<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) Quarterly Report Pursuant to Section 13 or 15(d)of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1996
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
--------- ---------
Commission File Number 1-2376
FMC Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 94-0479804
- ------------------------- ----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 East Randolph Drive, Chicago, Illinois 60601
------------------------------------------------------------------------------
(312) 861-6000
------------------------------------
(Registrant's telephone number,
including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at June 30, 1996
- ---------------------------------------- -----------------------------
Common Stock, par value $0.10 per share 37,104,607
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PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
ITEM 1. FINANCIAL STATEMENTS
FMC Corporation and Consolidated Subsidiaries
Consolidated Statements of Income (Unaudited)
(In millions, except per share data)
Three Months Six Months
Ended June 30 Ended June 30
------------------- -------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenue:
Sales $1,250.7 $1,118.6 $2,345.0 $2,125.2
Other revenue 16.1 7.8 54.9 22.2
-------- -------- -------- --------
Total revenue 1,266.8 1,126.4 2,399.9 2,147.4
-------- -------- -------- --------
Costs and expenses:
Cost of sales 944.5 793.6 1,744.8 1,522.1
Selling, general and
administrative expenses 162.9 151.2 325.7 292.6
Research and development 45.4 42.9 89.3 81.2
-------- -------- -------- --------
Total costs and expenses 1,152.8 987.7 2,159.8 1,895.9
-------- -------- -------- --------
Income from continuing operations
before minority interests,
net interest expense and
income taxes 114.0 138.7 240.1 251.5
Minority interests 12.0 8.1 35.5 25.2
Interest expense (net) 22.7 18.4 45.3 34.7
-------- -------- -------- --------
Income from continuing operations
before income taxes 79.3 112.2 159.3 191.6
Provision for income taxes 21.9 33.2 45.1 56.7
-------- -------- -------- --------
Income from continuing
operations 57.4 79.0 114.2 134.9
Discontinued operation, net of
income taxes (1.1) (1.3) (2.7) (4.8)
-------- -------- -------- --------
Net income $ 56.3 $ 77.7 $ 111.5 $ 130.1
======== ======== ======== ========
Average number of shares 38.1 37.7 38.0 37.6
Earnings (loss) per common share:
Continuing operations $ 1.51 $ 2.09 $ 3.00 $ 3.59
Discontinued operation (0.03) (0.03) (0.07) (0.13)
-------- -------- -------- --------
Net income per common share $ 1.48 $ 2.06 $ 2.93 $ 3.46
======== ======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
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FMC Corporation and Consolidated Subsidiaries
Consolidated Balance Sheets
(In millions, except per share data)
<TABLE>
<CAPTION>
June 30
1996 December 31
(Unaudited) 1995
----------- -----------
<S> <C> <C>
Assets:
Current assets:
Cash and cash equivalents $ 117.6 $ 70.9
Trade receivables, net of allowance
for doubtful accounts of $6.1 and
$11.3 in 1996 and 1995, respectively 928.0 832.9
Inventories 742.7 600.2
Other current assets 206.1 178.3
Deferred income taxes 81.5 98.5
-------- --------
Total current assets 2,075.9 1,780.8
Investments 94.1 98.4
Net assets of discontinued operation 93.6 83.7
Property, plant and equipment at cost 4,086.6 3,935.1
Less--accumulated depreciation 2,274.2 2,229.4
-------- --------
Net property, plant and equipment 1,812.4 1,705.7
Goodwill and intangible assets 336.0 345.6
Other assets 161.6 144.9
Unallocated purchase price of
Frigoscandia Equipment Holding AB 151.2 --
Deferred income taxes 72.7 71.2
-------- --------
Total assets $4,797.5 $4,230.3
======== ========
Liabilities and Stockholders' Equity:
Current liabilities:
Short-term debt $ 896.8 $ 420.8
Accounts payable, trade and other 798.3 835.6
Accrued and other current liabilities 445.3 408.8
Current portion of long-term debt 15.9 29.8
Current portion of accrued pension
and other postretirement benefits 31.1 36.5
Income taxes payable 39.5 35.6
-------- --------
Total current liabilities 2,226.9 1,767.1
Long-term debt, less current portion 965.3 974.4
Accrued pension and other postretirement
benefits, less current portion 285.7 284.6
Reserve for discontinued operations 160.3 168.3
Other liabilities 250.4 264.1
Minority interests in consolidated companies 140.3 118.4
Stockholders' equity:
Preferred stock, no par value, authorized
5,000,000 shares; no shares issued in
1996 or 1995 -- --
Common stock, $0.10 par value, authorized
60,000,000 shares; issued 37,405,034
shares in 1996 and 37,024,187 shares
in 1995 3.7 3.7
Capital in excess of par value
of common stock 116.3 99.7
Retained earnings 707.6 596.1
Foreign currency translation adjustment (49.7) (36.9)
Treasury stock, common, at cost;
300,427 shares in 1996 and 300,447
shares in 1995 (9.3) (9.2)
-------- --------
Total stockholders' equity 768.6 653.4
-------- --------
Total liabilities and stockholders' equity $4,797.5 $4,230.3
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
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PAGE 4
FMC Corporation and Consolidated Subsidiaries
- ---------------------------------------------
Consolidated Statements of Cash Flows (Unaudited)
- -------------------------------------------------
(In millions)
<TABLE>
<CAPTION>
Six Months
Ended June 30
-----------------------
1996 1995
-------- --------
<S> <C> <C>
Reconciliation from income from continuing
operations to cash used in operating
activities of continuing operations:
Income from continuing operations $ 114.2 $ 134.9
Adjustments for non-cash components of
income from continuing operations:
Depreciation and amortization 122.5 109.6
Deferred income taxes 14.5 33.6
Equity in net earnings of affiliates (5.6) (2.7)
Amortization of accrued pension costs 1.8 1.1
Minority interests 35.5 25.2
Other 14.8 3.9
(Increase) in assets:
Trade receivables (95.1) (122.2)
Inventories (142.5) (128.3)
Other current assets and other assets (194.6) (339.2)
(Decrease) increase in liabilities:
Accounts payable, accrued and other
current liabilities and other liabilities (9.3) 89.5
Income taxes payable 3.9 5.8
Restructuring reserve (5.2) (30.1)
Accrued pension and other
postretirement benefits, net (6.1) 4.3
------- -------
Cash used in operating activities of
continuing operations $(151.2) $(214.6)
======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
PAGE 5
FMC Corporation and Consolidated Subsidiaries
- ---------------------------------------------------
Consolidated Statements of Cash Flows (Unaudited)
- ---------------------------------------------------
(In millions)
<TABLE>
<CAPTION>
Six Months
Ended June 30
-----------------
1996 1995
------- -------
<S> <C> <C>
Cash used in operating activities of continuing
operations $(151.2) $(214.6)
Cash (required) by discontinued operations (19.6) (39.2)
Cash provided (required) by investing
activities:
Capital spending (260.0) (255.0)
Disposal of property, plant and
equipment 24.6 21.5
Decrease in investments 10.0 13.1
------- -------
(225.4) (220.4)
------- -------
Cash provided (required) by financing
activities:
Net proceeds from issuance of commercial
paper 10.5 -
Increase in other short-term debt 455.2 447.9
Net borrowings under credit facilities - 89.0
Repayment of long-term debt (23.0) (16.8)
Distributions to limited partner (15.9) (22.5)
Issuance of capital stock, net 16.6 3.4
------- -------
443.4 501.0
------- -------
Effect of exchange rate changes on cash
and cash equivalents (0.5) 2.2
------- -------
Increase in cash and cash equivalents 46.7 29.0
Cash and cash equivalents, beginning
of period 70.9 98.2
------- -------
Cash and cash equivalents, end
of period $ 117.6 $ 127.2
======= =======
</TABLE>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest, net of amounts capitalized, was $42.1 million and $43.0
million, and cash paid for income taxes, net of refunds, was $13.1 million and
$13.9 million for the six-month periods ended June 30, 1996 and 1995,
respectively.
See accompanying notes to consolidated financial statements.
<PAGE>
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FMC Corporation and Consolidated Subsidiaries
- ---------------------------------------------
Notes to Consolidated Financial Statements (Unaudited)
- ------------------------------------------------------
Note 1: Financial Information
- ------------------------------
The consolidated balance sheet of FMC Corporation ("FMC" or "the company") as of
June 30, 1996, and the related consolidated statements of income and of cash
flows for the interim periods ended June 30, 1996 and 1995 have been reviewed by
FMC's independent auditors. The review is discussed more fully in their report
included herein. In the opinion of management, such financial statements have
been prepared in conformity with generally accepted accounting principles and
reflect all adjustments necessary for a fair statement of the results of
operations for the interim periods. All such adjustments are of a normal
recurring nature. The results of operations for the three-month and six-month
periods ended June 30, 1996 and 1995 are not necessarily indicative of the
results of operations for the full year.
Prior period balances have been reclassified to conform with the current
period's presentation, including the reclassification of operations constituting
the Precious Metals segment as a discontinued operation (Note 3) and the
completion of purchase accounting related to the acquisition of Moorco
International Inc. ("Moorco") (Note 4).
The company's accounting policies are set forth in Note 1 to the company's 1995
financial statements which are incorporated by reference in the company's 1995
Annual Report on Form 10-K.
Note 2: Debt
- -------------
The company has $500 million in committed credit facilities consisting of a $250
million, 364 day non-amortizing revolving credit agreement due in December 1996
and a $250 million, five-year non-amortizing revolving credit agreement due in
December 1999. As of June 30, 1996, the company had advances under the five-year
revolving credit agreement of $100 million.
In November 1995, the company commenced a short-term commercial paper program
supported by the committed facilities. Committed credit available under the
revolving credit facilities provides management with the ability to refinance a
portion of its debt on a long-term basis and, as it is management's intent to do
so, $150 million of the $395 million in outstanding commercial paper has been
classified as long-term debt at June 30, 1996.
Short-term debt at June 30, 1996 includes $539 million of advances under
uncommitted U.S. credit facilities and $245 million of commercial paper. The
remaining amounts of short-term debt represent borrowings by FMC's foreign
subsidiaries.
On July 2, 1996 the company issued $100 million of 7.75% Senior Debentures due
2011 pursuant to a $500 million universal shelf registration filed in 1995. The
net proceeds from such issuance totaled approximately $98 million and were used
to reduce variable rate short-term debt.
Note 3: Discontinued Operation - Subsequent Event
- --------------------------------------------------
On July 15, 1996, FMC's management approved a plan to dispose of shares of FMC
Gold Company through a reincorporation of FMC Gold Company in Canada and a
secondary offering in Canada of substantially all of FMC's 80% interest. In
connection with the approval of the plan of disposal, the operations
constituting the Precious Metals segment have been accounted for as a
discontinued operation. The prior period consolidated financial statements
presented herein have been restated to conform with the 1996 presentation.
The reincorporation and offering were completed on July 31, 1996 and an option
on the part of the underwriters to purchase the remaining 8% interest held by
FMC was executed on August 9, 1996. FMC received gross cash proceeds of $107.2
million, plus a right to receive the second installment under installment
receipts totaling $107.2 million due July 31, 1997. FMC is examining
alternatives for monetizing these installment receipts. Cash proceeds were used
to
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PAGE 7
repay $75 million in loans owing to FMC Gold Company and to pay transaction and
other related costs. The company expects to record an immaterial gain on the
transaction during the quarter ending September 30, 1996. Estimated transaction
and other related costs, and anticipated losses of FMC Gold Company for the
period from July 15, 1996 through July 31, 1996 have been deferred and will
reduce the expected gain.
Results of discontinued operations for the three-month and six-month periods
ended June 30, 1996 include the following:
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, 1996 Ended June 30, 1996
-------------------- --------------------
<S> <C> <C>
Sales $18.3 $36.1
===== =====
Net loss $(1.1) $(2.7)
===== =====
</TABLE>
At June 30, 1996, the net assets of discontinued operations were comprised of:
<TABLE>
<S> <C>
Assets:
Current assets $ 25.5
Property, plant and
equipment, net 119.3
Other assets 4.6
------
Total assets 149.4
------
Liabilities:
Accounts payable and
other liabilities 55.8
------
Net assets $ 93.6
======
</TABLE>
In addition, the company's reserve for discontinued operations contains residual
liabilities of $160.3 million and $168.3 million at June 30, 1996 and December
31, 1995, respectively, related to operations previously discontinued. See Note
3 to the company's 1995 consolidated financial statements and Note 5 below.
There have been no significant changes to FMC Gold Company's Beartrack legal
proceedings from the information reported in the company's December 31, 1995
Annual Report on Form 10-K.
Note 4: Business Combinations and Divestitures
- -----------------------------------------------
Frigoscandia Equipment Holding AB. In June 1996, FMC acquired Frigoscandia
Equipment Holding AB ("Frigoscandia") from ASG AB for approximately $165 million
plus transaction costs and the assumption of Frigoscandia's debt. Frigoscandia,
headquartered in Helsingborg, Sweden, is the global leader in equipment for
industrial in-line freezing and also manufactures food processing equipment such
as fryers, ovens and portioners.
The acquisition will be accounted for under the purchase method of accounting
and, accordingly, the purchase price will be allocated to the assets acquired
and liabilities assumed based on the estimated fair value of such assets and
liabilities at the date of acquisition. Due to the timing of the transaction,
however, FMC's consolidated balance sheet at June 30, 1996 includes the
historical accounts of Frigoscandia as of the acquisition date, adjusted only
for certain known elements of purchase accounting. The remaining excess
purchase price at June 30, 1996 is classified as "Unallocated Purchase Price of
Frigoscandia Equipment Holding AB" on the company's consolidated balance sheet
and will be allocated to the assets acquired (which will include goodwill and
other intangible assets to be amortized over periods not exceeding 40 years) and
liabilities assumed based on the results of appraisals and other analyses which
are currently in process.
<PAGE>
PAGE 8
Moorco International Inc. In June 1995, FMC acquired all of the common shares
of Moorco for $28 per share, or approximately $350 million (including
acquisition costs and debt assumed). Moorco is the leading worldwide
manufacturer of meters for the petroleum industry and a leading manufacturer of
valves for the process and power generation industries.
In conjunction with the acquisition of Moorco, goodwill and other intangible
assets of $218.4 million were recorded (which will be amortized over 15 to 40
years), and $15.5 million of acquired in-process research and development was
charged to research and development expense in the third quarter of 1995.
The following unaudited pro forma information is intended to show the results of
FMC's continuing operations as if the acquisition of Moorco had occurred on
January 1, 1995, after giving effect to certain adjustments, including the
increased amortization of goodwill and other intangible assets, costs savings
from certain synergies created under the combined operations, additional
interest expense on incremental acquisition indebtedness, and the related income
tax effects of these adjustments:
Six months ended June 30, 1995
------------------------------
(In millions, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Sales $2,225.8
Income from continuing operations $ 132.7
Earnings per common share:
Continuing operations $ 3.53
</TABLE>
The unaudited pro forma results of continuing operations are not necessarily
indicative of the results that would have occurred had the acquisition actually
been consummated on January 1, 1995, and are not intended to be a projection of
future results.
The company also completed other smaller acquisitions during 1995 and 1996. The
purchase prices for Moorco, Frigoscandia and the other acquisitions were
satisfied from cash flow from operations and short-term and long-term financing.
Other than Moorco, the company's acquisitions did not have a material pro forma
effect on the company's consolidated results of operations.
Results of operations of the acquired companies have been included in the
company's consolidated statements of income from the respective dates of
acquisition.
Sale of Automotive Service Equipment Division. In March 1996, FMC sold its
Automotive Service Equipment Division to Snap-On Incorporated, resulting in an
immaterial pre-tax gain.
Joint venture. In July 1995, FMC completed a joint venture agreement involving
the sale of 20 percent of its soda ash business, FMC Wyoming Corporation, to
Sumitomo Corporation and Nippon Sheet Glass Company, Ltd. The company's results
subsequent to the date of the joint venture are net of minority interest
attributable to the joint venture partners.
Note 5: Environmental
- ----------------------
FMC is subject to various federal, state and local environmental laws and
regulations that govern emissions of air pollutants, discharges of water
pollutants, and the manufacture, storage, handling and disposal of hazardous
substances, hazardous wastes and other toxic materials. The most significant
environmental liabilities of the company primarily consist of obligations
relating to the remediation and/or study of sites at which the company is
alleged to have disposed of hazardous substances. In particular, the company is
subject to liabilities arising under the Comprehensive Environmental
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PAGE 9
Response, Compensation and Liability Act ("CERCLA") and similar state laws that
impose responsibility on persons who arranged for the disposal of hazardous
substances and on current and previous owners and operators of a facility for
the clean up of hazardous substances released from the facility into the
environment. In addition, the company is subject to liabilities under the
corrective action provisions of the Resource Conservation and Recovery Act
("RCRA") and analogous state laws that require owners and operators of
facilities that treat, store or dispose of hazardous waste to clean up releases
of hazardous waste constituents into the environment associated with past or
present practices.
At June 30, 1996, reserves were provided for potential environmental obligations
which management considers probable and for which a reasonable estimate of the
obligation could be made. Reserves of $290 million and $302 million, before
recoveries, have been provided at June 30, 1996 and December 31, 1995,
respectively, of which $122 million and $132 million are included in the reserve
for discontinued operations at June 30, 1996 and December 31, 1995,
respectively. The company's total environmental reserves include approximately
$262 million and $270 million for remediation activities and $28 million and $32
million for remedial investigation/feasibility study costs at June 30, 1996 and
December 31, 1995, respectively. In addition, the company has estimated that
reasonably possible environmental loss contingencies may exceed amounts accrued
by as much as $150 million at June 30, 1996.
Although potential environmental remediation expenditures in excess of the
current reserves and estimated loss contingencies could be significant, the
impact on the company's future financial results is not subject to reasonable
estimation due to numerous uncertainties concerning the nature and scope of
contamination at many sites, identification of remediation alternatives under
constantly changing requirements, selection of new and diverse clean-up
technologies to meet compliance standards, the timing of potential expenditures,
and the allocation of costs among Potentially Responsible Parties ("PRPs") as
well as other third parties.
The liabilities arising from potential environmental obligations that have not
been reserved for at this time may be material to any one quarter's or year's
results of operations in the future. Management, however, believes the aggregate
liability arising from the potential environmental obligations is not likely to
have a material adverse effect on the company's liquidity or financial condition
and may be satisfied over the next 20 years or longer.
To ensure FMC is held responsible only for its equitable share of site
remediation costs, FMC has initiated, and will continue to initiate, legal
proceedings for contributions from other PRPs, and for a determination of
coverage against its comprehensive general liability insurance carriers.
Approximately $134 million of recoveries ($56 million as other assets and $78
million as an offset to the reserve for discontinued operations) and
approximately $140 million of recoveries ($56 million as other assets and $84
million as an offset to the reserve for discontinued operations), have been
recorded as probable realization on claims against insurance companies and other
third parties at June 30, 1996 and December 31, 1995, respectively. The majority
of recorded assets related to recoveries from third parties are associated with
existing contractual arrangements with U.S. government agencies.
<PAGE>
PAGE 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF CONTINUING OPERATIONS
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
LIQUIDITY AND FINANCIAL CONDITION
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Total cash and cash equivalents at June 30, 1996 and December 31, 1995 were
$117.6 million and $70.9 million, respectively. As of June 30, 1996, the company
had total borrowings of $1.9 billion, up from $1.4 billion at December 31, 1995.
The increase in debt resulted primarily from capital expenditures, working
capital requirements and acquisitions. Advances under uncommitted facilities of
$539 million at June 30, 1996, up from $201 million at December 31, 1995, as
well as increases in commercial paper borrowings of $109 million (net of
discount), represented the primary sources of the additional borrowings. The
company has $500 million in committed credit facilities consisting of a $250
million, 364 day non-amortizing revolving credit agreement due in December 1996
and a $250 million, five-year non-amortizing revolving credit agreement due in
December 1999. As of June 30, 1996, the company had advances under the five-year
revolving credit agreement of $100 million, and commercial paper borrowings
(supported by committed credit facilities) of $395 million.
Capital and acquisition spending of $409 million for the six months ended June
30, 1996 decreased $123 million versus the first half of 1995. The decrease is
primarily driven by lower acquisition spending, partially offset by spending
related to the development of a lithium resource in Argentina and the expansion
of hydrogen peroxide production capacity at Bayport, Texas. The company
continues to evaluate potential acquisitions on an ongoing basis.
Expected cash requirements for the remainder of 1996 include approximately $230
million to $250 million for planned capital expenditures, excluding potential
acquisitions, and net after-tax interest payments of approximately $30 million
based on current debt levels and interest rates. Cash to meet these requirements
will be provided primarily by the company's operations and, if necessary, by
existing cash balances and available short- or long-term credit sources. As
discussed in Note 2 to the company's June 30, 1996 consolidated financial
statements, the company commenced a short-term commercial paper program in the
fourth quarter of 1995 to further expand its short-term financing options.
In 1995, the company filed a universal shelf registration under which $500
million of debt and/or equity securities may be publicly offered. At June 30,
1996, no securities had been offered under this shelf registration. However, as
discussed in Note 2 to the company's June 30, 1996 consolidated financial
statements, on July 2, 1996, the company issued $100 million of Senior
Debentures for net proceeds of approximately $98 million. The debentures carry
an interest rate of 7.75% with interest payable semi-annually through maturity
on July 1, 2011. The net proceeds were used to reduce variable rate short-term
debt.
The company's ratios of earnings to fixed charges were 4.0x and 4.8x for the six
months ended June 30, 1996 and 1995, respectively. The decrease in the six-month
ratio from 1995 to 1996 primarily reflects lower earnings and higher interest
charges resulting from increased borrowings.
EFFECT OF ACQUISITION OF FRIGOSCANDIA EQUIPMENT HOLDING AB
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
In June 1996, FMC acquired Frigoscandia Equipment Holding AB - the global leader
in equipment for industrial in-line freezing - for approximately $165 million
plus transaction costs and the assumption of Frigoscandia's debt. The company
anticipates that a portion of the unallocated purchase price at June 30, 1996
will be allocated to goodwill and other intangible assets. Portions of the
purchase price may also be allocated to property, plant and equipment. In
addition, the acquisition financing will result in additional interest expense.
Appraisals and other efforts necessary to complete the purchase accounting for
Frigoscandia are in process.
<PAGE>
PAGE 11
DISCONTINUED OPERATION
----------------------
Between July 31, 1996 and August 9, 1996 FMC sold all of its 80% interest in FMC
Gold Company through a secondary offering. Cash proceeds of the sale were used
to repay $75 million in loans owing to FMC Gold Company and to pay transaction
and other related costs. The Company expects to record an immaterial gain on the
transaction during the quarter ending September 30, 1996. Anticipated losses of
FMC Gold Company for the period from July 15, 1996 through July 31, 1996 plus
transaction and other related costs were deferred at June 30, 1996 and will
reduce the expected gain. The Precious Metals segment is classified as a
discontinued operation in the company's June 30, 1996 consolidated financial
statements. See Note 3 to the consolidated financial statements.
<PAGE>
PAGE 12
RESULTS OF CONTINUING OPERATIONS
--------------------------------
Second Quarter 1996 Compared to Second Quarter 1995
---------------------------------------------------
Industry Segment Data (Unaudited)
---------------------------------
(In millions)
<TABLE>
<CAPTION>
Three Months Ended
June 30
-------
1996 1995
---- ----
<S> <C> <C>
Sales
- -----
Performance Chemicals $ 345.2 $ 324.2
Industrial Chemicals 264.4 242.7
Machinery and Equipment 371.4 313.6
Defense Systems 277.0 242.4
Eliminations (7.3) (4.3)
-------- --------
$1,250.7 $1,118.6
======== ========
Income from continuing operations
- ---------------------------------
before income taxes (1)
- -----------------------
Performance Chemicals $ 61.3 $ 62.2
Industrial Chemicals 32.5 44.8
Machinery and Equipment 18.4 16.1
Defense Systems 18.3 32.6
-------- --------
Operating profit from
continuing operations 130.5 155.7
Corporate (22.3) (26.1)
Net interest expense (22.7) (18.4)
Other income and (expense), net (6.2) 1.0
-------- --------
$ 79.3 $ 112.2
======== ========
</TABLE>
FMC has modified its presentation of segment results, effective first quarter
1996, to better align presentation with management's evaluation of segment
performance. Accordingly, business segment results are presented net of minority
interest, reflecting only FMC's share of earnings. The corporate line primarily
includes staff expenses, and other income and expense consists of all other
corporate items, including certain immaterial amounts previously allocated to
business segments. Segment results for 1995 have been restated to be consistent
with the current period's presentation.
As described in Note 3 to the company's June 30, 1996 consolidated financial
statements, the operations constituting FMC's Precious Metals segment have been
reclassified as a discontinued operation and results of prior periods have been
restated for comparative purposes.
(1) Results for all segments are net of minority interests in 1996 and 1995 of
$(12.0) million and $(8.1) million, respectively, the majority of which,
$(9.3) million and $(7.8) million, pertains to Defense Systems.
<PAGE>
PAGE 13
General
- -------
Sales of $1.3 billion increased 12 percent from last year's quarter, driven
primarily by strong growth in Machinery and Equipment and Defense Systems.
Second quarter 1996 segment earnings (net of minority interest) were $131
million, compared with $156 million (net of minority interest) in the 1995
quarter. The earnings decrease primarily represents continued weakness in the
pulp and paper industry in the industrial chemicals segment and the partial
recognition of a favorable legal judgment in 1995 in the defense segment. Net
interest expense of $23 million increased from $18 million in last year's period
due to higher debt associated with increased capital expenditures, working
capital requirements and acquisitions. Income from continuing operations of $57
million decreased compared with $79 million in the second quarter of 1995.
Earnings per share from continuing operations were $1.51 compared with $2.09
last year.
Performance Chemicals
- ---------------------
Performance Chemicals sales of $345 million increased 6 percent from $324
million in last year's period, driven primarily by higher volumes of
agricultural products for international markets, which more than offset the
impact of reduced North American cotton acreage and wet weather in the Midwest.
Earnings of $61 million were roughly even with the prior-year period, reflecting
improvements in agricultural products, offset by lower specialty chemicals
results. Specialty chemicals continued to be affected by weak food ingredient
sales in North America and higher raw material prices. FMC believes these raw
material prices have peaked, with declines expected for the remainder of the
year. Overall, the specialty chemicals businesses have been improving since the
fourth quarter of 1995, and that trend is expected to continue through the
remainder of the year.
Industrial Chemicals
- --------------------
Industrial Chemicals sales of $264 million increased 9 percent from $243
million, primarily reflecting the benefit of higher phosphorus volumes and price
increases in key product lines. Earnings of $33 million in the 1996 quarter
decreased 27 percent from $45 million in the 1995 quarter due to lower hydrogen
peroxide volumes, reflecting continued weakness in the pulp and paper industry;
start-up costs for the company's major cost reduction and expansion projects;
and profits allocated to minority shareholders of the soda ash joint venture,
formed in the third quarter of 1995.
Second quarter 1996 sales of alkali products increased over second quarter 1995
primarily due to price increases. Sales increases were more than offset by
start-up costs for the company's major cost reduction and expansion project and
profits allocated to minority shareholders of the soda ash joint venture.
Phosphorus sales increased in the second quarter of 1996 due to higher volumes
and prices. Significantly higher earnings in 1996 primarily reflect the price
increases.
Peroxygen sales decreased slightly from the year-ago period. Earnings decreased
compared with the 1995 second quarter due to lower hydrogen peroxide volumes
reflecting the downturn in the pulp and paper industry plus start-up costs
related to the company's expansion project.
FMC Foret sales and earnings increased in the second quarter 1996 due to
increased domestic and export prices offset slightly by lower volumes.
<PAGE>
PAGE 14
Machinery and Equipment
- -----------------------
Machinery and Equipment sales of $371 million increased 18 percent from $314
million in the 1995 quarter, and profits of $18 million increased 14 percent
from $16 million in the prior-year period. These results reflect improving
subsea margins, the benefits of acquisitions, and recovering markets in food
processing. Machinery and Equipment second quarter results do not reflect the
acquisition of Frigoscandia Equipment Holding A.B. ("Frigoscandia"), which was
completed at the end of the quarter. Frigoscandia is the global leader in
industrial in-line freezing equipment and enhances FMC's thermal processing
product line.
Petroleum equipment sales increased in second quarter 1996 primarily due to
higher western region subsea sales and increased sales to Statoil. Earnings
increased primarily as a result of the higher western region subsea sales.
Sales of energy and transportation measurement equipment in second quarter 1996
increased due to the acquisition of Moorco's Smith Meter business in June 1995.
Moorco's Crosby Valve and Gage business, also acquired in June 1995, contributed
to the overall increase in Machinery and Equipment sales and earnings.
Food processing systems sales increased compared with second quarter 1995
primarily due to the acquisition of FranRica in the third quarter of 1995 and
improving markets in food processing. Earnings were flat compared with second
quarter 1995.
Defense Systems
- ---------------
Defense Systems sales of $277 million increased 14 percent from the year-ago
period on the strength of the Crusader program. Profits of $18 million, net of
minority interest, decreased significantly compared with $33 million, net of
minority interest, in the prior-year period, due primarily to the partial
recognition of a favorable legal judgment in the 1995 quarter. The remainder of
the difference results from a shift from higher margin production contracts to
lower margin research and development programs.
Ground Systems second quarter 1996 sales were lower than the same period in 1995
primarily due to lower volumes and the completion of certain contracts during
1995. Earnings were lower compared with second quarter 1995 due primarily to
these lower volumes.
Armament sales and earnings increased substantially during second quarter 1996
compared with second quarter 1995 due to increased Crusader program revenues,
vertical launching revenues and aftermarket revenues.
The Paladin production operation produced increased sales and earnings in the
second quarter 1996 compared with the same period in 1995 reflecting higher
vehicle deliveries.
As indicated in the company's 1995 annual report, FMC was notified during the
quarter ended June 30, 1996 that the Armored Gun System, a development program
FMC had worked on since 1984, was cancelled by the U.S. government. Cancellation
of the program is not expected to have a material impact on FMC's financial
position, results of operations or cash flows.
Corporate
- ---------
Corporate expenses declined $4 million from last year's quarter due to savings
related to reduced staffing levels.
Net Interest Expense
- --------------------
Net interest expense in the quarter increased to $23 million from $18 million in
last year's period, reflecting higher debt levels associated with acquisitions,
increased capital spending and working capital largely associated with increased
sales.
<PAGE>
PAGE 15
Other Income and Expense
- ------------------------
Other expenses increased $7 million from 1995's quarter, largely due to higher
LIFO and pension expense.
Effective Tax Rates
- -------------------
The effective tax rates for the quarters ended June 30, 1996 and 1995 were 28
percent and 30 percent, respectively. The decrease in 1996 is primarily due to
a change in business mix.
Order Backlog
- -------------
FMC's backlog of unfilled orders as of June 30, 1996 was $2.6 billion (excluding
Frigoscandia) versus $2.0 billion at December 31, 1995. Machinery and Equipment
backlog of $919 million increased from $545 million at the end of 1995. The
increase in backlog reflects the recognition of a significant portion of the
previously announced subsea order from Statoil, Norway's state-owned oil
company; strengthening food processing markets; and the benefit of acquisitions
in the energy business. Defense backlog was $1.7 billion at the end of the
quarter, up from $1.5 billion at December 31, 1995. Backlogs are not reported
for Industrial Chemicals or Performance Chemicals due to the nature of these
businesses.
<PAGE>
PAGE 16
RESULTS OF CONTINUING OPERATIONS
--------------------------------
Six Months 1996 Compared to Six Months 1995
-------------------------------------------
Industry Segment Data (Unaudited)
---------------------------------
(In millions)
<TABLE>
<CAPTION>
Six Months Ended
June 30
-----------------------
1996 1995
--------- ---------
<S> <C> <C>
Sales
- -----
Performance Chemicals $ 649.3 $ 609.1
Industrial Chemicals 506.3 471.1
Machinery and Equipment 694.3 577.7
Defense Systems 510.1 477.7
Eliminations (15.0) (10.4)
-------- --------
$2,345.0 $2,125.2
======== ========
Income from continuing operations
- ---------------------------------
before income taxes (1)
- -----------------------
Performance Chemicals $ 100.2 $ 104.7
Industrial Chemicals 71.0 84.6
Machinery and Equipment 31.8 24.3
Defense Systems 55.2 60.9
-------- --------
Operating profit from
continuing operations 258.2 274.5
Corporate (45.8) (47.9)
Net interest expense (45.3) (34.7)
Other income and (expense), net (7.8) (0.3)
-------- --------
$ 159.3 $ 191.6
======== ========
</TABLE>
FMC has modified its presentation of segment results, effective first quarter
1996, to better align presentation with management's evaluation of segment
performance. Accordingly, business segment results are presented net of minority
interest, reflecting only FMC's share of earnings. The corporate line primarily
includes staff expenses, and other income and expense consists of all other
corporate items, including certain immaterial amounts previously allocated to
business segments. Segment results for 1995 have been restated to be consistent
with the current period's presentation.
As described in Note 3 to the company's June 30, 1996 consolidated financial
statements, the operations constituting FMC's Precious Metals segment have been
reclassified as a discontinued operation and results of prior periods have been
restated for comparative purposes.
(1) Results for all segments are net of minority interests in 1996 and 1995, of
$(35.5) million and $(25.2) million, respectively, the majority of which,
$(31.4) million and $(24.9) million, pertains to Defense Systems.
Sales of $2.3 billion in the first half of 1996 increased 10 percent from the
1995 period reflecting increased sales in all operating segments. Segment
earnings decreased to $258 million in the first half of 1996 from $275 million
in 1995, primarily related to the continued weakness in the pulp and paper
industry in the Industrial Chemicals segment and the partial recognition of a
favorable legal judgment in 1995 in the Defense Systems segment. Corporate
expenses of $46 million declined from $48 million in the 1995 first half due
primarily to lower staff expenses. Net interest expense increased to $45 million
from $35 million in 1995, reflecting higher borrowings to support acquisitions
and capital expenditures and higher working capital requirements. Other expense
increased primarily related to higher LIFO and pension expense.
<PAGE>
PAGE 17
Income from continuing operations before income taxes decreased 17 percent to
$159 million compared with $192 million in the first half of 1995. Income from
continuing operations of $114 million compared with $135 million in last year's
period, and earnings per share from continuing operations were $3.00 compared
with $3.59 per share last year.
Performance Chemicals sales of $649 million rose 7 percent compared with $609
million in last year's period and profits of $100 million declined slightly
compared with $105 million in last year's period. Although sales benefited from
improving markets, profits declined primarily due to higher raw material prices
in the specialty chemicals businesses.
Industrial Chemicals sales increased 7 percent to $506 million while profits
decreased 16 percent to $71 million versus last year's first half. Profits
decreased due to minority interest expense related to the soda ash joint
venture, lower hydrogen peroxide volumes and start-up costs for the company's
major cost reduction and expansion projects. In addition, the 1995 period
included the favorable impact of reversals of certain previously accrued
expenses.
Machinery and Equipment sales of $694 million rose 20 percent from $578 million,
and profits increased to $32 million from $24 million. Energy & Transportation
Equipment sales benefited from higher sales and profits related to the Moorco
acquisition as well as strong first half results at Kongsberg Offshore and
growth in other Energy and Transportation Equipment businesses. Food machinery
sales and profits also increased compared with the first half of 1995, partly
due to the 1995 acquisition of FranRica.
Defense Systems sales were $510 million for the first half of 1996 compared with
$478 million for the same period last year, reflecting higher production
volumes. Profits, net of minority interest, totaled $55 million in the first
half of 1996 compared to profits of $61 million for the same period in 1995, as
the partial recognition of a favorable legal judgment in 1995 more than offset
1996's higher production volumes. Ground Systems lower sales were offset by
contract settlements in the first quarter of 1996.
The effective tax rates for the six-month periods ended June 30, 1996 and 1995
were 28 percent and 30 percent, respectively. The decline in 1996 is primarily
a result of a change in business mix.
INDEPENDENT ACCOUNTANTS' REPORTS
A report by KPMG Peat Marwick LLP, FMC's independent accountants, on
the financial statements included in Form 10-Q for the quarter
ended June 30, 1996 is included on page 18.
A report by Ernst and Young LLP, United Defense Limited Partnership's
independent accountants, on the financial statements referred to by KPMG Peat
Marwick LLP in its report noted above is included on page 19.
<PAGE>
PAGE 18
SIGNATURE
Independent Accountants' Report
-------------------------------
The Board of Directors
FMC Corporation:
We have reviewed the accompanying consolidated balance sheet of FMC Corporation
and consolidated subsidiaries as of June 30, 1996, and the related consolidated
statements of income for the three-month and six-month periods ended June 30,
1996 and 1995 and the consolidated statements of cash flows for the six month
periods ended June 30, 1996 and 1995. These consolidated financial statements
are the responsibility of the company's management.
We were furnished with the report of other accountants on their reviews of the
interim financial information of United Defense, L.P., whose total assets as of
June 30, 1996, and whose revenues for the three-month and six-month periods then
ended constituted 12 percent, 22 percent and 21 percent, respectively, of the
related consolidated totals.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our reviews and the report of other accountants, we are not aware of
any material modifications that should be made to the consolidated financial
statements referred to above for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of FMC Corporation and consolidated
subsidiaries as of December 31, 1995 and the related consolidated statements of
income, cash flows and changes in stockholders' equity for the year then ended
(not presented herein); and in our report dated January 17, 1996, we expressed
an unqualified opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying consolidated balance
sheet as of December 31, 1995 is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.
KPMG Peat Marwick LLP
Chicago, Illinois
July 17, 1996
<PAGE>
PAGE 19
SIGNATURE
Independent Accountants' Review Report
--------------------------------------
Partners
United Defense LP
Arlington, Virginia
We have reviewed the balance sheet of United Defense L.P. as of June 30, 1996,
and the related statements of income for the three-month and six-month periods
ended June 30, 1996 and 1995, the statements of cash flows for the six-month
periods ended June 30, 1996 and 1995 and the statement of partners' equity for
the six- month period ended June 30, 1996. These financial statements (not
presented separately in the FMC Corporation Form 10-Q for the quarter ended June
30, 1996) are the responsibility of the Partnership's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, which will be
performed for the full year with the objective of expressing an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the Partnership's financial statements referred to above for them to
be in conformity with generally accepted accounting principles.
Ernst and Young LLP
Washington, D.C.
July 15, 1996
<PAGE>
PAGE 20
PART II - OTHER INFORMATION
---------------------------
ITEM 1. LEGAL PROCEEDINGS
- -------------------------
Beartrack Proceedings
There have been no significant changes to FMC Gold Company's Beartrack
proceedings from the information reported in the company's December 31, 1995
Annual Report on Form 10-K.
Environmental Proceeding
There have been no significant changes to the environmental proceeding at FMC's
Phosphorus Chemicals Division plant from the information reported in the
company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996.
Safety
The investigation by the U.S. Occupational Safety and Health Administration into
the December 5, 1995, release of material at FMC's Process Additives Division
plant at Nitro, West Virginia, first reported in the company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1996, was terminated and settled on
June 6, 1996. FMC agreed to pay the sum of $500,000 to OSHA as part of a
Settlement Agreement regarding the December 5 release as well as process safety
management at four other FMC plants.
<PAGE>
PAGE 21
PART II - OTHER INFORMATION
---------------------------
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- -------------------------------------------------------------
Registrant's Annual Meeting of Stockholders was held on April 19, 1996. At the
meeting, stockholders voted on (i) the election of four directors; and (ii)
ratification of the appointment of KPMG Peat Marwick LLP as the Registrant's
independent auditors for 1996. Voting on each such matter was as follows:
<TABLE>
<CAPTION>
Votes Votes Withheld/ Broker
For Against Abstentions Non-Votes
---------- ------- ----------- ---------
<S> <C> <C> <C> <C>
1. Election of Directors:
R. N. Burt 32,758,376 -- 272,826 --
J. A. Francois-Poncet 32,750,462 -- 280,740 --
P. G. Gyllenhammar 32,781,866 -- 249,336 --
E. C. Meyer 32,770,713 -- 260,489 --
2. Ratification of Auditors 32,894,735 83,519 52,498 --
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------------------------------------------
(a) Exhibits
--------
<TABLE>
<CAPTION>
Number in
Exhibit Table Description
- ------------- -----------
<S> <C>
4 Indenture dated as of July 1, 1996 between FMC
Corporation and Harris Trust and Savings
Bank, as trustee
11 Statement re: computation of per share
earnings assuming full dilution
12 Statement re: computation of ratios of
earnings to fixed charges
15 Letters re: unaudited interim financial
information
27 Financial data schedule
</TABLE>
(b) Reports on Form 8-K
-------------------
Form 8-K dated May 3, 1996 describing consideration by FMC Gold Company
of reincorporation and a secondary public offering.
Form 8-K dated May 6, 1996 describing FMC Corporation's signing of a
definitive agreement to purchase the outstanding shares of Frigoscandia
Equipment Holding AB.
Form 8-K dated June 13, 1996 describing FMC Corporation's lower earnings
expectations for the 1996 second quarter.
<PAGE>
PAGE 22
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FMC CORPORATION
---------------
(Registrant)
Date: August 14, 1996 /s/ Ronald D. Mambu
------------------- -----------------------------------
Vice President, Controller and duly
authorized officer
<PAGE>
PAGE 1
EXHIBIT INDEX
-------------
Number in
Exhibit Table Description
------------- -----------
4 Indenture dated as of July 1, 1996 between FMC
Corporation and Harris Trust and Savings
Bank, as trustee
11 Statement re: computation of per share
earnings assuming full dilution
12 Statement re: computation of ratios of
earnings to fixed charges
15 Letters re: unaudited interim financial
information
27 Financial data schedule
<PAGE>
EXHIBIT 4
================================================================================
FMC CORPORATION
AND
HARRIS TRUST AND SAVINGS BANK
Trustee
______________________
Senior Debt Securities
_______________________
INDENTURE
Dated as of July 1, 1996
_______________________
================================================================================
<PAGE>
CROSS REFERENCE SHEET*
between
Provisions of Sections 310 through 318(a) inclusive of the Trust
Indenture Act of 1939, as amended, and the Indenture dated as of July 1, 1996
between FMC Corporation and Harris Trust and Savings Bank, as Trustee.
<TABLE>
<CAPTION>
SECTION OF ACT SECTION OF INDENTURE
- -------------- --------------------
<S> <C>
310(a)(1)..................... 6.10
310(a)(2)..................... 6.10
310(a)(3)..................... N/A
310(a)(4)..................... N/A
310(a)(5)..................... 6.10
310(b)........................ 6.10
310(c)........................ N/A
311(a)........................ 6.11
311(b)........................ 6.11
311(b)(2)..................... 6.11
311(c)........................ N/A
312(a)........................ 4.1
312(b)........................ 4.2(b)
312(c)........................ 4.2(c)
313(a)........................ 6.6
313(b)........................ 6.6
313(c)........................ 6.6
313(d)........................ 6.6
314(a)........................ 4.3
314(b)........................ N/A
314(c)(1)..................... 2.4 and 11.5
314(c)(2)..................... 2.4 and 11.5
314(c)(3)..................... N/A
314(d)........................ N/A
314(e)........................ 11.5
315(a)........................ 6.1(b)
315(b)........................ 6.5
315(c)........................ 6.1(a)
315(d)(1)..................... 6.1(b)(1) and (2)
315(d)(2)..................... 6.1(c)(2)
315(d)(3)..................... 6.1(c)(3)
315(e)........................ 5.10
316(a)(1)(A).................. 5.8
316(a)(1)(B).................. 5.9
316(a)(2)..................... N/A
316(b)........................ 5.6
316(c)........................ 2.7
317(a)(1)..................... 5.2
317(a)(2)..................... 5.2
317(b)........................ 3.2 and 3.3
318(a)........................ 11.7
</TABLE>
<PAGE>
* This cross reference sheet shall not, for any purpose, be deemed to be
a part of the Indenture.
Attention should also be directed to Section 318(c) of the Trust
Indenture Act of 1939, as amended, which provides that the provisions of
Sections 310 through 317 of such Act are a part of and govern every qualified
indenture, whether or not physically contained therein.
-ii-
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
PARTIES.................................................................... 1
RECITALS................................................................... 1
Authorization of Indenture................................................ 1
Compliance with Legal Requirements........................................ 1
Purpose of and Consideration for Indenture................................ 1
ARTICLE ONE
DEFINITIONS........................................................... 1
SECTION 1.1 Certain Terms Defined.................................. 1
Attributable Debt................................................ 1
Board of Diretors................................................ 2
Business Day..................................................... 2
Commission....................................................... 2
Common Shares.................................................... 2
Company.......................................................... 2
Company Notice................................................... 2
Consolidated Net Tangible Assets................................ 2
Corporate Trust Office........................................... 3
covenant defeasance.............................................. 3
defaulted interest............................................... 3
Depository....................................................... 3
Depository Security.............................................. 3
defeasance....................................................... 3
Dollar........................................................... 3
Event of Default................................................. 3
Funded Debt...................................................... 3
Government Obligations........................................... 4
Holder,.......................................................... 4
Holder of Securities,............................................ 4
Indenture........................................................ 4
Officers' Certificate............................................ 4
Opinion of Counsel............................................... 4
Original issue date.............................................. 4
Original Issue Discount Security................................. 4
Outstanding,..................................................... 5
Paying Agent..................................................... 5
"Person" or "person"............................................. 5
Place of Payment,................................................ 5
Preferred Shares................................................. 6
principal........................................................ 6
Principal Property............................................... 6
Responsible Officer.............................................. 6
Restricted Subsidiary............................................ 6
Sale and leaseback transaction................................... 6
"Security" or "Securities"....................................... 7
Series........................................................... 7
Series of Securities............................................. 7
Subsidiary....................................................... 7
Trustee.......................................................... 7
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Trust Indenture Act of 1939........................................ 7
TIA................................................................ 7
United States of America........................................... 7
vice president,.................................................... 7
ARTICLE TWO
SECURITIES.............................................................. 7
SECTION 2.1 Forms Generally.......................................... 7
SECTION 2.2 Form of Trustee's Certificate of Authentication.......... 8
SECTION 2.3 Amount Unlimited; Issuable in Series..................... 8
SECTION 2.4 Authentication and Delivery of Securities................ 11
SECTION 2.5 Execution of Securities.................................. 12
SECTION 2.6 Certificate of Authentication............................ 12
SECTION 2.7 Denomination and Date of Securities; Payments............ 13
SECTION 2.8 Registration, Transfer and Exchange...................... 14
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen Securities 15
SECTION 2.10 Cancellation of Securities; Destruction Thereof.......... 16
SECTION 2.11 Temporary Securities..................................... 17
SECTION 2.12 Securities in Global Form................................ 17
ARTICLE THREE
COVENANTS OF THE COMPANY................................................ 18
SECTION 3.1 Payment of Principal and Interest........................ 18
SECTION 3.2 Offices for Payment, etc................................. 18
SECTION 3.3 Paying Agents............................................ 19
SECTION 3.4 Written Statement to Trustee............................. 20
SECTION 3.5 Limitation Upon Liens.................................... 20
SECTION 3.6 Limitation Upon Sales and Leasebacks..................... 22
SECTION 3.7 Waiver of Certain Covenants.............................. 24
SECTION 3.8 Seniority of Securities.................................. 24
ARTICLE FOUR
SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE....... 24
SECTION 4.1 Company to Furnish Trustee Information as to Names and
Addresses of Securityholders....................................... 24
SECTION 4.2 Preservation and Disclosure of Security holders' Lists... 25
SECTION 4.3 Reports by the Company................................... 26
ARTICLE FIVE
REMEDIES OF TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT............. 27
</TABLE>
-iv-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SECTION 5.1 Event of Default Defined; Acceleration of
Maturity; Waiver of Default........................................ 27
SECTION 5.2 Collection of Indebtedness By Trustee; Trustee
May Prove Debt..................................................... 29
SECTION 5.3 Application of Proceeds.................................. 32
SECTION 5.4 Restoration of Rights on Abandonment of Proceedings...... 32
SECTION 5.5 Limitations on Suits by Securityholders.................. 32
SECTION 5.6 Unconditional Right of Securityholders to
Institute Certain Suits............................................ 33
SECTION 5.7 Powers and Remedies Cumulative; Delay or Omission
Not Waiver of Default.............................................. 33
SECTION 5.8 Control by Securityholders............................... 34
SECTION 5.9 Waiver of Past Defaults.................................. 34
SECTION 5.10 Right of Court to Require Filing of Undertaking
to Pay Costs....................................................... 34
SECTION 5.11 Suits for Enforcement.................................... 35
ARTICLE SIX
CONCERNING THE TRUSTEE.................................................. 35
SECTION 6.1 Duties of Trustee........................................ 35
SECTION 6.2 Rights of Trustee........................................ 36
SECTION 6.3 Individual Rights of Trustee............................. 38
SECTION 6.4 Trustee's Disclaimer..................................... 38
SECTION 6.5 Notice of Defaults....................................... 38
SECTION 6.6 Reports by Trustee to Holders............................ 38
SECTION 6.7 Compensation and Indemnity............................... 39
SECTION 6.8 Replacement of Trustee................................... 40
SECTION 6.9 Successor Trustee by Merger.............................. 40
SECTION 6.10 Eligibility; Disqualification............................ 41
SECTION 6.11 Preferential Collection of Claims Against Company........ 41
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders.............. 41
SECTION 7.2 Proof of Execution of Instruments........................ 41
SECTION 7.3 Holders to Be Treated as Owners.......................... 41
SECTION 7.4 Securities Owned by Company Deemed Not Outstanding....... 42
SECTION 7.5 Right of Revocation of Action Taken...................... 42
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES................................................. 43
SECTION 8.1 Supplemental Indentures Without Consent Securityholders.. 43
SECTION 8.2 Supplemental Indentures With Consent Securityholders..... 44
SECTION 8.3 Effect of Supplemental Indenture......................... 45
</TABLE>
-v-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SECTION 8.4 Documents to Be Given to Trustee......................... 45
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures............................................ 45
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE............................... 46
SECTION 9.1 Company May Consolidate, etc. on Certain Terms........... 46
SECTION 9.2 Successor Corporation Substituted........................ 46
SECTION 9.3 Opinion of Counsel to Trustee............................ 47
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE: UNCLAIMED MONEYS............... 47
SECTION 10.1 Satisfaction and Discharge of Indenture.................. 47
SECTION 10.2 Application by Trustee of Funds Deposited for
Payment of Securities.............................................. 50
SECTION 10.3 Repayment of Moneys Held by Paying Agent................. 51
SECTION 10.4 Return of Unclaimed Moneys Held by Trustee and
Paying Agent....................................................... 51
SECTION 10.5 Reinstatement of Company's Obligations................... 51
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS................................................ 52
SECTION 11.1 Incorporators, Stockholders, Officers and
Directors of Company Exempt from Individual Liability.............. 52
SECTION 11.2 Provisions of Indenture for the Sole Benefit of
Parties and Securityholders........................................ 52
SECTION 11.3 Successors and Assigns of Company Bound by Indenture..... 52
SECTION 11.4 Notices and Demands on Company, Trustee and
Securityholders.................................................... 52
SECTION 11.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein................................. 53
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays.......... 54
SECTION 11.7 Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939........................................ 54
SECTION 11.8 Illinois Law to Govern................................... 55
SECTION 11.9 Counterparts............................................. 55
SECTION 11.10 Effect of Headings; Gender............................... 55
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS.............................. 55
SECTION 12.1 Applicability of Article................................. 55
SECTION 12.2 Notice of Redemption; Partial Redemptions................ 55
</TABLE>
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<TABLE>
<S> <C>
SECTION 12.3 Payment of Securities Called for Redemption.............. 57
SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption........................................... 58
SECTION 12.5 Mandatory and Optional Sinking Fund...................... 58
SECTION 12.6 Repayment at the Option of the Holders................... 60
SECTION 12.7 Conversion Arrangement on Call for Redemption............ 60
ARTICLE THIRTEEN
CONVERSION OF SECURITIES................................................ 61
SECTION 13.1 Applicability of Article................................. 61
SECTION 13.2 Right of Holders to Convert Securities into Common Shares 62
SECTION 13.3 Issuance of Common Shares on Conversions................. 63
SECTION 13.4 No Payment or Adjustment for Interest or Dividends....... 63
SECTION 13.5 Adjustment of Conversion Price........................... 64
SECTION 13.6 No Fractional Shares to be Issued........................ 68
SECTION 13.7 Preservation of Conversion Rights upon
Consolidation, Merger, Sale or Conveyance.......................... 68
SECTION 13.8 Notice to Holders of the Securities of a Series
Prior to Taking Certain Types of Action............................ 69
SECTION 13.9 Covenant to Reserve Shares for Issuance on
Conversion of Securities........................................... 70
SECTION 13.10 Compliance with Governmental Requirements................ 70
SECTION 13.11 Payment of Taxes upon Certificates for Shares
Issued upon Conversion............................................. 71
SECTION 13.12 Trustee's Duties with Respect to Conversion Provisions... 71
SECTION 13.13 Conversion of Securities Into Preferred Stock............ 72
</TABLE>
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<PAGE>
THIS INDENTURE, dated as of July 1, 1996 between FMC CORPORATION, a
Delaware corporation (the "Company"), and HARRIS TRUST AND SAVINGS BANK, an
Illinois banking corporation (the "Trustee"),
W I T N E S S E T H:
WHEREAS, the Company has duly authorized the issue from time to time
of its unsecured debentures, notes or other evidences of indebtedness (the
"Securities") to be issued in one or more Series; and
WHEREAS, all things necessary to make this Indenture a valid indenture
and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchase of the Securities by
the Holders thereof, it is mutually agreed for the equal and proportionate
benefit of the Holders from time to time of the Securities or of any Series
thereof as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 Certain Terms Defined. The following terms (except
as otherwise expressly provided or unless the context otherwise clearly
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section. All other
terms used in this Indenture that are defined in the Trust Indenture Act of
1939, as amended, or the definitions of which in the Securities Act of 1933, as
amended, are referred to in the Trust Indenture Act of 1939, as amended,
including terms defined therein by reference to the Securities Act of 1933, as
amended (except as herein otherwise expressly provided or unless the context
otherwise clearly requires), shall have the meanings assigned to such terms in
said Trust Indenture Act and in said Securities Act as in force at the date of
this Indenture. All accounting terms used herein and not expressly defined
shall have the meanings assigned to such terms in accordance with generally
accepted accounting principles, and the term "generally accepted accounting
principles" means such accounting principles as are generally accepted at the
time of any computation. The words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole, as supplemented and
amended from time to time, and not to any particular Article, Section or other
subdivision. The terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular.
"Attributable Debt" shall mean, as of any date upon which a
determination of the amount thereof shall be computed, an amount determined by
multiplying the greater, at the time a sale and
<PAGE>
leaseback transaction was entered into, of (i) the fair value of the property,
plant or facility subject to such arrangement (as determined by the Company) or
(ii) the net proceeds of the sale of such property, plant or facility to the
lender or investor, by a fraction of which the numerator shall be the unexpired
initial term of the lease of such property as of the date of determination of
such computation and of which the denominator shall be the full initial term of
such lease. Attributable Debt shall not include any such arrangement for
financing air, water or noise pollution control facilities or sewage or solid
waste disposal facilities or involving industrial development bonds which are
tax exempt pursuant to Section 103 of the United States Internal Revenue Code of
1986, as amended (or which receive similar tax treatment under any subsequent
amendments thereto or successor laws thereof).
"Board of Directors" means either the Board of Directors of the
Company or any duly authorized committee of that Board or any duly authorized
committee created by that Board.
"Business Day" means, except as may otherwise be provided in the form
of Securities of any particular Series, with respect to any Place of Payment or
place of publication, any day, other than a Saturday or Sunday, or a day on
which banking institutions are authorized or required by law or regulation to
close in that Place of Payment, place of publication or place where the
principal corporate trust office of the Trustee is located.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or if at any time after the execution and delivery of this Indenture
such Commission is not existing and performing the duties now assigned to it
under the Trust Indenture Act, then the body performing such duties on such
date.
"Common Shares" means the shares of common stock, par value $0.10 per
share, of the Company as they exist on the date of this Indenture, or any other
shares of capital stock of the Company into which such shares shall be
reclassified or changed.
"Company" means FMC Corporation, a Delaware corporation, until a
successor corporation shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Company" shall mean such successor
corporation.
"Company Notice" means the confirmation of the Company, signed by an
officer, received by the Trustee, of the terms of the issuance of any
Securities.
"Consolidated Net Tangible Assets" means the aggregate amount of
assets (less applicable reserves and other properly deductible items) after
deducting therefrom (a) all current liabilities (excluding any thereof
constituting Funded Debt by
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<PAGE>
reason of being extendible or renewable), and (b) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the books and records of the Company and its
consolidated subsidiaries and computed in accordance with generally accepted
accounting principles.
"Corporate Trust Office" means the principal corporate trust office
of the Trustee at which at any particular time its corporate trust business
shall be administered, which office at the date of execution of this Indenture
is located at 311 West Monroe Street, Chicago, Illinois 60606.
"Covenant Defeasance" has the meaning specified in Section 10.1(B).
"Defaulted Interest" has the meaning specified in Section 2.7.
"Depository" shall mean, with respect to Securities of any Series for
which the Company shall determine that such Securities will be issued as a
Depository Security, The Depository Trust Company, New York, New York, or
another clearing agency or any successor registered under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation,
which, in each case, shall be designated by the Company pursuant to Sections 2.3
and 2.12.
"Depository Security" shall mean, with respect to any Series of
Securities, a Security executed by the Company and authenticated and delivered
by the Trustee to the Depository or pursuant to the Depository's instruction,
all in accordance with this Indenture and pursuant to a resolution of the Board
of Directors as contemplated by Section 2.3, which (i) shall be registered as to
principal and interest in the name of the Depository or its nominee and (ii)
shall represent, and shall be denominated in an amount equal to the aggregate
principal amount of, all of the Outstanding Securities of such Series.
"Defeasance" has the meaning specified in Section 10.1(B).
"Dollar" means the coin or currency of the United States of America
which as of the time of payment is legal tender for the payment of public and
private debts.
"Event of Default" has the meaning specified in Section 5.1.
"Funded Debt" means all indebtedness, whether or not evidenced by a
bond, debenture, note or similar instrument or agreement, for the repayment of
money borrowed, having a maturity of more than 12 months from the date of its
creation or having a
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<PAGE>
maturity of less than 12 months from the date of its creation but by its terms
being renewable or extendible beyond 12 months from such date at the option of
the borrower. For the purpose of determining "Funded Debt" of any corporation,
there shall be excluded any particular indebtedness if, on or prior to the
maturity thereof, there shall have been deposited with the proper depository in
trust the necessary funds for the payment, redemption or satisfaction of such
indebtedness.
"Government Obligations" means, unless otherwise specified pursuant
to Section 2.3, securities which are (i) direct obligations of the United States
government or (ii) obligations of a Person controlled or supervised by, or
acting as an agency or instrumentality of, the United States government, the
payment of which obligations is unconditionally guaranteed by such government,
and which, in either case, are full faith and credit obligations of such
government, and which are not callable or redeemable at the option of the issuer
thereof.
"Holder," "Holder of Securities," "Registered Holder,"
"Securityholder" or other similar terms mean the Person in whose name at the
time a particular Security is registered in the Security register.
"Indenture" means this instrument as originally executed or as it may
from time to time be amended or supplemented as herein provided, as so amended
or supplemented or both, and shall include the forms and terms of particular
Series of Securities established as contemplated by Section 2.3.
"Officers' Certificate" means a certificate signed on behalf of the
Company by the chairman of the Board of Directors or the vice chairman or the
president or any vice president and by the treasurer, the controller, any
assistant treasurer, the secretary or any assistant secretary of the Company and
delivered to the Trustee. Each such certificate shall include the statements
provided for in Section 11.5.
"Opinion of Counsel" means a written opinion of legal counsel who may
be an employee of or counsel to the Company and who shall be reasonably
acceptable to the Trustee. Each Opinion of Counsel shall include the statements
provided for in Section 11.5, if and to the extent required hereby.
"Original issue date" of any Security (or portion thereof) means the
date set forth as such on such Security.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration thereof pursuant to Section 5.1.
<PAGE>
"Outstanding," when used with reference to Securities, shall, subject
to the provisions of Section 7.4, mean, as of any particular time, all
Securities authenticated and delivered under this Indenture, except
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption of
which moneys in the necessary amount and in the required currency shall
have been deposited in trust with the Trustee or with any Paying Agent
(other than the Company) or shall have been set aside, segregated and held
in trust by the Company for the holders of such Securities (if the Company
shall act as its own Paying Agent), provided that if such securities, or
portions thereof, are to be redeemed prior to the maturity thereof, notice
of such redemption shall have been given as herein provided, or provision
satisfactory to the Trustee shall have been made for giving such notice;
(c) Securities in substitution for which other Securities shall have
been authenticated and delivered, or which shall have been paid, pursuant
to the terms of Section 2.9 (except with respect to any such Security as to
which proof satisfactory to the Trustee and the Company is presented that
such Security is held by a person in whose hands such Security is a legal,
valid and binding obligation of the Company);
(d) Securities converted into Common Shares or Preferred Shares in
accordance with or as contemplated by this Indenture; and
(e) Securities with respect to which the Company has effected
defeasance and/or covenant defeasance as provided in Article Ten.
"Paying Agent" means any Person (which may include the Company)
authorized by the Company to pay the principal of or interest, if any, on any
Security on behalf of the Company.
"Person" or "person" means any individual, corporation, partnership,
joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of any
Series, means the place or places where the principal of and interest, if any,
on the Securities of that Series are payable as specified pursuant to Section
3.2.
<PAGE>
"Preferred Shares" means any shares of capital stock issued by the
Company that are entitled to a preference or priority over the Common Shares
upon any distribution of the Company's assets, whether by dividend or upon
liquidation.
"principal," whenever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include "and premium, if
any."
"Principal Property" means any manufacturing or processing plant or
facility (other than any pollution control facility) or any mineral producing
property which is located within the continental United States of America and is
owned by the Company or any Subsidiary, whether owned at or acquired after the
date hereof, the gross book value on the books of the Company or such Subsidiary
(without deduction of any depreciation reserve) of which on the date as of which
the determination is being made exceeds 1% of the Consolidated Net Tangible
Assets, except (i) any such property, plant or facility which the Board of
Directors by resolution declares is not of material importance to the total
business conducted by the Company and its Restricted Subsidiaries as an
entirety, (ii) any portion of such property, plant or facility which the Board
of Directors by resolution declares is not of material importance to the total
business conducted by the Company and its Restricted Subsidiaries as an entirety
or (iii) any such property, plant or facility which is financed by industrial
development bonds which are tax exempt pursuant to Section 103 of the United
States Internal Revenue Code of 1986, as amended (or which receive similar tax
treatment under any subsequent amendments thereto or successor laws thereof).
"Responsible Officer" when used with respect to the Trustee shall
mean any officer within the corporate trust department (or any successor
department) of the Trustee including any vice president, assistant vice
president, secretary, assistant secretary, senior trust officer, trust officer
or any other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
at the Corporate Trust Office because of his or her knowledge of and familiarity
with the particular subject.
"Restricted Subsidiary" means any Subsidiary (other than FMC Gold
Company) (i) substantially all the property of which is located within the
continental United States of America or Canada and (ii) which owns or leases a
Principal Property.
"Sale and leaseback transaction" has the meaning specified in
Section 3.6.
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<PAGE>
"Security" or "Securities" has the meaning stated in the first
recital of this Indenture and more particularly means any securities
authenticated and delivered under this Indenture.
"Series" or "Series of Securities" means all Securities of a similar
tenor authorized by a particular resolution of the Board of Directors.
"Subsidiary" means (i) a corporation, a majority of whose capital
stock with voting power, under ordinary circumstances, to elect directors is, at
the date of determination, directly or indirectly owned by the Company, by one
or more Subsidiaries of the Company or by the Company and one or more
Subsidiaries of the Company, (ii) a partnership in which the Company or a
Subsidiary of the Company holds a majority interest in the equity capital or
profits of such partnership, or (iii) any other person (other than a
corporation) in which the Company, a Subsidiary of the Company or the Company
and one or more Subsidiaries of the Company, directly or indirectly, at the date
of determination, has (x) at least a majority ownership interest or (y) the
power to elect or direct the election of a majority of the directors or other
governing body of such person.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof until a successor Trustee shall have become such pursuant to
the provisions hereof, and thereafter "Trustee" shall mean or include each
Person who is then a Trustee hereunder, and if at any time there is more than
one such Person, "Trustee" as used with respect to the Securities of any Series
shall mean the Trustee with respect to Securities of that Series.
"Trust Indenture Act of 1939" or "TIA" (except as otherwise provided
in Sections 8.1 and 8.2) means the Trust Indenture Act of 1939, as amended, as
in force at the date as of which this Indenture was originally executed.
"United States of America" means the United States of America
(including the states and the District of Columbia), its territories,
possessions, the Commonwealth of Puerto Rico and other areas subject to its
jurisdiction.
"vice president," when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title of "vice president."
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each Series shall
be substantially in such form (including temporary or definitive global form)
as shall be established by or pursuant to
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<PAGE>
a resolution of the Board of Directors or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture (the
provisions of which shall be appropriate to reflect the terms of the Series of
Securities represented thereby) and may have imprinted or otherwise reproduced
thereon such legend or legends, not inconsistent with the provisions of this
Indenture, as may be required to comply with any law or with any rules or
regulations pursuant thereto, or with any rules of any securities exchange or to
conform to general usage, all as may be determined by the officers executing
such Securities as evidenced by their execution of the Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities as evidenced by their
execution of such Securities.
SECTION 2.2 Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
This is one of the Securities of the Series designated herein and
referred to in the within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK, as
Trustee
By:
--------------------------------
Authorized Signatory
or
HARRIS TRUST AND SAVINGS BANK, as
Trustee
By:
--------------------------------,
as Authentication Agent
By:
--------------------------------
Authorized Signatory
SECTION 2.3 Amount Unlimited; Issuable in Series. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more Series. There shall be
established in or pursuant to a resolution of the Board of Directors and set
forth in an Officers' Certificate, or
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<PAGE>
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any Series,
(1) the title of the Securities of the Series (which title shall
distinguish the Securities of the Series from all other Securities issued
by the Company);
(2) any limit upon the aggregate principal amount of the Securities of
the Series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
Series pursuant to Section 2.8, 2.9, 2.11, 8.5 or 12.3);
(3) if other than 100% of their principal amount, the percentage of
their principal amount at which the Securities of the Series will be
offered for sale to the public;
(4) the date or dates on which the principal of the Securities of the
Series is payable or the method of determination thereof;
(5) the rate or rates (which may be fixed or variable), or the method
or methods of determination thereof, at which the Securities of the Series
shall bear interest, if any, the date or dates from which such interest
shall accrue, the interest payment dates on which such interest shall be
payable and the record dates for the determination of Holders to whom
interest is payable;
(6) the place or places where the principal and interest, if any, on
Securities of the Series shall be payable (if other than as provided in
Section 3.2);
(7) if redeemable, the price or prices at which, the period or periods
within which and the terms and conditions upon which Securities of the
Series may be redeemed, in whole or in part, at the option of the Company;
(8) if other than the principal amount thereof, the portion of the
principal amount of Securities of the Series which shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section 5.1
or provable in bankruptcy pursuant to Section 5.2;
(9) the obligation, if any, of the Company to redeem, purchase or
repay Securities of the Series whether pursuant to any sinking fund or
analogous provisions or pursuant to other provisions set forth therein or
at the option of a Holder thereof and the price or prices at which and the
period or periods within which and the terms and conditions upon which
Securities of the Series shall be redeemed, purchased or repaid, in whole
or in part;
<PAGE>
(10) if other than denominations of $1,000, and any integral multiple
thereof, the denominations in which Securities of the Series shall be
issuable;
(11) the form of the Securities, including such legends as required by
law or as the Company deems necessary or appropriate and the form of any
temporary global security which may be issued;
(12) whether, and under what circumstances, the Securities of any
Series shall be convertible into Securities of any other Series and, if so,
the terms and conditions upon which such conversion will be effected
including the initial conversion price or rate, the conversion period and
other provisions in addition to or in lieu of those described herein;
(13) if other than the Trustee, any trustees, authenticating or Paying
Agents, transfer agents or registrars or any other agents with respect to
the Securities of such Series;
(14) if the Securities of such Series do not bear interest, the
applicable dates for purposes of Section 4.1 hereof;
(15) whether the Securities of such Series are to be issuable in whole
or in part in the form of one or more Depository Securities, and, in such
case, the Depository for such Securities;
(16) the application, if any, of either or both of Section 10.1(B)(ii)
or 10.1(B)(iii) to the Securities of the Series;
(17) the obligation, if any, of the Company to permit the conversion
of the Securities of such Series into the Company's Common Shares or
Preferred Shares (and the class thereof), as the case may be, and the terms
and conditions upon which such conversion shall be effected (including,
without limitation, the initial conversion price or rate, the conversion
period, any adjustment of the applicable conversion price or rate and any
requirements relative to reservation of shares for purposes of conversion);
and
(18) any other terms or conditions upon which the Securities of the
Series are to be issued (which terms shall not be inconsistent with the
provisions of this Indenture).
All Securities of any one Series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to such resolution of the Board of Directors or in any such indenture
supplemental hereto. All
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<PAGE>
Securities of any one Series need not be issued at the same time, and unless
otherwise provided, a Series may be reopened for issuances of additional
Securities of such Series.
SECTION 2.4 Authentication and Delivery of Securities. At any time and
from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities of any Series executed by the Company to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
make available for delivery such Securities to or upon the written order of the
Company, signed by both (a) the chairman of its Board of Directors, or its
president or any vice president and (b) its treasurer or any assistant
treasurer, secretary or any assistant secretary without any further action by
the Company. In authenticating such Securities and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive and (subject to Section 6.1) shall be fully
protected in relying upon:
(1) a copy of any resolution or resolutions of the Board of Directors
relating to such Series, in each case certified by the secretary or an
assistant secretary of the Company;
(2) a supplemental indenture, if any;
(3) an Officers' Certificate setting forth the form and terms of the
Securities of such Series as required pursuant to Sections 2.1 and 2.3,
respectively, and prepared in accordance with Section 11.5; and
(4) an Opinion of Counsel, prepared in accordance with Section 11.5,
which shall state
(a) that the form or forms and terms of such Securities have been
established by or pursuant to a resolution of the Board of Directors
or by a supplemental indenture as permitted by Sections 2.1 and 2.3 in
conformity with the provisions of this Indenture and in conformity
with such resolution; and
(b) that such Securities have been duly authorized, and, when
authenticated and delivered by the Trustee and issued by the Company
in the manner and subject to any conditions specified in such opinion
of counsel, will constitute valid and binding obligations of the
Company enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or other laws relating to or affecting the enforcement
of creditors' rights generally and by general equitable principles,
regardless of whether such enforceability is considered in a
proceeding in equity or at law.
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<PAGE>
The Trustee shall have the right to decline to authenticate and
deliver any Securities under this Section if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under this Indenture in a manner not reasonably acceptable to the
Trustee.
SECTION 2.5 Execution of Securities. The Securities shall be signed
on behalf of the Company by both (a) the chairman of its Board of Directors or
its president or any vice president and (b) its treasurer or any assistant
treasurer or its secretary or any assistant secretary, under its corporate seal
which may, but need not, be attested. Such signatures may be the manual or
facsimile signatures of such officers. The seal of the Company may be in the
form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Securities. Typographical and other minor errors or
defects in any such reproduction of the seal or any such signature shall not
affect the validity or enforceability of any Security that has been duly
authenticated and delivered by the Trustee.
In case any officer of the Company who shall have signed any of the
Securities shall cease to be such officer before the Security so signed shall be
authenticated and delivered by the Trustee or disposed of by the Company, such
Security nevertheless may be authenticated and delivered or disposed of as
though the person who signed such Security had not ceased to be such officer of
the Company; and any Security may be signed on behalf of the Company by such
persons as, at the actual date of the execution of such Security, shall be the
proper officers of the Company, although at the date of the execution and
delivery of this Indenture any such person was not such an officer.
SECTION 2.6 Certificate of Authentication. Only such Securities as
shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited and executed by the Trustee by the manual signature of one
of its authorized signatories shall be entitled to the benefits of this
Indenture or be valid or obligatory for any purpose. Such certificate by the
Trustee upon any Security executed by the Company shall be conclusive evidence
that the Security so authenticated has been duly authenticated and delivered
hereunder and that the Holder is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Security shall have been duly
authenticated and delivered hereunder but never issued and sold by the Company,
the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 2.10 together with a written statement (which need not
comply with Section 11.5 and need not be accompanied by an Opinion of Counsel)
stating that such Security has never been issued and sold by the Company, and
for all purposes of the Indenture such Security shall be deemed never to have
been authenticated and delivered hereunder and shall never be entitled to the
benefits of the Indenture.
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<PAGE>
SECTION 2.7 Denomination and Date of Securities; Payments of
Interest. The Securities shall be issuable in denominations as shall be
specified as contemplated by Section 2.3. In the absence of any such
specification with respect to the Securities of any Series, Securities shall be
issuable in denominations of $1,000 and any integral multiple thereof, and
interest shall be computed on the basis of a 360-day year of twelve 30-day
months. The Securities shall be numbered, lettered, or otherwise distinguished
in such manner or in accordance with such plan as the officers of the Company
executing the same may determine with the approval of the Trustee as evidenced
by the execution and authentication thereof.
Each Security shall be dated the date of its authentication.
Unless otherwise provided as contemplated by Section 2.3, interest on
any Security which is payable, and is punctually paid or duly provided for, on
any interest payment date shall be paid to 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 the payment of such interest.
The term "regular record date" as used with respect to any interest
payment date (except for a date for payment of defaulted interest) shall mean
the date specified as such in the terms of the Securities of any particular
Series, or, if no such date is so specified, the close of business on the
fifteenth day preceding such interest payment date, whether or not such record
date is a Business Day.
Any interest on any Security of any Series which is payable, but is
not punctually paid or duly provided for, on any interest payment date (called
"defaulted interest" for purposes of this Section) shall forthwith cease to be
payable to the Registered Holder on the relevant record date by virtue of his
having been such Holder; and such defaulted interest may be paid by the Company,
at its election in each case, as provided in clause (1) or clause (2) below:
(1) The Company may elect to make payment of any defaulted
interest to the persons in whose names any such Securities (or their
respective predecessor Securities) are registered at the close of
business on a special record date for the payment of such defaulted
interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of defaulted
interest proposed to be paid on each Security of such Series and the
date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such defaulted interest or
shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed
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payment, such money when deposited to be held in trust for the benefit
of the persons entitled to such defaulted interest as in this clause
provided. Thereupon the Trustee shall fix a special record date for
the payment of such defaulted interest in respect of Securities of
such Series which shall be not more than 15 nor less than 10 days
prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such special
record date and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such defaulted interest and
the special record date thereof to be mailed, first class postage
prepaid, to each Registered Holder at his address as it appears in the
Security register, not less than 10 days prior to such special record
date. Notice of the proposed payment of such defaulted interest and
the special record date therefor having been mailed as aforesaid, such
defaulted interest in respect of Securities of such Series shall be
paid to the persons in whose names such Securities (or their
respective predecessor Securities) are registered on such special
record date and such defaulted interest shall no longer be payable
pursuant to the following clause (2).
(2) The Company may make payment of any defaulted interest on the
Securities of any Series in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the
Securities of that Series may be listed, and upon such notice as may
be required by such exchange, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this clause, such
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
SECTION 2.8 Registration, Transfer and Exchange. The Company will
cause to be kept at each office or agency to be maintained for the purpose as
provided in Section 3.2 a register or registers in which, subject to such
reasonable regulations as it may prescribe, the Company will provide for the
registration, and the registration of the transfer, of the Securities. The
Trustee is hereby appointed Security registrar for purposes of registering, and
registering transfers of, the Securities.
Upon surrender for registration of transfer of any Security of any
Series at any such office or agency to be maintained for the purpose as provided
in Section 3.2, the Company shall execute and the Trustee shall authenticate and
make available for delivery in the name of the transferee or transferees a new
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Security or Securities of the same Series and of a like tenor and containing the
same terms (other than the principal amount thereof, if more than one Security
is executed, authenticated and delivered with respect to any security so
presented, in which case the aggregate principal amount of the executed,
authenticated and delivered Securities shall equal the principal amount of the
Security presented in respect thereof) and conditions.
All Securities issued upon any transfer or exchange of Securities
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
Every Security presented or surrendered for registration of transfer
or exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee 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 Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Securities, other than exchanges pursuant to
Sections 2.11, 8.5 or 12.3 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Security during a 15-day period prior to the day of mailing
of the relevant notice of redemption or (ii) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except, in
the case of any Security to be redeemed in part, the portion thereof not
redeemed.
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become mutilated
or defaced or be destroyed, lost or stolen, the Company shall execute, and upon
the written request of any officer of the Company, the Trustee shall
authenticate and make available for delivery a new Security of the same Series
and of like tenor and principal amount and with the same terms and conditions,
bearing a number not contemporaneously outstanding, in exchange and substitution
for the mutilated or defaced Security or in lieu of and substitution for the
Security so destroyed, lost or stolen. In every case the applicant for a
substitute Security shall furnish to the Company and to the Trustee and to any
agent of the Company or the Trustee such security or indemnity as may be
required by them to indemnify and defend and to save each of them harmless and,
in every case of destruction, loss or theft, evidence to their satisfaction of
the destruction, loss or theft of such Security and of the ownership thereof.
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Upon the issuance of any substitute Security, the Company may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith. In case any Security
which has matured or is about to mature or has been called for redemption in
full shall become mutilated or defaced or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute Security, pay or authorize the
payment of the same (without surrender thereof except in the case of a mutilated
or defaced Security); provided, however, that unless otherwise provided pursuant
to Section 2.3, the applicant for such payment shall furnish to the Company and
to the Trustee and any agent of the Company or the Trustee such security or
indemnity as any of them may require to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and the Trustee and any agent of the Company or the Trustee evidence
to their satisfaction of the destruction, loss or theft of such Security and of
the ownership thereof.
Every substitute Security of any Series issued pursuant to the
provisions of this Section by virtue of the fact that any Security is destroyed,
lost or stolen shall constitute an additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Security shall be at any
time enforceable by anyone and shall be entitled to all the benefits of (but
shall be subject to all the limitations of rights set forth in) this Indenture
equally and proportionately with any and all other Securities of such Series
duly authenticated and delivered hereunder. All Securities shall be held and
owned upon the express condition that, to the extent permitted by law, the
foregoing provisions are exclusive with respect to the replacement or payment of
mutilated, defaced, destroyed, lost or stolen Securities and shall preclude any
and all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
SECTION 2.10 Cancellation of Securities; Destruction Thereof. All
Securities surrendered for payment, redemption, registration of transfer or
exchange, or for credit against any payment in respect of a sinking or analogous
fund, shall, if surrendered to the Company or any agent of the Company or the
Trustee, be delivered to the Trustee for cancellation or, if surrendered to the
Trustee, shall be cancelled by it; and no Securities shall be issued in lieu
thereof, except as expressly permitted by any of the provisions of this
Indenture. The Company may at any time deliver to the Trustee for cancellation
any Securities previously authenticated hereunder which the Company has not
issued and sold and all Securities so delivered shall be promptly cancelled by
the Trustee. The Trustee shall return cancelled Securities held by it to the
Company. If the Company shall acquire any of the Securities, such acquisition
shall not
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operate as a redemption or satisfaction of the indebtedness represented by such
Securities unless and until the same are delivered to the Trustee for
cancellation.
SECTION 2.11 Temporary Securities. Pending the preparation of
definitive Securities for any Series, the Company may execute and the Trustee
shall authenticate and make available for delivery temporary Securities for such
Series (printed, lithographed, typewritten or otherwise reproduced, in each case
in form reasonably acceptable to the Trustee). Temporary Securities of any
Series may be issued of any authorized denomination, and substantially in the
form of the definitive Securities of such Series but with such omissions,
insertions and variations as may be appropriate for temporary Securities, all as
may be determined by the Company with the reasonable concurrence of the Trustee.
Temporary Securities may contain such reference to any provisions of this
Indenture as may be appropriate. Every temporary Security shall be executed by
the Company and be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the definitive
Securities. Without unreasonable delay the Company shall execute and shall
furnish definitive securities of such Series and thereupon temporary Securities
of such Series may be surrendered in exchange therefor without charge at each
office or agency to be maintained by the Company for that purpose pursuant to
Section 3.2, and the Trustee shall authenticate and make available for delivery
in exchange for such temporary Securities of such Series a like aggregate
principal amount of definitive Securities of the same Series of authorized
denominations. Until so exchanged, the temporary Securities of any Series shall
be entitled to the same benefits under this Indenture as definitive Securities
of such Series.
SECTION 2.12 Securities in Global Form. If Securities of a Series
are issuable in global form, as specified as contemplated by Section 2.3, then,
notwithstanding clause (10) of Section 2.3 and the provisions of Section 2.7,
such Security shall represent such of the Outstanding Securities of such series
as shall be specified therein and may provide that it shall represent the
aggregate amount of Outstanding Securities from time to time endorsed thereon
and that the aggregate amount of Outstanding Securities represented thereby may
from time to time be reduced to reflect exchanges. Any endorsement of a Security
in global form to reflect the amount, or any increase or decrease in the amount,
of Outstanding Securities represented thereby may be made by the Trustee in such
manner and upon instructions given by such Person or Persons as shall be
specified therein or in the company order to be delivered to the Trustee
pursuant to Section 2.4. Subject to the provisions of Section 2.4, the Trustee
shall deliver and redeliver any Security in definitive global form in the manner
and upon written instructions given by the Person or Persons specified therein
or in the applicable company order. If a company order pursuant to Section 2.4
has been, or simultaneously is, delivered,
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any instructions by the Company with respect to endorsement or delivery or
redelivery of a Security in global form shall be in writing but need not comply
with Section 11.5 and need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 2.6 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 11.5 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 2.6.
Notwithstanding the provisions of Sections 2.3 and 2.7, unless
otherwise specified as contemplated by Section 2.3, payment of principal of and
any interest on any Security in definitive global form shall be made to the
Person or Persons specified therein.
Except as provided in the preceding paragraph, the Company, the
Trustee and any agent of the Company and the Trustee shall treat a Person as the
Holder of such principal amount of outstanding Securities represented by a
definitive global Security as shall be specified in a written statement of the
Holder of such definitive global Security.
ARTICLE THREE
COVENANTS OF THE COMPANY
SECTION 3.1 Payment of Principal and Interest. The Company
covenants and agrees for the benefit of each particular Series of Securities
that it will duly and punctually pay or cause to be paid the principal of, and
interest on, each of the Securities of such Series in accordance with the terms
of the Securities of such Series and this Indenture.
SECTION 3.2 Offices for Payment, etc. So long as any of the
Securities remain outstanding, the Company will maintain the following for each
Series: an office or agency (a) where the Securities may be presented for
payment or conversion, (b) where the Securities may be presented for
registration of transfer and for exchange as in this Indenture provided, and (c)
where notices and demands to or upon the Company in respect of the Securities or
of this Indenture may be served. The Company will give to the Trustee written
notice of the location of any such office or agency and of any change of
location thereof. In case the Company shall fail to so designate or maintain any
such office or agency or shall fail to give such notice of the location or of
any change in the location thereof, presentations and demands may be made and
notices may be served at the Corporate Trust Office. Unless otherwise
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specified pursuant to Section 2.3, the Trustee is hereby appointed Paying Agent.
SECTION 3.3 Paying Agents. Whenever the Company shall appoint a
Paying Agent other than the Trustee with respect to the Securities of any
Series, it will cause such Paying Agent to execute and deliver to the Trustee an
instrument in which such Agent shall agree with the Trustee, subject to the
provisions of this Section,
(a) that it will hold all sums received by it as such Agent for the
payment of the principal of or interest on the Securities of such Series
(whether such sums have been paid to it by the Company or by any other obligor
on the Securities of such Series) in trust for the benefit of the Holders of the
Securities of such Series or of the Trustee, and upon the occurrence of an Event
of Default and upon the written request of the Trustee, pay over all such sums
received by it to the Trustee, and
(b) that it will give the Trustee notice of any failure by the Company
(or by any other obligor on the Securities of such series) to make any payment
of the principal of or interest on the Securities of such Series when the same
shall be due and payable.
The Company will, on or prior to each due date of the principal of or
interest on the Securities of such Series, deposit in a timely manner with the
Paying Agent a sum sufficient to pay such principal or interest so becoming due,
and (unless such Paying Agent is the Trustee) the Company will promptly notify
the Trustee of any failure to take such action.
If the Company shall act as its own Paying Agent with respect to the
Securities of any Series, it will, on or before each due date of the principal
of or interest on the Securities of such Series, set aside, segregate and hold
in trust for the benefit of the Holders of the Securities of such Series a sum
sufficient to pay such principal or interest so becoming due. The Company will
promptly notify the Trustee of any failure to take such action.
Anything in this Section to the contrary notwithstanding, the Company
may at any time, for the purpose of obtaining a satisfaction and discharge with
respect to one or more or all series of Securities hereunder, or for any other
reason, pay or cause to be paid to the Trustee all sums held in trust for any
such Series by the Company or any Paying Agent hereunder, as required by this
Section, such sums to be held by the Trustee upon the trusts herein contained.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 10.3 and 10.4.
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SECTION 3.4 Written Statement to Trustee. The Company shall deliver
to the Trustee, within 120 days after the end of each fiscal year of the Company
ending after the date hereof, a brief certificate (which need not comply with
Section 11.5) from the principal executive, financial or accounting officer of
the Company as to his or her knowledge, after due inquiry, of the Company's
compliance with all conditions and covenants under the Indenture (such
compliance to be determined without regard to any period of grace or requirement
of notice provided under the Indenture).
SECTION 3.5 Limitation Upon Liens. So long as any Securities of any
Series have been issued and remain Outstanding, the Company will not itself, and
will not permit any Restricted Subsidiary to, incur, issue, assume or guarantee
any indebtedness, whether or not evidenced by notes, bonds, debentures or other
similar instruments for money borrowed (being hereinafter in this Section 3.5
and Section 3.6 called "Debt"), secured by pledge of, or mortgage or other lien
(including lease purchase, installment purchase and other title retention
financing arrangements) on or in respect of any Principal Property owned by the
Company or any Restricted Subsidiary, or on any shares of stock or Debt of any
Restricted Subsidiary (such pledges, mortgages and other liens being hereinafter
in this Section 3.5 and in Section 3.6 called "Liens"), without effectively
providing that the Securities (together with, if the Company shall so determine,
any other Debt of the Company or such Restricted Subsidiary then existing or
thereafter created which is not subordinate to the Securities) shall be secured
equally and ratably with (or prior to) such secured Debt (for the purpose of
providing such equal and ratable security, the principal amount of any
Securities which are Original Issue Discount Securities shall mean and shall not
be less than that principal amount which could be declared to be due and payable
pursuant to Section 5.1 on the date of the making of such effective provision,
and the extent of such equal and ratable security shall be adjusted to the
extent permitted by law, as and when said principal amount changes over time
pursuant to Section 5.1 and any other provision hereof), so long as such secured
Debt shall be so secured, unless, after giving effect thereto, the aggregate
principal amount of all such secured Debt then outstanding plus all Attributable
Debt of the Company and its Restricted Subsidiaries in respect of sale and
leaseback transactions (as defined in Section 3.6) entered into after the date
of the first issuance of any Securities of such Series under this Indenture
(other than sale and leaseback transactions permitted by Section 3.6(b)) would
not exceed an amount equal to 10% of Consolidated Net Tangible Assets; provided,
however, that nothing contained in this Section shall prevent, restrict or apply
to, and there shall be excluded from secured Debt in any computation under this
Section, Debt secured by:
(a) With respect to each Series of Securities, Liens existing as
of the date of the issuance of Securities of such
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Series on any property or assets owned or leased by the Company or any
Restricted Subsidiary;
(b) Liens on property or assets of, or on any shares of stock or Debt of,
any corporation existing at the time such corporation becomes a Restricted
Subsidiary;
(c) Liens on any property or assets or shares of stock or Debt existing at
the time of acquisition thereof (including acquisition through merger or
consolidation) or to secure the payment of all or any part of the purchase price
or construction cost thereof or to secure any Debt incurred prior to, at the
time of or within 120 days after the later of acquisition of such property or
assets or shares of stock or Debt or the completion of any such construction and
the commencement of operation of such property, for the purpose of financing all
or any part of the purchase price or construction cost thereof;
(d) Liens on any property or assets to secure all or any part of the cost
of development, operation, construction, alteration, repair or improvement of
all or any part of such property or assets, or to secure Debt incurred prior to,
at the time of or within 120 days after the completion of such development,
operation, construction, alteration, repair or improvement, whichever is later,
for the purpose of financing all or any part of such cost;
(e) Liens in favor of, or which secure Debt owing to, the Company or a
Restricted Subsidiary;
(f) Liens arising from the assignment of moneys due and to become due under
contracts between the Company or any Restricted Subsidiary and the United States
of America, any State, Territory or possession thereof or any agency,
department, instrumentality or political subdivision of any thereof; or Liens in
favor of the United States of America, any State, Commonwealth, Territory or
possession thereof or any agency, department, instrumentality or political
subdivision of any thereof, to secure progress, advance or other payments
pursuant to any contract or provision of any statute, or pursuant to the
provisions of any contract not directly or indirectly in connection with
securing Debt;
(g) any deposit or pledge as security for the performance of any bid,
tender, contract, lease or undertaking not directly or indirectly in connection
with the securing of Debt; any deposit or pledge with any governmental agency
required or permitted to qualify the Company or any Restricted Subsidiary to
conduct business, to maintain self-insurance or to obtain the benefits of any
law pertaining to worker's compensation, unemployment insurance, old age
pensions, social security or similar matters, or to obtain any stay or
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discharge in any legal or administrative proceedings; deposits or pledges
to obtain the release of mechanics', worker's, repairmen's, materialmen's or
warehousemen's liens on the release of property in the possession of a common
carrier; any security interest created in connection with the sale, discount or
guarantee of notes, chattel mortgages, leases, accounts receivable, trade
acceptances or other paper, or contingent repurchase obligations, arising out of
sales of merchandise in the ordinary course of business; liens for taxes not yet
due and payable or being contested in good faith; or other deposits or pledges
similar to those referred to in this subparagraph (g);
(h) Liens arising by reason of any attachment, judgment, decree or order of
any court or other governmental authority, so long as any appropriate legal
proceedings which may have been initiated for review of such attachment,
judgment, decree or order shall not have been finally terminated or so long as
the period within which such proceedings may be initiated shall not have
expired;
(i) Liens created after the date of this Indenture on property leased to or
purchased by the Company or any Restricted Subsidiary after that date and
securing, directly or indirectly, obligations issued by a State, a Territory or
a possession of the United States of America, or any political subdivision of
any of the foregoing, or the District of Columbia, to finance the cost of
acquisition or cost of construction of such property; and
(j) any extension, renewal, substitution or replacement (or successive
extensions, renewals, substitutions or replacements), as a whole or in part, of
any Lien referred to in subparagraphs (a) through (i) above or the Debt secured
thereby; provided that (1) such extension, renewal, substitution or replacement
Lien shall be limited to all or any part of the same property or assets, shares
of stock or Debt that secured the Lien extended, renewed, substituted or
replaced (plus improvements on such property and any other property or assets
not then constituting a Principal Property) and (2) to the extent, if any, that
the Debt secured by such Lien at such time is increased, the amount of such
increase shall not be excluded from secured Debt under any computation under
this Section.
Debt created by the Company or any Restricted Subsidiary shall not be
cumulated with a guarantee of the same Debt by the Company or any other
Restricted Subsidiary for the same financial obligation.
SECTION 3.6 Limitation Upon Sales and Leasebacks. As long as any
Securities of a Series have been issued and are Outstanding, the Company will
not itself, and will not permit any
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Restricted Subsidiary to, enter into any arrangement after the date of this
Indenture with any bank, insurance company or other lender or investor (not
including the Company or any Restricted Subsidiary) providing for the leasing by
the Company or any such Restricted Subsidiary for a period, including renewals,
in excess of three years of any Principal Property which was or is owned by the
Company or such Restricted Subsidiary which has been or is to be sold or
transferred, more than 120 days after such property has been owned by the
Company or such Restricted Subsidiary and completion of construction and
commencement of full operation thereof, to such lender or investor or to any
Person to whom funds have been or are to be advanced by such lender or investor
on the security of such Principal Property (herein referred to as a "sale and
leaseback transaction") unless either:
(a) The Attributable Debt of the Company and its Restricted
Subsidiaries in respect of such sale and leaseback transaction and all
other sale and leaseback transactions entered into after the date of the
first issuance of any Securities of such Series (other than sale and
leaseback transactions permitted by Section 3.6(b))plus the aggregate
principal amount of Debt secured by Liens on Principal Properties then
outstanding (excluding any such Debt secured by Liens covered in
subparagraphs (a) through (j) of the first paragraph of Section 3.5)
without equally and ratably securing the Securities of any Series then
outstanding, would not exceed 10% of Consolidated Net Tangible Assets, or
(b) The Company, within 120 days after the sale or transfer, applies
an amount equal to the value of the Principal Property so sold and leased
back at the time of entering into such arrangement (as determined by the
Company) to (x) the retirement of Funded Debt (including Securities of any
Series constituting Funded Debt) of the Company (and any redemption of
Securities of any Series pursuant to this provision shall, if provided in
the terms of such particular Series of Securities, not be deemed to
constitute a refunding operation or anticipated refunding operation
pursuant to any redemption provision of such Series otherwise prohibiting
redemption when such would constitute a refunding operation or anticipated
refunding operation) or (y) the acquisition of properties, facilities or
equipment used for general operating purposes for the Company or any
Restricted Subsidiary; provided, that the amount to be applied to the
retirement of Funded Debt of the Company pursuant to this subparagraph (b)
shall be reduced by (i) the principal amount of any Securities (the
principal amount of any Securities which are Original Issue Discount
Securities shall mean and shall not be less than that principal amount
which could then be declared to be due and payable pursuant to Section 5.1)
delivered within 120 days after such sale or transfer to the Trustee for
redemption and cancellation, and (ii) the principal amount of Funded Debt
(similarly determined with respect to Funded Debt that would
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constitute an Original Issue Discount Security within the meaning of this
Indenture), other than Securities, voluntarily retired by the Company
within 120 days after such sale, whether or not any such retirement of
Funded Debt covered by subclause (i) or (ii) above shall be specified as
being made pursuant to this subparagraph (b). Notwithstanding the
foregoing, no retirement referred to in this subparagraph (b) may be
effected by payment at maturity or pursuant to any mandatory sinking fund
payment or any mandatory prepayment provision.
Notwithstanding the foregoing, where the Company or any Restricted
Subsidiary is the lessee in any sale and leaseback transaction, Attributable
Debt shall not include any Debt resulting from the guarantee by the Company or
any other Restricted Subsidiary of the lessee's obligation thereunder.
SECTION 3.7 Waiver of Certain Covenants. The Company may omit in
any particular instance to comply with any term, provision or condition set
forth in Section 3.5 or 3.6 with respect to the Securities of any Series if
before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities of such Series shall either waive
such compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
SECTION 3.8 Seniority of Securities. The Company covenants and
agrees that the indebtedness represented by the Securities is hereby expressly
made senior to any indebtedness represented by any securities now outstanding or
ever issued or to be issued pursuant to the Fiscal Agency Agreement, dated as of
January 16, 1990, between the Company and Union Bank of Switzerland, as fiscal
agent, or any amendment or supplement thereto.
ARTICLE FOUR
SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
SECTION 4.1 Company to Furnish Trustee Information as to Names and
Addresses of Securityholders. The Company covenants and agrees that it will
furnish or cause to be furnished to the Trustee a list in such form as the
Trustee may reasonably require of the names and addresses of the Holders of the
Securities of each Series:
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(a) semiannually and not more than 15 days after each record date for
the payment of interest on such Securities, as hereinabove specified, as of
such record date, and
(b) at such other times as the Trustee may reasonably request in
writing, within 30 days after receipt by the Company of any such request,
such list to be as of a date not more than 15 days prior to the time such
information is furnished,
provided that if and so long as the Trustee shall be the Security registrar for
such Series, such list shall not be required to be furnished.
SECTION 4.2 Preservation and Disclosure of Security-holders' Lists. (a)
The Trustee shall preserve, in as current a form as is reasonably practicable,
all information as to the names and addresses of the Holders of each Series of
Securities contained in the most recent list furnished to it as provided in
Section 4.1 or maintained by the Trustee in its capacity as Security registrar
for such Series, if so acting. The Trustee may destroy any list furnished to it
as provided in Section 4.1 upon receipt of a new list so furnished.
(b) In case three or more Holders of Securities of any Series
(hereinafter referred to as "applicants") apply in writing to the Trustee and
furnish to the Trustee 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 of Securities of a particular Series (in which
case the applicants must all hold Securities of such Series) or with Holders of
all Securities with respect to their rights under this Indenture or under such
Securities and such application is accompanied by a copy of the form of proxy or
other communication which such applicants propose to transmit, then the Trustee
shall, within five business days after the receipt of such application, at its
election, either
(i) afford to such applicants access to the information preserved at
the time by the Trustee in accordance with the provisions of subsection (a) of
this Section 4.2, or
(ii) inform such applicants as to the approximate number of Holders of
Securities of such Series or all Securities, as the case may be, whose names and
addresses appear in the information preserved at the time by the Trustee, in
accordance with the provisions of subsection (a) of this Section, and as to the
approximate cost of mailing to such Securityholders the form of proxy or other
communication, if any, specified in such application.
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If the Trustee shall elect not to afford to such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Securityholder of such Series or all Securities, as the case may
be, whose name and address appear in the information preserved at the time by
the Trustee in accordance with the provisions of subsection (a) of this Section,
a copy of the form of proxy or other communication which is specified in such
request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender, the
Trustee shall mail to such applicants and file with the Commission together with
a copy of the material to be mailed, a written statement to the effect that, in
the opinion of the Trustee, such mailing would be contrary to the best interests
of the Holders of Securities of such Series or all Securities, as the case may
be, or could be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after opportunity for a
hearing upon the objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or if, after the entry
of such order sustaining one or more of such objections, the Commission shall
find, after notice and opportunity for hearing, that all the objections so
sustained have been met, and shall enter an order so declaring, the Trustee
shall mail copies of such material to all such Securityholders with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.
(c) Each and every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of the Company or the Trustee shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the Holders of Securities in accordance with the provisions of subsection (b)
of this Section, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under such subsection (b).
SECTION 4.3 Reports by the Company. The Company covenants:
(a) to file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports and
of the information, documents, and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended, or if the Company is not required to file information,
documents, or reports pursuant to either of such
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Sections, then to file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such of
the supplementary and periodic information, documents, and reports which may be
required pursuant to Section 13 of the Securities Exchange Act of 1934, as
amended, in respect of a security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and regulations;
(b) to file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such additional
information, documents, and reports with respect to compliance by the Company
with the conditions and covenants provided for in this Indenture as may be
required from time to time by such rules and regulations; and
(c) to transmit by mail to the Holders of Securities in the manner and to
the extent required by Sections 6.6 and 11.4, within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents, and
reports required to be filed by the Company pursuant to subsections (a) and (b)
of this Section as may be required to be transmitted to such Holders by rules
and regulations prescribed from time to time by the Commission.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default. "Event of Default" with respect to Securities of any Series
wherever used herein, means any one of the following events which shall have
occurred and be continuing (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body) unless it is either
inapplicable to a particular Series or it is specifically deleted or modified in
or pursuant to the supplemental indenture or resolution of the Board of
Directors establishing such Series of Securities or in the form of Security for
such Series:
(a) default in the payment of any installment of interest upon any of
the Securities of such Series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; or
(b) default in the payment of all or any part of the principal of any
of the Securities of such Series as and when
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the same shall become due and payable, either at maturity, upon any
redemption, by declaration or otherwise; or
(c) default in the performance or breach of any covenant or warranty of the
Company contained in the Securities of such Series or in this Indenture (other
than a covenant or warranty a default in the performance of which or breach of
which is elsewhere in this Section specifically dealt with or which has
expressly been included in this Indenture solely for the benefit of a Series of
Securities other than that Series), and continuance of such default or breach
for a period of 90 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the Outstanding Securities of
that Series, a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" hereunder;
or
(d) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 90 consecutive days; or
(e) the commencement by the Company of a voluntary case or proceeding under
any applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a decree or order for relief in
respect of the Company in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar law or
to the commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or the
consent by it to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of the Company or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors; or
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(f) any other Event of Default provided with respect to Securities of
such Series in the supplemental indenture or resolution of the Board of
Directors establishing such Series.
If an Event of Default occurs and is continuing with respect to the Securities
of any Series, then and in each and every such case, unless the principal of all
Securities of such Series shall have already become due and payable, either the
Trustee for such Series or the Holders of not less than 25% in aggregate
principal amount at maturity of the Securities of such Series then Outstanding
hereunder, by notice in writing to the Company (and to the Trustee if given by
such Holders), may declare the principal of all the Securities of such Series to
be due and payable immediately, and upon any such declaration the same shall
become and shall be immediately due and payable. This provision, however, is
subject to the condition that if at any time after the principal of the
Securities of such Series shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest, if any, upon all the Securities of such Series and the principal of
any and all Securities of such Series which shall have become due otherwise than
by such acceleration (with interest upon such principal and, to the extent that
payment of such interest is enforceable under applicable law, upon overdue
installments of interest, at the rate borne by the Securities of such Series to
the date of such payment or deposit) and in Dollars such amount as shall be
sufficient to cover reasonable compensation to the Trustee, its agents,
attorneys and counsel and all other expenses and liabilities incurred, and all
advances made, by the Trustee, its agents, attorneys and counsel and any and all
defaults under this Indenture, other than the nonpayment of the principal of
Securities of such Series which shall have become due by such acceleration,
shall have been remedied, then and in every such case the Holders of a majority
in aggregate principal amount at maturity of the Securities of such Series then
Outstanding, by written notice to the Company and to the Trustee for the
Securities of such Series, may waive all defaults and rescind and annul such
declaration and its consequences; but no such waiver or rescission and annulment
shall extend to or shall affect any subsequent default or shall impair any right
consequent thereon.
SECTION 5.2 Collection of Indebtedness By Trustee; Trustee May
Prove Debt. The Company covenants that (a) in case default shall be made in the
payment of any installment of interest on any of the Securities of any Series
when such interest shall have become due and payable, and such default shall
have continued for a period of 30 days, or (b) in case default shall be made in
the payment of all or any part of the principal of any of the Securities of any
Series when the same shall have become due and payable, whether upon maturity of
the Securities of such Series or upon any redemption or by declaration or
otherwise, then upon
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demand of the Trustee for the Securities of such Series, the Company will pay to
the Trustee for the Securities of such Series for the benefit of the Holders of
the Securities of such Series the whole amount that then shall have become due
and payable on all Securities of such Series for principal of or interest, as
the case may be (with interest to the date of such payment upon the overdue
principal and, to the extent that payment of such interest is enforceable under
applicable law, on overdue installments of interest at the same rate as the rate
of interest specified in the Securities of such Series); and in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including reasonable compensation to, and all expenses
and liabilities incurred and all advances made by, the Trustee and each
predecessor Trustee and their respective agents, attorneys and counsel.
Until such demand is made by the Trustee, the Company may pay the
principal of and interest on the Securities of any Series to the persons
entitled thereto, whether or not the principal of and interest on the Securities
of such Series are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee for the Securities of such series, in its own name and as
trustee of an express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the sums so due
and unpaid, and may prosecute any such action or proceedings to judgment or
final decree, and may enforce any such judgment or final decree against the
Company or other obligor upon such Securities and collect in the manner provided
by law out of the property of the Company or other obligor upon such Securities,
wherever situated, the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the Company or
any other obligor upon the Securities under Title 11 of the United States Code
or any other applicable Federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Company or its property or such other obligor, or in
case of any other comparable judicial proceedings relative to the Company or
other obligor under the Securities of any Series, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of any Securities shall then be due and payable as therein
expressed (or by declaration or otherwise, and irrespective of whether the
Trustee shall have made any demand pursuant to the provisions of this Section,
shall be entitled and empowered, by intervention in such proceedings or
otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Securities of any
Series, and to file such other papers
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or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for reasonable compensation to, and all
expenses and liabilities incurred and all advances made by, the Trustee and
each predecessor Trustee, and their respective agents, attorneys and
counsel) and of the Securityholders allowed in any judicial proceedings
relative to the Company or other obligor upon all Securities of any Series,
or to the creditors or property of the Company or such other obligor, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Securityholders and of the Trustee on their
behalf; and any trustee, receiver, liquidator, custodian or other similar
official is hereby authorized by each of the Holders to make payments to
the Trustee for the Securities of such Series, and, in the event that such
Trustee shall consent to the making of payments directly to the
Securityholders, to pay to such Trustee such amounts as shall be sufficient
to cover reasonable compensation to, and all expenses and liabilities
incurred and all advances made by, such Trustee, each predecessor Trustee
and their respective agents, attorneys and counsel and all other amounts
due to such Trustee or any predecessor Trustee pursuant to Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities of any Series or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Securityholder in any such
proceeding.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee for the Securities
of such Series without the possession of any of the Securities of such Series or
the production thereof at any trial or other proceedings relative thereto, and
any such action or proceedings instituted by the Trustee shall be brought in its
own name as trustee of an express trust, and any recovery of judgment, subject
to the payment of the expenses, disbursements and compensation of the Trustee,
each predecessor Trustee and their respective agents and attorneys, shall be for
the ratable benefit of the Holders of the Securities in respect of which such
action was taken.
In any proceedings brought by the Trustee for the Securities of such
Series (and also any proceedings involving the interpretation of any provision
of this Indenture to which the Trustee shall be a party), the Trustee shall be
held to represent all the Holders of the Securities in respect of which such
action
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was taken, and it shall not be necessary to make any Holders of such Securities
parties to any such proceedings.
SECTION 5.3 Application of Proceeds. Any moneys collected by the
Trustee for the Securities of such Series pursuant to this Article in respect of
the Securities of any series shall be applied in the following order at the date
or dates fixed by such Trustee and, in case of the distribution of such moneys
on account of principal or interest, upon presentation of the several Securities
in respect of which moneys have been collected and stamping (or otherwise
noting) thereon the payment, or issuing Securities of such Series in reduced
principal amounts in exchange for the presented Securities of like Series if
only partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses applicable to such Series
in respect of which moneys have been collected, including reasonable
compensation to, and all expenses and liabilities incurred and all advances
made by, the Trustee and each predecessor Trustee and their respective
agents and attorneys and all other amounts due to the Trustee or any
predecessor Trustee pursuant to Section 6.7;
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest on the Securities of such Series in respect of
which moneys have been collected, such payments to be made ratably to the
persons entitled thereto, without discrimination or preference, according
to the amounts then due and payable on such Securities for principal and
interest; and
THIRD: To the payment of the remainder, if any, to the Company or any
other Person lawfully entitled thereto.
SECTION 5.4 Restoration of Rights on Abandonment of Proceedings. In
case the Trustee for the Securities of any Series shall have proceeded to
enforce any right under this Indenture and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Trustee, then and in every such case, subject to the
determination in any such proceeding, the Company and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company, the Trustee and the Securityholders
shall continue as though no such proceedings had been taken.
SECTION 5.5 Limitations on Suits by Securityholders. No Holder of
any Security of any Series shall have any right by virtue or by availing of any
provision of this Indenture to institute any action or proceeding at law or in
equity or in bankruptcy or otherwise upon or under or with respect to this
Indenture, or for the appointment of a trustee, receiver, liquidator, custodian
or other similar official or for any other
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remedy hereunder, unless such Holder previously shall have given to the Trustee
written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the Holders of not less than 25% in
aggregate principal amount of the Securities of such Series then Outstanding
shall have made written request upon the Trustee to institute such action or
proceedings in its own name as trustee hereunder and shall have offered to the
Trustee indemnity reasonable to it as it may require, against the costs,
expenses and liabilities to be incurred therein or thereby and the Trustee for
60 days after its receipt of such notice, request and offer of indemnity shall
have failed to institute any such action or proceeding and no direction
inconsistent with such written request shall have been given to the Trustee
during such 60-day period by Holders of a majority in principal amount of the
Securities of such Series then Outstanding; it being understood and intended,
and being expressly covenanted by the taker and Holder of every Security with
every other taker and Holder of a Security and the Trustee, that no one or more
Holders of Securities of any Series shall have any right in any manner whatever,
by virtue or by availing of any provision of this Indenture to affect, disturb
or prejudice the rights of any other such Holder of Securities, or to obtain or
seek to obtain priority over or preference to any other such Holder or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal, ratable and common benefit of all Holders of Securities of the
applicable Series.
SECTION 5.6 Unconditional Right of Securityholders to Institute
Certain Suits. Notwithstanding any provision in this Indenture and any provision
of any Security, the right of any Holder of any Security to receive payment of
the principal of and (subject to Section 2.7) interest on such Security at the
respective rates, in the respective amount on or after the respective due dates
expressed in such Security, or to institute suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
SECTION 5.7 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in Section 2.9 and Section 5.5, no right
or remedy herein conferred upon or reserved to the Trustee or to the
Securityholders 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.
No delay or omission of the Trustee or of any Securityholder to
exercise any right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power or shall be
construed to be a waiver of any
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such Event of Default or an acquiescence therein; and, subject to Section 5.5,
every power and remedy given by this Indenture or by law to the Trustee or to
the Securityholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or the Securityholders.
SECTION 5.8 Control by Securityholders. The Holders of a majority
in aggregate principal amount of the Securities of each Series affected (with
each Series treated as a separate class) at the time Outstanding shall have the
right to direct the time, method, and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee with respect to the Securities of such Series by this Indenture;
provided that such direction shall not be otherwise than in accordance with law
and the provisions of this Indenture and provided further that the Trustee shall
have the right to decline to follow any such direction if the Trustee shall
determine that the action or proceedings so directed would involve the Trustee
in personal liability or if the Trustee in good faith shall so determine that
the actions or forbearances specified in or pursuant to such direction would be
unduly prejudicial to the interests of Holders of the Securities of all Series
so affected not joining in the giving of said direction, it being understood
that the Trustee shall have no duty to ascertain whether or not such actions or
forebearances are unduly prejudicial to such Holders.
SECTION 5.9 Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of the Securities of such Series at the time
outstanding may on behalf of the Holders of all the Securities of such Series
waive any past default hereunder or its consequences, except a default in the
payment of the principal of or interest on any of the Securities of such Series.
Upon any such waiver, such default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 5.10 Right of Court to Require Filing of Undertaking to Pay
Costs. All parties to this Indenture agree, and each Holder of any Security, by
his acceptance thereof, shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made
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by such party litigant; but the provisions of this Section shall not apply to
any suit instituted by the Trustee, to any suit instituted by any Securityholder
or group of Securityholders of any Series holding in the aggregate more than 10%
in aggregate principal amount of the Securities of such Series, or to any suit
instituted by any Securityholder for the enforcement of the payment of the
principal of or interest on any Security on or after the due date expressed in
such Security.
SECTION 5.11 Suits for Enforcement. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing with respect
to the Securities of any Series, the Trustee shall exercise the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in its exercise as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default with respect
to the Securities of any Series:
(1) the Trustee need perform only those duties that are specifically
set forth in this Indenture and the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Indenture, and no implied covenants or obligations shall be
read into the document against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any statements, certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall
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examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph (c) does not limit the effect of paragraph (b) of
this Section 6.1;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.8.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 6.1.
(e) No provision of this Indenture shall require the Trustee to extend
or risk its own funds or otherwise incur any financial liability unless it
receives indemnity satisfactory to it against any loss, liability or expense.
(f) Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
SECTION 6.2 Rights of Trustee.
(a) The Trustee may rely, and shall be protected in relying, upon on
any document believed by it to be genuine and to have been signed or presented
by the proper person. The Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel.
(c) Subject to the provisions of Section 6.1(c), the Trustee shall not
be liable for any action it takes or omits to take in good faith which it
believes to be authorized or within its rights or powers.
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(d) Before the Trustee acts or refrains from acting the Trustee may
consult with counsel of its selection and the advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon in accordance with such advice or Opinion of Counsel.
(e) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee indemnity reasonable to it against the costs, expenses
and liabilities which might be incurred by it in compliance with such request or
direction.
(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
(g) Prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all Events of Default, the Trustee shall not be bound
to make any investigation into the facts or matters stated in any resolution,
Officer's Certificate, or other certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, appraisal, bond, debenture,
note, coupon, security, or other paper or document unless requested in writing
so to do by the Holders or not less than a majority in aggregate principal
amount of the Securities then Outstanding; provided that, if the payment within
a reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require reasonable indemnity
against such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such examination shall be paid by the Company or,
if advanced by the Trustee, shall be repaid by the Company upon demand.
(h) the Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(i) the Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions or agreements on the part
of the Company, except as otherwise set forth herein, but the Trustee may
require of the Company full information and advice as to the performance of the
covenants, conditions and agreements contained herein and shall be entitled in
connection herewith to examine the books, records and premises of the Company.
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(j) the permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty and the Trustee shall not be
answerable for other than its negligence or willful default.
(k) except for (i) a default under Sections 5.1(a) or (b) hereof, or
(ii) any other event of which the Trustee has "actual knowledge" and which
event, with the giving of notice or the passage of time or both, would
constitute an Event of Default under this Indenture, the Trustee shall not be
deemed to have notice of any default or event unless specifically notified in
writing of such event by the Company or the Holders of not less than 25% in
aggregate principal amount of the Securities Outstanding; as used herein, the
term "actual knowledge" means the actual fact or statement of knowing, without
any duty to make any investigation with regard thereto.
SECTION 6.3 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, registrar or co-
registrar may do the same with like rights. However, the Trustee must comply
with Sections 6.10 and 6.11.
SECTION 6.4 Trustee's Disclaimer. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use of the proceeds
from the Securities, it shall not be responsible for any statement in the
registration statement for the Securities under the Securities Act of 1933, as
amended, or in the Indenture or the Securities (other than its certificate of
authentication).
SECTION 6.5 Notice of Defaults. If a default occurs and is
continuing with respect to any Securities of any Series and if the Trustee has
actual knowledge of such default, the Trustee shall give to each Securityholder
of such Series notice of the default within 90 days after such default occurs.
Except in the case of a default described in Section 5.1(a) or (b), the Trustee
may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of Securityholders of such Series.
SECTION 6.6 Reports by Trustee to Holders. Within 60 days after
each July 1 beginning with the July 1 following the date of this Indenture, the
Trustee shall mail to each Securityholder of any Series and each other person
specified in TIA Section 313(c) a brief report dated as of such July 1 that
complies with TIA Section 313(a) to the extent required thereby. The Trustee
also shall comply with TIA Section 313(b).
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A copy of each report at the time of its mailing to Securityholders of
any Series shall be filed with the Commission and each securities exchange on
which the Securities of any Series are listed. The Company agrees promptly to
notify the Trustee whenever the Securities of any Series become listed on any
securities exchange and of any delisting thereof.
SECTION 6.7 Compensation and Indemnity. The Company agrees:
(a) to pay to the Trustee from time to time, and the Trustee shall be
entitled to, in Dollars such compensation as shall be agreed to in writing
between the Company and the Trustee for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust);
(b) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses, advances and disbursements of its agents and
counsel), except to the extent any such expense, disbursement or advance
may be attributable to its negligence or willful misconduct; and
(c) to indemnify the Trustee in Dollars for, and to hold it harmless
against, any loss, liability or expense arising out of or in connection
with the acceptance or administration of this trust or the performance of
its duties hereunder, including the costs and expenses of defending itself
against or investigating any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except to
the extent that any such loss, liability or expense may be attributable to
its negligence or willful misconduct.
As security for the performance of the obligations of the Company in
this Section 6.7, the Trustee shall have a lien prior to the Securities on all
money or property held or collected by the Trustee, except that held in trust to
pay the principal of or interest, if any, on particular Securities.
"Trustee" for purpose of this Section 6.7 includes any predecessor
trustee, provided that the negligence or bad faith of any Trustee shall not be
attributable to any other Trustee.
The Company's payment obligations pursuant to this Section 6.7 shall
constitute additional indebtedness hereunder and shall survive the discharge of
this Indenture. When the Trustee incurs expenses after the occurrence of a
default specified in Sections 5.1(d) and 5.1(e), such expenses (including
reasonable
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fees and expenses of its counsel) are intended to constitute expenses of
administration under bankruptcy law.
SECTION 6.8 Replacement of Trustee. The Trustee may resign at any
time with respect to Securities of one or more Series by so notifying the
Company; provided, however, no such resignation shall be effective until a
successor Trustee has accepted its appointment pursuant to this Section 6.8. The
Holders of a majority in aggregate principal amount of the Outstanding
Securities of any Series may remove the Trustee with respect to such Series at
the time outstanding by so notifying the Trustee and the Company. The Company
shall remove the Trustee if:
(1) the Trustee fails to comply with Section 6.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or its
property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, with respect to the Securities of one or more
Series, the Company shall promptly appoint, by resolution of its Board of
Directors, a successor Trustee with respect to the Securities of such Series.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture with respect to the Securities of such Series. The
successor Trustee shall mail a notice of its succession to Securityholders so
affected. The retiring Trustee shall promptly transfer all property held by it
as Trustee to the successor Trustee, subject to the lien provided for in Section
6.7.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate Principal Amount of the Securities at the
time outstanding may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 6.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
SECTION 6.9 Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers
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all or substantially all its corporate trust business or assets to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
SECTION 6.10 Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA Section 310(a)(1). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. Neither the Company nor any
person directly or indirectly controlling, controlled by or under common control
with the Company shall serve as Trustee hereunder. The Trustee shall comply with
TIA Section 310(b).
SECTION 6.11 Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by a
specified percentage in principal amount of the Securityholders of any or all
Series may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such specified percentage of
Securityholders 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 Trustee. Proof of execution
of any instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Sections 6.1 and 6.2)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Article.
(b) The ownership of Securities shall be proved by the Security
register.
SECTION 7.2 Proof of Execution of Instruments. Subject to Sections
6.1 and 6.2, the execution of any instrument by a Securityholder or his agent or
proxy may be proved in accordance with such reasonable rules and regulations as
may be prescribed by the Trustee or in such manner as shall be satisfactory to
the Trustee.
SECTION 7.3 Holders to Be Treated as Owners. The Company, the
Trustee and any agent of the Company or the Trustee
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may deem and treat the person in whose name any Security shall be registered
upon the Security register for such Series as the absolute owner of such
Security (whether or not such Security shall be overdue and notwithstanding any
notation of ownership or other writing thereon) for the purpose of receiving
payment of or on account of the principal of and interest on such Security and
for all other purposes; and neither the Company nor the Trustee nor any agent of
the Company or the Trustee shall be affected by any notice to the contrary. All
such payments so made to any such person, or upon his order, shall be valid,
and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for moneys payable upon any such Security.
SECTION 7.4 Securities Owned by Company Deemed Not Outstanding. In
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all Series have concurred in any direction,
consent or waiver under this Indenture, Securities which are owned by the
Company or any other obligor on the Securities with respect to which such
determination is being made or by any person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company or
any other obligor on the Securities with respect to which such determination is
being made shall be disregarded and deemed not to be Outstanding for the purpose
of any such determination, except that for the purpose of determining whether
the Trustee shall be protected in relying on any such direction, consent or
waiver only Securities which the Trustee knows are 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
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any other obligor on the Securities.
SECTION 7.5 Right of Revocation of Action Taken. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 7.1, of
the taking of any action by the Holders of the percentage in aggregate principal
amount of the Securities of any or all Series, as the case may be, specified in
this Indenture in connection with such action, any Holder of a Security the
serial number of which is shown by the evidence to be included among the serial
numbers of the Securities the Holders of which have consented to such action
may, by filing written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article, revoke such action so far as concerns such
Security. Except as aforesaid any such action taken by the Holder of any
Security shall be conclusive and binding upon such Holder and upon all future
Holders and owners of such Security and of any Securities issued in exchange or
substitution therefor, irrespective of whether or not any notation in regard
thereto is made upon any such Security. Any action taken by the Holders of
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the percentage in aggregate principal amount of the Securities of any or all
Series, as the case may be, specified in this Indenture in connection with such
action shall be conclusively binding upon the Company, the Trustee and the
Holders of all the Securities affected by such action.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. The Company, when authorized by a resolution of its Board of
Directors, and the Trustee for the Securities of any and all Series may from
time to time and at any time enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act of 1939
as in force at the date of the execution thereof), in form satisfactory to such
Trustee, for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Securities of one or more Series any property or assets;
(b) to evidence the succession of another corporation to the Company,
or successive successions, and the assumption by the successor corporation
of the covenants, agreements and obligations of the Company pursuant to
Article Nine;
(c) to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions for the protection of the Holders of
Securities of any or all Series and, if such additional covenants are to be
for the benefit of less than all the Series of Securities, stating that
such covenants are being added solely for the benefit of such Series;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture; or to make such other provisions in regard to
matters or questions arising under this Indenture or under any supplemental
indenture as the Board of Directors may deem necessary or desirable and
which shall not materially and adversely affect the interests of the
Holders of the Securities;
(e) to establish the form or terms of Securities of any Series as
permitted by Sections 2.1 and 2.3; or
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more Series and to add to or change
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any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than
the one Trustee, pursuant to the requirements of Section 6.8.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property thereunder,
but the Trustee shall not be obligated to enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Securities at the time Outstanding, notwithstanding any of the provisions of
Section 8.2.
SECTION 8.2 Supplemental Indentures With Consent of
Securityholders. With the consent (evidenced as provided in Article Seven) of
the Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding of each Series affected by such supplemental
indenture (voting as one class), the Company, when authorized by a resolution of
its Board of Directors, and the Trustee for such Series of Securities may, from
time to time and at any time, enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act of 1939
as in force at the date of execution thereof) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Holders of the Securities of each such Series; provided,
however, that no such supplemental indenture shall (a) extend the final maturity
of any Security, or reduce the principal amount thereof or any premium thereon,
or reduce the rate or extend the time of payment of interest thereon, or reduce
any amount payable on redemption thereof, or impair or affect the right of any
Securityholder to institute suit for payment thereof or, if the Securities
provide therefor, any right of repayment at the option of the Securityholder
without the consent of the Holder of each Security so affected, or (b) reduce
the aforesaid percentage of Securities of any Series, the consent of the Holders
of which is required for any such supplemental indenture, without the consent of
the Holders of each Security so affected.
Upon the request of the Company, accompanied by a copy of a resolution
of the Board of Directors certified by the secretary or an assistant secretary
of the Company authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee for such Series of Securities of evidence of
the consent of securityholders as aforesaid and other documents, if any,
required
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by Section 7.1, the Trustee for such Series of Securities shall join with the
Company in the execution of such supplemental indenture unless such supplemental
indenture affects such Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case such Trustee may in its discretion, but
shall not be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Company
shall give notice in the manner and to the extent provided in Section 11.4 to
the Holders of Securities of each Series affected thereby at their addresses as
they shall appear on the Security register of the Company, setting forth in
general terms the substance of such supplemental indenture. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the Holders of Securities
of each Series affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
SECTION 8.4 Documents to Be Given to Trustee. The Trustee, subject
to the provisions of Sections 6.1 and 6.2, shall receive an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article Eight complies with the
applicable provisions of this Indenture.
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures. Securities of any Series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article may bear, upon the direction of the Company, a notation in form
satisfactory to the Trustee for the Securities of such Series as to any matter
provided for by such supplemental indenture. If the Company or the Trustee shall
so determine, new Securities of any Series so modified as to conform, in the
opinion of the Trustee and the Board of Directors, to any modification of this
Indenture contained in any such
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supplemental indenture may be prepared by the Company, authenticated by the
Trustee and delivered in exchange for the Securities of such Series then
outstanding.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 Company May Consolidate, etc. on Certain Terms. The
Company may consolidate with, or sell, convey or lease all or substantially all
of its assets to, or merge with or into, any other corporation, provided that in
any such case, (i) either the Company shall be the continuing corporation, or
the successor corporation shall be organized and validly existing under the laws
of the United States of America or any State thereof or the District of Columbia
and shall expressly assume the due and punctual payment of the principal of and
interest on all the securities according to their tenor, and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed or observed by the Company by supplemental
indenture satisfactory to the Trustee, executed and delivered to the Trustee 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, conveyance or lease, be in material default in the performance or
observance of any such covenant or condition.
SECTION 9.2 Successor Corporation Substituted. In case of any such
consolidation, merger, sale, lease or conveyance, and following such an
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. Such successor corporation may cause to be signed, and may
issue either in its own name or in the name of the Company prior to such
succession any or all of the Securities issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Trustee; and,
upon the order of such successor corporation instead of the Company and subject
to all the terms, conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall make available for delivery any Securities
which previously shall have been signed and delivered by the officers of the
Company to the Trustee for authentication, and any Securities which such
successor corporation thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All of the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Securities had been issued at the date of the execution
hereof.
In case of any such consolidation, merger, sale, lease or conveyance
such changes in phraseology and form (but not in
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substance) may be made in the Securities thereafter to be issued as may be
appropriate.
In the event of any such sale or conveyance the Company (or any
successor corporation which shall theretofore have become such in the manner
described in this Article) shall be discharged from all obligations and
covenants under this Indenture and the Securities and may be liquidated and
dissolved.
SECTION 9.3 Opinion of Counsel to Trustee. The Trustee, subject to
the provisions of Sections 6.1 and 6.2, shall receive an Opinion of Counsel,
prepared in accordance with Section 11.5, as conclusive evidence that any such
consolidation, merger, sale, lease or conveyance, and any such assumption, and
any such liquidation or dissolution, complies with the applicable provisions of
this Indenture.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE: UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture.
(A) If at any time (a) the Company shall have paid or caused to be
paid the principal of and interest on all the Securities of any Series
Outstanding hereunder (other than Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 2.9) as and
when the same shall have become due and payable, or (b) the Company shall have
delivered to the Trustee for cancellation all Securities of any Series
theretofore authenticated (other than any Securities of such Series which have
been destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 2.9) or (c) (i) all the Securities of such Series not
theretofore delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one year or are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption, and (ii) the Company shall
have irrevocably deposited or caused to be deposited with the Trustee as trust
funds the entire amount (other than moneys repaid by the Trustee or any Paying
Agent to the Company in accordance with Section 10.4) or Government Obligations
maturing as to principal and interest in such amounts and at such times as will
ensure the availability of cash sufficient to pay at maturity or upon redemption
all Securities of such Series (other than any Securities of such Series which
shall have been destroyed, lost or stolen and which shall have been replaced or
paid as provided in Section 2.9) not theretofore delivered to the Trustee for
cancellation, including principal and interest due or to become due to such date
of maturity as the case may be, and if, in any such case, the Company shall also
pay or cause to be paid all other sums payable hereunder by the Company with
respect to Securities of such Series, then this Indenture shall cease to be of
further
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effect with respect to Securities of such Series (except as to (i) rights of
registration of transfer and exchange, and the Company's right of optional
redemption (provided the Company provides sufficient funds to effect such
optional redemption), (ii) substitution of mutilated, defaced, destroyed, lost
or stolen Securities, (iii) rights of Holders to receive payments of principal
thereof and interest thereon upon the original stated due dates therefor (but
not upon acceleration) and remaining rights of the Holders to receive mandatory
sinking fund payments, if any, (iv) the rights, obligations and immunities of
the Trustee hereunder and (v) the rights of the Securityholders of such Series
as beneficiaries hereof with respect to the property so deposited with the
Trustee payable to all or any of them), and, subject to Section 10.5, the
Trustee, on demand of the Company accompanied by an Officers' Certificate and an
Opinion of Counsel and at the cost and expense of the Company, shall execute
proper instruments acknowledging such satisfaction of and discharging this
Indenture with respect to such Series; provided, that the rights of Holders of
the Securities to receive amounts in respect of principal of and interest on the
Securities held by them shall not be delayed longer than required by then-
applicable mandatory rules or policies of any securities exchange upon which the
Securities are listed. The Company agrees to reimburse the Trustee for any costs
or expenses thereafter reasonably and properly incurred and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture and the Securities of such Series.
(B) (i) In addition to the provisions of Section 10.1(A), the Company
may, at its option by or pursuant to, or otherwise in a manner or by such
Persons as may be authorized pursuant to, one or more resolutions duly adopted
by the Board of Directors, at any time with respect to the Securities of any
Series, elect to have defeasance under subsection (ii) or covenant defeasance
under subsection (iii) of this Section 10.1(B) be applied to the Outstanding
Securities of such Series provided that provision therefor is made for such
application pursuant to Section 2.3 and the applicable conditions thereto as set
forth in this Section 10.1(B) have been satisfied.
(ii) Upon the Company's exercise of the option referenced in
Section 10.1(B)(i) applicable to this subsection, the Company may terminate its
obligations under the Outstanding Securities of any Series and this Indenture
with respect to such Series on the date the conditions set forth below are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Outstanding Securities of such Series and to
have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense and request of the Company, shall execute proper instruments
acknowledging the same), except for the following: (1) the rights of Holders of
Outstanding
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Securities of such Series to receive payments in respect of the principal of and
interest on such Securities when such payments are due, (2) the Company's
obligations with respect to such Securities under Sections 2.8, 2.9, 3.2, 6.7,
10.4 and 10.5, (3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder, and (4) this Section 10.1(B).
(iii) Upon the Company's exercise of the option referenced in
Section 10.1(B)(i) applicable to this subsection, the Company shall be released
from its obligations under Sections 3.5 and 3.6 with respect to the Outstanding
Securities of such Series on and after the date the conditions set forth below
are satisfied (hereinafter "covenant defeasance"). For this purpose, such
covenant defeasance means that, with respect to the Outstanding Securities of
such Series, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such Section,
whether directly or indirectly by reason of any reference elsewhere herein to
any such Section or by reason of any reference in any such Section to any other
provision herein or in any other document (including, without limitation, the
form of Securities of such Series), but the remainder of this Indenture and the
rights of each Holder of such Securities shall be unaffected thereby.
(iv) The following shall be the conditions to the application of
Section 10.1(B) (ii) or (iii) to the Outstanding Securities of such Series:
(1) The Company shall have irrevocably deposited or caused to be
deposited with the Trustee (or another trustee satisfying the
requirements of Section 6.10 who shall agree to comply with the
provisions of this Section 10.1(B) applicable to it) under the terms
of an irrevocable trust agreement, as trust funds in trust solely for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of
Securities of such Series, (I) cash in the currency or currency unit
required, or (II) Government Obligations maturing as to principal and
interest in such amounts (payable in the currency in which the
Securities of such Series are payable) and at such times as are
sufficient, to pay the principal of and interest on the Outstanding
Securities of such Series to maturity or redemption, as the case may
be, or (III) a combination thereof, in each case sufficient, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge, and which shall be applied by the
Trustee (or other qualifying trustee) to pay and discharge, (x) the
principal of and each installment of principal of and interest, if
any, on the Outstanding Securities of such Series on the stated
maturity of such
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principal or installment of principal or interest, if any, and (y) any
mandatory sinking fund payments or analogous payments applicable to
the Outstanding Securities of such Series on the day on which such
payments are due and payable in accordance with the terms of this
Indenture and of such Securities. Such irrevocable trust agreement
shall include, among other things, (a) provision for the payments
referenced in clauses (x) and (y) of the immediately preceding
sentence, (b) the payment of the reasonable expenses of the Trustee
incurred or to be incurred in connection with carrying out such trust
provisions, (c) rights of registration, transfer, substitution and
exchange of Securities of such Series in accordance with the terms
stated in this Indenture and (d) continuation of the rights and
obligations and immunities of the Trustee as against the Holders of
Securities of such Series as stated in this Indenture.
(2) No Event of Default or event which with notice or lapse of
time or both would constitute an Event of Default with respect to the
Securities of such Series shall have occurred and be continuing on the
date of such deposit or, insofar as Sections 5.1(d) and 5.1(e) are
concerned, at any time during the period ending on the 91st day after
the date of such deposit (it being understood that this condition
shall not be deemed satisfied until the expiration of such period).
(3) Such defeasance shall not result in a breach or violation of,
or constitute a default under, this Indenture or any other material
agreement or instrument to which the Company is a party or by which it
is bound.
(4) The Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that Securityholders of such Series will not
recognize income, gain or loss for Federal income tax purposes as a
result of such deposit and discharge and will be subject to Federal
income tax on the same amounts and in the same manner and at the same
time as would have been the case if such deposit and defeasance or
covenant defeasance, as the case may be, had not occurred.
(5) The Company shall have delivered to the Trustee an Officers'
Certificate and Opinion of Counsel, each stating that all conditions
precedent provided for herein relating to the deposit and defeasance
or covenant defeasance, as the case may be, contemplated by this
Section 10.1(B) have been complied with.
SECTION 10.2 Application by Trustee of Funds Deposited for Payment
of Securities. Subject to Section 10.4, all moneys
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deposited with the Trustee pursuant to Section 10.1 shall be held in trust and
applied by it to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent), to the Holders of the
particular Securities of such Series for the payment or redemption of which such
moneys have been deposited with the Trustee, of all sums due and to become due
thereon for principal and interest; but such money need not be segregated from
other funds except to the extent required by law.
SECTION 10.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect to
Securities of any Series, all moneys then held by any Paying Agent (other than
the Company) under the provisions of this Indenture with respect to such Series
of Securities shall, upon demand of the Company, be paid to the Trustee and
thereupon such Paying Agent shall be released from all further liability with
respect to such moneys.
SECTION 10.4 Return of Unclaimed Moneys Held by Trustee and Paying
Agent. Any moneys deposited with or paid to the Trustee or any Paying Agent
(including the Company acting as its own Paying Agent) for the payment of the
principal of or interest on any Security of any Series and not applied but
remaining unclaimed for two years after the date upon which such principal or
interest shall have become due and payable, shall, upon the written request of
the Company, unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property law, promptly be repaid to the
Company by the Trustee for such Series or such Paying Agent (except that with
respect to any amounts then held by the Company in trust as its own Paying Agent
no such request need be given and at such time the Company shall be discharged
from its duty to hold such moneys in trust as Paying Agent), and the Holder of
the Security of such Series shall, unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property laws,
thereafter look only to the Company for any payment which such Holder may be
entitled to collect, and all liability of the Trustee or any Paying Agent with
respect to such moneys shall thereupon cease. Anything in this Article Ten to
the contrary notwithstanding, the Trustee shall deliver or pay to the Company
from time to time upon the written request of the Company any money or
Government Obligations held by it as provided in Section 10.1(B)(iv) which, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect such defeasance or covenant defeasance, as the case may be, in accordance
with the provisions of this Indenture.
SECTION 10.5 Reinstatement of Company's Obligations. If the Trustee
is unable to apply any funds or Government Obligations in accordance with
Section 10.1 by reason of any legal proceeding or by reason of any order or
judgment of any court or
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governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this indenture and the Securities
of any Series for which such application is prohibited shall be revived and
reinstated as if no deposit had occurred pursuant to Section 10.1 until such
time as the Trustee is permitted to apply all such funds or Government
Obligations in accordance with Section 10.1; provided, however, that if the
Company has made any payment of interest on or principal of any of such
Securities because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Securityholders of such Securities to receive
such payment from the funds or Government Obligations held by the Trustee.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Incorporators, Stockholders, Officers and Directors of
Company Exempt from Individual Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, in any Security,
or because of any indebtedness evidenced thereby, shall be had against any
incorporator, as such, or against any past, present or future stockholder,
officer or director, as such, of the Company or of any successor, either
directly or through the Company or any successor, under any rule of law, statute
or constitutional provision or by the enforcement of any assessment or by any
legal or equitable proceeding or otherwise, all such liability being expressly
waived and released by the acceptance of the Securities by the Holders thereof
and as part of the consideration for the issue of the Securities.
SECTION 11.2 Provisions of Indenture for the Sole Benefit of
Parties and Securityholders. Nothing in this Indenture or in the Securities,
expressed or implied, shall give or be construed to give to any Person, firm or
corporation, other than the parties hereto, any Paying Agent and their
successors hereunder and the Holders of the Securities any legal or equitable
right, remedy or claim under this Indenture or under any covenant or provision
herein contained, all such covenants and provisions being for the sole benefit
of the parties hereto and their successors and of the Holders of the Securities.
SECTION 11.3 Successors and Assigns of Company Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Company shall bind its successors and assigns,
whether so expressed or not.
SECTION 11.4 Notices and Demands on Company, Trustee and
Securityholders. Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the Holders
of Securities to or on the Company may be given or served by being deposited
postage prepaid, first-
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class mail (except as otherwise specifically provided herein) addressed (until
another address of the Company is filed by the Company with the Trustee) to FMC
Corporation, 200 East Randolph Drive, Chicago, Illinois 60601, Attention:
Corporate Secretary. Any notice, direction, request or demand by the Company or
any Securityholder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or made at the Corporate
Trust Office.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed by first-class mail, postage prepaid, to such Holders
as their names and addresses appear in the Security register within the time
prescribed. Where this Indenture 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 Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver. 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, and any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Company and
Securityholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
reasonably acceptable to the Trustee shall be deemed to be a sufficient giving
of such notice.
SECTION 11.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Company to the Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that, in the case of any such
application or demand as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or
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opinion has read such covenant or condition, (b) a brief statement as to the
nature and scope of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are based, (c) a statement
that, in the opinion of such person, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not such covenant or condition has been complied with and (d) a
statement as to whether or not, in the opinion of such person, such condition or
covenant has been complied with.
Any certificate, statement 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 that the certificate
or opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters or information with respect to which is in the possession of
the Company, upon the certificate, statement or opinion of or representations by
an officer or officers of the Company, unless such counsel knows that the
certificate, statement or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of the Company or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Company, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays.
Unless otherwise specified in a Security, if the date of maturity of interest on
or principal of the Securities of any Series or the date fixed for redemption or
repayment of any such Security shall not be a Business Day, then payment of
interest or principal need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with another provision included in this Indenture
which is required by
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the Trust Indenture Act of 1939, as amended, such required provision shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act of 1939, as amended, that may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.
SECTION 11.8 Illinois Law to Govern. This Indenture and each
Security shall be deemed to be a contract under the internal laws of the State
of Illinois (without regard to conflicts of laws provisions thereof), and for
all purposes shall be construed in accordance with the laws of such State.
SECTION 11.9 Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 Effect of Headings; Gender. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof. The use of the masculine, feminine or neuter
gender herein shall not limit in any way the applicability of any term or
provision hereof.
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. The provisions of this
Article shall be applicable to the Securities of any Series which are redeemable
before their maturity or to any sinking fund for the retirement of Securities of
a Series except as otherwise specified as contemplated by Section 2.3 for
Securities of such Series.
SECTION 12.2 Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Securities of any Series required to be redeemed or
to be redeemed as a whole or in part at the option of the Company shall be given
by giving notice of such redemption as provided in Section 11.4, at least 15
days and not more than forty-five days prior to the date fixed for redemption,
to such Holders of Securities of such Series. Failure to give notice by mail, or
any defect in the notice to the Holder of any Security of a Series designated
for redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security of such Series.
The notice of redemption to each such Holder shall specify the date
fixed for redemption, the "CUSIP" number or numbers for such Securities, the
redemption price, the Place or Places of Payment, that payment will be made upon
presentation and surrender of such Securities, that such redemption is pursuant
to the mandatory or optional sinking fund, or both, if such be the
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case, that interest accrued to the date fixed for redemption will be paid as
specified in such notice, that on and after said date interest thereon or on the
portions thereof to be redeemed will cease to accrue and, if applicable, that a
Holder of Securities who desires to convert Securities for redemption must
satisfy the requirements for conversion contained in such Securities, the then
existing conversion price or rate and the date and time when the option to
convert shall expire. If less than all of the Securities of any Series are to be
redeemed, the notice of redemption shall specify the numbers of the Securities
of such Series to be redeemed. In case any Security of a Series is to be
redeemed in part, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Security, a new Security or
Securities of such Series in principal amount equal to the unredeemed Portion
thereof will be issued.
The notice of redemption of Securities of any Series to be redeemed at
the option of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company. If such
notice is to be given by the Trustee, the Company shall provide notice of such
redemption to the Trustee at least forty-five days prior to the date fixed for
redemption (unless a shorter notice shall be satisfactory to the Trustee). If
such notice is given by the Company, the Company shall provide a copy of such
notice given to the Holders of such redemption to the Trustee at least 3
Business Days prior to the date such notice is given to such Holders, but in any
event at least 15 days prior to the date fixed for redemption (unless a shorter
notice shall be satisfactory to the Trustee).
Unless otherwise specified pursuant to Section 2.3, not later than the
redemption date specified in the notice of redemption given as provided in this
Section, the Company will have on deposit with the Trustee or with one or more
Paying Agents (or, if the Company is acting as its own Paying Agent, set aside,
segregate and hold in trust as provided in Section 3.4) in funds available on
such date an amount of money sufficient to redeem on the redemption date all the
Securities of such Series so called for redemption at the appropriate redemption
price, together with accrued interest to the date fixed for redemption. If less
than all the Outstanding Securities of a Series are to be redeemed, the Company
will deliver to the Trustee at least forty-five days prior to the date fixed for
redemption an Officers' Certificate stating the aggregate principal amount of
Securities to be redeemed.
If less than all the Securities of a Series are to be redeemed, the
Trustee shall select, in such manner as it shall deem appropriate and fair,
Securities of such Series to be redeemed in whole or in part and the Trustee
shall promptly notify the Company in writing of the Securities of such Series
selected for redemption and, in the case of any Securities of such Series
selected for partial redemption, the principal amount thereof to be redeemed.
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However, if less than all the Securities of any Series with differing issue
dates, interest rates and stated maturities are to be redeemed, the Company in
its sole discretion shall select the particular securities to be redeemed and
shall notify the Trustee in writing thereof at least forty-five days prior to
the relevant redemption date. Securities may be redeemed in part in multiples
equal to the minimum authorized denomination for Securities of such Series or
any multiple thereof. For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities of
any Series shall relate, in the case of any Security redeemed or to be redeemed
only in part, to the portion of the principal amount of such Security which has
been or is to be redeemed.
SECTION 12.3 Payment of Securities Called for Redemption. If
notice of redemption has been given as above provided, the Securities or
portions of Securities specified in such notice shall become due and payable on
the date and at the place stated in such notice at the applicable redemption
price, together with interest accrued to the date fixed for redemption, and on
and after said date (unless the Company shall default in the payment of such
Securities at the redemption price, together with interest accrued to said date)
interest on the Securities or portions of Securities so called for redemption
shall cease to accrue, and, except as provided in Sections 6.1 and 10.4, such
Securities shall cease from and after the date fixed for redemption to be
entitled to any benefit or security under this Indenture, and the Holders
thereof shall have no right in respect of such Securities except the right to
receive the redemption price thereof and unpaid interest to the date fixed for
redemption. On presentation and surrender of such Securities at a Place of
Payment specified in said notice, said Securities or the specified portions
thereof shall be paid and redeemed by the Company at the applicable redemption
price, together with interest accrued thereon to the date fixed for redemption;
provided that if for any Securities the date fixed for redemption is a regular
interest payment date, payment of interest becoming due on such date shall be
payable to the Holders of such Securities registered as such on the relevant
record date subject to the terms and provisions of Section 2.7 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate of
interest borne by the Security.
Upon presentation of any Security redeemed in part only, the Company
shall execute and the Trustee shall authenticate and make available for delivery
to or on the order of the Holder thereof, at the expense of the Company, a new
Security or Securities, of authorized denominations, in principal amount equal
to the unredeemed portion of the Security so presented.
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SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in a written statement signed by an authorized officer of the Company and
delivered to the Trustee at least 30 days prior to the last date on which notice
of redemption may be given as being owned of record and beneficially by, and not
pledged or hypothecated by, either (a) the Company or (b) an entity specifically
identified in such written statement as directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
SECTION 12.5 Mandatory and Optional Sinking Funds. The minimum
amount of any sinking fund payment provided for by the terms of Securities of
any Series is herein referred to as a "mandatory sinking fund payment," and any
payment in excess of such minimum amount provided for by the terms of Securities
of any Series is herein referred to as an "optional sinking fund payment." The
date on which a sinking fund payment is to be made is herein referred to as the
"sinking fund payment date."
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any Series of Securities in cash, the Company may at its
option (a) deliver to the Trustee Securities of such Series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Company or receive credit for Securities of such
Series (not previously so credited) theretofore purchased or otherwise acquired
(except as aforesaid) by the Company and delivered to the Trustee for
cancellation pursuant to Section 2.10, (b) receive credit for optional sinking
fund payments (not previously so credited) made pursuant to this Section, or (c)
receive credit for Securities of such Series (not previously so credited)
redeemed by the Company through any optional redemption provision contained in
the terms of such Series. Securities so delivered or credited shall be received
or credited by the Trustee at the sinking fund redemption price specified in
such Securities.
On or before the forty-fifth day next preceding each sinking fund
payment date for any Series of Securities, the Company will deliver to the
Trustee a written statement (which need not contain the statements required by
Section 11.5) signed by an authorized officer of the Company (a) specifying the
portion of the mandatory sinking fund payment to be satisfied by payment of cash
(except as otherwise specified pursuant to Section 2.3 for the Securities of
such Series), and the portion to be satisfied by delivery or credit of
Securities of such Series, (b) stating that none of the Securities of such
Series for which credit is sought has theretofore been so credited, (c) stating
that no defaults in the payment of interest or Events of Default with respect to
such Series have occurred (which have not been waived or cured) and are
continuing, (d) stating whether or not the Company intends to
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exercise its right to make an optional sinking fund payment with respect to such
Series and, if so, specifying the amount of such optional sinking fund payment
which the Company intends to pay on or before the next succeeding sinking fund
payment date and (e) specifying such sinking fund payment date. Any Securities
of such Series to be credited and required to be delivered on the Trustee in
order for the Company to be entitled to credit therefor as aforesaid which have
not theretofore been delivered to the Trustee shall be delivered for
cancellation pursuant to Section 2.10 to the Trustee with such written
statement. Such written statement shall be irrevocable and upon its receipt by
the Trustee the Company shall become unconditionally obligated to make all the
cash payments or payments therein referred to, if any, on or before the next
succeeding sinking fund payment date. Failure of the Company, on or before any
such forty-fifth day, to deliver such written statement and Securities specified
in this paragraph, if any, shall not constitute a default but shall constitute,
on and as of such date, the irrevocable election of the Company (i) that the
mandatory sinking fund payment for such Series due on the next succeeding
sinking fund payment date shall be paid entirely in cash without the option to
deliver or credit Securities of such Series in respect thereof and (ii) that the
Company will make no optional sinking fund payment with respect to such Series
as provided in this Section.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date plus
any unused balance of any preceding sinking fund payments made in cash shall
exceed $100,000 (or a lesser sum if the Company shall so request) with respect
to the Securities of any particular Series, such cash shall be applied on the
next succeeding sinking fund payment date to the redemption of Securities of
such Series at the sinking fund redemption price together with accrued interest,
if any, to the date fixed for redemption. If such amount shall be $100,000 or
less and the Company makes no such request then it shall be carried over until a
sum in excess of $100,000 is available. The Trustee shall select, in the manner
provided in Section 12.2 and giving effect to any exclusions required pursuant
to Section 12.4, for redemption on such sinking fund payment date a sufficient
principal amount of Securities of such Series to absorb said cash, as nearly as
may be possible, and shall (if requested in writing by the Company) inform the
Company of the serial numbers of the Securities of such Series (or portions
thereof) so selected. The Trustee, in the name and at the expense of the Company
(or the Company, if it shall so notify the Trustee in writing), shall cause
notice of redemption of the Securities of such Series to be given in
substantially the manner provided in Section 12.2 (and with the effect provided
in Section 12.3) for the redemption of Securities of such Series at the option
of the Company. The amount of any sinking fund payments not so applied or
allocated to the redemption of Securities of such Series shall be added to the
next cash sinking fund payment for such Series and, together with such payment,
shall be applied in
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accordance with the provisions of this Section. Any and all sinking fund moneys
held on the stated maturity date of the Securities of any particular series (or
earlier, if such maturity is accelerated), which are not held for the payment or
redemption of particular Securities of such Series, shall be applied, together
with other moneys, if necessary, sufficient for the purpose, to the payment of
the principal of, and interest on, the Securities of such Series at maturity.
Unless otherwise specified pursuant to Section 2.3, not later than the
sinking fund payment date, the Company shall have paid to the Trustee in cash or
shall otherwise provide in funds available on such date for the payment of all
principal and interest accrued to the date fixed for redemption on Securities to
be redeemed on such sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities of
a Series with sinking fund moneys or mail or publish any notice of redemption of
Securities for such Series by operation of the sinking fund during the
continuance of a default in payment of interest on such Securities or of any
Event of Default except that, where the mailing or publication of notice of
redemption of any Securities shall theretofore have been made, the Trustee shall
redeem or cause to be redeemed such Securities, provided that it shall have
received from the Company a sum sufficient for such redemption. Except as
aforesaid, any moneys in the sinking fund for such Series at the time when any
such default or Event of Default shall occur, and any moneys thereafter paid
into the sinking fund, shall, during the continuance of such default or Event of
Default, be deemed to have been collected under Article Five and held for the
payment of all such Securities. In case such Event of Default shall have been
waived as provided in Section 5.9 or the default cured on or before the sixtieth
day preceding the sinking fund payment date in any year, such moneys shall
thereafter be applied on the next succeeding sinking fund payment date in
accordance with this Section to the redemption of such Securities.
SECTION 12.6 Repayment at the Option of the Holders. Securities of
any Series which are repayable at the option of the Holders thereof before their
stated maturity shall be repaid in accordance with the terms of the Securities
of such Series.
The repayment of any principal amount of Securities pursuant to such
option of the Holder to require repayment of Securities before their stated
maturity, for purposes of Section 10.1, shall not operate as a payment,
redemption or satisfaction of the indebtedness represented by such Securities
unless and until the Company, at its option, shall deliver or surrender the same
to the Trustee with a directive that such Securities be cancelled.
SECTION 12.7 Conversion Arrangement on Call for Redemption. In
connection with any redemption of Securities, the Company may arrange for the
purchase and conversion of any
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Securities called for redemption by an agreement with one or more investment
bankers or other purchasers to purchase such Securities by paying to the Trustee
or the Paying Agent in trust for the Holders of Securities, on or before 10:00
a.m. Chicago time on the redemption date, an amount not less than the redemption
price, together with interest, if any, accrued to the redemption date of such
Securities, in immediately available funds. Notwithstanding anything to the
contrary contained in this Article Twelve, the obligation of the Company to pay
the redemption price of such Securities, including all accrued interest, if any,
shall be deemed to be satisfied and discharged to the extent such amount is so
paid by such purchasers. If such an agreement is entered into, any Securities
not duly surrendered for conversion by the Holders thereof may, at the option of
the Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such Holders and surrendered by such purchasers for conversion,
all as of immediately prior to the close of business on the last day on which
Securities of such series called for redemption may be converted in accordance
with this Indenture and the terms of such Securities, subject to payment to the
Trustee or Paying Agent of the above-described amount. The Trustee or the Paying
Agent shall hold and pay to the Holders whose Securities are selected for
redemption any such amount paid to it in the same manner as it would pay moneys
deposited with it by the Company for the redemption of Securities. Without the
Trustee's and the Paying Agent's prior written consent, no arrangement between
the Company and such purchasers for the purchase and conversion of any
Securities shall increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Trustee and the Paying Agent as set forth
in this Indenture, and the Company agrees to indemnify the Trustee and the
Paying Agent from, and hold them harmless against, any loss, liability or
expense arising out of or in connection with any such arrangement for the
purchase and conversion of any Securities between the Company and such
purchasers, including the costs and expenses incurred by the Trustee and the
Paying Agent (including the fees and expenses of their agents and counsel) in
the defense of any claim or liability arising out of or in connection with the
exercise or performance of any of their powers, duties, responsibilities or
obligations under this Indenture.
ARTICLE THIRTEEN
CONVERSION OF SECURITIES
SECTION 13.1 Applicability of Article. Securities of any Series
which are convertible into Common Shares at the option of the Holder of such
Securities shall be convertible in accordance with their terms and (unless
otherwise specified as contemplated by Section 2.3 for the Securities of any
Series) in accordance with this Article. Each reference in this Article Thirteen
to "a Security" or "the Securities" refers to the Securities of the particular
Series that is convertible into Common Shares. If more
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than one Series of Securities with conversion privileges are Outstanding at any
time, the provisions of this Article Thirteen shall be applied separately to
each such Series.
SECTION 13.2 Right of Holders to Convert Securities into Common
Shares. Subject to and upon compliance with the terms of the Securities and the
provisions of Section 12.7 and this Article Thirteen, at the option of the
Holder thereof, any Security of any Series of any authorized denomination which
is convertible into Common Shares, or any portion of the principal amount
thereof which is $1,000 or any integral multiple of $1,000, may, at any time
during the period specified in the Securities of such Series, or in case such
Security or portion thereof shall have been called for redemption, then in
respect of such Security or portion thereof until and including, but not after
(unless the Company shall default in payment due upon the redemption thereof)
the close of business on the redemption date (except that in the case of
repayment at the option of the Holder, if specified in the terms of the relevant
Security, such right shall terminate upon the Company's receipt of written
notice of the exercise of such option), be converted into duly authorized,
validly issued, fully paid and nonassessable Common Shares, as specified in such
Security, at the conversion price or conversion rate for each $1,000 principal
amount of Securities (such initial conversion rate reflecting an initial
conversion price specified in such Security) in effect on the conversion date,
or, in case an adjustment in the conversion price has taken place pursuant to
the provisions of this Article Thirteen, then at the applicable conversion price
as so adjusted, upon surrender of the Security or Securities, the principal
amount of which is so to be converted, to the Company at any time during usual
business hours at the office or agency to be maintained by it in accordance with
the provisions of Section 3.2, accompanied by a written notice of election to
convert as provided in Section 13.3 and, if the Holder requests that the Common
Shares be registered in a name other than that of the Holder, by a written
instrument or instruments of transfer in form satisfactory to the Company and/or
the Trustee, as applicable, duly executed by the Holder thereof or his attorney
duly authorized in writing. All Securities surrendered for conversion shall, if
surrendered to the Company or any conversion agent, be delivered to the Trustee
for cancellation and cancelled by it, or shall, if surrendered to the Trustee,
be cancelled by it, as provided in Section 2.10.
The initial conversion price or conversion rate in respect of a Series
of Securities shall be as specified in the Securities of such Series. The
conversion price or conversion rate will be subject to adjustment on the terms
set forth in Section 13.5 or such other or different terms, if any, as may be
specified by Section 2.3 for Securities of such Series. Provisions of this
Indenture that apply to conversion of all of a Security also apply to conversion
of any portion of it.
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<PAGE>
SECTION 13.3 Issuance of Common Shares on Conversions. As promptly
as practicable after the surrender, as herein provided, of any Security or
Securities for conversion into Common Shares, the Company shall deliver or cause
to be delivered at its said office or agency to or upon the written order of the
Holder of the Security or Securities so surrendered a certificate or
certificates representing the number of duly authorized, validly issued, fully
paid and nonassessable Common Shares into which such Security or Securities may
be converted in accordance with the terms thereof and the provisions of this
Article Thirteen. Prior to delivery of such certificate or certificates, the
Company shall require written notice at its said office or agency from the
Holder of the Security or Securities so surrendered stating that the Holder
irrevocably elects to convert such Security or Securities, or, if less than the
entire principal amount thereof is to be converted, stating the portion thereof
to be converted. Such notice shall also state the name or names (with address
and social security or other taxpayer identification number) in which said
certificate or certificates are to be issued. Such conversion shall be deemed to
have been made at the time that such Security or Securities shall have been
surrendered for conversion and such notice shall have been received by the
Company or the Trustee, the rights of the Holder of such Security or Securities
as a Holder shall cease at such time, the Person or Persons entitled to receive
the Common Shares upon conversion of such Security or Securities shall be
treated for all purposes as having become either record holder or holders of
such Common Shares at such time and such conversion shall be at the conversion
price in effect at such time. In the case of any Security of any Series which is
converted in part only, upon such conversion, the Company shall execute and,
upon the Company's request and at the Company's expense, the Trustee or an
authenticating agent shall authenticate and deliver to the Holder thereof, as
requested by such Holder, a new Security or Securities of such Series of
authorized denominations in aggregate principal amount equal to the unconverted
portion of such Security.
If the last day on which such Security may be converted is not a
Business Day in a place where the conversion agent for that Security is located,
such Security may be surrendered to that conversion agent on the next succeeding
day that is a Business Day.
The Company shall not be required to deliver certificates for Common
Shares upon conversion while its stock transfer books are closed for a meeting
of shareholders or for the payment of dividends or for any other purpose, but
certificates for Common Shares shall be delivered as soon as the stock transfer
books shall again be opened.
SECTION 13.4 No Payment or Adjustment for Interest or Dividends.
Unless otherwise specified as contemplated by Section 2.3 for Securities of such
Series, Securities surrendered for conversion into Common Shares during the
period from the close of business on any regular record date (or special record
date) next
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<PAGE>
preceding any interest payment date to the opening of business on such interest
payment date (except Securities called for redemption on a redemption date
within such period) when surrendered for conversion must be accompanied by
payment (by certified or official bank check to the order of the Company payable
in clearing house funds at the location where the Securities are surrendered) of
an amount equal to the interest thereon which the Holder is entitled to receive
on such interest payment date. Payment of interest shall be made, on such
interest payment date or such other payment date (as set forth in Section 2.7),
as the case may be, to the Holder of the Securities as of such regular record
date or special record date, as applicable. Except where Securities surrendered
for conversion must be accompanied by payment as described above, no interest on
converted Securities will be payable by the Company on any interest payment date
subsequent to the date of conversion. No other payment or adjustment for
interest or dividends is to be made upon conversion. Notwithstanding the
foregoing, upon conversion of any Original Issue Discount Security, the fixed
number of Common Shares into which such Security is convertible delivered by the
Company to the Holder thereof shall be applied, first, to the portion
attributable to the accrued original issue discount relating to the period from
the date of issuance to the date of conversion of such Security, and, second, to
the portion attributable to the balance of the principal amount of such
Security.
SECTION 13.5 Adjustment of Conversion Price. Unless otherwise
specified as contemplated by Section 2.3 for Securities of such Series, the
conversion price for Securities convertible into Common Shares shall be adjusted
from time to time as follows:
(a) In case the Company shall (x) pay a dividend or make a
distribution on Common Shares in Common Shares, (y) subdivide the
outstanding Common Shares into a greater number of shares or (z) combine
the outstanding Common Shares into a smaller number of shares, the
conversion price for the Securities of such Series shall be adjusted so
that the Holder of any such Security thereafter surrendered for conversion
shall be entitled to receive the number of Common Shares which he would
have owned or have been entitled to receive after the happening of any of
the events described above had such Security been converted immediately
prior to the record date in the case of a dividend or the effective date in
the case of subdivision or combination. An adjustment made pursuant to this
subsection (a) shall become effective immediately after the record date in
the case of a dividend, except as provided in subsection (h) below, and
shall become effective immediately after the effective date in the case of
a subdivision or combination.
(b) In case the Company shall issue rights or warrants to all holders
of Common Shares entitling them (for a period expiring within 45 days after
the record date mentioned below)
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<PAGE>
to subscribe for or purchase Common Shares at a price per share less than
the current market price per share of Common Shares (as defined for
purposes of this subsection (b) in subsection (e) below), at the record
date for the determination of stockholders entitled to receive such rights
or warrants, the conversion price in effect immediately prior thereto shall
be adjusted so that the same shall equal the price determined by
multiplying the conversion price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the number of Common
Shares outstanding on such record date plus the number of Common Shares
which the aggregate offering price of the total number of Common Shares so
offered would purchase at such current market price, and the denominator of
which shall be the number of Common Shares outstanding on such record date
plus the number of additional Common Shares receivable upon exercise of
such rights or warrants. Such adjustment shall be made successively
whenever any such rights or warrants are issued, and shall become effective
immediately, except as provided in subsection (h) below, after such record
date. In determining whether any rights or warrants entitle the Holders of
the Securities of such Series to subscribe for or purchase Common Shares at
less than such current market price, and in determining the aggregate
offering price of such Common Shares, there shall be taken into account any
consideration received by the Company for such rights or warrants plus the
exercise price thereof, the value of such consideration or exercise price,
as the case may be, if other than cash, to be determined by the Board of
Directors.
(c) In case the Company shall distribute to all holders of Common
Shares any shares of capital stock of the Company (other than Common
Shares) or evidences of its indebtedness or assets (excluding cash
dividends or distributions paid from retained earnings of the Company) or
rights or warrants to subscribe for or purchase any of its securities
(excluding those rights or warrants referred to in subsection (b) above)
(any of the foregoing being herein in this subsection (c) called the
"Special Securities"), then, in each such case, unless the Company elects
to reserve such Special Securities for distribution to the Holders of
Securities of such Series upon the conversion so that any such Holder
converting such Securities will receive upon such conversion, in addition
to the Common Shares to which such Holder is entitled, the amount and kind
of Special Securities which such Holder would have received if such Holder
had, immediately prior to the record date for the distribution of the
Special Securities, converted Securities into Common Shares, the conversion
price shall be adjusted so that the same shall equal the price determined
by multiplying the conversion price in effect immediately prior to such
record date by a fraction the numerator of which shall be the current
market price per share (as defined for purposes of this subsection (c) in
subsection (e) below) of Common
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<PAGE>
Shares on the record date mentioned above less the then fair market value
(as determined by the Board of Directors, whose determination shall, if
made in good faith, be conclusive) of the portion of the Special Securities
so distributed applicable to one Common Share, and the denominator of which
shall be the current market price per Common Shares (as defined in
subsection (e) below); provided, however, that in the event the then fair
market value (as so determined) of the portion of the Special Securities so
distributed applicable to one Common Share is equal to or greater than the
current market price per Common Share (as defined in subsection (e) below)
on the record date mentioned above, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Holder of Securities of such
Series shall have the right to receive the amount and kind of Special
Securities such holder would have received had he converted such Securities
immediately prior to the record date for the distribution of the Special
Securities. Such adjustment shall become effective immediately, except as
provided in subsection (h) below, after the record date for the
determination of stockholders entitled to receive such distribution.
(d) If, pursuant to subsection (b) or (c) above, the conversion price
shall have been adjusted because the Company has declared a dividend, or
made a distribution, on the outstanding Common Shares in the form of any
right or warrant to purchase securities of the Company, or the Company has
issued any such right or warrant, then, upon the expiration of any such
unexercised right or unexercised warrant, the conversion price shall
forthwith be adjusted to equal the conversion price that would have applied
had such right or warrant never been declared, distributed or issued.
(e) For the purpose of any computation under subsection (b) above, the
current market price per Common Share on any date shall be deemed to be the
average of the reported last sales prices for the thirty consecutive
Trading Days (as defined below) commencing forty-five Trading Days before
the date in question. For the purpose of any computation under subsection
(c) above, the current market price per Common Share on any date shall be
deemed to be the average of the reported last sales prices for the ten
consecutive Trading Days before the date in question. The reported last
sales price for each day (whether for purposes of subsection (b) or
subsection (c)) shall be the reported last sales price, regular way, or, in
case no sale takes place on such day, the average of the reported closing
bid and asked prices, regular way, in either case as reported on the New
York Stock Exchange Composite Tape or, if the Common Shares are not listed
or admitted to trading on the New York Stock Exchange, on the principal
national securities exchange on which the Common Shares are listed or
admitted to trading or, if not listed or admitted to trading on any
national securities exchange, on
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<PAGE>
the National Market System of the National Association of Securities
Dealers, Inc. Automated Quotations System ("NASDAQ") or, if the Common
Shares are not quoted on such National Market System, the average of the
closing bid and asked prices on such day in the over-the-counter market as
reported by NASDAQ or, if bid and asked prices for the Common Shares on
each such day shall not have been reported through NASDAQ, the average of
the bid and asked prices for such day as furnished by any New York Stock
Exchange member firm regularly making a market in the Common Shares
selected for such purpose by the Board of Directors or a committee thereof
or, if no such quotations are available, the fair market value of the
Common Shares as determined by a New York Stock Exchange member firm
regularly making a market in the Common Shares selected for such purpose by
the Board of Directors. As used herein, the term "Trading Day" with respect
to the Common Shares means (x) if the Common Shares are listed or admitted
for trading on the New York Stock Exchange or another national securities
exchange, a day on which the New York Stock Exchange or such other national
securities exchange is open for business or (y) if the Common Shares are
quoted on the National Market System of the NASDAQ, a day on which trades
may be made on such National Market System or (z) otherwise, any day other
than a Saturday or Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive order to
close.
(f) No adjustment in the conversion price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
such price; provided, however, that any adjustments which by reason of this
subsection (f) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment; and, provided, further,
that adjustment shall be required and made in accordance with the
provisions of this Article Thirteen (other than this subsection (f)) not
later than such time as may be required in order to preserve the tax free
nature of a distribution to the holders of Common Shares. All calculations
under this Article Thirteen shall be made to the nearest cent or to the
nearest 1/100 of a share, as the case may be, with one-half cent and 1/200
of a share, respectively, being rounded upward. Anything in this Section
13.5 to the contrary notwithstanding, the Company shall be entitled to make
such reductions in the conversion price, in addition to those required by
this Section 13.5, as it in its discretion shall determine to be advisable
in order that any stock dividend, subdivision of shares, distribution of
rights or warrants to purchase stock or securities, or distribution of
other assets (other than cash dividends) hereafter made by the Company to
its shareholders shall not be taxable.
(g) Whenever the conversion price is adjusted, as herein provided, the
Company shall promptly file with the
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<PAGE>
Trustee, at the Corporate Trust Office of the Trustee, and with the office
or agency maintained by the Company for the conversion of Securities of
such Series pursuant to Section 3.2, an Officers' Certificate, setting
forth the conversion price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment, which certificate shall
be conclusive evidence of the correctness of such adjustment. Neither the
Trustee nor any conversion agent shall be under any duty or responsibility
with respect to any such certificate or any facts or computations set
forth therein, except to exhibit said certificate from time to time to any
Holder of a Security of such Series desiring to inspect the same. The
Company shall promptly cause a notice setting forth the adjusted
conversion price to be mailed to the Holders of Securities of such Series,
as their names and addresses appear upon the Security register of the
Company.
(h) In any case in which this Section 13.5 provides that an adjustment
shall become effective immediately after a record date for an event, the
Company may defer until the occurrence of such event (y) issuing to the
Holder of any Security of such Series converted after such record date and
before the occurrence of such event the additional Common Shares issuable
upon such conversion by reason of the adjustment required by such event
over and above the Common Shares issuable upon such conversion before
giving effect to such adjustment and (z) paying to such holder any amount
in cash in lieu of any fractional Common Shares pursuant to Section 13.6
hereof.
SECTION 13.6 No Fractional Shares to be Issued. No fractional
Common Shares shall be issued upon any conversion of Securities. If more than
one Security of any Series shall be surrendered for conversion at one time by
the same Holder, the number of full shares which shall be issuable upon
conversion thereof shall be computed on the basis of the aggregate principal
amount of the Securities of such Series (or specified portions thereof to the
extent permitted hereby) so surrendered. Instead of a fraction of a share of
Common Stock which would otherwise be issuable upon conversion of any Security
or Securities (or specified portions thereof), the Company shall pay a cash
adjustment (computed to the nearest cent, with one-half cent being rounded
upward) in respect of such fraction of a share in an amount equal to the same
fractional interest of the reported last sales price (as defined in Section
13.5(e)) of the Common Shares on the Trading Day (as defined in Section 13.5(e))
next preceding the day of conversion.
SECTION 13.7 Preservation of Conversion Rights upon Consolidation,
Merger, Sale or Conveyance. In case of any consolidation of the Company with, or
merger of the Company into, any other corporation (other than a consolidation or
merger in which the Company is the continuing corporation), or in the case of
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<PAGE>
any sale or transfer of all or substantially all of the assets of the Company,
the corporation formed by such consolidation or the corporation into which the
Company shall have been merged or the corporation which shall have acquired such
assets, as the case may be, shall execute and deliver to the Trustee, a
supplemental indenture, in accordance with the provisions of Articles Eight and
Nine as they relate to supplemental indentures, providing that the Holder of
each Security then Outstanding of a Series which was convertible into Common
Shares shall have the right thereafter to convert such Security into the kind
and amount of shares of stock and other securities and property, including cash,
receivable upon such consolidation, merger, sale or transfer by a holder of the
number of Common Shares of the Company into which such Securities might have
been converted immediately prior to such consolidation, merger, sale or
transfer. Such supplemental indenture shall conform to the provisions of the
Trust Indenture Act of 1939 as then in effect and shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article Thirteen. Neither the Trustee nor any conversion
agent shall have any liability or responsibility for determining the correctness
of any provision contained in any such supplemental indenture relating either to
the kind or amount of shares of stock or other securities or property receivable
by Holders of the Securities upon the conversion of their Securities after any
such consolidation, merger, sale or transfer, or to any adjustment to be made
with respect thereto and, subject to the provisions of Section 313 of the Trust
Indenture Act of 1939, may accept as conclusive evidence of the correctness of
any such provisions, and shall be protected in relying upon, an Officers'
Certificate with respect thereto and an Opinion of Counsel with respect to legal
matters related thereto. If in the case of any such consolidation, merger, sale
or transfer, the stock or other securities and property receivable by a Holder
of the Securities includes stock or other securities and property of a
corporation other than the successor or purchasing corporation, then such
supplemental indenture shall also be executed by such other corporation and
shall contain such additional provisions to protect the interests of the Holders
of the Securities as the Board of Directors shall reasonably consider necessary.
The above provisions of this Section 13.7 shall similarly apply to successive
consolidations, mergers, sales or transfers.
SECTION 13.8 Notice to Holders of the Securities of a Series Prior
to Taking Certain Types of Action. With respect to the Securities of any Series,
in case:
(a) the Company shall authorize the issuance to all holders of Common
Shares of rights or warrants to subscribe for or purchase shares of its
capital stock or of any other right;
(b) the Company shall authorize the distribution to all holders of
Common Shares of evidences of indebtedness or
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<PAGE>
assets (except for cash dividends or distributions paid from retained
earnings of the Company);
(c) of any subdivision or combination of Common Shares or of any
consolidation or merger to which the Company is a party and for which
approval by the shareholders of the Company is required, or of the sale or
transfer of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed with the Trustee and at the office or
agency maintained for the purpose of conversion of Securities of such Series
pursuant to Section 3.2, and shall cause to be mailed to the Holders of
Securities of such Series, at their last addresses as they shall appear on the
Security register of the Company, at least ten days prior to the applicable
record date hereinafter specified, a notice stating (i) the date as of which the
holders of Common Shares to be entitled to receive any such rights, warrants or
distribution are to be determined, or (ii) the date on which any such
subdivision, combination, consolidation, merger, sale, transfer, dissolution,
liquidation, winding up or other action is expected to become effective, and the
date as of which it is expected that holders of record of Common Shares shall be
entitled to exchange their Common Shares for securities or other property, if
any, deliverable upon such subdivision, combination, consolidation, merger,
sale, transfer, dissolution, liquidation, winding up or other action. The
failure to give the notice required by this Section 13.8 or any defect therein
shall not affect the legality or validity of any distribution, right, warrant,
subdivision, combination, consolidation, merger, sale, transfer, dissolution,
liquidation, winding up or other action, or the vote upon any of the foregoing.
SECTION 13.9 Covenant to Reserve Shares for Issuance on Conversion
of Securities. The Company covenants that at all times it will reserve and keep
available out of each class of its authorized Common Shares, free from
preemptive rights, solely for the purpose of issue upon conversion of Securities
of any Series as herein provided, such number of Common Shares as shall then be
issuable upon the conversion of all Outstanding Securities of such Series. The
Company covenants that all Common Shares which shall be so issuable shall, when
issued or delivered, be duly and validly issued Common Shares into which
Securities of such Series are convertible, and shall be fully paid and
nonassessable, free of all liens and charges and not subject to preemptive
rights and that, upon conversion, the appropriate capital stock accounts of the
Company will be duly credited.
SECTION 13.10 Compliance with Governmental Requirements. The
Company covenants that if any Common Shares required to be reserved for purposes
of conversion of Securities hereunder require
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<PAGE>
registration or listing with or approval of any governmental authority under any
Federal or State law, pursuant to the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, or any national or regional
securities exchange on which the Common Shares are listed at the time of
delivery of any Common Shares, before such shares may be issued upon conversion,
the Company will use its best efforts to cause such shares to be duly
registered, listed or approved, as the case may be.
SECTION 13.11 Payment of Taxes upon Certificates for Shares Issued
upon Conversion. The issuance of certificates for Common Shares upon the
conversion of Securities shall be made without charge to the converting Holders
for any tax (including, without limitation, all documentary and stamp taxes) in
respect of the issuance and delivery of such certificates, and such certificates
shall be issued in the respective names of, or in such names as may be directed
by, the holders of the Securities converted; provided, however, that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any such certificate in a name
other than that of the Holder of the Security converted, and the Company shall
not be required to issue or deliver such certificate unless or until the Person
or Persons requesting the 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.
SECTION 13.12 Trustee's Duties with Respect to Conversion
Provisions. The Trustee and any conversion agent shall have no duty,
responsibility or liability to any Holder to determine whether any facts exist
which may require any adjustment of the conversion rate, or with respect to the
nature or extent of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. Neither the Trustee nor any conversion agent shall be
accountable with respect to the registration under securities laws, listing,
validity or value (or the kind or amount) of any Common Shares, or of any other
securities or property, which may at any time be issued or delivered upon the
conversion of any Security, and neither the Trustee nor any conversion agent
makes any representation with respect thereto. Neither the Trustee nor any
conversion agent shall be responsible for any failure of the Company to make any
cash payment or to issue, transfer or deliver any shares of stock or stock
certificates or other securities or property upon the surrender of any Security
for the purpose of conversion; and the Trustee and any conversion agent, subject
to the provisions of Section 313 of the TIA, shall not be responsible for any
failure of the Company to comply with any of the covenants of the Company
contained in this Article Thirteen.
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<PAGE>
SECTION 13.13 Conversion of Securities Into Preferred Stock.
Notwithstanding anything to the contrary in this Article Thirteen, the Company
may issue Securities that are convertible into Preferred Shares, including
Preferred Shares convertible into Common Shares, in which case all terms and
conditions relating to the conversion of Securities into Preferred Shares,
including any terms similar to those provided in Sections 13.1 through 13.12,
shall be as provided in or pursuant to an appropriate resolution of the Board of
Directors or in any indenture supplemental hereto or as otherwise contemplated
by Section 2.3.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereto affixed and
attested, all as of the day and year first above written.
FMC CORPORATION
By: /s/Michael J. Callahan
--------------------------
Name: Michael J. Callahan
Title: Executive Vice Pres.
and Chief Financial
Officer
ATTEST:
By: /s/Robert L. Day
-------------------
Name: Robert L. Day
Title: Secretary
[CORPORATE SEAL]
HARRIS TRUST AND SAVINGS BANK,
as Trustee
By: /s/J. Bartolini
--------------------------
Name: J. Bartolini
Title: Vice President
ATTEST:
By: /s/D.G. Donovan
----------------
Name: D.G. Donovan
Title: Assistant Secretary
[CORPORATE SEAL]
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<PAGE>
PAGE 2
FMC Corporation
Quarterly Report
on Form 10-Q for
June 30, 1996
Exhibit 11 Statement re:
Computation of Per Share Earnings Assuming
Full Dilution (Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30 Ended June 30
---------------------- --------------------
1996 1995 1996 1995
---------- ---------- ---------- --------
<S> <C> <C> <C> <C>
Earnings:
Net income $56,308 $77,710 $111,521 $130,148
Shares:
Average number of shares of
common stock and common
stock equivalents
outstanding 38,059 37,669 38,016 37,600
Additional shares assuming
conversion of
stock options 25 81 52 75
------- ------- -------- --------
Pro forma shares 38,084 37,750 38,068 37,675
======= ======= ======== ========
Earnings per common share
assuming full dilution $ 1.48 $ 2.06 $ 2.93 $ 3.45
======= ======= ======== ========
</TABLE>
<PAGE>
PAGE 3
FMC Corporation
Quarterly Report
on Form 10-Q for
June 30, 1996
<TABLE>
<CAPTION>
Exhibit 12 Computation of Ratios of Earnings to Fixed Charges
--------------------------------------------------
(In millions, except ratio
data)
Six Months Ended
June 30
--------------------
1996 1995
------ ------
<S> <C> <C>
Earnings:
Income from continuing operations
before income taxes $159.3 $191.6
Minority interests 35.5 25.2
Undistributed (earnings) losses of
affiliates (4.8) (0.1)
Interest expense and amortization
of debt discount, fees and expenses 48.2 40.8
Amortization of capitalized interest 4.3 4.0
Interest included in rental expense 7.3 10.7
------ ------
Total earnings $249.8 $272.2
------ ------
Fixed charges:
Interest expense and amortization
of debt discount, fees and expenses $ 48.2 $ 40.8
Interest capitalized as part of
fixed assets 7.4 5.4
Interest included in rental expense 7.3 10.7
------ ------
Total fixed charges $ 62.9 $ 56.9
------ ------
Ratio of earnings to fixed charges 4.0x 4.8x
====== ======
</TABLE>
<PAGE>
PAGE 4
FMC Corporation
SIGNATURE Quarterly Report
on Form 10-Q for
June 30, 1996
Exhibit 15 Letter re: Unaudited Interim Financial Information
--------------------------------------------------
FMC Corporation
Chicago, Illinois
Gentlemen:
Re: Registration Statements No. 33-10661 and No. 33-7749 on Form S-8 and
Registration Statements No. 33-45648 and No. 33-62415 on Form S-3.
With respect to the subject registration statements, we acknowledge our
awareness of the incorporation by reference of our report dated July 17, 1996
related to our review of interim financial information.
Pursuant to Rule 436(c) under the Securities Act of 1933, such report is not
considered a part of a registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant within the meaning
of Sections 7 and 11 of the Act.
Very truly yours,
KPMG Peat Marwick LLP
Chicago, Illinois
August 13, 1996
<PAGE>
PAGE 5
FMC Corporation
SIGNATURE Quarterly Report
on Form 10-Q for
June 30, 1996
Exhibit 15 Letter re: Unaudited Interim Financial Information
--------------------------------------------------
July 15, 1996
Securities and Exchange Commission
Washington, D.C. 20549
We are aware of the incorporation by reference in the Registration Statements
(Form S-3 No. 33-62415, Form S-3 No. 33-45648, Form S-8 No. 33-10661 and Form
S-8 No. 33-7749) of FMC Corporation for the registration of its common stock of
our report dated July 15, 1996 relating to the unaudited interim financial
statements of United Defense L.P. which is included in the Form 10-Q of FMC
Corporation for the quarter ended June 30, 1996.
Pursuant to Rule 436(c) of the Securities Act of 1933, our report is not a part
of the registration statements prepared or certified by accountants within the
meaning of Section 7 or 11 of the Securities Act of 1933.
Ernst & Young LLP
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from FMC
Corporation Form 10Q for the Quarterly Period Ended June 30, 1996 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 118
<SECURITIES> 0
<RECEIVABLES> 934
<ALLOWANCES> 6
<INVENTORY> 743
<CURRENT-ASSETS> 2076
<PP&E> 4087
<DEPRECIATION> 2274
<TOTAL-ASSETS> 4798
<CURRENT-LIABILITIES> 2227
<BONDS> 966
<COMMON> 4
0
0
<OTHER-SE> 765
<TOTAL-LIABILITY-AND-EQUITY> 4798
<SALES> 2345
<TOTAL-REVENUES> 2400
<CGS> 1745
<TOTAL-COSTS> 2160
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 49
<INCOME-PRETAX> 159<F1>
<INCOME-TAX> 45
<INCOME-CONTINUING> 114
<DISCONTINUED> (3)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 111
<EPS-PRIMARY> 2.93
<EPS-DILUTED> 2.93
<FN>
<F1> Income before taxes and other items includes minority interest expense of
$35.5. Minority interest expense is primarily limited partner's share of
partnership profits for which tax has not been provided.
</FN>
</TABLE>
