AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
NOVEMBER 17, 1995
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ALUMINUM COMPANY OF AMERICA
(Exact name of issuer as specified in charter)
PENNSYLVANIA 25-0317820
(State of incorporation) (I.R.S. Employer Identification No.)
425 SIXTH AVENUE, ALCOA BUILDING,
PITTSBURGH, PENNSYLVANIA 15219-1850
(412) 553-4545
(Address and telephone number of principal executive offices)
DENIS A. DEMBLOWSKI, ASSISTANT SECRETARY
AND SENIOR COUNSEL
426 SIXTH AVENUE, RM. 1370A, ALCOA BUILDING,
PITTSBURGH, PENNSYLVANIA 15219-1850
(412) 553-3856
(Name, address and telephone number of agent for service)
WITH A COPY TO:
ROBERT S. RISOLEO, ESQ., SULLIVAN & CROMWELL
125 BROAD STREET, NEW YORK, NY 10004
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Approximate date of commencement of proposed sale to the
public: From time to time after the effective date of this
Registration Statement, as determined by market conditions
and other factors.
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]
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CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Title of each Amount Offering Aggregate Amount of
Class of Securities to be Price Offering Registration
to be Registered Registered Per Unit Price(1) Fee
Debt Securities...
Warrants to
Purchase
Debt Securities..
$300,000,000(2)(3) (2) $300,000,000 $60,000.00
Class B Serial
Preferred Stock.......
Common Stock (4)........
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(1) Estimated solely for the purpose of determining the
registration fee and excluding any accrued interest.
(2) There are being registered hereunder such principal amount or
number of Securities as may from time to time be issued at
indeterminate prices, but with an aggregate initial offering
price not to exceed $300,000,000.
(3) Or, if any of the above securities are issued (i) with a
principal amount denominated in a foreign currency or currency
unit, such principal amount as shall result in an aggregate
initial offering price equivalent to $300,000,000 at the time
of the initial offering, or (ii) at an original issue discount,
such greater principal amount as shall result in an aggregate
initial offering price of $300,000,000.
(4) There are being registered hereunder such indeterminate
number of shares of Common Stock as may be issuable upon
conversion or exchange of the Debt Securities or Preferred
Stock being registered hereunder, to the extent any of such
Debt Securities or shares of Preferred Stock are by their
terms convertible into or exchangeable for Common Stock.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment
which specifically states that this Registration Statement
shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date
as the Commission, acting pursuant to said Section 8(a),
may determine.
Pursuant to Rule 429 under the Securities Act of 1933, the
Prospectus contained in this Registration Statement and
supplments to such Prospectus will also be used in connection
with $250,000,000 of securities registered under Registration
Statement No. 33-60045 and $200,000,000 of securities registered
under Registration Statement No. 33-49997.
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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.
Subject To Completion, dated November 17, 1995
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PROSPECTUS
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$750,000,000
Aluminum Company of America Debt Securities
Warrants to Purchase Debt Securities, Preferred Stock
and Common Stock
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Aluminum Company of America (the "Company") may offer from
time to time, either jointly or separately, up to an aggregate
initial offering price of not more than $750,000,000 (or, if
applicable, the equivalent thereof in other currencies) of its
unsecured debt securities consisting of notes, debentures or
other evidences of indebtedness (the "Debt Securities") and
warrants to purchase Debt Securities (the "Warrants"); Class B
Serial Preferred Stock ("Preferred Stock") in one or more Series;
and shares of Common Stock issuable upon conversion of Debt
Securities or Preferred Stock (collectively, the "Securities").
The Debt Securities, Warrants and Preferred Stock may be offered
independently or together in any combination for sale directly to
purchasers or through dealers, underwriters or agents designated.
Shares of Common Stock may be offered only in connection with
Debt Securities or Preferred Stock which are, pursuant to the
terms thereof, convertible to shares of Common Stock. The
Securities will be offered to the public on terms determined by
market conditions at the time of sale and set forth in a
Prospectus Supplement or Prospectus Supplements.
The specific designation, aggregate principal amount, purchase
price, maturity, rate (or method of calculation thereof) and time
of payment of interest, if any, any conversion or exchange
provisions, any redemption provisions and any other specific
terms not set forth herein of the Debt Securities in respect of
which this Prospectus is being delivered (the "Offered Debt
Securities"); a description of the Debt Securities for which each
Warrant is exercisable and the offering price, if any, the
exercise price, duration and any other specific terms not set
forth herein of the Warrants in respect of which this Prospectus
is being delivered (the "Offered Warrants"); the specific title,
number of shares, rate (or method of calculation) and time of
payments of dividend, liquidation preferences, any conversion or
exchange provisions and any other specific terms of the Preferred
Stock in respect of which this Prospectus is being delivered (the
"Offered Preferred Stock"); any listing on a securities exchange
of the Securities in respect of which this Prospectus is being
delivered; and the names of the underwriters, dealers or agents,
and the other terms and manner of the sale and distribution of
such Securities, are set forth in the accompanying Prospectus
Supplement. See "Description of Debt Securities", "Description of
Warrants", "Description of Preferred Stock" and "Plan of
Distribution". For a discussion of certain United States federal
income tax consequences to holders of Securities and certain
limitations on the issuance thereof, see "United States Taxation."
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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This Prospectus may not be used to consummate sales of Securities
unless accompanied by a Prospectus Supplement.
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The date of this Prospectus is , 1995.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934 (the "Exchange Act") and in
accordance therewith files reports and other information with the
United States Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other information
filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the
following Regional Offices of the Commission: Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-
2511; and Seven World Trade Center, 13th Floor, New York, New
York 10048. Copies of such material can be obtained from the
Public Reference Section of the Commission, Washington, D.C.
20549, at prescribed rates. Such material can also be inspected
at the offices of the New York Stock Exchange, 20 Broad Street,
New York, New York 10005. This Prospectus does not contain all
information set forth in the Registration Statement and Exhibits
thereto which the Company has filed with the Commission under the
Securities Act of 1933, as amended (the "Act") and to which
reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the
Company (File No. 1-3610) are incorporated in this Prospectus by
reference and made a part hereof:
1. The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994.
2. The Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1995.
3. The Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1995.
4. The Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1995.
All documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of this Prospectus and prior to the termination of the
offering of the Debt Securities, Warrants and Preferred Stock
shall be deemed to be incorporated by reference in this
Prospectus. Any statement contained herein or in a document all
or a portion of which is incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to
whom a copy of this Prospectus is delivered, upon the written or
oral request of any such person, a copy of any and all of the
foregoing documents incorporated by reference herein, other than
the exhibits to such documents (unless such exhibits are
specifically incorporated by reference in such documents).
Requests should be directed to: Office of the Treasurer, Aluminum
Company of America, 425 Sixth Avenue, Alcoa Building, Pittsburgh,
Pennsylvania 15219-1850. Telephone requests should be directed to
(412) 553-3043.
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Unless otherwise indicated, currency amounts in this
Prospectus and any Prospectus Supplement are stated in United
States dollars ("$", "dollars", "U.S. dollars" or "U.S.$").
ALUMINUM COMPANY OF AMERICA
Alcoa has been a leading producer of aluminum products since
its formation in 1888. It is the world's largest producer of
aluminum products, which are used primarily by packaging,
transportation, building and industrial customers worldwide.
Alcoa's operations consist of three segments: Alumina and
Chemicals, Aluminum Processing, and Non-Aluminum Products.
The Alumina and Chemicals segment includes the production
and sale of bauxite, alumina and alumina-based chemicals, and
related transportation services. The Aluminum Processing
segment includes the production and sale of molten metal, ingot,
and aluminum products that are flat-rolled, engineered or
finished. Also included are power, transportation and other
services.
The Non-Aluminum Products segment includes the production
and sale of electrical, ceramic, plastic, vinyl, and composite
materials products, manufacturing equipment, gold, magnesium, and
steel and titanium forgings.
In this Prospectus, except as otherwise provided or as the
context otherwise requires, "Alcoa" or the "Company" means
Aluminum Company of America and all subsidiaries consolidated for
the purposes of the financial statements. The Company's principal
executive offices are located at 425 Sixth Avenue, Alcoa
Building, Pittsburgh, Pennsylvania 15219-1850, and its telephone
number is (412) 553-4545.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus
Supplement, the net proceeds from the sale of the Securities will
be used for general corporate purposes.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an indenture (the
"Indenture"), dated as of September 30, 1993, between the Company
and PNC Bank, National Association, as Trustee (the "Trustee"), a
copy of which Indenture is filed as an exhibit to the
Registration Statement of which this Prospectus is a part. The
statements under this caption are brief summaries of certain
provisions of the Indenture, 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 Indenture, including the
definitions therein of certain terms. Wherever particular
Sections of the Indenture are referred to herein or in a
Prospectus Supplement, it is intended that such Sections shall be
incorporated by reference herein or therein, as the case may be.
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The term "Securities," as used under this caption, refers to
all Securities issued under the Indenture and includes the Debt
Securities. The Debt Securities may be issued from time to time
in one or more series. The particular terms of each series of
Debt Securities offered by any Prospectus Supplement or
Prospectus Supplements will be described in such Prospectus
Supplement or Prospectus Supplements relating to such series.
GENERAL
The Indenture will not limit the aggregate amount of
Securities which may be issued thereunder and Securities may be
issued thereunder from time to time in separate series up to the
aggregate amount from time to time authorized by the Company for
each series. The Securities will be unsecured obligations of the
Company and will rank on a parity with all other unsecured and
unsubordinated indebtedness of the Company.
The applicable Prospectus Supplement or Prospectus
Supplements relating to the Offered Debt Securities will describe
the following terms of the Offered Debt Securities: (1) the title
of the Offered Debt Securities; (2) any limit on the aggregate
principal amount of the Offered Debt Securities; (3) whether the
Offered Debt Securities are to be issuable as Registered
Securities or Bearer Securities or both, whether any of the
Offered Debt Securities are to be issuable initially in temporary
global form and whether any of the Offered Securities are to be
issuable in permanent global form; (4) the price or prices
(expressed as a percentage of the aggregate principal amount
thereof) at which the Offered Debt Securities will be issued; (5)
the date or dates on which the Offered Debt Securities will
mature; (6) the rate or rates per annum at which the Offered Debt
Securities will bear interest, if any, or the formula pursuant to
which such rate or rates shall be determined, and the date from
which any such interest will accrue; (7) the Interest Payment
Dates on which any such interest on the Offered Debt Securities
will be payable, the Regular Record Date for any interest payable
on any Offered Debt Securities which are Registered Securities on
any Interest Payment Date and the extent to which, or the manner
in which, any interest payable on a temporary global Security on
an Interest Payment Date will be paid if other than in the manner
described under "Temporary Global Securities" below; (8) the
person to whom any interest on any Registered Security of the
series will be payable if other than the person in whose name
such Registered Security is registered at the close of business
on the Regular Record Date for such interest as described under
"Payment and Paying Agents" below, and the manner in which any
interest on any Bearer Security will be paid if other than in the
manner described under "Payment and Paying Agents" below; (9) any
mandatory or optional sinking fund or analogous provisions; (10)
each office or agency where, subject to the terms of the
Indenture as described below under "Payment and Paying Agents",
the principal of and any premium and interest on the Offered Debt
Securities will be payable and each office or agency where,
subject to the terms of the Indenture as described below under
"Form, Exchange, Registration and Transfer", the Offered Debt
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Securities may be presented for registration of transfer or
exchange; (11) the date, if any, after which and the price or
prices at which the Offered Debt Securities may, pursuant to any
optional or mandatory redemption provisions, be redeemed, in
whole or in part, and the other detailed terms and provisions of
any such optional or mandatory redemption provisions; (12) the
denominations in which any Offered Debt Securities which are
Registered Securities will be issuable, if other than
denominations of $1,000 and any integral multiple thereof, and
the denomination or denominations in which any Offered Debt
Securities which are Bearer Securities will be issuable, if other
than the denomination of $5,000; (13) the currency, currencies or
currency units of payment of principal of and any premium and
interest on the Offered Debt Securities and the manner of
determining the U.S. dollar equivalent thereof for purposes of
determining Outstanding Securities of such series; (14) any index
used to determine the amount of payments of principal of and any
premium and interest on the Offered Debt Securities; (15) the
portion of the principal amount of the Offered Debt Securities if
other than the principal amount thereof, payable upon
acceleration of maturity thereof; (16) if other than the Trustee,
the Person who shall be the Security Registrar of Offered Debt
Securities; (17) if applicable, that the Offered Debt Securities
shall be subject to defeasance or covenant defeasance as
described under "Defeasance and Covenant Defeasance"; (18) the
terms and conditions, if any, pursuant to which the Securities of
the series are convertible into or exchangeable for Common Stock
of the Company; (19) if and as applicable, that the Offered Debt
Securities of the series shall be issuable in whole or in part in
the form of one or more Book-Entry Securities and, in such case,
the Depository or Depositaries for such Book-Entry Security or
Book-Entry Securities and any circumstances other than those set
forth in the Indenture in which any such Book-Entry Security may
be transferred to, and registered and exchanged for Offered Debt
Securities registered in the name of, a Person other than the
Depository for such Book-Entry Security or a nominee thereof and
in which any such transfer may be registered; and (20) any other
terms of the Offered Debt Securities not inconsistent with the
provisions of the Indenture. (Section 301) Any such Prospectus
Supplement will also describe any special provisions for the
payment of additional amounts with respect to the Offered Debt
Securities.
Debt Securities may be issued at a substantial discount
below their stated principal amount. Special United States
federal income tax considerations applicable to Debt Securities
issued at discount and to Debt Securities which are denominated
in a currency other than United States dollars are described
under "United States Taxation of Debt Securities--United States
Holders".
Debt Securities may also be issued under the Indenture upon
the exercise of Warrants issued by the Company. See "Description
of Warrants". United States federal income tax consequences
applicable to any Offered Warrants will be set forth in the
Prospectus Supplement relating thereto.
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FORM, EXCHANGE, REGISTRATION AND TRANSFER
Securities of a series may be issuable in definitive form
solely as Registered Securities, solely as Bearer Securities or
as both Registered Securities and Bearer Securities. Unless
otherwise indicated in an applicable Prospectus Supplement,
definitive Bearer Securities will have interest coupons attached.
(Section 201) The Indenture also will provide that Securities of
a series may be issuable in temporary and permanent global form.
(Section 201) See "Permanent Global Securities."
In connection with its sale during the restricted period (as
defined in United States Treasury Regulations Section 1.163-
5(c)(2)(D)(7), no Bearer Security (including a Security in
permanent global form) shall be mailed or otherwise delivered to
any location in the United States or its possessions. No Bearer
Security other than a temporary global Bearer Security may be
delivered, nor may interest be paid on any Bearer Security
unless the Person entitled to receive such Bearer Security or
such interest furnishes written certification, in the form
required by the Indenture, to the effect that such person
(i) is not a United States person, (ii) is a foreign branch of
a United States financial institution purchasing for its own
account or for resale, or is a United States person who
acquired the Debt Security through such a financial institution
and who holds the Debt Security through such financial institu-
tion on the date of certification, provided in either case that
such financial institution provides a certificate to the Company
or the distributor selling the Debt Security to it stating that
it agrees to comply with the requirements of Section 165(j)(3)(A),
(B) or (C) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the United States Treasury Regulations thereunder,
or (iii) is a financial institution holding for purposes of
resale during the restricted period (as defined in United States
Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)). A financial
institution described in clause (iii) of the preceding sentence
(whether or not also described in clause (i) or (ii)) must
certify that it has not acquired the Debt Security for purposes
of resale directly or indirectly to a United States person or to
a person within the United States or its possessions. In the case
of a Bearer Security in permanent global form, such certification
must be given in connection with notation of a beneficial owner's
interest therein. (Section 303) See "Temporary Global Securities"
and "Limitations on Issuance of Bearer Securities."
Registered Securities of any series will be exchangeable for
other Registered Securities of the same series and of a like
aggregate principal amount and tenor of different authorized
denominations. In addition, if Securities of any series are
issuable as both Registered Securities and Bearer Securities, at
the option of the Holder upon request confirmed in writing, and
subject to the terms of the Indenture, Bearer Securities (with
all unmatured coupons, except as provided below, and all matured
coupons in default) of such series will be exchangeable into
Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor.
Bearer Securities surrendered in exchange for Registered
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Securities between a Regular Record Date or a Special Record Date
and the relevant date for payment of interest shall be
surrendered without the coupon relating to such date for payment
of interest and interest will not be payable in respect of the
Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in
accordance with the terms of the Indenture. Bearer Securities
will not be issued in exchange for Registered Securities.
(Section 305) Each Bearer Security other than a temporary global
Bearer Security will bear a legend substantially to the following
effect: "Any United States Person who holds this obligation will
be subject to limitations under the United States income tax
laws, including the limitations provided in Sections 165(j) and
1287(a) of the Internal Revenue Code."
Securities may be presented for exchange as provided above,
and Registered Securities may be presented for registration of
transfer (with the form of transfer endorsed thereon duly
executed, if so required by the Company or the Trustee or any
transfer agent), at the office of the Security Registrar or at
the office of any transfer agent designated by the Company for
such purpose with respect to any series of Securities and
referred to in an applicable Prospectus Supplement, without
service charge and upon payment of any taxes and other
governmental charges as described in the Indenture. Such transfer
or exchange will be effected upon the Security Registrar or such
transfer agent, as the case may be, being satisfied with the
documents of title and identity of the person making the request.
(Section 305) If a Prospectus Supplement refers to any transfer
agents (in addition to the Security Registrar) initially
designated by the Company with respect to any series of
Securities, the Company may at any time rescind the designation
of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that, if
Securities of a series are issuable solely as Registered
Securities, the Company will be required to maintain a transfer
agent in each Place of Payment for such series and, if Securities
of a series are issuable as Bearer Securities, the Company will
be required to maintain (in addition to the Security Registrar) a
transfer agent in a Place of Payment for such series located
outside the United States. The Company may at any time designate
additional transfer agents with respect to any series of
Securities. (Section 1002)
In the event of any redemption in part, the Company shall
not be required to (i) issue, register the transfer of or
exchange Securities of any series during a period beginning at
the opening of business 15 days before any selection of
Securities of that series to be redeemed and ending at the close
of business on (A) if Securities of the series are issuable only
as Registered Securities, the day of mailing of the relevant
notice of redemption and (B) if Securities of the series are
issuable as Bearer Securities, the day of the first publication
of the relevant notice of redemption or, if Securities of the
series are also issuable as Registered Securities and there is no
publication, the mailing of the relevant notice of redemption;
(ii) register the transfer of or exchange any Registered
Security, or portion thereof, called for redemption, except the
unredeemed portion of any Registered Security being redeemed in
part; or (iii) exchange any Bearer Security called for
redemption, except to exchange such Bearer Security for a
Registered Security of that series and like tenor which is
immediately surrendered for redemption. (Section 305)
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PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus
Supplement, payment of principal of and any premium and interest
on Bearer Securities will be payable, subject to any applicable
laws and regulations, at the offices of such Paying Agents
outside the United States as the Company may designate from time
to time by check or by transfer, at the option of the Holder, to
an account maintained by the payee with a bank located outside
the United States. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of interest on Bearer Securities
on any Interest Payment Date will be made only against surrender
outside the United States, to the Paying Agent, of the coupon
relating to such Interest Payment Date. (Section 1001) No payment
with respect to any Bearer Security will be made at any office or
agency of the Company in the United States or by check mailed to
any address in the United States or by transfer to an account
maintained with a bank located in the United States.
Notwithstanding the foregoing, payments of principal of and any
premium and interest on Bearer Securities denominated and payable
in U.S. dollars will be made at the office of the Company's
Paying Agent in the Borough of Manhattan, the City of New York,
if (but only if) payment of the full amount thereof in U.S.
dollars at all offices or agencies outside the United States is
illegal or effectively precluded by exchange controls or other
similar restrictions. (Section 1002)
Unless otherwise indicated in an applicable Prospectus
Supplement, payment of principal of and any premium and interest
on Registered Securities will be made at the office of such
Paying Agent or Paying Agents as the Company may designate from
time to time, except that at the option of the Company, payment
of any interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the
Security Register. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of any instalment of interest on
Registered Securities will be made to the Person in whose name
such Registered Security is registered at the close of business
on the Regular Record Date for such interest. (Section 307)
Unless otherwise indicated in an applicable Prospectus
Supplement, the Corporate Trust Office of the Trustee in
Pittsburgh, Pennsylvania will be designated as a Paying Agent for
the Company for payments with respect to Debt Securities which
are issuable solely as Registered Securities and the Company will
maintain a Paying Agent outside of the United States for payments
with respect to Debt Securities (subject to the limitations
described above in the case of Bearer Securities) which are
issuable solely as Bearer Securities or as both Registered
Securities and Bearer Securities. Any Paying Agents outside the
United States and any other Paying Agents in the United States
initially designated by the Company for the Debt Securities will
be named in an applicable Prospectus Supplement. The Company may
at any time designate additional Paying Agents or rescind the
designation of any Paying Agent or approve a change in the office
through which any Paying Agent acts, except that, if Securities
of a series are issuable solely as Registered Securities, the
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Company will be required to maintain a Paying Agent in each Place
of Payment for such series and, if Securities of a series are
issuable as Bearer Securities, the Company will be required to
maintain (i) a Paying Agent in the Borough of Manhattan, the City
of New York for payments with respect to any Registered
Securities of the series (and for payments with respect to Bearer
Securities of the series in the circumstances described above,
but not otherwise), and (ii) a Paying Agent in a Place of Payment
located outside the United States where Securities of such series
and any coupons appertaining thereto may be presented and
surrendered for payment; provided that if the Securities of such
series are listed on The Stock Exchange of the United Kingdom and
the Republic of Ireland or the Luxembourg Stock Exchange or any
other stock exchange located outside the United States and such
stock exchange shall so require, the Company will maintain a
Paying Agent in London or Luxembourg or any other required city
located outside the United States, as the case may be, for the
Securities of such series. (Section 1002)
All moneys paid by the Company to a Paying Agent for the
payment of principal of and any premium or interest on any
Security which remain unclaimed at the end of two years after
such principal, premium or interest shall have become due and
payable will be repaid to the Company and the Holder of such
Security or any coupon will thereafter look only to the Company
for payment thereof. (Section 1003)
BOOK-ENTRY SECURITIES
The Securities of a series may be issued in the form of one
or more Registered Securities that will be registered in the name
of the Depository or its nominee and bearing a legend as
specified in the Indenture ("Book-Entry Security"). Unless
otherwise indicated in the applicable Prospectus Supplement, a
Book-Entry Security may not be registered for transfer or
exchange to any Person other than the Depository or its nominee
unless (i) the Depository notifies the Company that it is
unwilling to continue as Depository or ceases to be a clearing
agency registered under the Exchange Act, (ii) the Company
executes and delivers to the Trustee a Company Order that such
Book-Entry Security shall be so exchangeable and the transfer
thereof so registrable, or (iii) there shall have occurred and be
continuing an Event of Default, or an event which after notice or
lapse of time, or both, would be an Event of Default, with
respect to the Securities evidenced by such Book-Entry Security.
Upon the occurrence in respect of any Book-Entry Security of any
series of any one or more of the conditions specified in clauses
(i) , (ii) or (iii) of the preceding sentence or such other
conditions as may be specified as contemplated by the Indenture
for such series, such Book-Entry Security may be exchanged for
Securities of such series registered in the names of, and the
transfer of such Book-Entry Security may be registered to, such
Persons (including Persons other than the Depository with respect
to such series and its nominees) as such Depository shall direct.
The specific terms of the depositary arrangement with
respect to any portion of a series of Registered Book-Entry
Securities to be represented by a Book-Entry Security will be
described in the applicable Prospectus Supplement. The Company
expects that the following provisions will apply to depositary
arrangements.
-11-
Unless otherwise specified in the applicable Prospectus
Supplement, Securities which are to be represented by a Book-
Entry Security to be deposited with or on behalf of a Depository
will be represented by a Book-Entry Security registered in the
name of such Depository or its nominee. Upon the issuance of such
Book-Entry Security, and the deposit of such Book-Entry Security
with or on behalf of the Depository for such Book-Entry Security,
the Depository will credit, on its book-entry registration and
transfer system, the respective principal amounts of the
Securities represented by such Book-Entry Security to the
accounts of institutions that have accounts with such Depository
or its nominee ("participants"). The accounts to be credited will
be designated by the underwriters or agents of such Securities or
by the Company if such Securities are offered and sold directly
by the Company. Ownership of beneficial interests in such Book-
Entry Security will be limited to participants or Persons that
may hold interests through participants. Ownership of beneficial
interests by participants in such Book-Entry Security will be
shown on, and the transfer of that ownership interest will be
effected only through, records maintained by the Depository or
its nominee for such Book-Entry Security. Ownership of beneficial
interests in such Book-Entry Security by Persons that hold
through participants will be shown on, and the transfer of that
ownership interest within such participant will be effected only
through, records maintained by such participant. The laws of some
jurisdictions require that certain purchasers of securities take
physical delivery of such securities in certificated form. The
foregoing limitations and such laws may impair the ability to
transfer beneficial interests in such Book-Entry Securities.
So long as the Depository for a Book-Entry Security, or its
nominee, is the registered owner of such Book-Entry Security,
such Depository or such nominee, as the case may be, will be
considered the sole owner or Holder of the Securities represented
by such Book-Entry Security for all purposes under the Indenture.
Unless otherwise specified in the applicable Prospectus
Supplement, owners of beneficial interests in such Book-Entry
Security will not be entitled to have Securities of the series
represented by such Book-Entry Security registered in their
names, will not receive or be entitled to receive physical
delivery of Securities of such series in certificated form and
will not be considered the Holders thereof for any purposes under
the Indenture. (Sections 204 and 305) Accordingly, each Person
owning a beneficial interest in such Book-Entry Security must
rely on the procedures of the Depository and, if such Person is
not a participant, on the procedures of the participant through
which such Person owns its interest, to exercise any rights of a
Holder under the Indenture. The Indenture provides that the
Depository may grant proxies and otherwise authorize participants
to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action which a Holder is
entitled to give or take under the Indenture. (Section 104) The
Company understands that under existing industry practices, if
the Company requests any action of Holders, or an owner of a
beneficial interest in such Book-Entry Security desires to give
any notice or take any action a Holder is entitled to give or
take under the Indenture, the Depository would authorize the
participants to give such notice or take such action, and
participants would authorize beneficial owners owning through
such participants to give such notice or take such action or
would otherwise act upon the instructions of beneficial owners
owning through them.
-12-
TEMPORARY GLOBAL SECURITIES
If so specified in an applicable Prospectus Supplement, all
or any portion of the Securities of a series which are issuable
as Bearer Securities will initially be represented by one or more
temporary global Securities, without interest coupons, to be
deposited with a common depositary in London for the Euro-clear
System ("Euro-clear") and CEDEL S.A. ("CEDEL") for credit to the
designated accounts. On and after the date determined as provided
in any such temporary global Security and described in an
applicable Prospectus Supplement, each such temporary global
Security will be exchanged for an interest in a permanent global
Bearer Security as specified in an applicable Prospectus
Supplement, but, unless otherwise specified in an applicable
Prospectus Supplement, only upon receipt of written certification
from Euro-clear or CEDEL, as the case may be, in the form and to
the effect required by the Indenture (a "Depository Tax
Certification") and upon receipt of written certification by Euro-
clear or CEDEL from the person entitled to receive such
Securities in the form and to the effect described under "Form,
Exchange, Registration and Transfer." No definitive Bearer
Security (including a Security in permanent global form that is
either a Bearer Security or exchangeable for Bearer Securities)
delivered in exchange for a portion of a temporary or permanent
global Security shall be mailed or otherwise delivered to any
location in the United States in connection with such exchange.
(Section 304)
Unless otherwise specified in an applicable Prospectus
Supplement, interest in respect of any portion of a temporary
global Security payable in respect of an Interest Payment Date
occurring prior to the issuance of securities in permanent global
form will be paid to each of Euro-clear and CEDEL with respect to
the portion of the temporary global Security held for its account
following the receipt by the Company or its agent of a Depository
Tax Certification. Each of Euro-clear and CEDEL will undertake in
such circumstances to credit such interest received by it in
respect of a temporary global Security to the respective accounts
for which it holds such temporary global Security only upon
receipt in each case of certification in the form and to the
effect described under "Form, Exchange, Registration and
Transfer" with respect to the portion of such temporary global
Security on which such interest is to be so credited. Receipt of
the certification described in the preceding sentence by Euro-
clear or CEDEL, as the case may be, shall constitute irrevocable
instructions to Euro-clear or CEDEL to exchange such portion of
the temporary global Security with respect to which such
certification was received for an interest in a permanent global
security.
-13-
PERMANENT GLOBAL SECURITIES
If any Securities of a series are issuable in permanent
global form, the applicable Prospectus Supplement will describe
the circumstances, if any, under which beneficial owners of
interests in any such permanent global Security may exchange such
interests for Securities of such series and of like tenor and
principal amount in any authorized form and denomination. No
Bearer Security delivered in exchange for a portion of a
permanent global Security shall be mailed or otherwise delivered
to any location in the United States in connection with such
exchange. (Section 305) A Person having a beneficial interest in
a permanent global Security will, except with respect to payment
of principal of and any premium and interest on such permanent
global Security, be treated as a Holder of such principal amount
of Outstanding Securities represented by such permanent global
Security as shall be specified in a written statement of the
Holder of such permanent global Security or, in the case of a
permanent global Security in bearer form, of the operator of Euro
clear or CEDEL which is produced to the Trustee by such Person.
(Section 203) Principal of and any premium and interest on a
permanent global Security will be payable in the manner described
in the applicable Prospectus Supplement.
CERTAIN LIMITATIONS
Liens. The Company covenants in the Indenture that it will
not create, incur, assume or guarantee, and will not permit any
Restricted Subsidiary to create, incur, assume or guarantee, any
indebtedness for borrowed money ("Debt") secured by a mortgage,
security interest, pledge, charge or similar encumbrance
("mortgages") upon any Principal Property of the Company or any
Restricted Subsidiary or upon any shares of stock or indebtedness
of any Restricted Subsidiary without equally and ratably securing
the Debt Securities. The foregoing restriction, however, will not
apply to (a) mortgages on property, shares of stock or
indebtedness of any corporation existing at the time such
corporation becomes a Restricted Subsidiary; (b) mortgages on
property existing at the time of acquisition of such property by
the Company or a Restricted Subsidiary or mortgages to secure the
payment of all or any part of the purchase price of such property
upon the acquisition or to secure any Debt incurred prior to, at
the time of, or within 180 days after, the acquisition of such
property for the purpose of financing all or any part of the
purchase price thereof, or mortgages to secure the cost of
improvements to such acquired property; (c) mortgages to secure
Debt of a Restricted Subsidiary to the Company or another
Restricted Subsidiary; (d) mortgages existing at the date of the
Indenture; (e) mortgages on property of a corporation existing at
the time such corporation is merged into or consolidated with the
Company or a Restricted Subsidiary or at the time of a sale,
lease, or other disposition of the properties of a corporation as
an entirety or substantially as an entirety to the Company or a
Restricted Subsidiary; (f) certain mortgages in favor of
governmental entities; or (g) extensions, renewals or
replacements of any mortgage referred to in the foregoing clauses
(a) through (f). (Section 1009)
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Notwithstanding the restrictions outlined in the preceding
paragraph, the Company or any Restricted Subsidiary will be
permitted to create, incur, assume or guarantee any Debt secured
by a mortgage without equally and ratably securing the Debt
Securities, provided that after giving effect thereto, the
aggregate amount of all debt so secured by mortgages (not
including mortgages permitted under clauses (a) through (g)
above) does not exceed 10% of Consolidated Net Tangible Assets.
(Section 1009)
Sale and Leaseback Arrangements. The Company covenants that
it will not, nor will it permit any Restricted Subsidiary to,
enter into any arrangement with any person that provides for the
leasing to the Company or any Restricted Subsidiary of Principal
Property (other than any such transaction involving a lease for a
term of not more than three years or any such transaction between
the Company and a Restricted Subsidiary or between Restricted
Subsidiaries) which has been or is to be sold or transferred by
the Company or such Restricted Subsidiary to such person, unless
either (a) the Company or such Restricted Subsidiary would be
entitled to create, incur, assume or guarantee Debt secured by a
mortgage on such Principal Property at least equal in amount to
the Attributable Debt with respect to such arrangement, without
equally and ratably securing the Debt Securities, pursuant to the
limitation in the Indenture on liens, or (b) the Company shall
apply an amount equal to the greater of the net proceeds of such
sale or the Attributable Debt with respect to such arrangement to
the retirement of Debt that matures more than twelve months after
the creation of such Debt. (Section 1010)
Highly leveraged transactions. The Indenture does not
contain provisions which would afford protection to the
Holders of the Debt Securities in the event of a highly
leveraged transaction involving the Company.
CERTAIN DEFINITIONS
The term "Affiliate" of any specified Person shall mean any
other Person directly or indirectly controlling or controlled by
or under direct or indirect common control with such specified
Person. For the purposes of this definition, "control," when used
with respect to any specified Person, means the power to direct
the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
The term "Attributable Debt" when used in connection with a
sale and leaseback transaction referred to above shall mean, at
the time of determination, the lesser of (a) the fair value of
such property (as determined by the Board of Directors of the
Company) or (b) the present value (discounted at the annual rate
of 9%, compounded semi-annually) of the obligation of the lessee
for net rental payments during the remaining term of the lease
(including any period for which such lease has been extended).
The term "Bearer Security" means any Security established
pursuant to the Indenture which is payable to bearer.
The term "Board of Directors" means either the board of
directors of the Company or any duly authorized committee of that
board.
-15-
The term "Book-Entry Security" means a Registered Security
bearing the legend specified in Section 204 of the Indenture,
evidencing all or part of a series of Securities, issued to the
Depository for such series or its nominee, and registered in the
name of such Depository or nominee. Book-Entry Securities shall
not be deemed to be securities in global form for purposes of
Sections 201 and 203 and Article Three of the Indenture.
The term "Common Stock" includes any stock of any class of
the Company which has no preference in respect of dividends or of
amounts payable in the event of any voluntary of involuntary
liquidation, dissolution or winding-up of the Company and which
is not subject to redemption by the Company. However, subject to
the provisions of Section 1511 of the Indenture, shares issuable
on conversion of Securities shall include only shares of the
class designated as Common Stock of the Company at the date of
this instrument or shares of any class or classes resulting from
any reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable in
the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and which are not
subject to redemption by the Company; provided that if at any
time there shall be more than one such resulting class, the
shares of each such class then so issuable shall be substantially
in the proportion which the total number of shares of each such
class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all
such reclassifications.
The term "Company Request" or "Company Order" means a
written request or order signed in the name of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its
President or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary and delivered
to the Trustee.
The term "Corporate Trust Office" means the principal office
of the Trustee in Pittsburgh, Pennsylvania at which at any
particular time its corporate trust business shall be
administered.
The term "Consolidated Net Tangible Assets" shall mean, as
of any particular time, the aggregate amount of assets (less
applicable reserves and other properly deductible items) adjusted
for inventories on the basis of cost (before application of the
"last-in first-out" method of determining cost) or current market
value, whichever is lower, and deducting therefrom (a) all
current liabilities except for (1) notes and loans payable, (2)
current maturities of long-term debt and (3) current maturities
of obligations under capital leases and(b) all goodwill,
tradenames, trademarks, patents, unamortized debt discount and
expenses (to the extent included in said aggregate amount of
assets) and other like intangibles, all as set forth on the most
recent consolidated balance sheet of the Company and its
consolidated Subsidiaries and computed in accordance with
generally accepted accounting principles.
The term "Defaulted Interest" shall mean any interest on any
Registered Security of any series which is payable, but is not
punctually paid or duly provided for on any Interest Payment
Date.
-16-
The term "Depository" means, with respect to the Securities
of any series issuable or issued in whole or in part in the form
of one or more Book-Entry Securities, the clearing agency
registered under the Exchange Act specified for that purpose as
contemplated by Section 301 of the Indenture.
The term "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, and any statute successor
thereto.
The term "Holder," when used with respect to any Security,
means in the case of a Registered Security the Person in whose
name the Security is registered in the Security Register and in
the case of a Bearer Security the bearer thereof and, when used
with respect to any coupon, means the bearer thereof.
The term "Indenture" mean the indenture as originally
executed or as it may from time to time be supplemented or
amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern the indenture, and any such
supplemental indenture, respectively. The term "Indenture" shall
also include the terms of particular series of Securities
established as contemplated by Section 301 therein.
The term "Interest Payment Date," when used with respect to
any Security, means the Stated Maturity of an installment of
interest on such Security.
The term "Maturity," when used with respect to any Security,
means the date on which the principal of such Security or an
installment of principal becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration
of acceleration, call for redemption or otherwise.
The term "Opinion of Counsel" means a written opinion of
counsel, who may be counsel for the Company and shall be
acceptable to the Trustee.
The term "Original Issue Discount Security" means any
Security which provides for an amount less than the principal
amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 502 of
the Indenture.
The term "Outstanding," when used with respect to
Securities, means, as of the date of determination, all
Securities theretofore authenticated and delivered under the
Indenture, except:
(1) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(2) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee
or any Paying Agent in trust or set aside and segregated in trust
by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Securities and any coupons appertaining
thereto; provided that, if such Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has
been made;
-17-
(3) Securities as to which Defeasance has been effected
pursuant to Section 1302 of the Indenture (See also "Defeasance
and Covenant Defeasance" section herein); and
(4) Securities which have been paid pursuant to Section 306
of the Indenture or in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to the
Indenture, other than any such Securities in respect of which
there shall have been presented to the Trustee proof satisfactory
to it that such Securities are held by a bona fide purchaser in
whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have
given any request, demand, authorization, direction, notice,
consent or waiver hereunder or whether a quorum is present at a
meeting of Holders of Securities (A) the principal amount of an
Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that
would be due and payable as of the date of such determination
upon acceleration of the Maturity thereof to such date pursuant
to Section 502 of the Indenture, (B) the principal amount of a
Security denominated in one or more foreign currencies or
currency units shall be the Dollar equivalent, determined in the
manner provided as contemplated by Section 301 of the Indenture
on the date of original issuance of such Security, of the
principal amount (or, in the case of an Original Issue Discount
Security, the Dollar equivalent on the date of original issuance
of such Security of the amount determined as provided in Clause
(A) above), of such Security, and (C), Securities owned by the
Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether
the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, or
upon any such determination as to the presence of a quorum, only
Securities which the Trustee knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor.
The term "Paying Agent" means any Person authorized by the
Company to pay the principal of or any premium or interest on any
Securities on behalf of the Company.
The term "Person" means any individual, corporation,
partnership, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
The term "Place of Payment," when used with respect to the
Securities of any series, means the place or places where,
subject to the provisions of Section 1002 of the Indenture, the
principal of and any premium and interest on the Securities of
that series are payable as specified as contemplated by Section
301 of the Indenture.
-18-
The term "Principal Property" shall mean any manufacturing
plant or manufacturing facility which is (i) owned by the Company
or any Restricted Subsidiary and (ii) located within the
continental United States of America, except any such plant
which, in the opinion of the Board of Directors, is not of
material importance to the total business conducted by the
Company and the Restricted Subsidiaries taken as a whole.
The term "Redemption Date," when used with respect to any
Security to be redeemed, means the date fixed for such redemption
by or pursuant to the Indenture.
The term "Registered Security" means any Security
established pursuant to the Indenture which is registered in the
Security Register.
The term "Regular Record Date" for the interest payable on
any Interest Payment Date on the Registered Securities of any
series means the date specified for that purpose as contemplated
by Section 301 of the Indenture.
The term "Restricted Subsidiary" shall mean any Subsidiary
substantially all the property of which is located within the
continental United States; provided, however, that the term
"Restricted Subsidiary" shall not include any Subsidiary which is
principally engaged in leasing or in financing receivables, or
which is principally engaged in financing the Company's
operations outside the continental United States, or which
principally serves as a partner in a partnership.
The term "Security Register" and "Security Registrar" shall
mean the Person named in the applicable Prospectus Supplement.
The term "Special Record Date" for the payment of any
Defaulted Interest on the Registered Securities of any series
means a date fixed by the Trustee pursuant to Section 307 of the
Indenture.
The term "Stated Maturity," when used with respect to any
Security or any installment of principal thereof or interest
thereon, means the date specified in such Security or a coupon
representing such installment of interest as the fixed date on
which the principal of such Security or such installment of
principal or interest is due and payable.
The term "Subsidiary" shall mean any corporation of which at
least a majority of the outstanding stock having the voting power
to elect a majority of the board of directors of such corporation
as at the time is owned, directly or indirectly, by the Company
or by one or more Subsidiaries, or by the Company and one or more
Subsidiaries.
The term "Trading Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday, other than any day on which the
Common Stock is not traded on the NYSE or, if the Common Stock is
not traded on the NYSE on the principal exchange or market on
which the Common Stock is traded or quoted.
The term "Trust Indenture Act" means the Trust Indenture Act
of 1939 as in force at the date as of which the Indenture was
executed, provided, however, that in the event the Trust
Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
-19-
The term "U.S. Government Obligations" shall mean (x) any
security that is (i) a direct obligation of the United States of
America for the payment of which full faith and credit of the
United States of America is pledged or (ii) an obligation of a
Person controlled or supervised by or acting as an agent or
instrumentality of the United States of America the payment of
which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case
(i) or (ii), is not callable or redeemable at the option of the
issuer thereof, and (y) any depositary receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act of 1933, as
amended) as custodian with respect to any U.S. Government
Obligation specified in Clause (x) and held by such custodian for
the account of the holder of such depositary receipt, or with
respect to any specific payment of principal of or interest on
any such U.S. Government Obligation, provided that (except as
required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such
depositary receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment
of principal or interest evidenced by such depositary receipt.
EVENTS OF DEFAULT
Any one of the following events will constitute an Event of
Default under the Indenture with respect to Securities of any
series: (a) failure to pay any interest on any Security of that
series when due, continued for 30 days; (b) failure to pay
principal of or any premium on any Security of that series when
due; (c) failure to deposit any sinking fund payment when due in
respect of any Security of that series, continued for 30 days;
(d) failure to perform any other covenant of the Company in the
Indenture (other than a covenant included in the Indenture solely
for the benefit of a series of Securities other than that
series), continued for 90 days after written notice as provided
in the Indenture; (e) default resulting in acceleration of any
indebtedness for money borrowed by the Company under the terms of
the instrument or instruments under which such indebtedness is
issued or secured if such acceleration is not rescinded or
annulled within 10 days after written notice as provided in the
Indenture (provided that, the resulting Event of Default under
the Indenture will be cured or waived if such other default is
cured or waived); (f) certain events in bankruptcy, insolvency or
reorganization involving the Company; and (g) any other Event of
Default provided with respect to Securities of that series.
(Section 501)
If an Event of Default with respect to Securities of any
series at the time Outstanding occurs and is continuing, either
the Trustee or the Holders of at least 25% in aggregate principal
amount of the Outstanding Securities of that series by notice as
provided in the Indenture may declare the principal amount (or,
if the Securities of that series are Original Issue Discount
Securities, such portion of the principal amount as may be
specified in the terms of that series) of all the Securities of
that series to be due and payable immediately. At any time after
a declaration of acceleration with respect to Securities of any
series has been made, but before a judgment or decree for payment
of money has been obtained by the Trustee, the Holders of a
majority in aggregate principal amount of the Outstanding
Securities of that series may, under certain circumstances,
rescind and annul such acceleration. (Section 502)
-20-
The Indenture will provide that, subject to the duty of the
Trustee during default to act with the required standard of care,
the Trustee will be under no obligation to exercise any of its
rights or powers under the Indenture at the request or direction
of any of the Holders, unless such Holders shall have offered to
the Trustee reasonable indemnity. (Sections 601 and 603) The
Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series will have the right to
direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee, with respect to the Securities
of that series. (Section 512)
CONVERSION AND EXCHANGE RIGHTS
The Securities of any series may be convertible into or
exchangeable for Common Stock of the Company on the terms and
subject to the conditions set forth in the Prospectus Supplement.
The right to convert Securities called for redemption will
terminate at the close of business on the Trading Day prior to
the Redemption Date. (Section 1501)
The conversion price will be subject to adjustment in
certain events, including (a) the payment of dividends (and other
distributions) payable in Common Stock on any class of capital
stock of the Company, (b) the issuance to all holders of Common
Stock of rights, options or warrants entitling them to subscribe
for or purchase Common Stock at a price per share less than the
then current market price (as defined) at the time of such
issuance (provided that the conversion price will be readjusted
to the extent any such rights, options or warrants are not
exercised prior to the expiration thereof), (c) subdivisions and
combinations of Common Stock, (d) distributions to all holders of
Common Stock of shares of any class of capital stock, evidences
of indebtedness of the Company or assets (including securities,
but excluding those dividends and distributions referred to
above, any rights, options and warrants, and any dividends or
distributions paid exclusively in cash), (e) distributions
consisting exclusively of cash to all holders of Common Stock in
an aggregate amount that, together with (i) other all-cash
distributions made within the preceding 12 months to all holders
of Common Stock and (ii) any cash and the fair market value of
other consideration paid in respect of any tender offer by the
Company or any of its subsidiaries for the Company's Common Stock
concluded within the preceding 12 months, exceeds 12.5% of the
Company's then current market capitalization (being the product
of the current market price per share (as defined) of the Common
Stock times the number of shares of Common Stock then
outstanding), (f) the successful completion of a tender offer
made by the Company or any of its subsidiaries for the Company's
Common Stock which involves an aggregate consideration that,
together with (i) any cash and other consideration paid in
respect of any tender offer by the Company or any of its
subsidiaries for the Company's Common Stock expiring within the
12 months preceding the expiration of such tender offer and (ii)
the aggregate amount of any all-cash distributions to all holders
of the Company's Common Stock within the 12 months preceding the
expiration of such tender offer, exceeds 12.5% of the Company's
-21-
then current market capitalization (being the product of the then
current market price per share (as defined) of the Common Stock
times the number of shares of Common Stock then outstanding) at
the expiration of such tender offer, and (g) certain
reclassifications. No adjustment of the conversion price will be
required unless an adjustment would require a cumulative increase
or decrease of at least 1% of such price; provided, however, that
any adjustment that would otherwise be required to be made shall
be carried forward and taken into account in a subsequent
adjustment. No adjustment of the conversion price will result in
zero or in a negative number or will reduce the conversion price
below the then par value of the Common Stock (in which case the
conversion price would be reduced to such par value), unless the
Common Stock has no par value at such time (in which case the
conversion price would be reduced to $.01 per share). (Section
1504)
If the Company distributes any rights, options or warrants
(other than those referred to in clause (b) of the preceding
paragraph) ("Rights") to all holders of Common Stock, in lieu of
a conversion price reduction, each holder who converts after the
record date for the distribution and prior to the expiration or
redemption of the Rights will be entitled to receive, in addition
to the shares of Common Stock issuable upon such conversion, the
same number of Rights to which a holder of the number of shares
of Common Stock into which the principal amount of the security
so converted was convertible would have been entitled.
In addition to the foregoing adjustments, the Company, at
its option, will be permitted to make such reductions in the
conversion price as it considers to be advisable (including such
reductions in the conversion price as it considers advisable in
order that any event treated for federal income tax purposes as a
dividend of stock or stock rights will not be taxable to the
holders of the Common Stock). In case of certain consolidations
or mergers to which the Company is a party or the transfer of the
property and the assets of the Company substantially as an
entirety, each Outstanding Security would, without the consent of
any Holder of the Securities, become convertible only into the
kind and amount of securities, cash and other property receivable
upon the consolidation, merger, sale or transfer by a holder of
the number of shares of Common Stock into which such Security
might have been converted immediately prior to such
consolidation, merger, sale or transfer (assuming such holder of
Common Stock failed to exercise any rights of election and
received per share the kind and amount received per share by a
plurality of non-electing shares). (Section 1512)
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Fractional shares of Common Stock will not be issued upon
conversion, but, in lieu thereof, the Company will pay a cash
adjustment based upon the market price of the Common Stock.
(Section 1503) Securities surrendered for conversion during the
period from the close of business on any Regular Record Date next
preceding any Interest Payment Date to the opening of business on
such Interest Payment Date (except the securities of any series
called for redemption during such period) must be accompanied by
payment of an amount equal to the interest thereon which the
registered Holder is to receive. In the case of any Security
which has been converted after any Regular Record Date but on or
before the next Interest Payment Date (except Securities of any
series whose Maturity is prior to such Interest Payment Date),
interest whose Stated Maturity is on such Interest Payment Date
will be payable on such Interest Payment Date notwithstanding
such conversion, and such interest shall be paid to the Holder of
such Note on such Regular Record Date. Except as described above,
no interest on converted Securities will be payable by the
Company on any Interest Payment Date subsequent to the date of
conversion. No other payment or adjustment for interest or
dividends is to be made upon conversion. (Sections 1507 and 1502)
DEFEASANCE AND COVENANT DEFEASANCE
Unless otherwise indicated in the applicable Prospectus
Supplement with respect to the Securities of a series, the
Company, at its option, (i) will be discharged from any and all
obligations in respect of the Securities of such series (except
for certain obligations to issue temporary Securities pending
preparation of definitive Securities, to register the transfer or
exchange of Securities of such series, to replace stolen, lost or
mutilated Securities of such series, and to maintain paying
agents and hold moneys for payment in trust) or (ii) need not
comply with the covenants that are set forth under "Certain
Limitations" and "Consolidations, Mergers and Sale of Assets,"
and the occurrence of an event described under clause (d) of the
"Events of Default" with respect to any defeased covenant and
Clauses (e) and (g) of the "Events of Default" shall no longer be
an Event of Default if, in each case, the Company irrevocably
deposits with the Trustee, in trust, money and/or U.S. Government
Obligations that through the scheduled payment of interest
thereon and principal thereof in accordance with their terms will
provide money in an amount sufficient to pay all the principal of
(and premium, if any) and any interest on the Securities of such
series on the dates such payments are due (which may include one
or more redemption dates designated by the Company) in accordance
with the terms of the Indenture and such Securities. Such a trust
may only be established if, among other things, (a) no Event of
Default or event which with the giving of notice or lapse of
time, or both, would become an Event of Default under the
Indenture shall have occurred and be continuing on the date of
such deposit, or with regard to any Event of Default or any such
event described under clause (f) of "Events of Default" shall
have occurred and be continuing at any time during the period
ending on the 91st day following such date of deposit, and (b)
the Company shall have delivered an Opinion of Counsel based, in
the event of a defeasance of the type described in clause (i)
above, upon a ruling from the Internal Revenue Service or a
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change in applicable Federal income tax law from the date of the
Indenture to the effect that the Holders of the Securities will
not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit or defeasance and will be
subject to Federal income tax in the same manner as if such
defeasance had not occurred. In the event the Company omits to
comply with its remaining obligations under the Indenture after a
defeasance of the Indenture with respect to the Securities of any
series as described under clause (ii) above and the Securities of
such series are declared due and payable because of the
occurrence of any undefeased Event of Default, the amount of
money and/or U.S. Government Obligations on deposit with the
Trustee may be insufficient to pay amounts due on the Securities
of such series at the time of the acceleration resulting from
such Event of Default. However, the Company will remain liable in
respect of such payments. (Article Thirteen)
MEETINGS, MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by
the Company and the Trustee with the consent of the Holders of
not less than 66 2/3% in aggregate principal amount of the
Outstanding Securities of each series affected by such
modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the Holder
of each Outstanding Security affected thereby, (a) change the
Stated Maturity of the principal of, or any instalment of
principal of or interest on any Security, (b) reduce the
principal amount of, or premium or interest on, any Security, (c)
change any obligation of the Company to pay additional amounts,
(d) reduce the amount of principal of an Original Issue Discount
Security payable upon acceleration of the Maturity thereof, (e)
change the coin or currency in which any Security or any premium
or interest thereon is payable, (f) impair the right to institute
suit for the enforcement of any payment on or with respect to any
Security, (g) reduce the percentage in principal amount of
Outstanding Securities of any series, the consent of whose
Holders is required for modification or amendment of the
Indenture or for waiver of compliance with certain provisions of
the Indenture or for waiver of certain defaults, (h) reduce the
requirements contained in the Indenture for quorum or voting, (i)
change any obligation of the Company to maintain an office or
agency in the places and for the purposes required by the
Indenture, or (j) modify any of the above provisions. (Section
902)
The Holders of at least 66 2/3% of the outstanding
Securities of a series may waive compliance by the Company with
certain restrictive provisions of the Indenture. (Section 1012)
The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities of each series may, on
behalf of all Holders of Securities of that series and any
coupons appertaining thereto, waive any past default under the
Indenture with respect to Securities of that series, except a
default (a) in the payment of principal of (or premium if any) or
any interest on any Security of such series, and (b) in respect
of a covenant or provision of the Indenture which cannot be
modified or amended without the consent of the Holder of each
Outstanding Security of such series affected. (Section 513)
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The Indenture will provide that in determining whether the
Holders of the requisite principal amount of the Outstanding
Securities have given any request, demand, authorization,
direction, notice, consent or waiver thereunder or are present at
a meeting of Holders of Securities for quorum purposes, (i) the
principal amount of an Original Issue Discount Security that
shall be deemed to be Outstanding shall be the amount of the
principal thereof that would be due and payable as of the date of
such determination upon acceleration of the Maturity thereof,
(ii) the principal amount of a Security denominated in a foreign
currency or currencies shall be the U.S. dollar equivalent,
determined on the date of original issuance of such Security, of
the principal amount of such Security (or, in the case of an
Original Issue Discount Security, the U.S. dollar equivalent,
determined on the date of original issuance of such Security, of
the amount determined as provided in (i) above), and (iii)
Securities owned by the Company or an Affiliate thereof shall not
be deemed outstanding. (Section 101)
The Indenture will contain provisions for convening meetings
of the Holders of Securities of a series if Securities of that
series are issuable as Bearer Securities. (Section 1401) A
meeting may be called at any time by the Trustee, and also, upon
request, by the Company or the Holders of at least 10% in
principal amount of the Outstanding Securities of such series, in
any such case upon notice given in accordance with "Notices"
below. (Section 1402) To be entitled to vote at any meeting of
Holders of Securities of any series, a Person shall be (1) a
Holder of one or more Outstanding Securities of such series, or
(2) a person appointed by an instrument in writing as proxy of a
Holder or Holders, including proxies given to beneficial owners
of Book-Entry Securities by the Depository, or its nominee.
(Section 1403) Except for any consent which must be given by the
Holder of each Outstanding Security affected thereby, as
described above, any resolution presented at a meeting or
adjourned meeting at which a quorum is present may be adopted by
the affirmative vote of the Holders of a majority in principal
amount of the Outstanding Securities of that series; provided,
however, that, except for any consent which must be given by the
Holder of each Outstanding Security affected thereby, as
described above, any resolution with respect to any consent or
waiver which may be given by the Holders of not less than 66 2/3%
in principal amount of the Outstanding Securities of a series may
be adopted at a meeting or an adjourned meeting at which a quorum
is present only by the affirmative vote of 66 2/3% in principal
amount of the Outstanding Securities of that series; and
provided, further, that, except for any consent which must be
given by the Holder of each Outstanding Security affected
thereby, as described above, any resolution with respect to any
request, demand, authorization, direction, notice, consent,
waiver or other action which may be made, given or taken by the
Holders of a specified percentage, which is less than a majority,
in principal amount of Outstanding Securities of a series may be
adopted at a meeting or adjourned meeting duly reconvened at
which a quorum is present by the affirmative vote of the Holders
of such specified percentage in principal amount of the
Outstanding Securities of that series. Any resolution passed or
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decision taken at any meeting of Holders of Securities of any
series duly held in accordance with the Indenture will be binding
on all Holders of Securities of that series and the related
coupons. The quorum at any meeting called to adopt a resolution,
and at any reconvened meeting, will be persons holding or
representing a majority in principal amount of the Outstanding
Securities of a series; provided, however, that if any action is
to be taken at such meeting with respect to a consent or waiver
which may be given by the Holders of not less than 66 2/3% in
principal amount of the Outstanding Securities of a series, the
persons holding or representing
66 2/3% in principal amount of the Outstanding Securities of such
series will constitute a quorum. (Section 1404)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of the Holders of any of
the Outstanding Securities under the Indenture, may consolidate
or merge with or into, or transfer or lease its assets
substantially as an entirety to, any Person which is a
corporation, partnership or trust organized and validly existing
under the laws of any domestic jurisdiction, or may permit any
such Person to consolidate with or merge into the Company or
convey, transfer or lease its properties and assets substantially
as an entirety to the Company, provided that any successor Person
assumes the Company's obligations on the Securities and under the
Indenture, that after giving effect to the transaction no Event
of Default, and no event which, after notice or lapse of time,
would become an Event of Default, shall have occurred and be
continuing, and that certain other conditions are met. (Section
801)
NOTICES
Except as otherwise provided in the Indenture, notices to
Holders of Bearer Securities will be given by publication at
least twice in a daily newspaper in the City of New York and in
such other city or cities as may be specified in such Securities
and described in the applicable Prospectus Supplement. Notices
to Holders of Registered Securities will be given by mail to the
addresses of such Holders as they appear in the Security
Register. (Sections 101 and 106)
TITLE
Title to any Bearer Securities and any coupons appertaining
thereto will pass by delivery. The Company, the Trustee and any
agent of the Company or the Trustee may treat the bearer of any
Bearer Security and the bearer of any coupon and the registered
owner of any Registered Security as the absolute owner thereof
(whether or not such Security or coupon shall be overdue and
notwithstanding any notice to the contrary) for the purpose of
making payment and for all other purposes. (Section 308)
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REPLACEMENT OF SECURITIES AND COUPONS
Any mutilated Security or a Security with a mutilated coupon
appertaining thereto will be replaced by the Company at the
expense of the Holder upon surrender of such Security to the
Security Registrar. Securities or coupons that become destroyed,
stolen or lost will be replaced by the Company at the expense of
the Holder upon delivery to the Trustee of the Security and
coupons or evidence of the destruction, loss or theft thereof
satisfactory to the Company and the Trustee; in the case of any
coupon which becomes destroyed, stolen or lost, such coupon will
be replaced by issuance of a new Security in exchange for the
Security to which such coupon appertains. In the case of a
destroyed, lost or stolen Security or coupon, an indemnity
satisfactory to the Trustee and the Company may be required at
the expense of the Holder of such Security or coupon before a
replacement Security will be issued. (Section 306)
GOVERNING LAW
The Indenture, the Securities and the coupons will be
governed by, and construed in accordance with, the laws of the
Commonwealth of Pennsylvania. (Section 113)
REGARDING THE TRUSTEE
PNC Bank, National Association, Trustee under the Indenture,
also is trustee under various indentures covering certain other
securities of the Company. The Company and certain of its
Subsidiaries maintain deposit accounts and conduct other banking
transactions, including borrowings in the ordinary course of
business, with PNC Bank, National Association.
DESCRIPTION OF WARRANTS
The Company may issue, together with any Debt Securities
offered by any Prospectus Supplement or separately, Warrants for
the purchase of other Debt Securities. The Warrants are to be
issued under Warrant Agreements (each a "Warrant Agreement") to
be entered into between the Company and a bank or trust company,
as Warrant Agent (the "Warrant Agent"), all as set forth in the
Prospectus Supplement relating to the particular issue of Offered
Warrants. A copy of the form of Warrant Agreement, including the
form of Warrant Certificates representing the Warrants (the
"Warrant Certificates"), reflecting the alternative provisions to
be included in the Warrant Agreements that will be entered into
with respect to particular offerings of Warrants, is filed as an
exhibit to the Registration Statement. The following summaries of
certain provisions of the Warrant Agreement and the 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 the Warrant Agreement and the Warrant Certificates,
respectively.
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GENERAL
The Prospectus Supplement will describe the terms of the
Offered Warrants, the Warrant Agreement relating to the Offered
Warrants and the Warrant Certificates representing the Offered
Warrants, including the following: (1) the designation, aggregate
principal amount and terms of the Debt Securities purchasable
upon exercise of the Offered Warrants; (2) the designation and
terms of any related Debt Securities with which the Offered
Warrants are issued and the number of Offered Warrants issued
with each such Debt Security; (3) the date, if any, on and after
which the Offered Warrants and the related Offered Debt
Securities will be separately transferable; (4) the principal
amount of Debt Securities purchasable upon exercise of one
Offered 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 the Offered Warrants shall
commence and the date (the "Expiration Date") on which such right
shall expire; and (6) whether the Warrants represented by the
Warrant Certificates will be issued in registered or bearer form,
and if registered, where they may be transferred and registered.
If the Debt Securities purchasable upon exercise of the
Offered Warrants are issuable in bearer form, such Offered
Warrants shall not be offered nor constitute an offer to, and
Bearer Debt Securities issuable upon exercise of such Offered
Warrants shall not be issued to, United States persons other than
to offices outside the United States of certain United States
financial institutions.
Warrant Certificates will be exchangeable for new Warrant
Certificates of different denominations and Warrants may be
exercised at the corporate trust office of the Warrant Agent or
any other office indicated in the Prospectus Supplement. Prior to
the exercise of their Warrants, holders of 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.
DESCRIPTION OF PREFERRED STOCK
The Company's Articles of Incorporation, as amended (the
"Articles"), authorize the issuance of two classes of preferred
stock, Serial Preferred Stock ("Class A Stock") and Class B
Serial Preferred Stock ("Class B Stock"). As of the date of this
Prospectus, there were 557,649 shares of Class A Stock
outstanding. No additional shares of Class A Stock may be issued.
The Company initiated an ongoing program to purchase and retire
shares of Class A Stock in 1989.
The following description of Class B Stock sets forth
certain general terms and provisions of the series of Class B
Stock to which any Prospectus Supplement may relate. The specific
terms of a particular series of Class B Stock will be described
in the Prospectus Supplement relating to such series of the
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Offered Preferred Stock (Offered Preferred Stock, Offered Debt
Securities and Offered Warrants are collectively called "Offered
Securities"). If so indicated in the Prospectus Supplement
relating thereto, the terms of any such series of Class B Stock
may differ from the terms set forth below. The description of
Class B Stock set forth below and the description of the terms of
a particular series of Class B Stock set forth in the Prospectus
Supplement relating thereto do not purport to be complete and are
qualified in their entirety by reference to the Company's
Articles and the Statement with Respect to Shares relating to
such series of Class B Stock, which will be filed or incorporated
by reference as an exhibit to the Registration Statement of which
this Prospectus is a part.
GENERAL
The Company is authorized to issue 10,000,000 shares of
Class B Stock. As of the date of this Prospectus, no shares of
this class have been issued. The Board of Directors has the
authority to issue Class B Stock in one or more series and to fix
the specific number of shares, title, voting powers, if any,
(except as otherwise required by law), liquidation preference of
each share, issue price, dividend rate or rates (or method of
calculation), dividend periods, dividend payment dates, any
redemption or sinking fund provisions, and conversion provisions
and any other specific terms of any series without any further
action by shareholders of the Company unless action is required
by applicable laws or regulations or by the terms of other
outstanding preferred stock.
The Prospectus Supplement will set forth the following
specific terms regarding the series of Class B Stock offered
thereby: (i) the designation, number of shares and liquidation
preference per share; (ii) the initial public offering price;
(iii) the dividend rate or rates, or the method of determining
the dividend rate or rates; (iv) the index, if any, upon which
the amount of dividends, if any, is determined; (v) the dates on
which dividends, if any, will accrue and be payable, that such
dividends will be cumulative, and the designated record dates for
determining the holders entitled to such dividends; (vi) any
redemption or sinking fund provisions; (vii) any conversion or
exchange provisions; (viii) provisions for issuance of global
securities;(ix) the currency (which may be composite currency) in
which payment of dividends, if any, shall be payable if other
than United States dollars; (x) voting rights, if any, (except as
otherwise required by law); and (xi) any additional terms,
preferences or rights and qualifications, limitations or
restrictions thereof.
The shares of Class B Stock will, when issued, be fully paid
and nonassessable and will have no preemptive rights.
The transfer agent, registrar, dividend disbursing agent and
redemption agent for the Class B Stock will be specified in the
Prospectus Supplement relating thereto.
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DIVIDENDS
The holders of the Class B Stock of each series will be
entitled to receive, when, as and if declared by the Board of
Directors of the Company, out of funds legally available
therefor, cumulative cash or other dividends at such rate or
rates and on such dates as will be set forth in the Prospectus
Supplement relating to such series. Such rates may be fixed or
variable or both. If variable, the formula used for determining
the dividend rate for each dividend period will be set forth in
the Prospectus Supplement. Dividends will be payable to the
holders of record as they appear on the stock books of the
Company on such record dates as will be fixed by the Board of
Directors of the Company and specified in the Prospectus
Supplement.
No dividends may be declared in respect of any dividend
period on any series of Class B stock, unless all accrued
dividends and the current quarterly dividend on Class A Stock
shall have been paid in full or contemporaneously are declared
and set apart. In the event that full cumulative dividends on
shares of a series of Class B Stock have not been declared and
paid or set apart when due, dividends thereon shall be declared
and paid pro rata to the holders of such series entitled thereto.
In the event that full cumulative dividends on any class or
series of the Company's preferred stock (including dividends for
the current quarter yearly dividend period for shares of Class A
Stock) have not been declared and paid or set apart when due, the
Company may not declare or pay any dividends on, or make other
distributions on or make payment on account of the purchase,
redemption, or other retirement, of its Common Stock. No
restriction applies to the repurchase or redemption of the
Company's preferred stock by the Company while there is any
arrearage in the payment of dividends or any applicable
sinking fund installments on such stock.
When dividends are not paid in full upon any series of Class
B Stock, all dividends declared or made upon shares of Class B
Stock shall be declared pro rata so that the amount of dividends
declared per share on Class B Stock shall in all cases bear to
each other the same ratio that accrued dividends per share on
shares of each series of the Class B Stock. No interest shall be
payable in respect of any dividend payment which may be in
arrears.
REDEMPTION
The shares of any series of Class B Stock may be redeemable
at the option of the Company, on the date or dates and at the
redemption price or prices set forth in the Prospectus Supplement
relating to such series.
If fewer than all shares of Class B Stock are to be
redeemed, the shares to be redeemed shall be selected by the
Company pro rata or by lot, or by any other method determined by
the Board of Directors to be equitable.
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Notice of redemption shall be given by mailing (or by some
other means deemed sufficient by the Board of Directors prior to
issuance of each series of Class B Stock) the same to each record
holder of the shares to be redeemed, not less than 30 nor more
than 60 days prior to the date fixed for redemption thereof, to
the respective addresses of such holders as the same shall appear
on the Company's stock books. Each such notice shall state: (i)
the redemption date; (ii) the number of shares and series of the
Class B Stock to be redeemed; (iii) the redemption price and the
manner in which such redemption price is to be paid and
delivered; (iv) the place or places where certificates for such
shares of Class B Stock are to be surrendered for payment of the
redemption price; and (v) that dividends on the shares to be
redeemed will cease to accrue on such redemption date. If fewer
than all shares of any series of the Class B Stock held by any
holder are to be redeemed, the notice mailed, or otherwise
communicated, to such holder shall also specify the number of
shares to be redeemed from such holder.
If notice of redemption has been given, from and after the
redemption date for the shares of the series of the Class B Stock
called for redemption (unless default shall be made by the
Company in providing money for the payment of the redemption
price of the shares so called for redemption), dividends on the
shares of Class B Stock so called for redemption will cease to
accrue, any right to convert the shares of Class B Stock will
terminate, such shares will no longer be deemed to be
outstanding, and all rights of the holders thereof as
shareholders of the Company (except the right to receive the
redemption price) will cease. Upon surrender in accordance with
such notice of the certificates representing any shares so
redeemed (properly endorsed or assigned for transfer, if the
Board of Directors of the Company; will so require and the notice
shall so state), the redemption price referred to above will be
paid out of funds provided by the Company. If fewer than all of
the shares represented by any such certificate are redeemed, a
new certificate will be issued representing the unredeemed shares
without cost to the holder thereof.
LIQUIDATION PREFERENCE
Upon any liquidation, dissolution or winding up of the
Company, the holders of Class A Stock shall be entitled to
receive out of the assets of the Company available for
distribution to shareholders before any distribution of assets is
made to or set apart for the holders of Class B Stock. The
holders of shares of each series of Class B Stock shall be
entitled to receive out of the assets of the Company available
for distribution to shareholders before any distribution of
assets is made to or set apart for the holders of Common Stock,
with respect to the Class B Stock, plus all dividends which have
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accrued on such series of Class B Stock and have not been paid or
declared and a sum sufficient for payment thereof set apart, an
amount described in the Prospectus Supplement relating to such
series of Class B Stock. If, in any case of any such liquidation,
dissolution or winding up of the Company, the assets of the
Company or the proceeds thereof shall be insufficient to pay in
full the amounts payable with respect to shares of each series of
Class B Stock, the holders of shares of such series of Class B
Stock will share ratably in any such distribution of assets of
the Company in proportion to the full respective preferential
amounts to which they are entitled. After payment to the holders
of shares of such series of Class B Stock of the full
preferential amounts to which they are entitled, the holders of
shares of such series of Class B Stock will not be entitled to
any further participation in any distribution of assets by the
Company, unless otherwise provided in the Prospectus Supplement.
A consolidation or merger of the Company with one or more
corporations shall not be deemed to be a liquidation, dissolution
or winding up of the Company.
CONVERSION AND EXCHANGE RIGHTS
The terms, if any, on which shares of any series of Class B
Stock are convertible into or exchangeable for Common Stock will
be set forth in the Prospectus Supplement relating thereto. Such
terms may include provisions for conversion or exchange, either
mandatory, at the option of the holder, or at the option of the
Company, in which the number of shares of Common Stock to be
received by the holders of Class B Stock would be calculated
according to the market price of Common Stock as of a time stated
in the Prospectus Supplement.
VOTING RIGHTS
Except as indicated below or in the Prospectus Supplement
relating to a particular series of the Class B Stock, or except
as expressly required by applicable law, the holders of Class B
Stock will not be entitled to vote.
Pennsylvania law requires that holders of outstanding shares
of a particular class or series be entitled to vote as a class on
an amendment to the Articles that would (i) authorize the Board
of Directors to fix and determine the relative rights and
preferences as between series of any preferred stock or special
class of stock; (ii) change the preferences, limitations or other
special rights of the shares of a class or series adverse to that
class or series; (iii) authorize a new class or series of shares
having a preference as to dividends or assets which is senior to
shares of a particular class or series; or (iv) increase the
number of authorized shares of any particular class or series
having a preference as to dividends or assets which is senior in
any respect to the shares of such class or series.
The Board of Directors, pursuant to the Company's Articles,
may limit or eliminate the voting rights applicable to any series
of Class B Stock prior to the issuance of such series, except as
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otherwise required by law. Any one or more series of the Class B
Stock may be issued with such additional voting rights,
exercisable only during certain extended periods of dividend
arrearages, as the Board of Directors may determine to be
required to qualify the series for listing on a recognized stock
exchange. Such rights may only be granted if there are no shares
of Class A Stock outstanding.
On matters on which holders of such series and holders of
any other series of Class B Stock are entitled to vote as a
single class, each full share of any series of the Class B Stock
shall be entitled to one vote. Therefore, the voting power of
such series will depend on the number of shares in such series,
not the liquidation preference or initial offering price of the
shares of such series of the Class B Stock.
So long as any shares of Class B Stock remain outstanding,
the Company shall not, without the consent of the holders of at
least two-thirds of the shares of the affected series of Class B
Stock outstanding at the time (voting separately as a class with
all other affected series of Class B Stock ranking on a parity
with the affected series of Class B Stock), (i) authorize, create
or issue, or increase the authorized amount of, any class or
series of stock ranking prior to the affected series of Class B
Stock as to dividends or upon liquidation; or (ii) amend, alter
or repeal the provisions of the Company's Articles, whether by
merger, consolidation or otherwise, so as to materially and
adversely affect any right, preference, privilege or voting power
of the affected series of Class B Stock or the holders thereof;
provided, however, that any increase in the amount of the
authorized Common Stock or authorized Class B Stock or the
creation and issuance of other series of common stock or
preferred stock ranking on a parity with or junior to the
affected series of Class B Stock as to dividends and upon
liquidation shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers.
DESCRIPTION OF COMMON STOCK
The Company is authorized to issue 300,000,000 shares of
Common Stock, par value $1.00 per share. As of November 10,
1995, there were 178,210,361 shares of Common Stock outstanding.
Dividend rights. The holders of Common Stock are entitled
to receive dividends, when and as declared by the Board of
Directors, but no dividend shall be declared or paid on the
Common Stock unless all dividends accrued on all classes of the
Company's preferred stock and the dividend on Class A Stock
for the current quarter yearly dividend shall have been
paid or declared and set apart.
Voting rights. The holders of Common Stock are entitled
to one vote per share.
Liquidation rights. Upon any liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary,
after payments to holders of preferred stock of such amount
as shall have been fixed by the Board of Directors, plus
accrued dividends, the remaining assets of the Company shall
belong to and be divided among the holders of Common Stock.
Preemptive or other subscription rights. The holders of
Common Stock have no right to participate in any right of
subscription to any increased or additional capital stock
of the Company.
Conversion and other rights. The Common Stock does not
have any conversion, redemption or sinking fund provisions
applicable thereto and is not liable to further call or
assessment by the Company. All outstanding shares of Common
Stock are fully paid and non-assessable.
Other matters. The Articles of the Company provide
for a classified Board of Directors with staggered
three year terms, establish special shareholder voting
requirements to remove directors and establish certain
procedures relating to the nomination of directors, filling
of vacancies and the vote required to amend or repeal any of
these provisions. The Articles also prohibit the Company's
payment of "green-mail"--that is, payment of a premium in
purchasing shares of its Common Stock from a present or
recent holder of 5% or more of the Common Stock--except with
the approval of a majority of the disinterested shareholders.
This provision and the classified board provision may be
amended or repealed only with the affirmative vote of at
least 80% of the Common Stock. In addition, the Articles
limit or eliminate to the fullest extent permitted by Penn-
sylvania law as from time to time in effect the personal
liability of the Company's directors for monetary damages,
and authorize the Company, except as prohibited by law, to
indemnify directors, officers, employees and others against
liabilities and expenses incurred by them in connection with
the performance of their duties to the Company. The classi-
fied Board article provision and the anti-"greenmail" provi-
sion may have certain anti-takeover effects.
The Company is governed by certain "anti-takeover"
provisions in the Pennsylvania Business Corporation Law,
including provisions that (i) give shareholders the right to
put their shares to a controlling person (i.e., generally a
20% or more shareholder) and receive a fair price for those
shares from the controlling person, (ii) strip voting rights
from "control shares" (i.e., generally, shares held by a
person that holds 20% or more, 33-1/3% or more, or 50% or
more of the Company's voting shares), (iii) impose super-
majority vote requirements on certain business combinations
with an interested shareholder (i.e., generally a 20% or more
shareholder), (iv) require disgorgement of short-term profits
upon disposition of stock by certain controlling persons, and
(v) require severance payments and protection of collective
bargaining agreements following certain control share acqui-
sitions. In addition, the Company is governed by a provision
of the Pennsylvania Business Corporation Law that purports to
widen the freedom for action for directors of Pennsylvania
corporations in responding to takeover attempts.
The transfer agent and registrar for the Common Stock is
First Chicago Trust Company of New York.
UNITED STATES TAXATION
DEBT SECURITIES
The following summary of the principal United States federal
income tax consequences of ownership of Debt Securities is based
upon the opinion of Sullivan & Cromwell, special tax counsel to
the Company. It deals only with Debt Securities held as capital
assets by initial purchasers, and not with special classes of
holders, such as dealers in securities or currencies, banks, tax-
exempt organizations, life insurance companies, persons that hold
Debt Securities that are a hedge or that are hedged against
currency risks or that are part of a straddle or conversion
transaction, or persons whose functional currency is not the U.S.
dollar. Moreover, the summary deals only with Debt Securities
that are due to mature 30 years or less from the date on which
they are issued. The United States federal income tax
consequences of ownership of Debt Securities that are due to
mature more than 30 years from their date of issue will be
discussed in an applicable Prospectus Supplement. The summary is
based on the Internal Revenue Code of 1986, as amended (the
"Code"), its legislative history, existing and proposed
regulations thereunder, published rulings and court decisions,
all as currently in effect and all subject to change at any time,
perhaps with retroactive effect.
-33-
Prospective purchasers of Debt Securities should consult
their own tax advisors concerning the consequences, in their
particular circumstances, under the Code and the laws of any
other taxing jurisdiction, of ownership of Debt Securities.
United States Holders
Payments of Interest
Interest on a Debt Security, whether payable in U.S. dollars
or a currency, composite currency or basket of currencies other
than U.S. dollars (a "foreign currency"), other than interest on
a "Discount Debt Security" that is not "qualified stated
interest" (each as defined below under "Original Issue Discount -
- - General"), will be taxable to a United States Holder as
ordinary income at the time it is received or accrued, depending
on the holder's method of accounting for tax purposes. A United
States Holder is a beneficial owner who or that is (i) a citizen
or resident of the United States, (ii) a domestic corporation or
(iii) otherwise subject to United States federal income taxation
on a net income basis in respect of the Debt Security.
If an interest payment is denominated in, or determined by
reference to, a foreign currency, the amount of income recognized
by a cash basis United States Holder will be the U.S. dollar
value of the interest payment, based on the exchange rate in
effect on the date of receipt, regardless of whether the payment
is in fact converted into U.S. dollars.
An accrual basis United States Holder may determine the
amount of income recognized with respect to an interest payment
denominated in, or determined by reference to, a foreign currency
in accordance with either of two methods. Under the first
method, the amount of income accrued will be based on the average
exchange rate in effect during the interest accrual period (or,
with respect to an accrual period that spans two taxable years,
the part of the period within the taxable year).
Under the second method, the United States Holder may elect
to determine the amount of income accrued on the basis of the
exchange rate in effect on the last day of the accrual period or,
in the case of an accrual period that spans two taxable years,
the exchange rate in effect on the last day of the part of the
period within the taxable year. Additionally, if a payment of
interest is actually received within five business days of the
last day of the accrual period or taxable year, an electing
accrual basis United States Holder may instead translate such
accrued interest into U.S. dollars at the exchange rate in effect
on the day of actual receipt. Any such election will apply to
all debt instruments held by the United States Holder at the
beginning of the first taxable year to which the election applies
or thereafter acquired by the United States Holder, and will be
irrevocable without the consent of the Internal Revenue Service
(the "Service").
-34-
Upon receipt of the interest payment (including a payment
attributable to accrued but unpaid interest upon the sale or
retirement of a Debt Security) denominated in, or determined by
reference to, a foreign currency, the United States Holder will
recognize ordinary income or loss measured by the difference
between (x) the average exchange rate used to accrue interest
income, or the exchange rate as determined under the second
method described above if the United States Holder elects that
method, and (y) the exchange rate in effect on the date of
receipt, regardless of whether the payment is in fact converted
into U.S. dollars.
Original Issue Discount
General. A Debt Security, other than a Debt Security with a
term of one year or less (a "short-term Debt Security"), will be
treated as issued at an original issue discount (a "Discount Debt
Security") if the excess of the Debt Security's "stated
redemption price at maturity" over its issue price is more than a
"de minimis amount" (as defined below). Generally, the issue
price of a Debt Security will be the first price at which a
substantial amount of Debt Securities included in the issue of
which the Debt Security is a part is sold to other than bond
houses, brokers, or similar persons or organizations acting in
the capacity of underwriters, placement agents, or wholesalers.
The stated redemption price at maturity of a Debt Security is the
total of all payments provided by the Debt Security that are not
payments of "qualified stated interest". A qualified stated
interest payment is generally any one of a series of stated
interest payments on a Debt Security that are unconditionally
payable at least annually at a single fixed rate (with certain
exceptions for lower rates paid during some periods) applied to
the outstanding principal amount of the Debt Security. Special
rules for "Variable Rate Debt Securities" (as defined below under
"Original Issue Discount - - Variable Rate Debt Securities") are
described below under "Original Issue Discount - - Variable Rate
Debt Securities".
In general, if the excess of a Debt Security's stated
redemption price at maturity over its issue price is less than
1/4 of 1 percent of the Debt Security's stated redemption price
at maturity multiplied by the number of complete years to its
maturity (the "de minimis amount"), then such excess, if any,
constitutes "de minimis original issue discount" and the Debt
Security is not a Discount Debt Security. Unless the election
described below under "Election to Treat All Interest as Original
Issue Discount" is made, a United States Holder of a Debt
Security with de minimis original issue discount must include
such de minimis original issue discount in income as stated
principal payments on the Debt Security are made. The includible
amount with respect to each such payment will equal the product
of the total amount of the Debt Security's de minimis original
issue discount and a fraction, the numerator of which is the
amount of the principal payment made and the denominator of which
is the stated principal amount of the Debt Security.
-35-
United States Holders of Discount Debt securities having a
maturity of more than one year from their date of issue must,
generally, include original issue discount ("OID") in income
calculated on a constant-yield method before the receipt of cash
attributable to such income, and generally will have to include
in income increasingly greater amounts of OID over the life of
the Debt Security. The amount of OID includible in income by a
United States Holder of a Discount Debt Security is the sum of
the daily portions of OID with respect to the Discount Debt
Security for each day during the taxable year or portion of the
taxable year on which the United States Bolder holds such
Discount Debt Security ("accrued OID"). The daily portion is
determined by allocating to each day in any "accrual period" a
pro rata portion of the OID allocable to that accrual period.
Accrual periods with respect to a Debt Security may be of any
length selected by the United States Holder and may vary in
length over the term of the Debt Security as long as (i) no
accrual period is longer than one year and (ii) each scheduled
payment of interest or principal on the Debt Security occurs on
either the final or first day of an accrual period. The amount of
OID allocable to an accrual period equals the excess of (a) the
product of the Discount Debt Security's adjusted issue price at
the beginning of the accrual period and such Debt Security's
yield to maturity (determined on the basis of compounding at the
close of each accrual period and properly adjusted for the length
of the accrual period) over (b) the sum of the payments of
qualified stated interest on the Debt Security allocable to the
accrual period. The "adjusted issue price" of a Discount Debt
Security at the beginning of any accrual period is the issue
price of the Debt Security increased by (x) the amount of accrued
OID for each prior accrual period and decreased by (y) the amount
of any payments previously made on the Debt Security that were
not qualified stated interest payments. For purposes of
determining the amount of OID allocable to an accrual period, if
an interval between payments of qualified stated interest on the
Debt Security contains more than one accrual period, the amount
of qualified stated interest payable at the end of the interval
(including any qualified stated interest that is payable on the
first day of the accrual period immediately following the
interval) is allocated pro rata on the basis of relative lengths
to each accrual period in the interval, and the adjusted issue
price at the beginning of each accrual period in the interval
must be increased by the amount of any qualified stated interest
that has accrued prior to the first day of the accrual period but
that is not payable until the end of the interval. The amount of
OID allocable to an initial short accrual period may be computed
using any reasonable method if all other accrual periods other
than a final short accrual period are of equal length. The
amount of OID allocable to the final accrual period is the
difference between (x) the amount payable at the maturity of the
Debt Security (other than any payment of qualified stated
interest) and (y) the Debt Security's adjusted issue price as of
the beginning of the final accrual period.
-36-
Acquisition Premium. A United States Holder that purchases
a Debt Security for an amount less than or equal to the sum of
all amounts payable on the Debt Security after the purchase date
other than payments of qualified stated interest but in excess of
its adjusted issue price (any such excess being "acquisition
premium") and that does not make the election described below
under "Election to Treat All Interest as Original Issue Discount"
is permitted to reduce the daily portions of OID by a fraction,
the numerator of which is the excess of the United States
Holder's adjusted basis in the Debt Security immediately after
its purchase over the adjusted issue price of the Debt Security,
and the denominator of which is the excess of the sum of all
amounts payable on the Debt Security after the purchase date,
other than payments of qualified stated interest, over the Debt
Security's adjusted issue price.
Market Discount. A Debt Security, other than a short-term
Debt Security, will be treated as purchased at a market discount
(a "Market Discount Debt Security") if (i) the amount for which a
United States Holder purchased the Debt Security is less than the
Debt Security's issue price (as determined above under "Original
Issue Discount -- General") and (ii) the Debt Security's stated
redemption price at maturity or, in the case of a Discount Debt
Security, the Debt Security's "revised issue price", exceeds the
amount for which the United States Holder purchased the Debt
Security by at least 1/4 of 1 percent of such Debt Security's
stated redemption price at maturity or revised issue price,
respectively, multiplied by the number of complete years to the
Debt Security's maturity. If such excess is not sufficient to
cause the Debt Security to be a Market Discount Debt Security,
then such excess constitutes "de minimis market discount". The
Code provides that, for these purposes, the "revised issue price"
of a Debt Security generally equals its issue price, increased by
the amount of any OID that has accrued on the Debt Security.
Any gain recognized on the maturity or disposition of a
Market Discount Debt Security will be treated as ordinary income
to the extent that such gain does not exceed the accrued market
discount on such Debt Security. Alternatively, a United States
Holder of a Market Discount Debt Security may elect to include
market discount in income currently over the life of the Debt
Security. Such an election shall apply to all debt instruments
with market discount acquired by the electing United States
Holder on or after the first day of the first taxable year to
which the election applies. This election may not be revoked
without the consent of the Service.
Market discount on a Market Discount Debt Security will
accrue on a straight-line basis unless the United States Holder
elects to accrue such market discount on a constant-yield method.
Such an election shall apply only to the Debt Security with
respect to which it is made and may not be revoked. A United
States Holder of a Market Discount Debt Security that does not
elect to include market discount in income currently generally
will be required to defer deductions for interest on borrowings
allocable to such Debt Security in an amount not exceeding the
accrued market discount on such Debt Security until the maturity
or disposition of such Debt Security.
-37-
Pre-Issuance Accrued Interest. If (i) a portion of the
initial purchase price of a Debt Security is attributable to pre-
issuance accrued interest, (ii) the first stated interest payment
on the Debt Security is to be made within one year of the Debt
Security's issue date and (iii) the payment will equal or exceed
the amount of pre-issuance accrued interest, then the United
States Holder may elect to decrease the issue price of the Debt
Security by the amount of pre-issuance accrued interest. In that
event, a portion of the first stated interest payment will be
treated as a return of the excluded pre-issuance accrued interest
and not as an amount payable on the Debt Security.
Debt Securities Subject to Contingencies Including Optional
Redemption. In general, if a Debt Security provides for an
alternative payment schedule or schedules applicable upon the
occurrence of a contingency or contingencies and the timing and
amounts of the payments that comprise each payment schedule are
known as of the issue date, the yield and maturity of the Debt
Security are determined by assuming that the payments will be
made according to the Debt Security's stated payment schedule.
If, however, based on all the facts and circumstances as of the
issue date, it is more likely than not that the Debt Security's
stated payment schedule will not occur, then, in general, the
yield and maturity of the Debt Security are computed based on the
payment schedule most likely to occur.
Notwithstanding the general rules for determining yield and
maturity in the case of Debt Securities subject to contingencies,
if the Company or the Holder has an unconditional option or
options that, if exercised, would require payments to be made on
the Debt Security under an alternative payment schedule or
schedules, then (i) in the case of an option or options of the
Company, the Company will be deemed to exercise or not exercise
an option or combination of options in the manner that minimizes
the yield on the Debt Security and (ii) in the case of an option
or options of the Holder, the Holder will be deemed to exercise
or not exercise an option or combination of options in the manner
that maximizes the yield on the Debt Security. For purposes of
those calculations, the yield on the Debt Security is determined
by using any date on which the Debt Security may be redeemed or
repurchased as the maturity date and the amount payable on such
date in accordance with the terms of the Debt Security as the
principal amount payable at maturity.
If a contingency (including the exercise of an option)
actually occurs or does not occur contrary to an assumption made
according to the above rules (a "change in circumstances") then,
except to the extent that a portion of the Debt Security is
repaid as a result of the change in circumstances and solely for
purposes of the accrual of OID, the yield and maturity of the
Debt Security are redetermined by treating the Debt Security as
reissued on the date of the change in circumstances for an amount
equal to the Debt Security's adjusted issue price on that date.
-38-
Election to Treat All Interest as Original Issue Discount.
A United States Holder may elect to include in gross income all
interest that accrues on a Debt Security using the constant-yield
method described above under the heading "Original Issue Discount
- -- General", with the modifications described below. For
purposes of this election, interest includes stated interest,
OID, de minimis original issue discount, market discount, de
minimis market discount and unstated interest, as adjusted by any
amortizable bond premium (described below under "Debt Securities
Purchased at a Premium") or acquisition premium.
In applying the constant-yield method to a Debt Security
with respect to which this election has been made, the issue
price of the Debt Security will equal the electing United States
Holder's adjusted basis in the Debt Security immediately after
its acquisition, the issue date of the Debt Security will be the
date of its acquisition by the electing United States Holder, and
no payments on the Debt Security will be treated as payments of
qualified stated interest. This election will generally apply
only to the Debt Security with respect to which it is made and
may not be revoked without the consent of the Service. If this
election is made with respect to a Debt Security with amortizable
bond premium, then the electing United States Holder will be
deemed to have elected to apply amortizable bond premium against
interest with respect to all debt instruments with amortizable
bond premium (other than debt instruments the interest on which
is excludible from gross income) held by the electing United
States Holder as of the beginning of the taxable year in which
the Debt Security with respect to which the election is made is
acquired or thereafter acquired. The deemed election with
respect to amortizable bond premium may not be revoked without
the consent of the Service.
If the election to apply the constant-yield method to all
interest on a Debt Security is made with respect to a Market
Discount Debt Security, the electing United States Holder will be
treated as having made the election discussed above under
"Original Issue Discount - - Market Discount" to include market
discount in income currently over the life of all debt
instruments held or thereafter acquired by such United States
Holder.
Variable Rate Debt Securities. A "Variable Rate Debt
Security" is a Debt Security that: (i) has an issue price that
does not exceed the total noncontingent principal payments by
more than the lesser of (1) the product of (x) the total
noncontingent principal payments, (y) the number of complete
years to maturity from the issue date and (z) .015, or (2) 15
percent of the total noncontingent principal payments, and (ii)
provides for stated interest compounded or paid at least annually
at (1) one or more "qualified floating rates", (2) a single fixed
rate and one or more qualified floating rates, (3) a single
"objective rate" or (4) a single fixed rate and a single
objective rate that is a "qualified inverse floating rate".
A qualified floating rate or objective rate in effect at any
time during the term of the instrument must be set at a "current
value" of that rate. A "current value" of a rate is the value of
the rate on any day that is no earlier than 3 months prior to the
first day on which that value is in effect and no later than 1
year following that first day.
-39-
A variable rate is a "qualified floating rate" if (i)
variations in the value of the rate can reasonably be expected to
measure contemporaneous variations in the cost of newly borrowed
funds in the currency in which the Debt Security is denominated
or (ii) it is equal to the product of such a rate and either (a)
a fixed multiple that is greater than zero but not more than
1.35, or (b) a fixed multiple greater than zero but not more than
1.35, increased or decreased by a fixed rate. A rate is not a
qualified floating rate, however, if the rate is subject to
certain restrictions (including caps, floors, governors or other
similar restrictions) unless such restrictions are fixed
throughout the term of the Debt Security or are not reasonably
expected to significantly affect the yield on the Debt Security.
An "objective rate" is a rate, other than a qualified
floating rate, that is determined using a single, fixed formula
and that is based on (i) one or more qualified floating rates,
(ii) one or more rates each of which would be a qualified
floating rate for a debt instrument denominated in a currency
other than the currency in which the debt instrument is
denominated, (iii) the yield or changes in the price of one or
more actively traded items of personal property other than stock
or debt of the issuer or a related party or (iv) a combination of
objective rates. A variable rate is not an objective rate,
however, if it is reasonably expected that the average value of
the rate during the first half of the Debt Security's term will
be either significantly less than or significantly greater than
the average value of the rate during the final half of the Debt
Security's term. An objective rate is a "qualified inverse
floating rate" if (i) the rate is equal to a fixed rate minus a
qualified floating rate, and (ii) the variations in the rate can
reasonably be expected to inversely reflect contemporaneous
variations in the cost of newly borrowed funds. Under these
rules, Commercial Paper Rate Debt securities, Prime Rate Debt
securities, LIBOR Debt Securities, Treasury Rate Debt Securities,
CD Rate Debt Securities, and Federal Funds Rate Debt Securities
will generally be treated as Variable Rate Debt Securities.
In general, if a Variable Rate Debt Security provides for
stated interest at a single qualified floating rate or objective
rate, all stated interest on the Debt Security is qualified
stated interest and the amount of OID, if any, is determined by
using, in the case of a qualified floating rate or qualified
inverse floating rate, the value as of the issue date of the
qualified floating rate or qualified inverse floating rate, or,
in the case of any other objective rate, a fixed rate that
reflects the yield reasonably expected for the Debt Security.
-40-
If a Variable Rate Debt Security does not provide for stated
interest at a single qualified floating rate or objective rate,
the amount of interest and OID accruals on the Debt Security are
generally determined by (i) determining a fixed rate substitute
for each variable rate provided under the Variable Rate Debt
Security (generally, the value of each variable rate as of the
issue date or, in the case of an objective rate that is not a
qualified inverse floating rate, a rate that reflects the
reasonably expected yield on the Debt Security), (ii)
constructing the equivalent fixed rate debt instrument (using the
fixed rate substitute described above), (iii) determining the
amount of qualified stated interest and OID with respect to the
equivalent fixed rate debt instrument, and (iv) making the
appropriate adjustments for actual variable rates during the
applicable accrual period.
If a Variable Rate Debt Security provides for stated
interest either at one or more qualified floating rates or at a
qualified inverse floating rate, and in addition provides for
stated interest at a single fixed rate (other than at a single
fixed rate for an initial period), the amount of interest and OID
accruals are determined as in the immediately preceding paragraph
with the modification that the Variable Rate Debt Security is
treated, for purposes of the first three steps of the
determination, as if it provided for a qualified floating rate
(or a qualified inverse floating rate, as the case may be) rather
than the fixed rate. The qualified floating rate (or qualified
inverse floating rate) replacing the fixed rate must be such that
the fair market value of the Variable Rate Debt Security as of
the issue date would be approximately the same as the fair market
value of an otherwise identical debt instrument that provides for
the qualified floating rate (or qualified inverse floating rate)
rather than the fixed rate.
Short-Term Debt Securities. In general, an individual or
other cash basis United States Holder of a short-term Debt
Security is not required to accrue OID (as specially defined
below for the purposes of this paragraph) for United States
federal income tax purposes unless it elects to do so (but may be
required to include any stated interest in income as the interest
is received). Accrual basis United States Holders and certain
other United States Holders, including banks, regulated
investment companies, dealers in securities, common trust funds,
United States Holders who hold Debt Securities as part of certain
identified hedging transactions, certain pass-thru entities and
cash basis United States Holders who so elect, are required to
accrue OID on short-term Debt Securities on either a straight-
line basis or under the constant-yield method (based on daily
compounding), at the election of the United States Holder. In the
case of a United States Holder not required and not electing to
-41-
include OID in income currently, any gain realized on the sale or
retirement of the short-term Debt Security will be ordinary
income to the extent of the OID accrued on a straight-line basis
(unless an election is made to accrue the OID under the constant-
yield method) through the date of sale or retirement. United
States Holders who are not required and do not elect to accrue
OID on short-term Debt Securities will be required to defer
deductions for interest on borrowings allocable to short-term
Debt Securities in an amount not exceeding the deferred income
until the deferred income is realized.
For purposes of determining the amount of OID subject to
these rules, all interest payments on a short- term Debt
Security, including stated interest, are included in the short-
term Debt Security's stated redemption price at maturity.
Foreign Currency Discount Debt Securities. OID for any
accrual period on a Discount Debt Security that is denominated
in, or determined by reference to, a foreign currency will be
determined in the foreign currency and then translated into U.S.
dollars in the same manner as stated interest accrued by an
accrual basis United States Holder, as described under "Payments
of Interest". Upon receipt of an amount attributable to OID
(whether in connection with a payment of interest or the sale or
retirement of a Debt Security), a United States Holder may
recognize ordinary income or loss.
Debt Securities Purchased at a Premium
A United States Holder that purchases a Debt Security for an
amount in excess of its principal amount may elect to treat such
excess as "amortizable bond premium", in which case the amount
required to be included in the United States Holder's income each
year with respect to interest on the Debt Security will be
reduced by the amount of amortizable bond premium allocable
(based on the Debt Security's yield to maturity) to such year. In
the case of a Debt Security that is denominated in, or determined
by reference to, a foreign currency, bond premium will be
computed in units of foreign currency, and amortizable bond
premium will reduce interest income in units of the foreign
currency. At the time amortized bond premium offsets interest
income, exchange gain or loss (taxable as ordinary income or
loss) is realized measured by the difference between exchange
rates at that time and at the time of the acquisition of the Debt
Securities. Any election to amortize bond premium shall apply to
all bonds (other than bonds the interest on which is excludible
from gross income) held by the United States Holder at the
beginning of the first taxable year to which the election applies
or thereafter acquired by the United States Holder, and is
irrevocable without the consent of the Service. See also
"Original Issue Discount - Election to Treat All Interest as
Original Issue Discount".
-42-
Purchase, Sale and Retirement of the Debt Securities
A United States Holder's tax basis in a Debt Security will
generally be its U.S. dollar cost (as defined below), increased
by the amount of any OID or market discount included in the
United States Holder's income with respect to the Debt Security
and the amount, if any, of income attributable to de minimis
original issue discount and de minimis market discount included
in the United States Holder's income with respect to the Debt
Security, and reduced by (i) the amount of any payments that are
not qualified stated interest payments, and (ii) the amount of
any amortizable bond premium applied to reduce interest on the
Debt Security. The U.S. dollar cost of a Debt Security purchased
with a foreign currency will generally be the U.S. dollar value
of the purchase price on the date of purchase or, in the case of
Debt Securities traded on an established securities market, as
defined in the applicable Treasury Regulations, that are
purchased by a cash basis United States Holder (or an accrual
basis United States Holder that so elects), on the settlement
date for the purchase.
A United States Holder will generally recognize gain or loss
on the sale or retirement of a Debt Security equal to the
difference between the amount realized on the sale or retirement
and the tax basis of the Debt Security. The amount realized on a
sale or retirement for an amount in foreign currency will be the
U.S. dollar value of such amount on (i) the date payment is
received in the case of a cash basis United States Holder, (ii)
the date of disposition in the case of an accrual basis United
States Holder or (iii) in the case of Debt Securities traded on
an established securities market, as defined in the applicable
Treasury Regulations, sold by a cash basis United States Holder
(or an accrual basis United States Holder that so elects), on the
settlement date for the sale. Except to the extent described
above under "Original Issue Discount - Short-Term Debt
Securities" or "Original Issue Discount - Market Discount" or
described in the next succeeding paragraph or attributable to
accrued but unpaid interest, gain or loss recognized on the sale
or retirement of a Debt Security will be capital gain or loss and
will be long-term capital gain or loss if the Debt Security was
held for more than one year.
Gain or loss recognized by a United States Holder on the
sale or retirement of a Debt Security that is attributable to
changes in exchange rates will be treated as ordinary income or
loss. However, exchange gain or loss is taken into account only
to the extent of total gain or loss realized on the transaction.
Exchange of Amounts in Other Than U.S. Dollars
Foreign currency received as interest on a Debt Security or
on the sale or retirement of a Debt Security will have a tax
basis equal to its U.S. dollar value at the time such interest is
received or at the time of such sale or retirement. Foreign
currency that is purchased will generally have a tax basis equal
to the U.S. dollar value of the foreign currency on the date of
purchase. Any gain or loss recognized on a sale or other
disposition of a foreign currency (including its use to purchase
Debt Securities or upon exchange for U.S. dollars) will be
ordinary income or loss.
-43-
Indexed Debt Securities
The applicable Prospectus Supplement will contain a
discussion of any special United States federal income tax rules
with respect to Debt Securities that are not subject to the
rules governing Variable Rate Debt Securities payments on
which are determined by reference to any index.
United States Alien Holders
For purposes of this discussion, a "United States Alien
Holder" is any holder of a Debt Security who is (i) a nonresident
alien individual or (ii) a foreign corporation, partnership or
estate or trust which is not subject to United States federal
income tax on a net income basis in respect of income or gain
from a Debt Security. This discussion assumes that the Debt
Security is not subject to the rules of Section 871(h) (4) (A) of
the Code (relating to interest payments that are determined by
reference to the income, profits, changes in the value of
property or other attributes of the debtor or a related party).
In addition, solely with respect to United States federal estate
tax, the discussion assumes that the Debt Security had a maturity
date, when issued, that was not less than 184 days from the date
of issuance.
Under present United States federal income and estate tax
law, and subject to the discussion of backup withholding below:
(i) payments of principal, premium (if any) and interest,
including OID, by the Company or any of its paying agents to any
holder of a Debt Security that is a United States Alien Holder
will not be subject to United States federal withholding tax if,
in the case of interest or OID, (a) the beneficial owner of the
Debt Security does not actually or constructively own 10% or more
of the total combined voting power of all classes of stock of the
Company entitled to vote, (b) the beneficial owner of the Debt
Security is not a controlled foreign corporation that is related
to the Company through stock ownership, and (c) either (A) the
beneficial owner of the Debt Security certifies to the Company or
its agent, under penalties of perjury, that it is not a United
States Holder and provides its name and address or (B) a
securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary
course of its trade or business (a "financial institution") and
holds the Debt Security certifies to the Company or its agent,
under penalties of perjury, that such statement has been received
from the beneficial owner by it or by a financial institution
between it and the beneficial owner and furnishes the payor with
a copy thereof;
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(ii) a United States Alien Holder of a Debt Security will
not be subject to United States federal withholding tax on any
gain realized on the sale or exchange of a Debt Security; and
(iii) a Debt Security held by an individual who at death is
not a citizen or resident of the United States will not be
includible in the individual's gross estate for purposes of the
United States federal estate tax as a result of the individual's
death if (a) the individual did not actually or constructively
own l0% or more of the total combined voting power of all classes
of stock of the Company entitled to vote and (b) the income on
the Debt Security would not have been effectively connected with
a United States trade or business of the individual at the
individual's death.
Bearer Debt Securities
The applicable Prospectus Supplement will contain a
discussion of any special United States federal income tax rules
with respect to Debt Securities that are issued as Bearer
Securities (including Debt Securities in permanent global form).
Backup Withholdinq and Information Reporting
United States Holders
In general, information reporting requirements will apply to
payments of principal, any premium and interest on a Debt
Security and the proceeds of the sale of a Debt Security before
maturity within the United States to, and to the accrual of OID
on a Discount Debt Security with respect to, non-corporate United
States Holders, and "backup withholding" at a rate of 31% will
apply to such payments and to payments of OID if the United
States Holder fails to provide an accurate taxpayer
identification number or to report all interest and dividends
required to be shown on its federal income tax returns.
United States Alien Holders
Information reporting and backup withholding will not apply
to payments of principal, premium (if any) and interest
(including OID) made by the Company or a paying agent to a United
States Alien Holder on a Debt Security if the certification
described in clause (i) (c) under "United States Alien Holders"
above is received, provided that the payor does not have actual
knowledge that the holder is a United States person.
Payments of the proceeds from the sale by a United States
Alien Holder of a Debt Security made to or through a foreign
office of a broker will not be subject to information reporting
or backup withholding, except that if the broker is a United
States person, a controlled foreign corporation for United States
tax purposes or a foreign person 50% or more of whose gross
income is effectively connected with a United States trade or
business for a specified three-year period, information reporting
may apply to such payments. Payments of the proceeds from the
sale of a Debt Security to or through the United States office of
a broker is subject to information reporting and backup
withholding unless the holder or beneficial owner certifies as to
its non-United States status or otherwise establishes an
exemption from information reporting and backup withholding.
-45-
WARRANTS
The applicable Prospectus Supplement will contain a
discussion of the United States federal income tax consequences
of purchasing Warrants.
PREFERRED STOCK
The applicable Prospectus Supplement will contain a
discussion of the United States federal income tax consequences
of purchasing Preferred Stock, including Preferred Stock that is
convertible into or exchangeable for Common Stock.
PLAN OF DISTRIBUTION
The Company may sell Offered Securities to one or more
underwriters for public offering and sale by them or may sell
Securities to investors directly or through agents. Any such
underwriter or agent involved in the offer and sale of the
Offered Securities will be named in an applicable Prospectus
Supplement.
Underwriters may offer and sell the Offered Securities at a
fixed price or prices, which may be changed, or from time to time
at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
The Company also may, from time to time, authorize underwriters
acting as the Company's agents to offer and sell the Offered
Securities upon the terms and conditions as shall be set forth in
any Prospectus Supplement. In connection with the sale of Offered
Securities, underwriters may be deemed to have received
compensation from the Company in the form of underwriting
discounts or commissions and may also receive commissions from
purchasers of Offered Securities for whom they may act as agent.
Underwriters may sell Offered Securities to or through dealers,
and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters
and/or commissions (which may be changed from time to time) from
the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Company to
underwriters or agents in connection with the offering of Offered
Securities, and any discounts, concessions or commissions allowed
by underwriters to participating dealers, will be set forth in an
applicable Prospectus Supplement. Underwriters, dealers and
agents participating in the distribution of the Offered
Securities may be deemed to be underwriters, and any discounts
and commissions received by them and any profit realized by them
on resale of the Offered Securities may be deemed to be
underwriting discounts and commissions under the Act, as amended.
Underwriters, dealers and agents may be entitled, under
agreements with the Company, to indemnification against and
contribution toward certain civil liabilities, including
liabilities under the Act, and to reimbursement by the Company
for certain expenses.
-46-
If so indicated in an applicable Prospectus Supplement, the
Company will authorize dealers acting as the Company's agents to
solicit offers by certain institutions to purchase Offered
Securities from the Company at the public offering price set
forth in such Prospectus Supplement pursuant to Delayed Delivery
Contracts ("Contracts") providing for payment and delivery on the
date or dates stated in such Prospectus Supplement. Each Contract
will be for an amount not less than, and the aggregate amount of
Offered Securities sold pursuant to Contracts shall be not less
nor more than, the respective amounts stated in such Prospectus
Supplement. Institutions with whom 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 will in all
cases be subject to the approval of the Company. Contracts will
not be subject to any conditions except (i) the purchase by an
institution of the Offered Securities covered by its Contracts
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, and (ii) if the Offered Securities are being sold to
underwriters, the Company shall have sold to such underwriters
the total principal amount of the Offered Securities less the
principal amount thereof covered by Contracts. Agents and
underwriters will have no responsibility in respect of the
delivery or performance of Contracts.
Each underwriter, dealer and agent participating in the
distribution of any Offered Securities which are issuable in
bearer form will agree that it will not offer, sell or deliver,
directly or indirectly, Offered Securities in bearer form in the
United States or to United States persons (other than qualifying
financial institutions) during the restricted period (as defined
in United States Treasury Regulations Section 1.163-
5(c)(2)(i)(D)(7)).
The Securities may not be offered or sold directly or
indirectly in Great Britain other than to persons whose ordinary
business it is to buy or sell shares or debentures (except in
circumstances which do not constitute an offer to the public
within the meaning of the Companies Act 1985), and this
Prospectus and any Prospectus Supplement or any other offering
material relating to the Securities may not be distributed in or
from Great Britain other than to persons whose business involves
the acquisition and disposal, or the holding, of securities
whether as principal or as agent.
All Offered Securities will be a new issue of securities
with no established trading market. Any underwriters to whom
Offered Securities are sold by the Company for public offering
and sale may make a market in such Offered Securities, but such
underwriters will not be obligated to do so and may discontinue
any market making at any time without notice. No assurance can be
given as to the liquidity of the secondary market for any Offered
Securities.
Certain of the underwriters or agents and their associates
may be customers of, engage in transactions with and perform
services for the Company in the ordinary course of business.
-47-
VALIDITY OF OFFERED SECURITIES
The validity of the Offered Securities will be passed upon
for the Company by Denis A. Demblowski, Esq., Senior Counsel
of the Company, and for any underwriters or agents by
Sullivan & Cromwell, New York, New York. Sullivan & Cromwell will
rely, as to all matters governed by Pennsylvania law, on the
opinion of Denis A. Demblowski, Esq. Mr. Demblowski is a
participant in the stock option plan and various other employee
benefit plans offered to employees of the Company. Sullivan &
Cromwell also may act as special tax counsel to the Company in
connection with the Offered Securities.
INDEPENDENT PUBLIC ACCOUNTANTS
The consolidated financial statements and related schedules
in the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, incorporated by reference in this Prospectus,
have been incorporated herein by reference in reliance upon the
reports of Coopers & Lybrand L.L.P. given upon their authority as
experts in auditing and accounting.
With respect to the unaudited financial information for the
periods ended March 31, June 30, September 30 1995 and 1994,
incorporated by reference in this Prospectus, the independent
accountants have reported that they have applied limited
procedures in accordance with professional standards for a
review of such information. However, their separate report
included in the Company's quarterly reports on Form 10-Q for
the quarters ended March 31, 1995, June 30, 1995 and Sep-
tember 30, 1995, and incorporated by reference herein, states
that they did not audit and they do not express an opinion on
that interim financial information. Accordingly, the degree
of reliance on their report on such information should be
restricted in light of the limited nature of the review
procedures applied. The accountants are not subject to
the liability provisions of Section 11 of the Act for
their report on the unaudited interim financial information
because that report is not a "report" or a "part" of the
registration statement prepared or certified by the accountants
within the meaning of Sections 7 and 11 of the Act.
- -----------------------------------------------------------------
- -----------------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN
THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH
DATE.
-48-
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution:
The expenses in connection with the issuance and distribution
of the securities being registered, other than underwriting
compensation, are:
Registration Fee ............................. $ 60,000.00
Rating Agency Fees ........................... 110,000.00*
Printing and Engraving ....................... 15,000.00*
Trustee's Fees and Expenses .................. 20,000.00*
Accounting Fees and Expenses ................. 10,000.00*
Blue Sky and Legal Fees and Expenses ......... 20,000.00*
Miscellaneous ................................ 10,000.00*
Total .................................... $245,000.00*
*Estimated
Item 15. Indemnification of Directors and Officers.
Article V of the By-laws of the Company provides that the
Company shall indemnify, under specified circumstances, persons
who were or are directors, officers or employees of the Company
or who served or serve other business entities at the request
of the Company. Under these By-law provisions, a person who
is wholly successful in defending a claim will be indemnified
for any reasonable expenses. To the extent a person is not
successful in defending a claim, reasonable expenses of the
defense and any liability incurred are to be indemnified under
these provisions only where independent legal counsel or other
disinterested person selected by the Board of Directors
determines that such person acted in good faith and in a manner
such person reasonably believed to be in, or not opposed to,
the best interests of the Company, and in addition with
respect to any criminal action or proceeding, had no
reasonable cause to believe the conduct of such person was
unlawful. Any expense incurred with respect to any claim may
be advanced by the Company if the recipient agrees to repay
such amount if it is ultimately determined that such recipient
is not to be indemnified pursuant to Article V.
The foregoing By-law provisions generally parallel Sections
1741 and 1745 of the Pennsylvania Business Corporation Law
("BCL"). Section 1746 and the By-laws both also provide that
the indemnification provided for therein shall not be deemed
exclusive of any other rights to which those seeking
indemnification may otherwise be entitled.
-49-
Section 1746 of the BCL and the By-laws provide for increased
indemnification protections for directors, officers and others.
Indemnification may be provided by Pennsylvania corporations in
any case except where the act or failure to act giving rise to
the claim for indemnification is determined by a court to have
constituted willful misconduct or recklessness.
Section 1713 of the BCL also sets forth a framework whereby
Pennsylvania corporations, with the approval of the
shareholders, may limit the personal liability of directors
for monetary damages except where the act or omission
giving rise to a claim constitutes self-dealing, willful
misconduct or recklessness. The section does not apply to a
director's responsibility or liability under a criminal or tax
statute and may not apply to liability under Federal statutes,
such as the Federal securities laws.
The Company's Articles and By-laws were amended by the
shareholders to implement the increased protections made
available to directors under the BCL as described in the
preceding paragraph. Article VIII of the By-laws provides
that, except as prohibited by law, every director of the Company
shall be entitled as of right to be indemnified by the Company for
expenses and any and all liability paid or incurred by such
person by reason of such person being or having been a director
of the Company. Expenses incurred with respect to
any claim may be advanced by the Company, subject to certain
exceptions. The shareholders have also approved a form of
indemnity agreement. The Company has entered into such an
indemnity agreement with each of its current directors.
Section 6(b) of the Underwriting Agreement, relating to each
of the Debt Securities and the Preferred Stock (Exhibit 1(a) and
1(b), respectively, hereto) and Section 7(b) of the Agency
Agreement (Exhibit 1(c) hereto) contain provisions relating to
the indemnification by each Underwriter and Agent,
respectively, of the Company, its officers and directors of the
Company and each person, if any, who controls the Company, and
Section 6(a) of such Underwriting Agreement and Section 7(a)
of such Agency Agreement contain provisions relating to the
indemnification by the Company of each Underwriter
and Agent, respectively, and each person controlling the same,
against liabilities arising out of any untrue statement of any
material fact contained in this Registration Statement, or
omission therefrom of any material fact.
The Company has purchased a one year liability insurance
policy with an aggregate limit of $75 million, with certain
specified deductible amounts, for liability of directors and
officers and reimbursement to the Company for indemnification
provided to directors and officers. The policy has an
expiration date of October 1, 1996 and provides liability
insurance and reimbursement coverage for the Company, and its
directors and officers, which is permitted by the laws of
Pennsylvania referred to above.
-50-
Item 16. Exhibits.
Exhibit
Number Description
(1)(a) Form of proposed Underwriting Agreement relating to the
Debt Securities and Warrants to Purchase Debt Securities
(incorporated by reference to Exhibit 1(a) to
Registration Statement No.33-49997 on Form S-3).
(1)(b) Form of proposed Underwriting Agreement relating to the
Preferred Shares (incorporated by reference to
Exhibit 1(b) to Registration Statement No. 33-49997
on Form S-3).
(1)(c) Form of proposed Agency Agreement relating to the
Distribution of Medium-Term Notes (incorporated by
reference to Exhibit 1(b) to Post-Effective Amendment
No. 2 to Registration Statement No. 33-877
on Form S-3).
(3)(i) Articles of the Company (incorporated by reference to
Exhibit 3(i) to Form 10-Q for the quarter ended
June 30, 1993).
(3)(ii) By-laws of the Company (incorporated by reference to
Exhibit 3 to Form 10-Q for the quarter ended
September 30, 1991).
(4)(a) Form of Indenture dated as of September 30, 1993 between
the Company and PNC Bank, National Association, as
Trustee (undated form of Indenture incorporated by
reference to Exhibit 4(a) to Registration
Statement No. 33-49997 on Form S-3).
(4)(b) Form of proposed Warrants to Purchase Debt Securities
(incorporated by reference to Exhibit 4(c) to
Registration Statement No. 2-78009 on Form S-3).
(4)(c) Form of proposed Warrant Agreement relating to the
Warrants to Purchase Debt Securities (incorporated
by reference to Exhibit 4(d) to Registration
Statement No. 2-78009 on Form S-3).
(4)(d) Form of Registered Security which is not an Original
Issue Discount Security (included in Exhibit 4(a)
as Exhibit A).
(4)(e) Form of Registered Security which is an Original Issue
Discount Security (included in Exhibit 4(a) as
Exhibit B).
(4)(f) Form of Bearer Security which is not an Original Issue
Discount Security and form of Related Coupon (included
in Exhibit 4(a) as Exhibit C).
(4)(g) Form of Bearer Security which is an Original Issue
Discount Security and form of Related Coupon
(included in Exhibit 4(a) as Exhibit D).
-51-
(4)(h) Form of Certificate for Shares of Preferred Stock
(incorporated by reference to Exhibit 4(h) to
Registration Statement No. 33-49997 on Form S-3).
(4)(i) Form of Certificate for Shares of Common Stock
(incorporated by reference to Exhibit 4(i) to
Registration Statement No. 33-49997 on Form S-3).
(5) Opinion of Denis A. Demblowski, Esq., counsel to the
Company (filed herewith).
(8) Opinion and consent of Sullivan & Cromwell, special tax
counsel to the Company (filed herewith).
(12) Computation of Ratio of Earnings to Fixed Charges
(incorporated by reference to Exhibit 12 to Form
10-K for the year ended December 31, 1994 and to
Exhibit 12 to Form 10-Q for the quarter ended
September 30, 1995).
(15) Letter from Coopers & Lybrand L.L.P. regarding unaudited
financial information (filed herewith).
(23)(a) Consent of Coopers & Lybrand L.L.P. (filed herewith).
(23)(b) Consent of Denis A. Demblowski, Esq., counsel to the
Company (included as part of Exhibit 5).
(23)(c) Consent of Sullivan & Cromwell (included as part of
Exhibit 8).
(24) Powers of Attorney of certain officers and directors
(filed herewith).
(25) Form T-1 Statement of Eligibility and Qualification
under the Trust Indenture Act of 1939 of PNC Bank,
National Association (to be filed by amendment).
Item 17. Undertakings.
The Company 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 prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represents a fundamental
change in the information set forth in the Registration
Statement; and
-52-
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
Registration Statement or material change to such information
in the Resgistration 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 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; and
(4) That, for purposes of determining any liability under
the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by
reference in the Registration Statement shall be
deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Company pursuant to the foregoing
provisions described in Item 15 above, the Company has been
informed 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 Company of expenses
incurred or paid by a director, officer or controlling person
of the Company 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 Company 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.
-53-
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3
and has duly caused this Registration Statement or amendment
thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Pittsburgh and
Commonwealth of Pennsylvania, on the 16th day of November, 1995.
ALUMINUM COMPANY OF AMERICA
(Registrant)
By /s/Howard W.Burdett
Howard W. Burdett
Vice President and Treasurer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement or amendment thereto has been signed
below by the following persons in the capacities and on the dates
indicated.
Signature Title Date
/s/Paul H. O'Neill
Paul H. O'Neill Chairman of the Board November 16, 1995
and Director
(Principal Executive Officer)
/s/Jan H.M. Hommen
Jan H.M. Hommen Executive Vice President November 16, 1995
and Chief Financial Officer
(Principal Financial Officer)
/s/Earnest J. Edwards
Earnest J. Edwards Vice President and November 16, 1995
Controller (Principal
Accounting Officer)
Kenneth W. Dam, John P. Diesel, Joseph T. Gorman, Judith M.
Gueron, Sir Ronald Hampel, John P. Mulroney, Sir Arvi Parbo,
Henry B. Schacht, Forrest N. Shumway, Franklin A. Thomas and
Marina v.N. Whitman, each as a Director, on November 16, 1995,
by Barbara S. Jeremiah, their attorney-in-fact.*
*By: /s/Barbara S. Jeremiah
Barbara S. Jeremiah
Attorney-in-Fact
-54-
INDEX OF EXHIBITS
Exhibit
Number Description
(1)(a) Form of proposed Underwriting Agreement relating to the
Debt Securities and Warrants to Purchase Debt Securities
(incorporated by reference to Exhibit 1(a) to
Registration Statement No.33-49997 on Form S-3).
(1)(b) Form of proposed Underwriting Agreement relating to the
Preferred Shares (incorporated by reference to
Exhibit 1(b) to Registration Statement No. 33-49997
on Form S-3).
(1)(c) Form of proposed Agency Agreement relating to the
Distribution of Medium-Term Notes (incorporated by
reference to Exhibit 1(b) to Post-Effective Amendment
No. 2 to Registration Statement No. 33-877
on Form S-3).
(3)(i) Articles of the Company (incorporated by reference to
Exhibit 3(i) to Form 10-Q for the quarter ended
June 30, 1993).
(3)(ii) By-laws of the Company (incorporated by reference to
Exhibit 3 to Form 10-Q for the quarter ended
September 30, 1991).
(4)(a) Form of Indenture dated as of September 30, 1993 between
the Company and PNC Bank, National Association, as
Trustee (undated form of Indenture incorporated by
reference to Exhibit 4(a) to Registration
Statement No. 33-49997 on Form S-3).
(4)(b) Form of proposed Warrants to Purchase Debt Securities
(incorporated by reference to Exhibit 4(c) to
Registration Statement No. 2-78009 on Form S-3).
(4)(c) Form of proposed Warrant Agreement relating to the
Warrants to Purchase Debt Securities (incorporated
by reference to Exhibit 4(d) to Registration
Statement No. 2-78009 on Form S-3).
(4)(d) Form of Registered Security which is not an Original
Issue Discount Security (included in Exhibit 4(a)
as Exhibit A).
(4)(e) Form of Registered Security which is an Original Issue
Discount Security (included in Exhibit 4(a) as
Exhibit B).
(4)(f) Form of Bearer Security which is not an Original Issue
Discount Security and form of Related Coupon (included
in Exhibit 4(a) as Exhibit C).
(4)(g) Form of Bearer Security which is an Original Issue
Discount Security and form of Related Coupon
(included in Exhibit 4(a) as Exhibit D).
-55-
(4)(h) Form of Certificate for Shares of Preferred Stock
(incorporated by reference to Exhibit 4(h) to
Registration Statement No. 33-49997 on Form S-3).
(4)(i) Form of Certificate for Shares of Common Stock
(incorporated by reference to Exhibit 4(i) to
Registration Statement No. 33-49997 on Form S-3).
(5) Opinion of Denis A. Demblowski, Esq., counsel to the
Company (filed herewith).
(8) Opinion and consent of Sullivan & Cromwell, special tax
counsel to the Company (filed herewith).
(12) Computation of Ratio of Earnings to Fixed Charges
(incorporated by reference to Exhibit 12 to Form
10-K for the year ended December 31, 1994 and to
Exhibit 12 to Form 10-Q for the quarter ended
September 30, 1995).
(15) Letter from Coopers & Lybrand L.L.P. regarding unaudited
financial information (filed herewith).
(23)(a) Consent of Coopers & Lybrand L.L.P. (filed herewith).
(23)(b) Consent of Denis A. Demblowski, Esq., counsel to the
Company (included as part of Exhibit 5).
(23)(c) Consent of Sullivan & Cromwell (included as part of
Exhibit 8).
(24) Powers of Attorney of certain officers and directors
(filed herewith).
(25) Form T-1 Statement of Eligibility and Qualification
under the Trust Indenture Act of 1939 of PNC Bank,
National Association (to be filed by amendment).
-56-
EXHIBIT 5
November 16, 1995
Aluminum Company of America
425 Sixth Avenue
Alcoa Building
Pittsburgh, Pennsylvania 15219-1850
Attention: Treasurer
This opinion is being supplied in connection with the proposed
offering from time to time by Aluminum Company of America (the
"Company") of up to $300,000,000 aggregate principal amount of
its debt securities (the "Debt Securities"), warrants to purchase
Debt Securities (the "Warrants"), Class B Serial Preferred Stock,
par value $1.00 per share (the "Preferred Stock"), and common
stock, par value $1.00 per share (the "Common Stock"), which you
are seeking to register with the Securities and Exchange
Commission ("SEC") under the provisions of the Securities Act of
1933, as amended (the "Act").
As a Senior Counsel of the Company, I am generally
familiar with its legal affairs. In addition, I have examined
the Articles and By-Laws of the Company; the Indenture dated as
of September 30, 1993 (the "Indenture") between the Company and
PNC Bank, National Association, as Trustee, under which the Debt
Securities may be issued; Registration Statement Nos. 33-49997 and
33-60045 on Form S-3 and the Registration Statement on Form S-3
being filed on today's date (together, the "Registration
Statement"), covering the sale from time to time of the Debt
Securities, the Warrants and the Preferred Stock; the resolutions
adopted at the meetings of the Board of Directors of the Company
held on May 13, 1993, July 16, 1993, March 11, 1994, and
November 9, 1995 relating to the issuance and sale of certain Debt
Securities and Warrants, and to the registration for issuance and
sale of shares of Preferred Stock and shares of Common Stock and
such other documents and corporate records as I have considered
necessary for the purposes of this opinion.
On the basis of the foregoing, I advise you that, in my opinion,
the issuance from time to time of any Debt Securities and any
Warrants by the Company in accordance with the provisions of the
above resolutions or of any supplemental or successor resolutions
duly adopted by the Board of Directors of the Company has or will
have been duly authorized by the Company and, upon the
establishment of the terms thereof in accordance with the forms
of Underwriting Agreement, Agency Agreement and Warrant Agreement
filed as Exhibits to the Registration Statement, any such offered
Debt Securities, when duly executed, authenticated and delivered
in accordance with the provisions of the Indenture against
payment for the Debt Securities, and any such offered Warrants,
when duly executed, authenticated and delivered in accordance
with the Warrant Agreement relating to a particular issue of
Warrants, will constitute valid and binding obligations of the
Company enforceable in accordance with and subject to their
terms, the terms of the Indenture and the terms of the Warrant
Agreement and any Common Stock issuable upon conversion of the
Debt Securities, when duly authorized by the Board of Directors
of the Company or any authorized committee thereof and issued
upon conversion of such Debt Securities, will be validly issued,
fully paid and nonassessable; the issuance from time to time of
any shares of Preferred Stock by the Company in accordance with
the provisions of resolutions duly adopted by the Board of
Directors of the Company or any authorized committee thereof will
have been duly authorized by the Company and, upon the
establishment of the terms thereof in accordance with the
Statement with Respect to Shares as filed with the Secretary of
State of the Commonwealth of Pennsylvania and the Company's
Articles, any such Preferred Stock will be validly issued, fully
paid and nonassessable, and any Common Stock issuable upon
conversion of the Preferred Stock, when duly issued upon
conversion thereof, will be validly issued, fully paid and
nonassessable.
I hereby consent to being named in the Registration Statement and
in any prospectus which constitutes a part thereof as counsel for
the Company who has passed upon legal matters in connection with
the Debt Securities, Warrants, the Preferred Stock, and, if
applicable, the shares of Common Stock initially issuable upon
conversion or exchange of the Debt Securities or Preferred Stock,
to which the Registration Statement and the prospectus relate. I
further consent to the filing of this opinion as an Exhibit to
the Registration Statement. I do not concede by these consents
that I come within the category of persons whose consent is
required under Section 7 of the Act or by the rules and
regulations of the SEC under the Act.
Very truly yours,
/s/ Denis A. Demblowski
Denis A. Demblowski
Senior Counsel
EXHIBIT 8
November 16, 1995
Aluminum Company of America
1501 Alcoa Building
Pittsburgh, PA 15219
Dear Sirs:
We have acted as your special tax counsel in connection with
the registration under the Securities Act of 1933, as amended
(the "Securities Act"), of $300,000,000 in Debt Securities and
Warrants to purchase Debt Securities, and shares of Preferred
Stock and Common Stock of Aluminum Company of America (the
"Company"). We hereby confirm to you our opinion is as set forth
under the caption "United States Taxation" in the prospectus
included in the related Registration Statement on Form S-3 filed
by the Company with the Securities and Exchange Commission on
the date hereof (the "Prospectus").
We hereby consent to the filing with the Securities and
Exchange Commission of this letter as an exhibit to the
Registration Statement of which the Prospectus is a part, and the
reference to us in the Prospectus under the caption "United
States Taxation." In giving such consent, we do not admit that
we are within the category of persons whose consent is required
under Section 7 of the Securities Act.
Very truly yours,
/s/ SULLIVAN & CROMWELL
Sullivan & Cromwell
EXHIBIT 15
November 16, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Aluminum Company of America
We are aware that our report dated April 7, 1995, July 7, 1995
and October 6, 1995, accompanying interim financial information
of Aluminum Company of America (Alcoa) and subsidiaries for the
three-month period ended March 31, 1995, the six-month period
ended June 30, 1995 and the nine-month period ended September 30,
1995, and included in Alcoa's quarterly report on Form 10-Q
for the quarter then ended, is incorporated by reference in this
registration statement for the registration of $300,000,000 of
Debt Securities, Warrants to Purchase Debt Securities, Preferred
Stock and Common Stock. Pursuant to Rule 436(c) under the
Securities Act of 1933, this report should not be considered as
part of a registration statement prepared or certified by us
within the meaning of Sections 7 and 11 of that Act.
Very truly yours,
/s/ COOPERS & LYBRAND, LLP
COOPERS & LYBRAND, LLP
EXHIBIT 23(a)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the
Prospectus forming part of the Registration Statement on
Form S-3, to be used in registering Debt Securities, Warrants
to Purchase Debt Securities, Preferred Stock and Common Stock
under the Act, of our reports dated January 11, 1995, on our
audits of the consolidated financial statements and financial
statement schedules of Aluminum Company of America and
consolidated subsidiaries as of December 31, 1994 and
1993, and for each of the three years in the period ended
December 31, 1994, which report is incorporated by reference
or included in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994. We also consent to the
reference to us in such prospectus under the caption
"Independent Public Accountants."
/s/COOPERS & LYBRAND, LLP
COOPERS & LYBRAND, LLP
Pittsburgh, Pennsylvania
November 16, 1995
EXHIBIT 24
POWER OF ATTORNEY
KNOWN ALL PERSONS BY THESE PRESENTS, that each of the
undersigned Directors of Aluminum Company of America (the
"Company") hereby constitutes and appoints JAN H. M. HOMMEN,
EARNEST J. EDWARDS and BARBARA S. JEREMIAH, or any of them, his
or her true and lawful attorneys and agents to do any and all
acts and things and to execute any and all instruments which said
attorneys and agents, or any of them, may deem necessary or
advisable or may be required to enable the Company to comply with
the Securities Act of 1933, as amended, and any rules,
regulations or requirements of the Securities and Exchange
Commission in respect thereof, in connection with the
registration under said Act of up to $300,000,000 of securities,
including but not limited to, debt, convertible, common,
preferred or hybrid securities of the Company, including
specifically, but without limiting the generality of the
foregoing, power and authority to sign the name of each of the
undersigned Directors of the Company in the capacity of Director
thereof to any registration statement to be filed with the
Securities and Exchange Commission in respect of said securities,
to any and all pre-effective amendments, post-effective
amendments and supplements to any such registration statement,
and to any instruments or documents filed as part of or in
connection with any such registration statement or pre-effective
amendments or post-effective amendments or supplements thereto;
and the undersigned hereby ratifies and confirms all that said
attorneys and agents, or any of them, shall do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have subscribed these
presents on the date set opposite the names below.
/s/ KENNETH W. DAM
Kenneth W. Dam November 16, 1995
/s/ JOHN P. DIESEL
John P. Diesel November 16, 1995
/s/ JOSEPH T. GORMAN
Joseph T. Gorman November 16, 1995
/s/ JUDITH M. GUERON
Judith M. Gueron November 16, 1995
/s/ SIR RONALD HAMPEL
Sir Ronald Hampel November 16, 1995
/s/ JOHN P. MULRONEY
John P. Mulroney November 16, 1995
/s/ SIR ARVI PARBO
Sir Arvi Parbo November 16, 1995
/s/ HENRY B. SCHACHT
Henry B. Schacht November 16, 1995
/s/ FORREST N. SHUMWAY
Forrest N. Shumway November 16, 1995
/s/ FRANKLIN A. THOMAS
Franklin A. Thomas November 16, 1995
/s/ MARINA v.N. WHITMAN
Marina v.N. Whitman November 16, 1995
