<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 21, 1998
REGISTRATION NO. 333-52369
POST-EFFECTIVE AMENDMENT NO. 3 TO REGISTRATION NO. 33-61809 AND 333-52369-01
THROUGH -02
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
PRE-EFFECTIVE AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C>
FOSTER WHEELER CORPORATION FW PREFERRED CAPITAL TRUST I
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS FW PREFERRED CAPITAL TRUST II
CHARTER) (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS
CHARTER)
</TABLE>
<TABLE>
<S> <C>
NEW YORK DELAWARE
(STATE OR OTHER JURISDICTION (STATE OR OTHER JURISDICTION
OF INCORPORATION OR ORGANIZATION) OF INCORPORATION OR ORGANIZATION)
</TABLE>
<TABLE>
<S> <C>
13-1855904 NOT APPLICABLE
(I.R.S. EMPLOYER IDENTIFICATION NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
</TABLE>
<TABLE>
<S> <C>
PERRYVILLE CORPORATE PARK C/O FOSTER WHEELER CORPORATION
CLINTON, NEW JERSEY 08809 PERRYVILLE CORPORATE PARK
(908) 730-4000 CLINTON, NEW JERSEY 08809
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, (908) 730-4000
INCLUDING (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE INCLUDING
OFFICES) AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE
OFFICES)
</TABLE>
<TABLE>
<S> <C> <C>
THOMAS R. O'BRIEN, ESQ. TIMOTHY B. GOODELL, ESQ. STACY J. KANTER, ESQ.
FOSTER WHEELER CORPORATION WHITE & CASE LLP SKADDEN, ARPS, SLATE,
PERRYVILLE CORPORATE PARK 1155 AVENUE OF THE AMERICAS MEAGHER & FLOM LLP
CLINTON, NEW JERSEY 08809 NEW YORK, NEW YORK 10036 919 THIRD AVENUE
(908) 730-4000 (212) 819-8200 NEW YORK, NEW YORK 10022
(212) 735-3000
(NAME, ADDRESS, INCLUDING ZIP
CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT
FOR SERVICE)
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined by
market conditions.
------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]__________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]__________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE> 2
Pursuant to Rule 429 under the Securities Act of 1933, as amended (the
"Securities Act"), the Prospectus included in this registration statement
relates to the unsold Debt Securities, Common Stock, Preferred Stock, Depositary
Shares and Warrants having an aggregate principal or liquidation amount of
$130,000,000 that were previously registered by Foster Wheeler Corporation under
the Registration Statement No. 33-61809 on Form S-3 (effective November 16,
1995). This registration statement constitutes Post-Effective Amendment No. 1 to
such prior registration statement. Such post-effective amendment shall hereafter
become effective in accordance with Section 8(c) of the Securities Act
concurrently with the effectiveness of this Registration Statement.
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PROSPECTUS Subject to Completion dated December 21, 1998
$300,000,000
FOSTER WHEELER CORPORATION
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
DEPOSITARY SHARES
WARRANTS
FW PREFERRED CAPITAL TRUST I
FW PREFERRED CAPITAL TRUST II
PREFERRED SECURITIES FULLY AND UNCONDITIONALLY
GUARANTEED, AS DESCRIBED HEREIN, BY
FOSTER WHEELER CORPORATION
Foster Wheeler Corporation ("Foster Wheeler" or the "Corporation") may
offer from time to time, together or separately, up to $300,000,000 aggregate
principal amount, or its equivalent based on the applicable exchange rate at the
time of the offering, of its (i) debt securities consisting of debentures, notes
or other unsecured evidences of indebtedness (the "Debt Securities"), which may
be either senior debt securities (the "Senior Debt Securities"), senior
subordinated debt securities (the "Senior Subordinated Debt Securities") or
junior subordinated debt securities (the "Junior Subordinated Debentures"); (ii)
shares of preferred stock (the "Preferred Stock"), which may be issued in the
form of depositary receipts (the "Depositary Shares") that will represent a
fraction of a share of Preferred Stock; (iii) shares of common stock (the
"Common Stock") and (iv) warrants to purchase securities of the Corporation as
shall be designated by the Corporation at the time of the offering (the
"Warrants"), in each case in amounts, at prices and on terms to be determined at
the time of the offering. The Debt Securities, Preferred Stock, Depositary
Shares, Common Stock and the Warrants are collectively called the "Corporation
Securities."
FW Preferred Capital Trust I and FW Preferred Capital Trust II, each a
statutory business trust organized under the laws of the State of Delaware
(each, an "Issuer Trust"), may severally offer, from time to time, preferred
securities (the "Preferred Securities") representing preferred undivided
beneficial interests in the assets of such Issuer Trust. The Corporation will
initially be the registered holder (the "Holder") of all the beneficial
interests represented by common securities of such Issuer Trust (the "Common
Securities" and, together with the Preferred Securities, the "Trust
Securities"). The Trust Securities and the Corporation Securities are referred
to collectively herein as the "Securities"). Holders of the Preferred Securities
will be entitled to receive preferential cumulative cash distributions
("Distributions") accumulating from the date of original issuance and payable
periodically as provided in the applicable supplement to this Prospectus (the
"Prospectus Supplement"). Concurrently with the issuance by an Issuer Trust of
its Preferred Securities, such Issuer Trust will invest the proceeds thereof and
of any contributions received in respect of the Common Securities in a
corresponding series of the Corporation's Junior Subordinated Debentures (the
"Corresponding Junior Subordinated Debentures") with terms corresponding to the
terms of that Issuer Trust's Preferred Securities (the "Related Preferred
Securities"). The Corresponding Junior Subordinated Debentures will be the sole
assets of such Issuer Trust, and payments under the Corresponding Junior
Subordinated Debentures will be the only revenues of such Issuer Trust. If so
provided in the applicable Prospectus Supplement, the Corporation may redeem the
Corresponding Junior Subordinated Debentures (and cause the redemption of the
Related Preferred Securities) or may dissolve each Issuer Trust and cause the
Corresponding Junior Subordinated Debentures to be distributed to the Holders of
the Related Preferred Securities in liquidation of their interests in such
Issuer Trust.
---------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS OR ANY APPLICABLE PROSPECTUS SUPPLEMENT, IN CONNECTION WITH THE
OFFERING CONTAINED HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
CORPORATION OR THE ISSUER TRUSTS. THIS PROSPECTUS AND ANY ACCOMPANYING
PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN
THOSE TO WHICH THEY RELATE OR AN OFFER TO ANY PERSON IN ANY JURISDICTION WHERE
SUCH AN OFFER WOULD BE UNLAWFUL OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO. NEITHER THE DELIVERY OF THIS PROSPECTUS
OR ANY ACCOMPANYING PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE THEREOF OR, IN THE CASE OF
INFORMATION INCORPORATED HEREIN BY REFERENCE, THE DATE OF FILING WITH THE
COMMISSION.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
LEHMAN BROTHERS
THE DATE OF THIS PROSPECTUS IS , 1998
<PAGE> 4
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information concerning the Corporation can be inspected and
copied at the Commission's office at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and the Commission's Regional Offices in New York (Seven
World Trade Center, 13th Floor, New York, New York 10048) and Chicago (Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511).
Copies of such material can also be obtained at prescribed rates from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. The Commission also maintains a site on the World Wide Web, the address
of which is http://www.sec.gov, that contains reports, proxy statements and
other information regarding issuers, such as the Corporation, that file
electronically with the Commission. In addition, such materials can be inspected
at the office of the New York Stock Exchange, Inc., on which certain securities
of the Corporation are listed. This Prospectus does not contain all the
information set forth in the registration statement of which this Prospectus
forms a part (the "Registration Statement"), which the Corporation and the
Issuer Trusts have filed with the Commission under the Securities Act of 1933,
as amended (the "Securities Act"), and to which reference is hereby made,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission.
No separate financial statements of any Issuer Trust have been included or
incorporated by reference herein. The Corporation and the Issuer Trusts do not
consider that such financial statements would be material to Holders of the
Preferred Securities because each Issuer Trust is a newly-formed special-purpose
entity, has no operating history or independent operations and is not engaged in
and does not propose to engage in any activity other than holding as trust
assets the Corresponding Junior Subordinated Debentures and issuing the Trust
Securities and engaging in only those other activities necessary or incidental
thereto. Furthermore, taken together, the Corporation's obligations under each
series of Corresponding Junior Subordinated Debentures, the Junior Subordinated
Indenture, the related Declaration of Trust, the related Expense Agreement and
the related Guarantee, in the aggregate, provide a full, irrevocable and
unconditional guarantee of payments of Distributions and other amounts due on
the Preferred Securities of the Issuer Trust. See "The Issuer Trusts",
"Description of Preferred Securities", "Description of Junior Subordinated
Debentures", "Description of Guarantees" and "Relationship Among the Preferred
Securities, the Corresponding Junior Subordinated Debentures, the Guarantees and
the Expense Agreements". In addition, the Corporation does not expect that the
Issuer Trusts will be filing reports under the Exchange Act with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Corporation and the Issuer Trusts hereby incorporate by reference in
this Prospectus the following documents:
(a) The Corporation's Annual Report on Form 10-K for the fiscal year
ended December 26, 1997 (as amended by the Form 10-K/A filed on December
18, 1998), filed pursuant to Section 13 of the Exchange Act;
(b) The Corporation's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 27, 1998, June 26, 1998 and September 25, 1998 (as
amended by the Form 10-Q/A filed on December 18, 1998), filed pursuant to
Section 13 of the Exchange Act; and
(c) The Corporation's Current Report on Form 8-K dated August 27,
1998.
All documents filed by the Corporation pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of any offering of the securities offered hereby shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such
2
<PAGE> 5
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Any person who receives a copy of this Prospectus may obtain without
charge, upon written or oral request, a copy of any of the documents
incorporated by reference herein, except for the exhibits to such documents
(unless such exhibits are specifically incorporated by reference herein).
Written requests should be mailed to the Office of the Secretary, Foster Wheeler
Corporation, Perryville Corporate Park, Clinton, NJ 08809. Telephone requests
may be directed to (908) 730-4000.
THE CORPORATION
GENERAL
The business of the Corporation and its subsidiaries falls within three
business groups. The Corporation's Engineering and Construction Group (the "E&C
Group") designs, engineers and constructs petroleum, chemical, petrochemical and
alternative-fuels facilities and related infrastructure, including power
generation and distribution facilities, production terminals, pollution control
equipment and water treatment facilities and process plants for the production
of fine chemicals, pharmaceuticals, dyestuffs, fragrances, flavors, food
additives and vitamins. Also, the E&C Group provides a broad range of
environmental remediation services, together with related technical, design and
regulatory services. The Corporation's Energy Equipment Group (the "Energy
Equipment Group") designs, manufactures and erects steam generating and
auxiliary equipment for power stations and industrial markets worldwide. Steam
generating equipment includes a full range of fluidized bed and conventional
boilers firing coal, oil, gas, biomass and other municipal solid waste, waste
wood and low-Btu gases. Auxiliary equipment includes feedwater heaters, steam
condensers, heat-recovery equipment and low-NOx burners. Site services related
to these products encompass plant erection, maintenance engineering, plant
upgrading and life extension, and plant repowering. In addition, the Energy
Equipment Group provides research analysis and experimental work in fluid
dynamics, heat transfer, combustion and fuel technology, materials engineering
and solids mechanics. At the end of June 1997, the Energy Equipment Group sold
Glitsch International, Inc. which provided proprietary solutions and systems for
many separation applications and manufactured highly engineered chemical
separations equipment for the petroleum refining, petrochemical, chemical and
gas processing industries. The Corporation's Power System's Group (the "Power
Systems Group") utilizes Foster Wheeler strengths in design, engineering,
manufacturing and construction to build, own or lease, and operate cogeneration,
independent power production and resource recovery facilities as well as
facilities for the process and petrochemical industries. The Power Systems Group
generates revenues from construction and operating activities pursuant to
long-term off-take and operating and maintenance agreements and from returns on
its equity positions. A special-purpose subsidiary established for each new
project manages that project from the permitting stage through plant
construction and operation. All of the special-purpose subsidiary project debt
is limited-recourse. The Power Systems Group refinances its equity interest in
selected projects from time to time when such refinancing will result in risk
mitigation, a lower effective financing cost or a potential increased return on
investment.
The executive offices of the Corporation, a New York corporation organized
in 1900, are located at Perryville Corporate Park, Clinton, New Jersey 08809,
and the general telephone number is (908) 730-4000.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the periods indicated:
<TABLE>
<CAPTION>
NINE
MONTHS
ENDED
- -------------- FISCAL YEAR
SEPTEMBER 25, --------------------------------
1998 1997 1996 1995 1994 1993
- -------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
1.18 1.02 2.64 2.13 3.38 3.26
</TABLE>
- ---------------
3
<PAGE> 6
The ratio of earnings to fixed charges was calculated based on information
from the Corporation's books and records. In computing the ratio of earnings to
fixed charges, earnings consist of net earnings/loss of the Corporation and its
consolidated subsidiaries, plus income taxes, plus fixed charges and capitalized
interest amortized, less capitalized interest and equity earnings of
non-consolidated associated companies accounted for by the equity method, net of
dividends. Fixed charges consist of interest costs on borrowed funds, including
capitalized interest, commitment fees, and a reasonable approximation of the
imputed interest on non-capitalized lease expense.
THE ISSUER TRUSTS
Each Issuer Trust is a statutory business trust created under Delaware law
pursuant to (i) a declaration of trust executed by the Corporation, as sponsor
(the "Sponsor") of the Issuer Trust, and the Delaware Trustee (as defined
herein) of such Issuer Trust and (ii) a certificate of trust filed with the
Delaware Secretary of State. Each declaration of trust will be amended and
restated in its entirety (each, as so amended and restated, a "Declaration of
Trust") substantially in the form filed as an exhibit to the Registration
Statement. Each Declaration of Trust will be qualified as an indenture under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The
Corporation will acquire Common Securities in an aggregate liquidation amount
equal to at least 3% of the total capital of such Issuer Trust at the same time
as the Preferred Securities are sold. Each Issuer Trust exists for the exclusive
purposes of (i) issuing and selling its Trust Securities, (ii) using the
proceeds from the sale of such Trust Securities to acquire a series of
Corresponding Junior Subordinated Debentures issued by the Corporation, and
(iii) engaging in only those other activities necessary or incidental thereto
(such as registering the transfer of the Trust Securities). Accordingly, the
Corresponding Junior Subordinated Debentures will be the sole assets of each
Issuer Trust, and payments under the Corresponding Junior Subordinated
Debentures will be the sole source of revenue of such Issuer Trust.
All of the Common Securities of each Issuer Trust will initially be owned
by the Corporation. The Common Securities of an Issuer Trust will rank pari
passu, and payments will be made thereon pro rata, with the Preferred Securities
of such Issuer Trust, except that upon the occurrence of a Trust Enforcement
Event (as defined under "Description of Preferred Securities"), the rights of
the Holder of all the Common Securities to payment in respect of Distributions
and payments upon liquidation, redemption or otherwise, will be subordinated to
the rights of the Holders of the Preferred Securities of such Issuer Trust. See
"Description of Preferred Securities".
Each Issuer Trust's business and affairs are conducted by its trustees,
each appointed by the Corporation as Holder of all the Common Securities. The
trustees for each Issuer Trust will be Harris Trust and Savings Bank, as the
Property Trustee (the "Property Trustee"), and Wilmington Trust Company, as
Delaware Trustee (the "Delaware Trustee"), and three individual trustees (the
"Administrative Trustees") who are employees or officers of or affiliated with
the Corporation (collectively, the "Issuer Trustees"). Harris Trust and Savings
Bank, as Property Trustee, will act as sole indenture trustee under each
Declaration of Trust for purposes of compliance with the Trust Indenture Act.
Harris Trust and Savings Bank will also act as trustee under the Guarantees (as
defined under "Description of Guarantees") and the Indentures (as defined under
"Description of Debt Securities"). See "Description of Guarantees" and
"Description of Debt Securities". If a Trust Enforcement Event relating thereto
has occurred and is continuing, the Holders of a majority in liquidation amount
of the Related Preferred Securities will be entitled to appoint, remove or
replace the Property Trustee and/or the Delaware Trustee for such Issuer Trust.
In no event will the Holders of the Preferred Securities have the right to vote
to appoint, remove or replace the Administrative Trustees; such voting rights
are vested exclusively in the Holder of all the Common Securities. The duties
and obligations of each Issuer Trustee are governed by the applicable
Declaration of Trust.
The Property Trustee will hold title to the Corresponding Junior
Subordinated Debentures for the benefit of the Holders of the related Trust
Securities and, as Holder of such Corresponding Junior Subordinated Debentures,
the Property Trustee will have the power to exercise all rights, powers and
privileges of a Holder of Corresponding Junior Subordinated Debentures under the
Junior Subordinated Indenture. In addition, the Property Trustee will maintain
exclusive control of a non-interest bearing bank account (the "Property
4
<PAGE> 7
Account") to hold all payments made in respect of the Corresponding Junior
Subordinated Debentures for the benefit of the Holders of the related Trust
Securities. The Corporation, as Holder of all the Common Securities, will have
the right to appoint, remove or replace any of the Issuer Trustees and to
increase or decrease the number of Issuer Trustees; provided that after the
issuance of the Trust Securities, the number of Issuer Trustees will at all
times be at least three; and provided further, that after the issuance of the
Trust Securities, at least one Issuer Trustee will be a Delaware Trustee, one
Issuer Trustee will be a Property Trustee and one Issuer Trustee will be an
Administrative Trustee. The Corporation, as issuer of the Corresponding Junior
Subordinated Debentures to be acquired and held by the Issuer Trusts, will pay
all fees and expenses related to the organization and operations of the Issuer
Trusts (including any taxes, duties, assessments or governmental charges of
whatever nature, other than United States withholding taxes, imposed by the
United States or any other domestic taxing authority upon the Issuer Trusts) and
the offering of the Trust Securities and be responsible for all debts and
obligations of the Issuer Trusts (other than with respect to the Trust
Securities).
With respect to each Issuer Trust, for so long as the Preferred Securities
of such Issuer Trust remain outstanding, the Corporation will covenant, among
other things, to maintain 100% ownership of the Common Securities of such Issuer
Trust, to cause such Issuer Trust to remain a statutory business trust and to
use its commercially reasonable efforts to ensure that such Issuer Trust will
not be an "investment company" for purposes of the Investment Company Act of
1940 (the "Investment Company Act").
The rights of the Holders of the Preferred Securities of an Issuer Trust,
including economic rights, rights to information and voting rights, are set
forth in the Declaration of Trust of each Issuer Trust and the Trust Indenture
Act. See "Description of Preferred Securities". The Declarations of Trust and
the Guarantees also incorporate by reference the terms of the Trust Indenture
Act.
The principal executive office of each Issuer Trust is c/o Foster Wheeler
Corporation, Perryville Corporate Park, Clinton, New Jersey, 08809 and its
telephone number is (908) 730-4000.
DESCRIPTION OF DEBT SECURITIES
The Senior Debt Securities and the Senior Subordinated Debt Securities may
be issued by the Corporation from time to time in one or more series under an
Indenture, dated as of November 17, 1995 (the "1995 Indenture"), between the
Corporation and Harris Trust and Savings Bank, as Trustee. The Junior
Subordinated Debentures may be issued by the Corporation from time to time in
one or more series under an Indenture, the form of which has been filed as an
exhibit to the Registration Statement (the "Junior Subordinated Indenture" and,
together with the 1995 Indenture, the "Indentures"), between the Corporation and
Harris Trust and Savings Bank, as Trustee (in its capacity as Trustee under
either the 1995 Indenture or the Junior Subordinated Indenture, as applicable,
the "Indenture Trustee"). The following summaries of certain provisions of the
Debt Securities and the Indentures, as modified or superseded by any applicable
Prospectus Supplement, are brief summaries of certain provisions thereof, do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all of the provisions of the relevant Indenture. Capitalized
terms are used as defined in the 1995 Indenture and the Junior Subordinated
Indenture, as applicable, unless otherwise defined herein. Whenever any term
defined therein is referred to, such definition is incorporated herein by
reference.
GENERAL
Neither Indenture limits the amount of Debt Securities that may be issued
thereunder, and each provides that additional Debt Securities may be issued in
one or more series thereunder up to the aggregate principal amount that may be
authorized from time to time by the Corporation's Board of Directors (the "Board
of Directors"). The Senior Debt Securities will be unsecured senior obligations
of the Corporation and will rank equally and ratably with all other unsecured
unsubordinated indebtedness of the Corporation. As will be described more fully
in the applicable Prospectus Supplement, the Senior Subordinated Debt Securities
will be subordinated in right of payment to the prior payment in full of all
Senior Debt (as defined below under "-- Certain Covenants of the Corporation
under the 1995 Indenture -- Definitions") of the Corporation. See "-- Senior
Subordinated Debt Securities". The Junior Subordinated Debentures will be
subordinated and junior in right of payment to the prior payment in full of all
Senior Indebtedness (as defined under "-- Junior
5
<PAGE> 8
Subordinated Debentures -- Subordination") of the Corporation. See "-- Junior
Subordinated Debentures -- Subordination".
In the event that Junior Subordinated Debentures are issued to an Issuer
Trust or an Issuer Trustee thereof in connection with the issuance of Trust
Securities by such Issuer Trust, such Junior Subordinated Debentures may
subsequently be distributed pro rata to the Holders of such Trust Securities as
will be described in the Prospectus Supplement relating to such Trust
Securities. Only one series of Junior Subordinated Debentures will be issued to
an Issuer Trust or an Issuer Trustee thereof in connection with the issuance of
Trust Securities by such Trust.
Reference is made to the Prospectus Supplement relating to the particular
Debt Securities offered thereby for the following terms, where applicable, of
the Debt Securities: (i) the specific designation of the Debt Securities; (ii)
the denominations in which such Debt Securities are authorized to be issued;
(iii) the aggregate principal amount of such Debt Securities; (iv) the date or
dates on which the principal and premium, if any, of such Debt Securities will
mature or the method of determining such date or dates; (v) the price or prices
(expressed as a percentage of the aggregate principal amount thereof) at which
the Debt Securities will be issued; (vi) the rate or rates (which may be fixed
or variable) at which such Debt Securities will bear interest, if any, or the
method of calculating such rate or rates; (vii) the times and places where
principal of, premium, if any, and interest, if any, on such Debt Securities
will be payable; (viii) the date, if any, after which such Debt Securities may
be redeemed and the redemption prices; (ix) the date or dates on which interest,
if any, will be payable and the record date or dates therefor or the method by
which such date or dates will be determined; (x) the period or periods within
which, the price or prices at which, the currency or currencies (including
currency units) in which, and the terms and conditions upon which, such Debt
Securities may be redeemed, in whole or in part, at the option of the
Corporation, pursuant to any sinking fund or otherwise; (xi) the obligation, if
any, of the Corporation to redeem or purchase such Debt Securities pursuant to
any sinking fund or analogous provisions, upon the happening of a specified
event or at the option of a Holder thereof and the period or periods within
which, the price or prices at which and the terms and conditions upon which,
such Debt Securities shall be redeemed or purchased, in whole or in part,
pursuant to such obligations; (xii) the terms and conditions, if any, pursuant
to which the Debt Securities are convertible or exchangeable into Common Stock
or Preferred Stock or other debt securities, including the conversion or
exchange price, the conversion or exchange period and other conversion or
exchange provisions; (xiii) the currency or currency units for which such Debt
Securities may be purchased or in which such Debt Securities may be denominated
and/or the currency or currency units in which principal of, premium, if any,
and/or interest, if any, on such Debt Securities will be payable and whether the
Corporation or the Holders of any such Debt Securities may elect to receive
payments in respect of such Debt Securities in a currency or currency units
other than that in which such Debt Securities are stated to be payable; (xiv)
any index or formula used to determine the amount of payments of principal of
and premium, if any, and interest; (xv) if other than the principal amount
thereof, the portion of the principal amount of such Debt Securities that will
be payable upon declaration of the acceleration of the maturity thereof or the
method by which such portion shall be determined; (xvi) the person to whom any
interest on any such Debt Security shall be payable if other than the person in
whose name such Debt Security is registered on the applicable record date;
(xvii) any addition to, or modification or deletion of, any Event of Default (as
defined herein) or any covenant of the Corporation specified in the relevant
Indenture with respect to such Debt Securities; (xviii) the application, if any,
of such means of defeasance or covenant defeasance as may be specified for such
Debt Securities; (xix) whether such Debt Securities are to be issued in whole or
in part in the form of one or more temporary or permanent global securities and,
if so, the identity of the depositary for such global security or securities;
(xx) subordination terms, if any, applicable to such Debt Securities; (xxi) the
right, if any, to extend the interest payment periods and the duration of such
extension; (xxii) the form of the Debt Securities, including the form of the
certificate of authentication; (xxiii) any trustee, paying agent, authenticating
agent, warrant agent, transfer agent or registrar with respect to the Debt
Securities; and (xxiv) any other terms pertaining to such Debt Securities not
inconsistent with the provisions of the applicable Indenture. Debt Securities
may also be issued under the 1995 Indenture upon the exercise of Debt Warrants.
See "Description of Warrants -- Debt Warrants." Unless otherwise specified in
the applicable Prospectus Supplement, the Debt Securities will not be listed on
any securities exchange.
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Some of the Debt Securities may be issued at a discount (bearing no
interest or interest at below market rates) ("Discount Securities") to their
stated principal amount. United States Federal income tax consequences and other
special considerations applicable to any such Discount Securities or any Debt
Securities which are denominated in a currency or composite currency other than
United States dollars will be described in the applicable Prospectus Supplement.
Since the Corporation is a holding company, the rights of the Corporation,
and hence the right of creditors of the Corporation (including the Holders of
Debt Securities), to participate in any distribution of the assets of any
subsidiary upon its liquidation or reorganization otherwise is necessarily
subject to the prior claims of creditors of any such subsidiary except to the
extent that claims of the Corporation itself as a creditor of the subsidiary may
be recognized.
Unless otherwise indicated in the applicable Prospectus Supplement, the
covenants contained in the Indentures and the Debt Securities would not provide
for redemption at the option of a Holder nor necessarily afford Holders thereof
protection in the event of a highly leveraged or other transaction that may
adversely affect such Holders, except to the extent described under
"-- Consolidation, Merger and Sale of Assets." Such covenants may not be waived
or modified by the Corporation or its Board of Directors, although Holders of
Debt Securities could waive or modify such covenants as more fully described
below under "-- Modification and Waiver."
CONVERSION OR EXCHANGE OF DEBT SECURITIES
If so indicated in the applicable Prospectus Supplement with respect to a
particular series of Debt Securities, such series will be convertible or
exchangeable into Common Stock, Preferred Stock or other securities on the terms
and conditions set forth therein. Such terms will include provisions as to
whether conversion is mandatory, at the option of the Holder or at the option of
the Corporation, and may include provisions pursuant to which the number of
shares of Common Stock, Preferred Stock or other securities of the Corporation
to be received by the Holders of such Debt Securities would be calculated
according to the market price of Common Stock, Preferred Stock or other
securities of the Corporation as of a time stated in the Prospectus Supplement.
The applicable Prospectus Supplement will indicate restrictions on ownership
that may apply in the event of a conversion or exchange.
FORM, EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Debt Securities will be issued in fully registered form without coupons in
denominations set forth in the Prospectus Supplement. No service charge will be
made for any transfer or exchange of such Debt Securities, but the Corporation
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. Where Debt Securities of any series are
issued in bearer form, the special restrictions and considerations, including
special offering restrictions and special United States Federal income tax
considerations, applicable to any such Debt Securities and to payment on and
transfer and exchange of such Debt Securities will be described in the
Prospectus Supplement. Debt Securities in bearer form will be transferable by
delivery.
Unless otherwise provided in the applicable Prospectus Supplement,
principal and premium, if any, or interest, if any, will be payable and the Debt
Securities may be surrendered for payment or transferred at the offices of the
Indenture Trustee as paying and authenticating agent, provided that payment of
interest on registered securities may be made at the option of the Corporation
(i) by check mailed to the address of the person entitled thereto as it appears
in the applicable Security Register or (ii) by wire transfer to an account
maintained by the person entitled thereto as specified in the applicable
Security Register. Payment of Debt Securities in bearer form will be made at
such paying agencies outside of the United States as the Corporation may
appoint.
BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a depositary (the "Global Depositary"), or its nominee,
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identified in the Prospectus Supplement relating to such series. In such a case,
one or more Global Securities will be issued in a denomination or aggregate
denomination equal to the portion of the aggregate principal amount of
outstanding Debt Securities of the series to be represented by such Global
Security or Securities. Unless and until it is exchanged in whole or in part for
Debt Securities in definitive registered form, a Global Security may not be
registered for transfer or exchange except as a whole by the Global Depositary
for such Global Security to a nominee for such Global Depositary and except in
the circumstances described in the applicable Prospectus Supplement.
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Global Security
and a description of the Global Depositary will be provided in the applicable
Prospectus Supplement.
CERTAIN COVENANTS OF THE CORPORATION UNDER THE 1995 INDENTURE
Definitions
"Attributable Debt" is defined to mean as to any particular lease under
which any Person is at the time liable, at any date as of which the amount
thereof is to be determined, the total net amount of rent required to be paid by
such Person under such lease during the remaining primary term thereof,
discounted from the respective due dates thereof to such date at the rate of
interest per annum, compounded semi-annually, implicit in the terms of such
lease, as determined in good faith by the Corporation. The net amount of rent
required to be paid under any such lease for any such period shall be the amount
of the rent payable by the lessee with respect to such period, after excluding
amounts required to be paid on account of maintenance, repairs, insurance,
taxes, assessments, water rates and similar charges and contingent rents such as
those based on sales. In the case of any lease which is terminable by the lessee
upon the payment of a penalty, such net amount shall also include the amount of
such penalty, but shall not include any rent required to be paid under such
lease subsequent to the first date upon which it may be so terminated.
"Consolidated Net Tangible Assets" is defined to mean the aggregate amount
of assets after deducting (a) all current liabilities and (b) all goodwill,
trade names, trademarks, patents, unamortized debt discount and expense, and
other like intangibles, all as set forth on the most recently prepared balance
sheet of the Corporation and its consolidated Subsidiaries and computed in
accordance with United States generally accepted accounting principles.
"Corporation" includes corporations, partnerships, associations, companies,
joint-stock companies and business trusts.
"Debt" with respect to any Person is defined to mean (i) any debt (a) for
money borrowed, or (b) evidenced by a bond, note, debenture, or similar
instrument (including purchase money obligations) given in connection with the
acquisition of any business, property or assets, whether by purchase, merger,
consolidation or otherwise, but shall not include any account payable or other
obligation created or assumed by a Person in the ordinary course of business in
connection with the obtaining of materials or services, or (c) which is a direct
or indirect obligation which arises as a result of banker's acceptances; (ii)
any debt of others described in the preceding clause (i) which such Person has
guaranteed or for which it is otherwise directly liable; (iii) the obligation of
such Person as lessee under any lease of property which is reflected on such
Person's balance sheet as a capitalized lease; and (iv) any deferral, amendment,
renewal, extension, supplement or refunding of any liability of the kind
described in any of the preceding clauses (i), (ii) and (iii); provided,
however, that, in computing the Debt of any Person, there shall be excluded any
particular Debt if, upon or prior to the maturity thereof, there shall have been
deposited with a depository in trust money (or evidence of Debt if permitted by
the instrument creating such Debt) in the necessary amount to pay, redeem or
satisfy such Debt as it becomes due, and the amount so deposited shall not be
included in any computation of the assets of such Person.
"Existing Debt" is defined to mean all Debt outstanding on the date of
issuance of a particular series of Debt Securities.
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"Permitted Secured Debt" means all Debt (i) permitted under the covenant
described in "-- Limitation on Liens" and (ii) to which the covenant described
in "-- Limitation on Liens" is expressly inapplicable.
"Principal Property" is defined to mean any facility owned by the
Corporation or any Subsidiary, in each case, the gross book value of which on
the date of determination exceeds 1% of Consolidated Net Tangible Assets.
"Project Debt" means Debt incurred to finance cogeneration, waste-to-energy
or other operating or construction projects, but only to the extent that such
Debt is limited in recourse to the assets, contractual rights and revenues of
the particular project being financed.
"Restricted Subsidiary" is defined to mean any Subsidiary of the
Corporation which owns, directly or indirectly, a Principal Property and any
Subsidiary which, in the opinion of the Board of Directors or any duly
authorized committee thereof, is of material importance to the Corporation.
"Secured Debt" means all Debt secured by a Lien.
"Senior Debt" is defined to mean the principal, premium, if any, unpaid
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Corporation whether or not a
claim for post-filing interest is allowed in such proceeding), fees, charges,
expenses, reimbursement and indemnification obligations, and all other amounts
payable under or in respect of Debt of the Corporation, whether any such Debt
exists as of the date of the Indenture or is created, incurred, assumed or
guaranteed after such date, other than (i) Debt that by its terms or by
operation of law is subordinated to or on a parity with the Debt Securities and
(ii) Debt owed to a subsidiary or partnership of the Corporation.
"Subsidiary" is defined to mean a corporation of which securities having
ordinary voting power, in the absence of contingencies, to elect a majority of
directors, are owned directly or indirectly by the Corporation.
"Working Debt" means Debt incurred by Subsidiaries of the Corporation
organized outside the United States for (i) working capital in the ordinary
course of business that is repayable within three years or (ii) hedging currency
risk relating to contracts with customers for the delivery of products and
services with proceeds segregated and identified and limited to investments and
uses designed to accomplish such purpose.
Limitation on Liens
In the 1995 Indenture, the Corporation has covenanted that it will not, and
will not permit any Subsidiary to, incur, issue, assume or guarantee any Debt
secured after the date of the 1995 Indenture by pledge of, or mortgage or other
lien on ("Lien"), any Principal Property of the Corporation or any Subsidiary,
or any shares of stock or Debt of any Subsidiary without effectively providing
that the Debt Securities of all series issued pursuant to the 1995 Indenture
(together with, if the Corporation shall so determine, any other Debt of the
Corporation or such Subsidiary then existing or thereafter created which is not
subordinate to the Debt Securities) shall be secured equally and ratably with
(or, at the option of the Corporation, prior to) such Secured Debt, 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 which would
otherwise be prohibited, plus all Attributable Debt of the Corporation and its
Subsidiaries in respect of sale and leaseback transactions (as defined in
"-- Restrictions on Sales and Leasebacks") occurring after the date of the 1995
Indenture and existing at such time which would otherwise be prohibited by the
covenant described in "-- Restrictions on Sales and Leasebacks", would not
exceed 5% of Consolidated Net Tangible Assets. This restriction does not apply
to, and there shall be excluded in computing secured Debt for the purpose of
such restriction, Debt secured by:
(1) Liens on property, capital 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 or commencement of operation thereof or to secure any
Debt incurred prior to, at the time of, or within 180 days after, the later
of the acquisition of such property or shares or Debt, the completion of
any such construction and the commencement of operation for the purpose of
financing all or any part of the purchase price or construction cost or
commencement of operation thereof, provided
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that any such Liens shall only extend to the above-described property or
property on which the above-described property is situated;
(2) Liens on property of, or on any shares of stock or Debt of, any
corporation or other Person existing at the time such corporation becomes a
Restricted Subsidiary;
(3) Liens on property of, or on any shares of capital stock or Debt of
any Corporation or other Person existing at the time such Corporation or
other Person is merged into or consolidated with the Corporation or a
Restricted Subsidiary or at the time of sale, lease or other disposition of
all or substantially all the properties of a Corporation or other Person to
the Corporation;
(4) Liens (a) (i) in favor of the United States of America or any
State thereof, or any department, agency or instrumentality or political
subdivision of the United States of America or any State thereof, or (ii)
in favor any other country, or any political subdivision thereof, to secure
partial, progress, advance or other payments pursuant to any contract or
statute, or (b) (i) for taxes, assessments or governmental charges or
levies in each case not then due and delinquent or the validity of which is
being contested in good faith by appropriate proceedings, and (ii) for
materialmen's, mechanics', carriers', workmen's, repairmen's, landlord's or
other like Liens, or deposits to obtain the release of such Liens;
(5) Liens on any property or assets of any Restricted Subsidiary to
secure Debt owing by it to the Corporation or any other Restricted
Subsidiary;
(6) Liens arising out of judgments or awards against the Corporation
or any subsidiary that the Corporation or such subsidiary is contesting in
good faith;
(7) Liens made in favor of any customer arising in the ordinary course
of business of the Corporation or any subsidiary in respect of payments
made by or on behalf of such customer for goods produced or services
rendered to such customer,
(8) Liens existing at the date of the 1995 Indenture;
(9) Liens created to secure Project Debt, but only to the extent that
any such Lien does not extend beyond the assets, contractual rights and
revenues of such project and the capital stock of the corporation owning
such project, and any extension, renewal, refunding, replacement or
refinancing (or successive extensions, renewals, replacements, refundings
or refinancings) as a whole or in part of any Liens referred to in this
clause (9); and
(10) Any extension, renewal, refunding or replacement (or successive
extensions, renewals, refundings or replacements), as a whole or in part,
of any Lien referred to in the foregoing clauses (1) through (3) and (8),
inclusive; provided, however, that (i) such extension, renewal, refunding
or replacement Lien shall be limited to all or a part of the same property,
shares of stock or Debt that secured the Lien extended, renewed, refunded
or replaced (plus improvements on such property) and (ii) the Debt secured
by such Lien at such time is not increased.
Restrictions on Sales and Leasebacks
In the 1995 Indenture, the Corporation has covenanted that it will not, and
will not permit any Subsidiary to, enter into any arrangement with any bank,
insurance company or other lender or investor (not including the Corporation or
any Subsidiary) or to which any such lender or investor is a party, providing
for the leasing by the Corporation or any such Subsidiary of any Principal
Property which has been owned and operated by the Corporation or such Subsidiary
for more than 180 days and which has been sold or transferred by the Corporation
or such Subsidiary to such lender or investor or to any Person to whom funds
have been advanced by such lender or investor (each, a "sale and leaseback
transaction") unless, after giving effect thereto, the aggregate amount of all
Attributable Debt of the Corporation and its Subsidiaries in respect of such
sale and leaseback transactions occurring after the date of the 1995 Indenture
and existing at such time which would otherwise be prohibited under the covenant
described in "-- Restrictions on Sales and Leasebacks" plus all secured Debt
then outstanding of the Corporation and its Subsidiaries incurred after the date
of the 1995 Indenture which would otherwise be prohibited by the covenant
described in "-- Limitation on Liens", would
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not exceed 5% of Consolidated Net Tangible Assets. This restriction does not
apply to, and there shall be excluded from Attributable Debt in any computation
under such restriction, Attributable Debt with respect to any sale and leaseback
transaction under any of the following circumstances:
(1) the lease in such sale and leaseback transaction is for a period,
including renewals, of not in excess of three years; or
(2) the property which is the subject of the sale and leaseback
transaction is property capable of being subject to a Lien described in
clauses (1), (2), (3), (8) or (9) in the covenant described in
"-- Limitation on Liens"; or
(3) the Corporation or a Subsidiary, within 180 days after the sale or
transfer shall have been made by the Corporation or by any such Subsidiary,
applies an amount equal to the lesser of (i) Attributable Debt or (ii) the
net proceeds of any such sale or transfer to (a) the acquisition of other
Principal Property of equal fair market value (as determined by the Board
of Directors) or (b) the retirement of indebtedness for pari passu borrowed
money (including Debt Securities of any series).
Limitation on Debt Incurred by Restricted Subsidiaries
In the 1995 Indenture, the Corporation has covenanted that it will not
permit any Restricted Subsidiary to directly or indirectly, incur, assume or
suffer to exist any Debt, unless, after giving effect thereto, the aggregate
amount of then outstanding Debt incurred by all Restricted Subsidiaries,
excluding all Secured Debt and Attributable Debt in respect of sale and
leaseback transactions, shall not exceed 10% of Consolidated Net Tangible
Assets. The immediately preceding sentence shall not apply to the incurrence or
issuance of (a) Existing Debt, (b) Working Debt, (c) Debt of a Restricted
Subsidiary which represents the assumption by such Restricted Subsidiary of Debt
of another Restricted Subsidiary as a result of the merger or acquisition of
such Restricted Subsidiary, (d) Debt of any Corporation existing at the time
such corporation becomes a Restricted Subsidiary, (e) Permitted Secured Debt and
(f) Project Debt which does not constitute Secured Debt.
No Similar Restrictive Covenants in the Junior Subordinated Indenture
The Junior Subordinated Indenture contains no covenants analogous to those
described above under "-- Certain Covenants of the Corporation under the 1995
Indenture -- Limitation on Liens" and "-- Restrictions on Sales and Leasebacks".
EVENTS OF DEFAULT
Events of Default under the 1995 Indenture
The following are Events of Default under the 1995 Indenture with respect
to Debt Securities of any particular series:
(1) default in the payment of any installment of interest, if any,
upon any of the Debt Securities of such series as and when it shall become
due and payable, and continuance of such default for a period of 30 days;
or
(2) default in the payment of the principal of, or any premium on, any
of the Debt Securities of such series as and when the same shall become due
and payable either at Stated Maturity, upon redemption, by declaration or
otherwise; or
(3) default in the payment of any sinking fund payment, when and as
due and payable by the terms of the Debt Securities of such series; or
(4) default in the performance, or breach, of any covenant of the
Corporation in the 1995 Indenture or the Debt Securities of such series
(other than a covenant a default in the performance or a breach of which is
otherwise specified as an Event of Default or which has expressly been
included in the 1995 Indenture and designated as being solely for the
benefit of such series of Debt Securities other than such
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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
Corporation by the Indenture Trustee or to the Corporation and the
Indenture Trustee by the Holders of at least 25% in principal amount of the
Debt Securities of such series then outstanding, a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" under the 1995 Indenture;
or
(5) default resulting in acceleration of or failure to pay at maturity
(i) other Debt of the Corporation or Debt that the Corporation has
guaranteed where the aggregate principal amount so accelerated exceeds $15
million or (ii) Debt of any Subsidiary which the Corporation has directly
assumed or on which the Corporation has otherwise become directly liable as
a result of the exercise of remedies upon the occurrence of a default by
such Subsidiary in the performance of its obligations under any agreement
guaranteed by the Corporation in a principal amount of $15 million or more;
without such involuntary acceleration having been rescinded or annulled
within a period of 30 days after there shall have been given, by registered
or certified mail, to the Corporation by the Indenture Trustee or to the
Corporation and the Indenture Trustee by the Holders of at least 25% in
aggregate principal amount of the Debt Securities of such series then
outstanding a written notice specifying such default and requiring the
Corporation to cause such acceleration to be rescinded or annulled and
stating that such notice is a "Notice of Default" under the 1995 Indenture;
provided, however, that, if such default shall be remedied or cured by the
Corporation or waived by the Holders of such indebtedness before any
judgment or decree for the payment of money due shall have been obtained or
entered, then the Event of Default under the Indenture by reason thereof
shall be deemed likewise to have been thereupon remedied, cured or waived
without any action on the part of the Indenture Trustee or any of the
Holders; or
(6) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Corporation in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law then or thereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) of the Corporation or for all or
substantially all of its property or ordering the winding up or liquidation
of its affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or
(7) the Corporation shall commence a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law then or thereafter in effect, or
consent to the entry of an order for relief in an involuntary case under
any such law, or consent to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee or sequestrator (or
similar official) of the Corporation or for all or substantially all of its
property, or make any general assignment for the benefit of creditors; or
(8) any other Event of Default provided with respect to Debt
Securities of such series.
Events of Default under the Junior Subordinated Indenture
The Junior Subordinated Indenture provides that any one or more of the
following events that has occurred and is continuing constitutes an "Event of
Default":
(i) failure for 30 days to pay any interest on the Junior Subordinated
Debentures when due (subject to the deferral of any due date in the case of
an Extension Period); or
(ii) failure to pay any principal of (or premium, if any) on the
Junior Subordinated Debentures when due, whether at maturity or upon
redemption, by declaration, by acceleration or otherwise; or
(iii) failure to observe or perform in any material respect certain
other covenants or agreements contained in the Junior Subordinated
Indenture that shall not have been remedied for 90 days after written
notice to the Corporation from the Indenture Trustee or to the Indenture
Trustee and the Corporation by the holders of at least 25% in aggregate
outstanding principal amount of the outstanding Junior Subordinated
Debentures of that series; or
(iv) certain events of bankruptcy, insolvency or reorganization of the
Corporation; or
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(v) any other Event of Default with respect to a particular series of
Junior Subordinated Debentures as described in the related Prospectus
Supplement.
Provisions Applicable to Events of Default under either Indenture
If an Event of Default (as used herein, "Event of Default" with respect to
a particular series of Debt Securities shall refer to an Event of Default under
the Indenture under which such series was issued) with respect to Debt
Securities of any series at the time outstanding occurs and is continuing, then,
and in each and every such case, unless the principal of all of the Debt
Securities of such series shall have already become due and payable, either the
Indenture Trustee or the Holders of not less than 25% in aggregate principal
amount of the Debt Securities of such series then outstanding, by notice in
writing to the Corporation (and to the Indenture Trustee if given by Holders),
may declare the entire principal amount (or, if the Debt Securities of such
series are Discount Securities (as defined in the applicable Indenture), such
portion of the principal as may be specified in the terms of such series) of all
of the Debt Securities of such series and any premium and interest accrued
thereon to be due and payable immediately, and upon any such declaration such
principal amount (or specified amount) and any premium and interest accrued
thereon shall become immediately due and payable. With regard to Corresponding
Junior Subordinated Debentures held by an Issuer Trust, if the Indenture Trustee
or such percentage of Holders of Corresponding Junior Subordinated Debentures
fails to make such declaration, the Holders of at least 25% in aggregate
liquidation amount of the outstanding Related Preferred Securities will have
such right.
However, at any time after a declaration of acceleration with respect to
Debt Securities of any series has been made, but before a judgment or decree
based on such acceleration has been obtained, the Holders of a majority in
principal amount of outstanding Debt Securities of that series may, under
certain circumstances, rescind and annul such acceleration. See also
"-- Modification and Waiver." In the case of Corresponding Junior Subordinated
Debentures, if the Holders of such Corresponding Junior Subordinated Debentures
fail to rescind and annul such declaration, the Holders of a majority in
aggregate liquidation amount of the Related Preferred Securities will have such
right.
Reference is made to the Prospectus Supplement relating to each series of
Debt Securities which are Discount Securities for the particular provisions
relating to acceleration of the Maturity of a portion of the principal amount of
such Discount Securities upon the occurrence of an Event of Default and the
continuation thereof.
Each Indenture provides that, subject to the duty of the Indenture Trustee
during default to act with the required standard of care, the Indenture Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders, unless such Holders
shall have offered to the Indenture Trustee reasonable indemnity. Subject to
such provisions for indemnification of the Indenture Trustee, the Holders of a
majority in principal amount of the outstanding Debt Securities of any series
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Indenture Trustee, or exercising any
trust or power conferred on the Indenture Trustee, with respect to the Debt
Securities of that series.
The occurrence of an Event of Default in respect of a series of
Corresponding Junior Subordinated Debentures will also constitute a Trust
Enforcement Event in respect of the Related Preferred Securities and related
Common Securities. See "Description of Preferred Securities."
If an Event of Default occurs and is continuing with respect to a series of
Corresponding Junior Subordinated Debentures, the Property Trustee will have the
right to declare the principal of and the interest on such Corresponding Junior
Subordinated Debentures, and any other amounts payable under the Indenture with
respect thereto, to be forthwith due and payable and to enforce its other rights
as a creditor with respect to such Corresponding Junior Subordinated Debentures.
The Corporation is required to furnish to the Indenture Trustee annual
statements as to the performance by the Corporation of certain of its
obligations under each Indenture and as to any default in such performance.
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MODIFICATION AND WAIVER
1995 Indenture
Modifications and amendments of the 1995 Indenture may be made by the
Corporation and the Indenture Trustee with the consent of the Holders of a
majority in principal amount of the outstanding Debt Securities of each series
affected thereby (each such series voting as a single class); provided, however,
that no such modification or amendment may, without the consent of the Holder of
each outstanding Debt Security affected thereby, (a) change the Stated Maturity
of the principal, or any installment of principal of or interest on, any Debt
Security, (b) reduce the principal amount thereof, or reduce any premium thereof
or change the time of payment of any premium thereon, (c) reduce the rate or
change the time of payment of interest thereon, if any, (d) reduce any amount
payable on redemption of any such Debt Security (if any), (e) reduce the overdue
rate thereof, (f) change the place or currency of payment of principal of, or
any premium or interest thereon, (g) reduce, if applicable, the amount of
principal of any Discount Security payable upon acceleration of the Maturity
thereof or the amount thereof provable in bankruptcy, (h) impair, if applicable,
any right of repayment at the option of the Holder, (i) impair the right to
institute suit for the enforcement of any payment on or with respect to any Debt
Security, or (j) reduce the percentage in principal amount of outstanding Debt
Securities of any series, the consent of the Holders of which is required for
modification or amendment of the 1995 Indenture or for waiver of compliance with
certain provisions of the 1995 Indenture or for waiver of certain defaults, or
(k) alter or impair the right of any Holder to convert or exchange Debt
Securities of any series, if applicable, at the rate and upon the terms
established pursuant to the 1995 Indenture.
Junior Subordinated Indenture
The Junior Subordinated Indenture contains provisions permitting the
Corporation and the Indenture Trustee, with the consent of the Holders of not
less than a majority in aggregate principal amount of the Junior Subordinated
Debentures of all series affected by such modification or amendment at the time
outstanding, to amend the Junior Subordinated Indenture or modify the rights of
the Holders of the Junior Subordinated Debentures; provided, that no such
amendment or modification shall (i) change the Stated Maturity of any Junior
Subordinated Debenture or reduce the principal amount thereof or reduce the rate
or extend the time for payment of interest thereon, or make the principal
thereof, or interest or premium, if any, thereon, payable in any coin or
currency other than that provided in such Junior Subordinated Debentures, or
impair or affect the right of any Holder of Junior Subordinated Debentures to
institute suit for the payment thereon or reduce any amount payable on
prepayment thereof, without the consent of each Holder of Junior Subordinated
Debentures so affected, or (ii) reduce the aforesaid percentage of principal
amount of Junior Subordinated Debentures for which the consent of the Holders is
required for any such modification, without the consent of each Holder of Junior
Subordinated Debentures so affected. Furthermore, in the case of Corresponding
Junior Subordinated Debentures, so long as any of the Related Preferred
Securities remain outstanding, (a) no such modification may be made that
adversely affects the Holders of such Preferred Securities in any material
respect, and no termination of the Junior Subordinated Indenture may occur, and
no waiver of any event of default or compliance with any covenant under the
Junior Subordinated Indenture in respect of such series of Junior Subordinated
Debentures may be effective, without the prior consent of the Holders of at
least a majority in aggregate liquidation amount of all the outstanding Related
Preferred Securities unless and until the principal of (and premium, if any, on)
the Corresponding Junior Subordinated Debentures and all accrued and unpaid
interest thereon have been paid in full and certain other conditions are
satisfied and (b) where a consent under the Junior Subordinated Indenture would
require the consent of each Holder of Corresponding Junior Subordinated
Debentures, no such consent may be given by the Property Trustee without the
prior consent of each Holder of Related Preferred Securities.
The Indentures Generally
The Holders of a majority in aggregate principal amount of the outstanding
Debt Securities of any series may on behalf of the Holders of all Debt
Securities of that series waive, insofar as that series is concerned, compliance
by the Corporation with certain restrictive provisions of the applicable
Indenture. In the case of
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Corresponding Junior Subordinated Debentures, if the Holders of such
Corresponding Junior Subordinated Debentures fail to waive such compliance, the
Holders of a majority in aggregate liquidation amount of the Related Preferred
Securities will have such right. The Holders of a majority in principal amount
of the outstanding Debt Securities of any series may, on behalf of the Holders
of all Debt Securities of that series, direct the Indenture Trustee as to the
time, method and place of pursuing any remedy available to it or exercising any
trust or power conferred on it and may waive any past default under the
Indenture with respect to Debt Securities of that series, except a default not
theretofore cured in the payment of the principal of (or premium, if any) or
interest on any Debt Securities of that series or in respect of any provision
which under the applicable Indenture cannot be modified or amended without the
consent of the Holder of each outstanding Security of that series affected.
Each Indenture contains provisions, where applicable, permitting the
Corporation and the Indenture Trustee to enter into one or more supplemental
indentures without the consent of the Holders of any of the Debt Securities in
order (i) to evidence the succession of another corporation to the Corporation
and the assumption of the covenants of the Corporation by a successor to the
Corporation; (ii) to add to the covenants of the Corporation or surrender any
right or power of the Corporation; (iii) to add additional Events of Default
with respect to any series of Debt Securities; (iv) to add to, change or
eliminate any provision affecting Debt Securities not yet issued; (v) to secure
the Debt Securities (in the case of Debt Securities issued under the 1995
Indenture only); (vi) to establish the form or terms of Debt Securities; (vii)
to evidence and provide for a successor Indenture Trustee; and (viii) to cure
any ambiguity or correct any mistake or to correct any defect or supplement any
inconsistent provisions or to make any other provisions with respect to matters
or questions arising under the Indenture, provided that such action does not
adversely affect the interests of any Holder of Debt Securities of any series.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Corporation may not consolidate or merge with or into, or convey,
transfer or lease all or substantially all its properties and assets to, any
Person, and any other Person may not consolidate or merge with or into, the
Corporation, unless (i) the Person (if other than the Corporation) formed by
such consolidation or into which the Corporation is merged or which acquires or
leases all or substantially all the assets of the Corporation is organized and
existing under the laws of the United States, any state thereof or the District
of Columbia and expressly assumes all of the Corporation's obligations under the
Debt Securities and under the applicable Indenture, (ii) immediately after
giving effect to such transaction no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of Default, shall have
happened and be continuing (provided that a transaction will only be deemed to
be in violation of this condition (ii) as to any series of Debt Securities as to
which such Event of Default or such event shall have occurred and be
continuing), and (iii) with respect to the 1995 Indenture only, the Trustee
receives an Opinion of Counsel and an Officers' Certificate that such
consolidation, merger, conversion, transfer or lease and such assumption
complies with the terms of the 1995 Indenture and all conditions precedent set
forth in the 1995 indenture relating to such transaction have been complied
with.
SATISFACTION, DISCHARGE, AND DEFEASANCE PRIOR TO MATURITY OR REDEMPTION
Covenant Defeasance of any Series Issued under the 1995 Indenture
If the Corporation shall deposit with the Indenture Trustee, in trust, at
or before maturity or redemption of the Debt Securities of any series issued
under the 1995 Indenture, money and/or Government Obligations in such amounts
and maturing at such times such that the proceeds of such obligations to be
received upon the respective maturities and interest payment dates of such
obligations will provide funds sufficient, without reinvestment, in the opinion
of a nationally recognized firm of independent public accountants, to pay when
due the principal of (and premium, if any) and each installment of principal of
(and premium, if any) and interest on such series of Debt Securities at the
Stated Maturity of such principal or installment of principal or interest, as
the case may be, then the Corporation may omit to comply with certain of the
terms of the 1995 Indenture with respect to that series of Debt Securities,
including any or all of the restrictive covenants described above or in any
Prospectus Supplement, and the Events of Default described in clauses (4) and
(5)
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under "Events of Default -- Events of Default under the 1995 Indenture" shall
not apply. Defeasance of Debt Securities of any such series is subject to the
satisfaction of certain conditions, including among others: (1) the absence of
an Event of Default or event which, with notice or lapse of time, would become
an Event of Default at the date of the deposit, (2) the delivery to the
Indenture Trustee by the Corporation of an Opinion of Counsel to the effect that
Holders of the Debt Securities of such series will not recognize income, gain or
loss for United States Federal income tax purposes as a result of such deposit
and covenant defeasance and will be subject to United States Federal income tax
in the same amounts and in the same manner and at the same times as would have
been the case if such deposit and covenant defeasance had not occurred, (3) such
covenant defeasance will not cause any Debt Securities of such series then
listed on any nationally recognized securities exchange to be delisted, (4) that
such covenant defeasance will not result in a breach of, or constitute a default
under, any instrument by which the Corporation is bound and (5) such covenant
defeasance shall not cause the Indenture Trustee for the Securities of such
series to have a "conflicting interest" (as defined in Section 310(b) of the
Trust Indenture Act) with respect to any securities of the Corporation. If
indicated in the Prospectus Supplement relating to a series of Debt Securities,
in addition to the obligations of the United States of America or obligations
guaranteed by the United States of America, Government Obligations may include
obligations of the government, and obligations guaranteed by such government,
issuing the currency or currency unit in which Debt Securities of such series
are payable.
Defeasance of any Series Issued under the 1995 Indenture
Upon the deposit of money or securities as contemplated in the preceding
paragraph and the satisfaction of certain other conditions, the Corporation may
also omit to comply with its obligation duly and punctually to pay the principal
of (and premium, if any) and interest on a particular series of Debt Securities
issued under the 1995 Indenture, and any Events of Default with respect thereto
shall not apply, and thereafter, the Holders of Debt Securities of such series
shall be entitled only to payment out of the money or securities deposited with
the Indenture Trustee. Such conditions include among others: (1) the absence of
an Event of Default or event which, with notice or lapse of time, would become
an Event of Default at the date of the deposit, (2) the delivery to the
Indenture Trustee by the Corporation of an Opinion of Counsel, which refers to
or is based on a ruling of the Internal Revenue Service or a change in the
applicable United States Federal income tax law occurring after the date of the
Indenture, to the effect that Holders of the Debt Securities of such series will
not recognize income, gain or loss for United States Federal income tax purposes
as a result of such deposit and the satisfaction, discharge and defeasance, and
will be subject to United States Federal income tax in the same amounts and in
the same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred, (3) such defeasance will not cause any
Debt Securities of such series then listed on any nationally recognized
securities exchange to be delisted, (4) that such defeasance will not result in
a breach of, or constitute a default under, any instrument by which the
Corporation is bound and (5) such defeasance shall not cause the Indenture
Trustee for the Securities of such series to have a conflicting interest for the
purpose of the Trust Indenture Act with respect to any securities of the
Corporation.
SATISFACTION AND DISCHARGE OF THE JUNIOR SUBORDINATED INDENTURE
The Junior Subordinated Indenture provides that when, among other things,
all Junior Subordinated Debentures of a series not previously delivered to the
Indenture Trustee for cancellation (i) have become due and payable or (ii) will
become due and payable at their Stated Maturity within one year, and the
Corporation deposits or causes to be deposited with the Indenture Trustee trust
funds, in trust, for the purpose of, and in an amount sufficient for, payment
and discharge of the entire indebtedness on the Junior Subordinated Debentures
of such series not previously delivered to the Indenture Trustee for
cancellation, for the principal (and premium, if any) and interest to the date
of the deposit or to the Stated Maturity, as the case may be, then the Junior
Subordinated Indenture will cease to be of further effect with respect to the
series (except as to the Corporation's obligations to pay all other sums due
with respect to that series pursuant to the Junior Subordinated Indenture and to
provide the officer's certificates and opinions of counsel described therein),
and the Corporation will be deemed to have satisfied and discharged the Junior
Subordinated Indenture with respect to that series.
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SENIOR DEBT SECURITIES
The Debt Securities that will be designated and will constitute part of the
Senior Debt and Senior Indebtedness of the Corporation, will rank pari passu
with all other unsecured and unsubordinated Debt of the Corporation.
SENIOR SUBORDINATED DEBT SECURITIES
The Senior Subordinated Debt Securities, may be subordinated and junior in
right of payment, to the extent set forth in the applicable Prospectus
Supplement, to all Senior Debt.
JUNIOR SUBORDINATED DEBENTURES
Corresponding Junior Subordinated Debentures
The Corresponding Junior Subordinated Debentures may be issued in one or
more series of Junior Subordinated Debentures under the Junior Subordinated
Indenture in connection with the issuance of a series of Related Preferred
Securities by an Issuer Trust. In that event, concurrently with the issuance of
such Issuer Trust's Preferred Securities, such Issuer Trust will invest the
proceeds thereof and the consideration paid by the Corporation for the Common
Securities of such Issuer Trust in such series of Corresponding Junior
Subordinated Debentures, which will be issued by the Corporation to such Issuer
Trust. Each series of Corresponding Junior Subordinated Debentures will be in a
principal amount equal to the aggregate stated liquidation amount of the Related
Preferred Securities and the Common Securities of such Issuer Trust. Holders of
the Related Preferred Securities for a series of Corresponding Junior
Subordinated Debentures will have the rights in connection with modifications to
the Indenture or upon occurrence of Events of Default, as described under
"-- Modification and Waiver" and "-- Events of Default -- Events of Default
under the Junior Subordinated Indenture", unless provided otherwise in the
applicable Prospectus Supplement.
Deferral of Interest Payments
If provided in the applicable Prospectus Supplement, the Corporation will
have the right under the Junior Subordinated Indenture and the Corresponding
Junior Subordinated Debentures to defer the payment of interest at any time or
from time to time on any series of Corresponding Junior Subordinated Debentures
for up to such number of consecutive interest payment periods as may be
specified in such Prospectus Supplement relating to such series (each, an
"Extension Period"); provided that no Extension Period may extend beyond the
Stated Maturity of the Corresponding Junior Subordinated Debentures as in effect
at the time of the Corporation's election to defer interest in this manner. As a
consequence of any such election, Distributions on the Related Preferred
Securities would be deferred (but would continue to accumulate additional
Distributions thereon at the rate per annum set forth in the Prospectus
Supplement for such Preferred Securities) by the Issuer Trust of such Preferred
Securities during any such Extension Period. During any such Extension Period,
the Corporation may not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Corporation's capital stock, (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Corporation that rank pari passu with or junior in interest to the Corresponding
Junior Subordinated Debentures, or (iii) make any guarantee payments with
respect to any guarantee by the Corporation of debt securities of any subsidiary
of the Corporation if such guarantee ranks pari passu with, or junior in right
of payment to, the Junior Subordinated Debentures (other than (a) dividends or
distributions by the Corporation by way of issuance of its common stock, (b)
payments under the applicable Guarantee made by the Corporation in respect of
the Trust Securities of such Issuer Trust, (c) any declaration of a dividend in
connection with the implementation of a shareholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, and (d) purchases of common
stock related to the issuance of common stock or rights under any of the
Corporation's benefit plans). Certain United States federal income tax
consequences and special considerations applicable to any such Junior
Subordinated Debentures will be described in the applicable Prospectus
Supplement.
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Enforcement of Certain Rights by Holders of Preferred Securities
If an Event of Default with respect to a series of Corresponding Junior
Subordinated Debentures has occurred and is continuing and such event is
attributable to the failure of the Corporation to pay any amounts payable in
respect of such Corresponding Junior Subordinated Debentures on the date such
amounts are otherwise payable, a Holder of the Related Preferred Securities may
institute a legal proceeding directly against the Corporation for enforcement of
payment to such Holder of an amount equal to the amount payable in respect of
such Corresponding Junior Subordinated Debentures having a principal amount
equal to the aggregate liquidation amount of the Related Preferred Securities
held by such Holder (a "Direct Action"). The Corporation may not amend the
Junior Subordinated Indenture or the Corresponding Junior Subordinated
Debentures to remove the foregoing right to bring a Direct Action without the
prior written consent of the Holders of all of the Preferred Securities.
The Holders of the Preferred Securities will not be able to exercise
directly any remedies available to the Holders of the Junior Subordinated
Debentures except under the circumstances described in the previous paragraph.
See "Description of Preferred Securities".
Subordination
The Junior Subordinated Debentures will be subordinate and junior in right
of payment, to the extent set forth therein and in the Junior Subordinated
Indenture, to all Debt of the Corporation other than Debt that expressly ranks
pari passu with, or junior in interest to, the Junior Subordinated Debentures
("Senior Indebtedness"). If the Corporation defaults in the payment of any
principal, premium, if any, or interest, if any, or any other amount payable on
any Senior Indebtedness when the same becomes due and payable, whether at
maturity or at a date fixed for redemption or by declaration of acceleration or
otherwise, then, unless and until such default has been cured or waived or has
ceased to exist or all Senior Indebtedness has been paid, no direct or indirect
payment (in cash, property, securities, by set-off or otherwise) may be made or
agreed to be made on the Junior Subordinated Debentures, or in respect of any
redemption, repayment, retirement, purchase or other acquisition of any of the
Junior Subordinated Debentures.
In the event of (i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to the Corporation, its creditors or its property, (ii) any proceeding for the
liquidation, dissolution or other winding up of the Corporation, voluntary or
involuntary, whether or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by the Corporation for the benefit of creditors or (iv) any
other marshalling of the assets of the Corporation, all Senior Indebtedness
(including any interest thereon accruing after the commencement of any such
proceedings) shall first be paid in full before any payment or distribution,
whether in cash, securities or other property, shall be made on account of the
Junior Subordinated Debentures. In such event, any payment or distribution on
account of the Junior Subordinated Debentures, whether in cash, securities or
other property, that would otherwise (but for the subordination provisions) be
payable or deliverable in respect of the Junior Subordinated Debentures will be
paid or delivered directly to the Holders of Senior Indebtedness in accordance
with the priorities then existing among such Holders until all Senior
Indebtedness (including any interest thereon accruing after the commencement of
any such proceedings) has been paid in full.
In the event of any such proceeding, after payment in full of all sums
owing with respect to Senior Indebtedness, the Holders of Junior Subordinated
Debentures, together with the Holders of any obligations of the Corporation
ranking pari passu with the Junior Subordinated Debentures, will be entitled to
be paid from the remaining assets of the Corporation the amounts at the time due
and owing on the Junior Subordinated Debentures and such other obligations
before any payment or other distribution, whether in cash, property or
otherwise, will be made on account of any capital stock or obligations of the
Corporation ranking junior to the Junior Subordinated Debentures and such other
obligations. If any payment or distribution on account of the Junior
Subordinated Debentures of any character or any security, whether in cash,
securities or other property is received by any Holder of any Junior
Subordinated Debentures in contravention of any of the terms hereof and before
all the Senior Indebtedness has been paid in full, such payment or distribution
or security will be received in trust for the benefit of, and must be paid over
or delivered and transferred to, the Holders of the
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Senior Indebtedness at the time outstanding in accordance with the priorities
then existing among such Holders for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all such Senior
Indebtedness in full. By reason of such subordination, in the event of the
insolvency of the Corporation, Holders of Senior Indebtedness may receive more,
ratably, and Holders of the Junior Subordinated Debentures may receive less,
ratably, than the other creditors of the Corporation. Such subordination will
not prevent the occurrence of any Event of Default.
The Junior Subordinated Indenture places no limitation on the amount of
additional Senior Indebtedness that may be incurred by the Corporation. The
Corporation expects from time to time to incur additional indebtedness
constituting Senior Indebtedness.
Restrictions on Certain Payments
The Corporation will not, as to each series of Junior Subordinated
Debentures, (i) declare or pay any dividends or distributions on, or prepay,
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Corporation's capital stock, (ii) make any payment of principal of, premium,
if any, or interest on, or repay, repurchase or redeem any debt securities of
the Corporation that rank pari passu with or junior in interest to the Junior
Subordinated Debentures, including other Junior Subordinated Debentures, or
(iii) make any guarantee payment with respect to any guarantee by the
Corporation of debt securities of any subsidiary of the Corporation if such
guarantee ranks pari passu with, or junior in right of payment to, the Junior
Subordinated Debentures (other than (a) dividends or distributions by the
Corporation by way of issuance of its common stock, (b) payments under the
applicable Guarantee made by the Corporation in respect of the Trust Securities
of such Issuer Trust, (c) any declaration of a dividend in connection with the
implementation of a shareholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, and (d) purchases of common stock related to the issuance of
common stock or rights under any of the Corporation's benefit plans), if at such
time (i) there has occurred any event of which the Corporation has actual
knowledge that with the giving of notice or the lapse of time, or both, would
constitute an Event of Default with respect to the Junior Subordinated
Debentures of such series, (ii) if such Junior Subordinated Debentures are held
by an Issuer Trust, the Corporation is in default with respect to its payment of
any obligations under the Guarantee relating to the Related Preferred Securities
or (iii) the Corporation has given notice of its selection of an Extension
Period as provided in the Junior Subordinated Indenture with respect to the
Junior Subordinated Debentures of such series and has not rescinded such notice,
or such Extension Period, or any extension thereof, is continuing.
Certain Covenants of the Corporation
In the event Junior Subordinated Debentures are issued to an Issuer Trust
or Issuer Trustee thereof in connection with the issuance of Trust Securities of
such Issuer Trust, for so long as such Trust Securities remain outstanding, the
Corporation will covenant (i) to maintain, directly or indirectly, 100%
ownership of the Common Securities of such Issuer Trust, provided that certain
successors that are permitted pursuant to the Junior Subordinated Indenture may
succeed to the Corporation's ownership of the Common Securities, (ii) to use
commercially reasonable efforts, consistent with the terms and provisions of the
Declaration of Trust of such Issuer Trust to cause such Issuer Trust (a) to
remain a grantor trust, except in connection with a distribution of Junior
Subordinated Debentures to the Holders of the Trust Securities in liquidation of
the Issuer Trust, the redemption of all of the Trust Securities of an Issuer
Trust, or certain mergers, consolidations or amalgamations, each as permitted by
the Declaration of Trust of such Issuer Trust, and (b) to otherwise continue to
be classified as a grantor trust and not an association taxable as a corporation
for United States federal income tax purposes and (iii) not to cause, as Sponsor
of each Issuer Trust, or permit, as Holder of the Commons Securities, the
dissolution, winding-up or termination of such Issuer Trust except in connection
with a distribution of the Junior Subordinated Debentures as provided in the
Declaration of Trust of such Issuer Trust and in connection with certain
mergers, consolidations or amalgamations.
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GOVERNING LAW
Each Indenture and the Debt Securities will be governed by, and construed
in accordance with, the laws of the State of New York.
REGARDING THE INDENTURE TRUSTEE
Harris Trust and Savings Bank is the trustee under each Indenture and has
been appointed by the Corporation as initial Security Registrar and Paying Agent
with regard to the Debt Securities. The Company has customary banking
relationships with the Indenture Trustee and certain of its affiliates in the
ordinary course of business.
DESCRIPTION OF PREFERRED SECURITIES
Each Issuer Trust may issue only one series of Preferred Securities having
terms described in the Prospectus Supplement relating thereto. The Declaration
of Trust of each Issuer Trust will be qualified as an indenture under the Trust
Indenture Act. Harris Trust and Savings Bank will act as indenture trustee under
each Declaration of Trust. The Preferred Securities will represent undivided
beneficial ownership interests in the assets of the Issuer Trusts and the
Holders thereof will be entitled to a preference in certain circumstances with
respect to Distributions and amounts payable on redemption or liquidation over
the Common Securities, as well as other benefits as described in the Declaration
of Trust. This Prospectus contains a description of all material provisions of
each Declaration of Trust. The summary of such provisions does not purport to be
complete; a copy of the form of such Declarations of Trust is filed as an
exhibit to the Registration Statement. All capitalized terms set forth below
have the meanings specified in the form of Declaration of Trust.
The Preferred Securities will have such terms, including as to
Distributions, redemption, voting, liquidation rights and such other preferred,
deferred or other special rights or such restrictions as shall be set forth in
the Declaration of Trust of the Issuer Trust issuing such Preferred Securities
or made part of such Declaration by the Trust Indenture Act. Reference is made
to any Prospectus Supplement relating to the Preferred Securities of an Issuer
Trust for specific terms, including (i) the distinctive designation of such
Preferred Securities, (ii) the number of Preferred Securities issued by such
Issuer Trust, (iii) the annual Distribution rate (or method of determining such
rate) for Preferred Securities issued by such Issuer Trust and the date or dates
upon which such Distributions shall be payable, (iv) whether Distributions on
Preferred Securities issued by such Issuer Trust shall be cumulative, and, in
the case of Preferred Securities having such cumulative distribution rights, the
date or dates or method of determining the date or dates from which
distributions on Preferred Securities issued by such Issuer Trust shall be
cumulative, (v) the amount or amounts which shall be paid out of the assets of
such Issuer Trust to the Holders of Preferred Securities of such Issuer Trust
upon voluntary or involuntary dissolution, winding-up or termination of such
Issuer Trust, (vi) the obligation, if any, of such Issuer Trust to purchase or
redeem Preferred Securities issued by such Issuer Trust and the price or prices
at which, the period or periods within which and the terms and conditions upon
which Preferred Securities issued by such Issuer Trust shall be purchased or
redeemed, in whole or in part, pursuant to such obligation, (vii) the voting
rights, if any, of Preferred Securities issued by such Issuer Trust in addition
to those required by law, including the number of votes per Preferred Security
and any requirement for the approval by the Holders of Preferred Securities as a
condition to specified action or amendments to the Declaration of Trust of such
Issuer Trust, and (viii) any other relevant rights, preferences, privileges,
limitations or restrictions of Preferred Securities issued by such Issuer Trust,
consistent with the Declaration of Trust of such Issuer Trust and with
applicable law. All Preferred Securities offered hereby will be guaranteed by
the Corporation to the extent set forth below under "Description of Guarantees."
Certain United States federal income tax considerations applicable to any
offering of Preferred Securities will be described in the Prospectus Supplement
relating thereto.
In connection with the issuance of Preferred Securities, each Issuer Trust
will issue one series of Common Securities, having such terms, including as to
Distributions, redemption, voting, liquidation rights or such restrictions, as
shall be set forth in the Declaration of Trust of the Issuer Trust issuing such
Common Securities or made part of such Declaration of Trust by the Trust
Indenture Act. The terms of the Common
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Securities issued by such Issuer Trust will be substantially identical to the
terms of the Preferred Securities issued by such Issuer Trust. The Common
Securities will rank on a parity, and payments will be made thereon pro rata,
with such Preferred Securities except that upon a Trust Enforcement Event under
the Declaration of Trust of such Issuer Trust, the rights of the Holders of such
Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise will be subordinated to the rights of the
Holders of such Preferred Securities. Except in certain limited circumstances,
the Holders of Common Securities of an Issuer Trust will also be entitled to
vote and appoint, remove or replace any of the Issuer Trustees of such Issuer
Trust. All of the Common Securities of an Issuer Trust will be directly or
indirectly owned by the Corporation.
If a Trust Enforcement Event with respect to a Declaration of Trust of any
Issuer Trust occurs and is continuing, then the Holders of Preferred Securities
of such Issuer Trust would rely on the enforcement by the Property Trustee of
its rights as a Holder of Junior Subordinated Debentures against the
Corporation. In addition, the Holders of a majority in liquidation amount of
such Preferred Securities will have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to the Property
Trustee or to direct the exercise of any trust or power conferred upon the
Property Trustee under such Declaration of Trust, including the right to direct
the Property Trustee to exercise the remedies available to it as a Holder of
Junior Subordinated Debentures.
An Event of Default under the Junior Subordinated Indenture that has
occurred and is continuing with respect to Corresponding Junior Subordinated
Debentures constitutes a "Trust Enforcement Event" under the Declaration of
Trust with respect to the Issuer Trust that issued the Related Preferred
Securities; provided that pursuant to such Declaration, the Holder of the Common
Securities will be deemed to have waived any Trust Enforcement Event with
respect to the Common Securities until all Trust Enforcement Events with respect
to the Related Preferred Securities have been cured, waived or otherwise
eliminated. Until such Trust Enforcement Event with respect to the Related
Preferred Securities has been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Related Preferred Securities and only the Holders of the Related Preferred
Securities will have the right to direct the Property Trustee with respect to
certain matters under such Declaration of Trust, and therefore the Junior
Subordinated Indenture.
Upon the occurrence of a Trust Enforcement Event, the Property Trustee, as
the Holder of Corresponding Junior Subordinated Debentures, will have the right
under the Junior Subordinated Indenture to declare the principal of and premium,
if any, and interest on such Junior Subordinated Debentures to be immediately
due and payable.
If the Property Trustee fails to enforce its rights with respect to Junior
Subordinated Debentures, any Holder of Preferred Securities may, to the extent
permitted by applicable law, institute a legal proceeding directly against the
Corporation to enforce the Property Trustee's rights under such Junior
Subordinated Debentures without first instituting any legal proceeding against
the Property Trustee or any other person or entity. In addition, if a Trust
Enforcement Event has occurred and is continuing and such event is attributable
to the failure of the Corporation to pay principal of and premium, if any, and
interest or other required payments on Junior Subordinated Debentures on the
date such interest, principal or other payment is otherwise payable, then a
Holder of Preferred Securities of such Issuer Trust may, on or after the
respective due dates specified in such Junior Subordinated Debentures, institute
a Direct Action. In connection with such Direct Action, the rights of the
Corporation will be subrogated to the rights of such Holder of Preferred
Securities under such Declaration of Trust to the extent of any payment made by
the Corporation to such Holder of Preferred Securities in such Direct Action.
Consequently, the Corporation will be entitled to payment of amounts that a
Holder of Preferred Securities receives in respect of an unpaid distribution
that resulted in the bringing of a Direct Action to the extent that such Holder
receives or has already received full payment with respect to such unpaid
distribution from an Issuer Trust. The Holders of Preferred Securities of an
Issuer Trust will not be able to exercise directly any other remedy available to
the Holders of Junior Subordinated Debentures.
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DESCRIPTION OF CAPITAL STOCK
GENERAL
The following description of the Corporation's capital stock does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, the more complete descriptions thereof set forth in the
Corporation's Restated Certificate of Incorporation, as amended (the
"Certificate"), and By-laws, as amended (the "By-laws") which documents are
exhibits to this Registration Statement.
The Corporation is authorized to issue up to 80,000,000 shares of Common
Stock, par value $1.00, and up to 1,500,000 shares of Preferred Stock, no par
value. As of March 27, 1998 there were 40,734,864 shares of Common Stock and no
shares of Preferred Stock outstanding. Of the 1,500,000 shares of authorized
Preferred Stock, 400,000 shares have been reserved and designated as "Series A
Junior Participating Preferred Stock."
PREFERRED STOCK
General. The following summary contains a description of certain general
terms of the Preferred Stock. The particular terms of any series of Preferred
Stock that may be offered will be described in the applicable Prospectus
Supplement. If so indicated in a Prospectus Supplement, the terms of any such
series may differ from the terms set forth below. The summary of terms of the
Preferred Stock does not purport to be complete and is subject to and qualified
in its entirety by reference to the provisions of the Certificate and the
Certificate of Designation (the "Certificate of Designation") relating to a
particular series of offered Preferred Stock which is or will be in the form
filed or incorporated by reference as an exhibit to the Registration Statement
at or prior to the time of the issuance of such series of Preferred Stock.
The Board of Directors has the power, without further action by the
shareholders, to issue Preferred Stock in one or more series, with such
designations or titles, dividend rates, redemption provisions, special or
relative rights in the event of liquidation, dissolution, distribution or
winding up of the Corporation, sinking fund provisions, conversion provisions,
voting rights thereof and other preferences, privileges, powers, rights,
qualifications, limitations and restrictions, as shall be set forth as and when
established by the Board of Directors; provided that the Board of Directors
shall fix such provisions as will, at a minimum, entitle the Holders of such
Preferred Stock, voting as a class, to elect at least two directors upon default
of the equivalent of six quarterly dividends, such right to continue until
cumulative dividends have been paid in full, or until non-cumulative dividends
have been paid regularly for at least a year, and require the affirmative
approval of at least two-thirds of the outstanding Preferred Stock as a
prerequisite to any amendment to the Certificate or By-laws altering materially
any existing provision of such Preferred Stock. The shares of any series of
Preferred Stock will be, when issued, fully paid and non-assessable and Holders
thereof will have no preemptive rights in connection therewith.
Rank. Any series of Preferred Stock will, with respect to rights on
liquidation, winding up and dissolution, rank (i) senior to all classes of
Common Stock and to all equity securities issued by the Corporation, the terms
of which specifically provide that such equity securities will rank junior to
such series of Preferred Stock (the "Junior Liquidation Securities"); (ii) on a
parity with all equity securities issued by the Corporation, the terms of which
specifically provide that such equity securities will rank on a parity with such
series of Preferred Stock ("Parity Liquidation Securities"); and (iii) junior to
all equity securities issued by the Corporation, the terms of which specifically
provide that such equity securities will rank senior to such series of Preferred
Stock (the "Senior Liquidation Securities"). In addition, any series of
Preferred Stock will, with respect to dividend rights, rank (i) senior to all
equity securities issued by the Corporation, the terms of which specifically
provide that such equity securities will rank junior to such series of Preferred
Stock and, to the extent provided in the applicable Certificate of Designation,
to Common Stock; (ii) on a parity with all equity securities issued by the
Corporation, the terms of which specifically provide that such equity securities
will rank on a parity with such series of Preferred Stock and, to the extent
provided in the applicable Certificate of Designation, to Common Stock ("Parity
Dividend Securities"); and (iii) junior to all equity securities issued by the
Corporation, the terms of which specifically provide that such equity securities
will
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rank senior to such series of Preferred Stock. As used in any Certificate of
Designation for these purposes, the term "equity securities" will not include
debt securities convertible into or exchangeable for equity securities.
Dividends. Holders of each series of Preferred Stock will be entitled to
receive, when, as and if declared by the Board of Directors out of funds legally
available therefor, cash dividends at such rates and on such dates as are set
forth in the Prospectus Supplement relating to such series of Preferred Stock.
Dividends will be payable to Holders of Preferred Stock as they appear on the
books of the Corporation (or, if applicable, the records of the Depositary
referred to below under "-- Depositary Shares") on such record dates as shall be
fixed by the Board of Directors. Dividends on any series of Preferred Stock may
be cumulative or non-cumulative.
No full dividends may be declared or paid out of funds set apart for the
payment of dividends on any series of Preferred Stock unless dividends shall
have been paid or set apart for such payment on the Parity Dividend Securities.
If full dividends are not so paid, such series of Preferred Stock shall share
dividends pro rata with the Parity Dividend Securities.
Conversion and Exchange. The Prospectus Supplement for any series of
Preferred Stock will state the terms, if any, on which shares of that series are
convertible into shares of another series of Preferred Stock or Common Stock or
exchangeable for another series of Preferred Stock, Common Stock or Debt
Securities of the Corporation.
Redemption. A series of Preferred Stock may be redeemable at any time, in
whole or in part, at the option of the Corporation or the Holder thereof and may
be subject to mandatory redemption pursuant to a sinking fund or otherwise upon
terms and at the redemption prices set forth in the Prospectus Supplement
relating to such series.
In the event of partial redemptions of Preferred Stock, whether by
mandatory or optional redemption, the shares to be redeemed will be determined
by lot or pro rata, as may be determined by the Board of Directors, or by any
other method determined to be equitable by the Board of Directors.
On and after a redemption date, unless the Corporation defaults in the
payment of the redemption price, dividends will cease to accrue on shares of
Preferred Stock called for redemption and all rights of Holders of such shares
will terminate except for the right to receive the redemption price.
Liquidation Preference. Upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, Holders of each series of
Preferred Stock that ranks senior to the Junior Liquidation Securities will be
entitled to receive out of assets of the Corporation available for distribution
to shareholders, before any distribution is made on any Junior Liquidation
Securities, including Common Stock, distributions upon liquidation in the amount
set forth in the Prospectus Supplement relating to such series of Preferred
Stock. If the Holders of the Preferred Stock of any series and any other Parity
Liquidation Securities are not paid in full, the Holders of the Preferred Stock
of such series and the Parity Liquidation Securities will share ratably in any
such distribution of assets of the Corporation in proportion to the full
liquidation preferences to which each is entitled. After payment of the full
amount of the liquidation preference to which they are entitled, the Holders of
such series of Preferred Stock will not be entitled (unless the applicable
Prospectus Supplement indicates otherwise) to any further participation in any
distribution of assets of the Corporation. The liquidation preference of any
series of Preferred Stock is not necessarily indicative of the price at which
shares of such series of Preferred Stock will actually trade at or after the
time of their issuance.
Voting Rights. Except as indicated in the Prospectus Supplement relating
to a particular series of Preferred Stock as specified under "-- General" above,
or except as expressly required by applicable law or the Certificate, the
Holders of shares of Preferred Stock will have no voting rights.
Preferred Share Purchase Rights. On September 22, 1987, the Corporation's
Board of Directors declared a dividend distribution of one Preferred Share
Purchase Right (a "Right") on each share of the Common Stock outstanding as of
October 2, 1987 and adopted the Rights Agreement, dated as of October 22, 1987
(the "Rights Agreement"). On September 30, 1997, the Board of Directors amended
and restated the Rights Agreement. Each Right allows the shareholder to purchase
1/100th of a share of a new series of
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preferred stock of the Corporation at an exercise price of $175. Rights are
exercisable only if a person or group acquires 20% or more of the Common Stock
or announces a tender offer the consummation of which would result in ownership
by a person or group of 20% or more of the Common Stock. The Rights, which do
not have the right to vote or receive dividends, expire on October 2, 2007 and
may be redeemed, prior to becoming exercisable, by the Board of Directors at
$.02 per Right or by shareholder action with an acquisition proposal.
If any person or group acquires 20% or more of the outstanding Common
Stock, the "flip-in" provision of the Rights will be triggered and the Rights
will entitle a Holder (other than such person or any member of such group) to
acquire a number of additional shares of the Corporation's common stock having a
market value of twice the exercise price of each Right.
In the event the Corporation is involved in a merger or other business
combination transaction, each Right will entitle its Holder to purchase, at the
Right's then-current exercise price, a number of the acquiring company's common
stock having a market value at that time of twice the Rights' exercise price.
The existence of the Rights Plan and the Rights may, under certain
circumstances discourage, delay or prevent a change in control of the
Corporation.
DEPOSITARY SHARES
The description set forth below of certain provisions of the Deposit
Agreement (as defined below) and of the Depositary Shares and Depositary
Receipts (as defined below) does not purport to be complete and is subject to
and qualified in its entirety by reference to the forms of Deposit Agreement and
Deposit Receipt, included as exhibits to the Registration Statement.
General. The Corporation may, at its option, elect to offer fractional
shares of Preferred Stock, rather than full shares of Preferred Stock. In the
event the Corporation so elects, the Depositary will issue receipts for
Depositary Shares, each of which will represent a fraction (to be set forth in
the Prospectus Supplement relating to a particular series of Preferred Stock) of
a share of a particular series of Preferred Stock as described below.
The shares of any series of Preferred Stock represented by Depositary
Shares will be deposited under a Deposit Agreement (the "Deposit Agreement")
between the Corporation and a depositary that is a bank or trust company having
its principal offices in the United States and having a combined capital surplus
of at least the amount set forth in the Deposit Agreement (the "Depositary").
Subject to the terms of the Deposit Agreement, each owner of a Depositary Share
will be entitled, in proportion to the applicable fraction of a share of
Preferred Stock represented by such Depositary Share, to all the rights and
preferences of the Preferred Stock represented thereby (including dividend,
voting, redemption, conversion and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement (the "Depositary Receipts"). The Depositary
Receipts will be distributed to those persons purchasing the fractional shares
of Preferred Stock in accordance with the terms of the offering.
Pending the preparation of definitive Depositary Receipts, the Depositary
shall, upon the written order of the Corporation or any Holder of deposited
Preferred Stock, execute and deliver temporary Depositary Receipts which are
substantially identical to, and entitle the Holders thereof to all the rights
pertaining to, the definitive Depositary Receipts. Depositary Receipts will be
prepared thereafter without unreasonable delay, and temporary Depositary
Receipts will be exchangeable for definitive Depositary Receipts at the
Corporation's expense.
Dividends and Other Distributions. The Depositary will distribute all cash
dividends or other cash distributions received in respect of the deposited
Preferred Stock to the record Holders of the Depositary Shares relating to such
Preferred Stock in proportion to the number of such Depositary Shares owned by
such Holders.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record Holders of Depositary Shares
entitled thereto. If the Depositary determines that it is not feasible to
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make such distribution, it may, with the approval of the Corporation, sell such
property and distribute the net proceeds from such sale to such Holders.
Redemption of Stock. If a series of Preferred Stock represented by
Depositary Shares is to be redeemed, the Depositary Shares will be redeemed from
the proceeds received by the Depositary resulting from the redemption, in whole
or in part, of such series of Preferred Stock held by the Depositary. The
Depositary Shares will be redeemed by the Depositary at a price per Depositary
Share equal to the applicable fraction of the redemption price per share payable
in respect of the shares of Preferred Stock so redeemed. If fewer than all the
Depositary Shares will be redeemed, the Depositary Shares to be redeemed will be
selected by the Depositary by lot or pro rata or by any other equitable method
as may be determined by the Depositary.
Voting Deposited Preferred Stock. Upon receipt of notice of any meeting at
which the Holders of any series of deposited Preferred Stock are entitled to
vote, the Depositary will mail the information contained in such notice of
meeting to the record Holders of the Depositary Shares relating to such series
of Preferred Stock. Each record Holder of such Depositary Shares on the record
date (which will be the same date as the record date for the relevant series of
Preferred Stock) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the amount of the Preferred Stock represented
by such Holder's Depositary Shares. The Depositary will endeavor, insofar as
practicable, to vote the amount of such series of Preferred Stock represented by
such Depositary Shares in accordance with such instructions, and the Corporation
will agree to take all reasonable actions that may be deemed necessary by the
Depositary in order to enable the Depositary to do so. The Depositary will
abstain from voting shares of the Preferred Stock to the extent it does not
receive specific instructions from the Holder of Depositary Shares representing
such Preferred Stock.
Amendment and Termination of the Deposit Agreement. The form of the
Depositary Receipt evidencing the Depositary Shares and any provision of the
Deposit Agreement may at any time be amended by agreement between the
Corporation and the Depositary. However, any amendment which materially
prejudices any substantial right of the Holders of the Depositary Shares
representing Preferred Stock of any series will not be effective unless such
amendment has been approved by the record Holders of a majority of the
Depositary Shares then outstanding. Every Holder of an outstanding Depositary
Receipt at the time any such amendment becomes effective shall be deemed, by
continuing to hold such Depositary Receipt to consent and agree to such
amendment and to be bound by the Deposit Agreement as amended thereby. The
Deposit Agreement may be terminated by the Corporation or by the Depositary only
after (i) all outstanding Depositary Shares have been redeemed; or (ii) each
share of Preferred Stock has been converted into other Preferred Stock or Common
Stock or has been exchanged for Debt Securities; or (iii) there has been a final
distribution in respect of the Preferred Stock in connection with any
liquidation, dissolution or winding up of the Corporation and such distribution
has been distributed to the Holders of Depositary Shares.
Charges of Depositary. The Corporation will pay all transfer and other
taxes and governmental charges arising solely from the existence of the
depositary arrangements. The Corporation will pay all charges of the Depositary
in connection with the initial deposit of the relevant series of Preferred Stock
and any redemption of such Preferred Stock. Holders of Depositary Receipts will
pay other transfer and other taxes and governmental charges and such other
charges or expenses as are expressly provided in the Deposit Agreement to be for
their accounts.
Resignation and Removal of Depositary. The Depositary may resign at any
time by delivering to the Corporation notice of its election to do so, and the
Corporation may at any time remove the Depositary, any such resignation or
removal to take effect upon the appointment of a successor Depositary and its
acceptance of such appointment. Such successor Depositary must be appointed
within 60 days after delivery of the notice of resignation or removal and must
be a bank or trust company having its principal office in the United States and
having a combined capital and surplus of at least the amount set forth in the
Deposit Agreement.
Miscellaneous. The Depositary will forward all reports and communications
from the Corporation that are delivered to the Depositary and that the
Corporation is required to furnish to the Holders of the deposited Preferred
Stock.
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Neither the Depositary nor the Corporation will be liable if it is
prevented or delayed by law or any circumstances beyond its control in
performing its obligations under the Deposit Agreement. The obligations of the
Depositary under the Deposit Agreement will be limited to performance in good
faith of its duties thereunder, and it will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares, Depositary
Receipts or shares of Preferred Stock unless satisfactory indemnity is
furnished. The Depositary may rely upon written advice of counsel or
accountants, or upon information provided by Holders of Depositary Receipts or
other persons believed to be competent and on documents believed to be genuine.
COMMON STOCK
Each Holder of Common Stock is entitled to one vote for each share owned of
record on all matters voted upon by shareholders, and a majority vote is
required for all action to be taken by shareholders except for certain
transactions described in the Certificate and in the New York Business
Corporation Law. See "Corporate Provisions." In the event of a liquidation,
dissolution or winding up of the Corporation, the Holders of Common Stock are
entitled to share equally and ratably in the assets of the Corporation, if any,
remaining after the payment of all debts and liabilities of the Corporation and
the liquidation preference of any outstanding Preferred Stock. The Holders of
the Common Stock have no preemptive rights or cumulative voting rights and there
are no redemption, sinking fund or conversion provisions applicable to the
Common Stock.
Holders of Common Stock are entitled to receive dividends if, as and when
declared by the Board of Directors out of funds legally available for such
purpose, subject to the dividend and liquidation rights of any Preferred Stock
that may be issued and subject to restrictions and limitations that may be
contained in the Corporation's loan agreements. See "-- Preferred
Stock -- Preferred Share Purchase Rights."
DESCRIPTION OF WARRANTS
GENERAL
The Corporation may issue together with other Securities or separately,
warrants for the purchase of (i) Debt Securities ("Debt Warrants"), (ii) Common
Stock ("Common Stock Warrants") or (iii) Preferred Stock ("Preferred Stock
Warrants"). The Corporation may also issue, together with Debt Securities or
Debt Warrants or separately, currency warrants ("Currency Warrants" and together
with Debt Warrants, Common Stock Warrants, the "Warrants") either in the form of
Currency Put Warrants or Currency Call Warrants (as defined below).
The Warrants are to be issued under agreements ("Warrant Agreements") to be
entered into between the Corporation and a bank or trust company, as agent, all
to be set forth in the applicable Prospectus Supplement relating to any or all
Warrants in respect of which this Prospectus is being delivered. Copies of the
form of agreement for each warrant, including the forms of certificates
representing the Warrants reflecting the provisions to be included in such
agreements that will be entered into with respect to particular offerings of
each type of warrant will be filed as exhibits to the Registration Statement.
The following summaries of certain provisions of the Warrant Agreements and
Warrant Certificates do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all the provisions of each Warrant
Agreement and Warrant Certificate, respectively, including the definitions
therein of certain capitalized terms not defined herein.
DEBT WARRANTS
General. Reference is made to the applicable Prospectus Supplement for the
terms of Debt Warrants in respect of which this Prospectus is being delivered,
the Debt Warrant Agreement relating to such Debt Warrants and the Debt Warrant
Certificates representing such Debt Warrants, including the following: (1) the
designation, aggregate principal amount and terms of the Debt Securities
purchasable upon exercise of
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such Debt Warrants and the procedures and conditions relating to the exercise of
such Debt Warrants; (2) the designation and terms of any related Debt Securities
with which such Debt Warrants are issued and the number of such Debt Warrants
issued with each such Debt Security; (3) the date, if any, on and after which
such Debt Warrants and the related Debt Securities will be separately
transferable; (4) the principal amount of Debt Securities purchasable upon
exercise of each Debt Warrant and the price at which such principal amount of
Debt Securities may be purchased upon such exercise; (5) the date on which the
right to exercise such Debt Warrants shall commence and the date on which such
right shall expire; (6) if the Debt Securities purchasable upon exercise of such
Debt Warrants are original issue discount Debt Securities, a discussion of
United States Federal income tax considerations applicable thereto; and (7)
whether the Debt Warrants represented by the Debt Warrant Certificates will be
issued in registered or bearer form, and, if registered, where they may be
transferred and registered.
Debt Warrant Certificates will be exchangeable for new Debt Warrant
Certificates of different denominations and Debt Warrants may be exercised at
the corporate trust office of the Debt Warrant Agent or any other office
indicated in the applicable Prospectus Supplement. Prior to the exercise of
their Debt Warrants, Holders of Debt Warrants will not have any of the rights of
Holders of the Debt Securities purchasable upon such exercise and will not be
entitled to payments of principal of (and premium, if any) or interest, if any,
on the Debt Securities purchasable upon such exercise.
Exercise of Debt Warrants. Each Debt Warrant will entitle the Holder to
purchase for cash such principal amount of Debt Securities at such exercise
price as shall in each case be set forth in, or be determinable as set forth in,
the applicable Prospectus Supplement relating to the Debt Warrants offered
thereby. Debt Warrants may be exercised at any time up to 5:00 p.m. New York
City time on the expiration date set forth in the applicable Prospectus
Supplement. After 5:00 p.m. New York City time on the expiration date,
unexercised Debt Warrants will become void.
Debt Warrants may be exercised as set forth in the applicable Prospectus
Supplement relating to the Debt Warrants. Upon receipt of payment and the Debt
Warrant Certificate properly completed and duly executed at the corporate trust
office of the Debt Warrant Agent or any other office indicated in the applicable
Prospectus Supplement, the Corporation will, as soon as practicable, forward the
Debt Securities purchasable upon such exercise. If less than all of the Debt
Warrants represented by such Debt Warrant Certificate are exercised, a new Debt
Warrant Certificate will be issued for the remaining amount of Debt Warrants.
COMMON STOCK WARRANTS
General. Reference is made to the applicable Prospectus Supplement for the
terms of Common Stock Warrants in respect of which this Prospectus is being
delivered, the Common Stock Warrant Agreement relating to such Common Stock
Warrants and the Common Stock Warrant Certificates representing such Common
Stock Warrants, including the following: (1) the offering price of such Common
Stock Warrants, if any; (2) the procedures and conditions relating to the
exercise of such Common Stock Warrants; (3) the number of shares of Common Stock
purchasable upon exercise of each Common Stock Warrant and the initial price at
which such shares may be purchased upon exercise; (4) the date on which the
right to exercise such Common Stock Warrants shall commence and the date on
which such right shall expire; (5) a discussion of United States Federal income
tax considerations applicable to the exercise of Common Stock Warrants; (6) call
provisions of such Common Stock Warrants, if any; and (7) any other terms of the
Common Stock Warrants.
Prior to the exercise of their Common Stock Warrants, Holders of the Common
Stock Warrants will not have any of the rights of Holders of Common Stock
purchasable upon such exercise, and will not be entitled to any dividend
payments on the Common Stock purchasable upon such exercise.
Exercise of Common Stock Warrants. Each Common Stock Warrant will entitle
the Holder to purchase for cash such number of shares of Common Stock at such
exercise price as shall in each case be set forth in, or be determinable as set
forth in, the applicable Prospectus Supplement relating to the Common Stock
Warrants offered thereby. Unless otherwise specified in the applicable
Prospectus Supplement, Common Stock Warrants may be exercised at any time up to
5:00 p.m. New York City time on the expiration
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date set forth in the applicable Prospectus Supplement. After 5:00 p.m. New York
City time on the expiration date, unexercised Common Stock Warrants will become
void.
Common Stock Warrants may be exercised as to be set forth in the applicable
Prospectus Supplement relating to the Common Stock Warrants in respect of which
this Prospectus is being delivered. Upon receipt of payment and the Common Stock
Warrant Certificates properly completed and duly executed at the corporate trust
office of the Common Stock Warrant Agent or any other office indicated in the
applicable Prospectus Supplement, the Corporation will, as soon as practicable,
forward a certificate representing the number of shares of Common Stock
purchasable upon such exercise. If less than all of the Common Stock Warrants
represented by such Common Stock Warrant Certificate are exercised, a new Common
Stock Warrant Certificate will be issued for the remaining amount of Common
Stock Warrants.
Anti-dilution Provisions. Unless otherwise specified in the applicable
Prospectus Supplement, the exercise price payable and the number of shares
purchasable upon the exercise of each Common Stock Warrant will be subject to
adjustment in certain events, including (1) the issuance of a stock dividend to
Holders of Common Stock or a combination, subdivision or reclassification of
Common Stock, (2) the issuance of rights, warrants or options to all Holders of
Common Stock entitling the Holders thereof to purchase Common Stock for an
aggregate consideration per share less than the then current market price per
share of the Common Stock, or (3) any distribution by the Corporation to the
Holders of its Common Stock of evidences of indebtedness of the Corporation or
of assets (excluding cash dividends or distributions payable out of capital
surplus and dividends and distributions referred to in (1) above). No fractional
shares will be issued upon exercise of Common Stock Warrants, but the
Corporation will pay the cash value of any fractional shares otherwise issuable.
PREFERRED STOCK WARRANTS
General. Reference is made to the applicable Prospectus Supplement for the
terms of Preferred Stock Warrants in respect of which this Prospectus is being
delivered, the Preferred Stock Warrant Agreement relating to such Preferred
Stock Warrants and the Preferred Stock Warrant Certificates representing such
Preferred Stock Warrants, including the following: (1) the offering price of
such Preferred Stock Warrants, if any; (2) the procedures and conditions
relating to the exercise of such Preferred Stock Warrants; (3) the number of
shares of Preferred Stock purchasable upon exercise of such Preferred Stock
Warrants and the initial price at which such shares may be purchased upon
exercise; (4) the date on which the right to exercise such Preferred Stock
Warrants shall commence and the date on which such right shall expire; (5) a
discussion of the United States Federal income tax considerations applicable to
the exercise of Preferred Stock Warrants; (6) call provisions of such Preferred
Stock Warrants, if any; and (7) any other terms of the Preferred Stock Warrants.
Prior to the exercise of their Preferred Stock Warrants, Holders of
Preferred Stock Warrants will not have any of the rights of Holders of Preferred
Stock purchasable upon such exercise, and will not be entitled to any dividend
payments on the Preferred Stock purchasable upon such exercise.
Exercise of Preferred Stock Warrants. Each Preferred Stock Warrant will
entitle the Holder to purchase for cash such number of shares of Preferred Stock
at such exercise price as shall in each case be set forth in, or be determinable
as set forth in, the applicable Prospectus Supplement relating to the Preferred
Stock Warrants offered thereby. Unless otherwise specified in the applicable
Prospectus Supplement, Preferred Stock Warrants may be exercised at any time up
to 5:00 p.m. New York City time on the expiration date set forth in the
applicable Prospectus Supplement. After 5:00 p.m. New York City time on the
expiration date, unexercised Preferred Stock Warrants will become void.
Preferred Stock Warrants may be exercised as to be set forth in the
applicable Prospectus Supplement relating to the Preferred Stock Warrants. Upon
receipt of payment and the Preferred Stock Warrant Certificates properly
completed and duly executed at the corporate trust office of the Preferred Stock
Warrant Agent or any other office indicated in the applicable Prospectus
Supplement, the Corporation will, as soon as practicable, forward a certificate
representing the number of shares of Preferred Stock purchasable upon such
exercise. If less than all of the Preferred Stock Warrants represented by such
Preferred Stock Warrant
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Certificate are exercised, a new Preferred Stock Warrant Certificate will be
issued for the remaining amount of Preferred Stock Warrants.
CURRENCY WARRANTS
The Corporation may issue, together with Debt Securities or Debt Warrants
or separately, Currency Warrants either in the form of "Currency Put Warrants"
entitling the Holders thereof to receive from the Corporation the Cash
Settlement Value in U.S. dollars of the right to sell a specified amount of a
specified foreign currency or currency units for a specified amount of U.S.
dollars, or in the form of "Currency Call Warrants" entitling the Holders
thereof to receive from the Corporation the Cash Settlement Value in U.S.
dollars of the right to purchase a specified amount of a specified foreign
currency or currency units for a specified amount of U.S. dollars. The spot
exchange rate of the applicable Base Currency, upon exercise, as compared to the
U.S. dollar, will determine whether the Currency Warrants have a Cash Settlement
Value on any given day prior to their expiration.
General. Reference is made to the applicable Prospectus Supplement for the
terms of Currency Warrants in respect of which this Prospectus is being
delivered, the Currency Warrant Agreement relating to such Currency Warrants and
the Currency Warrant Certificates representing such Currency Warrants, including
the following: (1) whether such Currency Warrants will be Currency Put Warrants,
Currency Call Warrants, or both; (2) the formula for determining the Cash
Settlement Value, if any, of each Currency Warrant; (3) the procedures and
conditions relating to the exercise of such Currency Warrants; (4) the
circumstances which will cause the Currency Warrants to be deemed to be
automatically exercised; (5) any minimum number of Currency Warrants which must
be exercised at any one time, other than upon automatic exercise; and (6) the
date on which the right to exercise such Currency Warrants will commence and the
date on which such right will expire.
Book-Entry Procedures and Settlement. Except as may otherwise be provided
in the applicable Prospectus Supplement, the Currency Warrants will be issued in
the form of Global Currency Warrant Certificates, registered in the name of a
depositary or its nominee. Holders will not be entitled to receive definitive
certificates representing Currency Warrants. A Holder's ownership of a Currency
Warrant will be recorded on or through the records of the brokerage firm or
other entity that maintains such Holder's account. In turn, the total number of
Currency Warrants held by an individual brokerage firm for its clients will be
maintained on the records of the depositary in the name of such brokerage firm
or its agent. Transfer of ownership of any Currency Warrant will be effected
only through the selling Holder's brokerage firm.
Exercise of Currency Warrants. Each Currency Warrant will entitle the
Holder to receive the Cash Settlement Value of such Currency Warrant on the
applicable Exercise Date, in each case as such terms will be defined in the
applicable Prospectus Supplement. If not exercised prior to 3:00 p.m., New York
City time, on the fifth New York Business Day preceding the expiration date,
Currency Warrants will be deemed automatically exercised on the expiration date.
DESCRIPTION OF GUARANTEES
A guarantee (each, a "Guarantee") will be executed and delivered by the
Corporation concurrently with the issuance by an Issuer Trust of Preferred
Securities for the benefit of the Holders from time to time of such Preferred
Securities. Each Guarantee will be qualified as an indenture under the Trust
Indenture Act. Harris Trust and Savings Bank will act as indenture trustee under
each Guarantee (the "Guarantee Trustee"). This Prospectus contains a description
of all material provisions of each Guarantee. The summary of such provisions
does not purport to be complete; a copy of the form of such Guarantees is filed
as an exhibit to the Registration Statement. All capitalized terms set forth
below have the meanings specified in the form of Guarantee. The Guarantee
Trustee will hold each Guarantee for the benefit of the Holders of the Preferred
Securities of an Issuer Trust.
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GENERAL
Pursuant to and to the extent set forth in each Guarantee, and except as
otherwise set forth in the applicable Prospectus Supplement, the Corporation
will irrevocably and unconditionally agree to pay in full the Guarantee Payments
(as defined below) to the Holders of the Preferred Securities, as and when due,
regardless of any defense, right of set-off or counterclaim that such Issuer
Trust may have or assert. The following payments or Distributions with respect
to the Preferred Securities, to the extent not paid by or on behalf of such
Issuer Trust (the "Guarantee Payments"), will be subject to such Guarantee: (i)
any accumulated and unpaid Distributions required to be paid on such Preferred
Securities, to the extent that such Issuer Trust has sufficient funds available
therefor at the time, (ii) the Redemption Price with respect to any Preferred
Securities called for redemption, to the extent that such Issuer Trust has
sufficient funds available therefor at such time, and (iii) upon a voluntary or
involuntary dissolution, winding up or liquidation of such Issuer Trust (other
than in connection with the distribution of Junior Subordinated Debentures to
the Holders of Trust Securities as provided in the Declaration of Trust), the
lesser of (a) the aggregate liquidation amount of the Preferred Securities and
all accumulated and unpaid Distributions thereon to the date of payment and (b)
the amount of assets of such Issuer Trust remaining available for distribution
to Holders of such Preferred Securities. The Corporation's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Corporation to the Holders of the applicable Preferred Securities or by
causing such Issuer Trust to pay such amounts to such Holders.
Each Guarantee will apply only to the extent that the applicable Issuer
Trust has sufficient funds available to make such payments. If the Corporation
does not make interest payments on Junior Subordinated Debentures held by an
Issuer Trust, such Issuer Trust will not be able to pay Distributions on the
Preferred Securities issued by such Issuer Trust and will not have funds legally
available therefor.
The Corporation will also irrevocably and unconditionally guarantee the
obligations of any Issuer Trust with respect to such Issuer Trust's Common
Securities to the same extent as the Guarantee of the Preferred Securities of
such Issuer Trust, except that upon the occurrence and the continuation of a
Trust Enforcement Event with respect to such Issuer Trust, Holders of such
Preferred Securities shall have a priority over Holders of such Common
Securities with respect to Distributions and payments on liquidation, redemption
or otherwise.
The Corporation will, through the Declarations of Trust, the Guarantees,
the Expense Agreements (as defined under "Description of Expense Agreements"),
the Junior Subordinated Debentures and the Junior Subordinated Indenture, taken
together, fully and unconditionally guarantee each Issuer Trust's obligations
under the Preferred Securities of such Issuer Trust. No single document standing
alone or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these documents
that has the effect of providing a full and unconditional guarantee of each
Issuer Trust's obligations under the Preferred Securities of such Issuer Trust.
STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of the Corporation
and will rank (i) subordinate and junior in right of payment to all other
liabilities of the Corporation, (ii) on a parity with the most senior preferred
or preference stock now or hereafter issued by the Corporation and with any
guarantee now or hereafter entered into by the Corporation in respect of any
preferred securities of any affiliate of the Corporation and (iii) senior to the
Corporation's common stock. The Guarantees will not place a limitation on the
amount of additional Senior Indebtedness that may be incurred by the
Corporation.
Each Guarantee will constitute a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly against
the Corporation to enforce its rights under a Guarantee without first
instituting a legal proceeding against any other person or entity). Each such
Guarantee will not be discharged except by payment of the Guarantee Payments in
full to the extent not paid by the applicable Issuer Trust or upon distribution
of Junior Subordinated Debentures to the Holders of the applicable Preferred
Securities in exchange for all such Preferred Securities.
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CERTAIN COVENANTS OF THE CORPORATION
In each Guarantee, the Corporation will covenant that, so long as any Trust
Securities issued by the applicable Issuer Trust remain outstanding, if (i)
there shall have occurred any Event of Default under the Junior Subordinated
Indenture with respect to the applicable series of Junior Subordinated
Debentures held by such Issuer Trust, (ii) the Corporation shall be in default
with respect to its payment of any obligations under such Guarantee or (iii) the
Corporation shall have given notice of its election of an Extension Period as
provided in the certificate evidencing such Junior Subordinated Debentures and
shall not have rescinded such notice, or such Extension Period or any extension
thereof shall be continuing, then the Corporation will not, and will not permit
any subsidiary to, (x) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Corporation's capital stock or (y) make any payment of principal, interest
or premium, if any, on or repay, repurchase or redeem any debt securities of the
Corporation that rank on a parity with or junior in interest to Junior
Subordinated Debentures or (z) make any guarantee payments with respect to any
guarantee by the Corporation of the debt securities of any subsidiary of the
Corporation if such guarantee ranks pari passu with, or junior in interest to,
such Junior Subordinated Debentures (other than (a) dividends or distributions
by the Corporation by way of issuance of its common stock, (b) payments under
the applicable Guarantee made by the Corporation in respect of the Trust
Securities of such Issuer Trust, (c) any declaration of a dividend in connection
with the implementation of a shareholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, and (d) purchases of common stock related to the
issuance of common stock or rights under any of the Corporation's benefit
plans).
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of Holders of Preferred Securities to which a Guarantee relates (in
which case no consent of such Holders will be required), a Guarantee may not be
amended without the prior approval of the Holders of not less than 66 2/3% of
the aggregate liquidation amount of the outstanding Preferred Securities to
which a Guarantee relates. The manner of obtaining any such approval will be as
set forth in an accompanying Prospectus Supplement. All guarantees and
agreements contained in a Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Corporation and shall inure to
the benefit of the Holders of such Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under a Guarantee will occur upon the failure of the
Corporation to perform any of its payment or other obligations thereunder. The
Holders of not less than a majority in aggregate liquidation amount of the
Preferred Securities to which a Guarantee relates have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of the Guarantee or to direct the exercise of
any trust or power conferred upon the Guarantee Trustee under such Guarantee.
If the Guarantee Trustee fails to enforce a Guarantee, then any Holder of
Preferred Securities to which such Guarantee relates may institute a legal
proceeding directly against the Corporation to enforce the Guarantee Trustee's
rights under such Guarantee, without first instituting a legal proceeding
against the Issuer Trust that issued such Preferred Securities, the Guarantee
Trustee or any other person or entity.
The Corporation, as guarantor, will be required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under any
outstanding Guarantees.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Corporation in performance of a Guarantee, undertakes to
perform only such duties as are specifically set forth in the Guarantee and,
after default with respect to a Guarantee (that has not been cured or waived)
that is
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actually known to a responsible officer of the Guarantee Trustee, must exercise
the same degree of care and skill as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs. Subject to
this provision, the Guarantee Trustee is under no obligation to exercise any of
the powers vested in it by a Guarantee at the request of any Holder of Preferred
Securities to which such Guarantee relates unless it is offered reasonable
indemnity against the costs, expenses and liabilities that might be incurred
thereby.
TERMINATION OF THE GUARANTEES
Each Guarantee will terminate as to the Preferred Securities issued by an
Issuer Trust and be of no further force and effect upon full payment of the
Redemption Price of all Preferred Securities of such Issuer Trust, upon full
payment of the amounts payable upon liquidation of such Issuer Trust or upon
distribution of Junior Subordinated Debentures held by such Issuer Trust to the
Holders of the Preferred Securities of such Issuer Trust in exchange for all of
the Preferred Securities of such Issuer Trust. Each Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder of related Preferred Securities issued by an Issuer Trust must restore
payment of any sums paid under such Preferred Securities or such Guarantee.
GOVERNING LAW
The Guarantees will be governed by and construed and interpreted in
accordance with the laws of the State of New York.
DESCRIPTION OF EXPENSE AGREEMENTS
Pursuant to the Agreements as to Expenses and Liabilities entered into by
the Corporation and each Issuer Trust (each, an "Expense Agreement"), the
Corporation will, as Sponsor, irrevocably and unconditionally guarantee to each
person or entity to whom the applicable Issuer Trust becomes indebted or liable,
the full payment of any costs, expenses or liabilities of such Issuer Trust,
other than obligations of such Issuer Trust to pay to the Holders of its Trust
Securities the amounts distributable to such Holders pursuant to the terms of
such Trust Securities. Each Expense Agreement will constitute an unsecured
obligation of the Corporation and will rank subordinate and junior in right of
payment to all liabilities of the Corporation in the same manner as the
Guarantees.
RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE
CORRESPONDING JUNIOR SUBORDINATED DEBENTURES, THE
GUARANTEES AND THE EXPENSE AGREEMENTS
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Preferred Securities
of any Issuer Trust (to the extent such Issuer Trust has funds available for
such payment) are irrevocably guaranteed by the Corporation as and to the extent
set forth under "Description of Guarantees". Taken together, the Corporation's
obligations under each series of Corresponding Junior Subordinated Debentures,
the Junior Subordinated Indenture, the related Declaration of Trust, the related
Expense Agreement and the related Guarantee provide, in the aggregate, a full,
irrevocable and unconditional guarantee on a subordinated basis of payments of
Distributions and other amounts due on the Related Preferred Securities. No
single document standing alone or operating in conjunction with fewer than all
of the other documents constitutes such guarantee. It is only the combined
operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of such Issuer Trust's obligations in
respect of the Related Preferred Securities. If and to the extent that the
Corporation does not make payments on the Corresponding Junior Subordinated
Debentures held by any Issuer Trust, such Issuer Trust will not have sufficient
funds to pay Distributions or other amounts due on its Related Preferred
Securities. The Guarantees do not cover payment of amounts payable with respect
to an Issuer Trust's Preferred Securities when such Issuer Trust does not have
sufficient
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funds to pay such amounts. In such event, the remedy of a Holder of Preferred
Securities is to institute a Direct Action against the Corporation for
enforcement of payment of the Corporation's obligations under Corresponding
Junior Subordinated Debentures having a principal amount equal to the
liquidation amount of the Preferred Securities held by such Holder.
The obligations of the Corporation under the Junior Subordinated
Debentures, each Guarantee and each Expense Agreement are subordinate and junior
in right of payment to all Senior Indebtedness of the Corporation.
SUFFICIENCY OF PAYMENTS
As long as payments are made when due on each series of Corresponding
Junior Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments distributable on the Related Preferred
Securities, primarily because (i) the aggregate principal amount of each series
of Corresponding Junior Subordinated Debentures will be equal to the sum of the
aggregate stated liquidation amount of the Related Preferred Securities and
related Common Securities; (ii) the interest rate and interest and other payment
dates on each series of Corresponding Junior Subordinated Debentures will match
the Distribution rate, Distribution dates and other payment dates for the
Related Preferred Securities; (iii) the Corporation will pay for all and any
costs, expenses and liabilities of each Issuer Trust except such Issuer Trust's
obligations to Holders of its Trust Securities; and (iv) each Declaration of
Trust further provides that the Issuer Trust will not engage in any activity
that is not consistent with the limited purposes of such Issuer Trust.
Notwithstanding anything to the contrary in the Junior Subordinated
Indenture, the Corporation has the right to set off any payment it is otherwise
required to make thereunder against and to the extent the Corporation has
theretofore made, or is concurrently on the date of such payment making, a
payment under the related Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A Holder of any Preferred Security may institute a legal proceeding
directly against the Corporation to enforce its rights under the related
Guarantee without first instituting a legal proceeding against the Guarantee
Trustee, the related Issuer Trust or any other person or entity. See
"Description of Guarantee".
A default or event of default under any Debt (other than the Corresponding
Junior Subordinated Debentures) of the Corporation would not constitute a
default or Event of Default in respect of the Related Preferred Securities.
However, in the event of payment defaults under, or acceleration of, Senior
Indebtedness of the Corporation, the subordination provisions of the Junior
Subordinated Indenture and the Junior Subordinated Debentures provide that no
payments may be made in respect of any Junior Subordinated Debentures until such
Senior Indebtedness has been paid in full or any payment default thereunder has
been cured or waived. See "Description of Debt Securities -- Description of
Junior Subordinated Debentures -- Subordination." Failure to make required
payments on any series of Corresponding Junior Subordinated Debentures would
constitute an Event of Default with respect to such series under the Junior
Subordinated Indenture.
LIMITED PURPOSE OF ISSUER TRUSTS
Each Issuer Trust's Preferred Securities represent preferred undivided
beneficial interests in the assets of such Issuer Trust, and each Issuer Trust
exists for the sole purpose of issuing its Preferred Securities and Common
Securities, investing the proceeds thereof in Corresponding Junior Subordinated
Debentures and engaging in only those other activities necessary or incidental
thereto. A principal difference between the rights of a Holder of a Preferred
Security and a Holder of a Corresponding Junior Subordinated Debenture is that a
Holder of a Corresponding Junior Subordinated Debenture is entitled to receive
from the Corporation payments on Corresponding Junior Subordinated Debentures
held, while a Holder of Preferred Securities is entitled to receive
Distributions or other amounts distributable with respect to the Preferred
Securities from
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such Issuer Trust (or from the Corporation under the related Guarantee) only if
and to the extent such Issuer Trust has funds available for the payment of such
Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary dissolution, winding-up or liquidation of
any Issuer Trust, other than any such dissolution, winding-up or liquidation
involving the distribution of the Corresponding Junior Subordinated Debentures,
after satisfaction of liabilities to creditors of the Issuer Trust as required
by applicable law, the Holders of the Related Preferred Securities will be
entitled to receive, out of the assets held by such Issuer Trust, the
Liquidation Distribution (as defined in the relevant Declaration of Trust) in
cash. See "Description of Preferred Securities". Upon any voluntary or
involuntary liquidation or bankruptcy of the Corporation, the Property Trustee,
as the Holder of the Corresponding Junior Subordinated Debentures, would be a
subordinated creditor of the Corporation, subordinated and junior in right of
payment to all Senior Indebtedness as set forth in the Junior Subordinated
Indenture and the Corresponding Junior Subordinated Debentures, but entitled to
receive payment in full of all amounts payable with respect to the Corresponding
Junior Subordinated Debentures, before any Holders of Common Stock or Preferred
Stock of the Corporation receive payments or distributions. Since the
Corporation is the guarantor under each Guarantee and has agreed under the
related Expense Agreement to pay for all costs, expenses and liabilities of each
Issuer Trust (other than such Issuer Trust's obligations to the Holders of its
Trust Securities), the positions of a Holder of the Preferred Securities and a
Holder of such Corresponding Junior Subordinated Debentures relative to other
creditors and to stockholders of the Corporation in the event of liquidation or
bankruptcy of the Corporation are expected to be substantially the same.
CORPORATE PROVISIONS
CERTIFICATE OF INCORPORATION AND BYLAWS
The Certificate and By-laws provide (i) for the classification of the Board
of Directors into three classes to be elected to staggered three-year terms
(with the exception of Mr. David J. Roberts who is elected to a two-year term);
(ii) that special meetings of shareholders may only be called pursuant to a
resolution approved by a majority of the entire Board of Directors and (iii)
subject to the rights of any series of Preferred Stock then outstanding,
directors may be removed from office only for cause and only by the affirmative
vote of the Holders of at least 66 2/3% of the voting power of all of the shares
of the Corporation entitled to vote for the election of directors.
The Board of Directors believes that the provisions described above and the
Rights described under "Description of Capital Stock -- Preferred
Stock -- Preferred Share Purchase Rights" will help assure that all of the
Corporation's shareholders will be treated similarly if certain kinds of
business combinations are effected. However, these provisions also may have the
effect of deterring hostile takeovers or delaying or preventing changes in
control or management of the Corporation, and may make it more difficult to
accomplish certain transactions that are opposed by the incumbent Board of
Directors.
NEW YORK BUSINESS CORPORATION LAW
The New York Business Corporation Law (the "BCL") requires the affirmative
vote of at least two thirds of the voting power of the outstanding shares
entitled to vote thereon to approve mergers or consolidations in which the
Corporation would be merged or consolidated or the sale of all or substantially
all the assets of the Corporation. New York law provides that mergers,
consolidations and amendments of the Certificate must also be approved by a
majority of each class of outstanding shares, voting separately as a class, if
the merger, consolidation or amendment would (1) eliminate or limit the voting
rights of the class, (2) subordinate the rights of the class or (3) change such
shares or result in their conversion or in the modification of the terms on
which they may be converted, but only if any such actions would adversely affect
the Holders thereof. Other amendments of the Certificate require the affirmative
vote of a majority of the voting power of the outstanding shares entitled to
vote thereon.
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In addition, Section 912 of the BCL provides, with certain exceptions that
no "domestic corporation" (or any subsidiary) shall engage in a "business
combination" with any "interested shareholder" (generally, a beneficial owner of
20% or more of the outstanding voting stock) for a period of five years of such
shareholder's "stock acquisition date," unless (1) the business combination or
the purchase of stock by the interested shareholder is approved by the board of
directors prior to such shareholder's stock acquisition date, (2) the business
combination is approved by a majority of the voting power of the corporation's
outstanding stock (excluding any stock owned by the interested shareholder) at a
meeting called no earlier than five years after the stock acquisition date or
(3) the consideration paid to shareholders in the business combination (which
may not occur until the expiration of five years from the stock acquisition
date) is at least equal to the highest of certain specified amounts. As defined,
a "domestic corporation" is a corporation incorporated under the BCL or any
other general statute or special act of the State of New York, other than under
the cooperative corporation law; a "business combination" includes a merger or
consolidation, a sale of assets representing 10% or more of the corporation's
consolidated earning power or market value, the issuance of stock amounting to
5% or more of the corporation's outstanding stock and a liquidation proposal
made by the interested shareholder; and the "stock acquisition date" is the date
on which a shareholder first becomes an interested shareholder.
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
The Corporation has a By-law provision requiring it to indemnify its
directors and officers to the fullest extent permitted in certain circumstances,
to advance expenses, to maintain insurance and to follow certain other
procedures. Provisions of the Certificate eliminate the personal monetary
liability of directors and officers for breaches of duty, except for (i)
breaches of such person's duty of loyalty, (ii) those instances where such
person is found not to have acted in good faith or in knowing violation of law,
(iii) those instances where such person received an improper personal benefit as
the result of such breach and (iv) acts in violation of Section 719 of the BCL.
TRANSFER AGENT
The transfer agent for the Common Stock is Mellon Securities Trust Company.
UNITED STATES TAXATION
Certain special United States federal income tax considerations may be
applicable to the Securities. If any such tax considerations are material to
investors, the applicable Prospectus Supplement will describe such tax
considerations. Prospective purchasers of Securities are urged to consult their
own tax advisors prior to any acquisition of such Securities.
PLAN OF DISTRIBUTION
The Corporation may sell the Securities directly to purchasers, through
agents, through underwriters, or through dealers.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
Offers to purchase Securities may be solicited directly by the Corporation
or by agents designated by the Corporation from time to time. Any such agent,
who may be deemed to be an underwriter as that term is defined in the Securities
Act involved in the offer or sale of the Securities in respect of which this
Prospectus is delivered will be named, and any commissions payable by the
Corporation to such agent will be set forth, in the Prospectus Supplement.
Unless otherwise indicated in the Prospectus Supplement, any such agent will be
acting on a best efforts basis for the period of its appointment. Agents may be
customers of, engage in transactions with or perform services for the
Corporation in the ordinary course of business.
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If an underwriter or underwriters are utilized in the sale, the Corporation
will execute an underwriting agreement with such underwriters at the time of
sale to them, and the names of the underwriters and the terms of the transaction
will be set forth in the Prospectus Supplement, which will be used by the
underwriters to make resales of the Securities in respect of which this
Prospectus is delivered to the public.
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, the Corporation will sell such Securities to such
dealer, as principal. The dealer may then resell such Securities to the public
at varying prices to be determined by such dealer at the time of resale.
Agents, underwriters and dealers may be entitled under the relevant
agreements to indemnification by the Corporation against certain liabilities,
including liabilities under the Securities Act.
If so indicated in the Prospectus Supplement, the Corporation will
authorize agents or underwriters to solicit offers by certain institutions to
purchase Securities from the Corporation at the public offering price set forth
in the Prospectus Supplement pursuant to delayed delivery contracts
("Contracts") providing for payment and delivery on the date stated in the
Prospectus Supplement. Each Contract will be for an amount not less than, and
unless the Corporation otherwise agrees the aggregate principal amount of
Securities sold pursuant to Contracts shall be not more than, the respective
amounts stated in the Prospectus Supplement. Institutions with which Contracts,
when authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and other institutions, but shall in all cases be subject to the
approval of the Corporation. Contracts will not be subject to any condition
except that the purchase by an institution of the Securities covered by its
Contract shall not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject. A
commission indicated in the Prospectus Supplement will be paid to underwriters
or agents soliciting purchases of Securities pursuant to Contracts accepted by
the Corporation.
The place and time of delivery for the Securities in respect of which this
Prospectus is delivered will be set forth in the Prospectus Supplement.
VALIDITY OF SECURITIES
The validity of the Preferred Securities, the enforceability of the
Declaration of Trust and the creation of the Issuer Trust will be passed upon by
Richards, Layton & Finger, P.A., One Rodney Square, Wilmington, Delaware 19801,
special Delaware counsel to the Corporation and the Issuer Trust. The validity
of the Guarantee and the Junior Subordinated Debentures will be passed upon for
the Corporation by White & Case LLP, 1155 Avenue of the Americas, New York, New
York 10036, and certain matters will be passed upon for the underwriters by
Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New York, New York
10022. Certain matters relating to United States federal income tax
considerations will be passed upon for the Corporation by White & Case LLP, as
counsel for the Corporation. White & Case LLP performs legal services for the
Corporation from time to time. Richards, Layton & Finger, P.A. is also serving
as counsel to Wilmington Trust Company, in its various capacities, in connection
with the issuance of the Preferred Securities. Richards, Layton & Finger, P.A.
performs other services for the Corporation and Wilmington Trust Company from
time to time.
EXPERTS
The consolidated financial statements of the Corporation and subsidiaries
for the year ended December 26, 1997, appearing in the Corporation's Annual
Report on Form 10-K for the year ended December 26, 1997 as amended by the
Annual Report on Form 10-K/A filed on December 18, 1998, and incorporated by
reference into this Prospectus, have been audited by PricewaterhouseCoopers,
LLP, independent auditors, as set forth in their report thereon, included
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in auditing and accounting.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Expenses in connection with the issuance of the securities being registered
hereby are estimated as follows:
<TABLE>
<S> <C>
Registration fee............................................ $43,673
-------
Accounting fees and expenses................................ 50,000
-------
Legal fees and expenses..................................... 275,000
-------
Blue Sky and Legal Investment fees and expenses............. 25,000
-------
Transfer Agent's fees and expenses.......................... *
-------
Rating Agency fees.......................................... 200,000
-------
Trustee fees................................................ *
-------
Printing expenses........................................... *
-------
Miscellaneous............................................... *
-------
Total............................................. $ *
=======
</TABLE>
- ---------------
* Subject to future contingencies.
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Reference is made to Sections 721 through 726 of BCL, which are summarized
below.
Section 721 of the BCL provides that indemnification pursuant to the BCL
shall not be deemed exclusive of other indemnification rights to which a
director or officer may be entitled, provided that no indemnification may be
made if a judgment or other final adjudication adverse to the director or
officer establishes that (1) his acts were committed in bad faith or were the
result of active and deliberate dishonesty, and, in either case, were material
to the cause of action so adjudicated, or (2) he personally gained in fact a
financial profit or other advantage to which he was not legally entitled.
Section 722(a) of the BCL provides that a corporation may indemnify a
director or officer made, or threatened to be made, a party to any civil or
criminal action, other than a derivative action, against judgments, fines,
amounts paid in settlement and reasonable expenses actually and necessarily
incurred as a result of such action or proceeding, or any appeal therein, if
such director or officer acted in good faith, for a purpose which he reasonably
believed to be in the best interests of the corporation and, in criminal actions
or proceedings, in addition, had no reasonable cause to believe that his conduct
was unlawful. With respect to derivative actions, Section 722(c) of the BCL
provides that a director or officer may be indemnified only against amounts paid
in settlement and reasonable expenses, including attorneys' fees, actually and
necessarily incurred in connection with the defense or settlement of such
action, or any appeal therein, if such director or officer acted in good faith,
for a purpose which he reasonably believed to be in the best interests of the
corporation and that no indemnification shall be made in respect of (1) a
threatened action, or a pending action which is settled or otherwise disposed
of, or (2) any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and to the extent an appropriate
court determines that the person is fairly and reasonably entitled to partial or
full indemnification.
Section 723 of the BCL specifies the manner in which payment of such
indemnification may be authorized by the corporation. It provides that
indemnification by a corporation is mandatory in any case in which the director
or officer has been successful, whether on the merits or otherwise, in defending
an action. In the event that the director or officer has not been successful or
the action is settled, indemnification may be
II-1
<PAGE> 40
made by the corporation only if authorized by any of the corporate actions set
forth in such Section 723 (unless the corporation has provided for
indemnification in some other manner as otherwise permitted by Section 721 of
the BCL). Section 724 of the BCL provides that upon proper application by a
director or officer, indemnification shall be awarded by a court to the extent
authorized under Sections 722 and 723 of the BCL. Section 725 of the BCL
contains certain other miscellaneous provisions affecting the indemnification of
directors and officers, including provision for the return of amounts paid as
indemnification if any such person is ultimately found not to be entitled
thereto. Section 726 of the BCL authorizes the purchase and maintenance of
insurance to indemnify (1) a corporation for any obligation which it incurs as a
result of the indemnification of directors and officers under the above
sections, (2) directors and officers in instances in which they may be
indemnified by a corporation under such sections, and (3) directors and officers
in instances in which they may not otherwise be indemnified by a corporation
under such sections, provided the contract of insurance covering such directors
and officers provides, in a manner acceptable to the New York State
Superintendent of Insurance, for a retention amount and for co-insurance.
Article Eight of the Certificate provides that a director of the
corporation shall not be personally liable to the corporation or its
shareholders for damages for any breach of duty in such capacity except that the
liability of a director shall not be limited (1) if a judgment or other final
adjudication adverse to him establishes that his acts or omissions were in bad
faith or involved in intentional misconduct or knowing violation of law or that
he personally gained in fact a financial profit or other advantage to which he
was not legally entitled or that his acts violated section 719 of the BCL, or
(2) his acts or omissions occurred prior to the adoption of said Article of the
Certificate.
In addition, the By-laws provide for indemnification of its directors and
officers to the fullest extent permitted in certain circumstances, to advance
expenses, to maintain insurance and to follow certain other procedures.
The Corporation carries two layers of directors' and officers' insurance.
The primary layer of $15 million annual aggregate amount is provided by the
National Union Fire Insurance Company of Pittsburgh, PA. An excess layer of $10
million annual aggregate amount is underwritten by CNA Insurance Companies.
ITEM 16. EXHIBITS.
(a) Documents filed as part of this Registration Statement:
<TABLE>
<S> <C>
1.1 Form of Underwriting Agreement between the Corporation and
the underwriters named therein for Common Stock, Preferred
Stock, Debt Securities, Depositary Shares and Warrants
(filed as Exhibit 1.1 to the Corporation's Current Report on
Form 8-K filed on November 17, 1995 and incorporated herein
by reference)
1.2 Form of Underwriting Agreement between the Corporation, the
Issuer Trust and the underwriters named therein for
Preferred Securities
3.1 Restated Certificate of Incorporation (filed as Exhibit 3.1
to the Corporation's Quarterly Report on Form 10-Q for the
quarter ended September 27, 1996 and incorporated herein by
reference.
4.1 Indenture, dated as of November 17, 1995 (filed as Exhibit 4
to the Corporation's Current Report on Form 8-K filed on
November 17, 1995 and incorporated herein by reference)
4.2** Form of Junior Subordinated Indenture
4.3** Form of Supplemental Indenture to be used in connection with
the issuance of the Junior Subordinated Debentures
4.4** Certificate of Trust for FW Preferred Capital Trust I
4.5** Certificate of Trust for FW Preferred Capital Trust II
4.6** Declaration of Trust for FW Preferred Capital Trust I
4.7** Declaration of Trust for FW Preferred Capital Trust II
4.8** Form of Amended and Restated Declaration of Trust for FW
Preferred Capital Trust I and FW Preferred Capital Trust II
4.9 Form of Preferred Security Certificate (included in Exhibit
4.8)
4.10 Form of Junior Subordinated Debenture (included in Exhibit
4.3)
4.11** Form of Guarantee Agreement
</TABLE>
II-2
<PAGE> 41
<TABLE>
<S> <C>
4.12* Form of Warrant Agreements
5.1** Opinion of White & Case LLP regarding the validity of the
Debt Securities, Common Stock, Preferred Stock, Depositary
Shares, Warrants and the Guarantees
5.2 Opinion of Richards, Layton & Finger, P.A. regarding the
validity of the Preferred Securities
8* Tax Opinion of White & Case LLP
12 Statement of Computation of Consolidated Ratio of Earnings
to Fixed Charges and Preferred Shares Dividend Requirements
(filed as Exhibit 12-1 to Foster Wheeler Corporation's
Quarterly Report on Form 10-Q for the quarter ended March
27, 1998 and incorporated herein by reference)
23.1 Consent of independent accountants
23.2 Consents of White & Case LLP (included in the opinions filed
as Exhibits 5.1 and 8)
23.3 Consent of Richards, Layton & Finger, P.A. (included in the
opinion filed as Exhibit 5.2)
24 Powers of Attorney (see "Power of Attorney" on pages II-5
and II-6 of the Registration Statement)
25.1** Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of Harris Trust and Savings Bank to act as
trustee under the Junior Subordinated Indenture relating to
the Junior Subordinated Debentures
25.2** Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of Harris Trust and Savings Bank to act as
trustee under the Amended and Restated Declaration of Trust
of FW Preferred Capital Trust I
25.3** Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of Harris Trust and Savings Bank to act as
trustee under the Amended and Restated Declaration of Trust
of FW Preferred Capital Trust II
25.4** Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of Harris Trust and Savings Bank to act as
trustee under the Guarantee for the benefit of the holders
of Preferred Securities issued by FW Preferred Capital Trust
I
25.5** Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of Harris Trust and Savings Bank to act as
trustee under the Guarantee for the benefit of the holders
of Preferred Securities issued by FW Preferred Capital Trust
II
25.6** Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of Harris Trust and Savings Bank to act as
trustee under the 1995 Indenture (filed as Exhibit 25.1 to
the Corporation's Current Report on Form 8-K filed on
November 17, 1995 and incorporated herein by reference)
</TABLE>
- ---------------
* To be filed by amendment or on Form 8-K.
** Previously filed.
ITEM 17. UNDERTAKINGS.
Each undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) If such registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any
financial statements required by Rule 3-19 of this chapter at the start of
any delayed offering or throughout a continuous offering. Financial
statements and information otherwise required by Section 10(a) (3) of the
Act need not be furnished, provided, that such registrant
II-3
<PAGE> 42
includes in the prospectus, by means of a post-effective amendment,
financial statements required pursuant to this paragraph (a) (4) and other
information necessary to ensure that all other information in the
prospectus is at least as current as the date of those financial
statements. Notwithstanding the foregoing, with respect to registration
statements on Form F-3, a post-effective amendment need not be filed to
include financial statements and information required by Section 10(a) (3)
of the Act or Rule 3-19 of this chapter if such financial statements and
information are contained in periodic reports filed with or furnished to
the Commission by the registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in
the Form F-3.
Each undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of such
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Each undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 or Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of a
registrant pursuant to the foregoing provisions, or otherwise, the Corporation
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Corporation of expenses incurred
or paid by a director, officer or controlling person of the Corporation in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Corporation will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Each undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(b) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE> 43
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, the undersigned
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Pre-Effective
Amendment No. 2 to this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
FOSTER WHEELER CORPORATION
(Registrant)
By: /s/ RICHARD J. SWIFT
------------------------------------
Name: Richard J. Swift
Title: Chairman, President and
Chief Executive Officer
Dated: December 18, 1998
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 2 to this Registration Statement has been signed, as
of June 23, 1998, by the following persons on behalf of Foster Wheeler
Corporation, in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ RICHARD J. SWIFT Director, Chairman, President and December 18, 1998
- --------------------------------------------- Chief Executive Officer
Richard J. Swift (Principal Executive Officer)
* Director, Vice Chairman, and December 18, 1998
- --------------------------------------------- Chief Financial Officer
David J. Roberts (Principal Financial Officer)
* Vice President and Controller December 18, 1998
- --------------------------------------------- (Principal Accounting Officer)
George S. White
* Director December 18, 1998
- ---------------------------------------------
Eugene D. Atkinson
* Director December 18, 1998
- ---------------------------------------------
Louis E. Azzato
* Director December 18, 1998
- ---------------------------------------------
David J. Farris
* Director December 18, 1998
- ---------------------------------------------
E. James Ferland
Director
- ---------------------------------------------
Martha Clark Goss
* Director December 18, 1998
- ---------------------------------------------
Constance J. Homer
* Director December 18, 1998
- ---------------------------------------------
Joseph J. Melone
</TABLE>
II-5
<PAGE> 44
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Director December 18, 1998
- ---------------------------------------------
John E. Stuart
*By: /s/ RICHARD J. SWIFT
---------------------------------------
Richard J. Swift
</TABLE>
II-6
<PAGE> 45
Pursuant to the requirements of the Securities Act of 1933, FW Preferred
Capital Trust I certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-3 and has duly caused this
Pre-Effective Amendment No. 2 to this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, on the 18th day of
December, 1998.
FW PREFERRED CAPITAL TRUST I
By: FOSTER WHEELER CORPORATION,
as Sponsor
By: /s/ RICHARD J. SWIFT
------------------------------------
II-7
<PAGE> 46
Pursuant to the requirements of the Securities Act of 1933, FW Preferred
Capital Trust II certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-3 and has duly caused this
Pre-Effective Amendment No. 2 to this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, on the 18th day of
December, 1998.
FW PREFERRED CAPITAL TRUST II
By: FOSTER WHEELER CORPORATION,
as Sponsor
By: /s/ RICHARD J. SWIFT
------------------------------------
II-8
<PAGE> 47
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
- ------- ------- ------------
<S> <C> <C>
1.1 Form of Underwriting Agreement between the Corporation and
the underwriters named therein for Common Stock, Preferred
Stock, Debt Securities, Depositary Shares and Warrants
(filed as Exhibit 1.1 to the Corporation's Current Report on
Form 8-K filed on November 17, 1995 and incorporated herein
by reference)
1.2 Form of Underwriting Agreement between the Corporation, the
Issuer Trust and the underwriters named therein for
Preferred Securities
3.1 Restated Certificate of Incorporation (filed as Exhibit 3.1
to the Corporation's Quarterly Report on Form 10-Q for the
quarter ended September 27, 1996 and incorporated herein by
reference)
4.1 Indenture, dated as of November 17, 1995 (filed as Exhibit 4
to the Corporation's Current Report on Form 8-K filed on
November 17, 1995 and incorporated herein by reference)
4.2 Form of Junior Subordinated Indenture
4.3 Form of Supplemental Indenture to be used in connection with
the issuance of the Junior Subordinated Debentures
4.4 Certificate of Trust for FW Preferred Capital Trust I
4.5 Certificate of Trust for FW Preferred Capital Trust II
4.6 Declaration of Trust for FW Preferred Capital Trust I
4.7 Declaration of Trust for FW Preferred Capital Trust II
4.8 Form of Amended and Restated Declaration of Trust for FW
Preferred Capital Trust I and FW Preferred Capital Trust II
4.9 Form of Preferred Security Certificate (included in Exhibit
4.8)
4.10 Form of Junior Subordinated Debenture (included in Exhibit
4.3)
4.11 Form of Guarantee Agreement
4.12* Form of Warrant Agreements
5.1 Opinion of White & Case LLP regarding the validity of the
Debt Securities, Common Stock, Preferred Stock, Depositary
Shares, Warrants and the Guarantees
5.2 Opinion of Richards, Layton & Finger, P.A. regarding the
validity of the Preferred Securities
8* Tax Opinion of White & Case LLP
12 Statement of Computation of Consolidated Ratio of Earnings
to Fixed Charges and Preferred Shares Dividend Requirements
(filed as Exhibit 12-1 to Foster Wheeler Corporation's
Quarterly Report on Form 10-Q for the quarter ended March
27, 1998 and incorporated herein by reference)
23.1 Consent of independent accountants
23.2 Consents of White & Case LLP (included in the opinions filed
as Exhibits 5.1 and 8)
23.3 Consent of Richards, Layton & Finger, P.A. (included in the
opinion filed as Exhibit 5.2)
24 Powers of Attorney (see "Power of Attorney" on pages II-5
and II-6 of the Registration Statement)
25.1 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of Harris Trust and Savings Bank to act as
trustee under the Junior Subordinated Indenture relating to
the Junior Subordinated Debentures
25.2 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of Harris Trust and Savings Bank to act as
trustee under the Amended and Restated Declaration of Trust
of FW Preferred Capital Trust I
25.3 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of Harris Trust and Savings Bank to act as
trustee under the Amended and Restated Declaration of Trust
of FW Preferred Capital Trust II
</TABLE>
II-9
<PAGE> 48
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
- ------- ------- ------------
<S> <C> <C>
25.4 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of Harris Trust and Savings Bank to act as
trustee under the Guarantee for the benefit of the holders
of Preferred Securities issued by FW Preferred Capital Trust
I
25.5 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of Harris Trust and Savings Bank to act as
trustee under the Guarantee for the benefit of the holders
of Preferred Securities issued by FW Preferred Capital Trust
II
25.6 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of Harris Trust and Savings Bank to act as
trustee under the 1995 Indenture (filed as Exhibit 25.1 to
the Corporation's Current Report on Form 8-K filed on
November 17, 1995 and incorporated herein by reference)
</TABLE>
- ---------------
* To be filed by amendment or on Form 8-K.
II-10
<PAGE> 1
Exhibit 1.2
$[150,000,000]
% PREFERRED SECURITIES, SERIES I
FW PREFERRED CAPITAL TRUST I
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
UNDERWRITING AGREEMENT
New York, New York
Dated the date set forth in
Schedule I hereto
To the Representative(s)
named in the Schedule I
hereto, of the Underwriters
named in Schedule II hereto
Ladies and Gentlemen:
FW Preferred Capital Trust I, a statutory business trust (the
"Trust") organized under the Business Trust Act of the State of Delaware
(Chapter 38, Title 12 of the Delaware Code, 12 Del. C. Sections 3801 et
seq.) (the "Delaware Business Trust Act") and Foster Wheeler Corporation, a New
York corporation (the "Corporation" and, together with the Trust, the
"Offerors"), as sponsor of the Trust and as guarantor, subject to the terms and
conditions stated herein, confirm their agreement with you and each of the other
underwriters named in Schedule II hereto (the "Underwriters"), for whom you are
acting as representatives (the "Representatives"), with respect to the issue and
sale by the Trust and the purchase by the Underwriters, acting severally and not
jointly, of the aggregate liquidation amount (the "Firm Securities") identified
in Schedule I hereto of the Trust's preferred securities (liquidation amount $25
per preferred security) (the "Preferred Securities") to be issued under an
Amended and Restated Declaration of Trust of the Trust (the "Declaration") among
the Corporation, as Sponsor, and the administrative trustees identified in
Schedule I hereto (the "Administrative Trustees"), Harris Trust and Savings
Bank, as property trustee (the "Property Trustee") and Wilmington Trust Company,
as Delaware Trustee (the "Delaware Trustee" and, together with the
Administrative Trustees and the Property Trustee, the "Trustees"). The Preferred
Securities will be fully and unconditionally guaranteed (the "Guarantee",
together with the Preferred Securities, the "Securities") by the Corporation to
the extent set forth in the Guarantee Agreement (the "Guarantee Agreement"),
between the Corporation and Harris Trust and Savings Bank, as guarantee trustee
(the "Guarantee Trustee"). In addition, the Trust proposes to grant to the
Underwriters an option to purchase up to an additional aggregate liquidation
amount of the Preferred Securities identified in Schedule I hereto on the terms
and for the purposes set forth in Section 3 hereof (the "Option Securities").
The Firm Securities and the Option Securities, if purchased, are hereinafter
collectively called "Preferred Securities". The Corporation will be the owner of
all of the beneficial ownership interests represented by common securities (the
"Common Securities", together with the Preferred Securities, the "Trust
Securities") of the Trust. Concurrently with the issuance of the Securities and
the Corporation's purchase of all of the Common Securities of the Trust, the
Trust will invest the proceeds of each in the Corporation's subordinated debt
securities identified in Schedule I hereto (the "Debentures"). The Debentures
are to be issued under the indenture (the "Base Indenture"), between the
Corporation and Harris Trust and Savings Bank, as indenture trustee (the
"Indenture Trustee"), as amended by a supplemental indenture, between the
Corporation and the Indenture Trustee, pertaining to the Debentures to be
purchased by the
1
<PAGE> 2
Trust. If the firm or firms listed in Schedule II hereto include only the firm
or firms listed in Schedule I hereto, then the terms "Underwriters" and
"Representatives" shall each be deemed to refer to such firm or firms.
1. Representations, Warranties and Agreements of the
Corporation and the Trust. The Offerors, jointly and severally, represent and
warrant to each Underwriter as of the date hereof and as of each Closing Date
(hereinafter defined), and agrees with each Underwriter, as follows:
(a) The Corporation meets the requirements for the
use of Form S-3 under the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations promulgated thereunder
(the "Rules and Regulations"), and has prepared and filed with the
Securities and Exchange Commission (the "Commission"), a registration
statement on Form S-3 (the file number of which is set forth in
Schedule I hereto), which has become effective, for the registration of
the Securities under the Securities Act. The registration statement, as
amended at the date of this Agreement, meets the requirements set forth
in Rule 415(a)(1)(x) under the Securities Act and complies in all other
material respects with such rule. The Corporation proposes to file with
the Commission pursuant to Rule 424 under the Securities Act ("Rule
424") a supplement to the form of prospectus included in the
registration statement relating to the initial offering of the
Securities and the plan of distribution thereof and has previously
advised you of all further information (financial and other) with
respect to the Corporation to be set forth therein. The term
"Registration Statement" means the registration statement, as amended
at the date of this Agreement, including the exhibits thereto,
financial statements, and all documents incorporated therein by
reference pursuant to Item 12 of Form S-3 (the "Incorporated
Documents"), and such prospectus as then amended, including the
Incorporated Documents, is hereinafter referred to as the "Basic
Prospectus"; and such supplemented form of prospectus, in the form in
which it shall be filed with the Commission pursuant to Rule 424
(including the Basic Prospectus as so supplemented), is hereinafter
called the "Final Prospectus". Any preliminary form of the Basic
Prospectus which has heretofore been filed pursuant to Rule 424 is
hereinafter called the "Interim Prospectus". Any reference herein to
the Registration Statement, the Basic Prospectus, any Interim
Prospectus or the Final Prospectus shall be deemed to refer to and
include the Incorporated Documents which were filed under the
Securities Exchange Act of 1934 (the "Exchange Act"), on or before the
date of this Agreement or the issue date of the Basic Prospectus, any
Interim Prospectus or the Final Prospectus, as the case may be; and any
reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus, any
Interim Prospectus or the Final Prospectus shall be deemed to refer to
and include the filing of any Incorporated Documents under the Exchange
Act after the date of this Agreement or the issue date of the Basic
Prospectus, any Interim Prospectus or the Final Prospectus, as the case
may be, and deemed to be incorporated therein by reference.
(b) As of the date hereof, when the Final Prospectus
is first filed with the Commission pursuant to Rule 424, when, before
either Closing Date, any amendment to the Registration Statement
becomes effective, when, before either Closing Date, any Incorporated
Document is filed with the Commission, when any supplement to the Final
Prospectus is filed with the Commission and at each Closing Date, the
Registration Statement, the Final Prospectus and any such amendment or
supplement will comply in all material respects with the applicable
requirements of the Securities Act and the Rules and Regulations, and
the Incorporated Documents will comply in all material respects with
the requirements of the Exchange Act and the rules and regulations
adopted by the Commission thereunder or the Securities Act and the
Rules and Regulations, as applicable, on the date hereof and on each
Closing Date, each of the Declaration, the Guarantee Agreement and the
Indenture shall have been qualified under and did or will comply in all
material respects with the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act") and the applicable rules and regulations
thereunder; on the date it became effective, the Registration Statement
did not, and, on the date that any post-effective amendment to the
Registration Statement becomes effective, the Registration Statement as
amended by such post-effective amendment did not or will not, as the
case may be, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; on the date the Final
Prospectus is filed with the Commission
2
<PAGE> 3
pursuant to Rule 424 and on each Closing Date, the Final Prospectus, as
it may be amended or supplemented, will not include an untrue statement
of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they are made, not misleading; and on said dates, the
Incorporated Documents will comply in all material respects with the
provisions of the Securities Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder, and, when
read together with the Final Prospectus, or the Final Prospectus as it
may be then amended or supplemented, will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they are made, not misleading;
provided that the foregoing representations and warranties in this
paragraph (b) shall not apply to statements or omissions made in
reliance upon and in conformity with written information furnished to
the Corporation by or through the Representatives on behalf of any
Underwriter specifically for use in connection with the preparation of
the Registration Statement or the Final Prospectus, as they may be
amended or supplemented, or to any statements in or omissions from the
statements of eligibility and qualification on Form T-1 of the
Indenture Trustee, the Property Trustee and the Guarantee Trustee under
the Trust Indenture Act (the "Forms T-1").
(c) The Basic Prospectus and any Interim Prospectus,
as of their respective dates, complied in all material respects with
the requirements of the Securities Act and of the Rules and Regulations
and did not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. The Commission has not issued an order preventing or
suspending the use of the Basic Prospectus or any Interim Prospectus.
(d) The Corporation and each of its significant
subsidiaries as such term is defined in Rule 405 of the Rules and
Regulations excluding clause (3) thereof and identified on Schedule III
hereto (each a "Significant Subsidiary") have been duly incorporated
and are validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation, are duly
qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective ownership
or lease of property or the conduct of their respective businesses
requires such qualification except where the failure to be so qualified
and in good standing would not have a material adverse effect on the
consolidated financial condition, shareholders' equity, results of
operations or business of the Corporation and its subsidiaries, taken
as a whole, and where so qualified have all corporate power and
authority necessary to own, lease or operate their respective
properties and to conduct the businesses in which they are engaged as
described in the Final Prospectus.
(e) The Corporation has an authorized capitalization
as set forth in the Final Prospectus, and all of the issued and
outstanding shares of capital stock of the Corporation have been duly
and validly authorized and issued, are fully paid and non-assessable
and conform in all material respects to the description thereof
contained in the Final Prospectus; and all of the issued and
outstanding shares of capital stock of each Significant Subsidiary have
been duly and validly authorized and issued and are fully paid and
non-assessable and (except for directors' qualifying shares and as set
forth in the Final Prospectus) are owned directly or indirectly by the
Corporation, free and clear of all liens, encumbrances, equities or
claims.
(f) This Agreement has been duly and validly
authorized, executed and delivered by the Corporation; the Guarantee
Agreement has been duly and validly authorized by the Corporation and,
when duly executed and delivered by the proper officers of the
Corporation (assuming due execution and delivery by the Guarantee
Trustee) will constitute a valid and legally binding agreement of the
Corporation enforceable against the Corporation in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law) or
an implied covenant of good faith and fair dealing; the Indenture has
been duly and validly authorized, executed
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and delivered by the Corporation and (assuming due execution and
delivery by the Indenture Trustee) constitutes a valid and legally
binding agreement of the Corporation, enforceable against the
Corporation in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally and general equitable principles (whether considered
in a proceeding in equity or at law) or an implied covenant of good
faith and fair dealing; and the Debentures have been duly and validly
authorized, and, when validly authenticated, issued and delivered in
accordance with the Indenture against payment of the purchase price
therefor as provided in this Agreement, will be validly issued and
outstanding obligations of the Corporation entitled to the benefits of
the Indenture and enforceable against the Corporation in accordance
with their terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium, and other similar
laws now or hereafter in effect relating to creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) or an implied covenant of good faith
and fair dealing; the Indenture conforms in all material respects to
the description thereof contained in the Final Prospectus; and the
Debentures and the Guarantee, when issued and delivered, will conform
in all material respects to the descriptions thereof contained in the
Final Prospectus.
(g) The execution, delivery and performance of this
Agreement, the Guarantee Agreement, the Indenture and the Debentures by
the Corporation and the Trust, as applicable, the purchase of the
Common Securities by the Corporation from the Trust, and the
consummation by the Corporation and the Trust of the transactions
contemplated hereby and thereby (the "Transactions"), and the issuance
and delivery of the Securities and the Debentures will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under any indenture, lien,
charge or encumbrance upon any property or mortgage, deed of trust,
loan agreement, or other agreement or instrument to which the
Corporation, the Trust or any of its Significant Subsidiaries is a
party or by which it or any of them is bound or to which any of the
property or assets of the Corporation, the Trust or any of its
Significant Subsidiaries is subject except for such conflicts,
breaches, violations or defaults which would not have a material
adverse effect on the consolidated financial condition, shareholders'
equity, results of operations or business of the Corporation and its
subsidiaries taken as a whole or as to the Trust separately, nor will
such action result in any violation of the provisions of the charter or
by-laws of the Corporation or any of its Significant Subsidiaries or
the Certificate of Trust (as defined herein) or the Declaration of the
Trust, or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Corporation,
the Trust or any of its Significant Subsidiaries or any of their
material properties or assets. Except as set forth in the Final
Prospectus or as required by the Securities Act, the Exchange Act, the
Trust Indenture Act and applicable state securities laws, no consent,
approval, authorization or order of, or filing, registration or
qualification of or with, any court or governmental agency or body is
required for the Transactions.
(h) Except as described or incorporated by reference
in the Registration Statement or the Final Prospectus, there are no
agreements or understandings between the Corporation and any person,
granting such person the right to require the Corporation to file a
registration statement under the Securities Act with respect to any
securities of the Corporation owned or to be owned by such person or to
require the Corporation to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Corporation under the Securities Act.
(i) Neither the Corporation nor any of its
subsidiaries has sustained, since the date of the latest financial
statements included or incorporated by reference in the Final
Prospectus, any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Final Prospectus; and, since such date, there has not been any change
in the capital stock or long-term debt of the Corporation or any of its
subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs,
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<PAGE> 5
management, financial condition, shareholders' equity or results of
operations of the Corporation and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Final Prospectus.
(j) Coopers & Lybrand L.L.P., who has certified the
financial statements of the Corporation, whose report appears in the
Final Prospectus or are incorporated by reference therein, and has
delivered the initial letters referred to in Section 8(i) hereof, are
independent public accountants as required by the Securities Act and
the Rules and Regulations.
(k) The consolidated financial statements (including
the related notes and supporting schedules) filed as part of the
Registration Statement or included or incorporated by reference in the
Final Prospectus present in all material respects fairly the financial
condition and results of operations of the entities purported to be
shown thereby at the dates and for the periods indicated; and have been
prepared in conformity with United States generally accepted accounting
principles, applied on a consistent basis throughout the periods
involved, except as otherwise expressly set forth therein.
(l) Except as described in the Registration Statement
and the Final Prospectus, there are no legal or governmental
proceedings pending to which the Corporation, the Trust or any of its
Significant Subsidiaries is a party or of which any material property
or assets of the Corporation, the Trust or any of its Significant
Subsidiaries is the subject which is required to be disclosed in the
Registration Statement, the Final Prospectus or the Incorporated
Documents or which would have a material adverse effect on the
consolidated financial condition, shareholders' equity, results of
operations or business of the Corporation and its subsidiaries, taken
as a whole, or the transactions contemplated by this Agreement; and to
the Corporation's knowledge, no such proceedings are threatened by
governmental authorities or threatened by others.
(m) There are no contracts or other documents which
are required to be described in the Prospectus or filed as exhibits to
the Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described in the Final Prospectus or
filed as exhibits to the Registration Statement or incorporated therein
by reference under the Rules and Regulations.
(n) None of the Corporation, the Trust, or any of its
Significant Subsidiaries is (i) in violation of its respective charter
or by-laws, or the Certificate of Trust or the Declaration, as
applicable, (ii) in default in any material respect, and no event has
occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term,
covenant or condition contained in any material indenture, mortgage,
deed of trust, loan agreement or other agreement to which the
Corporation, the Trust or any of its Significant Subsidiaries is a
party or by which it or any of them is or may be bound or to which any
of the properties or assets of the Corporation or any of its
subsidiaries is subject, except for such default which would not have a
material adverse effect on the consolidated financial condition,
shareholders' equity, results of operations or business of the
Corporation and its subsidiaries taken as a whole or (iii) in violation
in any material respect of any law, ordinance, governmental rule,
regulation or court decree to which the Corporation or any of its
subsidiaries or any of their property or assets may be subject or has
failed to obtain any material license, permit, certificate, franchise
or other governmental authorization or permit necessary to the
ownership of its or their property or to the conduct of its or their
business, except for such violation or failure which would not have a
material adverse effect on the condition (financial or otherwise),
shareholders' equity, results of operations or business of the
Corporation and its subsidiaries taken as a whole.
(o) Neither the Corporation nor, to the Corporation's
knowledge, any of its subsidiaries, any director, officer, agent,
employee or other person associated with or acting on behalf of the
Corporation or any of its subsidiaries, has used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any
provision of
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the Foreign Corrupt Practices Act of 1977, except for such violations
which would not have a material adverse effect on the consolidated
financial condition, shareholders' equity, results of operations or
business of the Corporation and its subsidiaries taken as a whole.
(p) Neither the Corporation nor any subsidiary is an
"investment company" or an entity "controlled" by an "investment
company" within the meaning of such terms under the Investment Company
Act of 1940 (the "Investment Act") and the rules and regulations of the
Commission thereunder.
(q) With the exception of Standard & Poor's Ratings
Service ("S&P") placing the Corporation on creditwatch with negative
outlook, neither the BBB nor Baa3 senior debt rating assigned
to the Corporation by S&P and by Moody's Investor Services, Inc.,
respectively, has been lowered or, to the Corporation's knowledge,
threatened to be lowered by either such rating agency nor, to the
Corporation's knowledge, has it been placed under surveillance or
review by either such rating agency.
(r) Except as described in the Registration Statement
and except as would not, singly or in the aggregate, reasonably be
expected to result in an impact on the Corporation required to be
disclosed in the Registration Statement, (A) to the knowledge of the
Corporation after reasonable investigation, neither the Corporation nor
the Trust is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Corporation and the Trust have all permits,
authorization and approvals required under any applicable Environmental
Laws and are in compliance with their requirements, (C) there are no
pending or threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigation or proceedings relating to any
Environmental Law against the Corporation or the Trust and (D) to the
knowledge of the Corporation after reasonable investigation, there are
no events or circumstances that might reasonably be expected to form
the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency,
against or affecting the Corporation or any of its subsidiaries
relating to Hazardous Materials or any Environmental Laws.
(s) Any certificate signed by any officer of the
Corporation or the Trust and delivered to the Underwriters or to
counsel for the Underwriters pursuant to this Agreement shall be deemed
a representation and warranty by the Corporation or the Trust,
respectively, to each Underwriter as to the matters covered thereby.
2. Representations, Warranties and Agreements of the Trust.
The Offerors, jointly and severally, represent and warrant to each Underwriter
as of the date hereof and as of the Closing Date, and agree with each
Underwriter, as follows:
(a) The Trust has been duly created, is validly
existing as a statutory business trust and in good standing under the
Delaware Business Trust Act and, under the Delaware Business Trust Act
and the Declaration, the Trust has the power and authority to (A)
execute and deliver, and to perform its obligations under this
Agreement and the Declaration, (B) issue and sell the Trust Securities
and (C) own property and conduct its business as described in the
Registration Statement and the Final Prospectus, and has conducted and
will conduct no business other than the transactions contemplated by
this Agreement as described in the Registration Statement and the Final
Prospectus. All filings required under the laws of the State of
Delaware
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with respect to the creation and valid existence of the Trust as a
business trust have been made. The Trust is not and will not be a party
to or bound by any agreement or instrument other than this Agreement,
the Certificate of Trust identified on Schedule I hereto (the
"Certificate of Trust") and the Declaration; the Trust has no and will
not have any liabilities or obligations other than those arising out of
the transactions contemplated by this Agreement, such Certificate of
Trust and the Declaration and described in the Final Prospectus; and
the Trust is not a party to or subject to any action, suit or
proceeding of any nature. The Trust will be characterized as a "grantor
trust" and not as an association taxable as a corporation for United
States federal income tax purposes.
(b) The Declaration is duly and validly authorized
and duly qualified under the Trust Indenture Act and, when duly
executed and delivered by the Corporation, as Sponsor, and the
Trustees, and (assuming due authorization, execution and delivery of
the Declaration by the Property Trustee and the Delaware Trustee), will
constitute a valid and legally binding agreement of the Corporation and
the Trust, enforceable against the Corporation and the Trust in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium, and
other similar laws now or hereafter in effect relating to creditors'
rights generally, general equitable principles (whether considered in a
proceeding in equity or at law) or an implied covenant of good faith
and fair dealing and will conform to the description thereof contained
in the Final Prospectus.
(c) All of the outstanding beneficial ownership
interests in the assets of the Trust have been, and the Trust
Securities, upon issuance and delivery and payment therefor in the
manner described herein, will be, duly authorized, validly issued and
outstanding, fully paid and non-assessable, and subject to the terms of
the Declaration, the holders of the Trust Securities will be entitled
to the benefits of the Declaration subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in a
proceeding in equity or at law) and by an implied covenant of good
faith and fair dealing; and will be entitled to the same limitation of
personal liability under Delaware law as extended to stockholders of
private corporations for profit and will conform to the description of
the Trust Securities contained in the Final Prospectus. The Trust
Securities are the only interests authorized to be issued by Trust. The
issuance of the Trust Securities is not subject to preemptive or other
similar rights; and at the Closing Date, all of the issued and
outstanding Common Securities of the Trust will be directly owned by
Corporation free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity.
(d) This Agreement has been duly and validly
authorized, executed and delivered by the Trust.
(e) The execution, delivery and performance of this
Agreement, the Declaration, the Trust Securities by the Trust, the
purchase of the Debentures by the Trust from the Corporation, the
distribution of the Debentures upon the liquidation of the Trust in the
circumstances contemplated by the Declaration and described in the
Final Prospectus, and the consummation by the Trust of the transactions
contemplated hereby and by the Declaration (the "Trust Transactions")
will not result in a violation of any order, rule or regulation of any
court or governmental agency having jurisdiction over the Trust or its
property. Except as set forth in the Final Prospectus or as required by
the Securities Act, the Exchange Act, the Trust Indenture Act and
applicable state securities laws, no consent, authorization or order
of, or filing or registration with, any court or governmental agency is
required for the Trust Transactions.
(f) The Trust is not regulated or required to be
registered as an "investment company" under the Investment Act.
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3. Sale and Purchase of the Securities.
(a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the
Trust agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Trust, at a purchase
price equal to 100% of the liquidation amount of the Preferred
Securities, the aggregate liquidation amount of Firm Securities set
forth opposite the name of such Underwriter in Schedule II hereto, plus
such additional number of Firm Securities which such Underwriter may
become obligated to purchase pursuant to Section 8 hereof.
(b) In addition, the Trust grants to the Underwriters
an option to purchase from the Trust, at a purchase price equal to 100%
of the liquidation amount of the Preferred Securities, up to an
additional aggregate liquidation amount of Option Securities indicated
in Schedule I hereto. Such option is granted solely for the purpose of
covering over-allotments in the sale of Firm Securities and is
exercisable as provided in Section 4 hereof. Option Securities shall be
purchased severally for the account of the Underwriters in proportion
to the liquidation amounts of Firm Securities set forth opposite the
name of such Underwriters in Schedule II hereto. The respective
purchase obligations of each Underwriter with respect to the Option
Securities shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Securities other than
in a liquidation amount of $1,000 or an integral multiple thereof.
(c) As compensation to the Underwriters, the
Corporation shall, on the First Closing Date and the Second Closing
Date (as defined in Section 4 hereof) pay to the Representatives for
the accounts of the several Underwriters a commission equal to
[2.6125]% of the aggregate liquidation amount of the Preferred
Securities sold by the Trust on such Closing Date.
4. Delivery and Payment.
(a) Delivery by the Trust of the Firm Securities to
the Representatives for the respective accounts of the several
Underwriters and payment by the Underwriters therefor by wire transfer
in federal (same day) funds to such account as the Corporation shall
specify on behalf of the Trust, shall take place at the office, on the
date and at the time specified in Schedule I hereto, which date and
time may be postponed by agreement between the Representatives and the
Corporation or as provided in Section 10 hereof (such date and time of
delivery and payment for the Firm Securities being herein called the
"First Closing Date").
(b) The Firm Securities will be in the form of one or
more global Firm Securities registered in the name of Cede & Co., as
nominee of the Depository Trust Company ("DTC").
(c) At any time on or before the thirtieth day after
the date hereof, the option granted in Section 3 may be exercised by
written notice being given to the Trust by the Representatives. Such
notice shall set forth the aggregate liquidation amount of Option
Securities as to which the option is being exercised and the date and
time, as determined by the Representatives, when the Option Securities
are to be delivered; provided, however, that this date and time shall
not be earlier than the First Closing Date nor earlier than the third
business day after the date on which the option shall have been
exercised nor later than the fifth business day after the date on which
the option shall have been exercised. The date and time the Option
Securities are delivered are sometimes referred to as the "Second
Closing Date" and the First Closing Date and the Second Closing Date
are sometimes referred to as a "Closing Date".
(d) Delivery by the Trust of the Option Securities to
the Representatives for the respective accounts of the several
Underwriters and payment by the Underwriters therefor by wire transfer
in federal (same day) funds to such account as the Corporation will
specify on behalf of the Trust, shall take place at the office and at
the time agreed to in advance by the Underwriters and the Corporation,
on the
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Second Closing Date, which date and time may be postponed by agreement
between the Representatives and the Corporation or as provided in
Section 10 hereof.
(e) The Option Securities will be in the form of one
or more global Option Securities registered in the name of Cede & Co.,
as nominee of DTC.
(f) On the First Closing Date and the Second Closing
Date, the Corporation shall pay, or cause to be paid, the commission
payable on such Closing Date to the Representatives for the accounts of
the Underwriters under Section 3 by wire transfer in federal (same day)
funds to such account as the Representatives shall specify.
5. Offering by Underwriters. The Corporation and the Trust
hereby confirm that the Underwriters and dealers have been authorized to
distribute or cause to be distributed any Interim Prospectus and are authorized
to distribute the Final Prospectus (as from time to time amended or supplemented
if the Corporation furnishes amendments or supplements thereto to the
Underwriters). The Representatives agree that, as soon as the Representatives
believe the offering of the Preferred Securities has been terminated, the
Representatives will so advise the Corporation and the Trust.
6. Agreements. Each of the Corporation and the Trust, jointly
and severally, agrees with the several Underwriters:
(a) To cause the Final Prospectus to be filed with
the Commission pursuant to Rule 424 as required thereby and promptly to
advise the Representatives when (A) the Final Prospectus shall have
been filed with the Commission pursuant to Rule 424, (B) any amendment
to the Registration Statement relating to the Securities shall have
become effective, (C) the Commission makes a request for any amendment
of the Registration Statement, the Final Prospectus, the Basic
Prospectus or any Interim Prospectus, or for any additional
information, (D) the Commission issues any stop order suspending the
effectiveness of the Registration Statement or the qualification of the
Declaration, the Guarantee Agreement or the Indenture or the
institution or threatening of any proceedings for that purpose and (E)
the Corporation or the Trust receives any notification with respect to
the suspension of the qualification of the Securities or the Debentures
for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; after the date of this Agreement and prior
to the termination of the offering of these Preferred Securities, not
to file any amendment of the Registration Statement or amendment or
supplement to the Final Prospectus (except an amendment or supplement
to the Final Prospectus that is deemed to be incorporated by reference
in the Final Prospectus pursuant to Item 12 of Form S-3) without the
consent of the Representatives and to use its best efforts to prevent
the issuance of any such stop order and, if issued, to obtain as soon
as possible the withdrawal thereof; prior to receipt of the advice to
be given by the Representatives pursuant to Section 5, not to file any
document that would be deemed to be incorporated by reference in the
Final Prospectus pursuant to Item 12 of Form S-3 without delivering to
the Representatives a copy of the document proposed to be so filed,
such delivery to be made at least twenty-four hours prior to such
filing, and to consult with the Representatives as to any comments
which the Representatives make in a timely manner with respect to the
document so delivered.
(b) Subject to the last sentence of the immediately
preceding paragraph, if, at any time when a prospectus relating to the
Securities is required to be delivered under the Securities Act, any
event occurs as a result of which the Final Prospectus as then amended
or supplemented would include any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it shall be necessary at any time to
amend or supplement the Final Prospectus to comply with the Securities
Act or the Rules and Regulations, to promptly prepare and file with the
Commission an amendment or supplement which will correct such statement
or omission or an amendment which will effect such compliance and to
use its best
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efforts to cause any amendment of the Registration Statement containing
an amended Final Prospectus to be made effective as soon as possible.
(c) To deliver to the Representatives, without
charge, (i) signed copies of the Registration Statement relating to the
Securities and of any amendments thereto (including all exhibits filed
with, or incorporated by reference in, any such document) and (ii) as
many conformed copies of the Registration Statement and of any
amendments thereto which shall become effective on or before each
Closing Date (excluding exhibits) as the Representatives may reasonably
request.
(d) During such period as a prospectus is required by
law to be delivered by an Underwriter or dealer, to deliver, without
charge to the Representatives and to Underwriters and dealers, at such
office or offices as the Representatives may designate, as many copies
of the Basic Prospectus, any Interim Prospectus and the Final
Prospectus as the Representatives may reasonably request.
(e) To make generally available to the Corporation's
security holders and to the Representatives as soon as practicable an
earnings statement (which need not be audited) of the Corporation and
its subsidiaries, covering a period of at least 12 months beginning
after the date the Final Prospectus is filed with the Commission
pursuant to Rule 424, which will satisfy the provisions of Section
11(a) of the Securities Act.
(f) To furnish such information, execute such
instruments and take such actions as may be required to qualify the
Securities and the Debentures for offering and sale under the laws of
such jurisdictions as the Representatives may designate and to maintain
such qualifications in effect so long as required for the distribution
of the Preferred Securities; provided, however, that neither the
Corporation nor the Trust shall be required to qualify to do business
in any jurisdiction where it is not now so qualified or to take any
action which would subject it to general or unlimited service of
process in any jurisdiction where it is not now so subject.
(g) So long as any Preferred Securities are
outstanding, to furnish or cause to be furnished to the Representatives
copies of all annual reports and current reports filed with the
Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as
may be designated by the Commission.
(h) The Corporation or the Trust will use its
reasonable best efforts to cause the listing of the Preferred
Securities on the New York Stock Exchange Inc. (the "NYSE") to be
approved promptly.
(i) For a period beginning at the time of execution
of this Agreement and ending 30 days thereafter, neither the Trust nor
the Corporation will, without the prior written consent of the Lehman
Brothers Inc., directly or indirectly, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of, any Preferred
Securities or Debentures, any securities convertible or exchangeable
into, or exercisable for, Preferred Securities or Debentures, or any
debt securities substantially similar to Debentures or equity
securities substantially similar to Preferred Securities, other than
the Debentures and Preferred Securities described in Schedule I hereto.
(j) To take such commercially reasonable steps as
shall be necessary to ensure that neither the Corporation nor the Trust
shall become subject to registration as an "investment company" under
the Investment Act.
(k) To apply the net proceeds from the sale of the
Securities being sold by the Corporation as set forth in the Final
Prospectus.
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(l) To use its reasonable best efforts to do and
perform all things to be done and performed hereunder prior to each
Closing Date and to satisfy all conditions precedent to the delivery of
the Preferred Securities to be purchased hereunder.
7. Expenses.
(a) Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the
Corporation will pay all costs and expenses incident to the performance
of the obligations of the Corporation and the Trust hereunder,
including, without limiting the generality of the foregoing, all costs,
taxes and expenses incident to the issuance, sale and delivery of the
Preferred Securities to the Underwriters, all fees and expenses of the
Corporation's counsel and accountants, all costs and expenses incident
to the preparing, printing and filing of the Registration Statement
(including all exhibits thereto), any Interim Prospectus, the Basic
Prospectus, the Final Prospectus and any amendments thereof or
supplements thereto and the mailing or delivering copies thereof to the
Underwriters and the Declaration, the Guarantee Agreement and the
Indenture, and the rating of the Preferred Securities by one or more
rating agencies, all costs and expenses (including reasonable fees of
Underwriters' Counsel (as defined below) and their disbursements)
incurred in connection with blue sky qualifications, advising on the
legality of the Securities for investment, the fee for listing the
Preferred Securities on the NYSE, the fees and expenses of the Property
Trustee, the Guarantee Trustee and the Indenture Trustee, all costs and
expenses of the printing and distribution of all documents in
connection with such offering. Except as provided in this Section 7,
the Corporation will have no responsibility to the Underwriters for the
Underwriters' own costs and expenses, including the fees of
Underwriters' Counsel and any advertising expenses in connection with
any offer the Underwriters may make.
(b) If the sale of the Preferred Securities provided
for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 8 hereof (other than Section
8(n)) is not satisfied or because of any refusal, inability or failure
on the part of the Corporation or the Trust to perform any agreement
herein or comply with any provision hereof, the Corporation will,
subject to demand by the Representatives, reimburse the Underwriters
for all out-of-pocket expenses (including reasonable fees and
disbursements of Underwriters' Counsel (as defined)) that shall have
been incurred by them in connection with the proposed purchase and sale
of the Preferred Securities.
8. Conditions of Underwriters' Obligations. The obligations of
the Underwriters to purchase and pay for any Securities are subject to the
accuracy of the representations and warranties of the Corporation and the Trust
contained herein as of the date hereof and each Closing Date, to the accuracy of
any material statements made in any certificates, opinions, affidavits, written
statements or letters furnished to the Representatives or to Skadden, Arps,
Slate, Meagher & Flom LLP ("Underwriters' Counsel") pursuant to this Section 8,
to the performance by the Corporation and the Trust of their respective
obligations hereunder and to the following additional conditions:
(a) The Final Prospectus shall have been filed with
the Commission pursuant to Rule 424 not later than 5:00 P.M., New York
City time, on the second business day following the date of this
Agreement or such later date and time as shall be consented to in
writing by the Representatives.
(b) No order suspending the effectiveness of the
Registration Statement, as amended from time to time, or suspending the
qualification of the Declaration, the Guarantee Agreement or the
Indenture, shall be in effect and no proceedings for such purpose shall
be pending before or threatened by the Commission and any requests for
additional information on the part of the Commission (to be included in
the Registration Statement or the Final Prospectus or otherwise) shall
have been complied with to the reasonable satisfaction of the
Representatives.
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(c) Thomas R. O'Brien, General Counsel to the
Corporation, shall have furnished to the Underwriters his opinion, as
general counsel to the Corporation, addressed to the Underwriters and
dated the Closing Date, in form and substance reasonably satisfactory
to counsel for the Underwriters to the effect that:
(i) The Corporation's Significant Subsidiaries
have been duly incorporated and are validly existing as
corporations in good standing under the laws of their
respective jurisdictions of incorporation; and each of the
Corporation and its Significant Subsidiaries is duly qualified
to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership or
lease of property or the conduct of its respective business
requires such qualification and where the failure to be so
qualified and in good standing would have a material and
adverse effect on the consolidated financial condition,
shareholders' equity, results of operations or business of the
Corporation and its subsidiaries, taken as a whole, and where
so qualified have all corporate power and authority necessary
to own, lease or operate their respective properties and to
conduct the businesses in which they are engaged as described
or incorporated by reference in the Final Prospectus; the
Corporation holds all valid franchises, permits and other
rights adequate for the business of the Corporation in the
territories which it serves, and such franchises, permits and
other rights contain no unduly burdensome restrictions.
(ii) The holders of outstanding shares of
capital stock of the Corporation are not entitled to any
preemptive rights under the charter or by-laws of the
Corporation or the laws of the State of New York to subscribe
for the Preferred Securities or the Debentures.
(iii) The Corporation has an authorized
capitalization as set forth in the Final Prospectus, and all
of the issued and outstanding shares of capital stock of the
Corporation have been duly and validly authorized and issued,
are fully paid and non-assessable and conform in all material
respects to the description thereof contained in the Final
Prospectus; and all of the issued and outstanding shares of
capital stock of each Significant Subsidiary of the
Corporation have been duly and validly authorized and issued
and are fully paid and non-assessable and (except for
directors' qualifying shares) and, as set forth in the Final
Prospectus, are owned directly or indirectly by the
Corporation, free and clear of all liens, encumbrances,
equities or claims.
(iv) To such counsel's knowledge, there are no
contracts or other documents which are required to be
described in the Final Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules
and Regulations which have not been described in the Final
Prospectus or filed as exhibits to the Registration Statement
or incorporated therein by reference under the Rules and
Regulations.
(v) The documents incorporated by reference in
the Final Prospectus (other than the financial statements and
related schedules therein, as to which such counsel need
express no opinion), when they were filed with the Commission
complied as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations
of the Commission thereunder.
(vi) To such counsel's knowledge and except as
described in the Registration Statement, the Final Prospectus,
or any Incorporated Documents, there are no agreements or
understandings between the Corporation and any person granting
such person the right to require the Corporation to file a
registration statement under the Securities Act with respect
to any securities of the Corporation owned or to be owned by
such person or to
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<PAGE> 13
require the Corporation to include such securities in the
securities registered pursuant to the Registration Statement
or in any securities being registered pursuant to any other
registration statement filed by the Corporation under the
Securities Act.
(vii) To such counsel's knowledge, and other
than as set forth in the Registration Statement, the Final
Prospectus, or any Incorporated Documents, there are no legal
or governmental proceedings pending to which the Corporation
or any of its Significant Subsidiaries is a party or of which
any material property or assets of the Corporation or any of
its Significant Subsidiaries is the subject which, if
determined adversely to the Corporation or any of its
Significant Subsidiaries, would have a material adverse effect
on the consolidated financial condition, shareholders' equity,
results of operations, business or prospects of the
Corporation and its subsidiaries taken as a whole; and to such
counsel's knowledge, no such proceedings are threatened by
governmental authorities or threatened by others.
(viii) Neither the Corporation nor any of its
Significant Subsidiaries is in violation of its corporate
charter or by-laws or in default under any material agreement,
indenture, or instrument known to such counsel, the effect of
which violation or default would be material to the
Corporation and its subsidiaries taken as a whole. The
execution, delivery and performance of this Agreement, the
Declaration, the Indenture and the Guarantee Agreement
(collectively the "Transaction Documents") by the Corporation
and the Trust, as applicable, will not conflict with or result
in a breach or violation of any of the terms or provisions of,
or constitute a default under, any material indenture,
mortgage, deed of trust, loan agreement or other agreement
known to such counsel to which the Corporation, the Trust or
any of the Significant Subsidiaries is a party or by which the
Corporation, the Trust or any of such Significant Subsidiaries
is bound or to which any of the property or assets of the
Corporation, the Trust or any of its Significant Subsidiaries
is subject except for such conflicts, breaches, violations or
defaults which would not have a material adverse effect on the
consolidated financial condition, shareholders' equity,
results of operations or business of the Corporation and its
subsidiaries taken as a whole nor will such actions result in
any violation of the provisions of any state or federal
statute or any order, rule or regulation known to such counsel
of any court or governmental agency or body having
jurisdiction over the Corporation, the Trust or any of its
Significant Subsidiaries or any of their material properties
or assets and the consummation of the transactions
contemplated hereby and thereby, will not result in any
violation of the provisions of the charter or by-laws of the
Corporation or any of its Significant Subsidiaries or any New
York State or U.S. federal statute or any order, rule or
regulations known to such counsel of any New York State or
U.S. federal court or governmental agency or body having
jurisdiction over the Corporation , its Significant
Subsidiaries or any of their respective properties.
(ix) To such counsel's knowledge, the Trust is
not a party to or otherwise bound by any agreement other than
those described in the Final Prospectus.
(d) White & Case LLP, special counsel to the
Corporation, shall have furnished to the Underwriters their opinion, as
counsel to the Corporation, addressed to the Underwriters and dated the
Closing Date, in form and substance reasonably satisfactory to counsel
for the Underwriters, to the effect that:
(i) The Corporation has been duly incorporated
and is validly existing as a corporation in good standing
under the laws of New York.
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<PAGE> 14
(ii) The Indenture has been duly and validly
authorized, executed and delivered by the Corporation, has
been duly qualified under the Trust Indenture Act and
constitutes a valid and legally binding obligation of the
Corporation enforceable against the Corporation in accordance
with its terms and the Indenture conforms in all material
respects to the description thereof contained in the Final
Prospectus; and the Debentures have been duly and validly
authorized by the Corporation, and when duly executed, issued
and delivered by the Corporation, and assuming due
authentication by the Indenture Trustee and upon payment and
delivery in accordance with this Agreement, will constitute
valid and legally binding obligations of the Corporation
entitled to the benefits of the Indenture and enforceable
against the Corporation in accordance with their terms and the
Debentures, when issued and delivered, conform in all material
respects to the description thereof contained in the Final
Prospectus; and the Guarantee Agreement has been duly and
validly authorized, executed and delivered by the Corporation
and, assuming due authorization, execution and delivery by the
Guarantee Trustee, will constitute a valid and legally binding
obligation of the Corporation enforceable against the
Corporation in accordance with its terms and the Guarantee
Agreement conforms in all material respects to the description
thereof contained in the Final Prospectus; provided, however,
that the foregoing is subject to the effects of effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, and other similar laws now or hereafter in effect
relating to creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law) or an implied covenant of good faith and fair dealing.
(iii) This Agreement and the Declaration have
been duly authorized, executed and delivered by the
Corporation.
(iv) The Corporation is not an "investment
company" or an entity "controlled" by an "investment company"
within the meaning of such terms under the Investment Act and
the rules and regulations of the Commission thereunder.
(v) The Registration Statement was declared
effective under the Securities Act and the Indenture was
qualified under the Trust Indenture Act as of the date and
time specified in such opinion, the Final Prospectus was filed
with the Commission pursuant to subparagraph of Rule 424
specified in such opinion on the date specified therein and no
stop order suspending the effectiveness of the Registration
Statement has been issued and, to the knowledge of such
counsel, no proceeding for that purpose is pending or
threatened by the Commission.
(vi) The statements contained in the Final
Prospectus under the captions relating to the Securities and
the Debentures insofar as they purport to constitute summaries
of the terms of such securities, constitute accurate
descriptions thereof in all material respects.
(vii) Each of the Registration Statement, as
of the Effective Date, and the Final Prospectus, as of the
date it was filed with the Commission, and any further
amendments or supplements thereto made by the Corporation
prior to the applicable Closing Date (other than the financial
statements and related schedules therein and all other
financial and statistical data included or incorporated by
reference therein or omitted therefrom and other than the
Forms T-1, as to which such counsel need express no opinion)
appears on its face to comply as to form in all material
respects with the requirements of the Securities Act and the
Rules and Regulations; and the Indenture conforms in all
material respects to the requirements of the Trust Indenture
Act and the applicable rules and regulations thereunder;
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<PAGE> 15
provided, however, that such counsel need express no opinion
as to any documents incorporated by reference to the
Registration Statement or the Final Prospectus.
(viii) The issue and sale of the Securities
being delivered on the Closing Date by the Corporation and the
compliance by the Corporation with all of the provisions of
this Agreement, the Indenture, the Guarantee Agreement, the
Declaration and the Debentures and the consummation of the
transactions contemplated hereby and thereby, will not result
in any violation of the provisions of the charter or by-laws
of the Corporation or any New York State or U.S. federal
statute or any order, rule or regulations known to such
counsel of any New York State or U.S. federal court or
governmental agency or body having jurisdiction over the
Corporation; and, except for the registration of the
Securities under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as
may be required under the Exchange Act, the Trust Indenture
Act and applicable state securities laws in connection with
the purchase and distribution of the Securities by the
Underwriters, no consent, approval, authorization or order of,
or filing or registration with, any such court or governmental
agency or body is required for the execution, delivery and
performance of this Agreement, the Guarantee Agreement, the
Indenture, the Declaration and the Debentures by the
Corporation and the consummation of the transactions
contemplated hereby and thereby.
In rendering the opinions required by subsections (c) and (d)
of this section, Thomas R. O'Brien and White & Case LLP, respectively,
may (i) state that their opinion is limited to matters governed by the
federal laws of the United States of America and the laws of the State
of New York and (ii) rely (to the extent such counsel deems proper and
specifies in their opinion), as to matters involving the application of
laws covered by supporting opinion upon the opinion of other counsel of
good standing, provided that such other counsel is reasonably
satisfactory to counsel for the Underwriters and furnishes a copy of
its opinion to the Underwriters. In addition, Thomas R. O'Brien, in
rendering the opinions required by clauses (i) and (ii) of Subsection
(c) with respect to Significant Subsidiaries, may rely on opinions
rendered by counsel employed by such Significant Subsidiaries.
Thomas R. O'Brien shall have furnished to the Underwriters a
written statement addressed to the Underwriters and dated the Closing
Date, in form and substance satisfactory to the Underwriters, to the
effect that he has acted as counsel to the Corporation on a regular
basis and in connection with previous financing transactions. In
addition, each of Thomas R. O'Brien and White & Case LLP shall also
have furnished to the Underwriters written statements, addressed to the
Underwriters and dated the Closing Date, in form and substance
satisfactory to the Underwriters, to the effect that such counsel has
acted as counsel to the Corporation in connection with the preparation
of the Registration Statement, and based on the foregoing, such counsel
does not believe that (A) the Registration Statement (other than the
financial statements and related schedules and all other financial and
statistical data included or incorporated by reference therein or
omitted therefrom, and other than the Forms T-1, as to which such
counsel shall express no opinion or belief), as of the Effective Date,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to
make the statements therein not misleading, or that the Final
Prospectus (other than the financial statements and related schedules
and all other financial and statistical data included or incorporated
by reference therein or omitted therefrom, and other than the Forms
T-1, as to which such counsel shall express no opinion or belief), as
of its date and the applicable Closing Date, contains any untrue
statement of a material fact or omits to state a material fact required
to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading or (B) any document incorporated by reference in the Final
Prospectus (other than the financial statements and related schedules
and all other financial and statistical data included or incorporated
by reference therein or omitted therefrom, and other than the Forms
T-1, as to which such counsel shall express no opinion or belief)
contained an untrue statement of a material fact or omitted to state
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<PAGE> 16
a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
The foregoing opinion and statement may be qualified by statements to
the effect that (i) such counsel does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in
the Registration Statement or the Final Prospectus except for the
statements made in the Final Prospectus under the captions relating to
the designated Trust Securities, the Guarantee and the Debentures and,
if applicable, "Certain Federal Income Tax Consequences", insofar as
such statements relate to such securities and concern legal matters and
(ii) as to facts necessary to the determination of materiality, such
counsel is relying upon the opinions of officers and other
representatives of the Corporation.
(e) Richards, Layton & Finger, P.A., special Delaware
counsel for the Corporation and the Trust, shall have furnished to the
Representatives its opinion, on certain matters of Delaware law
relating to the validity of the Preferred Securities, dated the
applicable Closing Date, to the effect that:
(i) The Trust has been duly created, is
validly existing in good standing as a business trust under
the Delaware Business Trust Act and all filings required under
the laws of the State of Delaware with respect to the creation
and valid existence of the Trust as a business trust have been
made.
(ii) Under the Delaware Business Trust Act
and the Declaration, the Trust has the requisite trust power
and authority to own property and conduct its business, all as
described in the Registration Statement and the Final
Prospectus.
(iii) The Declaration constitutes a valid
and binding obligation of the Corporation and the Trustees,
enforceable against the Corporation and the Trustees in
accordance with its terms, and the terms of the Preferred
Securities as set forth in the Declaration, to the extent they
are obligations of the Trust, are valid and binding
obligations of the Trust in accordance with the Declaration;
provided however, that the foregoing is subject to the effects
of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law) and by an implied covenant of good faith and fair
dealing; and conforms to the description thereof contained in
the Final Prospectus.
(iv) Under the Delaware Business Trust Act
and the Declaration, the Trust has the requisite trust power
and authority to (i) execute, deliver and to perform its
obligations under, and to consummate the transactions
contemplated by this Agreement and (ii) issue and perform its
obligations under the Preferred Securities and the Common
Securities.
(v) Under the Delaware Business Trust Act
and the Declaration, the execution and delivery by the Trust
of this Agreement, and the performance by the Trust of its
obligations hereunder, have been duly authorized by the
requisite trust action on the part of the Trust.
(vi) This Agreement has been duly executed
and delivered by the Trust.
(vii) The Preferred Securities have been
duly authorized by the Declaration and, when issued in
accordance with the Declaration and delivered in accordance
with this Agreement will be, duly and validly issued and
(subject to the
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<PAGE> 17
qualifications set forth in this paragraph (vii), fully paid
and non-assessable beneficial ownership interests in the
assets of the Trust, the holders of the Preferred Securities
will be entitled to the benefits of the Declaration. The
holders of the Preferred Securities will be entitled to the
same limitation of personal liability as extended to
stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware
(such counsel may note that the holders of Preferred
Securities may obligated, pursuant to the Declaration, to (i)
provide indemnity or security in connection with and pay taxes
or governmental charges arising from transfers or exchanges of
certificates representing the Preferred Securities and the
issuance of replacement certificates representing Preferred
Securities and (ii) provide security and indemnity in
connection with requests of or directions to the Property
Trustee to exercise its rights and remedies under the
Declaration.
(viii) The Common Securities have been duly
authorized by the Declaration and are validly issued and
represent beneficial interests in the assets of the Trust.
(ix) Under the Delaware Business Trust Act
and the Declaration, the issuance of the Preferred Securities
is not subject to preemptive or other similar rights.
(x) The issuance and sale by the Trust of
the Trust Securities, the purchase by the Trust of the
Debentures, the execution, delivery and performance by the
Trust of this Agreement, the consummation by the Trust of the
transactions contemplated by this Agreement and by the
Declaration and compliance by the Trust with its obligations
hereunder and under the Declaration and the Preferred
Securities will not violate (i) any of the provisions of the
Certificate of Trust or the Declaration or (ii) any applicable
Delaware law, rule or regulation.
(xi) No filing with, or authorization,
approval, consent, license, order, registration, qualification
or decree of, any Delaware court or Delaware governmental
authority or agency (other that as may be required under the
securities or blue sky laws of the State of Delaware, as to
which such counsel need express no opinion) is necessary or
required in connection with the due authorization, execution
and delivery of this Agreement or the offering, issuance, sale
or delivery of the Trust Securities.
(xii) The holders of the Trust Securities
(other than those holders of the Trust Securities who reside
or are domiciled in the State of Delaware) will have no
liability for income taxes imposed by the State of Delaware
solely as a result of their participation in the Trust, and
the Trust will not be liable for any income tax imposed by the
State of Delaware.
In rendering such opinion, such counsel may state that its
opinion is limited to matters governed by the law of the State of Delaware.
(f) White & Case LLP, special tax counsel to the
Corporation and the Trust, shall have furnished to the Representatives
its opinion, dated the applicable Closing Date, to the effect that:
(i) The Trust will not be taxable as a
corporation for United States federal income tax purposes; and
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(ii) Subject to the qualifications set forth
in the opinion and the Final Prospectus, the statements made
in the Final Prospectus under the caption "Certain United
States Federal Income Tax Consequences" insofar as they
purport to constitute summaries of matters of United States
federal income tax law and regulations or legal conclusions
with respect thereto, constitute accurate summaries of the
matters described therein in all material respects.
(g) The Underwriters shall have received from
Underwriters' Counsel, such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the Securities, the
Guarantee, the Debentures, the Registration Statement, the Final
Prospectus and other related matters as the Underwriters may reasonably
require, and the Corporation and the Trust shall have furnished to such
counsel such documents as they request for the purpose of enabling them
to pass upon such matters.
(h) At the Closing Date, Underwriters' Counsel shall
have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as contemplated herein and related
proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein and therein contained.
(i) At the Closing Date, the Underwriters shall have
received from Coopers & Lybrand L.L.P., dated the Closing Date, in form
and substance satisfactory to the Underwriters, addressed to the
Underwriters, which states in effect that:
(i) In their opinion, any consolidated
financial statements of the Corporation and its subsidiaries,
and the supporting schedules, included in the Registration
Statement and the Final Prospectus and audited by them comply
as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Exchange
Act and the related published rules and regulations
thereunder.
(ii) On the basis of a reading of the
unaudited consolidated financial statements of the Corporation
and its subsidiaries, if any, included in the Registration
Statement and the Final Prospectus and of the latest unaudited
consolidated financial statements made available by the
Corporation and its subsidiaries carrying out certain
specified procedures (but not an audit in accordance with
generally accepted auditing standards), a reading of the
minutes of the meetings of the directors of the Corporation,
and inquiries of certain officials of the Corporation and its
subsidiaries, who have responsibility for financial and
accounting matters of the Corporation and its subsidiaries, as
to transactions and events subsequent to the date of the most
recent audited consolidated financial statements included in
the Registration Statement and the Final Prospectus, nothing
came to their attention that caused them to believe that:
(A) any material modifications
should be made to the unaudited consolidated
financial statements of the Corporation and its
subsidiaries, if any, included in the Registration
Statement and the Final Prospectus and not covered by
their letter delivered pursuant to paragraph (j) of
this Section 8, for them to be in conformity with
generally accepted accounting principles; and such
financial statements do not comply as to form in all
material respects with the applicable accounting
requirements of the Securities Act and the published
instructions, rules and regulations thereunder.
(B) the unaudited capsule
information of the Corporation and its subsidiaries,
if any, included in the Registration Statement and
the Final Prospectus does not
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agree with the amounts set forth in the unaudited
consolidated financial statements of the Corporation
from which it was derived or was not determined on a
basis substantially consistent with that of the
corresponding financial information in the latest
audited financial statements of the Corporation
included in the Registration Statement and the Final
Prospectus.
(C)(I) as of the latest date as of
which the Corporation and its subsidiaries have
monthly financial statements, there was any decrease
in the capital stock, additional paid-in capital or
retained earnings, or increase in long-term
indebtedness of the Corporation and its subsidiaries,
as compared with the amounts shown in the most recent
consolidated statement of financial condition of the
Corporation and its subsidiaries included in the
Registration Statement and the Final Prospectus, (II)
with respect to the period subsequent to the date of
the most recent financial statements included in the
Registration Statement and the Final Prospectus and
extending through the latest date as of which the
Corporation and its subsidiaries have monthly
financial statements, there was a consolidated net
loss or (III) with respect to the amounts of net
capital or excess net capital of the Corporation and
its subsidiaries determined pursuant to Commission
Rule 15c3-1 and shown in the most recent financial
statement of the Corporation and its subsidiaries
filed pursuant to Commission Rule 17a-5, there has
been any decrease in such amounts as compared with
the amounts shown in the most recent consolidated
financial statements included in the Registration
Statement and the Final Prospectus; and
(D) as of a specified date not more
than three business days prior to the date of the
letter, there was any decrease in the capital stock
or additional paid-in capital, or increase in
long-term indebtedness of the Corporation and its
subsidiaries as compared with the amounts shown in
the most recent consolidated statement of financial
condition of the Corporation and its subsidiaries
included in the Registration Statement and the Final
Prospectus;
except in all instances for increases or decreases set forth
in such letter, in which case the letter shall be accompanied
by an explanation by the Corporation as to the significance
thereof, unless said explanation is not deemed necessary by
the Representatives.
(iii) If pro forma financial statements are
included in the Registration Statement or the Final Prospectus
and are not covered by their letter delivered pursuant to
paragraph (i) of this Section 8, (x) they have read such pro
forma financial statements, (y) they have made inquiries of
certain officials of the Corporation who have responsibility
for financial and accounting matters of the Corporation as to
the basis for their determination of the pro forma adjustments
and whether such pro forma financial statements comply as to
form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X and (z) they have
proved the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts; and as a result
thereof, nothing came to their attention that caused them to
believe that such pro forma financial statements do not so
comply with Rule 11-02 of Regulation S-X and that such pro
forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements.
(iv) To the extent not covered by their
letter delivered pursuant to paragraph (i) of this Section 8,
they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is
expressed in dollars, or percentages derived from dollar
amounts, and has been obtained from the general accounting
records of the Corporation) set forth in
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<PAGE> 20
the Registration Statement, as amended, and the Final
Prospectus, as amended or supplemented, and in Exhibit 12 to
the Registration Statement, including specified information,
if any, included or incorporated from the Corporation's Annual
Report on Form 10-K incorporated therein or specified
information, if any, included or incorporated from any of the
Corporation's Quarterly Reports on Form 10-Q or its Current
Reports on Form 8-K incorporated therein, agrees with the
accounting records of the Corporation and its subsidiaries or
computations made therefrom, excluding any questions of legal
interpretation.
(j) At the Closing Date, there shall not have been,
since the date hereof or since the respective dates as of which
information is given in the Registration Statement and the Final
Prospectus, any material adverse change in the consolidated financial
condition, stockholders' equity, results of operations or business of
the Corporation and its subsidiaries, taken as a whole, whether or not
arising in the ordinary course of business, and the Corporation shall
have furnished to the Underwriters a certificate, dated the Closing
Date of its Chairman of the Board, its President or a Vice President of
the Corporation, on the one hand, and its chief financial officer or
its Treasurer, on the other hand, stating that:
(i) The representations and warranties of
the Corporation in this Agreement are true and correct in all
material respects on and as of such Closing Date with the same
effect as if made on such Closing Date, and the Corporation
has complied with all the agreements contained in this
Agreement and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date;
(ii) They have carefully examined the
Registration Statement and the Final Prospectus and in their
opinion (A) as of the Effective Date, the Registration
Statement and Final Prospectus did not include any untrue
statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary to
make the statements therein, (in the case of the Final
Prospectus, in light of the circumstances in which they were
made) not misleading, and (B) since the Effective Date no
event has occurred which should have been set forth or
incorporated by reference in a supplement or amendment to the
Registration Statement or the Final Prospectus which has not
been so set forth; and
(iii) no stop order suspending the
effectiveness of the Registration Statement has been issued
and, to the knowledge of the Corporation, no proceedings for
that purpose have been initiated or threatened by the
Commission.
(k) The Trust shall have furnished to the
Representatives a certificate of its Administrative Trustees, dated the
applicable Closing Date, to the effect that, to the best of their
knowledge after due inquiry:
(i) The representations and warranties of
the Trust in this Agreement are true and correct in all
material respects on and as of such Closing Date with the same
effect as if made on such Closing Date, and the Trust has
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to such Closing Date.
(ii) No stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or
threatened.
20
<PAGE> 21
(iii) (x) The Registration Statement does
not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading, (y)
the Final Prospectus does not contain any untrue statement of
a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading, and (z) since the effective date of
the Registration Statement there has not occurred any event
required to be set forth in an amended or supplemented
prospectus which has not been so set forth.
(l) (i) Neither the Corporation nor any of its
Significant Subsidiaries shall have sustained since the respective
dates as of which information is given in the Registration Statement or
the Final Prospectus or in any document incorporated by reference
therein any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth, contemplated or
incorporated by reference in the Final Prospectus or in any of the
documents incorporated by reference therein, or (ii) since such date
there shall not have been any change in the capital stock or long-term
debt of the Corporation or any of its Significant Subsidiaries except
as set forth in the letters described in paragraphs (i) or (j) of this
Section 8, or any material change in the financial condition,
shareholders' equity or results of operations of the Corporation and
its subsidiaries taken as a whole, otherwise than as set forth or
contemplated or incorporated by reference in the Final Prospectus or in
any of the documents incorporated by reference therein, the effect of
which, in any such case described in clause (i) or (ii), is, in the
reasonable judgment of the majority in interest of the Underwriters, so
material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Securities
being delivered on such Closing Date on the terms and in the manner
contemplated in the Final Prospectus.
(m) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date, (i) no downgrading shall have
occurred in the rating accorded the Corporation's securities by any
"nationally recognized statistical rating organization", as that term
is defined by the Commission for purposes of Rule 436(g)(2) of the
Rules and Regulations and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Corporation's
securities.
(n) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following: (i)
trading in securities generally on the NYSE, the American Stock
Exchange, the NASDAQ National Market or in the over-the-counter market,
or trading in any securities of the Corporation on any exchange or in
the over-the-counter market, shall have been suspended or minimum
prices shall have been established on any such exchange or such market
by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a general banking
moratorium shall have been declared by federal or New York state
authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities
involving the United States or there shall have been a declaration of a
national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic or
financial conditions (or such a material adverse change in
international conditions the effect of which on the financial markets
in the United States shall be such) as to make it in each case, in the
reasonable judgment of a majority in interest of the several
Underwriters, impracticable or inadvisable to proceed with the public
offering or delivery of the Securities being delivered on such Closing
Date on the terms and in the manner contemplated in the Prospectus.
Prior to each Closing Date, the Corporation shall have
furnished to the Representatives such further information, certificates and
documents as the Representatives or Underwriters' Counsel may reasonably
request.
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<PAGE> 22
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in substance reasonably satisfactory to
counsel for the Underwriters. The Corporation may rely on any waiver of such
conditions given by the Underwriters or Underwriters' counsel as if given by the
Underwriters.
If any of the conditions specified in this Section 8 shall not
have been fulfilled when and as required by this Agreement, or if any of the
certificates or opinions furnished to the Representatives or Underwriters'
Counsel pursuant to this Section 8 shall not be in all material respects
reasonably satisfactory in form and substance to the Representatives and to
Underwriters' Counsel, this Agreement and all obligations of the Underwriters
hereunder may be cancelled at, or at any time prior to, each Closing Date by the
Representatives. Notice of such cancellation shall be given to the Corporation
in writing, or by telegraph confirmed in writing.
9. Indemnification and Contribution.
(a) Each of the Corporation and the Trust, jointly
and severally, agrees to indemnify and hold harmless each Underwriter,
the directors, officers, employees and agents of each Underwriter, and
each person who controls such Underwriter within the meaning of the
Securities Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become
subject under the Securities Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement, as originally filed or in any amendment thereof, or in any
Interim Prospectus, the Basic Prospectus or the Final Prospectus, or in
any amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading (and in the case of any Prospectus, in light of
the circumstances under which they were made), and agrees to reimburse
each such indemnified party for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that (i)
the Corporation will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Corporation as herein stated
by the Representatives on behalf of any Underwriter specifically for
use in connection with the preparation thereof, and (ii) such indemnity
with respect to the Basic Prospectus or any Interim Prospectus shall
not inure to the benefit of any Underwriter (or any person controlling
such Underwriter) from whom the person asserting any such loss, claim,
damage or liability purchased the Securities which are the subject
thereof if such person did not receive a copy of the Final Prospectus
at or prior to the confirmation of the sale of such Securities to such
person in any case where such delivery is required by the Securities
Act and the untrue statement or omission of a material fact contained
in the Basic Prospectus or any Interim Prospectus was corrected in the
Final Prospectus, unless such failure to deliver the Final Prospectus
was a result of noncompliance by the Corporation with Section 6(d)
hereof. This indemnity agreement will be in addition to any liability
which the Corporation may otherwise have.
(b) Each Underwriter severally agrees to indemnify
and hold harmless the Corporation, each of its directors, each of its
officers and employees, the Trust and each Trustee, and each person, if
any, who controls the Corporation or the Trust within the meaning of
the Securities Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become
subject under the Securities Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement, the Basic Prospectus, any Interim Prospectus or the Final
Prospectus, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or the alleged
22
<PAGE> 23
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that the same was made
therein in reliance upon and in conformity with written information
furnished to the Corporation as herein stated by the Representatives on
behalf of such Underwriter specifically for use in the preparation
thereof, and agrees to reimburse each such indemnified party for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action. This indemnity agreement will be in addition to any liability
which any Underwriter may otherwise have. The statements set forth in
the last paragraph of the cover page and under the heading
"Underwriting" in the Final Prospectus constitute the only information
furnished to the Corporation in writing by or on behalf of the several
Underwriters for inclusion in the Registration Statement and the Final
Prospectus, as the case may be, and you, as the Representatives,
confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party
under this Section 9 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 9, notify the
indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than
under this Section 9. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein, and, to the extent it wishes, jointly with any
other similarly notified indemnifying party, and to the extent that it
may elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party; provided, however, if the defendants in any
such action include both the indemnified party and the indemnifying
party and either (i) the indemnifying party or parties and the
indemnified party or parties mutually agree or (ii) representation of
both the indemnifying party or parties and the indemnified party or
parties by the same counsel is inappropriate under applicable standards
of professional conduct due to actual or potential differing interests
between them (such determination to be made in the reasonable judgment
of the indemnifying party and its counsel), the indemnified party or
parties shall have the right to select separate counsel reasonably
satisfactory to the indemnifying party to assume such legal defenses
and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to
assume the defense of such action and approval by the indemnified party
of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed
counsel in connection with the assumption of legal defenses in
accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel, approved by the
Representatives in the case of subparagraph (a) representing the
indemnified parties under subparagraph (a), as the case may be, who are
parties to such action), (ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice
of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party. No indemnifying party shall (i)
without the prior written consent of the indemnified parties (which
consent shall not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not
the indemnified parties are actual or potential parties to such claim
or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be
liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but
if settled with the consent of the indemnifying party or if there be a
final judgment for the plaintiff in any such action, the indemnifying
party agrees to indemnify and hold harmless any indemnified party from
and against any loss or liability by reason of such settlement or
judgment.
23
<PAGE> 24
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for
in subparagraph (a) or (b) of this Section 9 is due in accordance with
its terms but is for any reason held by a court to be unavailable from
the Corporation on grounds of policy or other similar grounds, the
Corporation and the Underwriters shall contribute to the aggregate
losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or
defending same) to which the Corporation, the Trust and one or more of
the Underwriters may be subject in such proportion so that the
Underwriters are responsible for that portion represented by the
percentage that the underwriting discounts appearing on the cover page
of the Final Prospectus bear to the public offering prices appearing
thereon and the Corporation is responsible for the balance; provided,
however, that (i) in no case shall any Underwriter (except as may be
provided in any agreement among underwriters) be responsible for any
amount in excess of the amount by which the total price of the
Preferred Securities underwritten by it and distributed to the public
was offered to the public exceeds the amount of any damages which such
underwriter has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission and
(ii) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9, each director,
officer, employee or agent of an Underwriter and each person who
controls an Underwriter within the meaning of the Securities Act shall
have the same rights to contribution as such Underwriter, and each
person who controls the Corporation within the meaning of either the
Securities Act or the Exchange Act, each officer or employee of the
Corporation, each director of the Corporation, the Trust and each
Trustee shall have the same rights to contribution as the Corporation,
subject in each case to clauses (i) and (ii) of this subparagraph (d).
Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against
another party or parties under this subparagraph (d), notify such party
or parties from whom contribution may be sought, but the omission to so
notify such party or parties shall not relieve the party or parties
from whom contribution may be sought from any other obligation it or
they may have hereunder or otherwise than under this subparagraph (d).
(e) The Underwriters severally confirm and the
Corporation acknowledges that the statements with respect to the public
offering of the Preferred Securities by the Underwriters set forth on
the [____________] are correct and constitute the only information
concerning such Underwriters furnished in writing to the Corporation by
or on behalf of the Underwriters specifically for inclusion in the
Registration Statement and the Prospectus.
10. Defaulting Underwriters. If, on either Closing Date, any
one or more Underwriters shall fail to purchase and pay for all of the Preferred
Securities agreed to be purchased by such Underwriter or Underwriters hereunder
and such failure to purchase shall constitute a default in the performance of
its or their obligations under this Agreement, the remaining Underwriters shall
be obligated severally to take up and pay for (in the respective proportions
which the aggregate liquidation amount of Preferred Securities set forth
opposite their names in Schedule II hereto bear to the aggregate liquidation
amount of Firm Securities set opposite the names of the remaining Underwriters)
the Firm Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase on such Closing Date; provided, however, that in the event
that the aggregate liquidation amount of Preferred Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
Closing Date shall exceed 10% of the aggregate liquidation amount of Preferred
Securities, the remaining Underwriters shall have the right to purchase all, but
shall not be under any obligation to purchase any, of the Preferred Securities,
and if such non-defaulting Underwriters do not purchase all the Preferred
Securities, this Agreement (or, with respect to the Second Closing Date, the
obligation of the Underwriters to purchase, and of the Corporation to sell, the
Option Securities) will terminate without liability to any non-defaulting
Underwriters or the Corporation or the Trust. In the event of a default by any
Underwriter as set forth in this Section 10, the applicable Closing Date shall
be postponed for such period, not exceeding seven days, as the Representatives
shall determine in order that the required changes in the Registration Statement
and the Final Prospectus or in any other documents or arrangements may be
effected. Nothing herein
24
<PAGE> 25
contained shall relieve any defaulting Underwriter of its liability, if any, to
the Corporation or the Trust and any non-defaulting Underwriter for damages
occasioned by its default hereunder.
11. Termination. The obligations of the Underwriters hereunder
may be terminated by the Underwriters which have agreed to purchase in the
aggregate 50% or more of the aggregate amount of Preferred Securities by notice
given to and received by the Company prior to delivery of and payment for the
Preferred Securities if, prior to that time, any of the events described in
Sections 8(l), (m) and (n) shall have occurred or if the Underwriters shall
decline to purchase the Preferred Securities as permitted by Section 10.
12. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or
sent by mail, telex or facsimile transmission c/o Lehman Brothers Inc.,
Three World Financial Center, New York, New York 10285, Attention:
Syndicate Department (Fax: (212) 526-6588); and
(b) if to the Corporation or Trust, shall be
delivered or sent by mail, telex or facsimile transmission to the
address of the Corporation set forth in the Registration Statement,
Attention: General Counsel; (Fax: (908) 730-5300). Any such statements,
requests, notices or agreements shall take effect at the time of
receipt thereof. The Corporation shall be entitled to act and rely upon
any request, consent, notice or agreement given or made on behalf of
the Underwriters by Lehman Brothers Inc.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their successors and, to the extent
and only to the extent stated in Section 9 hereof, the officers and directors
and controlling persons referred to in Section 9 hereof, and except as provided
in Section 9 hereof, no person other than the parties hereto and their
respective successors will have any right or obligation hereunder.
14. Representations and Indemnities to Survive Delivery. The
respective agreements, representations, warranties, indemnities and other
statements of the Corporation or its officers (as such officers) or the Trust
and of the Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of any Underwriter, the Corporation or the Trust or any of their
respective officers, directors or trustees or any controlling person within the
meaning of the Securities Act, and will survive delivery of the payment for the
Preferred Securities.
15. Definition of the Term "Business Day". For purposes of
this Agreement, a "business day" means any day on which the NYSE, Inc. is open
for trading.
16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
17. Counterparts. This Agreement may be executed in
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
25
<PAGE> 26
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Trust, the Corporation and the several Underwriters.
Very truly yours,
FW PREFERRED CAPITAL TRUST I
By:____________________________
Title: Administrative Trustee
FOSTER WHEELER CORPORATION
By:____________________________
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
LEHMAN BROTHERS INC.
By:___________________________
Title:
Acting on behalf of the Representatives named in Schedule I annexed hereto and
the several Underwriters named in Schedule II
annexed hereto.
26
<PAGE> 27
SCHEDULE I
Date of Underwriting Agreement:
Registration Statement Nos. 333-52369
333-52369 -01
333-52369 -02
Representatives and Address: Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
Certificate of Trust, Declaration, Title, Purchase Price and
Description of Preferred Securities:
Certificate of Trust:
Declaration:
Title:
Aggregate liquidation amount:
Price to public:
Purchase price:
Distribution rate:
Time of payment of distributions:
Redemption provisions:
Repayment:
Indenture, Title, Purchase Price and Description of Debentures:
Indenture:
Title:
Principal Amount:
Price to Trust:
Interest rate:
Time of payment of interest:
Maturity:
Redemption provisions:
Repayment:
Guarantee Agreement:
Commission payable by Corporation:
First Closing Date, Time and Location:
Date:
Time:
Location :
27
<PAGE> 28
SCHEDULE II
<TABLE>
<CAPTION>
Underwriters Liquidation Amount of Securities To Be Purchased
------------ ------------------------------------------------
<S> <C>
Lehman Brothers Inc........................................ $
Bear, Stearns & Co. Inc. . ................................
PaineWebber Incorporated...................................
Prudential Securities Incorporated. .......................
SG Cowen Securities Corporation. .......................
First Union Capital Markets................................
Total............................................. $
==============
</TABLE>
28
<PAGE> 29
SCHEDULE III
SIGNIFICANT SUBSIDIARIES
I. U.S. Domiciled Significant Subsidiaries:
Foster Wheeler Energy Corporation
II. Foreign Significant Subsidiaries:
Foster Wheeler Limited
29
<PAGE> 1
Exhibit 5.2
[LETTERHEAD OF RICHARDS, LAYTON & FINGER, P.A.]
December 18, 1998
FW Preferred Capital Trust I and Trust II
c/o Foster Wheeler Corporation
Perryville Corporate Park
Clinton, New Jersey 08809
Re: FW Preferred Capital Trust I
FW Preferred Capital Trust II
Ladies and Gentlemen:
We have acted as special Delaware counsel for FW Preferred
Capital Trust I and FW Preferred Capital Trust II, each a Delaware business
trust (each an "Issuer Trust," and collectively, the "Issuer Trusts"), in
connection with the matters set forth herein. This opinion is being delivered in
accordance with the requirements of Item 604(b)(5) of Regulations S-K under the
Securities Act of 1933, as amended.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of each Issuer Trust (the
"Certificate of Trust"), each as filed in the office
of the Secretary of State of the State of Delaware
(the "Secretary of State") on May 8, 1998;
(b) The Declaration of Trust of each Trust, each dated as
of May 8, 1998, each between Foster Wheeler
Corporation, a New York corporation (the "Company"),
and the trustees of the Issuer Trust named therein;
<PAGE> 2
FW Preferred Capital Trust
December 18, 1998
Page 2
(c) The Registration Statement (the "Registration
Statement") on Form S-3, including a prospectus (the
"Prospectus") relating to the ___% Preferred
Securities of the Issuer Trusts representing
preferred undivided beneficial interests in the
Issuer Trusts (each, a "Preferred Security" and
collectively, the "Preferred Securities"), as filed
by the Company and the Issuer Trust as set forth
therein with the Securities and Exchange Commission
on December , 1998, as amended;
(d) A form of the Amended and Restated Declaration of
Trust of each Issuer Trust, each to be entered into
among the Company, the trustees of the Issuer Trust
named therein, and the holders, from time to time, of
undivided beneficial interests in the Issuer Trust
(the "Declaration of Trust"), each attached as an
exhibit to the Registration Statement;
(e) A Certificate of Good Standing for each Trust,
dated December, 1998, obtained from the Secretary of
State; and
(f) the form of the Preferred Securities of each of the
Issuer Trusts.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Declaration of Trust.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed above, and we have assumed that there
exists no provision in any document that we have not reviewed that bears upon or
is inconsistent with the opinions stated herein. We have conducted no
independent factual investigation of our own but rather have relied solely upon
the foregoing documents, the statements and information set forth therein and
the additional matters recited or assumed herein, all of which we have assumed
to be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed
(i) the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that each
Declaration of Trust constitutes the entire agreement among the parties thereto
with respect to the subject matter thereof, including with respect to the
creation, operation and termination of each Issuer Trust, and that each
Declaration of Trust and each Certificate of Trust are in full force and effect
and have not been amended, (ii) except to the extent provided in paragraph 1
below, the due creation or due organization or due formation, as the case may
be, and valid existence in good standing of each party to the documents examined
by us under the laws of the jurisdiction governing its creation, organization or
formation, (iii) the legal capacity of natural persons who are parties to the
documents examined by us, (iv) that each of the parties to the documents
examined by us has
<PAGE> 3
FW Preferred Capital Trust
December 18, 1998
Page 3
the power and authority to execute and deliver, and to perform its obligations
under, such documents, (v) the due authorization, execution and delivery by all
parties thereto of all documents examined by us, (vi) the receipt by each Person
to whom a Preferred Security is to be issued by the Issuer Trusts (collectively,
the "Preferred Security Holders") of a Preferred Security Certificate for such
Preferred Security and the payment for the Preferred Security acquired by it, in
accordance with each Declaration of Trust and the Prospectus, and (vii) that the
Preferred Securities are issued and sold to the Preferred Security Holders in
accordance with each Declaration of Trust and the Prospectus. We have not
participated in the preparation of the Registration Statement and assume no
responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. Each Trust has been duly created and is validly existing
in good standing as a business trust under the Delaware Business
Trust Act, 12 Del. C. ss. 3801, et seq.
2. The Preferred Securities will have been duly authorized for
issuance and will represent valid and, subject to the qualifications set forth
in paragraph 3 below, fully paid and nonassessable undivided beneficial
interests in the assets of each Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in each Declaration of
Trust.
<PAGE> 4
FW Preferred Capital Trust
December 18, 1998
Page 4
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. In
addition, we hereby consent to the use of our name under the heading "Validity
of Securities" in the Prospectus. In giving the foregoing consents, we do not
thereby admit that we come within the category of Persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission thereunder. Except as
stated above, without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
GCK/sek
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the inclusion in this registration statement of Foster Wheeler
Corporation. FW Preferred Capital Trust I and FW Preferred Capital Trust II on
Form S-3 of our report, dated January 27, 1998 (which indicates that the
consolidated financial statements for the year ended December 26, 1997 have
been restated), on our audits of the consolidated financial statements of
Foster Wheeler Corporation and Subsidiaries as of December 26, 1997 and
December 27, 1996, and for each of the three years in the period ended December
26, 1997, which report is incorporated by reference in Foster Wheeler
Corporation's Annual Report on Form 10-K for the year ended December 26, 1997.
We also consent to the reference to our firm under the caption "Experts".
/s/ PricewaterhouseCoopers LLP
New York, New York
December 18, 1998
