities and bearing a number not contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder, and deliver to the Holder, a
Security Certificate on or after the Final Settlement Date or the Termination
Date. In lieu of delivery of a new Security Certificate, upon satisfaction of
the applicable conditions specified above in this Section and receipt of
appropriate registration or transfer instructions from such Holder, the Agent
shall (i) if the Final Settlement Date has occurred, deliver the shares of
Common Stock issuable in respect of the Purchase Contracts forming a part of
the Securities evidenced by such Security Certificate, or (ii) if a Termination
Event shall have occurred prior to the Final Settlement Date, transfer the
principal amount of the Treasury Notes evidenced thereby, in each case subject
to the applicable conditions and in accordance with the applicable provisions
of Article Five hereof.
Upon the issuance of any new Security Certificate under this Section,
the Company and the Agent may require the payment by the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Agent) connected therewith.
Every new Security Certificate issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security Certificate shall constitute an
original additional contractual obligation of the Company and of the Holder,
whether or not the destroyed, lost or stolen Security Certificate shall be at
any time enforceable by anyone, and shall be entitled to all the benefits and
be subject to all the obligations of this Agreement equally and proportionately
with any and all other Security Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or settlement of mutilated, destroyed, lost or stolen Security
Certificates.
SECTION 307. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security Certificate for registration of
transfer, the Company and the Agent, and any agent of the Company or the Agent,
may treat the Person
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in whose name such Security Certificate is registered as the owner of the
Securities evidenced thereby, for the purpose of receiving payments of interest
on the Treasury Notes, receiving payments of Contract Fees, performance of the
Purchase Contracts and for all other purposes whatsoever, whether or not the
payment of interest on the Treasury Notes or any Contract Fee payable in
respect of the Purchase Contracts constituting a part of the Securities
evidenced thereby shall be overdue and notwithstanding any notice to the
contrary, and neither the Company nor the Agent, nor any agent of the Company
or the Agent, shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Security
Certificate, nothing herein shall prevent the Company, the Agent or any agent
of the Company or the Agent, from giving effect to any written certification,
proxy or other authorization furnished by any Depositary (or its nominee), as a
Holder, with respect to such Global Security Certificate or impair, as between
such Depositary and owners of beneficial interests in such Global Security
Certificate, the operation of customary practices governing the exercise of
rights of such Depositary (or its nominee) as Holder of such Global Security
Certificate.
SECTION 308. CANCELLATION.
All Security Certificates surrendered for delivery of shares of Common
Stock on or after the Final Settlement Date, transfer of Treasury Notes after
the occurrence of a Termination Event or pursuant to an Early Settlement or
registration of transfer or exchange shall, if surrendered to any Person other
than the Agent, be delivered to the Agent and, if not already cancelled, shall
be promptly cancelled by it. The Company may at any time deliver to the Agent
for cancellation any Security Certificates previously authenticated, executed
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Security Certificates so delivered shall, upon Issuer
Order, be promptly cancelled by the Agent. No Security Certificates shall be
authenticated, executed on behalf of the Holder and delivered in lieu of or in
exchange for any Security Certificates cancelled as provided in this Section,
except as expressly permitted by this Agreement. All cancelled Security
Certificates held by the Agent shall be disposed of as directed by Issuer
Order.
If the Company or any Affiliate of the Company shall acquire any
Security Certificate, such acquisition shall not operate as a cancellation of
such Security Certificate unless and until such Security Certificate is
delivered to the Agent cancelled or for cancellation.
SECTION 309. SECURITIES NOT SEPARABLE.
Notwithstanding anything contained herein or in the Security
Certificates to the contrary, for so long as the Purchase Contract underlying a
Security remains in effect such Security shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such
Security in respect of the Treasury Notes and Purchase Contracts constituting
such Security may be acquired, and may be transferred and exchanged, only as a
Security. Other than a Security Certificate evidencing a Security, no Holder of
a Security, or any transferee thereof, shall be entitled to receive a
certificate evidencing the ownership of Treasury Notes or the rights and
obligations of the Holder and the Company under a Purchase Contract for so long
as the Purchase Contract underlying the Security remains in effect.
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ARTICLE FOUR
THE TREASURY NOTES
SECTION 401. PAYMENT OF INTEREST; RIGHTS TO INTEREST PRESERVED.
Interest on any Treasury Note which is paid on any Payment Date shall,
subject to receipt thereof by the Agent from the Collateral Agent as provided
by the terms of the Pledge Agreement, be paid to the Person in whose name the
Security Certificate (or one or more Predecessor Security Certificates) of
which such Treasury Note is a part is registered at the close of business on
the Record Date next preceding such Payment Date.
Each Security Certificate evidencing Treasury Notes delivered under
this Agreement upon registration of transfer of or in exchange for or in lieu
of any other Security Certificate shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by the Treasury Notes underlying
such other Security Certificate.
In the case of any Security with respect to which Early Settlement of
the underlying Purchase Contract is effected on an Early Settlement Date after
any Record Date and on or prior to the next succeeding Payment Date, interest
on the Treasury Notes underlying such Security otherwise payable on such
Payment Date shall be payable on such Payment Date notwithstanding such Early
Settlement, and such interest shall, subject to receipt thereof by the Agent,
be paid to the Person in whose name the Security Certificate (or one or more
Predecessor Security Certificates) is registered at the close of business on
the Record Date. Except as otherwise expressly provided in the immediately
preceding sentence, in the case of any Security with respect to which Early
Settlement of the underlying Purchase Contract is effected on an Early
Settlement Date, interest on the related Treasury Notes that would otherwise be
payable after the Early Settlement Date shall not be payable hereunder to the
Holder of such Security.
SECTION 402. TRANSFER OF TREASURY NOTES UPON OCCURRENCE OF TERMINATION
EVENT.
Upon the occurrence of a Termination Event and the transfer to the
Agent of the Treasury Notes underlying such Securities pursuant to the terms of
the Pledge Agreement, the Agent shall request transfer instructions with
respect to such Treasury Notes from each Holder of Securities by written
request mailed to such Holder at his address as it appears in the Security
Register, in respect of the Treasury Notes underlying the Security Certificate
held by such Holder. Upon surrender to the Agent of a Security Certificate with
such transfer instructions in proper form for transfer of the Treasury Notes by
Federal Reserve BankWire, book-entry transfer through the facilities of the
Depositary Trust Company, or other appropriate procedure, the Agent shall
transfer the Treasury Notes evidenced by such Security Certificate to such
Holder in accordance with such instructions. If a Security Certificate is not
duly surrendered to the Agent with appropriate transfer instructions, the Agent
shall hold the Treasury Notes evidenced by such Security Certificate as
custodian for the Holder of such Security Certificate.
Treasury Notes shall be transferred only in denominations of
$_____________ and integral multiples thereof. As promptly as practicable
following the occurrence of a Termination Event, the Agent shall determine the
excess of (i) the aggregate principal amount of Treasury Notes underlying the
Outstanding Securities over (ii) the aggregate principal amount of Treasury
Notes in denominations of $_____________ and integral multiples thereof
transferrable to Holders of record on the date of such Termination Event (such
excess being herein referred to as the "Excess Treasury Notes"). As soon as
practicable after transfer to the Agent of the Treasury Notes underlying the
Outstanding Securities as provided in the Pledge Agreement, the Agent shall
sell the Excess Treasury
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Notes to or through one or more registered broker dealers at then prevailing
prices. The Agent shall deduct from the proceeds of such sales all commissions
and other out-of-pocket transaction costs incurred in connection with such
sales of Excess Treasury Notes and, until the net proceeds of such sale or
sales have been distributed to Holders of the Securities, the Agent shall hold
such proceeds in trust for the Holders of Securities. Each Holder shall be
entitled to receive a portion, if any, of such net proceeds in lieu of Treasury
Notes with a principal amount of less than $1,000 determined by multiplying the
aggregate amount of such net proceeds by a fraction, the numerator of which is
the fraction of $1,000 in principal amount of Treasury Notes to which such
Holder would otherwise be entitled (after taking into account all Securities
then held by such Holder) and the denominator of which is the aggregate
principal amount of Excess Treasury Notes.
ARTICLE FIVE
THE PURCHASE CONTRACTS
SECTION 501. PURCHASE OF SHARES OF COMMON STOCK.
Each Purchase Contract shall obligate the Holder of the related
Security to purchase, and the Company to sell, on the Final Settlement Date at
a price equal to the Stated Amount, a number of shares of Common Stock equal to
the Settlement Rate, unless, on or prior to the Final Settlement Date, there
shall have occurred a Termination Event or an Early Settlement with respect to
the Security of which such Purchase Contract is a part. The "Settlement Rate"
is equal to (a) if the Applicable Market Value (as defined below) is greater
than $_____________ (the "Threshold Appreciation Price"), ________________ of a
share of Common Stock per Purchase Contract, (b) if the Applicable Market Value
is less than or equal to the Threshold Appreciation Price but is greater than
the Stated Amount, a fractional share of Common Stock per Purchase Contract
equal to the Stated Amount divided by the Applicable Market Value (rounded
upward or downward to the nearest 1/10,000th of a share) and (c) if the
Applicable Market Value is less than or equal to the Stated Amount, one share
of Common Stock per Purchase Contract, in each case subject to adjustment as
provided in Section 506. As provided in Section 510, no fractional shares of
Common Stock will be issued upon settlement of Purchase Contracts.
The "Applicable Market Value" means the average of the Closing Prices
per share of Common Stock on each of the twenty consecutive Trading Days ending
on the last Trading Day immediately preceding the Final Settlement Date. The
"Closing Price" of the Common Stock on any date of determination means the
closing sale price (or, if no closing price is reported, the last reported sale
price) of the Common Stock on the New York Stock Exchange (the "NYSE") on such
date or, if the Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
securities exchange on which the Common Stock is so listed, or if the Common
Stock is not so listed on a United States national or regional securities
exchange, as reported by The Nasdaq Stock Market, or, if the Common Stock is
not so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market value of the
Common Stock on such date as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company. A "Trading
Day" means a day on which the Common Stock (A) is not suspended from trading on
any national or regional securities exchange or association or over-the-counter
market at the close of business and (B) has traded at least once on the
national or regional securities exchange or association or over-the-counter
market that is the primary market for the trading of the Common Stock.
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Each Holder of a Security Certificate evidencing Securities, by his
acceptance thereof, irrevocably authorizes the Agent to enter into and perform
the related Purchase Contracts on his behalf as his attorney-in-fact, agrees to
be bound by the terms and provisions thereof, covenants and agrees to perform
his obligations under such Purchase Contracts, consents to the provisions
hereof, irrevocably authorizes the Agent as his attorney-in-fact to enter into
and perform the Pledge Agreement on his behalf as his attorney-in-fact, and
consents to and agrees to be bound by the Pledge of the Treasury Notes
underlying such Security Certificate pursuant to the Pledge Agreement. Each
Holder of a Security, by his acceptance thereof, further irrevocably covenants
and agrees, that, to the extent and in the manner provided in Section 504 and
the Pledge Agreement, but subject to the terms thereof, payments in respect of
principal of the Treasury Notes on the Final Settlement Date shall be paid by
the Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall acquire no
right, title or interest in such payments.
Upon registration of transfer of a Security Certificate evidencing
Purchase Contracts, the transferee shall be bound (without the necessity of any
other action on the part of such transferee), under the terms of this
Agreement, the Purchase Contracts evidenced thereby and the Pledge Agreement
and the transferor shall be released from the obligations under the Purchase
Contracts evidenced by the Security Certificates so transferred. The Company
covenants and agrees, and each Holder of a Security Certificate, by his
acceptance thereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
SECTION 502. CONTRACT FEES.
Subject to Section 503, the Company shall pay, on each Payment Date,
the Contract Fees payable in respect of each Purchase Contract to the Person in
whose name the Security Certificate (or one or more Predecessor Security
Certificates) evidencing such Purchase Contract is registered at the close of
business on the Record Date next preceding such Payment Date. The Contract Fee
will be payable at the office of the Agent in _____________________ maintained
for that purpose or, at the option of the Company, by check mailed to the
address of the Person entitled thereto at such address as it appears on the
Security Register.
Each Security Certificate delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of any other Security
Certificate shall carry the rights to Contract Fees accrued and unpaid, and to
accrue, which were carried by the Purchase Contracts evidenced by such other
Security Certificate.
In the case of any Security with respect to which Early Settlement of
the underlying Purchase Contract is effected on an Early Settlement Date after
any Record Date and on or prior to the next succeeding Payment Date, Contract
Fees otherwise payable on such Payment Date shall be payable on such Payment
Date notwithstanding such Early Settlement, and such Contract Fees shall be
paid to the Person in whose name the Security Certificate evidencing such
Security (or one or more Predecessor Security Certificates) is registered at
the close of business on such Record Date. Except as otherwise expressly
provided in the immediately preceding sentence, in the case of any Security
with respect to which Early Settlement of the underlying Purchase Contract is
effected on an Early Settlement Date, Contract Fees that would otherwise be
payable after the Early Settlement Date with respect to the Purchase Contract
underlying such Security shall not be payable.
SECTION 503. DEFERRAL OF PAYMENT DATES FOR CONTRACT FEE.
The Company shall have the right, at any time prior to the Final
Settlement Date, to defer the payment of any or all of the Contract Fees
otherwise payable on any Payment Date,
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but only if the Company shall give the Holders and the Agent written notice of
its election to defer such payment (specifying the amount to be deferred) at
least ten Business Days prior to the earlier of (i) the next succeeding Payment
Date or (ii) the date the Company is required to give notice of the Record Date
or Payment Date with respect to payment of such Contract Fee to the New York
Stock Exchange or other applicable self-regulatory organization or to Holders
of the Securities, but in any event not less than two Business Days prior to
such Record Date. Any Contract Fees so deferred shall bear additional Contract
Fees thereon at the rate of _____% per annum (computed on the basis of the
actual number of days elapsed in a year of 365 or 366 days, as the case may
be), compounding on each succeeding Payment Date, until paid in full. Deferred
Contract Fees (and additional Contract Fees accrued thereon) shall be due on
the next succeeding Payment Date except to the extent that payment is deferred
pursuant to this Section. No Contract Fees may be deferred to a date that is
after the Final Settlement Date or, with respect to any particular Purchase
Contract, Early Settlement thereof.
SECTION 504. PAYMENT OF PURCHASE PRICE.
The purchase price for the shares of Common Stock purchased pursuant
to a Purchase Contract shall be paid by application of payments received by the
Company on the Final Settlement Date from the Collateral Agent pursuant to the
Pledge Agreement in respect of the principal of the Treasury Notes Pledged to
secure the obligations of the relevant Holder under such Purchase Contract.
Such application shall satisfy in full the obligations under such Purchase
Contract of the Holder of the Security of which such Purchase Contract is a
part. The Company shall not be obligated to issue any shares of Common Stock in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate purchase
price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
SECTION 505. ISSUANCE OF SHARES OF COMMON STOCK.
Unless a Termination Event shall have occurred on or prior to the
Final Settlement Date, on the Final Settlement Date, upon its receipt of
Payment in full of the purchase price for the shares of Common Stock purchased
by the Holders pursuant to the foregoing provisions of this Article, and
subject to Section 506(b), the Company shall deposit with the Agent, for the
benefit of the Holders of the Outstanding Securities, one or more certificates
representing the shares of Common Stock registered in the name of the Agent (or
its nominee) as custodian for the Holders (such certificates for shares of
Common Stock, together with any dividends or interest with respect thereto,
being hereinafter referred to as the "Final Settlement Fund") to which the
Holders are entitled hereunder. Subject to the foregoing, upon surrender of a
Security Certificate to the Agent on or after the Final Settlement Date,
together with settlement instructions thereon duly completed and executed, the
Holder of such Security Certificate shall be entitled to receive in exchange
therefor a certificate representing that number of whole shares of Common Stock
which such Holder is entitled to receive pursuant to the provisions of this
Article Five (after taking into account all Securities then held by such
Holder) together with cash in lieu of fractional shares as provided in Section
510 and any dividends or interest with respect to such shares constituting part
of the Final Settlement Fund, but without any interest thereon and the Security
Certificate so surrendered shall forthwith be cancelled. Such shares shall be
registered in the name of the Holder or the Holder's designee as specified in
the settlement instructions on the Security Certificate.
If any shares of Common Stock issued in respect of a Purchase Contract
are to be registered to a Person other than the Person in whose name the
Security Certificate evidencing such Purchase Contract is registered, no such
registration shall be made unless
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the Person requesting such registration has paid any transfer and other taxes
required by reason of such registration in a name other than that of the
registered Holder of the Security Certificate evidencing such Purchase Contract
or has established to the satisfaction of the Company that such tax either has
been paid or is not payable.
SECTION 506. ADJUSTMENT OF SETTLEMENT RATE.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or
other distribution on any class of Common Stock of
the Company in Common Stock, the Settlement Rate in
effect at the opening of business on the day
following the date fixed for the determination of
stockholders entitled to receive such dividend or
other distribution shall be increased by dividing
such Settlement Rate by a fraction of which the
numerator shall be the number of shares of Common
Stock outstanding at the close of business on the
date fixed for such determination and the denominator
shall be the sum of such number of shares and the
total number of shares constituting such dividend or
other distribution, such increase to become effective
immediately after the opening of business on the day
following the date fixed for such determination. For
the purposes of this paragraph (1), the number of
shares of Common Stock at any time outstanding shall
not include shares held in the treasury of the
Company but shall include shares issuable in respect
of scrip certificates issued in lieu of fractions of
shares of Common Stock. The Company will not pay any
dividend or make any distribution on shares of Common
Stock held in the treasury of the Company.
(2) In case the Company shall issue rights, options or
warrants to all holders of its Common Stock (not
being available on an equivalent basis to Holders of
the Securities upon settlement of the Purchase
Contracts underlying such Securities) entitling them,
for a period expiring within 45 days after the record
date for the determination of stockholders entitled
to receive such rights, options or warrants, to
subscribe for or purchase shares of Common Stock at a
price per share less than the Current Market Price
per share of the Common Stock on the date fixed for
the determination of stockholders entitled to receive
such rights, options or warrants (other than pursuant
to a dividend reinvestment plan), the Settlement Rate
in effect at the opening of business on the day
following the date fixed for such determination shall
be increased by dividing such Settlement Rate by a
fraction of which the numerator shall be the number
of shares of Common Stock outstanding at the close of
business on the date fixed for such determination
plus the number of shares of Common Stock which the
aggregate of the offering price of the total number
of shares of Common Stock so offered for subscription
or purchase would purchase at such Current Market
Price and the denominator shall be the number of
shares of Common Stock outstanding at the close of
business on the date fixed for such determination
plus the number of shares of Common Stock so offered
for subscription or purchase, such increase to become
effective immediately after the opening of business
on the day following the date fixed for such
determination. For the purposes of this paragraph
(2), the number of shares of Common Stock at any time
outstanding shall not include shares held ln the
treasury of the
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Company but shall include shares issuable in respect
of scrip certificates issued in lieu of fractions of
shares of Common Stock. The Company shall not issue
any such rights, options or warrants in respect of
shares of Common Stock held in the treasury of the
Company.
(3) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common
Stock, the Settlement Rate in effect at the opening
of business on the day following the day upon which
such subdivision becomes effective shall be
proportionately increased, and, conversely, in case
outstanding shares of Common Stock shall each be
combined into a smaller number of shares of Common
Stock, the Settlement Rate in effect at the opening
of business on the day following the day upon which
such combination becomes effective shall be
proportionately reduced, such increase or reduction,
as the case may be, to become effective immediately
after the opening of business on the day following
the day upon which such subdivision or combination
becomes effective.
(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock
evidences of its indebtedness or assets (including
securities, but excluding any rights or warrants
referred to in paragraph (2) of this Section, any
dividend or distribution paid exclusively in cash and
any dividend or distribution referred to in paragraph
(1) of this Section), the Settlement Rate shall be
adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate in effect
immediately prior to the close of business on the
date fixed for the determination of stockholders
entitled to receive such distribution by a fraction
of which the numerator shall be the Current Market
Price per share of the Common Stock on the date fixed
for such determination less the then fair market
value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a
Board Resolution filed with the Agent) of the portion
of the assets or evidences of indebtedness so
distributed applicable to one share of Common Stock
and the denominator shall all be such Current Market
Price per share of the Common Stock, such adjustment
to become effective immediately prior to the opening
of business on the day following the date fixed for
the determination of stockholders entitled to receive
such distribution. In any case in which this
paragraph (4) is applicable, paragraph (2) of this
Section shall not be applicable.
(5) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash
(excluding any cash that is distributed in a
Reorganization Event to which Section 506(b) applies
or as part of a distribution referred to in paragraph
(4) of this Section) in an aggregate amount that,
combined together with (I) the aggregate amount of
any other distributions to all holders of its Common
Stock made exclusively in cash within the 12 months
preceding the date of payment of such distribution
and in respect of which no adjustment pursuant to
this paragraph (5) or paragraph (6) of this Section
has been made and (II) the aggregate of any cash plus
the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive
and described in a Board Resolution) of consideration
payable in respect of any tender or exchange offer by
the Company or any of its subsidiaries for all or any
portion of the Common Stock
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concluded within the 12 months preceding the date of
payment of such distribution and in respect of which
no adjustment pursuant to this paragraph (5) or
paragraph (6) of this Section has been made, exceeds
10% of the product of the Current Market Price per
share of the Common Stock on the date for the
determination of holders of shares of Common Stock
entitled to receive such distribution times the
number of shares of Common Stock outstanding on such
date, then, and in each such case, immediately after
the close of business on such date for determination,
the Settlement Rate shall be increased so that the
same shall equal the rate determined by dividing the
Settlement Rate in effect immediately prior to the
close of business on the date fixed for determination
of the stockholders entitled to receive such
distribution by a fraction (i) the numerator of which
shall be equal to the Current Market Price per share
of the Common Stock on the date fixed for such
determination less an amount equal to the quotient of
(x) the excess of such combined amount over such 10%
and (y) the number of shares of Common Stock
outstanding on such date for determination and (ii)
the denominator of which shall be equal to the
Current Market Price per share of the Common Stock on
such date for determination.
(6) In case a tender or exchange offer made by the
Company or any subsidiary of the Company for all or
any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the
expiration thereof) shall require the payment to
stockholders (based on the acceptance (up to any
maximum specified in the terms of the tender or
exchange offer) of Purchased Shares) of an aggregate
consideration having a fair market value (as
determined by the Board of Directors, whose
determination shall be conclusive and described in a
Board Resolution) that combined together with (I) the
aggregate of the cash plus the fair market value (as
determined by the Board of Directors, whose
determination shall be conclusive and described in a
Board Resolution), as of the expiration of such
tender or exchange offer, of consideration payable in
respect of any other tender or exchange offer, by the
Company or any subsidiary of the Company for all or
any portion of the Common Stock expiring within the
12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment
pursuant to paragraph (5) of this Section or this
paragraph (6) has been made and (II) the aggregate
amount of any distributions to all holders of the
Company's Common Stock made exclusively in cash
within 12 months preceding the expiration of such
tender or exchange offer and in respect of which no
adjustment pursuant to paragraph (5) of this Section
or this paragraph (6) has been made, exceeds 10% of
the product of the Current Market Price per share of
the Common Stock as of the last time (the "Expiration
Time") tenders could have been made pursuant to such
tender or exchange offer (as it may be amended) times
the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration
Time, then, and in each such case, immediately prior
to the opening of business on the day after the date
of the Expiration Time, the Settlement Rate shall be
adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate
immediately prior to close of business on the date of
the Expiration Time by a fraction (i) the numerator
of which shall be equal to (A) the product of (I) the
Current Market Price per share of the Common Stock on
the date of the
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Expiration Time and (II) the number of shares of
Common Stock outstanding (including any tendered
shares) on the Expiration Time less (B) the amount of
cash plus the fair market value (determined as
aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any
maximum specified in the terms of the tender or
exchange offer) of Purchased Shares, and (ii) the
denominator of which shall be equal to the product of
(A) the Current Market Price per share of the Common
Stock as of the Expiration Time and (B) the number of
shares of Common Stock outstanding (including any
tendered shares) as of the Expiration Time less the
number of all shares validly tendered and not
withdrawn as of the Expiration Time (the shares
deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares").
(7) The reclassification of Common Stock into securities
including securities other than Common Stock (other
than any reclassification upon a Reorganization Event
to which Section 506(b) applies) shall be deemed to
involve (a) a distribution of such securities other
than Common Stock to all holders of Common Stock (and
the effective date of such reclassification shall be
deemed to be "the date fixed for the determination of
stockholders entitled to receive such distribution"
and the "date fixed for such determination" within
the meaning of paragraph (4) of this Section), and
(b) a subdivision or combination, as the case may be,
of the number of shares of Common Stock outstanding
immediately prior to such reclassification into the
number of shares of Common Stock outstanding
immediately thereafter (and the effective date of
such reclassification shall be deemed to be "the day
upon which such subdivision becomes effective" or
"the day upon which such combination becomes
effective", as the case may be, and "the day upon
which such subdivision or combination becomes
effective" within the meaning of paragraph (3) of
this Section).
(8) The "Current Market Price" per share of Common Stock
on any day means the average of the daily Closing
Prices for the 5 consecutive Trading Days selected by
the Company commencing not more than 20 Trading Days
before, and ending not later than, the earlier of the
day in question and the day before the "ex" date with
respect to the issuance or distribution requiring
such computation. For purposes of this paragraph, the
term "`ex' date", when used with respect to any
issuance or distribution, shall mean the first date
on which the Common Stock trades regular way on such
exchange or in such market without the right to
receive such issuance or distribution.
(9) All adjustments to the Settlement Rate shall be
calculated to the nearest 1/10,000th of a share of
Common Stock (or if there is not a nearest 1/10,000th
of a share to the next lower 1/10,000th of a share).
No adjustment in the Settlement Rate shall be
required unless such adjustment would require an
increase or decrease of at least one percent therein;
provided, however, that any adjustments which by
reason of this subparagraph are not required to be
made shall be carried forward and taken into account
in any subsequent adjustment. If an adjustment is
made to the Settlement Rate pursuant to paragraph
(1), (2), (3), (4), (5), (6), (7) or (10) of this
Section 506(a), an adjustment shall also be made to
the Applicable Market Value solely to determine which
of
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<PAGE> 28
clauses (a), (b) or (c) of the definition of
Settlement Rate in Section 501 will apply on the
Final Settlement Date. Such adjustment shall be made
by multiplying the Applicable Market Value by a
fraction of which the numerator shall be the
Settlement Rate in clause (c) of the Settlement Rate
definition in Section 501 immediately after such
adjustment pursuant to paragraph (1), (2), (3), (4),
(5), (6), (7) or (10) of this Section 506(a) and the
denominator shall be the Settlement Rate in clause
(c) of the Settlement Rate definition in Section 501
immediately before such adjustment.
(10) The Company may make such increases in the Settlement
Rate, in addition to those required by this Section,
as it considers to be advisable in order to avoid or
diminish any income tax to any holders of shares of
Common Stock resulting from any dividend or
distribution of stock or issuance of rights or
warrants to purchase or subscribe for stock or from
any event treated as such for income tax purposes or
for any other reasons.
(b) Adjustment for Consolidation, Merger or Other Reorganization
Event.
In the event of (i) any consolidation or merger of the Company, with or into
another Person (other than a merger or consolidation in which the Company is
the continuing corporation and in which the Common Stock outstanding
immediately prior to the merger or consolidation is not exchanged for cash,
securities or other property of the Company or another corporation), (ii) any
sale, transfer, lease or conveyance to another Person of the property of the
Company as an entirety or substantially as an entirety, (iii) any statutory
exchange of securities of the Company with another Person (other than in
connection with a merger or acquisition) or (iv) any liquidation, dissolution
or winding up of the Company (any such event, a "Reorganization Event"), the
Settlement Rate will be adjusted to provide that each Holder of Securities will
receive on the Final Settlement Date with respect to each Purchase Contract
forming a part thereof, the kind and amount of securities, cash and other
property receivable upon such Reorganization Event by a Holder of the number of
shares of Common Stock issuable on account of each Purchase Contract if the
Final Settlement Date had occurred immediately prior to such Reorganization
Event, assuming such Holder of Common Stock is not a Person with which the
Company consolidated or into which the Company merged or which merged into the
Company or to which such sale or transfer was made, as the case may be
("constituent Person"), or an Affiliate of a constituent Person, and failed to
exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such Reorganization Event
(provided that if the kind or amount of securities, cash and other property
receivable upon such Reorganization Event is not the same for each share of
Common Stock held immediately prior to such Reorganization Event by other than
a constituent Person or an Affiliate thereof and in respect of which such
rights of election shall not have been exercised ("nonelecting share"), then
for the purpose of this Section the kind and amount of securities, cash and
other property receivable upon such Reorganization Event by each nonelecting
share shall be deemed to be the kind and amount so receivable per share by a
plurality of the nonelecting shares). In the event of such a Reorganization
Event, the Person formed by such consolidation, merger or exchange or the
Person which acquires the assets of the Company or, in the event of a
liquidation or dissolution of the Company, the Company or a liquidating trust
created in connection therewith, shall execute and deliver to the Agent an
agreement supplemental hereto providing that the Holders of each Outstanding
Security shall have the rights provided by this Section 506. Such supplemental
agreement shall provide for adjustments which, for events subsequent to the
effective date of such supplemental agreement, shall be as nearly equivalent
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as may be practicable to the adjustments provided for in this Section. The
above provisions of this Section shall similarly apply to successive
Reorganization Events.
SECTION 507. NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS.
(a) Whenever the Settlement Rate is adjusted as herein provided,
the Company shall:
(i) forthwith compute the adjusted Settlement Rate in
accordance with Section 506 and prepare and transmit
to the Agent an Officer's Certificate setting forth
the Settlement Rate, the method of calculation
thereof in reasonable detail, and the facts requiring
such adjustment and upon which such adjustment is
based; and
(ii) within 10 Business Days following the occurrence of
an event that permits or requires an adjustment to
the Settlement Rate pursuant to Section 506 (or if
the Company is not aware of such occurrence, as soon
as practicable after becoming so aware), provide a
written notice to the Holders of the Securities of
the occurrence of such event and a statement in
reasonable detail setting forth the method by which
the adjustment to the Settlement Rate was determined
and setting forth the adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or
responsibility to any holder of Securities to determine
whether any facts exist which may require any adjustment of
the Settlement Rate, or with respect to the nature or extent
or calculation of any such adjustment when made, or with
respect to the method employed in making the same. The Agent
shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of
any securities or property, which may at the time be issued or
delivered with respect to any Purchase Contract; and the Agent
makes no representation with respect thereto. The Agent shall
not be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock pursuant to a
Purchase Contract or to comply with any of the duties,
responsibilities or covenants of the Company contained in this
Article.
SECTION 508. TERMINATION EVENT; NOTICE.
The Purchase Contracts and the obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract Fee,
shall immediately and automatically terminate, without the necessity of any
notice or action by any Holder, the Agent or the Company, if, on or prior to
the Final Settlement Date, a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall give written notice to the
Agent, the Collateral Agent and to the Holders, at their addresses as they
appear in the Security Register. Upon and after the occurrence of a Termination
Event, the Securities shall thereafter represent the right to receive the
Treasury Notes forming a part of such Securities in accordance with the
provisions of Section 402 and the Pledge Agreement.
SECTION 509. EARLY SETTLEMENT.
(a) Subject to and upon compliance with the provisions of this
Section 509 at the option of the Holder thereof, any Purchase
Contracts underlying Securities
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<PAGE> 30
having an aggregate Stated Amount equal to $____________ or an
integral multiple thereof may be settled early ("Early
Settlement") as provided herein. In order to exercise the
right to effect Early Settlement with respect to any Purchase
Contracts, the Holder of the Security Certificate evidencing
such Purchase Contracts shall deliver such Security
Certificate to the Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form
of Election to Settle Early on the reverse thereof duly
completed and accompanied by payment in the form of a
certified or cashier's check payable to the order of the
Company in immediately available funds in an amount (the
"Early Settlement Amount") equal to (i) the product of (A) the
Stated Amount times (B) the number of Purchase Contracts with
respect to which the Holder has elected to effect Early
Settlement minus (ii) the aggregate amount of Contract Fees,
if any, otherwise payable on or prior to the immediately
preceding Payment Date deferred at the option of the Company
pursuant to Section 503 and remaining unpaid as of such
immediately preceding Payment Date plus (iii) if such delivery
is made with respect to any Purchase Contracts during the
period from the close of business on any Record Date next
preceding any Payment Date to the opening of business on such
Payment Date, an amount equal to the sum of (x) the Contract
Fees payable on such Payment Date with respect to such
Purchase Contracts plus (y) the interest on the related
Treasury Notes payable on such Payment Date. Except as
provided in the immediately preceding sentence and subject to
the last paragraph of Section 502, no payment or adjustment
shall be made upon Early Settlement of any Purchase Contract
on account of any Contract Fees accrued on such Purchase
Contract or on account of any dividends on the Common Stock
issued upon such Early Settlement. If the foregoing
requirements are first satisfied with respect to Purchase
Contracts underlying any Securities at or prior to 5:00 p.m.,
New York City time, on a Business Day, such day shall be the
"Early Settlement Date" with respect to such Securities and if
such requirements are first satisfied after 5:00 p.m., New
York City time, on a Business Day or on a day that is not a
Business Day, the "Early Settlement Date" with respect to such
Securities shall be the next succeeding Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Company shall issue, and the Holder
shall be entitled to receive, a number of shares of Common
Stock on account of each Purchase Contract as to which Early
Settlement is effected equal to the Early Settlement Rate. The
Early Settlement Rate shall initially be equal to
________________ and shall be adjusted in the same manner and
at the same time as the Settlement Rate is adjusted. As
promptly as practicable after Early Settlement of Purchase
Contracts in accordance with the provisions of this Section
509, the Company shall issue and shall deliver to the Agent at
the Corporate Trust Office a certificate or certificates for
the full number of shares of Common Stock issuable upon such
Early Settlement together with payment in lieu of any fraction
of a share, as provided in Section 510.
(c) The Company shall cause the shares of Common Stock issuable,
and Treasury Notes deliverable, upon Early Settlement of
Purchase Contracts to be issued and delivered, in the case of
such shares of Common Stock, and released from the Pledge by
the Collateral Agent and transferred, in the case of such
Treasury Notes, to the Agent, for delivery to the Holder
thereof or its designee, no later than the third Business Day
after the applicable Early Settlement Date.
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<PAGE> 31
(d) Upon Early Settlement of any Purchase Contracts, and subject
to receipt thereof from the Company or the Collateral Agent,
as applicable, the Agent shall, in accordance with the
instructions provided by the Holder thereof on the applicable
form of Election to Settle Early on the reverse of the
Security Certificate evidencing the related Securities, (i)
transfer the Treasury Notes forming a part of such Securities
and (ii) deliver a certificate or certificates for the full
number of shares of Common Stock issuable upon such Early
Settlement together with payment in lieu of any fraction of a
share, as provided in Section 510.
(e) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities
evidenced by a Security Certificate, upon such Early
Settlement the Company shall execute and the Agent shall
authenticate, countersign and deliver to the Holder thereof,
at the expense of the Company, a Security Certificate
evidencing the Securities as to which Early Settlement was not
effected.
SECTION 510. NO FRACTIONAL SHARES.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Final Settlement Date
or upon Early Settlement of any Purchase Contracts. If Security Certificates
evidencing more than one Purchase Contract shall be surrendered for settlement
at one time by the same Holder, the number of full shares of Common Stock which
shall be delivered upon settlement shall be computed on the basis of the
aggregate number of Purchase Contracts evidenced by the Security Certificates
so surrendered. Instead of any fractional share of Common Stock which would
otherwise be deliverable upon settlement of any Purchase Contracts on the Final
Settlement Date or upon Early Settlement, the Company, through the Agent, shall
make a cash payment in respect of such fractional interest in an amount equal
to the value of such fractional shares at the Closing Price per share on the
Trading Day immediately preceding the Final Settlement Date or the related
Early Settlement Date, respectively. The Company shall provide the Agent from
time to time with sufficient funds to permit the Agent to make all cash
payments required by this Section 510 in a timely manner.
SECTION 511. CHARGES AND TAXES.
The Company will pay all stock transfer and similar taxes attributable
to the initial issuance and delivery of the shares of Common Stock pursuant to
the Purchase Contracts; provided, however, that the Company shall not be
required to pay any such tax or taxes which may be payable in respect of any
exchange of or substitution for a Security Certificate evidencing a Purchase
Contract or any issuance of a share of Common Stock in a name other than that
of the registered Holder of a Security Certificate surrendered in respect of
the Purchase Contracts evidenced thereby, other than in the name of the Agent,
as custodian for such Holder, and the Company shall not be required to issue or
deliver such share certificates or Security Certificates unless or until the
Person or Persons requesting the transfer or issuance thereof shall have paid
to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
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ARTICLE SIX
REMEDIES
SECTION 601. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE CONTRACT FEE.
Notwithstanding any other provision in this Agreement, the Holder of
any Security shall have the right, which is absolute and unconditional (subject
to the right of the Company to defer payment thereof pursuant to Section 503),
to receive payment of each installment of the Contract Fee with respect to the
Purchase Contract constituting a part of such Security on the respective
Payment Date for such Security and to purchase Common Stock pursuant to such
Purchase Contract and, in each such case, to institute suit for the enforcement
of any such payment and right to purchase Common Stock, and such rights shall
not be impaired without the consent of such Holder.
SECTION 602. RESTORATION OF RIGHTS AND REMEDIES.
If any Holder of Securities has instituted any proceeding to enforce
any right or remedy under this Agreement and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
such Holder, then and in every such case, subject to any determination in such
proceeding, the Company and such Holder shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of such Holder shall continue as though no such proceeding had been
instituted.
SECTION 603. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement of
mutilated, destroyed, lost or stolen Security Certificates in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Holders of Securities is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
SECTION 604. DELAY OR OMISSION NOT WAIVER.
No delay or omission of any Holder to exercise any right or remedy
shall impair any such right or remedy or constitute a waiver of any such right.
Every right and remedy given by this Article or by law to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by such
Holders.
SECTION 605. UNDERTAKING FOR COSTS.
All parties to this Agreement agree, and each Holder of any Security
by his acceptance of the Security Certificate evidencing such Security shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Agreement, or in any
suit against the Agent for any action taken, suffered or omitted by it as
Agent, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; provided that the provisions of
this Section shall not apply to any suit instituted by the Company, to any suit
instituted by the Agent, to any suit instituted by any Holder of
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<PAGE> 33
Securities, or group of Holders, holding in the aggregate more than 10% of the
Outstanding Securities, or to any suit instituted by any Holder for the
enforcement of the payment of the interest on any Treasury Note or the Contract
Fee on any Purchase Contract on or after the respective Payment Date therefor
constituting a part of the Securities held by such Holder, or for enforcement
of the right to purchase shares of Common Stock under the Purchase Contracts
constituting a part of the Securities held by such Holder.
SECTION 606. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Agreement; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Agent or the Holders, but will suffer and
permit the execution of every such power as though no such law had been
enacted.
ARTICLE SEVEN
THE AGENT
SECTION 701. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The Agent undertakes to perform, with respect to the
Securities, such duties and only such duties as are
specifically set forth in this Agreement, and no implied
covenants or obligations shall be read into this Agreement
against the Agent; and in the absence of bad faith or
negligence on its part, the Agent may, with respect to the
Securities, conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Agent
and conforming to the requirements of this Agreement, but in
the case of any certificates or opinions which by any
provision hereof are specifically required to be furnished to
the Agent, the Agent shall be under a duty to examine the same
to determine whether or not they conform to the requirements
of this Agreement.
(b) No provision of this Agreement shall be construed to relieve
the Agent from liability for its own negligent action, its own
negligent failure to act, or its own wilful misconduct, except
that
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer,
unless it shall be proved that the Agent was
negligent in ascertaining the pertinent facts; and
(3) no provision of this Agreement shall require the
Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
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<PAGE> 34
(d) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the
liability of or affording protection to the Agent shall be
subject to the provisions of this Section.
SECTION 702. NOTICE OF DEFAULT.
Within 90 days after the occurrence of any default by the Company
hereunder, of which a Responsible Officer of the Agent has actual knowledge,
the Agent shall transmit by mail to all Holders of Securities, as their names
and addresses appear in the Security Register, notice of such default
hereunder, unless such default shall have been cured or waived.
SECTION 703. CERTAIN RIGHTS OF AGENT.
Subject to the provisions of Section 701:
(a) the Agent may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed
by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by an Officer's Certificate, Issuer
Order or Issuer Request, and any resolution of the Board of
Directors of the Company may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Agreement the Agent
shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder,
the Agent (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely
upon an Officer's Certificate of the Company;
(d) the Agent may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and
in reliance thereon;
(e) the Agent shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Agent, in its discretion, may make reasonable further inquiry
or investigation into such facts or matters related to the
issuance of the Securities and the execution, delivery and
performance of the Purchase Contracts as it may see fit, and,
if the Agent shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books,
records and promises of the Company, personally or by agent or
attorney; and
(f) the Agent may execute any of its powers hereunder or perform
any duties hereunder either directly or by or through agents
or attorneys and the Agent shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
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SECTION 704. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Security Certificates shall
be taken as the statements of the Company and the Agent assumes no
responsibility for their correctness. The Agent makes no representations as to
the validity or sufficiency of this Agreement or of the Securities. The Agent
shall not be accountable for the use or application by the Company of the
proceeds in respect of the Purchase Contracts.
SECTION 705. MAY HOLD SECURITIES.
Any Security Registrar or any other agent of the Company, or the
Agent, in its individual or any other capacity, may become the owner or pledgee
of Securities and may otherwise deal with the Company with the same rights it
would have if it were not Security Registrar or such other agent, or the Agent.
SECTION 706. MONEY HELD IN TRUST.
Money held by the Agent in trust hereunder need not be segregated from
the other funds except to the extent required by law. The Agent shall be under
no obligation to invest or pay interest on any money received by it hereunder
except as otherwise agreed with the Company.
SECTION 707. COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(1) to pay to the Agent from time to time reasonable compensation
for all services rendered by it hereunder;
(2) except as otherwise expressly provided herein, to reimburse
the Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Agent in
accordance with any provision of this Agreement (including the
reasonable compensation and the expenses and disbursements of
its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Agent and any predecessor Agent for, and to
hold each of them harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or
administration of its duties hereunder, including the costs
and expenses of defending itself against any claim or
liability in connection with the exercise or performance of
any of its powers or duties hereunder.
SECTION 708. CORPORATE AGENT REQUIRED; ELIGIBILITY.
There shall at all times be an Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $100,000,000, subject to supervision or examination by Federal or
State authority and having its Corporate Trust Office in _____________________,
if there be such a corporation in ____________________________________
qualified and eligible under this Article and willing to act on reasonable
terms. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority,
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then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Agent
shall cease to be eligible in accordance with the provisions of this Section,
it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
SECTION 709. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become
effective until the acceptance of appointment by the successor
Agent in accordance with the applicable requirements of
Section 710.
(b) The Agent may resign at any time by giving written notice
thereof to the Company 60 days prior to the effective date of
such resignation. If the instrument of acceptance by a
successor Agent required by Section 710 shall not have been
delivered to the Agent within 30 days after the giving of such
notice of resignation, the resigning Agent may petition any
court of competent jurisdiction for the appointment of a
successor Agent.
(c) The Agent may be removed at any time by Act of the Holders of
a majority in number of the Outstanding Securities delivered
to the Agent and the Company.
(d) If at any time
(1) the Agent fails to comply with Section 310(b) of the
TIA, as if the Agent were an indenture trustee under
an indenture qualified under the TIA, after written
request therefor by the Company or by any Holder who
has been a bona fide Holder of a Security for at
least six months, or
(2) the Agent shall cease to be eligible under Section
708 and shall fail to resign after written request
therefor by the Company or by any such Holder, or
(3) the Agent shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of
the Agent or of its property shall be appointed or
any public officer shall take charge or control of
the Agent or of its property or affairs for the
purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution
may remove the Agent, or (ii) any Holder who has been a bona
fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the
Agent and the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Agent for
any cause, the Company, by a Board Resolution, shall promptly
appoint a successor Agent and shall comply with the applicable
requirements of Section 710. If no successor Agent shall have
been so appointed by the Company and accepted appointment in
the manner required by Section 710, any Holder who has been a
bona fide Holder of a Security for at least six months may, on
behalf of himself and all
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others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor Agent to
give, notice of each resignation and each removal of the Agent
and each appointment of a successor Agent by mailing written
notice of such event by first class mail, postage prepaid, to
all Holders of Securities as their names and addresses appear
in the Security Register. Each notice shall include the name
of the successor Agent and the address of its Corporate Trust
Office.
SECTION 710. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Agent,
every such successor Agent so appointed shall execute,
acknowledge and deliver to the Company and to the retiring
Agent an instrument accepting such appointment, and thereupon
the resignation or removal of the retiring Agent shall become
effective and such successor Agent, without any further act,
deed or conveyance, shall become vested with all the rights,
powers, agencies and duties of the retiring Agent; but, on the
request of the Company or the successor Agent, such retiring
Agent shall, upon payment of its charges, execute and deliver
an instrument transferring to such successor Agent all the
rights, powers and trusts of the retiring Agent and shall duly
assign, transfer and deliver to such successor Agent all
property and money held by such retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company shall
execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Agent all such
rights, powers and agencies referred to in paragraph (a) of
this Section.
(c) No successor Agent shall accept its appointment unless at the
time of such acceptance such successor Agent shall be
qualified and eligible under this Article.
SECTION 711. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Agent, shall be the successor of the Agent hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Security Certificates shall have been
authenticated and executed on behalf of the Holders, but not delivered, by the
Agent then in office, any successor by merger, conversion or consolidation to
such Agent may adopt such authentication and execution and deliver the Security
Certificates so authenticated and executed with the same effect as if such
successor Agent had itself authenticated and executed such Securities.
SECTION 712. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders
received by the Agent in its capacity as Security Registrar.
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<PAGE> 38
(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Agent, and furnish to the Agent
reasonable proof that each such applicant has owned a Security
for a period of at least six months preceding the date of such
application, and such application states that the applicants
desire to communicate with other Holders with respect to their
rights under this Agreement or under the Securities and is
accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then
the Agent shall, within five Business Days after the receipt
of such application, afford such applicants access to the
information preserved at the time by the Agent in accordance
with Section 712(a).
(c) Every Holder of Securities, by receiving and holding the
Security Certificates evidencing the same, agrees with the
Company and the Agent that none of the Company, the Agent nor
any agent of any of them shall be held accountable by reason
of the disclosure of any such information as to the names and
addresses of the Holders in accordance with Section 712(b),
regardless of the source from which such information was
derived.
SECTION 713. NO OBLIGATIONS OF AGENT.
Except to the extent otherwise provided in this Agreement, the Agent
assumes no obligations and shall not be subject to any liability under this
Agreement or any Purchase Contract in respect of the obligations of the Holder
of any Security thereunder. The Company agrees, and each Holder of a Security
Certificate, by his acceptance thereof, shall be deemed to have agreed, that
the Agent's execution of the Security Certificates on behalf of the Holders
shall be solely as agent and attorney-in-fact for the Holders, and that the
Agent shall have no obligation to perform such Purchase Contracts on behalf of
the Holders, except to the extent expressly provided in Article Five hereof.
SECTION 714. TAX COMPLIANCE.
(a) The Agent, on its own behalf and on behalf of the Company,
will comply with all applicable certification, information
reporting and withholding (including "backup" withholding)
requirements imposed by applicable tax laws, regulations or
administrative practice with respect to (i) any payments made
with respect to the Securities or (ii) the issuance, delivery,
holding, transfer, redemption or exercise of rights under the
Securities. Such compliance shall include, without limitation,
the preparation and timely filing of required returns and the
timely payment of all amounts required to be withheld to the
appropriate taxing authority or its designated agent.
(b) The Agent shall comply with any direction received from the
Company with respect to the application of such requirements
to particular payments or Holders or in other particular
circumstances, and may for purposes of this Agreement rely on
any such direction in accordance with the provisions of
Section 701(a)(2) hereof.
(c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records
available on request to the Company or to its authorized
representative.
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ARTICLE EIGHT
SUPPLEMENTAL AGREEMENTS
SECTION 801. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company and the Agent, at any
time and from time to time, may enter into one or more agreements supplemental
hereto, in form satisfactory to the Company and the Agent, for any of the
following purposes:
(1) to evidence the succession of another Person to the Company,
and the assumption by any such successor of the covenants of
the Company herein and in the Security Certificates; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred
upon the Company; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(4) to make provision with respect to the rights of Holders
pursuant to the requirements of Section 506(b); or
(5) to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other provisions
herein, or to make any other provisions with respect to such
matters or questions arising under this Agreement, provided
such action shall not adversely affect the interests of the
Holders.
SECTION 802. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority of the
Outstanding Securities delivered to the Company and the Agent, the Company when
authorized by a Board Resolution, and the Agent may enter into an agreement or
agreements supplemental hereto for the purpose of modifying in the manner the
terms of the Securities, or the provisions of this Agreement or the rights of
the Holders in respect of the Securities, provided, however, that no such
supplemental agreement shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change any Payment Date;
(2) change the amount or type of Treasury Notes underlying a
Security, impair the right of the Holder of any Security to
receive interest payments on the underlying Treasury Notes or
otherwise adversely affect the Holder's rights in or to such
Treasury Notes;
(3) reduce any Contract Fee or change any place where, or the coin
or currency in which, any Contract Fee is payable;
(4) impair the right to institute suit for the enforcement of any
Purchase Contract;
(5) reduce the number of shares of Common Stock to be purchased
pursuant to any Purchase Contract, increase the price to
purchase shares of Common Stock upon settlement of any
Purchase Contract, change the Final Settlement Date or
otherwise adversely affect the Holder's rights under any
Purchase Contract; or
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(6) reduce the percentage of the Outstanding Securities the
consent of whose Holders is required for any such supplemental
agreement.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 803. EXECUTION OF SUPPLEMENTAL AGREEMENTS.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby
of the agencies created by this Agreement, the Agent shall be entitled to
receive and (subject to Section 701) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental agreement
is authorized or permitted by this Agreement. The Agent may, but shall not be
obligated to, enter into any such supplemental agreement which affects the
Agent's own rights, duties or immunities under this Agreement or otherwise.
SECTION 804. EFFECT OF SUPPLEMENTAL AGREEMENTS.
Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every
Holder of Security Certificates theretofore or thereafter authenticated,
executed on behalf of the Holders and delivered hereunder shall be bound
thereby.
SECTION 805. REFERENCE TO SUPPLEMENTAL AGREEMENTS.
Security Certificates authenticated, executed on behalf of the Holders
and delivered after the execution of any supplemental agreement pursuant to
this Article may, and shall if required by the Agent, bear a notation in form
approved by the Agent as to any matter provided for in such supplemental
agreement. If the Company shall so determine, new Security Certificates so
modified as to conform, in the opinion of the Agent and the Company, to any
such supplemental agreement may be prepared and executed by the Company and
authenticated, executed on behalf of the Holders and delivered by the Agent in
exchange for Outstanding Security Certificates.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 901. COVENANT NOT TO MERGE, CONSOLIDATE, SELL OR CONVEY PROPERTY
EXCEPT UNDER CERTAIN CONDITIONS.
The Company covenants that it will not merge or consolidate with any
other Person or sell or convey all or substantially all of its assets to any
Person, except that the Company may merge or consolidate with, or sell or
convey all or substantially all of its assets to, any other Person, provided
that (i) the Company shall be the continuing corporation, or the successor (if
other than the Company) shall be a corporation organized and existing under the
laws of the United States of America or a State thereof and such corporation
shall assume the obligations of the Company under the Purchase Contracts, this
Agreement and the Pledge Agreement by one or more supplemental agreements in
form satisfactory to the Agent and the Collateral Agent, executed and delivered
to the Agent and the Collateral Agent by such corporation, and (ii) the Company
or such successor corporation, as the case may be, shall not, immediately after
such merger or consolidation, or such sale or conveyance, be in
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<PAGE> 41
default ln the performance of any covenant or condition hereunder, under any of
the Securities or under the Pledge Agreement.
SECTION 902. RIGHTS AND DUTIES OF SUCCESSOR CORPORATION.
In case of any such consolidation, merger, sale or conveyance and upon
any such assumption by the successor corporation, such successor corporation
shall succeed to and be substituted for the Company with the same effect as if
it had been named herein as the Company. Such successor corporation thereupon
may cause to be signed, and may issue either in its own name or in the name of
Ferro Corporation, any or all of the Security Certificates evidencing
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Agent; and, upon the order of such successor
corporation, instead of the Company, and subject to all the terms, conditions
and limitations in this Agreement prescribed, the Agent shall authenticate and
execute on behalf of the Holders and deliver any Security Certificates which
previously shall have been signed and delivered by the officers of the Company
to the Agent for authentication and execution, and any Security Certificate
evidencing Securities which such successor corporation thereafter shall cause
to be signed and delivered to the Agent for that purpose. All the Security
Certificates so issued shall in all respects have the same legal rank and
benefit under this Agreement as the Security Certificates theretofore or
thereafter issued in accordance with the terms of this Agreement as though all
of such Security Certificates had been issued at the date of the execution
hereof.
In case of any such consolidation, merger, sale or conveyance such
change in phraseology and form (but not in substance) may be made in the
Security Certificates evidencing Securities thereafter to be issued as may be
appropriate.
SECTION 903. OPINION OF COUNSEL TO AGENT.
The Agent, subject to Sections 701 and 703, may receive an Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale or
conveyance, and any such assumption, complies with the provisions of this
Article.
ARTICLE TEN
COVENANTS
SECTION 1001. PERFORMANCE UNDER PURCHASE CONTRACTS.
The Company covenants and agrees for the benefit of the Holders from
time to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in ___________________________________ an
office or agency where Security Certificates may be presented or surrendered for
acquisition of shares of Common Stock upon settlement or Early Settlement and
for transfer of Treasury Notes upon occurrence of a Termination Event, where
Security Certificates may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities and this Agreement may be served. The Company will give prompt
written notice to the Agent of the location, and any change in the location, of
such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Agent with the
address thereof, such
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presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Company hereby appoints the Agent as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where Security Certificates may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall
in any manner relieve the Company of its obligation to maintain an office or
agency in ______________________________________________ for such purposes. The
Company will give prompt written notice to the Agent of any such designation or
rescission and of any change in the location of any such other office or
agency. The Company hereby designates as the place of payment for the
Securities the Corporate Trust Office and appoints the Agent at its Corporate
Trust Office as paying agent in such city.
SECTION 1003. COMPANY TO RESERVE COMMON STOCK.
The Company shall at all times prior to the Final Settlement Date
reserve and keep available, free from preemptive rights, out of its authorized
but unissued Common Stock the full number of shares of Common Stock issuable
against tender of payment in respect of all Purchase Contracts constituting a
part of the Securities evidenced by Outstanding Security Certificates.
SECTION 1004. COVENANTS AS TO COMMON STOCK.
The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Securities will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.
SECTION 1005. STATEMENTS OF OFFICERS OF THE COMPANY AS TO DEFAULT.
The Company will deliver to the Agent, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officer's
Certificate, stating whether or not to the best knowledge of the signers
thereof the Company is in default in the performance and observance of any of
the terms, provisions and conditions hereof, and if the Company shall be in
default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
FERRO CORPORATION
Attested by:
_______________________________________ By:
---------------------------------
____________________________________
Attested by:
_______________________________________ By:
---------------------------------
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EXHIBIT A
FERRO CORPORATION
_____% ________________ SECURITIES
(STATED AMOUNT $____________ PER SECURITY)
No. Securities
This Security Certificate certifies that _______________________ is
the registered Holder of the number of Securities set forth above. Each
Security represents ownership by the Holder of _____% United States Treasury
Notes due ________________ ("Treasury Notes") with a principal amount equal to
the Stated Amount, subject to the Pledge of such Treasury Notes by such Holder
pursuant to the Pledge Agreement, and the rights and obligations of the Holder
under one Purchase Contract with Ferro Corporation, an Ohio corporation (the
"Company").
Pursuant to the Pledge Agreement, the Treasury Notes constituting part
of each Security evidenced hereby have been pledged to the Collateral Agent to
secure the obligations of the Holder under the Purchase Contract constituting
part of such Security.
The Pledge Agreement provides that all payments of principal of, or
interest on, any Treasury Notes constituting part of the Securities received by
the Collateral Agent shall be paid by the Collateral Agent by wire transfer in
same day funds no later than ________, New York City time, on the Business Day
such payment is received by the Collateral Agent (provided that in the event
such payment is received by the Collateral Agent on a day that is not a
Business Day or after ________, New York City time, on a Business Day, then
such payment shall be made no later than ________, New York City time, on the
next succeeding Business Day) (i) in the case of (A) interest payments and (B)
any principal payments with respect to any Treasury Notes that have been
released from the Pledge pursuant to the Pledge Agreement, to the Agent to the
account designated by it for such purpose and (ii) in the case of principal
payments on any Pledged Treasury Notes (as defined in the Pledge Agreement), to
the Company, in full satisfaction of the respective obligations of the Holders
of the Securities of which such Pledged Treasury Securities are a part under
the Purchase Contracts forming a part of such Securities. Interest on any
Treasury Notes forming part of a Security evidenced hereby which is paid on any
or, commencing, 1995 (a "Payment Date"), shall, subject to receipt thereof by
the Agent from the Collateral Agent, be paid to the Person in whose name this
Security Certificate (or a Predecessor Security Certificate) is registered at
the close of business on the Record Date next preceding such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Security Certificate to purchase, and the Company to sell, on ________________,
(the "Final Settlement Date"), at a price equal to $____________ (the "Stated
Amount"), a number of shares of Common Stock, par value $1.00 per share
("Common Stock"), of the Company, equal to the Settlement Rate, unless on or
prior to the Final Settlement Date there shall have occurred a Termination
Event or Early Settlement with respect to the Security of which such Purchase
Contract is a part, all as provided in the Purchase Contract Agreement and more
fully described on the reverse hereof. The purchase price for the shares of
Common Stock purchased pursuant to each Purchase Contract evidenced hereby, if
not paid earlier, shall be paid on the Final Settlement Date by application of
payment received in respect of the principal of the Treasury Notes pledged to
secure the obligations under such Purchase Contract of the Holder of the
Security of which such Purchase Contract is a part.
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The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of a Security evidenced hereby a fee (the
"Contract Fee") equal to _____% per annum of the Stated Amount, from
________________, computed on the basis of the actual number of days elapsed in
a year of 365 or 366 days, as the case may be, subject to deferral at the
option of the Company as provided in the Purchase Contract Agreement and more
fully described on the reverse hereof. Such Contract Fee shall be payable to
the Person in whose name this Security Certificate (or a Predecessor Security
Certificate) is registered at the close of business on the Record Date next
preceding such Payment Date.
Interest on the Treasury Notes and the Contract Fee will be payable at
the office of the Agent in ____________________ or, at the option of the
Company, by check mailed to the address of the Person entitled thereto as such
address appears on the Security Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Security Certificate shall not be entitled
to any benefit under the Pledge Agreement or the Purchase Contract Agreement or
be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
FERRO CORPORATION
By:
---------------------------------
Attest:
- ----------------------------------
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By:
---------------------------------
as Attorney-in-Fact of such Holder
By:
---------------------------------
Dated:____________________
This is one of the Security Certificates referred to in the within
mentioned Purchase Contract Agreement
__________________________________,
as Agent
By:
-------------------------------
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Form of Reverse of Security Certificate
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of ________________ (the "Purchase Contract
Agreement"), between the Company and ________________, as Agent (herein called
the "Agent"), to which Purchase Contract Agreement and supplemental agreements
thereto reference is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Agent, the Company, and the Holders and of the terms upon which the Security
Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Security Certificate to purchase, and the Company to sell, on the Final
Settlement Date at a price equal to the Stated Amount, a number of shares of
Common Stock of the Company equal to the Settlement Rate, unless, on or prior
to the Final Settlement Date, there shall have occurred a Termination Event or
an Early Settlement with respect to the Security of which such Purchase
Contract is a part. The "Settlement Rate" is equal to (a) if the Applicable
Market Value (as defined below) is greater than $____________ (the "Threshold
Appreciation Price"), of a share of Common Stock per Purchase Contract, (b) if
the Applicable Market Value is less than or equal to the Threshold Appreciation
Price but is greater than the Stated Amount, a fractional share of Common Stock
per Purchase Contract equal to the Stated Amount divided by the Applicable
Market Value and (c) if the Applicable Market Amount is less than or equal to
the Stated Amount, one share of Common Stock per Purchase Contract, in each
case subject to adjustment as provided in the Purchase Contract. No fractional
shares of Common Stock will be issued upon settlement of Purchase Contracts, as
provided in the Purchase Contract Agreement.
The "Applicable Market Value" means the average of the Closing Prices
per share of Common Stock on each of the twenty consecutive Trading Days ending
on the last Trading Day immediately preceding the Final Settlement Date. The
"Closing Price" of the Common Stock on any date of determination means the
closing sale price (or, if no closing price is reported, the last reported sale
price) of the Common Stock on the New York Stock Exchange (the "NYSE") on such
date or, if the Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
securities exchange on which the Common Stock is so listed, or if the Common
Stock is not so listed on a United States national or regional securities
exchange, as reported by The Nasdaq Stock Market, or, if the Common Stock is
not so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market value of the
Common Stock on such date as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company. A "Trading
Day" means a day on which the Common Stock (A) is not suspended from trading on
any national or regional securities exchange or association or over-the-counter
market at the close of business and (B) has traded at least once on the
national or regional securities exchange or association or over-the-counter
market that is the primary market for the trading of the Common Stock.
The purchase price for the shares of Common Stock purchased pursuant
to each Purchase Contract shall be paid by application of payments received by
the Company on the Final Settlement Date from the Collateral Agent pursuant to
the Pledge Agreement in respect of the principal of the Treasury Notes Pledged
to secure the obligations of the relevant Holder under such Purchase Contract.
The Company shall not be obligated to issue any shares of Common Stock in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate purchase
price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
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Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Fee payable in respect of each Purchase
Contract to the Person in whose name the Security Certificate evidencing such
Purchase Contract is registered at the close of business on the Record Date
next pre ceding such Payment Date. Contract Fees will be payable at the office
of the Agent in _____________________ or, at the option of the Company, by
check mailed to the address of the Person entitled thereto at such address as
it appears on the Security Register.
The Company shall have the right, at any time prior to the Final
Settlement Date, to defer the payment of any or all of the Contract Fees
otherwise payable on any Payment Date, but only if the Company shall give the
Holders and the Agent written notice of its election to defer such payment
(specifying the amount to be deferred) as provided in the Purchase Contract
Agreement. Any Contract Fees so deferred shall bear additional Contract Fees
thereon at the rate of _____% per annum (computed on the basis of the actual
number of days elapsed in a year of 365 or 366 days, as the case may be),
compounding on each succeeding Payment Date, until paid in full. Deferred
Contract Fees (and additional Contract Fees accrued thereon) shall be due on
the next succeeding Payment Date except to the extent that payment is deferred
pursuant to the Purchase Contract Agreement. No Contract Fees may be deferred
to a date that is after the Final Settlement Date.
The Purchase Contracts and the obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract Fee,
shall immediately and automatically terminate, without the necessity of any
notice or action by any Holder, the Agent or the Company, if, on or prior to
the Final Settlement Date, a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall give written notice to the
Agent and to the Holders, at their addresses as they appear in the Security
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Treasury Notes from the Pledge. The Securities shall
thereafter represent the right to receive the Treasury Notes forming a part of
such Securities in accordance with the provisions of the Purchase Contract
Agreement and the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement at the option of the Holder thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $____________
or an integral multiple thereof may be settled early ("Early Settlement") as
provided in the Purchase Contract Agreement. In order to exercise the right to
effect Early Settlement with respect to any Purchase Contracts evidenced by
this Security Certificate, the Holder of this Security Certificate shall
deliver this Security Certificate to the Agent at the Corporate Trust Office
duly endorsed for transfer to the Company or in blank with the form of Election
to Settle Early set forth below duly completed and accompanied by payment in
the form of a certified or cashier's check payable to the order of the Company
in immediately available funds in an amount (the "Early Settlement Amount")
equal to (i) the product of (A) the Stated Amount times (B) the number of
Purchase Contracts with respect to which the Holder has elected to effect Early
Settlement minus (ii) the aggregate amount of Contract Fees, if any, otherwise
payable on or prior to the immediately preceding Payment Date deferred at the
option of the Company pursuant to the Purchase Contract Agreement and remaining
unpaid as of such immediately preceding Payment Date plus (iii) if such
delivery is made with respect to any Purchase Contracts during the period from
the close of business on any Record Date next preceding any Payment Date to the
opening of business on such Payment Date, an amount equal to the sum of (x) the
Contract Fees payable on such Payment Date with respect to such Purchase
Contracts plus (y) the interest with respect to the related Treasury Notes
payable on such Payment Date. Upon Early Settlement of Purchase Contracts by a
Holder of the related Securities, the Treasury Notes underlying such Securities
shall be released from the Pledge as provided in
42
<PAGE> 47
the Pledge Agreement and the Holder shall be entitled to receive, a number of
shares of Common Stock on account of each Purchase Contract forming part of a
Security as to which Early Settlement is effected equal to the Early Settlement
Rate. The Early Settlement Rate shall initially be equal to and shall be
adjusted in the same manner and at the same time as the Settlement Rate is
adjusted as provided in the Purchase Contract Agreement.
The Security Certificates are issuable only in registered form and
only in denominations of a single Security and any integral multiple thereof.
The transfer of any Security Certificate will be registered and Security
Certificates may be exchanged as provided in the Purchase Contract Agreement.
The Security Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents permitted by the Purchase
Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. For so long as the Purchase Contract
underlying a Security remains in effect, such Security shall not be separable
into its constituent parts, and the rights and obligations of the Holder of
such Security in respect of the Treasury Notes and Purchase Contract
constituting such Security may be transferred and exchanged only as a Security.
Upon registration of transfer of this Security Certificate, the
transferee shall be bound (without the necessity of any other action on the
part of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract
Agreement and the Purchase Contracts evidenced hereby and the transferor shall
be released from the obligations under the Purchase Contracts evidenced by this
Security Certificate. The Company covenants and agrees, and the Holder, by his
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
The Holder of this Security Certificate, by his acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Securities evidenced hereby on his behalf as his
attorney-in-fact, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform his obligations under such Purchase Contracts,
consents to the provisions of the Purchase Contract Agreement, authorizes the
Agent to enter into and perform the Pledge Agreement on his behalf as his
attorney-in-fact, and consents to the Pledge of the Treasury Notes underlying
this Security Certificate pursuant to the Pledge Agreement. The Holder further
covenants and agrees, that, to the extent and in the manner provided in the
Purchase Contract Agreement and the Pledge Agreement, but subject to the terms
thereof, payments in respect of principal of the Treasury Notes on the Final
Settlement Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of at least a majority
of the Outstanding Securities.
All terms used herein which are defined in the Purchase Contract
Agreement have the meanings set forth therein.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of ________________.
The Company, the Agent and any agent of the Company or the Agent may
treat the Person in whose name this Security Certificate is registered as the
owner of the Securities
43
<PAGE> 48
evidenced hereby for the purpose of receiving payments of interest on the
Treasury Notes, receiving payments of Contract Fees, performance of the
Purchase Contracts and for all other purposes whatsoever, whether or not any
payments in respect thereof be overdue and notwithstanding any notice to the
contrary, and neither the Company, the Agent nor any such agent shall be
affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Final Settlement Date of the
Purchase Contracts underlying the number of Securities evidenced by this
Security Certificate be registered in the name of, and delivered, together with
a check in payment for any fractional share, to the undersigned at the address
indicated below unless a different name and address have been indicated below.
If shares are to be registered in the name of a Person other than the under
signed, the undersigned will pay any transfer tax payable incident thereto.
Dated:____________________
----------------------------------------------
Signature
If shares are to be
registered in the name of and REGISTERED HOLDER
delivered to a Person other than
the Holder, please print such
Person's name and address:
Please print name and address of Registered
Holder:
__________________________________
Name
__________________________________________
__________________________________ Name
Address
___________________________________________
Address
- ----------------------------------
Social Security or other Taxpayer
identification number, if any
ELECTION TO SETTLE EARLY
The undersigned Holder of this Security Certificate hereby irrevocably
exercises the option to effect Early Settlement in accordance with the terms of
the Purchase Contract Agreement with respect to the Purchase Contracts
underlying the number of Securities evidenced by this Security Certificate
specified below. The option to effect Early Settlement may be exercised only
with respect to Purchase Contracts underlying Securities with an
44
<PAGE> 49
aggregate Stated Amount equal to $____________ or an integral multiple thereof.
The undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon such Early Settlement be registered in the name of
________________, and delivered, together with a check in payment for any
fractional share and any Security Certificate representing any Securities
evidenced hereby as to which Early Settlement of the related Purchase Contracts
is not effected, to the undersigned at the address indicated below unless a
different name and address have been indicated below. Treasury Notes
deliverable upon such Early Settlement will be transferred in accordance with
the transfer instructions set forth below. If shares are to be registered in
the name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
Dated:____________________
----------------------------------------------
Signature
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected: ________________________.
If shares are to be
registered in the name of and REGISTERED HOLDER
delivered to a Person other than
the Holder, please print such
Person's name and address:
Please print name and address of Registered
Holder:
__________________________________
Name
___________________________________________
__________________________________ Name
Address
___________________________________________
Address
- ----------------------------------
Social Security or other Taxpayer
identification number, if any
__________________________________
Transfer Instructions for Treasury Notes Transferable Upon Early Settlement or
a Termination Event:
________________________________________
________________________________________
________________________________________
45
<PAGE> 1
EXHIBIT (4f-1)
FORM OF
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of ______________, 199_ (this "Agreement"),
among Ferro Corporation, an Ohio corporation (the "Company"), __________________
__________________, as collateral agent (in such capacity, together with its
successors in such capacity, the "Collateral Agent"), and
_____________________________, as purchase contract agent and as
attorney-in-fact of the Holders (as hereinafter defined) from time to time of
the Securities (as hereinafter defined) (in such capacity, together with its
successors in such capacity, the "Purchase Contract Agent") under the Purchase
Contract Agreement (as hereinafter defined).
RECITALS
A. The Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement, dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which there will be issued ___% _________ Securities
(the "Securities").
B. Each Security consists of (a) one Purchase Contract (as
hereinafter defined) and (b) ___% United States Treasury Notes due _____________
("Treasury Notes") having a principal amount to $______ (the "Stated Amount")
and maturing on ______________ (the "Final Settlement Date"), subject to the
pledge of such Treasury Notes created hereby.
C. Pursuant to the terms of the Purchase Contract Agreement and
the Purchase Contracts, the Holders (as defined in the Purchase Contract
Agreement) from time to time of the Securities have irrevocably authorized the
Purchase Contract Agent, as attorney-in-fact of such Holders, among other things
to execute and deliver this Agreement on behalf of such Holders and to grant the
pledge provided hereby of the Treasury Notes constituting part of such
Securities as provided herein and subject to the terms hereof.
D. Accordingly, the Company, the Collateral Agent and the Purchase
Contract Agent, on its own behalf and as attorney-in-fact of the Holders from
time to time of the Securities, agree as follows:
Section 1. Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
1. the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular; and
2. the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Act" has the meaning specified in the Purchase Contract Agreement.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Treasury Regulations" means Subpart O-Book-Entry Procedure
of Title 31 of the Code of Federal Regulations (31 CFR (S) 306.115 et. seq.) and
any other
<PAGE> 2
regulations of the United States Treasury Department from time to time
applicable to the transfer or pledge of book-entry U.S. Treasury Securities.
"Board Resolution" has the meaning specified in the Purchase Contract
Agreement.
"Business Day" means any day that is not a Saturday, a Sunday or a day
on which the New York Stock Exchange or banking institutions or trust companies
in The City of New York are authorized or obligated by law or executive order to
be closed.
"Collateral Agent" has the meaning specified in the first paragraph of
this instrument.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"Early Settlement" has the meaning specified in the Purchase Contract
Agreement.
"Early Settlement Amount" has the meaning specified in the Purchase
Contract Agreement.
"Final Settlement Date" has the meaning specified in the Recitals.
"Holder" when used with respect to a Security, or a Purchase Contract
constituting a part thereof, has the meaning specified in the Purchase Contract
Agreement.
"Opinion of Counsel" has the meaning specified in the Purchase Contract
Agreement.
"Outstanding Securities" has the meaning specified in the Purchase
Contract Agreement.
"Outstanding Security Certificates" has the meaning specified in the
Purchase Contract Agreement.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pledge" has the meaning specified in Section 2 hereof.
"Pledged Treasury Notes" has the meaning specified in Section 2 hereof.
"Purchase Contract" has the meaning specified in the Purchase Contract
Agreement.
"Purchase Contract Agent" has the meaning specified in the first
paragraph of this instrument.
"Security" has the meaning specified in the Recitals.
"Security Certificate" has the meaning specified in the Purchase
Contract Agreement.
"Stated Amount" has the meaning specified in the Recitals.
"Termination Event" has the meaning specified in the Purchase Contract
Agreement.
<PAGE> 3
"Treasury Notes" has the meaning specified in the Recitals.
Section 2. The Pledge. The Holders from time to time of the
Securities acting through the Purchase Contract Agent, as their
attorney-in-fact, hereby pledge and grant to the Collateral Agent, as collateral
security for the performance when due by such Holders of their respective
obligations under the Purchase Contracts constituting part of such Securities,
for the benefit of the Company, a security interest in all of the right, title
and interest of such Holders in the Treasury Notes constituting a part of such
Securities. Prior to or concurrently with the execution and delivery of this
Agreement, the initial Holders and the Collateral Agent shall (i) cause the
Treasury Notes to be delivered to the Collateral Agent by Federal Reserve
Bank-Wire or by book-entry transfer through the facilities of the Depositary
Trust Company, as the case may be, to the account of the Collateral Agent
designated by it for such purpose and (ii) take appropriate action so that the
applicable Federal Reserve Bank through which such Treasury Notes have been
purchased will reflect such transfer and the Pledge by appropriate entries in
its records in accordance with Applicable Treasury Regulations. In addition, the
execution and delivery hereof by the Purchase Contract Agent and the Collateral
Agent shall constitute (i) the notification to the Collateral Agent (as bailee
or otherwise) of the Pledge and (ii) an acknowledgment by the Collateral Agent
(as third party in possession or otherwise) of the Pledge and of its holding of
such Treasury Notes subject to the Pledge, in each case, for purposes of
perfecting the Pledge under Applicable Treasury Regulations and other applicable
law, as the case may be, including, to the extent applicable, the Uniform
Commercial Code as adopted and in effect in any applicable jurisdiction. The
pledge provided in this Section 2 is herein referred to as the "Pledge" and the
Treasury Notes subject to the Pledge, excluding any Treasury Notes released from
the Pledge as provided in Section 4 hereof, are hereinafter referred to as the
"Pledged Treasury Notes." Subject to the Pledge, the Holders from time to time
of the Securities shall have full beneficial ownership of the Treasury Notes
constituting a part of such Securities.
Section 3. Distribution of Principal and Interest. (a) All
payments of principal of, or interest on, any Treasury Notes constituting part
of the Securities received by the Collateral Agent shall be paid by the
Collateral Agent by wire transfer in same day funds no later than ________, New
York City time on the Business Day such payment is received by the Collateral
Agent (provided that in the event such interest payment is received by the
Collateral Agent on a day that is not a Business Day or after ________, New York
City time, on a Business Day, then such payment shall be made no later than
_______, New York City time, on the next succeeding Business Day) (i) in the
case of (A) interest payments and (B) any principal payments with respect to any
Treasury Notes that have been released from the Pledge pursuant to Section 4
hereof, to the Purchase Contract Agent to the account designated by it for such
purpose and (ii) in the case of principal payments on any Pledged Treasury
Notes, to the Company, in full satisfaction of the respective obligations of the
Holders of the Securities of which such Pledged Treasury Notes are a part under
the Purchase Contracts forming a part of such Securities. All such payments
received by the Purchase Contract Agent as provided herein shall be applied by
the Purchase Contract Agent pursuant to the provisions of the Purchase Contract
Agreement. If, notwithstanding the foregoing, the Purchase Contract Agent shall
receive any payments of principal on account of any Pledged Treasury Notes, the
Purchase Contract Agent shall hold the same as trustee of an express trust for
the benefit of the Company (and promptly deliver over to the Company) for
application to the obligations of the Holders of the Securities of which such
Treasury Notes are a part under the Purchase Contracts relating to the
Securities of which such Treasury Notes are a part, and such Holders shall
acquire no right, title or interest in any such payments of principal so
received.
Section 4. Release of Pledged Treasury Notes. (a) Upon notice to
the Collateral Agent by the Company or the Purchase Contract Agent that there
has occurred a Termination
3
<PAGE> 4
Event, the Collateral Agent shall release all Pledged Treasury Notes from the
Pledge and shall transfer all such Treasury Notes, free and clear of any lien,
pledge or security interest created hereby, to the Purchase Contract Agent.
(b) Upon notice to the Collateral Agent by the Purchase Contract
Agent that one or more Holders of Securities have elected to effect Early
Settlement of their respective obligations under the Purchase Contracts forming
a part of such Securities in accordance with the terms of the Purchase Contracts
and the Purchase Contract Agreement, and that the Purchase Contract Agent has
received from such Holders, and paid to the Company, the related Early
Settlement Amounts pursuant to the terms of the Purchase Contracts and the
Purchase Contract Agreement and that all conditions to such Early Settlement
have been satisfied, then the Collateral Agent shall release from the Pledge
Pledged Treasury Notes with a principal amount equal to the product of (i) the
Stated Amount times (ii) the number of such Purchase Contracts as to which such
Holders have elected to effect Early Settlement.
(c) Transfers of Treasury Notes pursuant to Section 4(a) or (b)
shall be by Federal Reserve Bank-Wire, book-entry transfer through the
facilities of the Depository Trust Company or in another appropriate manner, (i)
if the Collateral Agent shall have received such notification at or prior to
_______, New York City time, on a Business Day, then no later than _______, New
York City time, on such Business Day and (ii) if the Collateral Agent shall have
received such notification on a day that is not a Business Day or after _______,
New York City time, on a Business Day, then no later than _______, New York City
time, on the next succeeding Business Day.
Section 5. Rights and Remedies. (a) The Collateral Agent shall
have all of the rights and remedies with respect to the Pledged Treasury Notes
of a secured party under the Uniform Commercial Code as in effect in the State
of _________ (the "Code") (whether or not said Code is in effect in the
jurisdiction where the rights and remedies are asserted) and such additional
rights and remedies to which a secured party is entitled under the laws in
effect in any jurisdiction where any rights and remedies hereunder may be
asserted.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of principal payments of any Pledged
Treasury Notes as provided in Section 3 hereof in satisfaction of the
obligations of the Holder of the Securities of which such Pledged Treasury Notes
are a part under the Purchase Contracts forming a part of such Securities, the
Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Notes and such obligations of such Holder, any and all of the rights
and remedies available to a secured party under the Code after default by a
debtor, and as otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of principal of or interest on
the Pledged Treasury Notes.
(d) The Purchase Contract Agent agrees that, from time to time,
upon the written request of the Collateral Agent, the Purchase Contract Agent
shall execute and deliver such further documents and do such other acts and
things as the Collateral Agent may reasonably request in order to maintain the
Pledge, and the perfection and priority thereof, and to confirm the rights of
the Collateral Agent hereunder.
Section 6. The Collateral Agent. The Collateral Agent and the
Company hereby agree between themselves as follows (it being understood and
agreed that neither the
4
<PAGE> 5
Purchase Contract Agent nor any Holder of Securities shall have any rights under
this Section 6):
6.01. Appointment, Powers and Immunities. The Collateral Agent
shall act as agent for the Company hereunder with such powers as are
specifically vested in the Collateral Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. The
Collateral Agent: (a) shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants or obligations
shall be inferred from this Agreement against the Collateral Agent, nor shall
the Collateral Agent be bound by the provisions of any agreement by any party
hereto beyond the specific terms hereof; (b) shall not be responsible to the
Company for any recitals contained in this Agreement, or in any certificate or
other document referred to or provided for in, or received by it under, this
Agreement, the Securities or the Purchase Contract Agreement, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement (other than as against the Collateral Agent), the Securities or the
Purchase Contract Agreement or any other document referred to or provided for
herein or therein or for any failure by the Company or any other Person (except
the Collateral Agent) to perform any of its obligations hereunder or thereunder;
(c) shall not be required to initiate or conduct any litigation or collection
proceedings hereunder (except pursuant to directions furnished under Section
6.02 hereof); (d) shall not be responsible for any action taken or omitted to be
taken by it hereunder or under any other document or instrument referred to or
provided for herein or in connection herewith or therewith, except for its own
negligence; and (e) shall not be required to advise any party as to selling or
retaining, or taking or refraining from taking any action with respect to, any
securities or other property deposited hereunder. Subject to the foregoing,
during the term of this Agreement the Collateral Agent shall take all reasonable
action in connection with the safe keeping and preservation of the Pledged
Treasury Notes hereunder.
No provision of this Agreement shall require the Collateral Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder. In no event shall the Collateral
Agent be liable for any amount in excess of the value of the Pledged Treasury
Notes.
6.02. Instructions of the Company. The Company shall have the
right, by one or more instruments in writing executed and delivered to the
Collateral Agent, to direct the time, method and place of conducting any
proceeding for any right or remedy available to the Collateral Agent, or of
exercising any power conferred on the Collateral Agent, or to direct the taking
or refraining from taking of any action authorized by this Agreement; provided,
however, that (i) such direction shall not conflict with the provisions of any
law or of this Agreement and (ii) the Collateral Agent shall be adequately
indemnified as provided herein. Nothing in this Section 6.02 shall impair the
right of the Collateral Agent in its discretion to take any action or omit to
take any action which it deems proper and which is not inconsistent with such
direction.
6.03. Reliance by Collateral Agent. The Collateral Agent shall
be entitled to rely upon any certification, order, judgment, opinion, notice or
other communication (including, without limitation, any thereof by telephone,
telecopy, telex, telegram or cable) believed by it to be genuine and correct and
to have been signed or sent by or on behalf of the proper Person or Persons
(without being required to determine the correctness of any fact stated
therein), and upon advice and statements of legal counsel and other experts
selected by the Collateral Agent. As to any matters not expressly provided for
by this Agreement, the Collateral Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
given by the Company in accordance with this Agreement.
5
<PAGE> 6
6.04. Rights in Other Capacities. The Collateral Agent and its
affiliates may (without having to account therefor to the Company) accept
deposits from, lend money to, make investments in and generally engage in any
kind of banking, trust or other business with the Purchase Contract Agent and
any Holder of Securities (and any of their subsidiaries or affiliates) as if it
were not acting as the Collateral Agent, and the Collateral Agent and its
affiliates may accept fees and other consideration from the Purchase Contract
Agent and any Holder of Securities without having to account for the same to the
Company, provided that the Collateral Agent covenants and agrees with the
Company that the Collateral Agent shall not accept, receive or permit there to
be created in its favor any security interest, lien or other encumbrance of any
kind in or upon the Pledged Treasury Notes.
6.05. Non-Reliance on Collateral Agent. The Collateral Agent
shall not be required to keep itself informed as to the performance or
observance by the Purchase Contract Agent or any Holder of Securities of this
Agreement, the Purchase Contract Agreement, the Securities or any other document
referred to or provided for herein or therein or to inspect the properties or
books of the Purchase Contract Agent or any Holder of Securities. The Collateral
Agent shall not have any duty or responsibility to provide the Company with any
credit or other information concerning the affairs, financial condition or
business of the Purchase Contract Agent or any Holder of Securities (or any of
their affiliates) that may come into the possession of the Collateral Agent or
any of its affiliates.
6.06. Compensation and Indemnity. The Company agrees: (i) to pay the
Collateral Agent from time to time reasonable compensation for all services
rendered by it hereunder and (ii) to indemnify the Collateral Agent for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of its powers and duties under this Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of such powers and
duties.
6.07. Failure to Act. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the undersigned and/or any other person or entity with respect to any
funds or property deposited hereunder, the Collateral Agent shall be entitled,
at its sole option, to refuse to comply with any and all claims, demands or
instructions with respect to such property or funds so long as such dispute or
conflict shall continue, and the Collateral Agent shall not be or become liable
in any way to any of the undersigned for its failure or refusal to comply with
such conflicting claims, demands or instructions. The Collateral Agent shall be
entitled to refuse to act until either (i) such conflicting or adverse claims or
demands shall have been finally determined by a court of competent jurisdiction
or settled by agreement between the conflicting parties as evidenced in a
writing, satisfactory to the Collateral Agent or (ii) the Collateral Agent shall
have received security or an indemnity satisfactory to the Collateral Agent
sufficient to save the Collateral Agent harmless from and against any and all
loss, liability or expense which the Collateral Agent may incur by reason of its
acting. The Collateral Agent may in addition elect to commence an interpleader
action or seek other judicial relief or orders as the Collateral Agent may deem
necessary. Notwithstanding anything contained herein to the contrary, the
Collateral Agent shall not be required to take any action that is in its opinion
contrary to law or to the terms of this Agreement, or which would in its opinion
subject it or any of its officers, employees or directors to liability.
6.08. Resignation of Collateral Agent. Subject to the
appointment and acceptance of a successor Collateral Agent as provided below,
(a) the Collateral Agent may resign at any time by giving notice thereof to the
Company and the Purchase Contract Agent, (b) the Collateral Agent may be removed
at any time by the Company and (c) if the Collateral Agent fails to perform any
of its material obligations hereunder in any material respect for a period
6
<PAGE> 7
of not less than 20 days after receiving notice of such failure by the Purchase
Contract Agent and such failure shall be continuing, the Collateral Agent may be
removed by the Purchase Contract Agent. The Purchase Contract Agent shall
promptly notify the Company of any removal of the Collateral Agent pursuant to
clause (c) of the immediately preceding sentence. Upon any such resignation or
removal, the Company shall have the right to appoint a successor Collateral
Agent. If no successor Collateral Agent shall have been so appointed and shall
have accepted such appointment within 30 days after the retiring Collateral
Agent's giving of notice of resignation or such removal, then the retiring
Collateral Agent may petition any court of competent jurisdiction for the
appointment of a successor Collateral Agent. The Collateral Agent shall be a
bank which has an office in _______________________ with a combined capital and
surplus of at least $50,000,000. Upon the acceptance of any appointment as
Collateral Agent hereunder by a successor Collateral Agent, such successor
Collateral Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent, and the
retiring Collateral Agent shall take all appropriate action to transfer any
money and property held by it hereunder (including the Pledged Treasury Notes)
to such successor Collateral Agent. The retiring Collateral Agent shall, upon
such succession, be discharged from its duties and obligations as Collateral
Agent hereunder. After any retiring Collateral Agent's resignation hereunder as
Collateral Agent, the provisions of this Section 6 shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as the Collateral Agent. [Promptly following the removal or
resignation of the Collateral Agent the Company shall give written notice
thereof to Moody's Investors Services, Inc.]
6.09. Right to Appoint Agent or Advisor. The Collateral Agent
shall have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the collateral Agent shall not be liable for any action
taken or omitted by such agents or advisors selected in good faith.
The provisions of this Section 6 shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent.
Section 7. Amendment.
7.01. Amendment Without Consent of Holders. Without the consent
of any Holders, the Company, the Collateral Agent and the Purchase Contract
Agent, at any time and from time to time, may amend this Agreement, in form
satisfactory to the Company, the Collateral Agent and the Purchase Contract
Agent, for any of the following purposes:
1. to evidence the succession of another Person to the Company,
and the assumption by any such successor of the covenants of the Company; or
2. to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the Company;
or
3. to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent or Purchase Contract Agent; or
4. to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other such provisions herein, or to
make any other provisions with respect to such matters or questions arising
under this Agreement, provided such action shall not adversely affect the
interests of the Holders.
7
<PAGE> 8
7.02. Amendment with Consent of Holders. With the consent of
the Holders of not less than 66 2/3% of the Outstanding Securities, by Act of
said Holders delivered to the Company, the Agent and the Collateral Agent, the
Company, when authorized by a Board Resolution, the Agent and the Collateral
Agent may amend this Agreement for the purpose of modifying in any manner the
provisions of this Agreement or the rights of the Holders in respect of the
Securities; provided, however, that no such supplemental agreement shall,
without the consent of the Holder of each Outstanding Security affected thereby,
1. change the amount or type of Treasury Notes underlying a
Security, impair the right of the Holder of any Security to receive
interest payments on the underlying Treasury Notes or otherwise
adversely affect the Holder's rights in or to such Treasury Notes; or
2. otherwise effect any action that would require the consent of
the Holder of each Outstanding Security affected thereby pursuant to the
Purchase Contract Agreement if such action were effected by an agreement
supplemental thereto; or
3. reduce the percentage of Outstanding Securities the consent of
whose Holders is required for any such amendment.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
7.03. Execution of Amendments. In executing any amendment
permitted by this Section, the Collateral Agent and the Purchase Contract Agent
shall be entitled to receive and (subject to Section 6.01 hereof, with respect
to the Collateral Agent, and Section 701 of the Purchase Contract Agreement,
with respect to the Purchase Contract Agent) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement.
7.04. Effect of Amendments. Upon the execution of any amendment
under this Section, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Security Certificates theretofore or thereafter authenticated,
executed on behalf of the Holders and delivered under the Purchase Contract
Agreement shall be bound thereby.
7.05. Reference to Amendments. Security Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any amendment pursuant to this Section may, and shall if required
by the Collateral Agent or the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent and the Collateral Agent as to any
matter provided for in such amendment. If the Company shall so determine, new
Security Certificates so modified as to conform, in the opinion of the
Collateral Agent, the Purchase Contract Agent and the Company, to any such
amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Purchase Contract Agent
in accordance with the Purchase Contract Agreement in exchange for Outstanding
Security Certificates.
Section 8. Miscellaneous.
8.01. No Waiver. No failure on the part of the Collateral Agent
or any of its agents to exercise, and no course of dealing with respect to, and
no delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by the Collateral Agent
or any of its agents of any right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right,
8
<PAGE> 9
power or remedy. The remedies herein are cumulative and are not exclusive of any
remedies provided by law.
8.02. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF _________. The Company,
the Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, hereby submit to
the nonexclusive jurisdiction of the United States District Court for the
_________ District of _________ and of any _________ state court sitting in
__________ for the purposes of all legal proceedings arising out of or relating
to this Agreement or the transactions contemplated hereby. The Company, the
Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
8.03. Notices. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) and delivered to
the intended recipient at the "Address for Notices" specified below its name on
the signature pages hereof or, as to any party, at such other address as shall
be designated by such party in a notice to the other parties. Except as
otherwise provided in this Agreement, all such communications shall be deemed to
have been duly given when transmitted by telecopier or personally delivered or,
in the case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
8.04. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent and the Purchase Contract Agent, and the Holders
from time to time of the Securities, by their acceptance of the same, shall be
deemed to have agreed to be bound by the provisions hereof and to have ratified
the agreements of, and the grant of the Pledge hereunder by, the Purchase
Contract Agent.
8.05. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.06. Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
8.07. Expenses, etc. The Company agrees to reimburse the
Collateral Agent for: (a) all reasonable out-of-pocket costs and expenses of the
Collateral Agent (including, without limitation, the reasonable fees and
expenses of counsel to the Collateral Agent), in connection with (i) the
negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the terms of
this Agreement; (b) all reasonable costs and expenses of the Collateral Agent
(including, without limitation, reasonable fees and expenses of counsel) in
connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its obligations
under the Purchase Contracts forming a part of the Securities and (ii)
9
<PAGE> 10
the enforcement of this Section 8.07; and (c) all transfer, stamp, documentary
or other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any other document referred to
herein and all costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated hereby.
8.08. Security Interest Absolute. All rights of the Collateral Agent
and security interests hereunder, and all obligations of the Holders from time
to time of the Securities hereunder, shall be absolute and unconditional
irrespective of:
1. any lack of validity or enforceability of any provision of the
Purchase Contracts or the Securities or any other agreement or
instrument relating thereto;
2. any change in the time, manner or place of payment of, or any
other term of, or any increase in the amount of, all or any of
the obligations of Holders of Securities under the related
Purchase Contracts, or any other amendment or waiver of any
term of, or any consent to any departure from any requirement
of, the Purchase Contract Agreement or any Purchase Contract or
any other agreement or instrument relating thereto; or
3. any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor
or a pledgor.
10
<PAGE> 11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
FERRO CORPORATION --------------------------------
As Purchase Contract Agent
By: and as Attorney-in-Fact of
---------------------------
Name:_________________________ the Holders from Time-to-Time
Title:________________________ of the Securities
By:
------------------------------
Address for Notices: Name:____________________________
Ferro Corporation Title:___________________________
1000 Lakeside Avenue
Cleveland, Ohio 44114 Address for Notices:
--------------------------------
As Collateral Agent
By:
-----------------------------
Name:___________________________
Title:__________________________
Address for Notices:
11
<PAGE> 1
EXHIBIT (4k)
DEPOSIT AGREEMENT
among
FERRO CORPORATION
and
-----------------------------------------------
and
THE HOLDERS FROM TIME TO TIME OF
THE DEPOSITARY RECEIPTS DESCRIBED HEREIN
IN RESPECT OF THE
{DESIGNATION OF PREFERRED STOCK}
Dated as of ____________, 19__
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
DEFINITIONS
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF PREFERRED STOCK,
EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS
<S> <C> <C>
SECTION 2.1 Form and Transferability of Receipts . . . . . . . . . . . . . . . . .
SECTION 2.2 Deposit of Preferred Stock, Execution and
Delivery of Receipts in Respect Thereof . . . . . . . . . . . . . .
SECTION 2.3 Redemption of Preferred Stock . . . . . . . . . . . . . . . . . . . .
SECTION 2.4 Transfer of Receipts . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.5 Combination and Split-ups of Receipts . . . . . . . . . . . . . . . .
SECTION 2.6 Surrender of Receipts and Withdrawal of
Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.7 Limitations on Execution and Delivery,
Transfer, Split-up, Combination, Surrender
and Exchange of Receipts . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.8 Lost Receipts, etc. . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.9 Cancellation and Destruction of Surrendered
Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.10 Optional Conversion of Preferred Stock into
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.11 Mandatory Conversion of Preferred Stock into
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . .
<CAPTION>
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS
OF RECEIPTS AND THE COMPANY
SECTION 3.1 Filing Proofs, Certificates and Other
Information . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.2 Payment of Taxes or Other Governmental Charges . . . . . . . . . . . .
SECTION 3.3 Representations and Warranties as to
Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . .
<CAPTION>
ARTICLE IV
THE PREFERRED STOCK, NOTICES
SECTION 4.1 Cash Distributions . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.2 Distributions Other Than Cash . . . . . . . . . . . . . . . . . . . .
SECTION 4.3 Subscription Rights, Preferences or Privileges . . . . . . . . . . . .
SECTION 4.4 Notice of Dividends; Fixing of Record Date for
Holders of Receipts . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.5 Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.6 Changes Affecting Preferred Stock and
Reclassifications, Recapitalizations, etc. . . . . . . . . . . . . .
</TABLE>
- i -
<PAGE> 3
<TABLE>
<S> <C> <C>
SECTION 4.7 Inspection of Reports . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.8 List of Receipt Holders . . . . . . . . . . . . . . . . . . . . . . .
<CAPTION>
ARTICLE V
THE DEPOSITARY AND THE COMPANY
SECTION 5.1 Maintenance of Offices, Agencies, Transfer
Books by the Depositary, the Registrar . . . . . . . . . . . . . . .
SECTION 5.2 Prevention of or Delay in Performance by the
Depositary, the Depositary's Agents or
the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.3 Obligations of the Depositary, the Depositary's
Agents, and the Company . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.4 Resignation and Removal of the Depositary;
Appointment of Successor Depositary . . . . . . . . . . . . . . . .
SECTION 5.5 Corporate Notices and Reports . . . . . . . . . . . . . . . . . . . .
SECTION 5.6 Deposit of Preferred Stock by the Company . . . . . . . . . . . . . .
SECTION 5.7 Indemnification by the Company . . . . . . . . . . . . . . . . . . . .
SECTION 5.8 Fees, Charges and Expenses . . . . . . . . . . . . . . . . . . . . . .
<CAPTION>
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.2 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.2 Exclusive Benefits of Parties . . . . . . . . . . . . . . . . . . . .
SECTION 7.3 Invalidity of Provisions . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.5 Depositary's Agents . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.6 Holders of Receipts Are Parties . . . . . . . . . . . . . . . . . . .
SECTION 7.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.8 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exhibit A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
</TABLE>
- ii -
<PAGE> 4
DEPOSIT AGREEMENT
This DEPOSIT AGREEMENT, dated as of _____________, 19__, is entered
into among FERRO CORPORATION, an Ohio corporation (the "Company"),
________________, as Depositary (including any successor, the "Depositary"), and
all holders from time to time of Depositary Receipts executed and delivered
hereunder.
WHEREAS, it is desired to provide, as hereinafter set forth in this
Deposit Agreement, for the deposit of up to ______ shares of {Designation of
Preferred Stock}, without par value per share (the "Preferred Stock"), of the
Company with the Depositary, as agent for the beneficial owners of the Preferred
Stock, for the purposes set forth in this Deposit Agreement and for the
execution and delivery hereunder of the Receipts (as defined below) evidencing
Depositary Shares (as defined below) in respect of the Preferred Stock so
deposited; and
WHEREAS, the Receipts are to be substantially in the form of the
Depositary Receipt annexed as Exhibit A, with appropriate insertions,
modifications and omissions, as hereinafter provided in this Deposit Agreement;
NOW, THEREFORE, in consideration of the premises contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
All capitalized terms used but not defined herein shall have the
respective meanings assigned to such terms in the Express Terms (as defined
below). The following definitions shall apply to the respective terms (in the
singular and plural forms of such terms) used in this Agreement and the
Depositary Receipts:
"Articles of Incorporation" shall mean the Eleventh Amended Articles of
Incorporation, as amended from time to time, of the Company.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the States of Ohio and New York are
authorized or obligated by law or executive order to close.
"Common Stock" shall mean the Common Stock, $1.00 par value per share,
of the Company.
"Company" shall mean Ferro Corporation, an Ohio corporation, and its
successors.
"Deposit Agreement" shall mean this agreement, as the same may be
amended, modified or supplemented from time to time.
"Depositary" shall mean ____________________________, as Depositary
hereunder, and any successor as Depositary hereunder.
<PAGE> 5
"Depositary's Office" shall mean the office of the Depositary in the
City of ________________ at which at any particular time its business in respect
of matters governed by this Deposit Agreement shall be administered, which at
the date of this Deposit Agreement is located at
_____________________________________________.
"Depositary Share" shall mean an interest in ___________________ of a
share of the Preferred Stock deposited with the Depositary hereunder, as
evidenced by the Receipts executed and delivered hereunder, and the same
proportional interest in any and all other property received by the Depositary
in respect of such share of Preferred Stock and held under this Deposit
Agreement. Subject to the terms of this Deposit Agreement, each owner of a
Depositary Share is entitled, proportionately, to all the rights, preferences
and privileges or the Preferred Stock represented by such Depositary Share,
including the dividend, voting and liquidation rights contained in the Express
Terms, and to the benefits of all obligations of the Company under the Express
Terms.
"Depositary's Agent" shall mean an agent appointed by the Depositary as
provided, and for the purposes specified, in Section 7.5.
"Express Terms" shall mean the designations, rights, powers,
qualifications, limitations and restrictions of the Preferred Stock as set forth
in the Articles of Incorporation and filed with the Secretary of State of Ohio.
"Mandatory Conversion Date" shall have the meaning given in
Section 2.11.
"Preferred Stock" shall mean the {Designation of Preferred Stock} per
share, of the Company.
"Receipt" or "Depositary Receipt" shall mean a Depositary Receipt
executed and delivered hereunder to evidence one or more Depositary Shares,
whether in definitive or temporary form.
"Record holder" as applied to a Receipt shall mean the person in whose
name a Receipt is registered on the books maintained by the Depositary for such
purpose.
"Registrar" shall mean any bank or trust company appointed to register
Receipts as herein provided.
"Securities Act" shall mean the Securities Act of 1933, as amended.
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF PREFERRED STOCK,
EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS
SECTION 2.1 Form and Transferability of Receipts. Definitive Receipts
shall be engraved or printed or lithographed with steel-engraved borders and
shall be substantially in the form set forth in Exhibit A annexed to this
Deposit Agreement, with appropriate insertions, modifications and omissions, as
hereinafter provided. Pending preparation of definitive Receipts, the
Depositary, upon the written order of the Company or any holder of Preferred
Stock, as the case may be, shall execute and deliver temporary Receipts,
delivered for deposit in compliance with Section 2.2, which are printed,
lithographed, typewritten, mimeographed or otherwise substantially of the tenor
of the definitive Receipts in lieu of which they are executed and delivered and
with such appropriate
- 2 -
<PAGE> 6
insertions, omissions, substitutions and other variations as the persons
executing such Receipts may determine, as evidenced by their execution of such
Receipts. If temporary Receipts are executed and delivered, the Company and the
Depositary will cause definitive Receipts to be prepared without unreasonable
delay. After the preparation of definitive Receipts, the temporary Receipts
shall be exchangeable for definitive Receipts upon surrender of the temporary
Receipts at an office described in the second to last paragraph of Section 2.2,
without charge to the holder. Upon surrender for cancellation of any one or more
temporary Receipts, the Depositary shall execute and deliver in exchange
therefor definitive Receipts representing the same number of Depositary Shares
as represented by the surrendered temporary Receipt or Receipts. Such exchange
shall be made at the Company's expense and without any charge therefor. Until so
exchanged, the temporary Receipts shall in all respects be entitled to the same
benefits under this Agreement, and with respect to the Preferred Stock deposited
hereunder, as definitive Receipts.
Receipts shall be executed by the Depositary by the manual signature of
a duly authorized signatory of the Depositary; provided, however, that such
signature may be a facsimile if a Registrar (other than the Depositary) shall
have countersigned the Receipts by the manual signature of a duly authorized
signatory of the Registrar. No Receipt shall be entitled to any benefits under
this Deposit Agreement or be valid or obligatory for any purpose unless it shall
have been executed as provided in the preceding sentence. The Depositary shall
record on its books each Receipt executed as provided above and delivered as
hereinafter provided.
Except as the Depositary may otherwise determine, Receipts shall be in
denominations of any number of whole Depositary Shares. All Receipts shall be
dated the date of their execution.
Receipts may be endorsed with or have incorporated in the text thereof
such legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required by the Depositary or required to comply
with any applicable law or regulation or with the rules and regulations of any
securities exchange upon which the Preferred Stock or the Depositary Shares may
be listed to conform with any usage with respect thereto, or to indicate any
special limitations or restrictions to which any particular receipts are subject
by reason of the date of issuance of the Preferred Stock or otherwise.
Ownership of any Receipt (and of the Depositary Shares evidenced by
such Receipt) that is properly endorsed or accompanied by a properly executed
instrument of transfer or endorsement, or other instrument satisfactory to the
Depositary, shall be transferable by delivery; provided, however, that until a
Receipt shall be transferred on the books of the Depositary as provided in
Section 2.4, the Depositary and the Company may, notwithstanding any notice to
the contrary, treat the record holder thereof at such time as the absolute owner
thereof for the purpose of determining the person entitled to distribution of
dividends or other distributions or to any notice provided for in this Deposit
Agreement and for all other purposes.
SECTION 2.2 Deposit of Preferred Stock, Execution and Delivery of
Receipts in Respect Thereof. Subject to the terms and conditions of this Deposit
Agreement, the Company or any holder of Preferred Stock may deposit shares of
Preferred Stock under this Deposit Agreement by delivery to the Depositary of a
certificate or certificates for the shares of Preferred Stock to be deposited,
properly endorsed or accompanied by a properly executed instrument of transfer
or endorsement in form satisfactory to the Depositary, together with (i) all
such certifications as may be required by the Depositary in accordance with the
provisions of this Deposit Agreement and (ii) a written order directing the
Depositary to execute and deliver to or upon the written order of the person or
persons stated
- 3 -
<PAGE> 7
in such order a Receipt or Receipts for the number of Depositary Shares
representing such deposited Preferred Stock.
If required by the Depositary, Preferred Stock presented for deposit at
any time, whether or not the register of holders of Receipts is closed, shall
also be accompanied by an agreement or assignment, or other instrument
satisfactory to the Depositary, that will provide for the prompt transfer to the
Depositary or its nominee of any dividend or right to subscribe for additional
Preferred Stock or to receive other property that any person in whose name the
Preferred Stock is or has been registered may thereafter receive upon or in
respect of such deposited Preferred Stock, or in lieu thereof such agreement of
indemnity or other agreement as shall be satisfactory to the Depositary.
Upon receipt by the Depositary of a certificate or certificates for the
shares of Preferred Stock to be deposited hereunder, together with the other
documents specified above, the Depositary shall, as soon as transfer and
registration can be accomplished, present such certificates to the registrar and
transfer agent of the Preferred Stock for transfer and registration in the name
of the Depositary or its nominee of the shares of Preferred Stock being
deposited. Deposited Preferred Stock shall be held by the Depositary in an
account to be established by the Depositary at the Depositary's Office.
Upon receipt by the Depositary of a certificate or certificates for
Preferred Stock to be deposited hereunder, together with the other documents
specified above, the Depositary, subject to the terms and conditions of this
Deposit Agreement, shall execute and deliver to or upon the order of the person
or persons named in the written order delivered to the Depositary referred to in
the first paragraph of this Section 2.2 a Receipt or Receipts for the number of
whole Depositary Shares representing the Preferred Stock so deposited and
registered in such name or names as may be requested by such person or persons.
The Depositary shall execute and deliver such Receipt or Receipts at the
Depositary's Office, except that, at the request, risk and expense of any person
requesting such delivery, such delivery may be made at such other place as may
be designated by such person. In each case, delivery will be made only upon
payment by such person to the Depositary of all taxes and other governmental
charges and any fees payable in connection with such deposit and the transfer of
the deposited Preferred Stock.
The Company shall deliver to the Depositary from time to time such
quantities of Receipts as the Depositary may request to enable the Depositary to
perform its obligations under this Deposit Agreement.
SECTION 2.3 Redemption of Preferred Stock. Whenever the Company shall
elect to redeem shares of Preferred Stock in accordance with the Express Terms
it shall (unless otherwise agreed in writing with the Depositary) give the
Depositary in its capacity as Depositary notice of the date of such proposed
redemption of the Preferred Stock, which notice shall (i) be given not less than
three (3) Business Days prior to the date the Depositary is to mail notice of
the redemption to the record holders of Receipts, in the case of a redemption of
all outstanding Depositary Shares, and not less than ten (10) calendar days
prior to the date the Depositary is to mail notice of the redemption to the
record holders of Receipts evidencing the Depositary Shares to be redeemed, in
the case of a partial redemption of outstanding Depositary Shares, and (ii) be
accompanied by a certificate from the Company stating that such redemption of
the Preferred Stock is in accordance with the provisions of the Express Terms.
Such notice shall be in addition to the notice required for redemption pursuant
to the Express Terms. On the date of any such redemption of Preferred Stock,
provided that the Company shall then have deposited with the Depositary the
shares of Common Stock as required pursuant to the Express Terms to be delivered
in exchange for the Preferred Stock held by the Depositary to be redeemed, the
Depositary shall redeem
- 4 -
<PAGE> 8
(using such shares of Common Stock and any cash deposited with it) the number of
Depositary Shares representing such redeemed Preferred Stock. Subject to the
penultimate sentence of this Paragraph, the Depositary shall mail, first class
postage prepaid, notice of the redemption of Preferred Stock and the
simultaneous redemption of the Depositary Shares representing the Preferred
Stock held by the Depositary to be redeemed, not less than 15 and not more than
60 days prior to the date fixed for redemption of such Preferred Stock and
Depositary Shares (the "Redemption Date"), to the record holders of the Receipts
evidencing the Depositary Shares to be so redeemed, at the addresses of such
holders as they appear on the records of the Depositary; but neither failure to
mail any such notice to one or more such holders nor any defect in any notice to
one or more such holders shall affect the sufficiency of the proceedings for
redemption as to other holders. Each such notice shall state: (i) the Redemption
Date; (ii) that all outstanding Depositary Shares are to be redeemed or, if less
than all the Depositary Shares held by any such holder are to be redeemed, the
number of such Depositary Shares held by such holder to be so redeemed; (iii)
(A) the number of shares of Common Stock deliverable upon redemption of each
Depositary Share pursuant to the Express Terms, and the Current Market Price
used to calculate such number of shares of Common Stock, (B) the number of
shares of Common Stock deliverable upon redemption of each Depositary Share
pursuant to the Express Terms and (C) the higher of the numbers of shares of
Common Stock specified in clauses (iii)(A) and (iii)(B); (iv) the Call Price and
the portion thereof applicable to each of the Depositary Shares; (v) the
Optional Conversion Rate (calculated in accordance with of the Express Terms)
and the resulting optional conversion rate applicable to the Depositary Shares,
together with a statement that all conversion rights with respect to Depositary
Shares called for redemption will terminate immediately prior to the close of
business on the date fixed for redemption; (vi) the place or places where
Receipts evidencing Depositary Shares are to be surrendered for redemption; and
(vii) that dividends in respect of the shares of Preferred Stock represented by
the Depositary Shares to be redeemed will cease to accumulate from and after
such Redemption Date. Any such notices shall be mailed in the same manner as
notices of redemption of the Preferred Stock are required to be mailed pursuant
to the Express Terms and published in the same manner as notices of redemption
of the Preferred Stock are required to be published pursuant to said section, if
so required. In case fewer than all the outstanding Depositary Shares are to be
redeemed, the Depositary Shares to be redeemed shall be selected by lot or pro
rata (as nearly as may be) or by any other equitable method determined by the
Depositary to be consistent with the method determined by the Board of Directors
of the Company with respect to the Preferred Stock.
Notice having been mailed and published by the Depositary as aforesaid,
from and after the Redemption Date (unless the Company shall have failed to
redeem the shares of Preferred Stock to be redeemed by it, as set forth in the
Company's notice provided for in the preceding paragraph), the Depositary Shares
called for redemption shall be deemed no longer to be outstanding and all rights
of the holders of Receipts evidencing such Depositary Shares except the right to
receive the shares of Common Stock upon redemption and cash for any fractional
share amount) shall, to the extent of such Depositary Shares, cease and
terminate. Upon surrender in accordance with said notice of the Receipts
evidencing such Depositary Shares (properly endorsed or assigned for transfer,
if the Depositary shall so require), such Depositary Shares shall be redeemed
for shares of Common Stock and cash for any fractional share amount at a rate
per Depositary Share equal to one hundredth of the number of shares of Common
Stock (including fractional amounts) delivered upon redemption of a share of
Preferred Stock pursuant to the Express Terms. The foregoing shall be subject
further to the terms and conditions of the Express Terms.
If fewer than all of the Depositary Shares evidenced by a Receipt are
called for redemption, the Depositary will deliver to the holder of such Receipt
upon its surrender to the Depositary, together with the shares of Common Stock
for the Depositary Shares called
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for redemption, a new Receipt evidencing the Depositary Shares evidenced by such
prior Receipt and not called for redemption.
No fractional shares of Common Stock shall be issuable upon the
redemption of Preferred Stock underlying the Depositary Shares. In lieu of any
fractional share otherwise issuable in respect of the aggregate number of shares
of Preferred Stock of any holder which are redeemed on any redemption date, the
Company shall cause to be delivered to such holder an amount in cash for such
fractional share as provided in the Express Terms.
Except with respect to a conversion of Depositary Shares which may
occur pursuant to the Express Terms, the Depositary shall not be required (a) to
execute and deliver, transfer or exchange any Receipts for a period beginning at
the opening of business 15 days next preceding any selection of Depositary
Shares and Preferred Stock to be redeemed and ending at the close of business on
the day of the mailing of notice of redemption of Depositary Shares or (b) to
transfer or exchange for another Receipt any Receipt evidencing Depositary
Shares called or being called for redemption in whole or in part, except as
provided in the third paragraph of this Section 2.3.
SECTION 2.4 Transfer of Receipts. Subject to the terms and conditions
of this Deposit Agreement, the Depositary shall make transfers on its books from
time to time of Receipts upon any surrender thereof at the Depositary's Office
or such other office as the Depositary may designate for such purpose, by the
holder in person or by a duly authorized attorney, properly endorsed or
accompanied by a properly executed instrument of transfer or endorsement, or
other instrument satisfactory to the Depositary, together with evidence of the
payment of any transfer taxes as may be required by law. Upon such surrender,
the Depositary shall execute a new Receipt or Receipts and deliver the same to
or upon the order of the person or persons entitled thereto evidencing the same
aggregate number of Depositary Shares evidenced by the Receipt or Receipts
surrendered.
SECTION 2.5 Combination and Split-ups of Receipts. Upon surrender of
a Receipt or Receipts at the Depositary's Office or such other office as the
Depositary may designate for the purpose of effecting a split-up or combination
of Receipts, subject to the terms and conditions of this Deposit Agreement, the
Depositary shall execute and deliver a new Receipt or Receipts in the authorized
denominations requested evidencing the same aggregate number of Depositary
Shares evidenced by the Receipt or Receipts surrendered; provided, however, that
the Depositary shall not execute and deliver any Receipt evidencing a fractional
Depositary Share.
SECTION 2.6 Surrender of Receipts and Withdrawal of Preferred Stock.
Any holder of a Receipt or Receipts may withdraw any or all of the Preferred
Stock (but only in whole shares of Preferred Stock) represented by the
Depositary Shares evidenced by such Receipts and all money and other property,
if any, represented by such Depositary Shares by surrendering such Receipt or
Receipts, properly endorsed or accompanied by a properly executed instrument of
transfer or endorsement, or other instrument satisfactory to the Depositary, at
the Depositary's Office or such other office as the Depositary may designate for
such withdrawals. After such surrender, without unreasonable delay, the
Depositary shall deliver to such holder, or to the person or persons designated
by such holder as hereinafter provided, the whole number of shares of Preferred
Stock and other property, if any, represented by the Depositary Shares evidenced
by the Receipt or Receipts so surrendered for withdrawal. If the Receipt or
Receipts delivered by the holder to the Depositary in connection with such
withdrawal shall evidence a number of Depositary Shares in excess of the number
of whole Depositary Shares representing the whole number of shares of Preferred
Stock to be withdrawn, the Depositary shall at the same time, in addition to
such whole number of shares of Preferred Stock and such money and other
property, if any,
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to be withdrawn, deliver to such holder, or (subject to Section 2.4) upon his
order, a new Receipt or Receipts evidencing such excess number of whole
Depositary Shares. Delivery of the Preferred Stock and such money and other
property being withdrawn may be made by the delivery of such certificates,
documents of title, and other instruments as the Depositary may deem
appropriate, which, if required by the Depositary, shall be properly endorsed or
accompanied by proper instruments of transfer.
If the Preferred Stock and the money and other property being withdrawn
are to be delivered to a person or persons other than the record holder of the
Receipt or Receipts being surrendered for withdrawal of Preferred Stock, such
holder shall execute and deliver to the Depositary a written order so directing
the Depositary and the Depositary may require that the Receipt or Receipts
surrendered by such holder for withdrawal of such shares of Preferred Stock be
properly endorsed in blank or accompanied by a properly executed instrument of
transfer or endorsement in blank.
The Depositary shall deliver the Preferred Stock and the money and
other property, if any, represented by the Depositary Shares evidenced by
Receipts surrendered for withdrawal at the Depositary's Office, except that, at
the request, risk and expense of the holder surrendering such Receipt or
Receipts and for the account of the holder thereof, such delivery may be made at
such other place as may be designated by such holder.
SECTION 2.7 Limitations on Execution and Delivery, Transfer,
Split-up, Combination, Surrender and Exchange of Receipts. As a condition
precedent to the execution and delivery, transfer, split-up, combination,
surrender or exchange of any Receipt, the Depositary, the Depositary's Agent or
the Company may require any or all of the following: (i) payment to it of a sum
sufficient for the payment (or, in the event that the Depositary or the Company
shall have made such payment, the reimbursement to it) of any tax or other
governmental charge with respect thereto (including any such tax or charge with
respect to the Preferred Stock being deposited or withdrawn with respect to the
Common Stock, or other securities or property of the Company being issued upon
conversion or redemption); (ii) the production of proof satisfactory to it as to
the identity and genuineness of any signature; and (iii) compliance with such
regulations, if any, as the Depositary or the Company may establish not
inconsistent with the provisions of the Deposit Agreement.
The deposit of Preferred Stock may be refused, the delivery of Receipts
against Preferred Stock may be suspended, the transfer of Receipts may be
refused, and the transfer, split-up, combination, surrender or exchange of
outstanding Receipts may be suspended (i) during any period when the register of
holders of Receipts is closed, (ii) if any such action is deemed necessary or
advisable by the Depositary, any of the Depositary's Agents or the Company at
any time or from time to time because of any requirement of law or of any
government or governmental body or commission, or under any provision of this
Deposit Agreement, or (iii) except for the transfer of Receipts, with the
approval of the Company, for any other reason.
SECTION 2.8 Lost Receipts, etc. In case any Receipt shall be
mutilated or destroyed or lost or stolen, the Depositary in its discretion may
execute and deliver a Receipt of like form and tenor in exchange and
substitution for such mutilated Receipt or in lieu of and in substitution for
such destroyed, lost or stolen Receipt; provided, however, that the holder
thereof provides the Depositary with (i) evidence satisfactory to the Depositary
of such destruction, loss or theft of such Receipt, of the authenticity thereof
and of his ownership thereof, (ii) reasonable indemnification satisfactory to
the Depositary and (iii) payment of any expense (including fees, charges and
expenses of the Depositary) in connection with such execution and delivery.
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<PAGE> 11
SECTION 2.9 Cancellation and Destruction of Surrendered Receipts. All
Receipts surrendered to the Depositary or any Depositary's Agent shall be
cancelled by the Depositary. Except as prohibited by applicable law or
regulation, the Depositary is authorized to destroy such Receipts so cancelled.
SECTION 2.10 Optional Conversion of Preferred Stock into Common Stock.
Receipts may be surrendered with written instructions to the Depositary to
instruct the Company to cause the conversion of any specified number of shares,
or fractions of shares, of Preferred Stock represented by whole Depositary
Shares evidenced by such Receipts into whole shares of Common Stock, and cash
for any fractional share of Common Stock, at the conversion price then in effect
for the Preferred Stock pursuant to the Express Terms as such conversion price
may be adjusted by the Company from time to time as provided in the Express
Terms. Subject to the terms and conditions of this Deposit Agreement and the
Express Terms, a holder of a Receipt or Receipts evidencing Depositary Shares
representing whole or fractional shares of Preferred Stock may surrender such
Receipt or Receipts at the Depositary's Office or at such office or to such
Depositary's Agent, as the Depositary may designate for such purpose, together
with a notice of conversion duly completed and executed, thereby directing the
Depositary to instruct the Company to cause the conversion of the number of
shares, or fractions of shares, of underlying Preferred Stock specified in such
notice of conversion into shares of Common Stock, and an assignment of such
Receipt or Receipts to the Company or in blank, duly completed and executed. To
the extent that a holder delivers to the Depositary for conversion a Receipt or
Receipts which in the aggregate are convertible into less than one whole share
of Common Stock, the holder shall receive payment in cash in lieu of such
fractional share of Common Stock otherwise issuable. If more than one Receipt
shall be delivered for conversion at one time by the same holder, the number of
whole shares of Common Stock issuable upon conversion thereof shall be computed
on the basis of the aggregate number of Depositary Shares represented by the
Receipts so delivered.
Upon receipt by the Depositary of a Receipt or Receipts, together with
notice of conversion, duly completed and executed, directing the Depositary to
instruct the Company to cause the conversion of a specified number of shares of
Preferred Stock, and an assignment of such Receipt or Receipts to the Company or
in blank, duly completed and executed, the Depositary shall instruct the Company
(i) to cause the conversion of the number of shares, or fractions of shares, of
Preferred Stock represented by the Depositary Shares evidenced by the Receipts
so surrendered for conversion as specified in the written notice to the
Depositary and (ii) to cause the delivery to the holders of such Receipts of a
certificate or certificates evidencing the number of whole shares of Common
Stock and the amount of money, if any, to be delivered to the holders of
Receipts surrendered for conversion in lieu of fractional shares of Common Stock
otherwise issuable. The Company shall as promptly as practicable after receipt
thereof cause the delivery of (i) a certificate or certificates evidencing the
number of whole shares of Common Stock into which the Preferred Stock
represented by the Depositary Shares evidenced by such Receipt or Receipts has
been converted, and (ii) any money or other property to which the holder is
entitled by reason of such conversion. Upon such conversion, the Depositary (i)
shall deliver to the holder a Receipt evidencing the number of Depositary
Shares, if any, that equals that excess of the number of Depositary Shares
evidenced by the surrendered Receipt over the number of Depositary Shares
evidenced by such Receipt that has been so converted, (ii) shall cancel the
Depositary Shares evidenced by Receipts surrendered for conversion and (iii)
shall deliver to the Company or its transfer agent for the Preferred Stock for
cancellation the shares of Preferred Stock represented by the Depositary Shares
evidenced by the Receipts so surrendered and so converted. Upon the delivery of
the shares of Preferred Stock to be cancelled due to such conversion by the
Depositary to the Company, the Company shall deliver to the Depositary a
certificate or certificates evidencing the number of shares, or
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<PAGE> 12
fractions of shares, of Preferred Stock, if any, that equals the excess of the
number of shares of Preferred Stock evidenced by the surrendered certificate
over the number of shares of Preferred Stock evidenced by that certificate that
has been so converted.
If Preferred Stock shall be called by the Company for redemption, the
Depositary Shares representing such Preferred Stock may be converted into Common
Stock as provided in this Deposit Agreement until, but not after, the close of
business on the Redemption Date unless the Company shall fail to deposit with
the Depositary the shares of Common Stock and cash for any fractional share
amounts required to redeem the Preferred Stock held by the Depositary, in which
case the Depositary Shares representing such Preferred Stock may continue to be
converted into Common Stock until, but not after, the close of business on the
date on which the Company deposits with the Depositary such shares of Common
Stock and cash for any fractional share amounts as are required by the Express
Terms to make full payment of the amounts payable upon such redemption. Upon
receipt by the Depositary of a Receipt or Receipts, together with a properly
completed and executed notice of conversion, representing any Preferred Stock
called for redemption, the shares of Preferred Stock held by the Depositary
represented by such Depositary Shares for which conversion is requested shall be
deemed to have been received by the Company for conversion as of immediately
prior to the close of business on the date of such receipt by the Depositary.
The record holder of Depositary Shares on any dividend payment record
date established by the Depositary pursuant to Section 4.4 shall be entitled to
receive the dividend payable with respect to such Depositary Shares on the
corresponding dividend payment date notwithstanding the conversion subsequent to
such record date and before the corresponding dividend payment date of the
shares of Preferred Stock to which such Depositary Shares relate.
Upon the conversion of any share of Preferred Stock for which a request
for conversion has been made by the holder of Depositary Shares representing
such share, all dividends in respect of such Depositary Shares shall cease to
accrue, such Depositary Shares shall be deemed no longer outstanding, all rights
of the holder of the Receipt with respect to such Depositary Shares (except the
right to receive the Common Stock, any cash Payable with respect to any
fractional shares of Common Stock as provided herein and any cash payable on
account of accrued dividends as provided herein and any Receipts evidencing
Depositary Shares not so converted) shall terminate, and the Receipt evidencing
such Depositary Shares shall be cancelled in accordance with Section 2.9 hereof.
No fractional shares of Common Stock shall be issuable upon conversion
of Preferred Stock underlying the Depositary Shares. If any holder of Receipts
surrendered with instructions to the Depositary for conversion of the underlying
Preferred Stock would be entitled to a fractional share of Common Stock upon
such conversion, the Company shall cause to be delivered to such holder an
amount in cash for such fractional share as provided in the Express Terms.
SECTION 2.11 Mandatory Conversion of Preferred Stock into Common
Stock. With respect to any Preferred Stock on deposit with the Depositary as to
which the Company has not exercised its right to redeem and the record holder
has not exercised its right of optional conversion pursuant to the Express
Terms, the Depositary shall mail, first class postage prepaid, notice of the
mandatory conversion of Preferred Stock and the simultaneous mandatory
conversion of the Depositary Shares representing the Preferred Stock to be
automatically converted, not less than 5 and not more than 15 days prior to the
date fixed for mandatory conversion of such Preferred Stock and Depositary
Shares (the "Mandatory Conversion Date"), to all record holders of Receipts
evidencing Depositary Shares who are of record on the date that is two Business
Days prior to the date of mailing,
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at the addresses of such holders as they appear on the records of the
Depositary; but neither failure to mail any such notice to one or more such
holders nor any defect in any notice to one or more such holders shall affect
the sufficiency of the proceedings for mandatory conversion as to any record
holder (whether or not such failure or defect affects such record holder). Each
such notice shall state: (i) the Mandatory Conversion Date; (ii) that all
outstanding Depositary Shares on the Mandatory Conversion Date will be
automatically converted pursuant to the Express Terms and this Agreement; (iii)
the Common Equivalent Rate (determined in accordance with the Express Terms) and
the resulting common equivalent rate applicable to the Depositary Shares; (iv)
the place or places where Receipts evidencing Depositary Shares are to be
surrendered for payment of the mandatory conversion price; and (v) that
dividends in respect of the shares of Preferred Stock represented by the
Depositary Shares to be automatically converted will cease to accumulate from
and after the Mandatory Conversion Date.
On the Mandatory Conversion Date, all then outstanding shares of
Preferred Stock and the Depositary Shares representing such shares of Preferred
Stock shall automatically convert into shares of Common Stock, cash for any
fractional share amounts and the right to receive amounts in cash equal to all
accrued and unpaid dividends on such shares of Preferred Stock to but not
including the Mandatory Conversion Date (other than previously declared
dividends payable to a holder of record as of a prior date), all as provided in
and subject to the Express Terms.
From and after the Mandatory Conversion Date, the Depositary Shares
representing the shares of Preferred Stock automatically converted shall be
deemed no longer to be outstanding and all rights of the record holders of
Receipts evidencing such Depositary Shares (except the right to receive the
shares of Common Stock, any cash for accrued and unpaid dividends (other than
previously declared dividends payable to a holder of record as of a prior date)
and any cash for fractional share amounts deliverable or payable upon mandatory
conversion or in connection therewith) shall, to the extent of such Depositary
Shares, cease and terminate. Upon surrender, in accordance with said notice, of
the Receipts evidencing such Depositary Shares (properly endorsed or assigned
for transfer, if the Depositary shall so require), such Depositary Shares shall
be exchanged for shares of Common Stock and cash for any fractional share amount
(and the right to receive cash for any accrued and unpaid dividends payable in
connection therewith) at a rate per Depositary Share equal to _______________ of
the number (including fractional amounts) of shares of Common Stock (and
_________________ of the amount of cash paid in respect of accrued and unpaid
dividends) exchanged for each share of Preferred Stock pursuant to the Express
Terms. The foregoing shall be subject further to the terms and conditions of the
Express Terms.
On or prior to the Mandatory Conversion Date, the Company shall deposit
with the Depositary certificates for the shares of Common Stock and the cash for
any fractional share amounts into which the shares of Preferred Stock held by
the Depositary shall automatically convert on the Mandatory Conversion Date,
plus, subject to the Express Terms, an amount in cash equal to all accrued and
unpaid dividends on such shares of Preferred Stock (other than previously
declared dividends payable to a holder of record as of a prior date) to and
including the Mandatory Conversion Date. Using such shares of Common Stock and
cash, the Depositary shall deliver certificates for the appropriate number of
shares of Common Stock and the appropriate amount of cash, without interest, to
record holders who properly deliver their Receipts to the Depositary.
No fractional shares of Common Stock shall be issuable upon mandatory
conversion of Preferred Stock underlying the Depositary Shares. If any holder of
Receipts surrendered to the Depositary for mandatory conversion of the
underlying Preferred Stock
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<PAGE> 14
shall be entitled to a fractional share of Common Stock upon such mandatory
conversion, the Company shall cause to be delivered to such holder an amount in
cash for such fractional share as provided in the Express Terms.
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS
OF RECEIPTS AND THE COMPANY
SECTION 3.1 Filing Proofs, Certificates and Other Information. Any
person presenting Preferred Stock for deposit or any holder of a Receipt may be
required from time to time to file such proof of residence or other information,
to execute such certificates and to make such representations and warranties as
the Depositary or the Company may reasonably deem necessary or proper. The
Depositary or the Company, as the case may be, may withhold or delay the
delivery of any Receipt, the transfer, redemption, conversion, or exchange of
any Receipt, the withdrawal of the Preferred Stock or money or other property,
if any, represented by the Depositary Shares evidenced by any Receipt or the
distribution of any dividend or other distribution until such proof or other
information is filed, such certificates are executed or such representations and
warranties are made.
SECTION 3.2 Payment of Taxes or Other Governmental Charges. If any
tax or other governmental charge shall become payable by or on behalf of the
Depositary with respect to any Receipt, the Depositary Shares evidenced by such
Receipt, the Preferred Stock (or fractional interest therein) represented by
such Depositary Shares or any transaction referred to in Section 4.6, such tax
(including transfer, issuance or acquisition taxes, if any) or governmental
charge shall be payable by the holder of such Receipt. Until such payment is
made, transfer, redemption, conversion, or exchange of any Receipt or any
withdrawal of the Preferred Stock or money or other property, if any,
represented by the Depositary Shares evidenced by such Receipt may be refused,
any dividend or other distribution with respect to such Receipt or the Preferred
Stock represented by the Depositary Shares evidenced by such receipt may be
withheld and any part or all of the Preferred Stock or other property
represented by the Depositary Shares evidenced by such Receipt may be sold for
the account of the holder thereof (after attempting by reasonable means to
notify such holder prior to such sale). Any dividend or other distribution so
withheld and the proceeds of any such sale may be applied to payment of any such
tax or other governmental charge, the holder of such Receipt remaining liable
for any deficiency. The Depositary shall act as the withholding agent for any
payments, distributions, and exchanges made with respect to the Depositary
Shares and Receipts, and the Preferred Stock, Common Stock or other securities
or assets represented thereby (collectively, the "Securities"). The Depositary
shall be responsible with respect to the Securities for the timely (i)
collection and deposit of any required withholding or backup withholding tax,
and (ii) filing of any information returns or other documents with federal (and
other applicable) taxing authorities. In the event the Depositary is required to
pay any such amounts, the Company shall reimburse the Depositary for payment
thereof upon the request of the Depositary and the Depositary shall, upon the
Company's request and as instructed by the Company, pursue its rights against
such holder at the Company's expense.
SECTION 3.3 Representations and Warranties as to Preferred Stock.
Each person depositing Preferred Stock under this Deposit Agreement shall be
deemed thereby to represent and warrant that such Preferred Stock and each
certificate therefor are valid and that the person making such deposit is duly
authorized to do so. Such representations and
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<PAGE> 15
warranties shall survive the deposit of the Preferred Stock and the execution
and delivery of Receipts.
ARTICLE IV
THE PREFERRED STOCK, NOTICES
SECTION 4.1 Cash Distributions. Whenever the Depositary shall receive
any cash dividend or other cash distribution on the Preferred Stock, the
Depositary shall, subject to Section 3.2, distribute to record holders of
Receipts on the record date fixed pursuant to Section 4.4 such portions of such
sum as are, as nearly as practicable, proportionate to the respective numbers of
Depositary Shares evidenced by the Receipts held by such holders; provided,
however, that in case the Company or the Depositary shall be required to
withhold from any cash dividend or other cash distribution, in respect of the
Preferred Stock an amount on account of taxes or as otherwise required by law,
regulation or court order, the amount made available for distribution or
distributed in respect of Depositary Shares shall be reduced accordingly. The
Depositary shall distribute or make available for distribution, as the case may
be, only such amount, however, as can be distributed without attributing to any
owner of Depositary Shares a fraction of one cent and any balance not so
distributable shall be held by the Depositary (without liability for interest
thereon) and shall be added to and be treated as part of the next sum received
by the Depositary for distribution to record holders of Receipts then
outstanding.
SECTION 4.2 Distributions Other Than Cash. Whenever the Depositary
shall receive any distribution other than cash on the Preferred Stock, the
Depositary shall, subject to Section 3.2, distribute to record holders of
Receipts on the record date fixed pursuant to Section 4.4 such portions of the
securities or property received by it as are, as nearly as practicable,
proportionate to the respective numbers of Depositary Shares evidenced by the
Receipts held by such holders, in any manner that the Depositary and the Company
may deem equitable and practicable for accomplishing such distribution. If, in
the opinion of the Company after consultation with the Depositary, such
distribution cannot be made proportionately among such record holders, or if for
any other reason (including any requirement that the Company or the Depositary
withhold an amount on account of taxes or as otherwise required by law,
regulation or court order) the Depositary deems, after consultation with the
Company, such distribution not to be feasible, the Depositary may, with the
approval of the Company, adopt such method as it deems equitable and practicable
for the purpose of effecting such distribution, including the sale (at public or
private sale) of the securities or property thus received, or any part thereof,
at such place or places and upon such terms as it may deem proper. The net
proceeds of any such sale shall, subject to Section 3.2, be distributed or made
available for distribution, as the case may be, by the Depositary to record
holders of Receipts as provided by Section 4.1 in the case of a distribution
received in cash.
SECTION 4.3 Subscription Rights, Preferences or Privileges. If the
Company shall at any time offer or cause to be offered to the persons in whose
names Preferred Stock is registered on the books of the Company any rights,
preferences or privileges to subscribe for or to Purchase any securities or any
rights, preferences or privileges of any other nature, such rights, preferences
or privileges shall in each such instance be made available by the Depositary to
the record holders of Receipts if the Company so directs in such manner as the
Company shall instruct (including by the execution and delivery to such record
holders of warrants representing such rights, preferences or privileges);
provided, however, that (a) if at the time of issue or offer of any such rights,
preferences or privileges the Company determines that it is not lawful or
feasible
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<PAGE> 16
to make such rights, preferences or privileges available to some or all holders
of Receipts (by the execution and delivery of warrants or otherwise) or (b) if
and to the extent instructed by holders of Receipts who do not desire to
exercise such rights, preferences or privileges, the Depositary shall then, if
so instructed by the Company, and if applicable laws and the terms of such
rights, preferences or privileges so permit, sell such rights, preferences or
privileges of such holders at public or private sale, at such place or places
and upon such terms as it may deem proper, the net proceeds of any such sale
shall, subject to Section 3.2, be distributed by the Depositary to the record
holders of Receipts entitled thereto in accordance with the withholding and
fractional amount provisions of Section 4.1.
If registration under the Securities Act of the securities to which any
rights, preferences or privileges relate is required in order for holders of
Receipts to be offered or sold such securities, the Company shall promptly file
a registration statement pursuant to the Securities Act with respect to such
securities and use its best efforts and take all steps available to it to cause
such registration statement to become effective sufficiently in advance of the
expiration of such rights, preferences or privileges to enable such holders to
exercise such rights, preferences or privileges. In no event shall the
Depositary make available to the holders of Receipts any right, preference or
privilege to subscribe for or to purchase any securities unless and until
notified by the Company in writing that such registration statement has become
effective or that the offering and sale of such securities to such holders are
exempt from registration under the provisions of the Securities Act.
If any other action under the law of any jurisdiction or any
governmental or administrative authorization, consent or permit is required in
order for such rights, preferences or privileges to be made available to holders
of Receipts, the Company agrees with the Depositary that the Company will use
its best efforts to take such action or obtain such authorization, consent or
permit sufficiently in advance of the expiration of such rights, preferences or
privileges to enable such holders to exercise such rights, preferences or
privileges.
SECTION 4.4 Notice of Dividends; Fixing of Record Date for Holders of
Receipts. Whenever any cash dividend or other cash distribution shall become
payable, or any distribution other than cash shall be made, or any rights,
preferences or privileges shall at any time be offered, with respect to the
Preferred Stock, or whenever the Depositary shall receive notice of (i) any
meeting at which holders of Preferred Stock are entitled to vote or of which
holders of Preferred Stock are entitled to notice or (ii) any election on the
part of the Company to call for redemption any shares of Preferred Stock, the
Depositary shall in each such instance fix a record date (which shall be the
same date as the record date fixed by the Company with respect to the Preferred
Stock) for the determination of the holders of Receipts (i) who shall be
entitled to receive such dividend, distribution, rights, preferences or
privileges or the net proceeds of the sale thereof, or to give instructions for
the exercise of voting rights at any such meeting or to receive notice of such
meeting or (ii) whose Depositary Shares are to be so redeemed.
SECTION 4.5 Voting Rights. Upon issuance of notice of any meeting at
which the holders of Preferred Stock are entitled to vote, the Company shall
direct the Depositary, as soon as practicable thereafter, to mail to the record
holders of Receipts a notice, which shall be provided by the Company and which
shall contain (i) such information as is contained in such notice of meeting,
(ii) a statement that the holders of Receipts at the close of business on a
specified record date fixed pursuant to Section 4.4 will be entitled, subject to
any applicable provision of law, the Articles of Incorporation or the Express
Terms, to instruct the Depositary as to the exercise of the voting rights
pertaining to the amount of Preferred Stock represented by their respective
Depositary Shares and (iii) a brief statement as to the manner in which such
instructions may be given. Upon the written
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<PAGE> 17
request of a holder of a Receipt on such record date, the Depositary shall
endeavor insofar as practicable to vote or cause to be voted the amount of
Preferred Stock represented by the Depositary Shares evidenced by such Receipt
in accordance with the instructions set forth in such request. The Company
hereby agrees to take all reasonable action that may be deemed necessary by the
Depositary in order to enable the Depositary to vote such Preferred Stock or
cause such Preferred Stock to be voted. In the absence of specific instructions
from the holder of a Receipt, the Depositary will abstain from voting to the
extent of the Preferred Stock represented by the Depositary Shares evidenced by
such Receipt. After aggregating all voting Depositary Shares, the Depositary
will disregard for voting purposes any fractional share of Preferred Stock
remaining.
SECTION 4.6 Changes Affecting Preferred Stock and Reclassifications,
Recapitalizations, etc. Upon any split-up, consolidation or any other
reclassification of Preferred Stock, or upon any recapitalization,
reorganization, merger, amalgamation or consolidation affecting the Company or
to which it is a party or sale of all or substantially all of the Company's
assets, the Depositary shall, upon the instructions of the Company, treat any
shares of stock or other securities or property (including cash) that shall be
received by the Depositary in exchange for or upon conversion of or in respect
of the Preferred Stock as new deposited property under this Deposit Agreement,
and Receipts then outstanding shall thenceforth represent the proportionate
interests of holders thereof in the new deposited shares of stock, other
securities or other property so received in exchange for or upon conversion or
in respect of such Preferred Stock. In any such case the Depositary may, in its
discretion, with the approval of the Company, execute and deliver additional
Receipts, or may call for the surrender of all outstanding Receipts to be
exchanged for new Receipts specifically describing such new deposited shares,
other securities or other property.
SECTION 4.7 Inspection of Reports. The Depositary shall make
available for inspection by holders of Receipts at the Depositary's Office and
at such other places as it may from time to time deem advisable during normal
business hours any reports and communications received from the Company that are
both received by the Depositary as the holder of Preferred Stock and made
generally available to the holders of Preferred Stock by the Company.
SECTION 4.8 List of Receipt Holders. Promptly upon request from time
to time by the Company and at the Company's expense, the Depositary shall
furnish to it a list, as of a recent date, of the names, addresses and holdings
of Depositary Shares of all persons in whose names Receipts are registered on
the books of the Depositary.
ARTICLE V
THE DEPOSITARY AND THE COMPANY
SECTION 5.1 Maintenance of Offices, Agencies, Transfer Books by the
Depositary, the Registrar. Upon execution of this Deposit Agreement in
accordance with its terms, the Depositary shall maintain at the Depositary's
Office and at the offices of the Depositary's Agents, if any, facilities for the
execution and delivery, transfer, surrender and exchange, split-up, combination
and redemption of Receipts and deposit and withdrawal of Preferred Stock, all in
accordance with the provisions of this Deposit Agreement.
The Depositary shall keep books at the Depositary's Office for the
registration and transfer of Receipts, which books during normal business hours
shall be open for inspection by the record holders of Receipts, as provided by
applicable law, and by the Company. The Depositary shall consult with the
Company upon receipt of any request for inspection. The
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<PAGE> 18
Depositary may close such books, at any time or from time to time, when deemed
expedient by it in connection with the performance of its duties hereunder.
If the Receipts or the Depositary Shares evidenced thereby or the
Preferred Stock represented by such Depositary Shares shall be listed on the
Nasdaq National Market, the Depositary may, with the approval of the Company,
appoint a Registrar for registry of such Receipts or Depositary Shares in
accordance with the requirements of the Nasdaq National Market. Such Registrar
(which may be the Depositary if so permitted by the requirements of the Nasdaq
National Market) may be removed and a substitute registrar appointed by the
Depositary upon the request or with the approval of the Company. If the
Receipts, such Depositary Shares or such Preferred Stock are listed on one or
more other stock exchanges, the Company will, with the assistance of the
Depositary arrange such facilities for the delivery, transfer, surrender and
exchange of such Receipts, such Depositary Shares or Preferred Stock as may be
required by law or applicable stock exchange regulations.
SECTION 5.2 Prevention of or Delay in Performance by the Depositary,
the Depositary's Agents or the Company. Neither the Depositary nor any
Depositary's Agent nor the Company shall incur any liability to any holder of
any Receipt if, by reason of any provision of any present or future law or
regulation thereunder of the United States of America or of any other
governmental authority or, in the case of the Depositary or any Depositary's
Agent, by reason of any provision, present or future, of the Articles of
Incorporation or the Express Terms or, in the case of the Company, the
Depositary or any Depositary's Agent, by reason of any act of God or war or
other circumstance beyond the control of the relevant party, the Depositary, any
Depositary's Agent or the Company shall be prevented or forbidden from doing or
performing any act or thing that the terms of this Deposit Agreement provide
shall be done or performed; nor shall the Depositary, any Depositary's Agent or
the Company incur any liability to any holder of a Receipt by reason of any
nonperformance or delay, caused as aforesaid, in the performance or any act or
thing that the terms of this Deposit Agreement provide shall or may be done or
performed or by reason of any exercise of, or failure to exercise, any
discretion provided for in this Deposit Agreement.
SECTION 5.3 Obligations of the Depositary, the Depositary's Agents,
and the Company. Neither the Depositary nor any Depositary's Agent nor the
Company assumes any obligation or shall be subject to any liability under this
Deposit Agreement or any Receipt to holders of Receipts other than that each of
them agrees to use good faith in the performance of such duties as are
specifically set forth in this Deposit Agreement.
Neither the Depositary nor any Depositary's Agent nor the Company
shall be under any obligation to appear in, prosecute or defend any action, suit
or other proceeding with respect to the Preferred Stock, Depositary Shares,
Receipts or Common Stock that in its opinion may involve it in expense or
liability, unless indemnity satisfactory to it against all expense and liability
be furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor the Company shall
be liable for any action or any failure to act by it in reliance upon the advice
of, or information from, legal counsel, accountants, any person presenting
Preferred Stock for deposit, any holder of a Receipt or any other person
believed by it in good faith to be competent to give such advice or information.
The Depositary, any Depositary's Agent and the Company may each rely and shall
each be protected in acting upon any written notice, request, direction or other
document believed by it to be genuine and to have been signed or presented by
the proper party or parties.
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<PAGE> 19
The Depositary, its parent, affiliates, subsidiaries, officers,
directors or employees and any Depositary's Agent may own, buy, sell or deal in
any class of securities of the Company and its affiliates and Receipts or
Depositary Shares, or become pecuniarily interested in any transaction in which
the Company or its officers may be interested, or contract with or lend money to
the Company or any of its affiliates or officers, or otherwise act fully or as
freely as if it were not the Depositary or the Depositary's Agent hereunder. The
Depositary may also act as transfer agent or registrar of any of the securities
of the Company and its affiliates.
It is intended that neither the Depositary nor any Depositary's Agent
shall be deemed to be an "issuer" of securities under the federal securities
laws or applicable state securities laws, it being expressly understood and
agreed that the Depositary and any Depositary's Agent are acting only in a
ministerial capacity as Depositary for the Preferred Stock; provided, however,
that the Depositary agrees to comply with all information reporting and
withholding requirements applicable to it under law or this Deposit Agreement in
its capacity as Depositary.
Neither the Depositary (or its officers, directors, employees or
agents) nor any Depositary's Agent makes any representation or has any
responsibility as to the validity, of the Registration Statement pursuant to
which the Depositary Shares, the Preferred Stock and the Common Stock are
registered under the Securities Act, the Preferred Stock, the Depositary Shares,
the Receipts (except for its countersignatures thereon) or any instruments
referred to therein or herein (other than an instrument executed by the
Depositary or Depositary's Agent), or as to the correctness of any statement
made therein or herein or for the failure of the Company to comply with any
covenants contained in this Agreement or the Receipts; provided, however, that
the Depositary is responsible for its representations in this Deposit Agreement.
The Depositary assumes no responsibility for the correctness of the
description that appears in the Receipts, which can be taken as a statement of
the Company summarizing certain provisions of this Deposit Agreement.
Notwithstanding any other provision herein or in the Receipts, the Depositary
makes no warranties or representations as to the validity, genuineness or
sufficiency of any Preferred Stock at any time deposited with the Depositary
hereunder or of the Depositary Shares, as to the validity or sufficiency of this
Deposit Agreement, as to the value of the Depositary Shares, or as to any right,
title or interest of the record holders of Receipts in and to the Depositary
Shares, except that the Depositary hereby represents and warrants as follows:
(i) the Depositary has been duly organized and is validly existing and in good
standing under the laws of the United States with full power, authority and
legal right under such laws to execute, deliver and carry out the terms of this
Deposit Agreement; (ii) this Deposit Agreement has been duly authorized,
executed and delivered by the Depositary; and (iii) this Deposit Agreement
constitutes a valid and binding obligation of the Depositary, enforceable
against the Depositary in accordance with its terms, except as enforcement
hereof may be limited by bankruptcy, insolvency, reorganization or other similar
laws affecting enforcement of creditors rights generally and except as
enforcement hereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law). The
Depositary shall not be accountable for the use or application by the Company of
the Depositary Shares or the Receipts or the proceeds of the sale thereof.
SECTION 5.4 Resignation and Removal of the Depositary; Appointment of
Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by notice of its election to do so delivered to the Company, such
resignation to take effect upon the appointment of a successor depositary and
its acceptance of such appointment as hereinafter provided.
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<PAGE> 20
The Depositary may at any time be removed by the Company by notice of
such removal delivered to the Depositary, such removal to take effect upon the
appointment of a successor depositary and its acceptance of such appointment as
hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall, within 45 days after the delivery of the notice of
resignation or removal, as the case may be, appoint a successor depositary,
which shall be a bank or trust company, or an affiliate of a bank or trust
company having its principal office in the United States of America and having a
combined capital and surplus of at least $50,000,000. If a successor depositary
shall not have been appointed in 45 days, the resigning Depositary may petition
a court of competent jurisdiction to appoint a successor depositary. Every
successor depositary shall execute and deliver to its predecessor and to the
Company an instrument in writing accepting its appointment hereunder, and
thereupon such successor depositary, without any further act or deed, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor and for all purposes shall be the Depositary under this Deposit
Agreement, and such predecessor, upon payment of all sums due it and on the
written request of the Company, shall promptly execute and deliver an instrument
transferring to such successor all rights and powers of such predecessor
hereunder, shall duly assign, transfer and deliver all rights, title and
interest in the Preferred Stock and any moneys or property held hereunder to
such successor and shall deliver to such successor a list of the record holders
of all outstanding Receipts and such other records respecting the Receipts, the
Depositary Shares and the Preferred Stock as the successor shall require in
order to perform its duties. Any successor depositary shall promptly mail notice
of its appointment to the record holders of Receipts.
Any corporation into or with which the Depositary may be merged,
consolidated or converted shall be the successor of such Depositary without the
execution or filing of any document or any further act. Such successor
depositary may execute the Receipts either in the name of the predecessor
depositary or in the name of the successor depositary.
SECTION 5.5 Corporate Notices and Reports. The Company agrees that it
will deliver to the Depositary, and the Depositary agrees that it will, promptly
after receipt thereof, and as directed by the Company transmit to the record
holders of Receipts, in each case at the most recent address recorded in the
Depositary's books, copies of all notices and reports (including financial
statements) required by law, by the rules of any national securities exchange
upon which the Preferred Stock, the Depositary Shares or the Receipts are
listed, or by the Articles of Incorporation and the Express Terms to be
furnished by the Company to holders of Preferred Stock. Such transmission will
be at the Company's expense and the Company will provide the Depositary with
such number of copies of such documents as the Depositary may reasonably
request. In addition, the Depositary will transmit to the record holders of
Receipts at the Company's expense such other documents as may be requested by
the Company.
SECTION 5.6 Deposit of Preferred Stock by the Company. Neither the
Company nor any company controlled by the Company will at any time deposit any
Preferred Stock if such Preferred Stock is required to be registered under the
provisions of the Securities Act and no registration statement is at such time
in effect as to such Preferred Stock.
SECTION 5.7 Indemnification by the Company. The Company shall
indemnify the Depositary, any Depositary's Agent and any Registrar for, and hold
each of them harmless against, any loss, liability or expense incurred without
gross negligence or intentional misconduct on the part of any such person,
arising out of or in connection with this Deposit Agreement and the Receipts,
including the costs and expenses of any of its
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<PAGE> 21
duties under this Deposit Agreement or the Receipts. Anything in this Agreement
to the contrary notwithstanding, in no event shall the Depositary, any
Depositary's Agent or Registrar be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits) even if the Depositary, any Depositary's Agent or Registrar has been
advised of the likelihood of such loss or damage and regardless of the form of
the action. The obligations of the Company to the Depositary, any Depositary's
Agent or Registrar shall survive the termination of this Agreement.
SECTION 5.8 Fees, Charges and Expenses. No fees, charges and expenses
of the Depositary or any Depositary's Agent hereunder or of any Registrar shall
be payable by any person other than the Company, except for any taxes and other
governmental charges and except as provided in this Deposit Agreement. If the
Depositary incurs fees, charges or expenses for which it is not otherwise liable
hereunder at the election of a holder of a Receipt or other person, such holder
or other person will be liable for such fees, charges and expenses. All other
fees, charges and expenses of the Depositary and any Depositary's Agent
hereunder and of any Registrar (including, in each case, reasonable fees and
expenses of counsel) incident to the performance of their respective obligations
hereunder will be paid from time to time upon consultation and agreement between
the Depositary and the Company as to the amount and nature of such fees, charges
and expenses.
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.1 Amendment. The form of the Receipts and any provisions of
this Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect that they may
deem necessary or desirable. Any amendment that shall impose any fees, taxes or
charges payable by holders of Receipts (other than taxes and other governmental
charges, fees and other expenses provided for herein or in the Receipts), or
that shall otherwise prejudice any substantial existing right of holders of
Receipts, shall not become effective as to outstanding Receipts until the
expiration of 90 days after notice of such amendment shall have been given to
the record holders of outstanding Receipts. Every holder of an outstanding
Receipt at the time any such amendment becomes effective shall be deemed, by
continuing to hold such Receipt, to consent and agree to such amendment and to
be bound by this Deposit Agreement as amended thereby. In no event shall any
amendment impair the right, subject to the provisions of Sections 2.3, 2.6, 2.7,
2.10 and 2.11 and Article III, of any owner of any Depositary Shares to
surrender the Receipt evidencing such Depositary Shares with instructions to the
Depositary to deliver to the holder the Preferred Stock and all money and other
property, if any, represented thereby, or to cause the conversion of the
underlying Preferred Stock into Common Stock and cash for any fractional share
amount, except in order to comply with mandatory provisions of applicable law.
SECTION 6.2 Termination. Whenever so directed by the Company upon at
least five Business Days' prior notice, the Depositary will terminate this
Deposit Agreement, provided, that notice of such termination has been given by
mailing notice of such termination to the record holders of all Receipts then
outstanding at least 30 days prior to the date fixed in such notice for such
termination. The Depositary may likewise terminate this Deposit Agreement if at
any time 45 days shall have expired after the Depositary shall have delivered to
the Company a written notice of its election to resign and a successor
depositary shall not have been appointed and accepted its appointment as
provided in Section 5.4.
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<PAGE> 22
If any Receipts shall remain outstanding after the date of termination
of this Deposit Agreement, the Depositary thereafter shall discontinue the
transfer of Receipts, shall suspend the distribution of dividends to the holders
thereof and shall not give any further notices (other than notice of such
termination) or perform any further acts under this Deposit Agreement, except as
hereinafter provided in this paragraph and except that the Depositary shall
continue to collect dividends and other distributions pertaining to Preferred
Stock, shall sell rights, preferences, privileges or other property as provided
in this Deposit Agreement and shall continue to deliver the Preferred Stock and
any money and other property represented by Receipts, without liability for
interest thereon, upon surrender thereof by the holders thereof. At any time
after the expiration of two years from the date of termination, the Depositary
may sell Preferred Stock then held hereunder at public or private sale, at such
place or places and upon such terms as it deems proper and may thereafter hold
the net proceeds of any such sale, together with any money and other property
held by it hereunder, without liability for interest, for the benefit, pro rata
in accordance with their holdings, of the holders of Receipts that have not
theretofore been surrendered. After making such sale, the Depositary shall be
discharged from all obligations under this Deposit Agreement except to account
for such net proceeds and money and other property. Upon the termination of this
Deposit Agreement, the Company shall be discharged from all obligations under
this Deposit Agreement except for its obligations to the Depositary, any
Depositary Agent and any Registrar under Sections 5.7 and 5.8. In the event this
Deposit Agreement is terminated and a sufficient number of shares of Preferred
Stock remain outstanding, the Company hereby agrees to use its best efforts to
cause the shares of Preferred Stock to be split ____ to one (so that each
Depositary Share then represents one share of Preferred Stock) and to have the
Preferred Stock included for quotation on the Nasdaq National Market (unless the
holders of a majority of the outstanding shares of Preferred Stock shall consent
to the Company not effecting such listing).
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Counterparts. This Deposit Agreement may be executed by
the Company and the Depositary in separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed an original, but
all such counterparts taken together shall constitute one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Deposit Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart of this Deposit Agreement. Copies of this Deposit
Agreement shall be filed with the Depositary and each Depositary's Agent, if
any, and shall be open to inspection during business hours at the Depositary's
Office and the respective offices of the Depositary's Agents, if any, by any
holder of a Receipt.
SECTION 7.2 Exclusive Benefits of Parties. This Deposit Agreement is
for the exclusive benefit of the parties hereto, and their respective successors
hereunder, and shall not be deemed to give any legal or equitable right, remedy
or claim to any other person whatsoever.
SECTION 7.3 Invalidity of Provisions. In case any one or more of the
provisions contained in this Deposit Agreement or in the Receipts should be or
become invalid, illegal, or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
in no way be affected, prejudiced or disturbed thereby.
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<PAGE> 23
SECTION 7.4 Notices. Any notices to be given to the Company hereunder
or under the Receipts shall be in writing and shall be deemed to have been duly
given if personally delivered or sent by first class mail, postage prepaid or by
facsimile transmission confirmed by letter, addressed to the Company at 1000
Lakeside Avenue, Cleveland, Ohio 44114, Attention: Treasurer, or at any other
place to which the Company may have transferred its principal operating or
executive office.
Any notices to be given to the Depositary hereunder or under the
Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by first class mail, postage prepaid, or by
telegram or telex or telecopier confirmed by letter, addressed to the Depositary
at the Depositary's Office.
Any notices given to any record holder of a Receipt hereunder or under
the Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by first class mail, postage prepaid, or by
telegram or telex or telecopier confirmed by letter, addressed to such record
holder at the most recent address of such record holder as it appeared on the
books of the Depositary or, if such holder shall have timely filed with the
Depositary a written request that notices intended for such holder be mailed to
some other address, at the address designated in such request.
Delivery of a notice sent by mail, or by telegram or telex or
telecopier, shall be deemed to be effected at the time when a duly addressed
letter containing the same (or a duly addressed letter confirming an earlier
notice in the case of a facsimile transmission, telegram or telex) is deposited,
postage prepaid, in a post office letter box. The Depositary or the Company may,
however, act upon any facsimile transmission received by it from the other or
from any holder of a Receipt, notwithstanding that such facsimile transmission
shall not subsequently be confirmed by letter as aforesaid.
SECTION 7.5 Depositary's Agents. The Depositary may from time to time
appoint Depositary's Agents to act in any respect for the Depositary for the
purposes of this Deposit Agreement and may at any time appoint additional
Depositary's Agents and vary or terminate the appointment of such Depositary's
Agents. The Depositary will notify the Company of any such action.
SECTION 7.6 Holders of Receipts Are Parties. Notwithstanding that
holders of Receipts have not executed and delivered this Deposit Agreement or
any counterpart thereof, the holders of Receipts from time to time shall be
deemed to be parties to this Deposit Agreement and shall be bound by all of the
terms and conditions hereof and of the Receipts by acceptance of delivery of
Receipts.
SECTION 7.7 Governing Law. This Deposit Agreement and the Receipts
and all rights hereunder and thereunder and provisions hereof and thereof shall
be governed by, and construed in accordance with, the law of the State of
____________ without giving effect to principles of conflict of laws.
SECTION 7.8 Headings. The headings of articles and sections in this
Deposit Agreement and in the form of the Receipt set forth in Exhibit A hereto
have been inserted for convenience only and are not to be regarded as a part of
this Deposit Agreement or the Receipts or to have any bearing upon the meaning
or interpretation of any provision contained herein or in the Receipts.
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<PAGE> 24
IN WITNESS WHEREOF, Ferro Corporation and __________________________
have duly executed this agreement as of the day and year first above set forth
and all holders of Receipts shall become parties hereto by and upon acceptance
by them of delivery of Receipts executed and delivered in accordance with the
terms hereof.
FERRO CORPORATION
By:
----------------------------
Name:
Title:
-------------------------------
as Depositary
By:
----------------------------
Name:
Title:
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<PAGE> 25
EXHIBIT A
DEPOSITARY RECEIPT
FOR
DEPOSITARY SHARES,
EACH REPRESENTING ____________ OF A SHARE OF
{DESIGNATION OF PREFERRED STOCK}
OF
FERRO CORPORATION
(Incorporated under the Laws of the State of Ohio)
Depositary Shares
CUSIP ______________
____________________________, as Depositary (the "Depositary"), hereby
certifies that _____________ is the registered owner of _______________
Depositary Shares (the "Depositary Shares"), each Depositary Share representing
_________ of a share of {Designation of Preferred Stock}, without par value per
share (the "Preferred Stock"), of FERRO CORPORATION, a corporation duly
organized and existing under the laws of the State of Ohio (the "Company"), and
the same proportionate interest in any and all other property received by the
Depositary in respect of such shares of Preferred Stock and held by the
Depositary under the Deposit Agreement (as defined below). Subject to the terms
of the Deposit Agreement, each owner of a Depositary Share is entitled,
proportionately, to all the rights, preferences and privileges of the Preferred
Stock represented thereby, including the dividend, voting, conversion,
liquidation and other rights contained in the Express Terms of the Preferred
Stock, establishing the rights, preferences, privileges and limitations of the
Preferred Stock (the "Express Terms"), copies of which are on file at the office
of the Depositary at which at any particular time its business in respect of
matters governed by the Deposit Agreement shall be administered, which at the
time of the execution of the Deposit Agreement is located at
____________________________________________________ (the "Depositary's
Office"). THE DEPOSITARY IS NOT RESPONSIBLE FOR THE VALIDITY OF ANY DEPOSITED
STOCK. THE DEPOSITARY ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS OF THE
DESCRIPTION SET FORTH IN THIS RECEIPT, WHICH CAN BE TAKEN AS A STATEMENT OF THE
COMPANY SUMMARIZING CERTAIN PROVISIONS OF THE DEPOSIT AGREEMENT. UNLESS
EXPRESSLY SET FORTH IN THE DEPOSIT AGREEMENT, THE DEPOSITARY MAKES NO WARRANTIES
OR REPRESENTATIONS AS TO THE VALIDITY, GENUINENESS OR SUFFICIENCY OF ANY STOCK
AT ANY TIME DEPOSITED WITH THE DEPOSITARY UNDER THE DEPOSIT AGREEMENT OR OF THE
DEPOSITARY SHARES OR RECEIPTS (EXCEPT FOR ITS SIGNATURE THEREON), AS TO THE
VALIDITY OR SUFFICIENCY OF THE DEPOSIT AGREEMENT, AS TO THE VALUE OF THE
DEPOSITARY SHARES OR AS TO ANY RIGHT, TITLE OR INTEREST OF THE RECORD HOLDERS OF
THE RECEIPTS IN AND TO THE DEPOSITARY SHARES.
The Company will furnish to any holder of a Receipt without charge,
upon request addressed to its executive office or the office of its transfer
agent, a statement or summary of the powers, designations, preferences and
relative, participating optional or other special rights of each authorized
class of capital stock of the Company, and of each series of
A-1
<PAGE> 26
preferred stock of the Company authorized to be issued, so far as the same may
have been fixed, and of the qualifications, limitations or restrictions of such
preferences and/or rights.
This Depositary Receipt (the "Receipt") is continued on the reverse
hereof and the additional provisions therein set forth for all purposes have the
same effect as if set forth at this place.
Dated:_____________________
------------------------------
Depositary, Transfer Agent and
Registrar
By:
---------------------------
Authorized Signatory
A-2
<PAGE> 27
{FORM OF REVERSE
OF DEPOSITARY RECEIPT}
1. The Deposit Agreement. Depositary Receipts (the "Receipts"), of
which this Receipt is one, are made available upon the terms and conditions set
forth in the Deposit Agreement, dated as of ________, 19__ (the "Deposit
Agreement") among the Company, the Depositary and all holders from time to time
of Receipts. The Deposit Agreement (copies of which are on file at the
Depositary's Office and at the office of any Depositary's Agent) sets forth the
rights of holders of Receipts and the rights and duties of the Depositary. The
statements made on the face and the reverse of this Receipt are summaries of
certain provisions of the Deposit Agreement and are subject to the detailed
provisions thereof, to which reference is hereby made. In the event of any
conflict between the provisions of this Receipt and the provisions of the
Deposit Agreement, the provisions of the Deposit Agreement will govern.
2. Definitions. Unless otherwise expressly herein provided, all
defined terms used herein shall have the meanings ascribed thereto in the
Deposit Agreement.
3. Redemption of Preferred Stock. Whenever the Company shall elect
to redeem shares of Preferred Stock for shares of its Common Stock, $1.00 par
value per share ("Common Stock"), in accordance with the Express Terms, it shall
(unless otherwise agreed in writing with the Depositary) give the Depositary in
its capacity as Depositary the notice required by the Deposit Agreement. The
Depositary shall mail, first class postage prepaid, notice of such redemption
and the simultaneous redemption of the number of Depositary Shares representing
the Preferred Stock held by the Depositary to be redeemed, not less than 15 and
not more than 60 days prior to the date fixed for redemption of such Preferred
Stock and Depositary Shares (the "Redemption Date"), to the record holders of
the Receipts evidencing the Depositary Shares to be so redeemed, at the
addresses of such holders as they appear on the records of the Depositary; but
neither failure to mail any such notice to one or more such holders nor any
defect in any notice to one or more such holders shall affect the sufficiency of
the proceedings for redemption as to other holders. Each such notice shall
state: (i) the Redemption Date; (ii) that all outstanding Depositary Shares are
to be redeemed or, if less than all the Depositary Shares held by any such
holder are to be redeemed, the number of such Depositary shares held by such
holder to be so redeemed; (iii)(A) the number of shares of Common Stock
deliverable upon redemption of each Depositary Share pursuant to the Express
Terms, and the Current Market Price used to calculate such number of shares of
Common Stock, (B) the number of shares of Common Stock deliverable upon
redemption of each Depositary Share pursuant to the Express Terms and (C) the
higher of the numbers of shares of Common Stock specified in clauses (iii)(A)
and (iii)(B); (iv) the Call Price and the portion thereof applicable to each of
the Depositary Shares; (v) the Optional Conversion Rate (calculated in
accordance with the Express Terms) and the resulting optional conversion rate
applicable to the Depositary Shares, together with a statement that all
conversion rights with respect to the Depositary Shares called for redemption
will terminate immediately prior to the close of business on the date fixed for
redemption; (vi) the place or places where Receipts evidencing Depositary Shares
are to be surrendered for redemption; and (vii) that dividends in respect of the
shares of Preferred Stock represented by the Depositary Shares to be redeemed
will cease to accumulate from and after such Redemption Date. Any such notices
shall be mailed in the same manner as notices of redemption of the Preferred
Stock are required to be mailed pursuant to the Express Terms and published in
the same manner as notices of redemption of the Preferred Stock are required to
be published pursuant to said section, if so required. In case fewer than all
the outstanding Depositary Shares are to be redeemed, the Depositary Shares to
be redeemed shall be selected by lot or pro rata (as nearly as may be) or by any
other equitable
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method determined by the Depositary to be consistent with the method determined
by the Board of Directors of the Company with respect to the Preferred Stock.
Notice having been mailed and published by the Depositary as aforesaid,
from and after the Redemption Date (unless the Company shall have failed to
redeem the shares of Preferred Stock to be redeemed by it, as set forth in the
Company's notice provided for above), the Depositary Shares called for
redemption shall be deemed no longer to be outstanding and all rights of the
holders of Receipts evidencing such Depositary Shares (except the right to
receive the shares of Common Stock upon redemption and cash for any fractional
share amount) shall, to the extent of such Depositary Shares, cease and
terminate. Upon surrender in accordance with said notice of the Receipts
evidencing such Depositary Shares (properly endorsed or assigned for transfer,
if the Depositary shall so require), such Depositary Shares shall be redeemed
for shares of Common Stock and cash for any fractional share amount at a rate
per Depositary Share equal to one hundredth of the number of shares of Common
Stock (including fractional amounts) delivered upon redemption of a share of
Preferred Stock pursuant to the Express Terms. The foregoing shall be subject to
the detailed terms and conditions of the Express Terms, to which reference is
hereby made.
If fewer than all of the Depositary Shares evidenced by this Receipt
are called for redemption, the Depositary will deliver to the holder of this
Receipt upon its surrender to the Depositary, together with shares of Common
Stock for the Depositary Shares called for redemption, a new receipt evidencing
the Depositary Shares evidenced by such prior Receipt and not called for
redemption.
4. Surrender of Receipts and Withdrawal of Preferred Stock. Upon
surrender of this Receipt to the Depositary at the Depositary's Office or such
other offices as the Depositary may designate, and subject to the provisions of
the Deposit Agreement, the holder hereof is entitled to withdraw, and to obtain
delivery of, to or upon the order of such holder, any or all of the Preferred
Stock (but only in whole shares of Preferred Stock) and any or all money and
other property, if any, at the time represented by the Depositary Shares
evidenced by this Receipt; provided, however, that, in the event this Receipt
shall evidence a number of Depositary Shares in excess of the number of
Depositary Shares representing the whole number of shares of Preferred Stock to
be withdrawn, the Depositary shall, in addition to such whole number of shares
of Preferred Stock and such money and other property, if any, to be withdrawn,
deliver, to or upon the order of such holder, a new Receipt or Receipts
evidencing such excess number of whole Depositary Shares.
5. Optional Conversion of Preferred Stock into Common Stock.
Subject to the terms and conditions of the Deposit Agreement and the Express
Terms, this Receipt may be surrendered with written instructions to the
Depositary to instruct the Company to cause the conversion of any specified
number of shares, or fractions of shares, of Preferred Stock represented by
whole Depositary Shares evidenced hereby into whole shares of Common Stock and
cash for any fractional share of Common Stock at the conversion price then in
effect for the Preferred Stock pursuant to the Express Terms as such conversion
price may be adjusted by the Company from time to time as provided in the
Express Terms. Subject to the terms and conditions of the Deposit Agreement and
the Express Terms, a holder of a Receipt or Receipts evidencing Depositary
Shares representing whole or fractional shares of Preferred Stock may surrender
such Receipt or Receipts at the Depositary's Office or at such office or to such
Depositary's Agents as the Depositary may designate for such purpose, together
with (i) a notice of conversion duly completed and executed, thereby directing
the Depositary to instruct the Company to cause the conversion of the number of
shares, or fractions of shares, of underlying Preferred Stock specified in such
notice of conversion into shares of Common Stock, and (ii) an assignment of such
Receipt or Receipts to the Company or in blank, duly completed and executed. To
the extent that a holder delivers to
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<PAGE> 29
the Depositary for conversion a Receipt or Receipts which in the aggregate are
convertible into less than one whole share of Common Stock, the holder shall
receive payment in cash in lieu of such fractional share of Common Stock
otherwise issuable. If more than one Receipt shall be delivered for conversion
at one time by the same holder, the number of whole shares of Common Stock
issuable upon conversion thereof shall be computed on the basis of the aggregate
number of Depositary shares represented by the Receipts so delivered.
If Preferred Stock shall be called by the Company for redemption, the
Depositary Shares representing such Preferred Stock may be converted into Common
Stock as provided in the Deposit Agreement until, but not after, the close of
business on the Redemption Date unless the Company shall fail to deposit with
the Depositary the shares of Common Stock and cash for any fractional share
amounts required to redeem the Preferred Stock held by the Depositary, in which
case the Depositary Shares representing such Preferred Stock may continue to be
converted into Common Stock until, but not after, the close of business on the
date on which the Company deposits with the Depositary such shares of Common
Stock and cash for any fractional share amounts as are required by the Express
Terms to make full payment of the amounts payable upon such redemption. Upon
receipt by the Depositary of a Receipt or Receipts, together with a properly
completed and executed notice of conversion, representing any Preferred Stock
called for redemption, the shares of Preferred Stock held by the Depositary
represented by such Depositary Shares for which conversion is requested shall be
deemed to have been received by the Company for conversion as of immediately
prior to the close of business on the date of such receipt by the Depositary.
6. Mandatory Conversion of Preferred Stock into Common Stock. With
respect to any Preferred Stock on deposit with the Depositary as to which the
Company has not exercised its right to redeem and the record holder has not
exercised its right of optional conversion pursuant to the Express Terms, the
Depositary shall mail, first class postage prepaid, notice of the mandatory
conversion of Preferred Stock and the simultaneous mandatory conversion of the
Depositary Shares representing the Preferred Stock to be automatically
converted, not less than 5 and not more than 15 days prior to the date fixed for
mandatory conversion of such Preferred Stock and Depositary Shares (the
"Mandatory Conversion Date"), to all record holders of Receipts evidencing
Depositary Shares who are of record on the date that is two Business Days prior
to the date of mailing, at the addresses of such holders as they appear on the
records of the Depositary; but neither failure to mail any such notice to one or
more such holders nor any defect in any notice to one or more such holders shall
affect the sufficiency of the proceedings for mandatory conversion as to any
record holder (whether or not such failure or defect affects such record
holder). Each such notice shall state: (i) the Mandatory Conversion Date; (ii)
that all outstanding Depositary Shares on the Mandatory Conversion Date will be
automatically converted pursuant to the Express Terms and the Deposit Agreement;
(iii) the Common Equivalent Rate (determined in accordance with the Express
Terms); (iv) the place or places where Receipts evidencing Depositary Shares are
to be surrendered for payment of the mandatory conversion price; and (v) that
dividends in respect of the shares of Preferred Stock represented by the
Depositary Shares to be automatically converted will cease to accumulate from
and after the Mandatory Conversion Date.
On the Mandatory Conversion Date, all then outstanding shares of
Preferred Stock and the Depositary Shares representing such shares of Preferred
Stock shall automatically convert into shares of Common Stock, cash for any
fractional share amounts and the right to receive amounts in cash equal to all
accrued and unpaid dividends on such shares of Preferred Stock to and including
the Mandatory Conversion Date (other than previously declared dividends payable
to a holder of record as of a prior date), all as provided in and subject to the
Express Terms.
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From and after the Mandatory Conversion Date, the Depositary Shares
representing the shares of Preferred Stock automatically converted shall be
deemed no longer to be outstanding and all rights of the record holders of
Receipts evidencing such Depositary Shares (except the right to receive the
shares of Common Stock, any cash for accrued and unpaid dividends (other than
previously declared dividends payable to a holder of record as of a prior date)
and any fractional share amount deliverable or Payable upon mandatory conversion
or in connection therewith) shall, to the extent of such Depositary Shares,
cease and terminate. Upon surrender, in accordance with said notice, of the
Receipts evidencing such Depositary Shares (properly endorsed or assigned for
transfer, if the Depositary shall so require), such Depositary Shares shall be
exchanged for shares of Common Stock and cash for any fractional share amount
(and the right to receive cash for any accrued and unpaid dividends payable in
connection therewith) at a rate per Depositary Share equal to _______________ of
the number (including fractional amounts) of shares of Common Stock (and
______________ of the right to receive cash for any accrued and unpaid
dividends) exchanged for each share of Preferred Stock pursuant to the Express
Terms. The foregoing shall be subject to the detailed terms and conditions of
the Express Terms.
On or prior to the Mandatory Conversion Date, the Company shall deposit
with the Depositary certificates for the shares of Common Stock and the cash for
any fractional share amounts into which the shares of Preferred Stock held by
the Depositary shall automatically convert on the Mandatory Conversion Date,
plus, subject to the Express Terms, an amount in cash equal to all accrued and
unpaid dividends on such shares of Preferred Stock (other than previously
declared dividends payable to a holder of record as of a prior date) to and
including the Mandatory Conversion Date. Using such shares of Common Stock and
cash, the Depositary shall deliver certificates for the appropriate number of
shares of Common Stock and the appropriate amount of cash, without interest, to
record holders who properly deliver their Receipts to the Depositary.
7. Transfers, Split-ups, Combinations. Subject to Paragraphs 8, 9
and 10 below, this Receipt is transferable on the books of the Depositary upon
surrender of this Receipt to the Depositary at the Depositary's Office or such
other offices as the Depositary may designate, properly endorsed or accompanied
by a properly executed instrument of transfer or endorsement, and upon such
surrender the Depositary shall execute and deliver a Receipt to or upon the
order of the person entitled thereto, all as provided in and subject to the
Deposit Agreement. This Receipt may be split into other Receipts or combined
with other Receipts into one Receipt evidencing the same aggregate number of
Depositary Shares evidenced by the Receipt or Receipts surrendered; provided,
however, that the Depositary shall not execute and deliver any Receipt
evidencing a fractional Depositary Share.
8. Conditions to Signing and Delivery, Transfer, etc., of
Receipts. Prior to the execution and delivery, transfer, split-up, combination,
surrender or exchange of this Receipt, the Depositary, any of the Depositary's
Agents or the Company may require any or all of the following: (i) payment to it
of a sum sufficient for the payment (or, in the event that the Depositary or the
Company shall have made such payment, the reimbursement to it) of any tax or
other governmental charge with respect thereto (including any such tax or charge
with respect to Preferred Stock being deposited or withdrawn or with respect to
Common Stock or other securities or property of the Company being issued upon
conversion or redemption); (ii) the production of proof satisfactory to it as to
the identity and genuineness of any signature; and (iii) compliance with such
regulations, if any, as the Depositary or the Company may establish not
inconsistent with the Deposit Agreement. Any person presenting Preferred Stock
for deposit, or any holder of this Receipt, may be required to file such proof
of information, to execute such certificates and to make such representations
and warranties as the Depositary or the Company may reasonably deem necessary or
proper. The Depositary or the Company may withhold or delay the delivery of
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<PAGE> 31
any Receipt, the transfer, redemption, conversion or exchange of any Receipt,
the withdrawal of the Preferred Stock or money or other property, if any,
represented by the Depositary Shares evidenced by this Receipt or the
distribution of any dividend or other distribution until such proof or other
information is filed, such certificates are executed or such representations and
warranties are made.
9. Suspension of Delivery, Transfer, etc. The deposit of Preferred
Stock may be refused, the delivery of Receipts against Preferred Stock may be
suspended, the transfer of Receipts may be refused and the transfer, split-up,
combination, surrender or exchange of this Receipt may be suspended (i) during
any period when the register of holders of Receipts is closed; (ii) if any such
action is deemed necessary or advisable by the Depositary, any of the
Depositary's Agents or the Company at any time or from time to time because of
any requirement of law or of any government or governmental body or commission,
or under any provision of the Deposit Agreement; or (iii) except for the
transfer of Receipts, with the approval of the Company, for any other reason.
Except with respect to a conversion of Depositary Shares which may occur
pursuant to the Express Terms, the Depositary shall not be required (a) to
execute and deliver, transfer or exchange any receipts for a period beginning at
the opening of business 15 days next preceding any selection of Depositary
Shares and Preferred Stock to be redeemed and ending at the close of business on
the day of the mailing of notice of redemption of Depositary Shares or (b) to
transfer or exchange for another Receipt any Receipt evidencing Depositary
Shares called or being called for redemption in whole or in part, except as
provided in the last paragraph of Paragraph 3 above.
10. Payment of Taxes or other Governmental Charges. If any tax or
other governmental charge shall become payable by or on behalf of the Depositary
with respect to this Receipt, the Depositary Shares evidenced by this Receipt,
the Preferred Stock (or any fractional interest therein) represented by such
Depositary Shares or any transaction referred to in Section 4.6 of the Deposit
Agreement, such tax (including transfer, issuance or acquisition taxes, if any)
or governmental charge shall be payable by the holder hereof. Until such payment
is made, transfer, redemption, conversion or exchange of this Receipt or any
withdrawal of the Preferred Stock or money and other property, if any,
represented by the Depositary Shares evidenced by this Receipt may be refused,
any dividend or other distribution may be withheld and any part or all of the
Preferred Stock or other property represented by the Depositary Shares evidenced
by this Receipt may be sold for the account of the holder hereof (after
attempting by reasonable means to notify such holder prior to such sale). Any
dividend or other distribution so withheld and the proceeds of any such sale may
be applied to any payment of such tax or other governmental charge, the holder
of this Receipt remaining liable for any deficiency.
11. Amendment. The form of the Receipts and any provision of the
Deposit Agreement may at any time and from time to time be amended by agreement
between the Company and the Depositary in any respect that they may deem
necessary or desirable. Any amendment that shall impose any fees, taxes or
charges payable by holders of Receipts (other than taxes and other governmental
charges, fees and other expenses provided for herein or in the Deposit
Agreement), or that shall otherwise prejudice any substantial existing right of
holders of Receipts, shall not become effective as to outstanding Receipts until
the expiration of 90 days after notice of such amendment shall have been given
to the record holders of outstanding Receipts. The holder of this Receipt at the
time any such amendment becomes effective shall be deemed, by continuing to hold
this Receipt, to consent and agree to such amendment and to be bound by the
Deposit Agreement as amended thereby. In no event shall any amendment impair the
right, subject to the provisions of Paragraphs 3, 4, 5, 6, 8, 9 and 10 hereof
and of Sections 2.3, 2.6., 2.7., 2.10 and 2.11 and Article III of the Deposit
Agreement, of the owner of the Depositary Shares evidenced by this Receipt to
surrender this
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<PAGE> 32
Receipt with instructions to the Depositary to deliver to the holder the
Preferred Stock and all money and other property, if any, represented hereby, or
to cause the conversion of the underlying Preferred Stock into Common Stock and
cash for any fractional share amount, except in order to comply with mandatory
provisions of applicable law.
12. Fees, Charges and Expenses. The Company will pay all fees,
charges and expenses of the Depositary, except for taxes (including transfer
taxes, if any) and other governmental charges and such charges as are expressly
provided in the Deposit Agreement to be at the expense of persons depositing
Preferred Stock, holders of Receipts or other persons.
13. Ownership of Receipts. It is a condition of this Receipt, and
every successive holder hereof by accepting or holding the same consents and
agrees, that ownership of this Receipt (and of the Depositary Shares evidenced
hereby) when properly endorsed or accompanied by a properly executed instrument
of transfer or endorsement, is transferable by delivery; provided, however, that
until this Receipt shall be transferred on the books of the Depositary as
provided in Section 2.4 of the Deposit Agreement, the Depositary may,
notwithstanding any notice to the contrary, treat the record holder hereof at
such time as the absolute owner hereof for the purpose of determining the person
entitled to distribution of dividends or other distributions or to any notice
provided for in the Deposit Agreement and for all other purposes.
14. Dividends and Distributions. Whenever the Depositary receives
any cash dividend or other cash distribution on the Preferred Stock, the
Depositary will, subject to the provisions of the Deposit Agreement, distribute
such portions of such sum to record holders of Receipts as are, as nearly as
practicable, proportionate to the respective numbers of Depositary Shares
evidenced by the Receipts held by such holders; provided, however, that in case
the Company or the Depositary shall be required to withhold and does withhold
from any cash dividend or other cash distribution in respect of the Preferred
Stock an amount on account of taxes or as otherwise required by law, regulation
or court order, the amount made available for distribution or distributed in
respect of Depositary Shares shall be reduced accordingly. The Depositary shall
distribute or make available for distribution, as the case may be, only such
amount, however, as can be distributed without attributing to any owner of
Depositary Shares a fraction of one cent and any balance not so distributable
shall be held by the Depositary (without liability for interest thereon) and
shall be added to and be treated as part of the next sum received by the
Depositary for distribution to record holders of Receipts then outstanding.
15. Subscription Rights, Preferences or Privileges. If the Company
shall at any time offer or cause to be offered to the persons in whose names
Preferred Stock is registered on the books of the Company any rights,
preferences or privileges to subscribe for or to purchase any securities or any
rights, preferences or privileges of any other nature, such rights, preferences
or privileges shall in each such instance, subject to the provisions of the
Deposit Agreement, be made available by the Depositary to the record holders of
Receipts if the Company so directs in such manner as the Company shall instruct.
16. Notice of Dividends; Fixing of Record Date. Whenever any cash
dividend or other cash distribution shall become payable, any distribution other
than cash shall be made, or any rights, preferences or privileges shall at any
time be offered, with respect to the Preferred Stock, or whenever the Depositary
shall receive notice of (i) any meeting at which holders of Preferred Stock are
entitled to vote or of which holders of Preferred Stock are entitled to notice
or (ii) any election on the part of the Company to call for redemption any
shares of Preferred Stock, the Depositary shall in each such instance fix a
record date (which shall be the same date as the record date fixed by the
Company with respect to the Preferred
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<PAGE> 33
Stock) for the determination of the holders of Receipts (i) who shall be
entitled to receive such dividend, distribution, rights, preferences or
privileges or the net proceeds of the sale thereof, or to give instructions for
the exercise of voting rights at any such meeting or to receive notice of such
meeting or (ii) whose Depositary Shares are to be so redeemed.
17. Voting Rights. Upon issuance of notice of any meeting at which
the holders of Preferred Stock are entitled to vote, the Company shall direct
the Depositary, as soon as practicable thereafter, to mail to the record holders
of Receipts a notice, which shall contain (i) such information as is contained
in such notice of meeting, (ii) a statement that the holders of Receipts at the
close of business on a specified record date determined as provided in Paragraph
15 will be entitled, subject to any applicable provision of law, the Company's
Articles of Incorporation or the Express Terms, to instruct the Depositary as to
the exercise of the voting rights pertaining to the amount of Preferred Stock
represented by their respective Depositary Shares, and (iii) a brief statement
as to the manner in which such instructions may be given. Upon the written
request of a holder of a Receipt on such record date, the Depositary shall
endeavor insofar as practicable to vote or cause to be voted the amount of
Preferred Stock represented by the Depositary Shares evidenced by such Receipt
in accordance with the instructions set forth in such request. The Company has
agreed to take all reasonable action that may be deemed necessary by the
Depositary in order to enable the Depositary to vote such Preferred Stock or
cause such Preferred Stock to be voted. In the absence of specific instructions
from the holder of a Receipt, the Depositary will abstain from voting to the
extent of the Preferred Stock represented by the Depositary Shares evidenced by
such Receipt. After aggregating all voting Depositary Shares, the Depositary
will disregard for voting purposes any fractional share of Preferred Stock
remaining.
18. Reports, Inspection of Transfer Books. The Depositary shall
make available for inspection by holders of Receipts at the Depositary's Office
and at such other places as it may from time to time deem advisable during
normal business hours any reports and communications received from the Company
that are both received by the Depositary as the holder of Preferred Stock and
made generally available to the holders of Preferred Stock by the Company. The
Depositary shall keep books at the Depositary's Office for the registration and
transfer of Receipts, which books during normal business hours will be open for
inspection by the record holders of Receipts as provided by applicable law.
19. Liability of the Depositary, the Depositary's Agents and the
Company. Neither the Depositary nor any Depositary's Agent nor the Company shall
incur any liability to any holder of any Receipt, if by reason of any provision
of any present or future law or regulation of any governmental authority or, in
the case of the Depositary or any Depositary's Agent, by reason of any
provision, present or future, of the Articles of Incorporation or the Express
Terms or, in the case of the Company, the Depositary or any Depositary's Agent,
by reason of any act of God or war or other circumstance beyond the control of
the relevant party, the Depositary, any Depositary's Agent or the Company shall
be prevented or forbidden from doing or performing any act or thing that the
terms of the Deposit Agreement provide shall or may be done or performed; nor
shall the Depositary, any Depositary's Agent or the Company incur any liability
to any holder of a Receipt by reason of any nonperformance or delay, caused as
aforesaid, in the performance of any act or thing that the terms of the Deposit
Agreement provide shall or may be done or performed or by reason of any exercise
of, or failure to exercise, any discretion provided for in the Deposit
Agreement.
20. Obligations of the Depositary, the Depositary's Agents and the
Company. Neither the Depositary nor any Depositary's Agent nor the Company
assumes any obligation or shall be subject to any liability hereunder or under
the Deposit Agreement to holders of Receipts other than that each of them agrees
to use good faith in the performance of such
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duties as are specifically set forth in the Deposit Agreement. Neither the
Depositary nor any Depositary's Agent nor the Company shall be under any
obligation to appear in, prosecute or defend any action, suit or other
proceeding with respect to Preferred Stock, Depositary Shares, Receipts or
Common Stock that in its opinion may involve it in expense or liability, unless
indemnity satisfactory to it against all expense and liability be furnished as
often as may be required.
Neither the Depositary nor any Depositary's Agent nor the Company will
be liable for any action or failure to act by it in reliance upon the advice of
or information from legal counsel, accountants, any person presenting Preferred
Stock for deposit, any holder of a Receipt or any other person believed by it in
good faith to be competent to give such advice or information.
21. Termination of Deposit Agreement. Whenever so directed by the
Company upon at least five Business Days prior notice, the Depositary will
terminate the Deposit Agreement, provided that notice of such termination has
been given by mailing notice of such termination to the record holders of all
Receipts then outstanding at least 30 days prior to the date fixed in such
notice for such termination. The Depositary may likewise terminate the Deposit
Agreement if at any time 45 days shall have expired after the Depositary shall
have delivered to the Company a written notice of its election to resign and a
successor Depositary shall not have been appointed and accepted its appointment
as provided in Section 5.4 of the Deposit Agreement. Upon the termination of the
Deposit Agreement, the Company shall be discharged from all obligations
thereunder except for its obligations to the Depositary, any Depositary's Agent
and any Registrar under Sections 5.7 and 5.8 of the Deposit Agreement.
If any Receipts remain outstanding after the date of termination, the
Depositary thereafter shall discontinue all functions and be discharged from all
obligations as provided in the Deposit Agreement, except as specifically
provided therein.
22. Governing Law. The Deposit Agreement and this Receipt and all
rights thereunder and hereunder and provisions thereof and hereof shall be
governed by, and construed in accordance with, the law of the State of
______________ without giving effect to principles of conflict of laws.
This Receipt shall not be entitled to any benefits under the Deposit
Agreement or be valid or obligatory for any purpose, unless this Receipt shall
have been executed on behalf of the Depositary by the manual or facsimile
signature of a duly authorized officer and executed manually or, if a Registrar
for the Receipts (other than the Depositary) shall have been appointed, by
facsimile by the Depositary by the signature of a duly authorized officer and,
if executed by facsimile signature of the Depositary, shall have been
countersigned manually by such Registrar by the signature of a duly authorized
officer.
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<PAGE> 35
NOTICE OF CONVERSION
The undersigned holder of this Receipt for Depositary Shares hereby
irrevocably exercises the option to convert that number of shares, or fractions
of shares, of {Designation of Preferred Stock} of the Company represented by
_____________ Depositary Shares into shares of Common Stock of the Company and
cash for any fraction of Common Stock in accordance with the terms of and
subject to the conditions of the Preferred Stock, including the Express Terms in
respect thereof, and the Deposit Agreement, and directs the Depositary to
instruct the Company that the shares of Common Stock deliverable upon such
conversion be registered in the name of, and delivered together with a check in
payment for any fractional shares of Common Stock to, the undersigned unless a
different name has been indicated below. If the shares of Common Stock are to be
registered in the name of a person other than the undersigned, the undersigned
will pay all transfer and similar taxes payable with respect thereto. If the
number of shares of Preferred Stock, represented by the number of Depositary
Shares set forth above is less than the number of shares of Preferred Stock on
deposit in respect of this Receipt, the undersigned directs that the Depositary
execute and deliver to the undersigned, unless a different name is indicated
below, a new Receipt evidencing Depositary Shares for the balance of such
Preferred Stock not to be converted.
Dated: _____________________________
Signature:
-----------------------------------------
NOTE: The signature on this notice of conversion must correspond
with the name as written upon the face of this Receipt in every
particular without alteration or enlargement or any change
whatsoever, and must be guaranteed by a commercial bank, trust
company, securities broker or dealer, credit union, savings
association or other eligible guarantor institution which is a
member of or participant in a signature guarantee program
acceptable to the Depositary.
Name:
----------------------------------------------------------------
Address:
----------------------------------------------------------------
(Please print name and address of Registered Holder)
Name:
----------------------------------------------------------------
Address:
----------------------------------------------------------------
(Please indicate other delivery instructions, if applicable)
A-11
<PAGE> 1
EXHIBIT (5)
January 3, 1996
Ferro Corporation
1000 Lakeside Avenue
Cleveland, OH 44114
Gentlemen:
We have acted as counsel for Ferro Corporation, an Ohio corporation
(the "Company"), in connection with a Registration Statement on Form S-3
(Registration No. 33-63855) (the "Registration Statement") filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
with respect to the offering from time to time by the Company at an aggregate
offering price of up to $300,000,000 of (i) Debt Securities, (ii) Common Stock,
(iii) Preferred Stock, (iv) Warrants, (v) Stock Purchase Contracts, (vi) Stock
Purchase Units and (vii) Depositary Shares (each as defined in the Registration
Statement and collectively referred to as the "Securities").
We have reviewed the Registration Statement and the exhibits thereto,
and have examined such other documents and matters of law as we have deemed
necessary for purposes of this opinion. In rendering this opinion, we have
assumed there will be no changes in applicable law between the date of this
opinion and any date of issuance or delivery of the Securities, including any
Securities that may be issued upon conversion or exchange of any of the
Securities.
Based upon the foregoing, it is our opinion that:
1. With respect to Debt Securities to be issued under the Senior
Indenture (as defined in the Registration Statement), when (a) the terms of such
Debt Securities have been duly established by or in accordance with resolutions
of the board of directors of the Company authorizing the issuance and sale of
the Debt Securities, (b) such Debt Securities have been duly executed by the
Company and authenticated by the trustee in accordance with the provisions of
the Senior Indenture, and (c) such Debt Securities have been issued and sold by
the Company as contemplated in the Registration Statement, the prospectus
contained therein and the applicable prospectus supplement, such Debt Securities
will constitute valid and binding obligations of the Company and will be
entitled to the benefits of the Senior Indenture.
<PAGE> 2
Ferro Corporation
January 3, 1996
Page 2
2. With respect to Debt Securities to be issued under the Subordinated
Indenture (as defined in the Registration Statement), when (a) the terms of such
Debt Securities have been duly established by or in accordance with resolutions
of the board of directors of the Company authorizing the issuance and sale of
the Debt Securities, (b) such Debt Securities have been duly executed by the
Company and authenticated by the trustee in accordance with the provisions of
the Subordinated Indenture, and (c) such Debt Securities have been issued and
sold by the Company as contemplated in the Registration Statement, the
prospectus contained therein and the applicable prospectus supplement, such Debt
Securities will constitute valid and binding obligations of the Company and will
be entitled to the benefits of the Subordinated Indenture.
3. When (a) the terms of any offering of shares of Common Stock have
been duly established by or in accordance with resolutions of the board of
directors of the Company authorizing the issuance and sale of the shares of
Common Stock, and (b) such shares so offered have been issued and delivered in
the manner and for the consideration contemplated by the Registration Statement,
the prospectus contained therein and the applicable prospectus supplement, such
shares of Common Stock will be legally issued, fully paid and nonassessable.
4. When (a) the terms of any particular series of Preferred Stock have
been duly established by or in accordance with resolutions of the board of
directors of the Company authorizing the issuance and sale of shares of
Preferred Stock, and (b) such shares of Preferred Stock so offered have been
issued and delivered in the manner and for the consideration contemplated by the
Registration Statement, the prospectus contained therein and the applicable
prospectus supplement, such shares of Preferred Stock will be legally issued,
fully paid and nonassessable.
5. When (a) the terms of the Warrants have been duly established by or
in accordance with resolutions of the board of directors of the Company
authorizing the issuance and sale of the Warrants, and (b) the Warrants so
offered have been issued and delivered in the manner and for the consideration
contemplated by the Registration Statement, the prospectus contained therein and
the applicable prospectus supplement, such Warrants will be legally issued and
will constitute valid and binding obligations of the Company.
6. When (a) the terms of the Stock Purchase Contracts have been duly
established by or in accordance with resolutions of the board of directors of
the Company authorizing the issuance and sale of the Stock Purchase Contracts,
(b) all documentation relating to such Stock Purchase Contracts has been duly
authorized by or in accordance with resolutions of the board of directors of the
Company and has been duly executed and delivered, and (c) the Stock Purchase
Contracts so offered have been issued and delivered in the manner and for the
<PAGE> 3
Ferro Corporation
January 3, 1996
Page 3
consideration contemplated by the Registration Statement, the prospectus
contained therein and the applicable prospectus supplement, such Stock Purchase
Contracts will be legally issued and will constitute valid and binding
obligations of the Company.
7. When (a) the terms of the Stock Purchase Units have been duly
established by or in accordance with resolutions of the board of directors of
the Company authorizing the issuance and sale of the Stock Purchase Units, (b)
all documentation relating to such Stock Purchase Units, including that relating
to arrangements regarding securities constituting part of the Stock Purchase
Units, has been duly authorized by or in accordance with resolutions of the
board of directors of the Company and has been duly executed and delivered, and
(c) the Stock Purchase Units so offered have been issued and delivered in the
manner and for the consideration contemplated by the Registration Statement, the
prospectus contained therein and the applicable prospectus supplement, such
Stock Purchase Units will be legally issued and will constitute valid and
binding obligations of the Company.
8. When (a) the terms of the Depositary Shares have been duly
established by or in accordance with resolutions of the board of directors of
the Company authorizing the issuance and sale of the Depositary Shares, (b) all
documentation, including the deposit agreement, relating to the Depositary
Shares has been duly authorized by or in accordance with resolutions of the
board of directors of the Company and has been duly executed and delivered, (c)
the Preferred Stock that is represented by the Depositary Shares has been
validly issued and delivered to the depositary in accordance with the deposit
agreement, and (d) the Depositary Shares have been issued and delivered in the
manner and for the consideration contemplated by the Registration Statement, the
prospectus contained therein and the applicable prospectus supplement, such
Depositary Shares will be legally issued.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the prospectus included as part of the Registration Statement.
Respectfully submitted,
/s/ Squire, Sanders & Dempsey
Squire, Sanders & Dempsey
<PAGE> 1
EXHIBIT 12a
FERRO CORPORATION AND SUBSIDIARIES
RATIO OF EARNINGS TO FIXED CHARGES
PER REGULATION S-K 229.503 (ITEM 503)
<TABLE>
<CAPTION>
BEFORE BEFORE BEFORE
NINE MONTHS ACCT CHG RESTRUCTURING LITIGATION
SEPTEMBER DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER
1995 1994 1993 1993 1992 1991 1991 1990 1990
----------- -------- -------- -------- -------- -------- ------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Pre-Tax Income 61,143 74,306 89,289 89,289 97,689 65,649 65,649 55,509 55,509
Extraordinary
Charges (37,764)(1) -- -- (45,300)(2) -- (12,000)(3) --
Add: Fixed Charges 12,560 12,774 11,989 11,989 10,780 12,419 12,419 18,709 18,709
Less: Interest
Capitalization (617) (1,041) (1,108) (1,108) (753) (1,629) (1,629) (1,032) (1,032)
------ ------ ------ ------- ------- ------ ------ ------ ------
Total Earnings 73,086 86,039 62,406 100,170 107,716 31,139 76,439 61,186 73,186
====== ====== ====== ======= ======= ====== ====== ====== ======
Fixed Charges:
Interest Expense 11,343 10,933 10,081 10,081 9,227 9,940 9,940 16,827 16,827
Interest
Capitalization 617 1,041 1,108 1,108 753 1,629 1,629 1,032 1,032
Interest Portion
of Rental
Expense 600 800 800 800 800 850 850 850 850
------ ------ ------ ------- ------- ------ ------ ------ ------
Total Fixed
Charges 12,560 12,774 11,989 11,989 10,780 12,419 12,419 18,709 18,709
====== ====== ====== ======= ======= ====== ====== ====== ======
Total Earnings 73,086 86,039 62,406 100,170 107,716 31,139 76,439 61,186 73,186
Divided By:
Total Fixed
Charges 12,560 12,774 11,989 11,989 10,780 12,419 12,419 18,709 18,709
------ ------ ------ ------- ------- ------ ------ ------ ------
Ratio 5.82 6.74 5.21 8.36 9.99 2.51 6.16 3.27 3.91
</TABLE>
- ------------------
(1) Pre-tax effect of FAS 106, accounting for retiree benefits.
(2) Pre-tax effect of restructuring charges
(3) Pre-tax effect of litigation charge
Note: Amortization of debt expense and discounts and premiums were deemed
immaterial to the above calculations. Interest portion of rental expense
are conservative estimates based on actual amounts from prior years.
<PAGE> 1
EXHIBIT 12b
FERRO CORPORATION AND SUBSIDIARIES
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
PER REGULATION S-K 229.503 (ITEM 503)
<TABLE>
<CAPTION>
BEFORE BEFORE BEFORE
NINE MONTHS ACCT CHG RESTRUCTURING LITIGATION
SEPTEMBER DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER
1995 1994 1993 1993 1992 1991 1991 1990 1990
----------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Pre-Tax Income 61,143 74,306 89,289 89,289 97,689 65,649 65,649 55,509 55,509
Extraordinary Charges (37,764)(1) -- -- (45,300)(2) -- (12,000)(3) --
Add: Fixed Charges 15,959 17,372 16,664 16,664 15,552 17,297 17,297 23,634 23,634
Less: Preferred Dividend (3,399) (4,598) (4,675) (4,675) (4,772) (4,878) (4,878) (4,925) (4,925)
Less: Interest Capitalization (617) (1,041) (1,108) (1,108) (753) (1,629) (1,629) (1,032) (1,032)
------ ------ ------ ------- ------- ------ ------ ------ ------
Total Earnings 73,086 86,039 62,406 100,170 107,716 31,139 76,439 61,186 73,186
====== ====== ====== ======= ======= ====== ====== ====== ======
Fixed Charges:
Interest Expense 11,343 10,933 10,081 10,081 9,227 9,940 9,940 16,827 16,827
Interest Capitalization 617 1,041 1,108 1,108 753 1,629 1,629 1,032 1,032
Preferred Dividend 3,399 4,598 4,675 4,675 4,772 4,878 4,878 4,925 4,925
Interest Portion of
Rental Expense 600 800 800 800 800 850 850 850 850
------ ------ ------ ------- ------- ------ ------ ------ ------
Total Fixed Charges 15,959 17,372 16,664 16,664 15,552 17,297 17,297 23,634 23,634
====== ====== ====== ======= ======= ====== ====== ====== ======
Total Earnings 73,086 86,039 62,406 100,170 107,716 31,139 76,439 61,186 73,186
Divided By:
Total Fixed Charges 15,959 17,372 16,664 16,664 15,552 17,297 17,297 23,634 23,634
------ ------ ------ ------- ------- ------ ------ ------ ------
Ratio 4.58 4.95 3.74 6.01 6.93 1.80 4.42 2.59 3.10
</TABLE>
- ----------------
(1) Pre-tax effect of FAS 106, accounting for retiree benefits.
(2) Pre-tax effect of restructuring charges.
(3) Pre-tax effect of litigation charge.
Note: Amortization of debt expense and discounts and premiums were deemed
immaterial to the above calculations. Interest portion of rental expense
are conservative estimates based on actual amounts from prior years.
<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)
- -------------------------------------------------------------------------------
SOCIETY NATIONAL BANK
---------------------
(Exact name of Trustee as specified in its charter)
<TABLE>
<C> <C>
National Banking Association 34-0797057
- ---------------------------------------- ----------------------------------------
(Jurisdiction of incorporation or organization (I.R.S. Employer Identification Numbers)
if not a U.S. national bank)
127 Public Square, Cleveland, Ohio 44114
- ---------------------------------------- ---------------------------------------
(Address of principal executive (Zip Code)
offices)
</TABLE>
Clive M. Nagy, 127 Public Square, Cleveland, OH 44114, 216/689-7549
- -------------------------------------------------------------------------------
(Name, address and telephone number of agent for service)
FERRO CORPORATION
- -------------------------------------------------------------------------------
(Exact Name of obligor as specified in its charter)
<TABLE>
<C> <C>
Ohio 34-0217820
- ---------------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
100 Lakeside Avenue
Cleveland, Ohio 44114-1183
- ---------------------------------------- ---------------------------------------
(Address of principal executive offices) (Zip code)
</TABLE>
Debt Securities
- -------------------------------------------------------------------------------
(Title of the 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.
Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
Yes
ITEM 2. AFFILIATIONS WITH THE OBLIGOR
If the obligor is an affiliate of the trustee, describe each
such affiliation.
The obligor is not an affiliate of the Trustee.
No responses are included for Items 3 - 15 of this Form T-1 because the Obligor
is not in default as provided under Item 13.
ITEM 16. LIST OF EXHIBITS
List below all exhibits filed as a part of this statement of
eligibility.
1. Exhibit T1A(a) A copy of the Amended Articles of
Association of Society National
Bank as now in effect.
2. Exhibit T1A(b) Certificate of Authority of Trustee
to Commence Business.
3. Exhibit T1A(c) Authorization of the Trustee to
exercise Corporate Trust Powers.
4. Exhibit T1B A copy of By-Laws of Society
National Bank as now in effect.
5. Exhibit T1C A copy of each Indenture referred
to in Item 4. Not Applicable.
6. Exhibit T1D The Trustee's consent required by
Section 321(b) of the Trust
Indenture Act of 1939.
2
<PAGE> 3
7. Exhibit T1E A copy of the latest report of condition of the Trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Exhibit T1F A copy of any order 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.
9. Exhibit T1G Foreign trustees are required to furnish a consent to
service of process (on Form F-X). Not Applicable.
3
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Society National Bank, 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 Cleveland, and State of Ohio on
the 29th day of December, 1995.
SOCIETY NATIONAL BANK
By: /s/ C.M. Nagy
----------------
C. M. Nagy
Its: Vice President
[Corporate Seal]
ATTEST:
By: /s/ Dave Kovach
---------------------
Dave Kovach
Its: Assistant Secretary
4
<PAGE> 5
EXHIBIT T1A(a)
EXHIBIT A
SOCIETY NATIONAL BANK
AMENDED
ARTICLES OF ASSOCIATION
First. The title of this Association shall be Society National Bank.
Second. The main office of this Association shall be in Cleveland,
Ohio, County of Cuyahoga. The general business of this Association shall be
conducted at its main office and its branches.
Third. The Board of Directors of this Association shall consist of not
less than five nor more than twenty-five members, the exact number of Directors
within such minimum and maximum limits to be fixed and determined from time to
time by resolution of a majority of the full Board of Directors or by
resolution of the shareholders at any annual or special meeting thereof. In
accordance with 12 U.S.C. Section 72, each director, during the full term of
his or her directorship, shall own in his or her own right either shares of
capital stock of the Association the aggregate par value of which is not less
than $1,000 or an equivalent interest, as determined by the Comptroller of the
Currency, in any company which has control over the Association within the
meaning of 12 U.S.C. Section 1841. Unless otherwise provided by the laws of the
United States, any vacancy in the Board of Directors for any reason, including
an increase in the number thereof, may be filled by action of the Board of
Directors.
Fourth. The annual meeting of the shareholders for the election of
Directors and the transaction of whatever other business may be brought before
said meeting shall be held at the main office or such other place as the Board
of Directors may designate, on the day of each year specified therefor in the
Bylaws, but if no election is held on that day, it may be held on any
subsequent day according to the provisions of law, and all elections shall be
held according to such lawful regulations as may be prescribed by the Board of
Directors.
Fifth. The amount of authorized capital stock of this Association
shall be One Hundred Ninety-two Million Four Hundred Sixty-two Thousand Five
Hundred Dollars ($192,462,500) divided into 1,924,625 shares of common stock of
the par value of One Hundred Dollars ($100) per share but said capital stock
may be increased or decreased from time to time, in accordance with the
provisions of the laws of the United States.
No holder of shares of capital stock of any class of this Association
shall have any pre-emptive or preferential right of subscription to any shares
of any class of stock of this Association, whether now or hereafter authorized,
or to any obligations convertible into stock of this Association, issued or
sold, nor any right of subscription to any thereof other than such,
7
<PAGE> 6
if any, as the Board of Directors, in its discretion, may from time to time
determine and at such price as the Board of Directors may from time to time fix.
This Association, at any time and from time to time, may authorize and
issue debt obligations, whether or not Subordinated, without the approval of
shareholders.
Sixth. The Board of Directors shall appoint one of its members
President of this Association, who shall be Chairman of the Board, unless the
Board appoints another Director to be the Chairman. The Board of Directors
shall have the power to appoint one or more Vice Presidents and to appoint a
Cashier and such other officers and employees as may be required to transact
the business of this Association.
The Board of Directors shall have the power to define the duties of the
officers and employees of this Association, to fix the salaries to be paid to
them; to dismiss them; to require bonds from them and to fix the penalty
thereof; to regulate the manner in which any increase of the capital of this
Association shall be made; to manage and administer the business and affairs of
this Association; to make all Bylaws that it may be lawful for them to make;
and generally to do and perform all acts that it may be legal for a Board of
Directors to do and perform.
Seventh. The Board of Directors shall have the power to change the
location of the main office to any other place within the limits of Cleveland,
Ohio, without the approval of the shareholders but subject to the approval of
the Comptroller of the Currency, and shall have the power to establish or
change the location of any branch or branches of the Association to any other
location, without the approval of the shareholders but subject to the approval
of the Comptroller of the Currency.
Eighth. The corporate existence of this Association shall continue
until terminated in accordance with the laws of the United States.
Ninth. The Board of Directors of this Association, or any shareholders
owning, in the aggregate, not less than 10 percent (10%) of the stock of this
Association, may call a special meeting of shareholders at any time. Unless
otherwise provided by the laws of the United States, a notice of time, place,
and purpose of every annual and special meeting of the shareholders shall be
given by first-class mail, postage prepaid, mailed at least ten days prior to
the date of such meeting to each shareholder of record at this address as shown
upon the books of this Association, except as to any shareholder who has
specifically waived notice of such meeting.
Tenth. (a) This Association shall indemnify, to the full extent
permitted or authorized by the Ohio General Corporation Law as it may from time
to time be amended, any person made or threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, or investigative, by reason of the fact that he is or
was a director, officer, or employee of this Association, or is or was serving
at the request of this Association as a director, trustee, officer, or employee
of another association,
10
<PAGE> 7
corporation, partnership, joint venture, trust, or other enterprise; in the
case of a person serving at the request of this Association, such request shall
be evidenced by a resolution of the Board of Directors or a duly-authorized
committee thereof or by a writing executed by an officer of this Association
pursuant to a resolution of the Board of Directors or a duly-authorized
committee thereof. In the case of a merger into this Association of a
constituent association which, if its separate existence had continued, would
have been required to indemnify directors, officers, or employees in specified
situations prior to the merger, any person who served as a director, officer,
or employee of the constituent association, or served at the request of the
constituent association as a director, trustee, officer, or employee of another
association, corporation, partnership, joint venture, trust, or other
enterprise, shall be entitled to indemnification by this Association (as the
surviving association) for acts, omissions, or other events or occurrences
prior to the merger to the same extent he would have been entitled to
indemnification by the constituent association if its separate existence had
continued. The indemnification provided by this TENTH shall not be deemed
exclusive of any other rights to which any person seeking indemnification may
be entitled by law or under these Articles or the Bylaws, or any agreement,
vote of shareholders or disinterested directors, or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
director, trustee, officer, or employee and shall inure to the benefit of the
heirs, executors, and administrators of such a person.
(b) Notwithstanding division (a) of this TENTH, no director, officer,
or employee of this Association shall be indemnified against expenses,
including attorneys' fees, penalties or other payments incurred in an
administrative proceeding or action instituted by the Comptroller of the
Currency or other appropriate bank regulatory agency when such proceeding or
action results in a final order assessing civil money penalties against, or
requiring affirmative action of, such director, officer, or employee in the
form of payments to this Association.
(c) This Association may purchase and maintain insurance or furnish
similar protection, including but not limited to trust funds, letters of
credit, or self-insurance on behalf of or for any person who is or was a
director, officer, employee, or agent of this Association, or is or was serving
at the request of this Association as a director, trustee, officer, employee,
or agent of another association, corporation, partnership, joint venture,
trust, or other enterprise, against any liability asserted against him and
incurred by him in any capacity, or arising out of his status as such, whether
or not this Association would have the power to indemnify him against liability
under the provisions of this TENTH or of the Ohio General Corporation Law;
provided, however, such insurance shall explicitly exclude insurance coverage
for a formal order assessing civil money penalties against a director, officer,
or employee of this Association as a result of an administrative proceeding or
action instituted by the Comptroller of the Currency or other appropriate bank
regulatory agency. Insurance may be purchased from or maintained with a person
in which this Association has a financial interest.
(d) Expenses (including attorney's fees) incurred by a director in
defending any action, suit, or proceeding referred to in division (a) of this
TENTH commenced or threatened against the director for any action or failure to
act as a director shall be paid by this Association, as
<PAGE> 8
they are incurred, in advance of final disposition of the action, suit, or
proceeding upon receipt of an undertaking by or on behalf of the director in
which he agrees both (i) to repay the amount if it is proved by clear and
convincing evidence in a court of competent jurisdiction that his action or
failure to act involved an act or omission undertaken with deliberate intent to
cause injury to this Association or undertaken with reckless disregard for the
best interests of this Association and (ii) to reasonably cooperate with this
Association concerning the action, suit, or proceeding. The provisions of this
paragraph shall not apply if the only liability asserted against the director
in such action, suit, or proceeding is for (i) the payment of a dividend or
distribution, or the making of a distribution of assets to shareholders, or the
purchase or redemption of this Association's own shares, contrary in any such
case to law or these Articles of Association, or (ii) a distribution of assets
to shareholders during the winding up of the affairs of the Association, on
dissolution or otherwise, without the payment of all known obligations of the
Association, or without making adequate provision therefor.
Expenses (including attorney's fees) incurred by a director (to the extent the
expenses are not required to be advanced pursuant to the preceding paragraph),
officer, or employee in defending any action, suit, or proceeding referred to
in division (a) of this TENTH may be paid by this Association, as they are
incurred, in advance of final disposition of the action, suit, or proceeding,
as authorized by the Board of Directors in the specific case, upon receipt of
an undertaking by or on behalf of the director, officer, or employee to repay
the amount if it is ultimately determined that he is not entitled to be
indemnified by this Association.
(e) Notwithstanding division (d) of this TENTH, expenses, including
attorneys' fees, incurred by a present or former director, officer, or employee
of this Association in defending an administrative proceeding or action
instituted by the Comptroller of the Currency or other appropriate bank
regulatory agency that seeks a final order assessing civil money penalties or
requiring affirmative action by an individual or individuals in the form of
payments to this Association, may be paid by this Association as they are
incurred in advance of the final disposition of the action, suit, or
proceeding, only in the event that:
(i) the Board of Directors of this Association, in good faith,
determines in writing that all of the following conditions are
met:
(A) the director, officer, or employee has a substantial
likelihood of prevailing on the merits;
(B) in the event the director, officer, or employee does not
prevail, he will have the financial capability to reimburse
this Association;
(C) all applicable laws and regulations affecting loans to the
director, officer, or employee will be complied with in the
event reimbursement is required;
(D) payment of expenses by this Association will not adversely
affect this Association's safety and soundness; and
<PAGE> 9
(ii) the director, officer, or employee enters into an agreement with
this Association to repay such amount if:
(A) such administrative proceeding or action instituted by the
Comptroller of the Currency or other appropriate bank
regulatory agency results in a final order assessing civil
money penalties against, or requiring affirmative action of,
such director, officer, or employee in the form of payments
to this Association; or
(B) the Board of Directors of this Association finds that the
director, officer, or employee willfully misrepresented
factors relevant to the Board of Directors' determination of
conditions (A) or (B) set forth in (i), above.
If at any time the Board of Directors of this Association
believes that any of the conditions set forth in (i) above are no
longer met, such expenses will no longer be paid by this
Association.
(f) Notwithstanding divisions (a) through (e) of this TENTH, all of
the provisions of this TENTH are subject to the authority of the Office of the
Comptroller of the Currency to direct a modification of a specific
indemnification by a national bank through appropriate administrative action.
Eleventh. These Articles of Association may be amended at any regular
or special meeting of the shareholders by the affirmative vote of the holders
of a majority of the stock of this Association, unless the vote of the holders
of a greater amount of stock is required by law, and in that case by the vote
of the holders of such greater amount.
<PAGE> 10
EXHIBIT T1A(b)
Comptroller of the Currency
TREASURY DEPARTMENT OF THE UNITED STATES
Washington, D.C.,
Whereas, satisfactory evidence has been presented to the Comptroller of
the Currency that "SOCIETY NATIONAL BANK OF CLEVELAND", located in CLEVELAND,
State of OHIO, has complied with all provisions of the statutes of the United
States required to be complied with before being authorized to commence the
business of banking as a National Banking Institution.
Now, therefore, I, RAY M. GIDNEY, Comptroller of the Currency, do
hereby certify that the aforementioned association is authorized to commence
the business of banking as a National Banking Institution.
In testimony whereof, witness my signature and seal of
office this 27TH day of DECEMBER, 1955.
[SEAL] /s/ Ray M. Gidney
----------------------------
Ray M. Gidney
Charter No. 14761
<PAGE> 11
Comptroller of the Currency
TREASURY DEPARTMENT OF THE UNITED STATES
Washington, D.C.
KNOW ALL MEN BY THESE PRESENTS:
That, First National Bank of Clermont County, Clermont, Ohio, being
merged with and into Society National Bank of Cleveland, Ohio, effective as of
the close of business March 21, 1980, under the charter of Society National
Bank of Cleveland and under the title "Society National Bank";
Now, Therefore, approval and consent are hereby given to the said
receiving association, "Society National Bank", to operate the presently
existing branches of Society National Bank of Cleveland.
In Witness Whereof, I have hereunto set my hand
and official seal this 26th day of March, 1980,
[SEAL]
/s/ John G. Helmann
---------------------------
John G. Helmann
Comptroller of the Currency
<PAGE> 12
EXHIBIT T1A(c)
Comptroller of the Currency
TREASURY DEPARTMENT OF THE UNITED STATES
Washington, D.C.
WHEREAS, SOCIETY NATIONAL BANK, LOCATED IN CLEVELAND, STATE OF OHIO,
BEING A NATIONAL BANKING ASSOCIATION, ORGANIZED UNDER THE STATUES OF THE UNITED
STATES, HAS MADE APPLICATION FOR AUTHORITY TO ACT AS FIDUCIARY
AND WHEREAS, APPLICABLE PROVISIONS OF THE STATUTES OF THE UNITED STATES
AUTHORIZE THE GRANT OF SUCH AUTHORITY;
NOW THEREFORE, I HEREBY CERTIFY THAT THE NECESSARY APPROVAL HAS BEEN
GIVEN AND THAT THE SAID ASSOCIATION IS AUTHORIZED TO ACT IN ALL FIDUCIARY
CAPACITIES PERMITTED BY SUCH STATUTES.
IN TESTIMONY WHEROF, WITNESS MY
SIGNATURE AND SEAL OF OFFICE THIS
TWENTY-FIRST DAY OF MARCH, 1980.
[SEAL]
/s/ John G. Helmann
----------------------------
John G. Helmann
COMPTROLLER OF THE CURRENCY
CHARTER NO. 14761
<PAGE> 13
EXHIBIT TIB
The following Bylaws were adopted by the Board of Directors of Society
National Bank on July 16, 1992.
BYLAWS OF
SOCIETY NATIONAL BANK
ARTICLE I
MEETING OF SHAREHOLDERS
-----------------------
Section 1. Annual Meeting. The annual meeting of shareholders for the election
of Directors, and the transaction of whatever other business may properly come
before the meeting, shall be held at the main office of the Bank, or such other
place authorized by the Board of Directors or the Chairman of the Board, on the
Thursday after the third Wednesday in January of each year, or such other date
authorized by the Board of Directors or the Chairman of the Board. If, for any
cause, the election of Directors is not held on that day, the Board of
Directors shall order the election to be held on some subsequent day, as soon
thereafter as practicable, according to the provisions of law, and notice
thereof shall be given in the manner herein provided for the annual meeting.
Section 2. Special Meetings. Except as otherwise specifically provided by
statute, special meetings of the shareholders may be called for any purpose at
any time by the Chairman of the Board, the President, the Board of Directors,
or by any shareholder or shareholders owning, in the aggregate, not less than
ten per centum (10%) of the stock of the Bank.
Section 3. Notice of Meetings. Unless otherwise provided by law, these Bylaws,
or the Articles of Association, a notice of the time, place, and purpose of
every annual meeting and every special meeting of the shareholders shall be
given by first-class mail, postage prepaid, mailed not less than ten days nor
more than sixty days prior to the date of such meeting, to each shareholder of
record at such shareholder's address as shown upon the books of the Bank. The
attendance of any shareholder at a shareholder meeting without protesting,
prior to or at the commencement of the meeting, the lack of proper notice,
shall be deemed a waiver by such shareholder of notice of such meeting.
Section 4. Proxies. Shareholders may vote at any meeting of the shareholders
by proxies duly authorized in writing, but no officer or employee of this Bank
may act as a proxy. Proxies shall be valid only for one meeting, to be
specified therein, and any adjournments of such meeting. Proxies shall be dated
and shall be filed in the Bank's records. The person appointed as proxy need
not be a shareholder. Unless the writing appointing a proxy otherwise provides,
the presence at a meeting of the person who appointed a proxy shall not operate
to revoke the appointment. Notice to the Bank, in writing or in open meeting,
of the revocation of the appointment of a proxy shall not affect any vote or
act previously taken or authorized by such proxy.
<PAGE> 14
Section 5. Quorum: Adjournment. Except as may otherwise be provided by
law, at any meeting of the shareholders, the holders of shares entitling them
to exercise a majority of the voting power of the Bank present in person or by
proxy shall constitute a quorum for such meeting; provided, however, that no
action required by law to be authorized or taken by a designated proportion of
the shares may be authorized or taken by a lesser proportion; provided,
further, that, if a quorum is not present, the holders of a majority of the
voting shares represented thereat may adjourn such meeting or any adjournment
thereof. If any meeting is adjourned, notice of such adjournment need not be
given if the time and place to which such meeting is adjourned are fixed and
announced at such meeting.
Section 6. Voting Power, Cumulative Voting. In voting on issues at
meetings of shareholders, except on the election of Directors, each shareholder
shall be entitled to one vote for each share of stock held. A majority of
votes cast shall decide each issue submitted to the shareholders at any
meeting, except in cases where by law or by the Articles of Association a
larger vote is required. In all elections of Directors, each shareholder shall
have the right to vote the number of shares owned by such shareholder for as
many persons as there are Directors to be elected, or to cumulate such shares
and give one candidate as many votes as the number of Directors multiplied by
the number of such shareholder's shares shall equal, or to distribute them on
the same principle among as many candidates as such shareholder chooses.
Section 7. Record of Shareholders and Votes. At any meeting of the
shareholders, a record showing the names of shareholders present and the number
of shares of stock held by each, the names of shareholders represented by proxy
and the number of shares held by each, and the names of the proxies shall be
made. This record also shall show the number of shares voted on each action
taken, including the number of shares voted for each candidate for the Board of
Directors. This record shall be included in the minute book of the Bank.
ARTICLE II
BOARD OF DIRECTORS
Section 1. Authority. The Board of Directors shall have power to manage
and administer the business and affairs of the Bank. Except as expressly
limited by law, all corporate powers of the Bank shall be vested in and
exercised by or under the authority of the Board of Directors.
Section 2. Number. The Board of Director shall consist of not less than
five nor more than twenty-five members; the exact number within such minimum
and maximum limits shall be fixed and determined from time to time by
resolution of a majority of the full Board of Directors or by resolution of the
shareholders at any meeting thereof; provided, however, that a majority of the
full Board of Directors may not increase the number of Directors to a number
which exceeds by more than: (i) two the number of Directors last fixed and
determined by the shareholders where such number was fifteen or less, or (ii)
four the number of Directors last fixed and determined by the shareholders
where such number was sixteen or more.
<PAGE> 15
Section 3. Election of Directors: Vacancies. The Directors shall be
elected at each annual meeting of shareholders or at a special meeting called
for the purpose of electing Directors. Any vacancy or vacancies occurring in
the Board of Directors, including vacancies created by an increase in the
numbers of Directors, shall be filled by appointment by the remaining Directors
at any regular or special meeting of the Board, and any Director or Directors
so appointed shall hold office until the next election. Each person elected or
appointed a Director must take the oath of such office in the form prescribed
by the Comptroller of the Currency. No person elected or appointed a Director
shall exercise the functions of such office until he has taken such oath. The
Bank shall transmit evidence of such oath or oaths to the Comptroller of the
Currency.
Section 4. Term of Office; Resignations. Directors shall hold office
until the next annual meeting of shareholders or until their successors are
elected and have qualified, or until their earlier resignation, removal from
office, or death. Any Director may resign at any time by oral statement to
that effect made at a meeting of the Board of Directors, or in a writing to
that effect delivered to the Secretary or an Assistant Secretary of the Bank;
such resignation shall take effect immediately or at such other time as the
Director may specify at such meeting or in such writing. At a meeting of
shareholders called expressly for that purpose, any director or the entire
Board of Directors may be removed, with or without cause, by a vote of the
holders of a majority of the shares than entitled to vote at an election of
directors. If permitted by law, the majority of the Board of Directors may
remove a director for cause.
Section 5. Organization Meeting. Following the annual meeting of
shareholders, the Directors-elect shall hold an organization meeting for the
purpose of appointing officers and transacting such other business as properly
may come before the meeting. Such organization meeting shall be held on the
day of the election or as soon thereafter as practicable and, in any event,
within thirty days thereof. Notice of such meeting need not be given if held
on the day of the election.
Section 6. Regular Meetings. Regular meetings of the Board of Directors
shall be held, without notice, on the Thursday after the third Wednesday of
each month, at the main office of the Bank or at such other times and places
authorized by the Board of Directors, the Chairman of the Board, or in such
person's absence, a Vice Chairman of the Board. When any regular meeting of
the Board falls upon a holiday, the meeting shall be held on the next banking
business day unless the Board shall designate some other day.
Section 7. Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman of the Board, by the President, or at the request
of three or more Directors. Notice of special meetings, stating the time and
place thereof, and whether telephone or similar communications equipment will
be utilized, shall be given in person or by mailing, telephoning, or
telegraphing such notice at least 24 hours prior to the meeting; provided,
however, that attendance of any Director at such meeting without protesting,
prior to or at the commencement of the meeting, the lack of proper notice,
shall be deemed a waiver by such Director of notice of such meeting. Notice of
a meeting may be waived in writing or by telegram either before or after such
meeting. Unless otherwise indicated in the notice of the meeting, any business
may be transacted at such meeting.
<PAGE> 16
Section 8. Quorum: Adjournment. A quorum of the Board of Directors shall
consist of a majority of the Directors then in office; provided that a majority
of the Directors then present at a meeting duly held, whether or not a quorum
is present, may adjourn such meeting from time to time. If any meeting is
adjourned, notice of such adjournment need not be given if the time and place
to which such meeting is adjourned are fixed and announced at such meeting.
At each meeting of the Board of Directors at which a quorum is present, all
issues shall be determined by a majority vote of those present except as
otherwise expressly provided in these Bylaws or by law. A Director cannot vote
or otherwise act by proxy at a meeting of the Board of Directors.
ARTICLE III
OFFICERS
Section 1. Election and Designation of Officers. The Board of Directors
shall elect or appoint a Chairman of the Board, a President, one or more Vice
Presidents, a Secretary, and such other officers as the Board may deem
necessary. The Chairman of the Board and the President shall be members of the
Board of Directors. The Board of Directors may delegate the authority to
appoint and dismiss officers to officers of the Bank or to a committee composed
of such officers. Any two or more offices may be held by the some person, but
no officer shall execute, acknowledge, or verify any instrument in more than one
capacity if the instrument is required to be executed, acknowledged, or verified
by two or more officers. The Board of Directors shall approve the compensation
of officers, except that the Board of Directors may delegate to a committee of
the Board of Directors, or to officers of the Bank, authority for approving
officers' compensation.
Section 2. Term of Office: Vacancies. The officers of the Bank shall hold
office until their successors are elected or appointed and qualified, except
in the case of resignation, dismissal or removal from office, or death. The
Board of Directors may dismiss or remove any officer at any time, with or
without cause, by a majority vote of the Directors then in office, without
prejudice to the contract rights of such officer, an election or appointment of
an officer shall not of itself create any contract rights. Any vacancy in any
office may be filled in the manner provided herein for the election or
appointment of office. The Board of Directors is not required to annually
elect or appoint officers.
Section 3. Chairman of the Board. The Chairman of the Board shall preside
at all meetings of shareholders and the Board of Directors. He also shall
serve the Bank in such capacity and perform such other duties as may be
assigned to him, from time to time, by the Board of Directors. In the absence
of, or at the direction of, the Chairman of the Board, the President, or such
other Director designated by the Chairman of the Board, shall preside at a
meeting of the shareholders or the Board of Directors, as the case maybe.
Section 4. President. The President shall have general executive powers
over the management and business of the Bank, subject to the direction of the
Board of Directors and the Chairman of the Board.
<PAGE> 17
Section 5. Vice President. Each Vice President shall have such powers and
duties as may be assigned to him by the Board of Directors or as otherwise
provided for herein; the Board of Directors may authorize one of the Vice
Presidents to perform the duties of the President in the President's absence or
if the President is unable to act.
Section 6. Secretary. The Board of Directors shall appoint a Secretary or
other designated officer (who, in the absence of a Cashier, shall have all the
powers and duties of a Cashier) who shall be Secretary of the Board and of the
Bank. The Secretary shall give or provide for giving of all notices required
by law or these Bylaws to be given, shall be custodian of the corporate seal,
records, documents, and papers of the Bank, shall keep accurate minutes of all
meetings covered by these Bylaws, and shall perform such other duties as may be
assigned from time to time by the Board of Directors.
Section 7. Other Officers. Other officers shall have such powers and
duties as may be assigned by the Board of Directors.
Section 8. Delegation of Duties. The Board of Directors is authorized to
delegate the assignment of the duties of any officer, to control the action of
the officers, and to require the performance of duties in addition to those
mentioned herein, to any other officer.
ARTICLE IV
COMMITTEES
Section 1. Executive Committee. The Board of Directors may appoint an
Executive Committee which shall consist of the Chairman of the Board, the
President, and not less than three other Directors. Each member of the Board
of Directors who is not a member of the Committee shall be an alternate and, at
the request of the officer who is to preside at the meeting, may serve in the
place of any regular member who is unable to attend a committee meeting for any
reason. The Chairman of the Board shall preside at all meetings of the
Committee; if such officer is absent, a Vice Chairman shall preside. If none
of these officers is available, the President shall preside. If none of the
foregoing persons is available, the non-officer Director members of the
Executive Committee shall select a Director, who need not be an officer, to
preside.
Section 2. Powers of Executive Committee. The Executive Committee shall
have and may exercise, as far as permitted by law, all the powers and authority
of the Board of Directors and other committees of the Board of Directors between
meetings of such Board or such committees. At each meeting of the Board of
Directors, the minutes of all previous meetings of the Executive Committee not
theretofore submitted to the Board shall be presented for review and
ratification by the Board. Any action of the Board disapproving any prior action
of the Executive Committee shall not affect the rights of third parties dealing
with Bank, if such rights have attached by virtue of action of the Executive
Committee within the scope of the corporate powers of the Bank.
<PAGE> 18
Section 3. Other Committees. The Board of Directors may, be resolutions
adopted by a majority of the full Board, establish one or more other
committees; each committee shall consist of two or more members of the Board of
Directors which, to the extent provided in such resolution or resolutions or in
these Bylaws, shall have and may exercise the powers of the Board of Directors
in the management of the business and affairs of the Bank and may have the
power to authorize the seal of the Bank to be affixed to all papers which may
require it. Such committee or committees shall have such name or names as may
be stated in these Bylaws or as may be determined from time to time by
resolution adopted by the Board of Directors. The Board of Directors may
designate one or more Directors as alternate members of any committee, who may
serve in the place of any regular member who is unable to attend a committee
meeting for any reason. Each committee shall keep regular minutes of its
meetings and present such minutes for review to the Board of Directors.
Section 4. Notice of Meetings. Meetings of the Board committees shall be
held at the principal office of the Bank in the City of Cleveland, or at such
other place as may be designated in the notice of the meeting at any time upon
call by the Chairman of the Board, the Vice Chairman of the Board, the
President, or the Chairman of the Committee. Notice of each such meeting shall
be given to each member of the Committee in person or by mailing, telephoning,
or telegraphing such notice at least 24 hours prior to the meeting; provided,
however, that attendance by any Director at such meeting, without protesting
prior to or at the commencement of such meeting, the lack of proper notice
shall be deemed a waiver by such Director of the notice of such meeting.
Notice of the meeting may be waived in writing or by telegram by any member
either before or after such meeting. Unless otherwise indicated in the notice
of the meeting, any business may be transacted at such meeting.
ARTICLE V
TRUSTS
Section 1. Trust Department. There shall be a department of the Bank
known as the Trust Department or similar name which shall perform the fiduciary
responsibilities of the Bank.
Section 2. Trust Department Files. There shall be maintained in the Trust
Department files containing all fiduciary records necessary to assure that its
fiduciary responsibilities have been properly undertaken and discharged.
Section 3. Trust Investments. Funds held in a fiduciary capacity shall be
invested in accordance with the instrument establishing the fiduciary
relationship and local law. Where such instrument does not specify the
character and class of investments to be made and does not vest in the Bank
discretion in the matter, funds held pursuant to such instrument shall be
invested in investments in which corporate fiduciaries may invest under local
law.
<PAGE> 19
ARTICLE VI
RECORD DATES
The Board of Directors may fix, or authorize the Chairman of the Board or the
President to fix, a record date for any lawful purpose. The record date for the
purpose of the determination of the shareholders who are entitled to receive
notice of or to vote at a meeting of shareholders shall continue to be the
record date for all adjournments of such meeting. The Board of Directors may
close the share transfer books against transfer of shares during the whole or
any part of the period provided for in this Article, including the date of the
meeting of shareholders and the period ending with the date, if any, to which
the meeting is adjourned.
ARTICLE VII
CERTIFICATES FOR SHARES
Section 1. Form of certificates and Signatures. Each holder of shares shall be
entitled to one or more certificates signed by the Chairman of the Board, the
President or a Vice President, and by the Secretary or an Assistant Secretary.
The signature of any of such officers of the Bank may be a facsimile, engraved,
stamped, or printed. In case any such officer whose legal or facsimile
signature has been placed upon such certificate ceases to be such officer
before the certificate is delivered, such certificate nevertheless shall be
effective in all respects when delivered.
Section 2. Transfer of Shares. Shares of the Bank shall be transferable upon
the books of the Bank by the holders thereof, in person, or by a duly
authorized attorney, upon surrender and cancellation of certificates for a like
number of shares of the same class, with duly executed assignment and power of
transfer endorsed thereon or attached thereto, and with such proof of the
authenticity of such signatures to such certificates and power of transfer as
the Bank or its agents may reasonably require.
Section 3. Corporate Seal. The following is an impression of the seal adopted
by the Board of Directors of the Bank.
(to be inserted)
Any officer shall have authority to affix the corporate seal to any document
requiring such seal and to attest the same. Failure to affix the seal to any
instrument executed on behalf of the Bank shall not affect the validity of such
instrument unless such action is required by law.
<PAGE> 20
ARTICLE VIII
BANKING HOURS
The main office and branch offices of the Bank shall be open for business upon
such days of the year and for such hours as the Board of Directors or the
officers of the Bank may from time to time determine.
ARTICLE IX
MISCELLANEOUS
Section 1. Fiscal Year. The fiscal year of the Bank shall be the calendar
year.
Section 2. Definitions. The word "person" whenever used in these Bylaws shall
be taken to mean and include individuals, partnerships, associations, and
corporations when the text so requires. "Vice President", as used in these
Bylaws, shall include Vice Chairman and such titles as Senior Executive Vice
President, Executive Vice President, and Senior Vice President. Words of the
singular number shall be taken to include the plural and those of the plural
number shall be taken to include the singular whenever appropriate. Nouns and
pronouns of the masculine gender shall include the feminine whenever
appropriate.
Section 3. Execution of Instruments. The Chief Executive Officer may from time
to time prescribe in writing and authority of the officers, employees, and
agents of the Bank with respect to the making, execution, and delivery in the
name and on behalf of the Bank of documents and instruments in writing
necessary to the transaction of its business, whether in a fiduciary capacity
or otherwise, and with respect to the approval orally, or by conduct other than
signing of agreements, of transactions in the name and on behalf of the Bank
necessary to the carrying out of the business of the Bank; provided, however,
that if the Chief Executive Officer fails to take such action, the Board of
Directors shall, by resolution, establish such authorities in writing. Where
any such resolution or any such writing has been certified by the Secretary or
an Assistant Secretary as to its full force and effect, any instrument executed
or transaction effected in conformity with such resolution or such writing may
be relied upon by any person. Authority granted to officers, employees, and
agents of the Bank, pursuant to this Section 3 shall apply to all documents,
instruments, and conduct relating to any entity for which the Bank is a
successor in interest, whether by merger or otherwise.
Section 4. Use of Communications Equipment at Meetings. Members of the Board of
Directors may participate in regular or special meetings of the Board of
Directors, and members of committees appointed by the Board of Directors may
participate in regular or special meetings of those committees, through use of
conference telephone or similar communications equipment, as long as all
members participating in such meeting can hear one another.
<PAGE> 21
Section 5. Action Without a Meeting. Any action which may be taken at a
meeting of the Bank's shareholders, Board of Directors, or committee of the
Board of Directors, may be taken without a meeting by the unanimous vote of
approval of, and in a writing or writings signed by, all of the Bank's
shareholders, Directors, or committee members, respectively, entitled to notice
of such meeting; such writing or writings shall be included in the minute book
of the Bank.
Section 6. Waivers of Notice. Any shareholder or Director may waive the
giving of any notice required to be given to him under these Bylaws.
Section 7. Telegram. Any action required or permitted to be taken hereunder
by telegram may be taken by telex, fax, or similar communication equipment.
Section 8. Records. The Articles of Association, these Bylaws, and the
proceedings of all meetings of the shareholders, the Board of Directors, and
committees of the Board, shall be recorded in appropriate minute books provided
for that purpose. The minutes of each meeting shall be signed by the Secretary,
an Assistant Secretary, or other officer appointed to act as secretary of the
meeting.
Section 9. Interest Rates and Assessments and Loans. The Bank may assess and
collect from borrowers interest at any rate agreed upon by the Bank and the
borrower as specified in the loan agreement. In addition to such interest, the
Bank may assess and collect any dues, fines, premiums, or other assessments on
loans made in such amount as may be agreed upon in the loan agreement,
including, but not limited to, the following: origination fees; guarantee fees
or charges for any insurance protecting a creditor against a borrower's default
or other credit loss; late, default, or delinqency charges; deferment charges;
annual or other periodic membership fees; charges for returned checks and other
forms of payment; overlimit charges; cash advance fees; stop payment fees; ATM,
electronic, or similar interchange access fees; transaction fees; currency
conversion charges; fees for replacement of credit cards, access checks, or
other access devices; minimum charges; research charges; charges for providing
documentation or other evidence; credit, property, or other types of insurance
premiums, including premiums for insurance in lieu of perfecting a security
interest; collection costs; court costs; attorney's fees; applications fees;
credit report fees; investigation fees; commitment fees; finder's fees; broker
fees; assumption fees; processing fees; credit report fees; investigation fees;
points; survey and appraisal fees; title examination and report fees; title
insurance premiums; abstract of title fees; escrow fees; trustee fees; official
fees and taxes; filing and recording fees; fees for taking or releasing a
security interest; document preparation and notarization fees; prepayment fees.
ARTICLE X
AMENDMENTS
These Bylaws may be amended, altered, or repealed, at any regular or special
meeting of the Board of Directors, by a vote of the majority of the whole
number of the Directors.
<PAGE> 22
EXHIBIT T-1D
Consent for Records of Governmental Agencies
to be Made Available to the Commission
--------------------------------------
The undersigned, Society National Bank, of Cleveland, Ohio pursuant to
Section 321(b) of The Trust Indenture Act of 1939, hereby authorizes the Board
of Governors of the Federal Reserve System, the Federal Reserve Banks, the
Treasury Department, the Comptroller of the Currency and the Federal Deposit
Insurance Corporation, under such conditions as they may prescribe, to make
available to the Commission such reports, records, or other information as they
may have available with respect to the undersigned as a prospective trustee
under an indenture to be qualified under the aforesaid Trust Indenture Act of
1939 and to make through their examiners or other employees for the use of the
Commission, examinations of the undersigned prospective Trustee.
The undersigned also, pursuant to Section 321(b) of said Trust Indenture Act
of 1939, consents that reports of examination by the Federal, State, Territorial
or District authorities may be furnished by such authorities to the Commission
upon request therefor.
Dated this 29th day of December, 1995
SOCIETY NATIONAL BANK
BY: /s/ C. M. Nagy
______________________________
C. M. Nagy, Vice President
(Corporate Seal)
ATTEST:
By: /s/ David Kovach
_____________________________________
David Kovach, Assistant Secretary
<PAGE> 23
EXHIBIT TIE
<TABLE>
<S> <C>
Legal Title of Bank: Society National Bank Call Date: 9/30/95 ST-BK: 39-1495 FFIEC 031
Address: 127 Public Square Page RC-1
City, State Zip: Cleveland, OH 44114-1306
FDIC Certificate No.: /1/7/5/3/4/
-----------
</TABLE>
Consolidated Report of Condition for Insured Commercial and State-Chartered
Savings Banks for September 30, 1995
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>
--------
C400 <-
------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- ---------------------------------------------------------------------------------------------- ------------------
<S> <C> <C> <C> <C>
ASSETS //////////////////
1. Cash and balances due from depository institutions (from Schedule RC-A): //////////////////
a. Noninterest-bearing balances and currency and coin(1)................................. 0081 1,323,014 1.a.
b. Interest-bearing balances(2).......................................................... 0071 700 1.b.
2. Securities: //////////////////
a. Held-to-maturity securities (from Schedule RC-B, column A)............................ 1754 2,592,964 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D).......................... 1773 695,737 2.b.
3. Federal funds sold and securities purchased under agreements to resell in domestic //////////////////
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: //////////////////
a. Federal funds sold.................................................................... 0276 637,461 3.a.
b. Securities purchased under agreements to resell....................................... 0277 0 3.b.
4. Loans and lease financing receivables: //////////////////
------------------------
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 16,854,647 ////////////////// 4.a.
b. LESS: Allowance for loan and lease losses................... RCFD 3123 375,895 ////////////////// 4.b.
c. LESS: Allocated transfer risk reserve....................... RCFD 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 16,478,752 4.d.
5. Trading assets (from Schedule RC-D)....................................................... 3545 183,710 5.
6. Premises and fixed assets (including capitalized leases).................................. 2145 339,440 6.
7. Other real estate owned (from Schedule RC-M).............................................. 2150 7,457 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M).. 2130 37,128 8.
9. Customers' liability to this bank on acceptances outstanding.............................. 2155 25,785 9.
10. Intangible assets (from Schedule RC-M).................................................... 2143 137,408 10.
11. Other assets (from Schedule RC-P)......................................................... 2160 1,067,639 11.
12. Total assets (sum of items 1 through 11).................................................. 2170 23,527,195 12.
</TABLE>
- --------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 24
EXHIBIT TIE (CONTINUED)
<TABLE>
<S> <C>
Legal Title of Bank: Society National Bank Call Date: 9/30/95 ST-BK: 39-1495 FPIEC 031
Address: 127 Public Square Page RC-2
City, State Zip: Cleveland, OH 44114-1306
FDIC Certificate /1/7/5/3/4/
-----------
</TABLE>
Schedule RC--Continued
<TABLE>
<CAPTION>
-------------------------
Dollar Amounts in Thousands ///////// Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LIABILITIES ///////////////////////
13. Deposits: ///////////////////////
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, ///////////////////////
part I).................................................................... RCCN 2200 12,937,379 13.a.
-----------------------------
(1) Noninterest-bearing(1).................. RCCN 6631 2,878,895 /////////////////////// 13.a.(1)
(2) Interest-bearing........................ RCCN 6636 10,058,484 /////////////////////// 13.a.(2)
-----------------------------
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from ///////////////////////
Schedule RC-E, part II).................................................... RCFN 2200 2,132,410 13.b.
-----------------------------
(1) Noninterest-bearing.................... RCFN 6631 0 /////////////////////// 13.b.(1)
(2) Interest-bearing....................... RCFN 6636 2,132,410 /////////////////////// 13.b.(2)
-----------------------------
14. Federal funds purchased and securities sold under agreements to repurchase in ///////////////////////
domestic offices of the bank and of its Edge and Agreement subsidiaries, and ///////////////////////
in IBFs:
a. Federal funds purchased................................................... RCFD 0278 2,674,149 14.a.
b. Securities sold under agreements to repurchase............................ RCFD 0279 40,363 14.b.
15. a. Demand notes issued to the U.S. Treasury.................................. RCCN 2840 451,381 15.a.
b. Trading liabilities (from Schedule RC-D).................................. RCFD 3548 17,748 15.b.
16. Other borrowed money: ///////////////////////
a. With original maturity of one year or less................................ RCFD 2332 881,991 16.a.
b. With original maturity of more than one year.............................. RCFD 2333 1,502,131 16.b.
17. Mortage indebtedness and obligations under capitalized leases................. RCFD 2910 10,507 17.
18. Bank's liability on acceptances executed and outstanding...................... RCFD 2920 25,785 18.
19. Subordinated notes and debentures............................................. RCFD 3200 598,837 19.
20. Other liabilities (from Schedule RC-G)........................................ RCFD 2930 552,162 20.
21. Total liabilities (sum of items 13 through 20)................................ RCFD 2948 21,824,843 21.
///////////////////////
22. Limited-life preferred stock and related surplus.............................. RCFD 3282 0 22.
EQUITY CAPITAL ///////////////////////
23. Perpetual preferred stock and related surplus................................. RCFD 3838 0 23.
24. Common stock.................................................................. RCFD 3230 206,863 24.
25. Surplus (exclude all surplus related to preferred stock)...................... RCFD 3839 762,776 25.
26. a. Undivided profits and capital reserves.................................... RCFD 3632 751,730 26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities.... RCFD 8434 (19,017) 26.b.
27. Cumulative foreign currency translation adjustments........................... RCFD 3284 0 27.
28. Total equity capital (sum of items 23 through 27)............................. RCFD 3210 1,702,352 28.
29. Total liabilities, limited-life preferred stock, and equity capital (sum of ///////////////////////
items 21, 22, and 28)......................................................... RCFD 3300 23,527,195 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 Number
describes the most comprehensive level of auditing work performed for the -------------------
bank by independent external auditors as of any date during 1994............. RCFD 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.
12
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
[TYPE]
[DESCRIPTION]
[TEXT]
<ARTICLE> 5
<CIK> 0000035214
<NAME> FERRO CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 65,845
<SECURITIES> 24,980
<RECEIVABLES> 231,686
<ALLOWANCES> 0
<INVENTORY> 155,351
<CURRENT-ASSETS> 509,131
<PP&E> 652,630
<DEPRECIATION> 348,281
<TOTAL-ASSETS> 901,353
<CURRENT-LIABILITIES> 257,372
<BONDS> 130,482
<COMMON> 31,549
0
0
<OTHER-SE> 356,315
<TOTAL-LIABILITY-AND-EQUITY> 901,353
<SALES> 987,799
<TOTAL-REVENUES> 987,799
<CGS> 748,779
<TOTAL-COSTS> 916,648
<OTHER-EXPENSES> (1,335)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,343
<INCOME-PRETAX> 61,143
<INCOME-TAX> 23,564
<INCOME-CONTINUING> 37,579
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,579
<EPS-PRIMARY> 1.24
<EPS-DILUTED> 1.19
</TABLE>
