<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 5, 1996
REGISTRATION NO. 33-65772
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
POST EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
----------------
HALLIBURTON COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 73-0271280
(I.R.S. EMPLOYER IDENTIFICATION NO.)
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
3600 LINCOLN PLAZA
500 N. AKARD
DALLAS, TEXAS 75201-3391
(214) 978-2600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
LESTER L. COLEMAN
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
HALLIBURTON COMPANY
3600 LINCOLN PLAZA
500 N. AKARD
DALLAS, TEXAS 75201-3391
(214) 978-2600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
----------------
COPIES OF CORRESPONDENCE TO:
VINSON & ELKINS L.L.P. SIMPSON THACHER & BARTLETT
FIRST CITY TOWER 425 LEXINGTON AVENUE
HOUSTON, TEXAS 77002-6760 NEW YORK, NEW YORK 10017-3909
(713) 758-2222 (212) 455-2000
ATTN: WILLIAM E. JOOR III ATTN: JOHN B. TEHAN
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective as determined by
market conditions.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
----------------
THE REGISTRANT HEREBY FURTHER AMENDS THIS REGISTRATION STATEMENT, AS AMENDED
HEREBY, ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY THE EFFECTIVE DATE
HEREOF UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY
STATES THAT THIS REGISTRATION STATEMENT, AS AMENDED HEREBY, SHALL THEREAFTER
BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933
OR UNTIL THE REGISTRATION STATEMENT, AS AMENDED HEREBY, SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO
SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ +
+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 WITHOUT THE DELIVERY OF A FINAL PROSPECTUS +
+SUPPLEMENT AND PROSPECTUS. 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. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PRELIMINARY PROSPECTUS SUPPLEMENT SUBJECT TO COMPLETION, DATED DECEMBER 5, 1996
PROSPECTUS SUPPLEMENT
(To Prospectus dated December , 1996)
$300,000,000
HALLIBURTON COMPANY
MEDIUM-TERM NOTES
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE, SERIES A
----------
Halliburton Company (the "Company") may offer from time to time, at an
aggregate initial offering price of up to $300,000,000, its Medium-Term Notes
Due Nine Months or More From Date of Issue, Series A (the "Notes"). Such
aggregate initial offering price is subject to reduction as a result of the
sale by the Company of other Debt Securities described in the accompanying
Prospectus. Each Note will mature on any day nine months or more from the date
of issue, as specified in the applicable pricing supplement hereto (each, a
"Pricing Supplement"), and may be subject to redemption at the option of the
Company or repayment at the option of the Holder thereof, in each case, in
whole or in part, prior to its Stated Maturity Date, if specified in the
applicable Pricing Supplement. Each Note will be denominated and payable in
United States dollars. The Notes will be issued in denominations of $1,000 and
integral multiples thereof, unless otherwise specified in the applicable
Pricing Supplement.
The Company may issue Notes that bear interest at fixed rates ("Fixed Rate
Notes") or at floating rates ("Floating Rate Notes"). The applicable Pricing
Supplement will specify whether a Floating Rate Note is a Regular Floating Rate
Note, a Floating Rate/Fixed Rate Note or an Inverse Floating Rate Note and
whether the rate of interest thereon is determined by reference to one or more
of the CD Rate, the CMT Rate, the Commercial Paper Rate, the Eleventh District
Cost of Funds Rate, the Federal Funds Rate, LIBOR, the Prime Rate and the
Treasury Rate (each, an "Interest Rate Basis"), or any other interest rate
basis or formula, as adjusted by any Spread and any Spread Multiplier. Interest
on each Floating Rate Note will accrue from its date of issue and, unless
otherwise specified in the applicable Pricing Supplement, will be payable
monthly, quarterly, semiannually or annually in arrears, as specified in the
applicable Pricing Supplement, and on the Maturity Date. Unless otherwise
specified in the applicable Pricing Supplement, the rate of interest on each
Floating Rate Note will be reset daily, weekly, monthly, quarterly,
semiannually or annually, as specified in the applicable Pricing Supplement.
Interest on each Fixed Rate Note will accrue from its date of issue and, unless
otherwise specified in the applicable Pricing Supplement, will be payable
semiannually in arrears on March 31 and September 30 of each year and on the
Maturity Date. The Company may also issue Discount Notes, Indexed Notes and
Amortizing Notes.
The interest rate, or formula for the determination of the interest rate, if
any, applicable to each Note and the other variable terms thereof will be
established by the Company on the date of issue of such Note and will be
specified in the applicable Pricing Supplement. Interest rates or formulas and
other terms of Notes are subject to change by the Company, but no such change
will affect any Note previously issued or as to which an offer to purchase has
been accepted by the Company.
Each Note will be issued in book-entry form (a "Book-Entry Note") or in fully
registered certificated form (a "Certificated Note"), as specified in the
applicable Pricing Supplement. Each Book-Entry Note will be represented by one
or more fully registered global securities (the "Global Securities") deposited
with or on behalf of The Depository Trust Company (or such other depositary
identified in the applicable Pricing Supplement) (the "Depositary") and
registered in the name of the Depositary or its nominee. Interests in the
Global Securities will be shown on, and transfers thereof will be effected only
through, records maintained by the Depositary (with respect to its
participants) and the Depositary's participants (with respect to beneficial
owners). Except in limited circumstances, Book-Entry Notes will not be
exchangeable for Certificated Notes.
SEE "RISK FACTORS" COMMENCING ON PAGE S-2 FOR A DISCUSSION OF CERTAIN RISKS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE NOTES OFFERED
HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT, THE
PROSPECTUS OR ANY SUPPLEMENT HERETO. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
AGENTS' DISCOUNTS
PRICE TO AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(1)(2) COMPANY (1)(3)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note........... 100% .125%-.750% 99.875%-99.250%
- -------------------------------------------------------------------------------
Total.............. $300,000,000 $375,000-$2,250,000 $299,625,000-$297,750,000
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
(1) Unless otherwise indicated in the applicable Pricing Supplement, Notes will
be sold at 100% of their principal amount.
(2) The Company will pay a commission to an Agent (as defined below) not to
exceed . % of the Price to Public of any Note when such Agent places the
Note. The Company may also sell Notes to any Agent, as principal, at
negotiated discounts not in excess of such commission, for resale to
investors and other purchasers. The Company has agreed to indemnify the
Agents against, and to provide contribution with respect to, certain
liabilities, including liabilities under the Securities Act. See "Plan of
Distribution."
(3) Before deducting expenses payable by the Company estimated at $ .
----------
The Notes are being offered on a continuing basis by the Company to or
through Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Lehman Brothers Inc., Morgan Stanley & Co. Incorporated and
NationsBanc Capital Markets, Inc. (the "Agents"). Unless otherwise specified in
the applicable Pricing Supplement, the Notes will not be listed on any
securities exchange. There is no assurance that the Notes offered hereby will
be sold or, if sold, that there will be a secondary market for the Notes or
liquidity in the secondary market if one develops. The Company reserves the
right to cancel or modify the offer made hereby without notice. The Company or
an Agent, if it solicits the offer on an agency basis, may reject any offer to
purchase Notes in whole or in part. See "Plan of Distribution."
----------
MERRILL LYNCH & CO.
LEHMAN BROTHERS
MORGAN STANLEY & CO.
INCORPORATED
NATIONSBANC CAPITAL MARKETS, INC.
----------
The date of this Prospectus Supplement is , 1996.
<PAGE>
IN CONNECTION WITH AN OFFERING OF NOTES PURCHASED BY ONE OR MORE AGENTS AS
PRINCIPAL ON A FIXED OFFERING PRICE BASIS, SUCH AGENT(S) MAY OVER-ALLOT OR
EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF NOTES AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
Capitalized terms used but not defined in this Prospectus Supplement are
defined in the accompanying Prospectus or the Second Senior Debt Indenture (as
hereinafter defined) and are used herein with the same meanings as ascribed to
them therein.
----------------
RISK FACTORS
This Prospectus Supplement does not describe all of the risks of an
investment in Notes that may be subject to one or more interest rate or other
indices or formulas. The Company and the Agents disclaim any responsibility to
advise prospective investors of the risks peculiar to an investment in such
Notes. Prospective investors should consult their own financial and legal
advisors as to the risks entailed by an investment in such Notes and the
suitability of investing in such Notes in light of their particular
circumstances. Such Notes are not appropriate investments for investors who
are unsophisticated with respect to transactions involving the applicable
interest rate or other indices or formulas. Prospective investors should
carefully consider, among other factors, the matters described below.
STRUCTURE RISKS
An investment in Notes indexed, as to principal, premium, if any, or
interest, if any, to one or more interest rate or other indices or formulas,
either directly or inversely, entails significant risks that are not
associated with similar investments in a conventional fixed rate or floating
rate debt security. Such risks include, without limitation, the possibility
that such indices or formulas may be subject to significant changes, that no
interest will be payable in respect of such Notes or will be payable at a rate
lower than one applicable to a conventional fixed rate or floating rate debt
security issued by the Company at the same time, that repayment of the
principal or premium, if any, in respect of such Notes may occur at times
other than as expected by the holders of the Notes registered in the
securities register maintained by or on behalf of the Company (the "Holders"),
and that the Holders could lose all or a substantial portion of principal or
premium, if any, payable with respect to such Notes on the Maturity Date (as
defined under "Description of Notes--General"). Such risks depend on a number
of interrelated factors, including economic, financial and political events,
over which the Company has no control. Additionally, if the formula used to
determine the amount of principal, premium, if any, or interest, if any,
payable with respect to such Notes contains a multiplier or leverage factor,
the effect of any change in the applicable index or indices or formula or
formulas will be magnified. In recent years, values of certain indices and
formulas have been highly volatile and such volatility may continue in the
future. Fluctuations in the value of any particular index or formula that have
occurred in the past are not necessarily indicative, however, of fluctuations
that may occur in the future.
Any optional redemption feature of Notes may affect the market value of such
Notes. Since the Company may be expected to redeem such Notes when prevailing
interest rates are relatively low, Holders generally will not be able to
reinvest the redemption proceeds in a comparable security at an effective
interest rate as high as the current interest rate on such Notes.
The Notes will not have an established trading market when issued, and there
can be no assurance of a secondary market for the Notes or the liquidity of
the secondary market if one develops. See "Plan of Distribution."
S-2
<PAGE>
The secondary market, if any, for Notes will be affected by a number of
factors independent of the creditworthiness of the Company and the value
attributed to the applicable index or indices or formula or formulas. Such
factors include the complexity and volatility of each such index or formula,
the method of calculating the principal, premium, if any, or interest, if any,
in respect of such Notes, the time remaining to the maturity of such Notes,
the outstanding amount of such Notes, any redemption features of such Notes,
the amount of other debt securities linked to such index or formula and the
level, direction and volatility of market interest rates generally. Such
factors will affect both the liquidity of any such secondary market and the
value attributed by the market to such Notes. In addition, certain Notes may
be designed for specific investment objectives or strategies and, therefore,
may have a more limited secondary market and experience more price volatility
than conventional debt securities. Holders may not be able to sell such Notes
readily or at prices that will enable them to realize their anticipated yield.
No investor should purchase Notes unless such investor understands and is able
to bear the risk that such Notes may not be readily saleable, that the value
of such Notes will fluctuate over time and that such fluctuations may be
significant.
STRUCTURAL SUBORDINATION
Structural Subordination. If any Debt Securities are sold prior to the
Reorganization, the obligations of the Company thereunder will be assumed by
the Holding Company at the time of the Reorganization. Debt Securities sold
after the Reorganization will be obligations of the Holding Company
exclusively. See "The Company-- Holding Company Reorganization" in the
accompanying Prospectus. After the Reorganization, all of the operations of
the Company will be conducted through subsidiaries. As a consequence, the
Holding Company's cash flow and its ability to service debt, including the
Notes, will be substantially dependent on the free cash flow and earnings of
its subsidiaries and the payment of funds by those subsidiaries to the Holding
Company in the form of loans, dividends or otherwise. The subsidiaries are
separate and distinct legal entities and, except for the limited circumstance
in which the Company may issue Notes prior to the Reorganization, have no
obligation, contingent or otherwise, to pay any amounts due pursuant to the
Notes or to make any funds available for such purpose. Moreover, the payment
of dividends and the making of loans and advances to the Holding Company by
its subsidiaries are, in the case of certain foreign subsidiaries, subject to
statutory and regulatory restrictions, and, in the case of all subsidiaries,
are generally contingent upon the earnings of those subsidiaries and subject
to various business considerations.
Any right of the Holding Company to receive assets of any of its
subsidiaries upon their liquidation or reorganization (and the consequent
right of the holders of Notes to participate in those assets) will be
effectively subordinated to the claims of that subsidiary's creditors
(including trade creditors), except to the extent that the Holding Company is
recognized as a creditor of such subsidiary. In such case, the claims of the
Holding Company will be subordinate to the claims of the creditors secured by
the assets of such subsidiary and any claims of creditors of such subsidiary
senior to those held by the Holding Company.
At December 31, 1995, the Company and its subsidiaries had approximately
$1.9 billion of outstanding liabilities (including, among other things,
liabilities such as accounts payable, advance billings on uncompleted
contracts and long-term debt, but excluding intercompany indebtedness). (Such
amount does not give effect to the acquisition of Landmark Graphics
Corporation on October 4, 1996, which was accounted for as a pooling of
interests.) After the Reorganization, the Company and its current subsidiaries
will be subsidiaries of the Holding Company, and all of such liabilities will
continue to be obligations of the Company and its current subsidiaries
(although the Holding Company will assume certain obligations, including $200
million in principal amount of 8.75% Debentures due February 15, 2021 issued
by the Company under the First Senior Debt Indenture). There are no
restrictions in either Indenture on the creation of additional indebtedness,
including indebtedness of the Company's subsidiaries, and the incurrence of
additional indebtedness could have an adverse impact on the Holding Company's
ability to service its indebtedness, including the Notes.
S-3
<PAGE>
CHANGE OF CONTROL AND HIGHLY LEVERAGED TRANSACTIONS
The Notes will not contain any provisions that may afford Holders thereof
protection in the event of a change of control of the Company or in the event
of a highly leveraged transaction (whether or not such transaction results in
a change of control of the Company).
CREDIT RATINGS
The credit ratings assigned to the Company's medium-term note program may
not reflect the potential impact of all risks related to structure and other
factors on the value of the Notes. Accordingly, prospective investors should
consult their own financial and legal advisors as to the risks entailed by an
investment in the Notes and the suitability of investing in such Notes in
light of their particular circumstances.
HOLDING COMPANY REORGANIZATION
As more fully described under "The Company--Holding Company Reorganization"
in the accompanying Prospectus, the Company currently intends to reorganize
its corporate structure prior to the end of calendar year 1996 to establish a
holding company as the parent corporation for its operating subsidiaries. In
connection with the Reorganization (as such term is defined in the
Prospectus), the new holding company will change its name to "Halliburton
Company," will assume the obligations of the Company with respect to any Debt
Securities, including any Notes, issued and sold by the Company prior to the
Reorganization and will be the issuer of, and sole obligor with respect to,
any Debt Securities, including any Notes, issued and sold after the
Reorganization.
DESCRIPTION OF NOTES
The Notes will be issued as a series of Debt Securities under a Second
Senior Indenture, dated as of December 1, 1996, between the Company and Texas
Commerce Bank National Association, as Trustee (the "Trustee"), as
supplemented, amended and modified by the First Supplemental Indenture thereto
dated as of December 5, 1996 and as further supplemented, amended and modified
from time to time (the "Indenture"). The Indenture is subject to, and governed
by, the Trust Indenture Act of 1939, as amended. The following summary of
certain provisions of the Notes and the Indenture does not purport to be
complete and is qualified in its entirety by reference to the actual
provisions of the Notes and the Indenture. Capitalized terms used but not
defined herein shall have the meanings given to them in the accompanying
Prospectus, the Notes or the Indenture, as the case may be. The term "Debt
Securities," as used in this Prospectus Supplement, refers to all debt
securities, including the Notes, issued and issuable from time to time under
the Indenture. The following description of Notes will apply to each Note
offered hereby unless otherwise specified in the applicable Pricing
Supplement.
GENERAL
All Debt Securities, including the Notes, issued and to be issued under the
Indenture will be unsecured general obligations of the Company and will rank
pari passu with all other unsecured and unsubordinated indebtedness of the
Company from time to time outstanding. For information regarding the
structural subordination of the Debt Securities, including the Notes, to
indebtedness of the subsidiaries of the Company, see "Risk Factors--Structural
Subordination" and, in the Prospectus, "Description of Debt Securities--
Provisions Applicable to Senior Debt Securities--Structural Subordination."
The Indenture does not limit the aggregate initial offering price of Debt
Securities that may be issued thereunder and Debt Securities may be issued
thereunder from time to time in one or more series up to the aggregate initial
offering price from time to time authorized by the Company for each series.
The Company may, from time to time, without the consent of the Holders of the
Notes, provide for the issuance of other Debt Securities under the Indenture
in addition to the Notes offered hereby.
S-4
<PAGE>
The aggregate initial offering price of the Notes is limited to
$300,000,000. Each Note will mature on any day nine months or more from its
date of issue (the "Stated Maturity Date"), as specified in the applicable
Pricing Supplement, unless the principal thereof (or any installment of
principal thereof) becomes due and payable prior to the Stated Maturity Date,
whether by the declaration of acceleration of maturity, notice of redemption
at the option of the Company, notice of the Holder's option to elect repayment
or otherwise (the Stated Maturity Date or such prior date, as the case may be,
is herein referred to as the "Maturity Date" with respect to the principal of
such Note repayable on such date). Unless otherwise specified in the
applicable Pricing Supplement, interest-bearing Notes will either be Fixed
Rate Notes or Floating Rate Notes, as specified in the applicable Pricing
Supplement. The Company may also issue Discount Notes, Indexed Notes and
Amortizing Notes (as such terms are hereinafter defined).
The Notes will be denominated in, and payments of principal, premium, if
any, or interest, if any, in respect thereof will be made in, United States
dollars. References herein to "United States dollars," "U.S. dollars" or "$"
are to the lawful currency of the United States of America (the "United
States"). Purchasers are required to pay for the Notes in United States
dollars.
Interest rates offered by the Company with respect to the Notes may differ
depending upon, among other factors, the aggregate principal amount of Notes
purchased in any single transaction. Notes with different variable terms other
than interest rates may also be offered concurrently to different investors.
Interest rates or formulas and other terms of Notes are subject to change by
the Company from time to time, but no such change will affect any Note
previously issued or as to which an offer to purchase has been accepted by the
Company.
Each Note will be issued as a Book-Entry Note represented by one or more
fully registered Global Securities or as a fully registered Certificated Note.
The denomination of each Note will be $1,000 or an integral multiple thereof,
unless otherwise specified in the applicable Pricing Supplement.
In the case of Book-Entry Notes, payments of principal of, and premium, if
any, and interest, if any, will be made by the Company through an affiliate of
the Trustee (the "Paying Agent") to the Depositary. See "--Book-Entry Notes."
In the case of Certificated Notes, payments of principal and premium, if any,
due on any Maturity Date will be made in immediately available funds upon
presentation and surrender thereof (and, in the case of any repayment on an
Optional Repayment Date, upon submission of a duly completed election form in
accordance with the provisions described below) at the office or agency
maintained by the Company for such purpose in the Borough of Manhattan, The
City of New York, currently the corporate trust office of the Paying Agent,
The Chase Manhattan Bank, located at 450 West 33rd Street, 15th Floor, New
York, New York 10001 (the "Corporate Trust Office"). Payment of interest, if
any, due on the Maturity Date of a Certificated Note will be made to the
person to whom payment of the principal thereof and premium, if any, thereon
shall be made. Payment of interest, if any, due on a Certificated Note on any
Interest Payment Date (as hereinafter defined) other than the Maturity Date
will be made by check mailed to the address of the Holder entitled thereto as
such address shall appear in the Security Register of the Company. A Holder of
$10,000,000 or more in aggregate principal amount of Certificated Notes
(whether having identical or different terms and provisions) will, however, be
entitled to receive interest payments, if any, on any Interest Payment Date
other than the Maturity Date by wire transfer of immediately available funds
if appropriate wire transfer instructions have been received in writing by the
Paying Agent not less than 15 days prior to such Interest Payment Date. Any
such wire transfer instructions received by the Paying Agent will remain in
effect until revoked by such Holder.
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking
institutions are authorized or required by law, regulation or executive order
to close in The City of New York; provided, however, that, with respect to
Notes as to which LIBOR is an applicable Interest Rate Basis, such day is also
a London Business Day (as hereinafter defined). "London Business Day" means a
day on which dealings in United States dollars are transacted in the London
interbank market.
Book-Entry Notes may be transferred or exchanged only through the
Depositary. See "--Book-Entry Notes." Registration of transfer or exchange of
Certificated Notes will be made at the office or agency
S-5
<PAGE>
maintained by the Company for such purpose in the Borough of Manhattan, The
City of New York, currently the Corporate Trust Office of the Paying Agent. No
service charge will be made by the Company or the Paying Agent for any such
registration of transfer or exchange of Notes, but the Company or any paying
agent may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith (other than
exchanges pursuant to the Indenture not involving any transfer).
The defeasance and covenant defeasance provisions contained in the Indenture
shall apply to the Notes. See "Description of Debt Securities" in the
Prospectus.
REDEMPTION AT THE OPTION OF THE COMPANY
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will not be subject to any sinking fund. The Notes will be redeemable at the
option of the Company prior to the Stated Maturity Date only if an Initial
Redemption Date is specified in the applicable Pricing Supplement. If so
specified, each Note will be subject to redemption at the option of the
Company on any date on and after the applicable Initial Redemption Date in
whole or from time to time in part in increments of $1,000 (provided that any
remaining principal amount thereof shall be at least $1,000), at the
applicable Redemption Price (as hereinafter defined), together with unpaid
interest accrued thereon to the date of redemption, on written notice given to
the Holders thereof not more than 60 nor less than 30 calendar days prior to
the date of redemption and in accordance with the provisions of the Indenture.
For this purpose, "Redemption Price" means an amount equal to the Initial
Redemption Percentage specified in the applicable Pricing Supplement (as
adjusted by the Annual Redemption Percentage Reduction, if applicable)
multiplied by the unpaid principal amount to be redeemed. The Initial
Redemption Percentage, if any, applicable to a Note shall decline at each
anniversary of the Initial Redemption Date by an amount equal to the
applicable Annual Redemption Percentage Reduction, if any, until the
Redemption Price is equal to 100% of the unpaid principal amount to be
redeemed. For a discussion of the redemption of Discount Notes, see "--
Discount Notes."
REPAYMENT AT THE OPTION OF THE HOLDER
The Notes will be repayable by the Company at the option of the Holders
thereof prior to the Stated Maturity Date only if one or more Optional
Repayment Dates are specified in the applicable Pricing Supplement. If so
specified, the Notes will be subject to repayment at the option of the Holders
thereof on any such Optional Repayment Date in whole or in part in increments
of $1,000 (provided that any remaining principal amount thereof shall be at
least $1,000), at a repayment price equal to 100% of the unpaid principal
amount to be repaid on such Optional Repayment Date, together with unpaid
interest accrued thereon to the date of repayment. For any Note to be repaid
on an Optional Repayment Date, such Note must be received, together with the
form thereon entitled "Option to Elect Repayment" duly completed, by the
Company at its office maintained for such purpose in the Borough of Manhattan,
The City of New York, currently the Corporate Trust Office of the Paying
Agent, not more than 60 nor less than 30 calendar days prior to the date of
repayment. Exercise of such repayment option by the Holder will be
irrevocable. For a discussion of the repayment of Discount Notes, see "--
Discount Notes."
Only the Depositary may exercise the repayment option in respect of Global
Securities representing Book-Entry Notes. Accordingly, Beneficial Owners (as
hereinafter defined) of Global Securities that desire to have all or any
portion of the Book-Entry Notes represented by such Global Securities repaid
must instruct the Participant (as hereinafter defined) through which they own
their interest to direct the Depositary to exercise the repayment option on
their behalf by delivering the related Global Security and duly completed
election form to the Paying Agent as aforesaid. In order to ensure that such
Global Security and election form are received by the Paying Agent on a
particular day, the applicable Beneficial Owner must so instruct the
Participant through which it owns its interest before such Participant's
deadline for accepting instructions for that day. Participants may have
different deadlines for accepting instructions from their customers.
Accordingly, Beneficial Owners should consult the Participants through which
they own their interest for the respective deadlines for such Participants.
S-6
<PAGE>
All instructions given to Participants from Beneficial Owners of Global
Securities relating to the option to elect repayment shall be irrevocable. In
addition, at the time such instructions are given, each such Beneficial Owner
shall cause the Participant through which it owns its interest to transfer
such Beneficial Owner's interest in the Global Security or Securities
representing the related Book-Entry Notes, on the Depositary's records, to the
Paying Agent. See "--Book-Entry Notes."
If applicable, the Company will comply with the requirements of Section
14(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the rules promulgated thereunder, and any other securities laws or
regulations in connection with any such repayment.
The Company may at any time purchase Notes at any price or prices in the
open market or otherwise. Notes so purchased by the Company may, at the
discretion of the Company, be held, resold or surrendered to the Paying Agent
for cancellation.
INTEREST
General
Unless otherwise specified in the applicable Pricing Supplement, each
interest-bearing Note will bear interest from its date of issue at the rate
per annum, in the case of a Fixed Rate Note, or pursuant to the interest rate
formula, in the case of a Floating Rate Note, in each case as specified in the
applicable Pricing Supplement, until the principal thereof is paid or duly
made available for payment. Unless otherwise specified in the applicable
Pricing Supplement, interest payments in respect of Fixed Rate Notes and
Floating Rate Notes will be made in an amount equal to the interest accrued
from and including the immediately preceding Interest Payment Date in respect
of which interest has been paid or duly made available for payment (or from
and including the date of issue, if no interest has been paid or duly made
available for payment) to but excluding the applicable Interest Payment Date
or the Maturity Date, as the case may be (each, an "Interest Period").
Interest on Fixed Rate Notes and Floating Rate Notes will be payable in
arrears on each Interest Payment Date and on the Maturity Date. Unless
otherwise specified in the applicable Pricing Supplement, however, the first
payment of interest on any such Note originally issued between a Record Date
(as hereinafter defined) and the related Interest Payment Date will be made on
the Interest Payment Date immediately following the next succeeding Record
Date to the Holder on such next succeeding Record Date. Unless otherwise
specified in the applicable Pricing Supplement, a "Record Date" shall be the
fifteenth calendar day (whether or not a Business Day) immediately preceding
the related Interest Payment Date.
Fixed Rate Notes
Interest on Fixed Rate Notes will be payable on March 31 and September 30 of
each year or on such other date(s) specified in the applicable Pricing
Supplement (each, an "Interest Payment Date" with respect to Fixed Rate Notes)
and on the Maturity Date with respect to all or part of the principal thereof.
Unless otherwise specified in the applicable Pricing Supplement, interest on
Fixed Rate Notes will be computed on the basis of a 360-day year of twelve 30-
day months.
If any Interest Payment Date or the Maturity Date of a Fixed Rate Note falls
on a day that is not a Business Day, the required payment of principal,
premium, if any, or interest will be made on the next succeeding Business Day
as if made on the date such payment was due, and no interest will accrue on
such payment for the period from and after such Interest Payment Date or the
Maturity Date, as the case may be, to the date of such payment on the next
succeeding Business Day.
Floating Rate Notes
Interest on Floating Rate Notes will be determined by reference to the
applicable Interest Rate Basis or Interest Rate Bases, which may, as described
below, include (i) the CD Rate, (ii) the CMT Rate, (iii) the
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Commercial Paper Rate, (iv) the Eleventh District Cost of Funds Rate, (v) the
Federal Funds Rate, (vi) LIBOR, (vii) the Prime Rate, (viii) the Treasury
Rate, or (ix) such other Interest Rate Basis or interest rate formula as may
be specified in the applicable Pricing Supplement. The applicable Pricing
Supplement will specify whether such Floating Rate Note is a "Regular Floating
Rate Note," a "Floating Rate/Fixed Rate Note" or an "Inverse Floating Rate
Note," and, to the extent applicable, certain terms with respect to each
Floating Rate Note, including the Fixed Rate Commencement Date, Fixed Interest
Rate, Interest Rate Basis or Bases, Initial Interest Rate, Initial Interest
Reset Date, Interest Reset Dates, Interest Payment Dates, Index Maturity,
Maximum Interest Rate, Minimum Interest Rate, and Spread and Spread
Multiplier, as such terms are defined below. If one or more of the applicable
Interest Rate Bases is LIBOR or the CMT Rate, the applicable Pricing
Supplement will also specify the Designated LIBOR Page or the Designated CMT
Maturity Index and Designated CMT Telerate Page, respectively, as such terms
are defined below.
The interest rate borne by the Floating Rate Notes will be determined as
follows:
(i) Unless such Floating Rate Note is designated as a "Floating
Rate/Fixed Rate Note" or an "Inverse Floating Rate Note," or as having an
Addendum attached or having "Other/Additional Provisions" apply, in each
case relating to a different interest rate formula, such Floating Rate Note
will be designated as a "Regular Floating Rate Note" and, except as
described below or in the applicable Pricing Supplement, will bear interest
at the rate determined by reference to the applicable Interest Rate Basis
or Bases (a) plus or minus the applicable Spread, if any, and (b)
multiplied by the applicable Spread Multiplier, if any. Commencing on the
initial Interest Reset Date for such Note (the "Initial Interest Reset
Date"), the rate at which interest on such Regular Floating Rate Note shall
be payable shall be reset as of each Interest Reset Date; provided,
however, that the interest rate in effect for the period, if any, from the
date of issue to the Initial Interest Reset Date will be the initial
interest rate on such Note (the "Initial Interest Rate").
(ii) If such Floating Rate Note is designated as a "Floating Rate/Fixed
Rate Note," then, except as described below or in the applicable Pricing
Supplement, such Floating Rate Note will bear interest at the rate
determined by reference to the applicable Interest Rate Basis or Bases (a)
plus or minus the applicable Spread, if any, and (b) multiplied by the
applicable Spread Multiplier, if any. Commencing on the Initial Interest
Reset Date, the rate at which interest on such Floating Rate/Fixed Rate
Note shall be payable shall be reset as of each Interest Reset Date;
provided, however, that (y) the interest rate in effect for the period, if
any, from the date of issue to the Initial Interest Reset Date will be the
Initial Interest Rate and (z) the interest rate in effect for the period
commencing on the date specified in the applicable Pricing Supplement as
the Fixed Rate Commencement Date (the "Fixed Rate Commencement Date") to
the Maturity Date shall be the Fixed Interest Rate, if such rate is
specified in the applicable Pricing Supplement or, if no such Fixed
Interest Rate is specified, the interest rate in effect thereon on the day
immediately preceding the Fixed Rate Commencement Date.
(iii) If such Floating Rate Note is designated as an "Inverse Floating
Rate Note," then, except as described below or in the applicable Pricing
Supplement, such Floating Rate Note will bear interest at the Fixed
Interest Rate minus the rate determined by reference to the applicable
Interest Rate Basis or Bases (a) plus or minus the applicable Spread, if
any, and (b) multiplied by the applicable Spread Multiplier, if any;
provided, however, that, unless otherwise specified in the applicable
Pricing Supplement, the interest rate thereon will not be less than zero.
Commencing on the Initial Interest Reset Date, the rate at which interest
on such Inverse Floating Rate Note shall be payable shall be reset as of
each Interest Reset Date; provided, however, that the interest rate in
effect for the period, if any, from the date of issue to the Initial
Interest Reset Date will be the Initial Interest Rate.
The "Spread" is the number of basis points to be added to or subtracted from
the related Interest Rate Basis or Bases applicable to such Floating Rate
Note. The "Spread Multiplier" is the percentage of the related Interest Rate
Basis or Bases applicable to such Floating Rate Note by which such Interest
Rate Basis or Bases will be multiplied to determine the applicable interest
rate on such Floating Rate Note. The "Index Maturity" is the period to
maturity of the instrument or obligation with respect to which the related
Interest Rate Basis or Bases will be calculated.
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Unless otherwise specified in the applicable Pricing Supplement, the
interest rate with respect to each Floating Rate Note will be determined in
accordance with the applicable provisions below. Except as set forth above or
in the applicable Pricing Supplement, the interest rate in effect on each day
shall be the interest rate determined as of the most recent Interest
Determination Date (as hereinafter defined).
The applicable Pricing Supplement will specify whether the rate of interest
on the related Floating Rate Note will be reset daily, weekly, monthly,
quarterly, semiannually or annually or on another specified basis (each, an
"Interest Reset Period") and the dates on which such rate of interest will be
reset (each, an "Interest Reset Date"). Unless otherwise specified in the
applicable Pricing Supplement, the Interest Reset Dates will be, in the case
of Floating Rate Notes which reset: (i) daily, each Business Day; (ii) weekly,
the Wednesday of each week (with the exception of weekly reset Floating Rate
Notes as to which the Treasury Rate is an applicable Interest Rate Basis,
which will reset the Tuesday of each week, except as described below); (iii)
monthly, the third Wednesday of each month (with the exception of monthly
reset Floating Rate Notes as to which the Eleventh District Cost of Funds Rate
is an applicable Interest Rate Basis, which will reset on the first calendar
day of the month); (iv) quarterly, the third Wednesday of March, June,
September and December of each year; (v) semiannually, the third Wednesday of
the two months specified in the applicable Pricing Supplement; and (vi)
annually, the third Wednesday of the month specified in the applicable Pricing
Supplement; provided, however, that, with respect to Floating Rate/Fixed Rate
Notes, the rate of interest thereon will not reset after the applicable Fixed
Rate Commencement Date. If any Interest Reset Date for any Floating Rate Note
would otherwise be a day that is not a Business Day, such Interest Reset Date
will be postponed to the next succeeding Business Day, except that in the case
of a Floating Rate Note as to which LIBOR is an applicable Interest Rate Basis
and such Business Day falls in the next succeeding calendar month, such
Interest Reset Date will be the immediately preceding Business Day.
The interest rate applicable to each Interest Reset Period commencing on the
related Interest Reset Date will be the rate determined by the Calculation
Agent as of the applicable Interest Determination Date and calculated on or
prior to the Calculation Date (as hereinafter defined), except with respect to
LIBOR and the Eleventh District Cost of Funds Rate, which will be calculated
on such Interest Determination Date. The "Interest Determination Date" with
respect to the CD Rate, the CMT Rate, the Commercial Paper Rate, the Federal
Funds Rate and the Prime Rate will be the second Business Day immediately
preceding the applicable Interest Reset Date; the "Interest Determination
Date" with respect to the Eleventh District Cost of Funds Rate will be the
last working day of the month immediately preceding the applicable Interest
Reset Date on which the Federal Home Loan Bank of San Francisco (the "FHLB of
San Francisco") publishes the Index (as hereinafter defined); and the
"Interest Determination Date" with respect to LIBOR will be the second London
Business Day immediately preceding the applicable Interest Reset Date. With
respect to the Treasury Rate, the "Interest Determination Date" will be, with
respect to the week in which the Interest Reset Date occurs, the day in the
week on which Treasury Bills (as hereinafter defined) are normally auctioned.
(Treasury Bills are normally sold at an auction held on Monday of each week,
unless that day is a legal holiday, in which case the auction is normally held
on the following Tuesday, except that such auction may be held on the
preceding Friday.) If an auction is held on the Friday of the week preceding
the applicable Interest Reset Date, however, the "Interest Determination Date"
will be such preceding Friday, but, if the Interest Determination Date would
otherwise fall on an Interest Reset Date, then such Interest Reset Date will
be postponed to the next succeeding Business Day. The "Interest Determination
Date" pertaining to a Floating Rate Note the interest rate of which is
determined by reference to two or more Interest Rate Bases will be the second
Business Day next preceding the Interest Reset Date for such Floating Rate
Note on which each Interest Rate Basis is determinable. Each Interest Rate
Basis will be determined as of such date, and the applicable interest rate
will take effect on the applicable Interest Reset Date.
Notwithstanding the foregoing, a Floating Rate Note may also have either or
both of the following: (i) a maximum interest rate, or ceiling, that may
accrue during any Interest Period (a "Maximum Interest Rate") and (ii) a
minimum interest rate, or floor, that may accrue during any Interest Period (a
"Minimum Interest Rate"). In addition to any Maximum Interest Rate that may
apply to any Floating Rate Note, the interest rate on Floating
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Rate Notes will in no event be higher than the maximum rate permitted by New
York law, as the same may be modified by United States law.
Except as provided below or in the applicable Pricing Supplement, interest
will be payable, in the case of Floating Rate Notes which reset: (i) daily,
weekly or monthly, on the third Wednesday of each month or on the third
Wednesday of March, June, September and December of each year, as specified in
the applicable Pricing Supplement; (ii) quarterly, on the third Wednesday of
March, June, September and December of each year; (iii) semiannually, on the
third Wednesday of the two months of each year specified in the applicable
Pricing Supplement; and (iv) annually, on the third Wednesday of the month of
each year specified in the applicable Pricing Supplement (each, an "Interest
Payment Date" with respect to Floating Rate Notes) and, in each case, on the
Maturity Date. If any Interest Payment Date other than the Maturity Date for
any Floating Rate Note would otherwise be a day that is not a Business Day,
such Interest Payment Date will be postponed to the next succeeding Business
Day, except that, in the case of a Floating Rate Note as to which LIBOR is an
applicable Interest Rate Basis and such Business Day falls in the next
succeeding calendar month, such Interest Payment Date will be the immediately
preceding Business Day. If the Maturity Date of a Floating Rate Note falls on
a day that is not a Business Day, the required payment of principal, premium,
if any, and interest will be made on the next succeeding Business Day as if
made on the date such payment was due, and no interest will accrue on such
payment for the period from and after the Maturity Date to the date of such
payment on the next succeeding Business Day.
All percentages resulting from any calculation on Floating Rate Notes will
be rounded to the nearest one hundred-thousandth of a percentage point, with
five-one millionths of a percentage point rounded upwards (e.g., 9.876545% (or
.09876545) would be rounded to 9.87655% (or .0987655)), and all amounts used
in or resulting from such calculation on Floating Rate Notes will be rounded
to the nearest cent (with one-half cent being rounded upwards).
With respect to each Floating Rate Note, accrued interest is calculated by
multiplying its principal amount by an accrued interest factor. Such accrued
interest factor is computed by adding the interest factor calculated for each
day in the applicable Interest Period. Unless otherwise specified in the
applicable Pricing Supplement, the interest factor for each such day will be
computed by dividing the interest rate applicable to such day by 360, in the
case of Floating Rate Notes for which an applicable Interest Rate Basis is the
CD Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds Rate,
the Federal Funds Rate, LIBOR or the Prime Rate, or by the actual number of
days in the year in the case of Floating Rate Notes for which an applicable
Interest Rate Basis is the CMT Rate or the Treasury Rate. Unless otherwise
specified in the applicable Pricing Supplement, the interest factor for
Floating Rate Notes for which the interest rate is calculated with reference
to two or more Interest Rate Bases will be calculated in each period in the
same manner as if only the applicable Interest Rate Basis specified in the
applicable Pricing Supplement applied.
Unless otherwise specified in the applicable Pricing Supplement, an
affiliate of the Trustee will be the "Calculation Agent." Upon request of the
Holder of any Floating Rate Note, the Calculation Agent will disclose the
interest rate then in effect and, if determined, the interest rate that will
become effective as a result of a determination made for the next succeeding
Interest Reset Date with respect to such Floating Rate Note. Unless otherwise
specified in the applicable Pricing Supplement, the "Calculation Date," if
applicable, pertaining to any Interest Determination Date will be the earlier
of (i) the tenth calendar day after such Interest Determination Date or, if
such day is not a Business Day, the next succeeding Business Day or (ii) the
Business Day immediately preceding the applicable Interest Payment Date or the
Maturity Date, as the case may be.
Unless otherwise specified in the applicable Pricing Supplement, the
Calculation Agent shall determine each Interest Rate Basis in accordance with
the following provisions.
CD RATE. Unless otherwise specified in the applicable Pricing Supplement,
"CD Rate" means, with respect to any Interest Determination Date relating to a
Floating Rate Note for which the interest rate is determined with reference to
the CD Rate (a "CD Rate Interest Determination Date"), the rate on such date
for negotiable United
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States dollar certificates of deposit having the Index Maturity specified in
the applicable Pricing Supplement as published by the Board of Governors of
the Federal Reserve System in "Statistical Release H.15(519), Selected
Interest Rates" or any successor publication ("H.15(519)") under the heading
"CDs (Secondary Market)," or, if not published by 3:00 P.M., New York City
time, on the related Calculation Date, the rate on such CD Rate Interest
Determination Date for negotiable United States dollar certificates of deposit
of the Index Maturity specified in the applicable Pricing Supplement as
published by the Federal Reserve Bank of New York in its daily statistical
release "Composite 3:30 P.M. Quotations for U.S. Government Securities" or any
successor publication ("Composite Quotations") under the heading "Certificates
of Deposit." If such rate is not yet published in either H.15(519) or
Composite Quotations by 3:00 P.M., New York City time, on the related
Calculation Date, then the CD Rate on such CD Rate Interest Determination Date
will be calculated by the Calculation Agent as the arithmetic mean of the
secondary market offered rates as of 10:00 A.M., New York City time, on such
CD Rate Interest Determination Date of three leading nonbank dealers in
negotiable United States dollar certificates of deposit in The City of New
York (which may include the Agents or their affiliates) selected by the
Calculation Agent for negotiable United States dollar certificates of deposit
of major United States money center banks with a remaining maturity closest to
the Index Maturity specified in the applicable Pricing Supplement in an amount
that is representative for a single transaction in that market at that time;
provided, however, that, if the dealers so selected by the Calculation Agent
are not quoting as mentioned in this sentence, the CD Rate determined as of
such CD Rate Interest Determination Date will be the CD Rate in effect
immediately prior to such CD Rate Interest Determination Date.
CMT RATE. Unless otherwise specified in the applicable Pricing Supplement,
"CMT Rate" means, with respect to any Interest Determination Date relating to
a Floating Rate Note for which the interest rate is determined with reference
to the CMT Rate (a "CMT Rate Interest Determination Date"), the rate displayed
on the Designated CMT Telerate Page under the caption ". . . Treasury Constant
Maturities. . . Federal Reserve Board Release H.15. . . Mondays Approximately
3:45 P.M.," under the column for the Designated CMT Index Maturity for (i), if
the Designated CMT Telerate Page is 7055, the rate on such CMT Rate Interest
Determination Date and (ii), if the Designated CMT Telerate Page is 7052, the
weekly or monthly average, as specified in the applicable Pricing Supplement,
for the week or the month, as applicable, ended immediately preceding the week
or the month, as applicable, in which the related CMT Rate Interest
Determination Date falls. If such rate is no longer displayed on the relevant
page or is not displayed by 3:00 P.M., New York City time, on the related
Calculation Date, then the CMT Rate for such CMT Rate Interest Determination
Date will be such treasury constant maturity rate for the Designated CMT Index
Maturity for such CMT Rate Interest Determination Date as published in
H.15(519). If such rate is no longer published or is not published by 3:00
P.M., New York City time, on the related Calculation Date, then the CMT Rate
for such CMT Rate Interest Determination Date will be such treasury constant
maturity rate for the Designated CMT Index Maturity (or such other United
States Treasury rate for the Designated CMT Index Maturity) for such CMT Rate
Interest Determination Date as may then be published by either the Board of
Governors of the Federal Reserve System or the United States Department of the
Treasury and as the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in
H.15(519). If such information is not provided by 3:00 P.M., New York City
time, on the related Calculation Date, then the CMT Rate on the CMT Rate
Interest Determination Date will be calculated by the Calculation Agent as a
yield to maturity, based on the arithmetic mean of the secondary market
closing offer prices as of approximately 3:30 P.M., New York City time, on
such CMT Rate Interest Determination Date reported, according to their written
records, by three leading United States government securities dealers in The
City of New York (which may include the Agents or their affiliates) (each, a
"Reference Dealer") selected by the Calculation Agent (from five such
Reference Dealers selected by the Calculation Agent and eliminating the
highest quotation (or, in the event of equality, one of the highest) and the
lowest quotation (or, in the event of equality, one of the lowest)), for the
most recently issued direct noncallable fixed rate obligations of the United
States ("Treasury Notes") with an original maturity of approximately the
Designated CMT Index Maturity and a remaining term to maturity of not less
than such Designated CMT Index Maturity minus one year. If the Calculation
Agent is unable to obtain three such Treasury Note quotations, the CMT Rate on
such CMT Rate Interest Determination Date will be calculated by the
Calculation Agent as a yield to maturity based on the arithmetic mean of the
secondary market offered rates as
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of approximately 3:30 P.M., New York City time, on such CMT Rate Interest
Determination Date of three Reference Dealers in The City of New York (from
five such Reference Dealers selected by the Calculation Agent and eliminating
the highest quotation (or, in the event of equality, one of the highest) and
the lowest quotation (or, in the event of equality, one of the lowest)), for
Treasury Notes with an original maturity of the number of years that is the
next highest to the Designated CMT Index Maturity and a remaining term to
maturity closest to the Designated CMT Index Maturity and in an amount of at
least $100 million. If three or four (and not five) of such Reference Dealers
are quoting as described above, then the CMT Rate will be based on the
arithmetic mean of the offered rates obtained and neither the highest nor the
lowest of such quotes will be eliminated; provided, however, that, if fewer
than three Reference Dealers so selected by the Calculation Agent are quoting
as mentioned herein, the CMT Rate determined as of such CMT Rate Interest
Determination Date will be the CMT Rate in effect on such CMT Rate Interest
Determination Date. If two Treasury Notes with an original maturity as
described in the second preceding sentence have remaining terms to maturity
equally close to the Designated CMT Index Maturity, the Calculation Agent will
obtain quotations for the Treasury Note with the shorter remaining term to
maturity.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service (or any successor service) on the page specified in the applicable
Pricing Supplement (or any other page as may replace such page on such
service) for the purpose of displaying Treasury Constant Maturities as
reported in H.15(519). If no such page is specified in the applicable Pricing
Supplement, the Designated CMT Telerate Page shall be 7052 for the most recent
week.
"Designated CMT Index Maturity" means the original period to maturity of the
U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years) specified
in the applicable Pricing Supplement with respect to which the CMT Rate will
be calculated or, if no such maturity is specified in the applicable Pricing
Supplement, 2 years.
COMMERCIAL PAPER RATE. Unless otherwise specified in the applicable Pricing
Supplement, "Commercial Paper Rate" means, with respect to any Interest
Determination Date relating to a Floating Rate Note for which the interest
rate is determined with reference to the Commercial Paper Rate (a "Commercial
Paper Rate Interest Determination Date"), the Money Market Yield (as
hereinafter defined) on such date of the rate for commercial paper having the
Index Maturity specified in the applicable Pricing Supplement as published in
H.15(519) under the heading "Commercial Paper." If such rate is not published
by 3:00 P.M., New York City time, on the related Calculation Date, then the
Commercial Paper Rate on such Commercial Paper Rate Interest Determination
Date will be the Money Market Yield of the rate for commercial paper having
the Index Maturity specified in the applicable Pricing Supplement as published
in Composite Quotations under the heading "Commercial Paper" (with an Index
Maturity of one month or three months being deemed to be equivalent to an
Index Maturity of 30 days or 90 days, respectively). If such rate is not yet
published in either H.15(519) or Composite Quotations by 3:00 P.M., New York
City time, on the related Calculation Date, then the Commercial Paper Rate on
such Commercial Paper Rate Interest Determination Date will be calculated by
the Calculation Agent as the Money Market Yield of the arithmetic mean of the
offered rates at approximately 11:00 A.M., New York City time, on such
Commercial Paper Rate Interest Determination Date of three leading dealers of
commercial paper in The City of New York (which may include the Agents or
their affiliates) selected by the Calculation Agent for commercial paper
having the Index Maturity specified in the applicable Pricing Supplement
placed for an industrial issuer whose bond rating is "Aa", or the equivalent,
from a nationally recognized statistical rating organization; provided,
however, that, if the dealers so selected by the Calculation Agent are not
quoting as mentioned in this sentence, the Commercial Paper Rate determined as
of such Commercial Paper Rate Interest Determination Date will be the
Commercial Paper Rate in effect immediately prior to such Commercial Paper
Rate Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage) calculated in
accordance with the following formula:
D X 360
----------------
Money Market Yield = X 100
360 - (D x M)
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where "D" refers to the applicable per annum rate for commercial paper quoted
on a bank discount basis and expressed as a decimal, and "M" refers to the
actual number of days in the applicable Interest Reset Period.
ELEVENTH DISTRICT COST OF FUNDS RATE. Unless otherwise specified in the
applicable Pricing Supplement, "Eleventh District Cost of Funds Rate" means,
with respect to any Interest Determination Date relating to a Floating Rate
Note for which the interest rate is determined with reference to the Eleventh
District Cost of Funds Rate (an "Eleventh District Cost of Funds Rate Interest
Determination Date"), the rate equal to the monthly weighted average cost of
funds for the calendar month immediately preceding the month in which such
Eleventh District Cost of Funds Rate Interest Determination Date falls, as set
forth under the caption "11th District" on Telerate Page 7058 as of 11:00
A.M., San Francisco time, on such Eleventh District Cost of Funds Rate
Interest Determination Date. If such rate does not appear on Telerate Page
7058 on such Eleventh District Cost of Funds Rate Interest Determination Date,
then the Eleventh District Cost of Funds Rate on such Eleventh District Cost
of Funds Rate Interest Determination Date shall be the monthly weighted
average cost of funds paid by member institutions of the Eleventh Federal Home
Loan Bank District that was most recently announced (the "Index") by the
Federal Home Loan Bank ("FHLB") of San Francisco as such cost of funds for the
calendar month immediately preceding such Eleventh District Cost of Funds Rate
Interest Determination Date. If the FHLB of San Francisco fails to announce
the Index on or prior to such Eleventh District Cost of Funds Rate Interest
Determination Date for the calendar month immediately preceding such Eleventh
District Cost of Funds Rate Interest Determination Date, the Eleventh District
Cost of Funds Rate determined as of such Eleventh District Cost of Funds Rate
Interest Determination Date will be the Eleventh District Cost of Funds Rate
in effect immediately prior to such Eleventh District Cost of Funds Rate
Interest Determination Date.
FEDERAL FUNDS RATE. Unless otherwise specified in the applicable Pricing
Supplement, "Federal Funds Rate" means, with respect to any Interest
Determination Date relating to a Floating Rate Note for which the interest
rate is determined with reference to the Federal Funds Rate (a "Federal Funds
Rate Interest Determination Date"), the rate on such date for United States
dollar federal funds as published in H.15(519) under the heading "Federal
Funds (Effective)" or, if not published by 3:00 P.M., New York City time, on
the related Calculation Date, the rate on such Federal Funds Rate Interest
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate." If such rate is not published in either
H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on the
related Calculation Date, then the Federal Funds Rate on such Federal Funds
Rate Interest Determination Date will be calculated by the Calculation Agent
as the arithmetic mean of the rates for the last transaction in overnight
United States dollar federal funds arranged by three leading brokers of
federal funds transactions in The City of New York (which may include the
Agents or their affiliates) selected by the Calculation Agent prior to 9:00
A.M., New York City time, on such Federal Funds Rate Interest Determination
Date; provided, however, that, if the brokers so selected by the Calculation
Agent are not quoting as mentioned in this sentence, the Federal Funds Rate
determined as of such Federal Funds Rate Interest Determination Date will be
the Federal Funds Rate in effect immediately prior to such Federal Funds Rate
Interest Determination Date.
LIBOR. Unless otherwise specified in the applicable Pricing Supplement,
"LIBOR" means the rate determined in accordance with the following provisions:
(i) With respect to any Interest Determination Date relating to a
Floating Rate Note for which the interest rate is determined with reference
to LIBOR (a "LIBOR Interest Determination Date"), LIBOR will be either: (a)
if "LIBOR Reuters" is specified in the applicable Pricing Supplement, the
arithmetic mean of the offered rates (unless the Designated LIBOR Page by
its terms provides only for a single rate, in which case such single rate
shall be used) for deposits in United States dollars having the Index
Maturity specified in such Pricing Supplement, commencing on the applicable
Interest Reset Date, that appear on the Designated LIBOR Page as of 11:00
A.M., London time, on such LIBOR Interest Determination Date, or (b) if
"LIBOR Telerate" is specified in the applicable Pricing Supplement or if
neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the applicable
Pricing Supplement as the method for calculating LIBOR, the rate for
deposits in United States dollars having the Index Maturity specified in
such Pricing Supplement, commencing on such Interest Reset Date, that
appears on the Designated LIBOR Page as of
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11:00 A.M., London time, on such LIBOR Interest Determination Date. If
fewer than two such offered rates so appear, LIBOR on such LIBOR Interest
Determination Date will be determined in accordance with the provisions
described in clause (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which fewer
than two offered rates appear on the Designated LIBOR Page as specified in
clause (i) above, LIBOR will be the arithmetic mean of the quotations for
deposits in United States dollars for the period of the Index Maturity
specified in the applicable Pricing Supplement, commencing on the
applicable Interest Reset Date, offered to prime banks in the London
interbank market by the principal London offices of four major reference
banks (which may include affiliates of the Agents) in the London interbank
market, as selected by the Calculation Agent, at approximately 11:00 A.M.,
London time, on such LIBOR Interest Determination Date and in a principal
amount that is representative for a single transaction in United States
dollars in such market at such time. If fewer than two such quotations are
so provided, then LIBOR on such LIBOR Interest Determination Date will be
the arithmetic mean of the rates quoted at approximately 11:00 A.M., in
London, England, on such LIBOR Interest Determination Date by three major
banks (which may include affiliates of the Agents) in London, England,
selected by the Calculation Agent for loans in United States dollars to
leading European banks, having the Index Maturity specified in the
applicable Pricing Supplement and in a principal amount that is
representative for a single transaction in United States dollars in such
market at such time; provided, however, that, if the banks so selected by
the Calculation Agent are not quoting as mentioned in this sentence, LIBOR
determined as of such LIBOR Interest Determination Date will be LIBOR in
effect immediately prior to such LIBOR Interest Determination Date.
"Designated LIBOR Page" means (a) if "LIBOR Reuters" is specified in the
applicable Pricing Supplement, the display on the Reuter Monitor Money Rates
Service (or any successor service) on the page specified in such Pricing
Supplement (or any other page that may replace such page in such service) for
the purpose of displaying the London interbank rates of major banks for United
States dollars, or (b) if "LIBOR Telerate" is specified in the applicable
Pricing Supplement or neither "LIBOR Reuters" nor "LIBOR Telerate" is
specified in the applicable Pricing Supplement as the method for calculating
LIBOR, the display on the Dow Jones Telerate Service (or any successor
service) on the page specified in such Pricing Supplement (or any other page
that may replace such page in such service) for the purpose of displaying the
London interbank rates of major banks for United States dollars.
PRIME RATE. Unless otherwise specified in the applicable Pricing Supplement,
"Prime Rate" means, with respect to any Interest Determination Date relating
to a Floating Rate Note for which the interest rate is determined with
reference to the Prime Rate (a "Prime Rate Interest Determination Date"), the
rate on such date as such rate is published in H.15(519) under the heading
"Bank Prime Loan." If such rate is not published prior to 3:00 P.M., New York
City time, on the related Calculation Date, then the Prime Rate shall be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen USPRIME1 Page (as hereinafter defined) as such
bank's prime rate or base lending rate as in effect for such Prime Rate
Interest Determination Date. If fewer than four such rates appear on the
Reuters Screen USPRIME1 Page for such Prime Rate Interest Determination Date,
then the Prime Rate on such Prime Rate Interest Determination Date shall be
the arithmetic mean of the prime rates or base lending rates quoted on the
basis of the actual number of days in the year divided by a 360-day year as of
the close of business on such Prime Rate Interest Determination Date by four
major money center banks (which may include affiliates of the Agents) in The
City of New York selected by the Calculation Agent. If fewer than four such
quotations are so provided, then the Prime Rate on such Prime Rate Interest
Determination Date shall be the arithmetic mean of four prime rates quoted on
the basis of the actual number of days in the year divided by a 360-day year
as of the close of business on such Prime Rate Interest Determination Date as
furnished in The City of New York by the major money center banks, if any,
that have provided such quotations and by a reasonable number of substitute
banks or trust companies (which may include affiliates of the Agents) to
obtain four such prime rate quotations, provided such substitute banks or
trust companies are organized and doing business under the laws of the United
States, or any State thereof, each having total equity capital of at least
$500 million and being subject to supervision or examination by Federal or
State authority, selected by the Calculation Agent to provide such rate
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or rates; provided, however, that, if the banks or trust companies so selected
by the Calculation Agent are not quoting as mentioned in this sentence, the
Prime Rate determined as of such Prime Rate Interest Determination Date will
be the Prime Rate in effect immediately prior to such Prime Rate Interest
Determination Date.
"Reuters Screen USPRIME1 Page" means the display on the Reuter Monitor Money
Rates Service (or any successor service) on the "USPRIME1" page (or such other
page that may replace the USPRIME1 page in such service) for the purpose of
displaying prime rates or base lending rates of major United States banks.
TREASURY RATE. Unless otherwise specified in the applicable Pricing
Supplement, "Treasury Rate" means, with respect to any Interest Determination
Date relating to a Floating Rate Note for which the interest rate is
determined by reference to the Treasury Rate (a "Treasury Rate Interest
Determination Date"), the rate from the auction held on such Treasury Rate
Interest Determination Date (the "Auction") of direct obligations of the
United States ("Treasury Bills") having the Index Maturity specified in the
applicable Pricing Supplement, as such rate is published in H.15(519) under
the heading "Treasury Bills-auction average (investment)" or, if not published
by 3:00 P.M., New York City time, on the related Calculation Date, the auction
average rate of such Treasury Bills (expressed as a bond equivalent on the
basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) as otherwise announced by the United States Department of the Treasury.
If the results of the Auction of Treasury Bills having the Index Maturity
specified in the applicable Pricing Supplement are not reported as provided by
3:00 P.M., New York City time, on the related Calculation Date or if no such
Auction is held, then the Treasury Rate will be calculated by the Calculation
Agent as a yield to maturity (expressed as a bond equivalent on the basis of a
year of 365 or 366 days, as applicable, and applied on a daily basis) of the
arithmetic mean of the secondary market bid rates, as of approximately 3:30
P.M., New York City time, on such Treasury Rate Interest Determination Date,
of three leading United States government securities dealers (which may
include the Agents or their affiliates) selected by the Calculation Agent, for
the issue of Treasury Bills with a remaining maturity closest to the Index
Maturity specified in the applicable Pricing Supplement; provided, however,
that, if the dealers so selected by the Calculation Agent are not quoting as
mentioned in this sentence, the Treasury Rate determined as of such Treasury
Rate Interest Determination Date will be the Treasury Rate in effect
immediately prior to such Treasury Rate Interest Determination Date.
OTHER/ADDITIONAL PROVISIONS; ADDENDUM
Any provisions with respect to the Notes, including the specification and
determination of one or more Interest Rate Bases, the calculation of the
interest rate applicable to a Floating Rate Note, the Interest Payment Dates,
the Stated Maturity Date, any redemption or repayment provisions or any other
term relating thereto, may be modified and/or supplemented as specified under
"Other/Additional Provisions" on the face thereof or in an Addendum relating
thereto, if so specified on the face thereof and described in the applicable
Pricing Supplement.
DISCOUNT NOTES
The Company may offer Notes ("Discount Notes") from time to time that have
an Issue Price (as specified in the applicable Pricing Supplement) that is
less than 100% of the principal amount thereof (i.e., par) by more than a
percentage equal to the product of 0.25% and the number of full years to the
Stated Maturity Date. Discount Notes may not bear any interest currently or
may bear interest at a rate that is below market rates at the time of
issuance. The difference between the Issue Price of a Discount Note and par is
referred to herein as the "Discount." In the event of redemption, repayment or
acceleration of maturity of a Discount Note, the amount payable to the Holder
of such Discount Note will be equal to the sum of (i) the Issue Price
increased by any accruals of Discount and, in the event of any redemption of
such Discount Note (if applicable), multiplied by the Initial Redemption
Percentage (as adjusted by the Annual Redemption Percentage Reduction, if
applicable) and (ii) any unpaid interest accrued thereon to the date of such
redemption, repayment or acceleration of maturity, as the case may be.
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Unless otherwise specified in the applicable Pricing Supplement, for
purposes of determining the amount of Discount that has accrued as of any date
on which a redemption, repayment or acceleration of maturity occurs for a
Discount Note, such Discount will be accrued using a constant yield method.
The constant yield will be calculated using a 30-day month, 360-day year
convention, a compounding period that, except for the Initial Period (as
hereinafter defined), corresponds to the shortest period between Interest
Payment Dates for the applicable Discount Note (with ratable accruals within a
compounding period), a coupon rate equal to the initial coupon rate applicable
to such Discount Note and an assumption that the maturity of such Discount
Note will not be accelerated. If, in the case of an interest bearing Discount
Note, the period from the date of issue to the initial Interest Payment Date
for a Discount Note (the "Initial Period") is shorter than the compounding
period for such Discount Note, a proportionate amount of the yield for an
entire compounding period will be accrued. If, in such case, the Initial
Period is longer than the compounding period, then such period will be divided
into a regular compounding period and a short period with the short period
being treated as provided in the preceding sentence. The accrual of the
applicable Discount may differ from the accrual of original issue discount for
purposes of the Internal Revenue Code of 1986, as amended (the "Code"),
certain Discount Notes may not be treated as having original issue discount
within the meaning of the Code, and Notes other than Discount Notes may be
treated as issued with original issue discount for federal income tax
purposes. See "United States Federal Income Tax Considerations."
INDEXED NOTES
The Company may from time to time offer Notes ("Indexed Notes") with the
amount of principal, premium or interest payable in respect thereof to be
determined by reference to the price or prices of specified commodities or
stocks or to other items, in each case as specified in the applicable Pricing
Supplement. In certain cases, Holders of Indexed Notes may receive a principal
payment on the Maturity Date that is greater than or less than the principal
amount of such Indexed Notes depending upon the relative value on the Maturity
Date of the specified indexed item. Information as to the method for
determining the amount of principal, premium, if any, or interest, if any,
payable in respect of Indexed Notes, certain historical information with
respect to the specified indexed item and any material tax considerations
associated with an investment in Indexed Notes will be specified in the
applicable Pricing Supplement. See also "Risk Factors."
AMORTIZING NOTES
The Company may from time to time offer Notes ("Amortizing Notes") with the
amount of principal thereof and interest thereon payable in installments over
the term of such Notes. Unless otherwise specified in the applicable Pricing
Supplement, interest on each Amortizing Note will be computed on the basis of
a 360-day year of twelve 30-day months. Payments with respect to Amortizing
Notes will be applied first to interest due and payable thereon and then to
the reduction of the unpaid principal amount thereof. Further information
concerning additional terms and provisions of Amortizing Notes will be
specified in the applicable Pricing Supplement, including a table setting
forth repayment information for such Amortizing Notes.
BOOK-ENTRY NOTES
The Company has established a depositary arrangement with The Depository
Trust Company with respect to the Book-Entry Notes, the terms of which are
summarized below. Any additional or differing terms of the depositary
arrangement with respect to the Book-Entry Notes will be described in the
applicable Pricing Supplement.
Upon issuance, all Book-Entry Notes of an issue thereof of like tenor and
terms and up to $200,000,000 in aggregate principal amount will be represented
by a single Global Security. Each Global Security will be deposited with, or
on behalf of, the Depositary and will be registered in the name of the
Depositary or a nominee of the Depositary. No Global Security may be
transferred except as a whole by a nominee of the Depositary to the Depositary
or to another nominee of the Depositary, or by the Depositary or such nominee
to a successor of the Depositary or a nominee of such successor.
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So long as the Depositary or its nominee is the registered owner of a Global
Security, the Depositary or its nominee, as the case may be, will be the sole
Holder of the Book-Entry Notes represented thereby for all purposes under the
Indenture. Except as otherwise provided below, the Beneficial Owners of the
Global Security or Securities representing Book-Entry Notes will not be
entitled to receive physical delivery of Certificated Notes and will not be
considered the Holders thereof for any purpose under the Indenture.
Accordingly, each Beneficial Owner must rely on the procedures of the
Depositary and, if such Beneficial Owner is not a Participant, on the
procedures of the Participant through which such Beneficial Owner owns its
interest in order to exercise any rights of a Holder under such Global
Security or the Indenture. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of such securities in
certificated form. Such laws may impair the ability of the Company to issue
Book-Entry Notes with respect to a particular issue of such Notes if persons
subject to such laws purchase any of such Notes.
Unless otherwise specified in the applicable Pricing Supplement, each Global
Security representing Book-Entry Notes will be exchangeable for Certificated
Notes of like tenor and terms and of differing authorized denominations in a
like aggregate principal amount, only if (i) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for the
Global Securities or the Company becomes aware that the Depositary has ceased
to be a clearing agency registered under the Exchange Act and, in any such
case, the Company shall not have appointed a successor to the Depositary
within 60 days thereafter, (ii) the Company, in its sole discretion,
determines that the Global Securities shall be exchangeable for Certificated
Notes or (iii) an Event of Default shall have occurred and be continuing with
respect to the Notes under the Indenture. Upon any such exchange, the
Certificated Notes shall be registered in the names of the Beneficial Owners
of the Global Security or Securities representing Book-Entry Notes, which
names shall be provided by the Depositary's relevant Participants (as
identified by the Depositary) to the Paying Agent.
The following is based on information furnished by the Depositary:
The Depositary will act as a securities depository for the Book-Entry
Notes. The Book-Entry Notes will be issued as fully registered securities
registered in the name of Cede & Co. (the Depositary's nominee). One fully
registered Global Security will be issued for each issue of Book-Entry
Notes, each in the aggregate principal amount of such issue, and will be
deposited with the Depositary. If, however, the aggregate principal amount
of any issue exceeds $200,000,000, one Global Security will be issued with
respect to each $200,000,000 of principal amount and an additional Global
Security will be issued with respect to any remaining principal amount of
such issue.
The Depositary is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code,
and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. The Depositary holds securities that its
participants ("Participants") deposit with the Depositary. The Depositary
also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in Participants'
accounts, thereby eliminating the need for physical movement of securities
certificates. Direct Participants of the Depositary ("Direct Participants")
include securities brokers and dealers (including the Agents), banks, trust
companies, clearing corporations and certain other organizations. The
Depositary is owned by a number of its Direct Participants and by the New
York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to the Depositary's
system is also available to others such as securities brokers and dealers,
banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly
("Indirect Participants"). The rules applicable to the Depositary and its
Participants are on file with the Securities and Exchange Commission.
Purchases of Book-Entry Notes under the Depositary's system must be made
by or through Direct Participants, which will receive a credit for such
Book-Entry Notes on the Depositary's records. The ownership interest of
each actual purchaser of each Book-Entry Note represented by a Global
Security
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("Beneficial Owner") is in turn to be recorded on the records of Direct
Participants and Indirect Participants. Beneficial Owners will not receive
written confirmation from the Depositary of their purchase, but Beneficial
Owners are expected to receive written confirmations providing details of
the transaction, as well as periodic statements of their holdings, from the
Direct Participants or Indirect Participants through which such Beneficial
Owners entered into the transaction. Transfers of ownership interests in a
Global Security representing Book-Entry Notes are to be accomplished by
entries made on the books of Participants acting on behalf of Beneficial
Owners. Beneficial Owners of a Global Security representing Book-Entry
Notes will not receive Certificated Notes representing their ownership
interests therein, except in the event that use of the book-entry system
for such Book-Entry Notes is discontinued.
To facilitate subsequent transfers, all Global Securities representing
Book-Entry Notes which are deposited with, or on behalf of, the Depositary
are registered in the name of the Depositary's nominee, Cede & Co. The
deposit of Global Securities with, or on behalf of, the Depositary and
their registration in the name of Cede & Co. effect no change in beneficial
ownership. The Depositary has no knowledge of the actual Beneficial Owners
of the Global Securities representing the Book-Entry Notes; the
Depositary's records reflect only the identity of the Direct Participants
to whose accounts such Book-Entry Notes are credited, which may or may not
be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by the Depositary to
Direct Participants, by Direct Participants to Indirect Participants, and
by Direct Participants and Indirect Participants to Beneficial Owners will
be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.
Neither the Depositary nor Cede & Co. will consent or vote with respect
to the Global Securities representing the Book-Entry Notes. Under its usual
procedures, the Depositary mails an Omnibus Proxy to the Company as soon as
possible after the applicable record date. The Omnibus Proxy assigns Cede &
Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Book-Entry Notes are credited on the applicable record date
(identified in a listing attached to the Omnibus Proxy).
Principal, premium, if any, or interest, if any, payments on the Global
Securities representing the Book-Entry Notes will be made in immediately
available funds to the Depositary. The Depositary's practice is to credit
Direct Participants' accounts on the applicable payment date in accordance
with their respective holdings shown on the Depositary's records unless the
Depositary has reason to believe that it will not receive payment on such
date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered
in "street name", and will be the responsibility of such Participant and
not of the Depositary, the Trustee, the Paying Agent or the Company,
subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of principal, premium, if any, or interest, if
any, to the Depositary is the responsibility of the Company and the Paying
Agent, disbursement of such payments to Direct Participants shall be the
responsibility of the Depositary, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct Participants and
Indirect Participants.
If applicable, redemption notices shall be sent to Cede & Co. If less
than all of the Book-Entry Notes of like tenor and terms are being
redeemed, the Depositary's practice is to determine by lot the amount of
the interest of each Direct Participant in such issue to be redeemed.
A Beneficial Owner shall give notice of any option to elect to have its
Book-Entry Notes repaid by the Company, through its Participant, to the
Paying Agent, and shall effect delivery of such Book-Entry Notes by causing
the Direct Participant to transfer the Participant's interest in the Global
Security or Securities representing such Book-Entry Notes, on the
Depositary's records, to the Paying Agent. The requirement for physical
delivery of Book-Entry Notes in connection with a demand for repayment will
be deemed satisfied when the ownership rights in the Global Security or
Securities representing such Book-Entry Notes are transferred by Direct
Participants on the Depositary's records.
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The Depositary may discontinue providing its services as securities
depository with respect to the Book-Entry Notes at any time by giving
reasonable notice to the Company or the Paying Agent. Under such
circumstances, if a successor securities depository is not obtained,
Certificated Notes are required to be printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through the Depositary (or a successor securities depository). In
that event, Certificated Notes will be printed and delivered.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary of certain United States Federal income tax
consequences of the purchase, ownership and disposition of the Notes is based
upon laws, regulations, rulings and decisions now in effect, all of which are
subject to change (including changes in effective dates) or possible differing
interpretations. It deals only with Notes held as capital assets and does not
purport to deal with persons in special tax situations, such as financial
institutions, insurance companies, regulated investment companies, dealers in
securities or currencies, persons holding Notes as a hedge against currency
risks or as a position in a "straddle" for tax purposes or persons whose
functional currency is not the United States dollar. It also does not deal
with holders other than original purchasers (except where otherwise
specifically noted). Persons considering the purchase of the Notes should
consult their own tax advisors concerning the application of United States
Federal income tax laws to their particular situations as well as any
consequences of the purchase, ownership and disposition of the Notes arising
under the laws of any other taxing jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a Note
that is for United States Federal income tax purposes (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States or of any
political subdivision thereof, (iii) an estate or trust the income of which is
subject to United States Federal income taxation regardless of its source or
(iv) any other person whose income or gain in respect of a Note is effectively
connected with the conduct of a United States trade or business. As used
herein, the term "non-U.S. Holder" means a beneficial owner of a Note that is
not a U.S. Holder.
U.S. HOLDERS
Payments of Interest
Payments of interest on a Note generally will be taxable to a U.S. Holder as
ordinary interest income at the time such payments are accrued or are received
(in accordance with the U.S. Holder's regular method of tax accounting).
Original Issue Discount
The following summary is a general discussion of the United States Federal
income tax consequences to U.S. Holders of the purchase, ownership and
disposition of Notes issued with original issue discount ("Original Issue
Discount Notes"). The following summary is based upon final Treasury
regulations (the "OID Regulations") released by the Internal Revenue Service
("IRS") on January 27, 1994, as amended on June 11, 1996, under the original
issue discount provisions of the Code.
For United States Federal income tax purposes, original issue discount is
the excess of the stated redemption price at maturity of a Note over its issue
price, if such excess equals or exceeds a de minimis amount (generally 1/4 of
1% of the Note's stated redemption price at maturity multiplied by the number
of complete years to its maturity from its issue date or, in the case of a
Note providing for the payment of any amount other than qualified stated
interest (as hereinafter defined) prior to maturity, multiplied by the
weighted average maturity of such
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Note). The issue price of each Note in an issue of Notes equals the first
price at which a substantial amount of such Notes has been sold (ignoring
sales to 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 Note is the sum of all payments provided by
the Note other than "qualified stated interest" payments. The term "qualified
stated interest" generally means stated interest that is unconditionally
payable in cash or property (other than debt instruments of the issuer) at
least annually at a single fixed rate. In addition, under the OID Regulations,
if a Note bears interest for one or more accrual periods at a rate below the
rate applicable for the remaining term of such Note (e.g., Notes with teaser
rates or interest holidays) and if the greater of either the resulting
foregone interest on such Note or any "true" discount on such Note (i.e., the
excess of the Note's stated principal amount over its issue price) equals or
exceeds a specified de minimis amount, then the stated interest on the Note
would be treated as original issue discount rather than qualified stated
interest.
Payments of qualified stated interest on a Note are taxable to a U.S. Holder
as ordinary interest income at the time such payments are accrued or are
received (in accordance with the U.S. Holder's regular method of tax
accounting). A U.S. Holder of an Original Issue Discount Note must include
original issue discount in income as ordinary interest for United States
Federal income tax purposes as it accrues under a constant yield method in
advance of receipt of the cash payments attributable to such income,
regardless of such U.S. Holder's regular method of tax accounting. In general,
the amount of original issue discount included in income by the initial U.S.
Holder of an Original Issue Discount Note is the sum of the daily portions of
original issue discount with respect to such Original Issue Discount Note for
each day during the taxable year (or portion of the taxable year) on which
such U.S. Holder held such Original Issue Discount Note. The "daily portion"
of original issue discount on any Original Issue Discount Note is determined
by allocating to each day in any accrual period a ratable portion of the
original issue discount allocable to that accrual period. An "accrual period"
may be of any length and the accrual periods may vary in length over the term
of the Original Issue Discount Note, provided that each accrual period is no
longer than one year and each scheduled payment of principal or interest
occurs on either the first or last day of an accrual period. The amount of
original issue discount allocable to each accrual period is generally equal to
the difference between (i) the product of the Original Issue Discount Note's
adjusted issue price at the beginning of such accrual period and its yield to
maturity (determined on the basis of compounding at the close of each accrual
period and appropriately adjusted to take into account the length of the
particular accrual period) and (ii) the amount of any qualified stated
interest payments allocable to such accrual period. The "adjusted issue price"
of an Original Issue Discount Note at the beginning of any accrual period is
the sum of the issue price of the Original Issue Discount Note plus the amount
of original issue discount allocable to all prior accrual periods minus the
amount of any prior payments on the Original Issue Discount Note that were not
qualified stated interest payments. Under these rules, U.S. Holders generally
will have to include in income increasingly greater amounts of original issue
discount in successive accrual periods.
A U.S. Holder who purchases an Original Issue Discount Note for an amount
that is greater than its adjusted issue price as of the purchase date and less
than or equal to the sum of all amounts payable on the Original Issue Discount
Note after the purchase date other than payments of qualified stated interest,
will be considered to have purchased the Original Issue Discount Note at an
"acquisition premium." Under the acquisition premium rules, the amount of
original issue discount which such U.S. Holder must include in its gross
income with respect to such Original Issue Discount Note for any taxable year
(or portion thereof in which the U.S. Holder holds the Original Issue Discount
Note) will be reduced (but not below zero) by the portion of the acquisition
premium properly allocable to the period.
Under the OID Regulations, Floating Rate Notes and Indexed Notes ("Variable
Notes") are subject to special rules whereby a Variable Note will qualify as a
"variable rate debt instrument" if (a) the issue price does not exceed the
total noncontingent principal payments due under the Variable Note by more
than a specified de minimis amount and (b) it provides for stated interest,
paid or compounded at least annually, at current values of (i) one or more
qualified floating rates, (ii) a single fixed rate and one or more qualified
floating rates, (iii) a single objective rate, or (iv) a single fixed rate and
a single objective rate that is a qualified inverse floating rate.
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A "qualified floating rate" is any variable rate where variations in the
value of such rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the
Variable Note is denominated. Although a multiple of a qualified floating rate
will generally not itself constitute a qualified floating rate, a variable
rate equal to the product of a qualified floating rate and a fixed multiplier
that is greater than .65 but not more than 1.35 will constitute a qualified
floating rate. A variable rate equal to the product of a qualified floating
rate and a fixed multiplier that is greater than .65 but not more than 1.35,
increased or decreased by a fixed rate, will also constitute a qualified
floating rate. In addition, under the OID Regulations, two or more qualified
floating rates that can reasonably be expected to have approximately the same
values throughout the term of the Variable Note (e.g., two or more qualified
floating rates with values within 25 basis points of each other as determined
on the Variable Note's issue date) will be treated as a single qualified
floating rate. Notwithstanding the foregoing, a variable rate that would
otherwise constitute a qualified floating rate but which is subject to one or
more restrictions such as a maximum numerical limitation (i.e., a cap) or a
minimum numerical limitation (i.e., a floor) may, under certain circumstances,
fail to be treated as a qualified floating rate under the OID Regulations
unless such cap or floor is fixed throughout the term of the Note. An
"objective rate" is a rate that is not itself a qualified floating rate but
which is determined using a single fixed formula and which is based upon
objective financial or economic information. A rate will not qualify as an
objective rate if it is based on information that is within the control of the
issuer (or a related party) or that is unique to the circumstances of the
issuer (or a related party), such as dividends, profits or the value of the
issuer's stock (although a rate does not fail to be an objective rate merely
because it is based on the credit quality of the issuer). A "qualified inverse
floating rate" is any objective rate where such rate is equal to a fixed rate
minus a qualified floating rate, as long as variations in the rate can
reasonably be expected to reflect inversely contemporaneous variations in the
qualified floating rate. The OID Regulations also provide that, if a Variable
Note provides for stated interest at a fixed rate for an initial period of one
year or less followed by a variable rate that is either a qualified floating
rate or an objective rate and if the variable rate on the Variable Note's
issue date is intended to approximate the fixed rate (e.g., the value of the
variable rate on the issue date does not differ from the value of the fixed
rate by more than 25 basis points), then the fixed rate and the variable rate
together will constitute either a single qualified floating rate or objective
rate, as the case may be.
If a Variable Note that provides for stated interest at either a single
qualified floating rate or a single objective rate throughout the term thereof
qualifies as a "variable rate debt instrument" under the OID Regulations and
if interest on such Note is unconditionally payable in cash or property (other
than debt instruments of the issuer) at least annually, then all stated
interest on such Note will constitute qualified stated interest and will be
taxed accordingly. Thus, a Variable Note that provides for stated interest at
either a single qualified floating rate or a single objective rate throughout
the term thereof and that qualifies as a "variable rate debt instrument" under
the OID Regulations will generally not be treated as having been issued with
original issue discount unless the Variable Note is issued at a "true"
discount (i.e., at a price below the Note's stated principal amount) in excess
of a specified de minimis amount. The amount of qualified stated interest and
the amount of original issue discount, if any, that accrues during an accrual
period on such Variable Note is determined under the rules applicable to fixed
rate debt instruments by assuming that the variable rate is a fixed rate equal
to (i) 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 (ii) in the case of an objective rate
(other than a qualified inverse floating rate), a fixed rate that reflects the
yield that is reasonably expected for the Variable Note. The qualified stated
interest allocable to an accrual period is increased (or decreased) if the
interest actually paid during an accrual period exceeds (or is less than) the
interest assumed to be paid during the accrual period pursuant to the
foregoing rules.
In general, any other Variable Note that qualifies as a "variable rate debt
instrument" will be converted into an "equivalent" fixed rate debt instrument
for purposes of determining the amount and accrual of original issue discount
and qualified stated interest on the Variable Note. The OID Regulations
generally require that such a Variable Note be converted into an "equivalent"
fixed rate debt instrument by substituting any qualified floating rate or
qualified inverse floating rate provided for under the terms of the Variable
Note with a fixed rate equal to the value of the qualified floating rate or
qualified inverse floating rate, as the case may be, as of the
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Variable Note's issue date. Any objective rate (other than a qualified inverse
floating rate) provided for under the terms of the Variable Note is converted
into a fixed rate that reflects the yield that is reasonably expected for the
Variable Note. In the case of a Variable Note that qualifies as a "variable
rate debt instrument" and provides for stated interest at a fixed rate in
addition to either one or more qualified floating rates or a qualified inverse
floating rate, the fixed rate is initially converted into a qualified floating
rate (or a qualified inverse floating rate, if the Variable Note provides for
a qualified inverse floating rate). Under such circumstances, the qualified
floating rate or qualified inverse floating rate that replaces the fixed rate
must be such that the fair market value of the Variable Note as of the
Variable Note's issue date is approximately the same as the fair market value
of an otherwise identical debt instrument that provides for either the
qualified floating rate or qualified inverse floating rate rather than the
fixed rate. Subsequent to converting the fixed rate into either a qualified
floating rate or a qualified inverse floating rate, the Variable Note is then
converted into an "equivalent" fixed rate debt instrument in the manner
described above.
Once the Variable Note is converted into an "equivalent" fixed rate debt
instrument pursuant to the foregoing rules, the amount of original issue
discount and qualified stated interest, if any, are determined for the
"equivalent" fixed rate debt instrument by applying the general original issue
discount rules to the "equivalent" fixed rate debt instrument and a U.S.
Holder of the Variable Note will account for such original issue discount and
qualified stated interest as if the U.S. Holder held the "equivalent" fixed
rate debt instrument. For each accrual period appropriate adjustments will be
made to the amount of qualified stated interest or original issue discount
assumed to have been accrued or paid with respect to the "equivalent" fixed
rate debt instrument if such amounts differ from the actual amount of interest
accrued or paid on the Variable Note during the accrual period.
If a Variable Note does not qualify as a "variable rate debt instrument"
under the OID Regulations, then the Variable Note would be treated as a
contingent payment debt obligation. It is not entirely clear under current law
how a Variable Note would be taxed if such Note were treated as a contingent
payment debt obligation. U.S. Holders should be aware that on June 11, 1996
the Treasury Department issued final regulations (the "CPDI Regulations")
concerning the proper United States Federal income tax treatment of contingent
payment debt instruments. In general, the CPDI Regulations would cause the
timing and character of income, gain or loss reported on a contingent payment
debt instrument to differ substantially from the timing and character of
income, gain or loss reported on a contingent payment debt instrument under
general principles of current United States Federal income tax law.
Specifically, the CPDI Regulations generally require a U.S. Holder of such an
instrument to include future contingent and noncontingent interest payments in
income as such interest accrues based upon a projected payment schedule.
Moreover, in general, under the CPDI Regulations, any gain recognized by a
U.S. Holder on the sale, exchange, or retirement of a contingent payment debt
instrument will be treated as ordinary income and all or a portion of any loss
realized could be treated as ordinary loss as opposed to capital loss
(depending upon the circumstances). The CPDI Regulations apply to debt
instruments issued on or after August 13, 1996. The proper United States
Federal income tax treatment of Variable Notes that are treated as contingent
payment debt obligations will be more fully described in the applicable
Pricing Supplement. Furthermore, any other special United States Federal
income tax considerations, not otherwise discussed herein, which are
applicable to any particular issue of Notes will be discussed in the
applicable Pricing Supplement.
Certain of the Notes (i) may be redeemable at the option of the Company
prior to their stated maturity (a "call option") or (ii) may be repayable at
the option of the holder prior to their stated maturity (a "put option").
Notes containing such features may be subject to rules that differ from the
general rules discussed above. Investors intending to purchase Notes with such
features should consult their own tax advisors, since the original issue
discount consequences will depend, in part, on the particular terms and
features of the purchased Notes.
U.S. Holders may generally, upon election, include in income all interest
(including stated interest, acquisition discount, original issue discount, de
minimis original issue discount, market discount, de minimis market discount,
and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium) that accrues on a debt instrument by using the constant
yield method applicable to original issue discount, subject to certain
limitations and exceptions.
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Short-Term Notes
Notes that have a fixed maturity of one year or less ("Short-Term Notes")
will be treated as having been issued with original issue discount. In
general, an individual or other cash method U.S. Holder is not required to
accrue such original issue discount unless the U.S. Holder elects to do so. If
such an election is not made, any gain recognized by the U.S. Holder on the
sale, exchange or maturity of the Short-Term Note will be ordinary income to
the extent of the original issue discount accrued on a straight-line basis, or
upon election under the constant yield method (based on daily compounding),
through the date of sale or maturity, and a portion of the deductions
otherwise allowable to the U.S. Holder for interest on borrowings allocable to
the Short-Term Note will be deferred until a corresponding amount of income is
realized. U.S. Holders who report income for United States Federal income tax
purposes under the accrual method, and certain other holders including banks
and dealers in securities, are required to accrue original issue discount on a
Short-Term Note on a straight-line basis unless an election is made to accrue
the original issue discount under a constant yield method (based on daily
compounding).
Market Discount
If a U.S. Holder purchases a Note, other than an Original Issue Discount
Note, for an amount that is less than its issue price (or, in the case of a
subsequent purchaser, its stated redemption price at maturity) or, in the case
of an Original Issue Discount Note, for an amount that is less than its
adjusted issue price as of the purchase date, such U.S. Holder will be treated
as having purchased such Note at a "market discount," unless such market
discount is less than a specified de minimis amount. (The market discount
rules do not apply to Short-Term Notes.)
Under the market discount rules, a U.S. Holder will be required to treat any
partial principal payment (or, in the case of an Original Issue Discount Note,
any payment that does not constitute qualified stated interest) on, or any
gain realized on the sale, exchange, retirement or other disposition of, a
Note as ordinary income to the extent of the lesser of (i) the amount of such
payment or realized gain or (ii) the market discount which has not previously
been included in income and is treated as having accrued on such Note at the
time of such payment or disposition. Market discount will be considered to
accrue ratably during the period from the date of acquisition to the maturity
date of the Note, unless the U.S. Holder elects to accrue market discount on
the basis of semiannual compounding.
A U.S. Holder may be required to defer the deduction of all or a portion of
the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a Note with market discount until the maturity of the Note
or certain earlier dispositions, because a current deduction is only allowed
to the extent the interest expense exceeds an allocable portion of market
discount. A U.S. Holder may elect to include market discount in income
currently as it accrues (on either a ratable or semiannual compounding basis),
in which case the rules described above regarding the treatment as ordinary
income of gain upon the disposition of the Note and upon the receipt of
certain cash payments and regarding the deferral of interest deductions will
not apply. Generally, such currently included market discount is treated as
ordinary interest for United States Federal income tax purposes. Such an
election will apply to all debt instruments acquired by the U.S. Holder on or
after the first day of the first taxable year to which such election applies
and may be revoked only with the consent of the IRS.
Premium
If a U.S. Holder purchases a Note for an amount that is greater than the sum
of all amounts payable on the Note after the purchase date other than payments
of qualified stated interest, such U.S. Holder will be considered to have
purchased the Note with "amortizable bond premium" equal in amount to such
excess. A U.S. Holder may elect to amortize such premium using a constant
yield method over the remaining term of the Note and may offset interest
otherwise required to be included in respect of the Note during any taxable
year by the amortized amount of such excess for the taxable year. If the Note
may, however, be optionally redeemed after the U.S. Holder acquires it at a
price in excess of its stated redemption price at maturity, special rules
would apply which could result in a deferral of the amortization of some bond
premium until later in the term of the Note. Any
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<PAGE>
election to amortize bond premium applies to all taxable debt instruments then
owned and thereafter acquired by the U.S. Holder on or after the first day of
the first taxable year to which such election applies and may be revoked only
with the consent of the IRS.
Disposition of a Note
Except as discussed above, upon the sale, exchange or retirement of a Note,
a U.S. Holder generally will recognize taxable gain or loss equal to the
difference between the amount realized on the sale, exchange or retirement
(other than amounts representing accrued and unpaid interest) and such U.S.
Holder's adjusted tax basis in the Note. A U.S. Holder's adjusted tax basis in
a Note generally will equal such U.S. Holder's initial investment in the Note
increased by any original issue discount included in income (and accrued
market discount, if any, if the U.S. Holder has included such market discount
in income) and decreased by the amount of any payments, other than qualified
stated interest payments, received and amortizable bond premium taken with
respect to such Note. Such gain or loss generally will be long-term capital
gain or loss if the Note were held for more than one year.
NON-U.S. HOLDERS
A non-U.S. Holder will not be subject to United States Federal income taxes
on payments of principal, premium (if any) or interest (including original
issue discount, if any) on a Note, unless such non-U.S. Holder is a direct or
indirect 10% or greater shareholder of the Company, a controlled foreign
corporation related to the Company or a bank receiving interest described in
section 881(c)(3)(A) of the Code. To qualify for the exemption from taxation,
the last United States payor in the chain of payment prior to payment to a
non-U.S. Holder (the "Withholding Agent") must have received in the year in
which a payment of interest or principal occurs, or in either of the two
preceding calendar years, a statement that (i) is signed by the beneficial
owner of the Note under penalties of perjury, (ii) certifies that such owner
is not a U.S. Holder and (iii) provides the name and address of the beneficial
owner. The statement may be made on an IRS Form W-8 or a substantially similar
form, and the beneficial owner must inform the Withholding Agent of any change
in the information on the statement within 30 days of such change. If a Note
is held through a securities clearing organization or certain other financial
institutions, the organization or institution may provide a signed statement
to the Withholding Agent. In such case, however, the signed statement must be
accompanied by a copy of the IRS Form W-8 or the substitute form provided by
the beneficial owner to the organization or institution. The Treasury
Department is considering implementation of further certification requirements
aimed at determining whether the issuer of a debt obligation is related to
holders thereof.
Generally, a non-U.S. Holder will not be subject to Federal income taxes on
any amount which constitutes capital gain upon retirement or disposition of a
Note, provided the gain is not effectively connected with the conduct of a
trade or business in the United States by the non-U.S. Holder. Certain other
exceptions may be applicable, and a non-U.S. Holder should consult its tax
advisor in this regard.
The Notes will not be includible in the estate of a non-U.S. Holder unless
the individual is a direct or indirect 10% or greater shareholder of the
Company or, at the time of such individual's death, payments in respect of the
Notes would have been effectively connected with the conduct by such
individual of a trade or business in the United States.
BACKUP WITHHOLDING
Backup withholding of United States Federal income tax at a rate of 31% may
apply to payments made in respect of the Notes to registered owners who are
not "exempt recipients" and who fail to provide certain identifying
information (such as the registered owner's taxpayer identification number) in
the required manner. Generally, individuals are not exempt recipients, whereas
corporations and certain other entities generally are exempt recipients.
Payments made in respect of the Notes to a U.S. Holder must be reported to the
IRS, unless
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<PAGE>
the U.S. Holder is an exempt recipient or establishes an exemption. Compliance
with the identification procedures described in the preceding section would
establish an exemption from backup withholding for those non-U.S. Holders who
are not exempt recipients.
In addition, upon the sale of a Note to (or through) a broker, the broker
must withhold 31% of the entire purchase price, unless either (i) the broker
determines that the seller is a corporation or other exempt recipient or (ii)
the seller provides, in the required manner, certain identifying information
and, in the case of a non-U.S. Holder, certifies that such seller is a non-
U.S. Holder (and certain other conditions are met). Such a sale must also be
reported by the broker to the IRS, unless either (i) the broker determines
that the seller is an exempt recipient or (ii) the seller certifies its non-
U.S. status (and certain other conditions are met). Certification of the
registered owner's non-U.S. status would be made normally on an IRS Form W-8
under penalties of perjury, although in certain cases it may be possible to
submit other documentary evidence.
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States Federal income tax provided the required
information is furnished to the IRS.
PLAN OF DISTRIBUTION
The Notes are being offered on a continuing basis for sale by the Company to
or through Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Lehman Brothers Inc., Morgan Stanley & Co. Incorporated and
NationsBanc Capital Markets, Inc. (the "Agents"). The Agents, individually or
in a syndicate, may purchase Notes, as principal, from the Company from time
to time for resale to investors and other purchasers at varying prices
relating to prevailing market prices at the time of resale as determined by
the applicable Agent or, if so specified in the applicable Pricing Supplement,
for resale at a fixed offering price. If agreed to by the Company and an
Agent, such Agent may also utilize its reasonable efforts on an agency basis
to solicit offers to purchase the Notes at 100% of the principal amount
thereof, unless otherwise specified in the applicable Pricing Supplement. The
Company will pay a commission to an Agent, ranging from .125% to .750% of the
principal amount of each Note, depending upon its stated maturity, sold
through such Agent as an agent of the Company. Commissions with respect to
Notes with stated maturities in excess of 30 years that are sold through an
Agent as an agent of the Company will be negotiated between the Company and
such Agent at the time of such sale.
Unless otherwise specified in the applicable Pricing Supplement, any Note
sold to an Agent as principal will be purchased by such Agent at a price equal
to 100% of the principal amount thereof less a percentage of the principal
amount equal to the commission applicable to an agency sale of a Note of
identical maturity. An Agent may sell Notes it has purchased from the Company
as principal to certain dealers less a concession equal to all or any portion
of the discount received in connection with such purchase. Such Agent may
allow, and such dealers may reallow, a discount to certain other dealers.
After the initial offering of Notes, the offering price (in the case of Notes
to be resold on a fixed offering price basis), the concession and the
reallowance may be changed.
Notwithstanding the foregoing, the Company may issue and sell Notes, on
terms that are substantially similar (including discounts and commissions) to
the terms described above, to or through one or more agents, dealers or
underwriters other than the Agents or, on its own behalf, directly to the
investors or other purchasers thereof without the intervention or any agents,
dealers or underwriters.
The Company reserves the right to withdraw, cancel or modify the offer made
hereby without notice and may reject offers in whole or in part (whether
placed directly with the Company or through an Agent). Each Agent will have
the right, in its discretion reasonably exercised, to reject in whole or in
part any offer to purchase Notes received by it on an agency basis.
S-25
<PAGE>
Unless otherwise specified in the applicable Pricing Supplement, payment of
the purchase price of the Notes will be required to be made in immediately
available funds in United States dollars in The City of New York on the date
of settlement. See "Description of Notes--General."
Upon issuance, the Notes will not have an established trading market. The
Notes will not be listed on any securities exchange. The Agents may from time
to time purchase and sell Notes in the secondary market, but the Agents are
not obligated to do so, and there can be no assurance that there will be a
secondary market for the Notes or that there will be liquidity in the
secondary market if one develops. From time to time, the Agents may make a
market in the Notes, but the Agents are not obligated to do so and may
discontinue any market-making activity at any time.
The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act. The Company has agreed to indemnify the Agents against, and to
provide contribution with respect to, certain liabilities (including
liabilities under the Securities Act). The Company has agreed to reimburse the
Agents for certain other expenses.
In the ordinary course of its business, the Agents and their affiliates have
engaged and may in the future engage in investment and commercial banking
transactions with the Company and certain of its affiliates.
From time to time, the Company may issue and sell other Debt Securities
described in the accompanying Prospectus, and the amount of Notes offered
hereby is subject to reduction as a result of such sales.
S-26
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+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 THESE SECURITIES 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 STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED DECEMBER 5, 1996
PROSPECTUS
$500,000,000
LOGO
DEBT SECURITIES
-----------
Halliburton Company (the "Company") may offer and sell from time to time, in
one or more series, its debt securities issued and issuable from time to time
under either of the Indentures, as hereinafter defined (the "Debt Securities"),
with an aggregate initial offering price not to exceed $500,000,000, on terms
to be determined at the time of offering. The specific designation, aggregate
principal amount, ranking as senior or subordinated Debt Securities, maturity,
rate (or method of determining the same) and time of payment of interest, if
any, purchase price, any terms for redemption or repurchase or conversion into
Common Stock, par value $2.50 per share, of the Company ("Common Stock"), the
principal amounts to be purchased by or through agents, dealers or
underwriters, if any, and other special terms in connection with the offering
and sale of the series of Debt Securities in respect of which this Prospectus
is being delivered and any listing of the Debt Securities on a securities
exchange are set forth in the accompanying Prospectus Supplement (the
"Prospectus Supplement") or in the applicable pricing supplement hereto (each,
a "Pricing Supplement").
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-----------
The Debt Securities may be sold (i) through underwriting syndicates
represented by managing underwriters or by underwriters without a syndicate;
(ii) through agents or dealers designated from time to time; or (iii) directly
to purchasers. The names of any underwriters or agents of the Company involved
in the sale of the Debt Securities in respect of which this Prospectus is being
delivered and any applicable commissions or discounts are set forth in the
Prospectus Supplement or in the applicable Pricing Supplement. The net proceeds
to the Company from such sale are also set forth in the accompanying Prospectus
Supplement or in the applicable Pricing Supplement. See "Distribution" for
possible indemnification arrangements for any such underwriters and agents.
December , 1996
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "SEC"). Such reports, proxy statements
and other information may be obtained from the web site that the SEC maintains
at http://www.sec.gov. In addition, reports, proxy statements and other
information filed by the Company with the SEC can be inspected and copied at
the public reference facilities maintained by the SEC at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, as well as at the regional offices of
the SEC at the Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661, and Seven World Trade Center, New York, New York 10048. Copies
of such material may also be obtained from the Public Reference Section of the
SEC in its Washington, D.C. office at prescribed rates. The Common Stock is
listed on the New York Stock Exchange. The reports, proxy and information
statements and other information concerning the Company described above may
also be inspected at the New York Stock Exchange, 20 Broad Street, New York,
New York 10005.
Reports, proxy statements and other information concerning the Company may
also be obtained electronically through a variety of databases, including,
among others, the SEC's Electronic Data Gathering and Retrieval ("EDGAR")
program, Knight-Ridder Information Inc., Federal Filing/Dow Jones and
Lexis/Nexis.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Company with the SEC under the Securities Act of
1933, as amended (the "Securities Act"). This Prospectus omits certain of the
information contained in the Registration Statement, and reference is hereby
made to the Registration Statement for further information with respect to the
Company and the Debt Securities offered hereby. Any statements contained
herein concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the SEC are not necessarily
complete, and in each instance reference is made to the copy of such document
so filed. Each such statement is qualified in its entirety by such reference.
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, heretofore filed with the SEC by the Company
pursuant to the Exchange Act, are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the year ended December
31, 1995;
(b) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996; June 30, 1996; and September 30, 1996;
(c) The Company's Current Reports on Form 8-K dated January 23, 1996,
February 15, 1996, March 25, 1996, April 8, 1996, April 22, 1996, May 6,
1996, May 21, 1996, June 4, 1996, June 20, 1996, July 23, 1996, July 31,
1996, August 20, 1996, September 24, 1996, October 4, 1996; October 22,
1996; and November 15, 1996;
(d) The description of the Common Stock contained in the Registration
Statement on Form 10 dated August 26, 1948, as amended by Form 8 dated July
7, 1988; and
(e) The description of the Company's Preferred Stock Purchase Rights
contained in the Registration Statement on Form 8-A dated May 20, 1986, as
amended by Form 8 dated February 23, 1990, as amended by Form 8-A/A dated
January 16, 1996.
All documents filed by the Company pursuant to Sections 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 pursuant hereto
shall be deemed to be incorporated by reference in this Prospectus and to be a
part hereof from the date of filing of such documents. Any statement contained
in a document incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document that also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any 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, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any or all documents that have been
incorporated by reference in this Prospectus (not including exhibits to the
documents that are incorporated by reference unless such exhibits are
specifically incorporated by reference into the documents that this Prospectus
incorporates). Requests for such copies should be directed to the office of
the Vice President and Secretary, 3600 Lincoln Plaza, 500 N. Akard, Dallas,
Texas 75201-3391, telephone number (214) 978-2600.
3
<PAGE>
THE COMPANY
Halliburton Company, together with its subsidiaries, is a diversified world-
wide services and sales organization. The Company and its subsidiaries render
oil field services, both onshore and offshore, to the petroleum industry. They
also provide engineering, construction, project management, facilities
operation and maintenance services to the petroleum industry and other
industrial and governmental customers. In addition, the Company and its
subsidiaries manufacture various products for sale to the petroleum industry,
manufacture specialty products for and render specialty services to general
industry.
The Company, together with its subsidiaries, is one of the world's largest
companies providing services to the energy industry. For the year ended
December 31, 1995, approximately 80% of its consolidated revenues was derived
from sales and services to, including construction for, the energy industry.
The Company and its subsidiaries conduct business in more than 100 countries
and approximately 51% of the Company's consolidated revenues for 1995 was
derived from international sales and services.
The Company was incorporated under the laws of the State of Delaware in
1924. Its principal executive offices are located at 3600 Lincoln Plaza, 500
N. Akard, Dallas, Texas 75201-3391, telephone number (214) 978-2600.
HOLDING COMPANY REORGANIZATION
The Company currently intends to reorganize its corporate structure prior to
the end of calendar year 1996 to establish a holding company as the parent
corporation for its operating subsidiaries (the "Reorganization"). In order to
effect the Reorganization, the Company will incorporate the new holding
company (the "Holding Company") as a wholly owned subsidiary of the Company
and will merge with an indirect, wholly owned subsidiary of the Holding
Company. The merger will be effected without a vote of stockholders of the
Company pursuant to the provisions of the General Corporation Law of Delaware.
In connection with the merger, the name of the Holding Company will be changed
to "Halliburton Company" and all the outstanding Common Stock of the Company
will be converted into a like number of shares of common stock of the Holding
Company. The capital structure of the Holding Company will be the same as that
of the Company prior to the merger. The Company has received an opinion of its
counsel, Vinson & Elkins L.L.P., that the Reorganization will constitute a
tax-free reorganization under Section 368(a) of the Internal Revenue Code of
1986, as amended (the "Code") and that no gain or loss will be recognized by
the stockholders of the Company upon the receipt of the common stock of the
Holding Company in exchange for their shares of the Company pursuant to the
Reorganization.
Consummation of the Reorganization is contingent upon the Company receiving
a ruling from the Internal Revenue Service that the Reorganization will not
adversely affect the status of the merger of Landmark Graphics Corporation
with a wholly owned subsidiary of the Company on October 4, 1996 as a tax-free
reorganization under Section 368(a) of the Code.
If any Debt Securities are sold prior to the Reorganization, the obligations
of the Company thereunder will be assumed by the Holding Company at the time
of the Reorganization. As a result, both the Holding Company and the Company
will be primary obligors with respect to such Debt Securities. The Company
does not anticipate selling any Debt Securities that are convertible into
Common Stock prior to the Reorganization, but, if it should do so, the
obligation to issue Common Stock upon conversion thereof will be assumed by
the Holding Company at the time of the Reorganization.
Debt Securities sold subsequent to the Reorganization will be solely
obligations of the Holding Company. After the Reorganization, the only assets
of the Holding Company will be stock of its subsidiaries, and, as a
consequence, any indebtedness of the Holding Company, including any Debt
Securities sold subsequent to the Reorganization, will be structurally
subordinated to all of the indebtedness of its subsidiaries. For further
information, see "Description of Debt Securities--Provisions Applicable to
Senior Debt Securities--Structural Subordination."
4
<PAGE>
USE OF PROCEEDS
Unless otherwise provided in the Prospectus Supplement or the applicable
Pricing Supplement, the net proceeds from the sale of the Debt Securities
offered by this Prospectus, the Prospectus Supplement and any applicable
Pricing Supplement (the "Offered Debt Securities") will be added to the
Company's general funds and used for general corporate purposes, which may
include repayment of debt, working capital, capital expenditures and
acquisitions. Until so utilized, it is expected that such net proceeds will be
placed in interest bearing time deposits or invested in short-term marketable
securities.
RATIO OF EARNINGS TO FIXED CHARGES (a)
<TABLE>
<CAPTION>
NINE MONTHS
YEARS ENDED DECEMBER 31, ENDED
------------------------------------------------------- SEPTEMBER 30,
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- -------------
<S> <C> <C> <C> <C> <C>
1.4 (b) (b) 3.4 4.8 6.3
</TABLE>
- --------
(a) Excludes the effect of the acquisition of Landmark Graphics Corporation on
October 4, 1996, which was accounted for as a pooling of interests.
(b) Earnings were inadequate to cover fixed charges in 1992 and 1993 by $148.7
million and $214.7 million, respectively.
For purposes of computing the ratio of earnings to fixed charges: (i) fixed
charges consist of interest on debt (whether expensed or capitalized),
amortization of debt discount and expense and a portion of rental expense
determined to be representative of interest and (ii) earnings consist of
income (loss) from continuing operations before provision for income taxes,
minority interest, cumulative effects of accounting changes and extraordinary
items plus fixed charges as described above, adjusted to exclude capitalized
interest and by the excess or deficiency of dividends over income of 50
percent or less owned entities accounted for by the equity method.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement and, if applicable, any Pricing Supplement may relate.
The particular terms of the Offered Debt Securities offered by any Prospectus
Supplement and any applicable Pricing Supplement and the extent, if any, to
which such general provisions do not apply to such Offered Debt Securities
will be described in the Prospectus Supplement and any Pricing Supplement
relating to such Offered Debt Securities.
The Debt Securities will constitute either senior or subordinated debt of
the Company and will be issued, in the case of Debt Securities that will be
senior debt ("Senior Debt Securities"), under a Second Senior Indenture dated
as of December 1, 1996 between the Company and Texas Commerce Bank National
Association, as trustee (the "Trustee"), as supplemented, amended and modified
by that certain First Supplemental Indenture dated as of December 5, 1996
between the Company and the Trustee (and as further supplemented, amended and
modified (the "Second Senior Debt Indenture"), and, in the case of Debt
Securities that will be subordinated debt ("Subordinated Debt Securities"),
under a Subordinated Indenture (the "Subordinated Debt Indenture") dated as of
January 2, 1991 between the Company and Texas Commerce Bank National
Association, as trustee. The Second Senior Debt Indenture and the Subordinated
Debt Indenture are sometimes hereinafter referred to individually as an
"Indenture" and collectively as the "Indentures." Texas Commerce Bank National
Association (and any successor thereto as trustee under the Indentures) is
hereinafter referred to as the "Trustee." The Indentures are filed as exhibits
to the Registration Statement of which this Prospectus is a part. The
following summaries of certain provisions of the Indentures and the Debt
Securities do not purport to be complete and such summaries are subject to the
detailed provisions of the applicable Indenture to which reference is hereby
made for a full description of such provisions, including the definition of
certain terms used herein. Section references in parentheses below are to
sections in both Indentures unless otherwise indicated. Wherever particular
sections or defined terms of the applicable Indenture are referenced, such
sections or defined terms are incorporated herein by reference as part of the
statement made, and the statement is qualified in its entirety by such
reference. The Indentures are substantially identical, except for certain
covenants of the Company and provisions relating to subordination and
conversion.
5
<PAGE>
In connection with the Reorganization, the Company, the Holding Company and
the Trustee will enter into indentures supplemental to the Second Senior Debt
Indenture and the Subordinated Debt Indenture pursuant to which the Holding
Company will assume the obligations of the Company and become a primary
obligor, together with the Company, with respect to any Debt Securities sold
prior to the Reorganization. Such supplemental indentures will provide, with
respect to Debt Securities sold subsequent to the Reorganization, that the
Holding Company will be the issuer of, and only obligor with respect to, such
Debt Securities and will be substituted for the Company under all of the
provisions of such Indentures, including the definitions and covenants.
Accordingly, each reference to the Company in this Description of Debt
Securities will, with respect to Debt Securities sold after the
Reorganization, refer to the Holding Company.
In addition, the Company, the Holding Company and the Trustee will, in
connection with the Reorganization, enter into an indenture supplemental to
that certain Senior Indenture (the "First Senior Debt Indenture") dated as of
January 2, 1991 between the Company and Texas Commerce Bank National
Association, as trustee, pursuant to which the Holding Company will assume the
obligations of the Company and become a primary obligor, together with
Company, with respect to the $200 million in principal amount of the Company's
outstanding 8.75% Debentures due February 15, 2021.
PROVISIONS APPLICABLE TO BOTH SENIOR AND SUBORDINATED DEBT SECURITIES
General. The Debt Securities will be unsecured senior or subordinated
obligations of the Company and may be issued from time to time in one or more
series. Neither of the Indentures limits the amount of Debt Securities that
may be issued thereunder nor does either limit the aggregate unsecured
indebtedness of the Company or any subsidiary thereof or limit the payment of
dividends or the acquisition of stock of the Company.
Unless otherwise set forth in the Prospectus Supplement or any applicable
Pricing Supplement relating to a particular series of Offered Debt Securities,
the Debt Securities will not contain any provisions that may afford holders of
the Debt Securities protection in the event of a change of control of the
Company or in the event of a highly leveraged transaction (whether or not such
transaction results in a change of control of the Company).
Reference is made to the Prospectus Supplement and any applicable Pricing
Supplement for the following terms of and information relating to the Offered
Debt Securities (to the extent such terms are applicable to such Offered Debt
Securities): (i) the title of the Offered Debt Securities; (ii) classification
as Senior Debt Securities or Subordinated Debt Securities, aggregate principal
amount, and denomination; (iii) whether the Offered Debt Securities are
convertible into Common Stock and, if so, the terms and conditions upon which
such conversion will be effected including the initial conversion price or
conversion rate, the conversion period and other conversion provisions in
addition to or in lieu of those described herein; (iv) the date or dates on
which the Offered Debt Securities will mature; (v) the method by which amounts
payable in respect of principal of, premium, if any, or interest, if any, on
or upon the redemption of such Offered Debt Securities may be calculated; (vi)
the interest rate or rates (or the method by which such will be determined),
and the dates from which such interest, if any, will accrue; (vii) the date or
dates on which any such interest will be payable; (viii) the purchase price,
expressed as a percentage of their principal amount, at which any Offered Debt
Securities will be offered; (ix) the place or places where and the manner in
which the principal of, premium, if any, and interest, if any, on the Offered
Debt Securities will be payable and the place or places where the Offered Debt
Securities may be presented for transfer and, if applicable, conversion; (x)
the obligation, if any, of the Company to redeem, repay or purchase the
Offered Debt Securities pursuant to any sinking fund or analogous provisions
or at the option of a holder thereof and the period or periods within which,
the price or prices at which and the terms and conditions upon which the
Offered Debt Securities will be redeemed, repaid or purchased pursuant to any
such obligation; (xi) any applicable United States Federal income tax
consequences; and (xii) any other specific terms of the Offered Debt
Securities, including any additional or different events of default, remedies
or covenants provided with respect to such Offered Debt Securities, and any
terms that may be required by or advisable under applicable laws or
regulations.
In addition, the issue price of Offered Debt Securities that are original
issue discount securities, the amount of the original issue discount with
respect thereto, the manner and rate or rates per annum (which may be fixed or
variable) at which such original issue discount shall accrue, the yield to
maturity represented thereby, the date
6
<PAGE>
or dates from or to which or period or periods during which such original
issue discount shall accrue, the portion of the principal amount of such
Offered Debt Securities that will be payable upon acceleration of the maturity
thereof or upon the optional or mandatory redemption, purchase or exchange
thereof and any other specific terms thereof will be described in the
Prospectus Supplement and any applicable Pricing Supplement relating thereto.
Unless otherwise specified in any Prospectus Supplement, the Debt Securities
will be issued only in fully registered form and in denominations of $1,000
and any integral multiple thereof (Section 2.7). No service charge will be
made for any transfer or exchange of any Debt Securities but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith (Section 2.8).
Debt Securities may bear interest at a fixed rate or a floating rate. Debt
Securities bearing no interest or interest at a rate that at the time of
issuance is below the prevailing market rate may be sold at a discount below
their stated principal amount. Special United States Federal income tax
considerations applicable to any such discounted Debt Securities or to certain
Debt Securities issued at par that are treated as having been issued at a
discount for United States Federal income tax purposes will be described in
the applicable Prospectus Supplement.
Global Securities. The Debt Securities of a series may be issued in whole or
in part in the form of one or more global securities ("Global Securities")
that will be deposited with, or on behalf of, a depositary (the "Depositary")
identified in the Prospectus Supplement relating to such series. Global
Securities may be issued only in fully registered form and in either temporary
or permanent form. Unless and until it is exchanged in whole or in part for
the individual Debt Securities represented thereby, a Global Security may not
be transferred except as a whole by the Depositary for such Global Security to
its nominee or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor Depositary or nominee of such successor Depositary (Section 2.8).
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the Prospectus Supplement relating to
such series.
Events of Default. Unless otherwise specified in the Prospectus Supplement,
an Event of Default is defined under each Indenture with respect to the Debt
Securities of any series issued under such Indenture as being: (a) default in
the payment of any interest with respect to Debt Securities of such series
when due, continued for 30 days; (b) default in the payment of principal or
premium, if any, with respect to Debt Securities of such series when due; (c)
default in the payment or satisfaction of any sinking fund obligation with
respect to Debt Securities of such series when due; (d) default in the
performance of any other covenant of the Company applicable to Debt Securities
of such series, continued for 60 days after written notice by the Trustee or
the holders of at least 25% in aggregate principal amount of the Debt
Securities of such series then outstanding, (or, in the case of any series of
Debt Securities originally issued at a discount from their stated principal
amount, at least 25% of the amount of principal thereof that would be due and
payable on such date of determination in the event of an acceleration of the
maturity of such series on such date); and (e) certain events of bankruptcy,
insolvency or reorganization (Section 5.1). If any Event of Default shall
occur and be continuing, the Trustee or the holders of not less than 25% in
aggregate principal amount of the Debt Securities of such series then
outstanding, by notice in writing to the Company (and to the Trustee, if given
by the holders), may declare the Debt Securities of such series due and
payable immediately, but the holders of a majority in aggregate principal
amount of the Debt Securities of such series then outstanding, by notice in
writing to the Company and the Trustee, may rescind such declaration if the
Company shall have paid or deposited with the Trustee all amounts that shall
have become due, otherwise than through acceleration, for principal, premium,
if any, and interest, if any, and all defaults under such Indenture are cured
or waived (Section 5.1).
Each Indenture provides that no holder of any series of Debt Securities then
outstanding may institute any suit, action or proceeding with respect to, or
otherwise attempt to enforce, such Indenture, unless (i) such holder shall
have given to the Trustee written notice of default and of the continuance
thereof, (ii) the holders of not less than 25% in aggregate principal amount
of such series of Debt Securities then outstanding shall have made written
request to the Trustee to institute such suit, action or proceeding and shall
have offered to the Trustee
7
<PAGE>
such reasonable indemnity as it may require with respect thereto and (iii) the
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity shall have neglected or refused to institute any such action, suit
or proceeding; provided that, subject to the subordination provisions
applicable to the Subordinated Debt Securities, the right of any holder of any
Debt Security to receive payment of the principal of, premium, if any, or
interest, if any, on such Debt Security, on or after the respective due dates,
or, with respect to any convertible Subordinated Debt Security, the right to
convert such Subordinated Debt Security, or to institute suit for the
enforcement of any such payment or right to convert shall not be impaired or
affected without the consent of such holder (Section 5.4). The holders of a
majority in aggregate principal amount of the Debt Securities of such series
then outstanding may 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, provided that such direction shall not be in
conflict with any rule of law or the Indenture (Section 5.7).
In determining whether the holders of the requisite aggregate principal
amount of outstanding Debt Securities of any or all series have given any
request, demand, authorization or consent under the Indenture, the principal
amount of an original issue discount Debt 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 a declaration of
acceleration of the maturity thereof.
The Company is required to furnish to the Trustee annually a statement as to
the fulfillment by the Company of all of its obligations under each Indenture
(Section 4.3).
Discharge and Defeasance. Unless otherwise specified in the applicable
Prospectus Supplement, the Company can discharge or defease its obligations
with respect to each series of Debt Securities as set forth below (Article
10).
The Company may discharge all of its obligations (except those set forth
below) to holders of any series of Debt Securities issued under either
Indenture that have not already been delivered to the Trustee for cancellation
and that have either become due and payable or are by their terms due and
payable within one year (or subject to optional redemption within one year) by
depositing with the Trustee cash or U.S. Government Obligations (as defined in
such Indenture), or a combination thereof, as trust funds in an amount
certified to be sufficient to pay when due the principal of, premium, if any,
and interest, if any, on all outstanding Debt Securities of such series and to
make any mandatory sinking fund payments thereon when due.
Unless otherwise provided in the applicable Prospectus Supplement, the
Company may also discharge at any time all of its obligations (except those
set forth below) to holders of any series of Debt Securities issued under
either Indenture (other than convertible Subordinated Debt Securities)
("defeasance") only if, among other things: (i) the Company irrevocably
deposits with the Trustee cash or U.S. Government Obligations, or a
combination thereof, as trust funds in an amount certified to be sufficient to
pay when due the principal of, premium, if any, and interest, if any, on all
outstanding Debt Securities of such series and to make any mandatory sinking
fund payments thereon when due and such funds have been so deposited for 91
days; (ii) such defeasance will not result in a breach or violation of, or
cause a default under, any agreement or instrument to which the Company is a
party or by which it is bound; and (iii) the Company delivers to the Trustee
an opinion of counsel to the effect that the holders of such series of Debt
Securities will not recognize income, gain or loss for United States Federal
income tax purposes as a result of such defeasance and that defeasance will
not otherwise alter the United States Federal income tax treatment of such
holders' principal and interest payments on such series of Debt Securities
(such opinion must be based on a ruling of the Internal Revenue Service or a
change in United States Federal income tax law occurring after the date of
this Prospectus because such an opinion could not be rendered under current
tax law).
Notwithstanding the foregoing, no discharge or defeasance described above
shall affect the following obligations to or rights of the holders of any
series of Debt Securities: (i) rights of registration of transfer and
8
<PAGE>
exchange of Debt Securities of such series; (ii) rights of substitution of
mutilated, defaced, destroyed, lost or stolen Debt Securities of such series;
(iii) rights of holders of Debt Securities of such series to receive payments
of principal thereof and premium, if any, and interest, if any, thereon when
due and to receive mandatory sinking fund payments thereon when due, if any;
(iv) the rights, obligations, duties and immunities of the Trustee; (v) the
rights of holders of Debt Securities of such series as beneficiaries with
respect to property deposited with the Trustee payable to all or any of them;
(vi) the obligations of the Company to maintain an office or agency in respect
of Debt Securities of such series; and (vii) if applicable, the obligations of
the Company with respect to the conversion of Debt Securities of such series
into Common Stock.
Modification of the Indenture. Each Indenture provides that the Company and
the Trustee may enter into supplemental indentures without the consent of the
holders of the Debt Securities: (a) to evidence the assumption by a successor
entity of the obligations of the Company under such Indenture; (b) to add
covenants or new events of default for the protection of the holders of such
Debt Securities; (c) to cure any ambiguity or correct any inconsistency in the
Indenture; (d) to establish the form and terms of such Debt Securities; (e) to
evidence the acceptance of appointment by a successor trustee; (f) to amend the
Indenture in any other manner that the Company may deem necessary or desirable
and that will not adversely affect the interests of the holders of Debt
Securities issued thereunder; or (g), in the case of Senior Debt Securities, to
secure such Debt Securities (Section 8.1). At the time of the Reorganization,
the Company, the Holding Company and the Trustee will enter into indentures
supplemental to the First Senior Debt Indenture, the Second Senior Debt
Indenture and the Subordinated Debt Indenture to evidence the assumption by the
Holding Company of the obligations of the Company under each such Indenture
and, if any Offered Debt Securities have theretofore been sold, to evidence the
assumption by the Holding Company of the Company's obligations with respect
thereto. See "Description of Debt Securities" and "The Company-- Holding
Company Reorganization."
Each Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of Debt Securities of each series then outstanding
and affected, to add any provisions to, or to change in any manner or eliminate
any of the provisions of, such Indenture or modify in any manner the rights of
the holders of the Debt Securities of such series; provided that the Company
and the Trustee may not, without the consent of the holder of each outstanding
Debt Security affected thereby, (a) extend the stated maturity of the principal
of any Debt Security, reduce the amount of the principal or premium, if any,
thereof, reduce the rate, change the method of determination or extend the time
of payment of interest thereon, reduce or alter the method of computation of
any amount payable on or at redemption thereof, reduce the principal amount of
any original issue discount security payable upon acceleration or provable in
bankruptcy, change the coin or currency in which principal, premium, if any,
and interest, if any, are payable, impair or affect the right to institute suit
for the enforcement of any payment or repayment thereof or, if applicable,
adversely affect the right to convert Debt Securities or any right of
prepayment at the option of the holder or (b) reduce the aforesaid percentage
in aggregate principal amount of Debt Securities of any series issued under
such Indenture, the consent of the holders of which is required for any such
modification (Section 8.2).
The Subordinated Debt Indenture may not be amended to alter the subordination
of any outstanding Subordinated Debt Securities without the consent of each
holder of Senior Indebtedness then outstanding that would be adversely affected
thereby (Section 8.6 of the Subordinated Debt Indenture).
Paying Agent and Registrar. The Trustee or an affiliate of the Trustee
initially will act as paying agent and registrar with respect to any series of
Debt Securities issued under an Indenture (Section 3.2).
PROVISIONS APPLICABLE TO SENIOR DEBT SECURITIES
General. Senior Debt Securities will be issued under the Second Senior Debt
Indenture and will rank pari passu with all other unsecured and unsubordinated
debt of the Company.
9
<PAGE>
Debt Securities sold subsequent to the Reorganization (as described under
"Holding Company Reorganization" below) will be solely obligations of a new
holding company. The only assets of such holding company will be stock of its
subsidiaries, and, as a consequence, any indebtedness of such holding company,
including any Debt Securities sold subsequent to the Reorganization, will be
structurally subordinated to all of the indebtedness of its subsidiaries. See
"Risk Factors--Structural Subordination" in the accompanying Prospectus
Supplement.
Certain Definitions. For purposes of the following discussion, the following
definitions are applicable (Article One of the Second Senior Debt Indenture).
"Subsidiary" means any corporation of which the Company, or the Company and
one or more Subsidiaries, or any one or more Subsidiaries, directly or
indirectly own voting securities entitling any one or more of the Company and
its Subsidiaries to elect a majority of the directors of such corporation.
"Principal Property" means any real estate, manufacturing plant, warehouse,
office building or other physical facility, or any item of marine,
transportation or construction equipment or other like depreciable assets of
the Company or of any Restricted Subsidiary, whether owned at or acquired
after the date of the Second Senior Debt Indenture (other than any pollution
control facility), that in the opinion of the Board of Directors is of
material importance to the total business conducted by the Company and its
Restricted Subsidiaries as a whole.
"Restricted Subsidiary" means (a) any Subsidiary existing at the date of the
Second Senior Debt Indenture whose principal assets and business are located
in the United States or Canada, except certain sales financing, real estate
and other Subsidiaries so designated, and (b) any other Subsidiary that is
designated by the Company to be a Restricted Subsidiary. At the time of the
Reorganization, the Company, the Subsidiary of the Holding Company to which
the Company will transfer all of the outstanding capital stock of certain
Subsidiaries in connection with the Reorganization and such Subsidiaries will
be designated as Restricted Subsidiaries.
"Secured Debt" means indebtedness (other than indebtedness among the Company
and Restricted Subsidiaries) for money borrowed by the Company or a Restricted
Subsidiary, or any other indebtedness of the Company or a Restricted
Subsidiary on which interest is paid or payable, which in any case is secured
by (a) a lien or other encumbrance on any Principal Property of the Company or
a Restricted Subsidiary, (b) a pledge, lien or other security interest on any
shares of stock or indebtedness of a Restricted Subsidiary or (c) in the case
of indebtedness of the Company, a guaranty by a Restricted Subsidiary
provided, that any indebtedness of the Company issued prior to the
Reorganization shall not, by virtue of the assumption of such indebtedness by
the Holding Company at the time of the Reorganization, constitute indebtedness
secured by a guarantee of a Restricted Subsidiary within the meaning of clause
(c) above.
"Consolidated Net Tangible Assets" means the aggregate amount of assets
included on a consolidated balance sheet of the Company and its Restricted
Subsidiaries, less applicable reserves and other properly deductible items and
after deducting therefrom (a) all current liabilities and (b) all goodwill,
trade names, trademarks, patents, unamortized debt discount and expense and
other like intangibles, all in accordance with generally accepted accounting
principles consistently applied.
"Sale and Leaseback Transaction" means the sale or transfer by the Company
or a Restricted Subsidiary of any Principal Property owned by it which has
been in full operation for more than 120 days prior to such sale or transfer
with the intention of taking back a lease on such property (other than a lease
not exceeding 36 months) where the use by the Company or such Restricted
Subsidiary of such property will be discontinued on or before the expiration
of the term of such lease.
Restrictions on Secured Debt. At such time as any series of Senior Debt
Securities has been issued and is outstanding, the Company and its Restricted
Subsidiaries are prohibited from creating, incurring, assuming or guaranteeing
any Secured Debt without equally and ratably securing the Senior Debt
Securities of such series and any other indebtedness of or guaranteed by the
Company or any such Restricted Subsidiary then entitled thereto. The foregoing
restrictions are not applicable to (i) certain purchase money mortgages, (ii)
certain mortgages to finance construction on unimproved property, (iii)
mortgages existing on property at the time of
10
<PAGE>
acquisition by the Company or a Restricted Subsidiary, (iv) mortgages existing
on the property or on the outstanding shares or indebtedness of a corporation
at the time it becomes a Restricted Subsidiary, (v) mortgages on property of a
corporation existing at the time such corporation is merged or consolidated
with the Company or a Restricted Subsidiary, (vi) mortgages in favor of
governmental bodies to secure certain payments of indebtedness or (vii)
extensions, renewals or replacement of the foregoing (Section 3.6 of the Second
Senior Debt Indenture).
Notwithstanding the foregoing restrictions, the Company and any one or more
Restricted Subsidiaries may create, incur, assume or guarantee Secured Debt not
otherwise permitted or excepted without equally and ratably securing the Senior
Debt Securities of each series issued and outstanding under the Senior Debt
Indenture if the sum of (a) the amount of such Secured Debt plus (b) the
aggregate value of Sale and Leaseback Transactions (subject to certain
exceptions) does not exceed 5% of Consolidated Net Tangible Assets (Section 3.6
of the Second Senior Debt Indenture).
Limitations on Sale and Leaseback Transactions. At such time as any series of
Senior Debt Securities has been issued and is outstanding, Sale and Leaseback
Transactions are prohibited unless (a) the Company or the Restricted Subsidiary
owning such Principal Property would be entitled to incur Secured Debt equal to
the amount realizable upon the sale or transfer of the property to be so leased
secured by a mortgage on such property without equally and ratably securing the
Senior Debt Securities of such series or (b) an amount equal to the value of
the property so leased is applied to the retirement (other than mandatory
retirement) of the Senior Debt Securities of such series or certain other
funded indebtedness of the Company and its Restricted Subsidiaries (Section 3.7
of the Second Senior Debt Indenture).
Restrictions on Transfer of Principal Property to Unrestricted Subsidiary.
The Company and its Restricted Subsidiaries are prohibited from transferring
(whether by merger, consolidation or otherwise), except for fair value, any
Principal Property to any Subsidiary that is not a Restricted Subsidiary,
without retiring indebtedness as summarized in clause (b) of the preceding
paragraph (Section 3.8 of the Second Senior Debt Indenture).
Consolidation, Merger, Sale or Conveyance. Under the Senior Debt Indenture,
no consolidation or merger of the Company, and no sale of substantially all of
its property, shall be made with or to another corporation if any Principal
Property of the Company or a Restricted Subsidiary would become subject to any
mortgage or lien (other than those permitted by Section 3.6 of the Second
Senior Debt Indenture) unless prior thereto all Senior Debt Securities then
outstanding are secured (equally and ratably with any other indebtedness of or
guaranteed by the Company or any Restricted Subsidiary then entitled thereto)
by a lien on any such Principal Property and certain other properties (Section
9.2 of the Second Senior Debt Indenture).
The Board of Directors of the Company has not designated any property of the
Company or of any Restricted Subsidiaries as a Principal Property because, in
the opinion of management of the Company, no single property or asset is of
material importance to the total business of the Company and its Restricted
Subsidiaries taken as a whole. Nonetheless, at the time of the Reorganization,
the Company will be designated as a Restricted Subsidiary.
PROVISIONS APPLICABLE TO SUBORDINATED DEBT SECURITIES
Subordination. The Subordinated Debt Securities will be subordinate and
junior in right of payment, to the extent set forth in the Subordinated Debt
Indenture, to all Senior Indebtedness (as defined below) of the Company. If the
Company should default in the payment of any principal of or premium or
interest on any Senior Indebtedness when the same becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration or
otherwise, then, upon written notice of such default to the Company by the
holders of such Senior Indebtedness or any trustee therefor and subject to
certain rights of the Company to dispute such default and subject to proper
notification of the Trustee, unless and until such default shall have been
cured or waived or shall have ceased to exist, no direct or indirect payment
(in cash, property, securities, by set-off or otherwise) will be made or agreed
to be made for principal of, premium, if any, or interest, if any, on the
Subordinated
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Debt Securities, or in respect of any redemption, retirement, purchase or other
acquisition of the Subordinated Debt Securities other than those made in
capital stock of the Company (or cash in lieu of fractional shares thereof)
pursuant to any conversion right of the Subordinated Debt Securities or
otherwise made in capital stock of the Company (Sections 14.1, 14.4 and 14.5 of
the Subordinated Debt Indenture).
"Senior Indebtedness" is defined in the Subordinated Debt Indenture as
Indebtedness of the Company outstanding at any time except (a) any Indebtedness
as to which, by the terms of the instrument creating or evidencing the same, it
is provided that such Indebtedness is not senior in right of payment to the
Subordinated Debt Securities, (b) the Subordinated Debt Securities, (c) any
Indebtedness of the Company to a wholly-owned Subsidiary of the Company, (d)
interest accruing after the filing of a petition initiating certain events of
bankruptcy or insolvency unless such interest is an allowed claim enforceable
against the Company in a proceeding under Federal or state bankruptcy laws, and
(e) trade accounts payable. "Indebtedness" is defined in the Subordinated Debt
Indenture as, with respect to any Person, (a)(i) the principal of and premium
and interest on indebtedness for money borrowed of such Person evidenced by
bonds, notes, debentures or similar obligations, including any guaranty by such
Person of any indebtedness for money borrowed of any other Person, whether any
such indebtedness or guaranty is outstanding on the date of the Subordinated
Debt Indenture or is thereafter created, assumed or incurred, (ii) the
principal of and premium and interest on indebtedness for money borrowed,
incurred, assumed or guaranteed by such Person in connection with the
acquisition by it or any of its subsidiaries of any other businesses,
properties or other assets and (iii) lease obligations that such Person
capitalizes in accordance with Statement of Financial Accounting Standards No.
13 promulgated by the Financial Accounting Standards Board or such other
generally accepted accounting principles as may be from time to time in effect,
(b) any other indebtedness of such Person, including any indebtedness
representing the balance deferred and unpaid of the purchase price of any
property or interest therein, including any such balance that constitutes a
trade account payable, and any guaranty, endorsement or other contingent
obligation of such Person in respect of any indebtedness of another, that is
outstanding on the date of the Subordinated Debt Indenture or is thereafter
created, assumed or incurred by such Person and (c) any amendments,
modifications, refunding, renewals or extensions of any indebtedness or
obligation described as Indebtedness in clauses (a) and (b) above.
If (i) without the consent of the Company a court shall enter an order for
relief with respect to the Company under the United States Federal bankruptcy
laws or a judgment, order or decree adjudging the Company a bankrupt or
insolvent, or enter an order for relief for reorganization, arrangement,
adjustment or composition of or in respect of the Company under the United
States Federal or state bankruptcy or insolvency laws or (ii) the Company shall
institute proceedings for the entry of an order for relief with respect to the
Company under the United States Federal bankruptcy laws or for an adjudication
of insolvency, or shall consent to the institution of bankruptcy or insolvency
proceedings against it, or shall file a petition seeking, or seek or consent to
reorganization, arrangement, composition or similar relief under any applicable
law, or shall consent to the filing of such petition or to the appointment of a
receiver, custodian, liquidator, assignee, trustee, sequestrator or similar
official in respect of the Company or of substantially all of its property, or
the Company shall make a general assignment for the benefit of creditors, then
all Senior Indebtedness (including any interest thereon accruing after the
commencement of any such proceedings) must first be paid in full before any
payment or distribution, whether in cash, securities or other property, is made
on account of the principal of, premium, if any, or interest, if any, on the
Subordinated Debt Securities. In such event, any payment or distribution on
account of the principal of, premium, if any, or interest, if any, on the
Subordinated Debt Securities, whether in cash, securities or other property
(other than securities of the Company or any other corporation provided for by
a plan of reorganization or readjustment the payment of which is subordinate,
at least to the extent provided in the subordination provisions with respect to
the Subordinated Debt Securities, to the payment of all Senior Indebtedness
then outstanding and to any securities issued in respect thereof under any such
plan of reorganization or readjustment), that would otherwise (but for the
subordination provisions) be payable or deliverable in respect of the
Subordinated Debt Securities must be paid or delivered directly to the holders
of Senior Indebtedness in accordance with the priorities then existing among
such holders until all Senior Indebtedness (including any interest thereon
accruing after the commencement of any such proceedings) has been paid in full.
If any payment or distribution on account of the principal of, premium, if any,
or interest, if any, on
12
<PAGE>
the Subordinated Debt Securities of any character, whether in cash, securities
or other property (other than securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment the
payment of which is subordinate, at least to the extent provided in the
subordination provisions with respect to the Subordinated Debt Securities, to
the payment of all Senior Indebtedness then outstanding and to any securities
issued in respect thereof under any such plan of reorganization or
readjustment), shall be received by any holder of any Subordinated Debt
Securities in contravention of any of the terms of the Subordinated Debt
Indenture and before all the Senior Indebtedness shall have been paid in full,
such payment or distribution of securities will be received in trust for the
benefit of, and must be paid over or delivered and transferred to, the holders
of the Senior Indebtedness then outstanding in accordance with the priorities
then existing among such holders for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all such Senior
Indebtedness in full. In the event of any such proceeding, after payment in
full of all sums owing with respect to Senior Indebtedness, the holders of
Subordinated Debt Securities, together with the holders of any obligations of
the Company ranking on a parity with the Subordinated Debt Securities, will be
entitled to be repaid from the remaining assets of the Company the amounts at
that time due and owing on account of unpaid principal of or any premium or any
interest on the Subordinated Debt Securities and such other obligations before
any payment or other distribution, whether in cash, property or otherwise,
shall be made on account of any capital stock or obligations of the Company
ranking junior to the Subordinated Debt Securities and such other obligations
(Section 14.1 of the Subordinated Debt Indenture).
By reason of such subordination, in the event of the insolvency of the
Company, holders of Senior Indebtedness may receive more, ratably, than holders
of the Subordinated Debt Securities. Such subordination will not prevent the
occurrence of an Event of Default or limit the right of acceleration in respect
of the Subordinated Debt Securities.
Conversion. Offered Debt Securities that constitute Subordinated Debt
Securities may provide for a right of conversion thereof into Common Stock (or
cash in lieu thereof). The following provisions will apply to Debt Securities
that are convertible Subordinated Debt Securities unless otherwise provided in
the Prospectus Supplement for such Offered Debt Securities.
The holder of any convertible Subordinated Debt Securities will have the
right exercisable at any time prior to maturity, unless such Subordinated Debt
Securities have been previously redeemed or otherwise purchased by the Company,
to convert such Subordinated Debt Securities into shares of Common Stock at the
conversion price or conversion rate set forth in the Prospectus Supplement,
subject to adjustment (Section 13.2 of the Subordinated Debt Indenture). The
holder of convertible Subordinated Debt Securities may convert any portion
thereof which is $1,000 in principal amount or any integral multiple thereof
(Section 13.2 of the Subordinated Debt Indenture).
In certain events, the conversion price or conversion rate will be subject to
adjustment as set forth in the Subordinated Debt Indenture. Such events include
the issuance of shares of Common Stock of the Company as a dividend or
distribution on the Common Stock; subdivisions, combinations and
reclassifications of the Common Stock; the issuance to all holders of Common
Stock of rights or warrants entitling the holders thereof (for a period not
exceeding 45 days) to subscribe for or purchase shares of Common Stock at a
price per share less than the then current market price per share of Common
Stock (as defined in the Subordinated Debt Indenture); and the distribution to
all holders of Common Stock of evidences of indebtedness, equity securities
(including equity interests in the Company's subsidiaries) other than Common
Stock or other assets (excluding cash dividends paid from surplus) or
subscription rights or warrants (other than those referred to above). No
adjustment of the conversion price or conversion rate will be required unless
an adjustment would require a cumulative increase or decrease of at least 1% in
such price or rate (Section 13.4 of the Subordinated Debt Indenture). The
Company has been advised by its counsel, Vinson & Elkins L.L.P., that certain
adjustments in the conversion price or conversion rate in accordance with the
foregoing provisions may result in constructive distributions to either holders
of the Subordinated Debt Securities or holders of Common Stock that would be
taxable pursuant to Treasury Regulations issued under Section 305 of the Code.
The amount of any such taxable
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<PAGE>
constructive distribution will be the fair market value of the Common Stock
which is treated as having been constructively received, such value being
determined as of the time the adjustment resulting in the constructive
distribution is made.
Fractional shares of Common Stock will not be issued upon conversion, but, in
lieu thereof, the Company will pay a cash adjustment based on the then current
market price for the Common Stock (Section 13.3 of the Subordinated Debt
Indenture). Upon conversion, no adjustments will be made for accrued interest
or dividends and therefore convertible Subordinated Debt Securities surrendered
for conversion between the record date for an interest payment and the interest
payment date (except convertible Subordinated Debt Securities called for
redemption on a redemption date during such period) must be accompanied by
payment of an amount equal to the interest thereon which the registered holder
is to receive (Sections 13.2 and 13.4 of the Subordinated Debt Indenture).
In the case of any consolidation or merger of the Company with or into any
other person (with certain exceptions) or any sale or transfer of all or
substantially all the assets of the Company, the holder of convertible
Subordinated Debt Securities, after the consolidation, merger, sale or
transfer, will have the right to convert such convertible Subordinated Debt
Securities only into the kind and amount of securities, cash and other property
which the holder would have been entitled to receive upon such consolidation,
merger, sale or transfer, if the holder had held the Common Stock issuable upon
conversion of such convertible Subordinated Debt Securities immediately prior
to such consolidation, merger, sale or transfer (Section 13.5 of the
Subordinated Debt Indenture).
Consolidation, Merger, Sale or Conveyance. The Subordinated Debt Indenture
permits the Company to consolidate with, or merge into, or transfer
substantially all of its property to, another person provided certain specified
conditions are met (Section 9.1 of the Subordinated Debt Indenture).
CONCERNING THE TRUSTEE
Pursuant to the Trust Indenture Act of 1939, as amended, should a default
occur with respect to either the 8.75% Debentures due February 15, 2021
outstanding under the First Senior Debt Indenture or any Senior Debt Securities
issued under the Second Senior Debt Indenture, on one hand, or any Subordinated
Debt Securities issued under the Subordinated Debt Indenture, on the other,
Texas Commerce Bank National Association would be required to resign as trustee
under either the First and Second Senior Debt Indentures or the Subordinated
Debt Indenture within 90 days of such default unless such default were cured,
duly waived or otherwise eliminated.
Texas Commerce Bank National Association, the Trustee under both Indentures,
is a depositary for funds of, makes loans to and performs other services for
the Company in the normal course of business.
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DESCRIPTION OF CAPITAL STOCK
GENERAL
The following descriptions of certain of the provisions of the Composite
Certificate of Incorporation of the Company and of the Restated Rights
Agreement (as defined below) are necessarily general and do not purport to be
complete and are qualified in their entirety by reference to such documents,
which are included as exhibits to the Registration Statement of which this
Prospectus is a part.
COMMON STOCK
The Company is authorized to issue 200,000,000 shares of Common Stock, par
value $2.50. As of November 30, 1996, there were 125,258,208 shares of
Halliburton Common Stock issued and outstanding and approximately 15,050
holders of record of Common Stock. The holders of Common Stock are entitled to
one vote for each share on all matters submitted to a vote of stockholders.
The holders of Common Stock do not have cumulative voting rights in the
election of directors. Subject to the rights of the holders of Preferred Stock
(as defined below), the holders of Common Stock are entitled to receive
ratably such dividends, if any, as may be declared by the Board of Directors
of the Company out of legally available funds. In the event of liquidation,
dissolution or winding up of the Company, the holders of Common Stock are
entitled to share ratably in all assets of the Company remaining after the
full amounts, if any, to which the holders of outstanding Preferred Stock are
entitled. The holders of Common Stock have no preemptive, subscription,
redemptive or conversion rights. The outstanding shares are fully paid and
nonassessable.
PREFERRED STOCK
General. The Company is authorized to issue 5,000,000 shares of Preferred
Stock, without par value (the "Preferred Stock"), of which 2,000,000 shares
have been designated as the Series A Junior Participating Preferred Stock. No
shares of Preferred Stock are outstanding. The Board of Directors of the
Company has authority, without stockholder approval (subject to a limited
exception), to issue shares of Preferred Stock in one or more series and to
determine the number of shares, designations, dividend rights, conversion
rights, voting power, redemption rights, liquidation preferences and other
terms of such series. The issuance of Preferred Stock, while providing desired
flexibility in connection with possible acquisitions and other corporate
purposes, could adversely affect the voting power of holders of Common Stock
and the likelihood that such holders will receive dividend payments and
payments upon liquidation and could have the effect of delaying, deferring or
preventing a change in control of the Company. The Company has no present
plans to issue any Preferred Stock.
Series A Preferred Stock. The Board of Directors of the Company has, in
conjunction with its adoption of the Rights Agreement described below,
designated 2,000,000 shares of Preferred Stock as the Series A Junior
Participating Preferred Stock (the "Series A Preferred Stock"). The terms of
the Series A Preferred Stock are designed so that the value of each one-
hundredth of a share purchasable upon exercise of a Right will approximate the
value of one share of Common Stock. The Series A Preferred Stock is
nonredeemable and will rank junior to all other series of Preferred Stock.
Each whole share of Series A Preferred Stock is entitled to receive a
cumulative quarterly preferential dividend in an amount per share equal to the
greater of (i) $1.00 in cash or (ii), in the aggregate, 100 times the dividend
declared on the Common Stock. In the event of liquidation, the holders of the
Series A Preferred Stock are entitled to receive a preferential liquidation
payment equal to the greater of (i) $100.00 per share or (ii), in the
aggregate, 100 times the payment made on the Common Stock, plus, in either
case, the accrued and unpaid dividends and distributions thereon. In the event
of any merger, consolidation or other transaction in which the Common Stock is
exchanged for or changed into other stock or securities, cash or property,
each whole share of Series A Preferred Stock is entitled to receive 100 times
the amount received per share of Common Stock. Each whole share of Series A
Preferred Stock is entitled to 100 votes on all matters submitted to a vote of
the stockholders of the Company, and holders of Series A Preferred Stock will
generally vote together as one class with the holders of Common Stock and any
other capital stock on all matters submitted to a vote of stockholders of the
Company.
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RIGHTS TO PURCHASE PREFERRED STOCK
On May 20, 1986, the Board of Directors declared a dividend of one preferred
share purchase right (a "Right") for each outstanding share of Common Stock
held of record on June 2, 1986 and approved the further issuance of Rights
with respect to all shares of Halliburton Common Stock that are subsequently
issued. The Rights were issued subject to a Rights Agreement that, in its
amended and restated form, is the Second Amended and Restated Rights Agreement
dated as of December 15, 1995 between Halliburton and Chemical Mellon
Shareholder Services L.L.C. (now ChaseMellon Shareholder Services, L.L.C.), as
Rights Agent (the "Restated Rights Agreement"). Each Right now entitles the
registered holder to purchase from the Company one-hundredth of a share of
Series A Preferred Stock at a price of $150.00 in cash (the "Purchase Price"),
subject to adjustment. See "Preferred Stock--Series A Preferred Stock." Until
the occurrence of certain events described below, the Rights are not
exercisable, will be evidenced by the certificates for Common Stock and will
not be transferable apart from the Common Stock.
Detachment of Rights; Exercise. The Rights are currently attached to all
certificates representing outstanding shares of Common Stock and no separate
Right certificates have been distributed. The Rights will separate from the
Common Stock and a distribution date ("Distribution Date") will occur upon the
earlier of (i) ten business days following the public announcement that a
person or group of affiliated or associated persons (an "Acquiring Person")
has acquired beneficial ownership of 15% or more of the outstanding Voting
Shares (as defined in the Restated Rights Agreement) of the Company or (ii)
ten business days following the commencement or announcement of an intention
to commence a tender offer or exchange offer, the consummation of which would
result in the beneficial ownership by a person or group of 15% or more of such
outstanding Voting Shares.
The Rights are not exercisable until the Distribution Date. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights will be mailed to holders of record of Common Stock as of the close
of business on the Distribution Date and such separate certificates alone will
thereafter evidence the Rights.
If a person or group were to acquire 15% or more of the Voting Shares of the
Company, each Right then outstanding (other than Rights beneficially owned by
the Acquiring Person which would become null and void) would become a right to
buy that number of shares of Common Stock (or, under certain circumstances,
the equivalent number of one-hundredths of a share of Series A Preferred
Stock) that at the time of such acquisition would have a market value of two
times the Purchase Price of the Right.
If the Company were acquired in a merger or other business combination
transaction or more than 50% of its consolidated assets or earning power were
sold, proper provision would be made so that each holder of a Right would
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction would have a
market value of two times the Purchase Price of the Right.
Antidilution and Other Adjustments. The number of shares (or fractions
thereof) of Series A Preferred Stock or other securities or property issuable
upon exercise of the Rights, and the Purchase Price payable, are subject to
customary adjustments from time to time to prevent dilution. The number of
outstanding Rights and the number of shares (or fractions thereof) of Series A
Preferred Stock issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Stock or a stock
dividend on the Common Stock payable in Common Stock or any subdivision,
consolidation or combination of the Common Stock occurring, in any such case,
prior to the Distribution Date.
Exchange Option. At any time after the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 15% or more of the
outstanding Voting Shares of the Company and before the acquisition by a
person or group of 50% or more of the outstanding Voting Shares of the
Company, the Board of Directors may, at its option, issue Common Stock in
mandatory redemption of, and in exchange for, all or part of the then
outstanding and exercisable Rights (other than Rights owned by such person or
group which would become null and void) at an exchange ratio of one share of
Common Stock (or one-hundreth of a share of Series A Preferred Stock) for each
two shares of Common Stock for which each Right is then exercisable, subject
to adjustment.
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<PAGE>
Redemption of Rights. At any time prior to the first public announcement
that a person or group has become the beneficial owner of 15% or more of the
outstanding Voting Shares, the Board of Directors of the Company may redeem
all but not less than all the then outstanding Rights at a price of $.01 per
Right (the "Redemption Price"). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board of
Directors of the Company in its sole discretion may establish. Immediately
upon the action of the Board of Directors of the Company ordering redemption
of the Rights, the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption Price.
Expiration; Amendment of Rights. The Rights will expire on December 15,
2005, unless earlier extended, redeemed or exchanged. The terms of the Rights
may be amended by the Board of Directors of the Company without the consent of
the holders of the Rights, including an amendment to extend the expiration
date of the Rights, and, provided a Distribution Date has not occurred, to
extend the period during which the Rights may be redeemed, except that after
the first public announcement that a person or group has become the beneficial
owner of 15% or more of the outstanding Voting Shares, no such amendment may
materially and adversely affect the interests of holders of the Rights.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without the approval of the Board of Directors of the Company. The Rights
should not, however, interfere with any merger or other business combination
that is approved by the Board of Directors of the Company.
The foregoing description of the Rights does not purport to be complete and
is qualified in its entirety by reference to the Rights Agreement, a copy of
which is filed as an exhibit to the Registration Statement and is available
free of charge from the Company.
EFFECT OF REORGANIZATION
After the Reorganization, the authorized capital stock, the issued and
outstanding capital stock and the treasury stock of the Holding Company will
be identical to that of the Company immediately prior to the Reorganization.
In addition, prior to the Reorganization, the Holding Company will adopt a
Rights Agreement (the "New Rights Agreement") that will be identical in all
respects to the Restated Rights Agreement except that the Holding Company will
be the party thereto rather than the Company. Under the terms of the New
Rights Agreement, the Holding Company will be obligated to issue one Holding
Company preferred stock purchase right at the time of each issuance thereafter
of Common Stock of the Holding Company. As a result, each share of Common
Stock of the Holding Company issued pursuant to the Reorganization will be
accompanied by a Holding Company preferred stock purchase right and all then
outstanding Rights of the Company will be cancelled.
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DISTRIBUTION
The Company may sell Debt Securities to or through underwriters or dealers
and also may sell Debt Securities directly to one or more other purchasers or
through agents. The Prospectus Supplement sets forth the names of any
underwriters or agents involved in the sale of the Offered Debt Securities and
any applicable commissions or discounts.
Underwriters, dealers or agents may offer and sell the Debt 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. In connection with the sale of the Debt
Securities, underwriters or agents 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 the Debt Securities for whom they
may act as agent. Underwriters or agents may sell the Debt Securities to or
through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters or commissions
from the purchasers for whom they may act as agent.
The Debt Securities, when first issued, will have no established trading
market. Any underwriters or agents to or through whom Debt Securities are sold
by the Company for public offering and sale may make a market in such Debt
Securities, but such underwriters or agents will not be obligated to do so and
may discontinue any market making at any time without notice. No assurance can
be given that a trading market will develop or be continued and no assurance
can be given as to the liquidity of any such market.
Any underwriters, dealers or agents participating in the distribution of the
Debt 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
Debt Securities may be deemed to be underwriting discounts and commissions
under the Securities Act. Underwriters, dealers or agents may be entitled,
under agreements entered into with the Company, to indemnification against or
contribution toward certain civil liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
The legality of the Debt Securities, as well as certain tax matters in
connection therewith, is being passed upon for the Company by Vinson & Elkins
L.L.P., First City Tower, Houston, Texas 77002-6760. Certain legal matters in
connection with the Debt Securities may be passed upon for any underwriters or
dealers by Simpson Thacher & Bartlett (a partnership which includes
professional corporations), 425 Lexington Avenue, New York, New York 10017-
3909.
EXPERTS
The financial statements and schedules incorporated in this Prospectus and
elsewhere in the Registration Statement by reference to the Company's Annual
Report on Form 10-K have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and
are incorporated by reference herein in reliance upon the authority of said
firm as experts in accounting and auditing in giving said reports.
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT, THE APPLICABLE
PRICING SUPPLEMENT OR THE PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS
PROSPECTUS SUPPLEMENT, THE APPLICABLE PRICING SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE AGENTS. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT, THE APPLICABLE PRICING SUPPLEMENT OR
THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT, THE
APPLICABLE PRICING SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER IS NOT QUALIFIED TO
DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
Risk Factors............................................................... S-2
Holding Company Reorganization............................................. S-4
Description of Notes....................................................... S-4
Certain United States Federal Income Tax Considerations.................... S-19
Plan of Distribution....................................................... S-25
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents By Reference............................ 3
The Company................................................................ 4
Use of Proceeds............................................................ 5
Ratio of Earnings to Fixed Charges......................................... 5
Description of Debt Securities............................................. 5
Description of Capital Stock............................................... 15
Distribution............................................................... 18
Legal Matters.............................................................. 18
Experts.................................................................... 18
</TABLE>
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$300,000,000
LOGO
HALLIBURTON COMPANY
MEDIUM-TERM NOTES
DUE NINE MONTHS OR MORE
FROM DATE OF ISSUE
----------------
PROSPECTUS SUPPLEMENT
----------------
MERRILL LYNCH & CO.
LEHMAN BROTHERS
MORGAN STANLEY & CO.
INCORPORATED
NATIONSBANC CAPITAL MARKETS, INC.
, 1996
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
*1.1 --Underwriting Arrangements.
3.1 --Composite Certificate of Incorporation filed May 26, 1987 with
the Secretary of State of the State of Delaware and that certain
Certificate of Designations, Rights and Preferences related to the
authorization of the Company's Series A Junior Participating
Preferred Stock (incorporated by reference to Exhibit 4(d) to the
Company's Registration Statement on Form S-3 (File No. 33-38394)
originally filed with the SEC on December 21, 1990).
3.2 --By-laws of the Company, as amended (revised as of July 18, 1996)
(incorporated by reference to Exhibit 3 to the Company's Quarterly
Report on Form 10-Q for the quarterly period ended September 30,
1996).
4.1 --Second Amended and Restated Rights Agreement dated as of December
15, 1995, between the Company and Chemical Mellon Shareholder
Services L.L.C., as Rights Agent, which includes the form of Right
Certificate as Exhibit A (incorporated by reference to Exhibit 1
to the Company's Form 8-A/A dated January 16, 1996 to the
Company's Registration Statement on Form 8-A dated May 20, 1986).
*4.2 --Forms of Debt Securities.
4.3 --Senior Indenture dated as of January 2, 1991 between the Company
and Texas Commerce Bank National Association, as Trustee
(incorporated by reference to Exhibit 4(b) to the Company's
Registration Statement on Form S-3 (File No. 33-38394) originally
filed with the SEC on December 21, 1990).
+4.4 --Form of Second Senior Indenture dated as of December 1, 1996
between the Company and Texas Commerce Bank National Association,
as Trustee.
*4.5 --Form of First Supplemental Indenture dated as of December 5, 1996
between the Company and Texas Commerce Bank National Association,
as Trustee, supplementing the Second Senior Indenture (Exhibit
4.4).
4.6 --Subordinated Indenture dated as of January 2, 1991 between the
Company and Texas Commerce Bank National Association, as Trustee
(incorporated by reference to Exhibit 4(c) to the Company's
Registration on Form S-3 (File No. 33-38394) originally filed with
the SEC on December 21, 1990).
4.7 --Form of Common Stock Certificate (incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on Form S-3
(File No. 33-58212) originally filed with the SEC on February 12,
1993).
++5.1 --Opinion of Vinson & Elkins L.L.P. as to the legality of the
securities being registered.
*8.1 --Opinion of Vinson & Elkins L.L.P. as to certain tax matters.
+12.1 --Computation of Ratio of Earnings to Fixed Charges.
++23.2 --Consent of Vinson & Elkins L.L.P. (contained in Exhibit 5.1).
+23.3 --Consent of Arthur Andersen LLP.
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
+++24.1 --Powers of Attorney.
++25.1 --Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939 of Texas Commerce Bank National Association.
</TABLE>
--------
* The Company will file forms of, or final copies of, any
underwriting, distribution or similar agreements, Debt Securities,
supplemental indentures and any related legal opinions not
previously so filed by amendment hereto or as exhibits to a Current
Report on Form 8-K.
+ Filed herewith.
++ Previously filed.
+++ Powers of attorney with respect to three directors elected to the
Company's Board of Directors since the initial effectiveness of
this Registration Statement filed herewith. Powers of attorney with
respect to the remaining directors were previously filed.
II-2
<PAGE>
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 post effective
amendment to registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Dallas, State of Texas,
on this the 4th day of December, 1996.
HALLIBURTON COMPANY
/s/ Richard B. Cheney
By __________________________________
Richard B. Cheney, Chairman of the
Board, President andChief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on this the 4th day of December, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
/s/ Richard B. Cheney Chairman of the Board,
- ------------------------------------ President and Chief
Richard B. Cheney Executive Officer and
Director (Principal
Executive Officer)
/s/ David J. Lesar Executive Vice President and
- ------------------------------------ Chief Financial Officer
David J. Lesar (Principal Financial
Officer)
/s/ R. Charles Muchmore Vice President and
- ------------------------------------ Controller (Principal
R. Charles Muchmore Accounting Officer)
* Anne L. Armstrong Director
- ------------------------------------
Anne L. Armstrong
* Lord Clitheroe Director
- ------------------------------------
Lord Clitheroe
* Robert L. Crandall Director
- ------------------------------------
Robert L. Crandall
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C> <C>
* W. R. Howell Director
- ------------------------------------
W. R. Howell
* Dale P. Jones Director
- ------------------------------------
Dale P. Jones
* Delano E. Lewis Director
- ------------------------------------
Delano E. Lewis
* C. J. Silas Director
- ------------------------------------
C. J. Silas
* Roger T. Staubach Director
- ------------------------------------
Roger T. Staubach
* Richard J. Stegemeier Director
- ------------------------------------
Richard J. Stegemeier
* E. L. Williamson Director
- ------------------------------------
E. L. Williamson
</TABLE>
/s/ Lester L. Coleman
*By: __________________________
Lester L. Coleman
Pursuant to Powers of
Attorney
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
NUMBERING
EXHIBIT PAGE NO.
------- ----------
<C> <S> <C>
*1.1 --Underwriting Arrangements.
3.1 --Composite Certificate of Incorporation filed May 26,
1987 with the Secretary of State of the State of
Delaware and that certain Certificate of Designations,
Rights and Preferences related to the authorization of
the Company's Series A Junior Participating Preferred
Stock (incorporated by reference to Exhibit 4(d) to the
Company's Registration Statement on Form S-3 (File No.
33-38394) originally filed with the SEC on December 21,
1990).
3.2 --By-laws of the Company, as amended (revised as of July
18, 1996) (incorporated by reference to Exhibit 3 to
the Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 1996).
4.1 --Second Amended and Restated Rights Agreement dated as
of December 15, 1995, between the Company and Chemical
Mellon Shareholder Services L.L.C., as Rights Agent,
which includes the form of Right Certificate as Exhibit
A (incorporated by reference to Exhibit 1 to the
Company's Form 8-A/A dated January 16, 1996 to the
Company's Registration Statement on Form 8-A dated May
20, 1986).
*4.2 --Forms of Debt Securities.
4.3 --Senior Indenture dated as of January 2, 1991 between
the Company and Texas Commerce Bank National
Association, as Trustee (incorporated by reference to
Exhibit 4(b) to the Company's Registration Statement on
Form S-3 (File No. 33-38394) originally filed with the
SEC on December 21, 1990).
+4.4 --Form of Second Senior Indenture dated as of December
1, 1996 between the Company and Texas Commerce Bank
National Association, as Trustee.
*4.5 --Form of First Supplemental Indenture dated as of
December 5, 1996 between the Company and Texas Commerce
Bank National Association, as Trustee, supplementing
the Second Senior Indenture (Exhibit 4.4).
4.6 --Subordinated Indenture dated as of January 2, 1991
between the Company and Texas Commerce Bank National
Association, as Trustee (incorporated by reference to
Exhibit 4(c) to the Company's Registration on Form S-3
(File No. 33-38394) originally filed with the SEC on
December 21, 1990).
4.7 --Form of Common Stock Certificate (incorporated by
reference to Exhibit 4.1 to the Company's Registration
Statement on Form S-3 (File No. 33-58212) originally
filed with the SEC on February 12, 1993).
++5.1 --Opinion of Vinson & Elkins L.L.P. as to the legality
of the securities being registered.
*8.1 --Opinion of Vinson & Elkins L.L.P. as to certain tax
matters.
+12.1 --Computation of Ratio of Earnings to Fixed Charges.
++23.2 --Consent of Vinson & Elkins L.L.P. (contained in
Exhibit 5.1).
+23.3 --Consent of Arthur Andersen LLP.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIAL
NUMBERING
EXHIBIT PAGE NO.
------- ----------
<C> <S> <C>
+++24.1 --Powers of Attorney.
++25.1 --Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of Texas Commerce Bank National
Association.
</TABLE>
- --------
* The Company will file forms of, or final copies of, any underwriting,
distribution or similar agreements, Debt Securities, supplemental
indentures and any related legal opinions not previously so filed by
amendment hereto or as exhibits to a Current Report on Form 8-K.
+ Filed herewith.
++ Previously filed.
+++ Powers of attorney with respect to three directors elected to the
Company's Board of Directors since the initial effectiveness of this
Registration Statement filed herewith. Powers of attorney with respect to
the remaining directors were previously filed.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HALLIBURTON COMPANY
AND
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
----------------
SECOND SENIOR INDENTURE
DATED AS OF DECEMBER 1, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CROSS REFERENCE SHEET
----------------
Provisions of Trust Indenture Act of 1939, as amended, and the Second Senior
Indenture to be dated as of December 1, 1996 between HALLIBURTON COMPANY and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION, Trustee:
<TABLE>
<CAPTION>
SECTION OR THE ACT SECTION OF INDENTURE
- ------------------ --------------------
<S> <C>
310(a)(1), (2) and (5).......................... 6.9
310(a)(3) and (4)............................... Inapplicable
310(b).......................................... 6.8 and 6.10(a), (b) and (d)
310(c).......................................... Inapplicable
311(a).......................................... 6.13(a) and (c)
311(b).......................................... 6.13(b) and (c)
311(c).......................................... Inapplicable
312(a).......................................... 4.1 and 4.2(a)
312(b).......................................... 4.2(a) and (b)(i) and (ii)
312(c).......................................... 4.2(c)
313(a).......................................... 4.4(a) (i). (ii), (iii), (iv),
(v), (vi) and (vii)
313(a)(5)....................................... Inapplicable
313(b)(1)....................................... Inapplicable
313(b)(2)....................................... 4.4(b)
313(c).......................................... 4.4(c)
313(d).......................................... 4.4(d)
314(a).......................................... 4.3
314(b).......................................... Inapplicable
314(c)(1) and (2)............................... 11.5
314(c)(3)....................................... Inapplicable
314(d).......................................... Inapplicable
*314(e)......................................... 11.5
314(f).......................................... Inapplicable
315(a), (c) and (d)............................. 6.1
315(b).......................................... 5.8
315(e).......................................... 5.9
316(a)(1)....................................... 5.7
316(a)(2)....................................... Not required
316(a) (last sentence).......................... 7.4
316(b).......................................... 5.4
317(a).......................................... 5.2
317(b).......................................... 3.5(a)
318(a).......................................... 11.7
</TABLE>
- --------
* This Cross Reference Sheet is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
----------------
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Parties...................................................................
Recitals..................................................................
ARTICLE ONE
Definitions
Section 1.1 Authenticating Agent......................................... 1
Bankruptcy Code.............................................. 1
Board of Directors........................................... 1
Board Resolution............................................. 1
Business Day................................................. 2
Commission................................................... 2
Common Stock................................................. 2
Consolidated Net Tangible Assets............................. 2
Corporate Trust Office....................................... 2
Depositary................................................... 2
Event of Default............................................. 2
Global Security.............................................. 2
Holder, Holder of Securities, Securityholder................. 2
Indenture.................................................... 2
interest..................................................... 2
Issuer....................................................... 2
Issuer Order................................................. 2
Officer's Certificate........................................ 3
Opinion of Counsel........................................... 3
original issue date.......................................... 3
Original Issue Discount Security............................. 3
Outstanding.................................................. 3
Paying Agent................................................. 3
Periodic Offering............................................ 3
Person....................................................... 3
Place of Payment............................................. 4
principal.................................................... 4
Principal Property........................................... 4
record date.................................................. 4
Registrar.................................................... 4
Responsible Officer.......................................... 4
Restricted Subsidiary........................................ 4
Sale and Leaseback Transaction............................... 4
Secured Debt................................................. 4
Security, Securities......................................... 4
Subsidiary................................................... 4
Trust Indenture Act of 1939.................................. 4
Trustee...................................................... 5
Unrestricted Subsidiary...................................... 5
U.S. Government Obligations.................................. 5
Yield to Maturity............................................ 5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
ARTICLE TWO
Securities
<C> <S> <C>
Section 2.1. Forms Generally.......................................... 5
Section 2.2. Form of Trustee's Certificate of Authentication.......... 5
Section 2.3. Amount Unlimited; Issuable in Series..................... 6
Section 2.4. Authentication and Delivery of Securities................ 7
Section 2.5. Execution of Securities.................................. 9
Section 2.6. Certificate of Authentication............................ 9
Section 2.7. Denomination and Date of Securities; Payments of
Interest................................................ 10
Section 2.8. Registration, Transfer and Exchange...................... 10
Section 2.9. Mutilated, Defaced, Destroyed, Lost and Stolen
Securities.............................................. 12
Section 2.10. Cancellation of Securities; Disposition Thereof.......... 12
Section 2.11. Temporary Securities..................................... 13
ARTICLE THREE
Covenants of the Issuer
Section 3.1. Payment of Principal, Premium and Interest............... 13
Section 3.2. Offices for Notices and Payments, etc.................... 13
Section 3.3. No Interest Extension.................................... 13
Section 3.4. Appointments to Fill Vacancies in Trustee's Office....... 13
Section 3.5. Provision as to Paying Agent............................. 13
Section 3.6. Restriction on Creation of Secured Debt.................. 14
Section 3.7. Restriction on Sale and Leaseback Transactions........... 15
Section 3.8. Restriction on Transfer of Principal Property to
Unrestricted Subsidiary................................. 16
ARTICLE FOUR
Securityholders Lists and Reports by the Issuer and the Trustee
Section 4.1. Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholder............................. 16
Section 4.2. Preservation and Disclosure of Securityholders Lists..... 16
Section 4.3. Reports by the Issuer.................................... 17
Section 4.4. Reports by the Trustee................................... 18
ARTICLE FIVE
Remedies of the Trustee and Securityholders on Event of Default
Section 5.1. Events of Default........................................ 19
Section 5.2. Payment of Securities on Default; Suit Therefor.......... 20
Section 5.3. Application of Moneys Collected by Trustee............... 21
Section 5.4. Proceedings by Securityholders........................... 22
Section 5.5. Proceedings by Trustee................................... 22
Section 5.6. Remedies Cumulative and Continuing....................... 22
Section 5.7. Direction of Proceedings; Waiver of Defaults by Majority
of Securityholders...................................... 22
Section 5.8. Notice of Defaults....................................... 23
Section 5.9. Undertaking to Pay Costs................................. 23
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
ARTICLE SIX
Concerning the Trustee
<C> <S> <C>
Section 6.1. Duties and Responsibilities of the Trustee; During
Default Prior to Default................................ 23
Section 6.2. Certain Rights of the Trustee............................ 24
Section 6.3. Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof........... 25
Section 6.4. Trustee and Agents May Hold Securities; Collections,
etc..................................................... 25
Section 6.5. Moneys Held by Trustee................................... 25
Section 6.6. Compensation and Indemnification of Trustee and Its Prior
Claim................................................... 25
Section 6.7. Right of Trustee to Rely on Officer's Certificate, etc... 26
Section 6.8. Qualification of Trustee; Conflicting Interests.......... 26
Section 6.9. Persons Eligible for Appointment as Trustee.............. 30
Section 6.10. Resignation and Removal; Appointment of Successor
Trustee................................................. 30
Section 6.11. Acceptance of Appointment by Successor Trustee........... 31
Section 6.12. Merger, Conversion, Consolidation or Succession to
Business of Trustee..................................... 32
Section 6.13. Preferential Collection of Claims Against the Issuer..... 32
Section 6.14. Appointment of Authenticating Agent...................... 34
ARTICLE SEVEN
Concerning the Securityholders
Section 7.1. Evidence of Action Taken by Securityholders.............. 35
Section 7.2. Proof of Execution of Instruments and of Holding of
Securities.............................................. 35
Section 7.3. Holders to be Treated as Owners.......................... 35
Section 7.4. Securities Owned by Issuer Deemed Not Outstanding........ 36
Section 7.5. Right of Revocation of Action Taken...................... 36
Section 7.6. Record Date for Consents and Waivers..................... 36
ARTICLE EIGHT
Supplemental Indentures
Section 8.1. Supplemental Indentures Without Consent of
Securityholders......................................... 37
Section 8.2. Supplemental Indentures With Consent of Securityholders.. 37
Section 8.3. Effect of Supplemental Indenture......................... 38
Section 8.4. Documents to Be Given to Trustee......................... 39
Section 8.5. Notation on Securities in Respect of Supplemental
Indentures.............................................. 39
ARTICLE NINE
Consolidation, Merger, Sale, Conveyance and Lease
Section 9.1. Issuer May Consolidate, etc. on Certain Terms............ 39
Section 9.2. Securities to be Secured in Certain Events............... 39
Section 9.3. Successor Corporation to be Substituted.................. 39
Section 9.4. Opinion of Counsel to be Given Trustee................... 40
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
ARTICLE TEN
Satisfaction and Discharge of Indenture; Unclaimed Moneys
<C> <S> <C>
Section 10.1. Satisfaction and Discharge of Indenture................... 40
Section 10.2. Application by Trustee of Funds Deposited for Payment of
Securities............................................... 42
Section 10.3. Repayment of Moneys Held by Paying Agent.................. 42
Section 10.4. Return of Moneys Held By Trustee and Paying Agent
Unclaimed for Two Years.................................. 42
Section 10.5. Indemnity For U.S. Government Obligations................. 42
ARTICLE ELEVEN
Miscellaneous Provisions
Section 11.1. Partners, Incorporators, Stockholders, Officers and
Directors of Issuer Exempt from Individual Liability..... 43
Section 11.2. Provisions of Indenture for the Sole Benefit of Parties
and Holders of Securities................................ 43
Section 11.3. Successors and Assigns of Issuer Bound by Indenture....... 43
Section 11.4. Notices and Demands on Issuer, Trustee and Holders of
Securities............................................... 43
Section 11.5. Officer's Certificates and Opinions of Counsel; Statements
to be Contained Therein.................................. 43
Section 11.6. Payments Due on Saturdays, Sundays and Holidays........... 44
Section 11.7. Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939.................................... 44
Section 11.8. Governing Law............................................. 44
Section 11.9. Counterparts.............................................. 44
Section 11.10. Effect of Headings........................................ 45
ARTICLE TWELVE
Redemption of Securities and Sinking Funds
Section 12.1. Applicability of Article.................................. 45
Section 12.2. Notice of Redemption; Partial Redemptions................. 45
Section 12.3. Payment of Securities Called for Redemption............... 46
Section 12.4. Exclusion of Certain Securities from Eligibility for
Selection for Redemption................................. 46
Section 12.5. Mandatory and Optional Sinking Funds...................... 46
TESTIMONIUM...............................................................
SIGNATURES................................................................
</TABLE>
iv
<PAGE>
THIS SECOND SENIOR INDENTURE, dated as of December 1, 1996 between
HALLIBURTON COMPANY, a Delaware corporation (the "Issuer"), and TEXAS COMMERCE
BANK NATIONAL ASSOCIATION, as trustee (the "Trustee"),
WITNESSETH:
Whereas, the Issuer has duly authorized the issue from time to time of its
unsecured debentures, notes or other evidences of indebtedness to be issued in
one or more series (the "Securities") up to such principal amount or amounts
as may from time to time be authorized in accordance with the terms of this
Indenture;
Whereas, the Issuer has duly authorized the execution and delivery of this
Indenture to provide, among other things, for the authentication, delivery and
administration of the Securities; and
Whereas, all things necessary to make this Indenture a valid indenture and
agreement according to its terms have been undertaken and completed;
Now, THEREFORE::
In consideration of the premises and the purchases of the Securities by the
Holders thereof, the Issuer and the Trustee mutually covenant and agree for
the equal and proportionate benefit of the respective Holders from time to
time of the Securities as follows:
ARTICLE ONE
Definitions
Section 1.1 For all purposes of this Indenture and of any indenture
supplemental hereto the following terms shall have the respective meanings
specified in this Section 1.1 (except as otherwise expressly provided or
unless the context otherwise clearly requires). All other terms used in this
Indenture that are defined in the Trust Indenture Act of 1939, including terms
defined therein by reference to the Securities Act of 1933, shall have the
meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of this Indenture (except as herein
otherwise expressly provided or unless the context otherwise clearly
requires).
All accounting terms used herein and not expressly defined shall have the
meanings assigned to such terms in accordance with generally accepted
accounting principles, and the term "generally accepted accounting principles"
means such accounting principles as are generally accepted at the time of any
computation.
The words "herein", "hereof"' and "hereunder" and other words of similar
import refer to this indenture as a whole and not to any particular Article,
Section or other subdivision.
The terms defined in this Article have the meanings assigned to them in this
Article and include the plural as well as the singular.
"Authenticating Agent" shall have the meaning set forth in Section 6.14.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 United States
Code (S)(S) 101 et seq., or any successor statute thereto.
"Board of Directors" means either the Board of Directors of the Issuer or
any committee of such Board duly authorized to act on its behalf.
"Board Resolution" means one or more resolutions, certified by the secretary
or an assistant secretary of the Issuer to have been duly adopted or consented
to by the Board of Directors and to be in full force and effect.
<PAGE>
"Business Day" means, with respect to any Security, a day that (a) in the
Place of Payment (or in any of the Places of Payment, if more than one) in
which amounts are payable, as specified in the form of such Security, and (b)
in the city in which the Trustee administers its corporate trust business, is
not a day on which banking institutions are authorized or required by law or
regulation to close.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after the execution and delivery of this Indenture such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act of 1939, then the body performing such duties on such date.
"Common Stock" means the common stock, par value $2.50 per share, of the
Issuer as the same exists at the date of execution and delivery of this
Indenture or as such stock may be reconstituted from time to time.
"Consolidated Net Tangible Assets" means the aggregate amount of assets
included on a consolidated balance sheet of the Issuer and its Restricted
Subsidiaries, less applicable reserves and other properly deductible items and
after deducting therefrom (a) all current liabilities, and (b) all goodwill,
trade names, trademarks, patents, unamortized debt discount and expense and
other like intangibles, all in accordance with generally accepted accounting
principles consistently applied (except that the accounts of any Restricted
Subsidiary engaged in the insurance business shall be included using the
equity method of accounting).
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located in Houston, Texas.
"Depositary" means, with respect to the Securities of any series issuable or
issued in the form of one or more Global Securities, the Person designated as
Depositary by the Issuer pursuant to Section 2.3 until a successor Depositary
shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Depositary" shall mean or include each Person who
is then a Depositary hereunder, and, if at any time there is more than one
such Person, "Depositary" as used with respect to the Securities of any such
series shall mean the Depositary with respect to the Global Securities of such
series.
"Event of Default" means any event or condition specified as such in Section
5.1.
"Global Security" means a Security evidencing all or a part of a series of
Securities issued to the Depositary for such series in accordance with Section
2.3 and bearing the legend prescribed in Section 2.4.
"Holder", "Holder of Securities", "Securityholder" or other similar terms
mean, in the case of any Security, the person in whose name such Security is
registered in the security register kept by the Issuer for that purpose in
accordance with the terms hereof.
"Indenture" means this instrument as originally executed and delivered or,
if amended or supplemented as herein provided, as so amended or supplemented
or both, including, for all purposes of this instrument and any such
supplement, the provisions of the Trust Indenture Act of 1939 that are deemed
to be a part of and govern this instrument and any such supplement,
respectively, and shall include the forms and terms of particular series of
Securities established as contemplated hereunder.
"interest" means, when used with respect to non-interest bearing Securities,
interest payable after maturity (whether at stated maturity, upon acceleration
or redemption or otherwise) or after the date, if any, on which the Issuer
becomes obligated to acquire a Security, whether by purchase or otherwise.
"Issuer" means (except as otherwise provided in Section 6.8) Halliburton
Company, a Delaware corporation, and, subject to Article Nine, its successors
and assigns.
"Issuer Order" means a written statement, request or order of the Issuer
which is signed in its name by the chairman of the Board of Directors, the
president, any senior vice president or any vice president of the Issuer.
2
<PAGE>
"Officer's Certificate", when used with respect to the Issuer, means a
certificate signed by the chairman of the Board of Directors, the president,
or any vice president and by the treasurer, any assistant treasurer, the
controller, any assistant controller, the secretary or any assistant secretary
of the Issuer. Each such certificate shall include the statements provided for
in Section 11.5 if and to the extent required by the provisions of such
Section 11.5. One of the officers signing any Officer's Certificate given
pursuant to Section 4.3 shall be the principal executive, financial or
accounting officer of the Issuer.
"Opinion of Counsel" means an opinion in writing signed by the general
counsel of the Issuer or by such other legal counsel who may be an employee of
or counsel to the Issuer and who shall be satisfactory to the Trustee. Each
such opinion shall include the statements provided for in Section 11.5, if and
to the extent required by the provisions of such Section 11.5.
"original issue date" of any Security (or portion thereof) means the earlier
of (a) the date of such Security or (b) the date of any Security (or portion
thereof) for which such Security was issued (directly or indirectly) on
registration of transfer, exchange or substitution.
"Original Issue Discount Security" means any Security that 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 5.1.
"Outstanding" (except as otherwise provided in Section 6.8), when used with
reference to Securities, shall, subject to the provisions of Section 7.4,
mean, as of any particular time, all Securities authenticated and delivered by
the Trustee under this Indenture, except:
(a) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(b) Securities (other than Securities of any series as to which the
provisions of Article Ten hereof shall not be applicable), or portions
thereof, for the payment or redemption of which moneys or U.S. Government
Obligations (as provided for in Section 10.1) in the necessary amount shall
have been deposited in trust with the Trustee or with any Paying Agent
(other than the Issuer) or shall have been set aside, segregated and held
in trust by the Issuer for the Holders of such Securities (if the Issuer
shall act as its own paying agent), provided that, if such Securities, or
portions thereof, are to be redeemed prior to the maturity thereof, notice
of such redemption shall have been given as herein provided, or provision
satisfactory to the Trustee shall have been made for giving such notice;
and
(c) Securities which shall have been paid or in substitution for which
other Securities shall have been authenticated and delivered pursuant to
the terms of Section 2.9 (except with respect to any such Security as to
which proof satisfactory to the Trustee is presented that such Security is
held by a Person in whose hands such Security is a legal, valid and binding
obligation of the Issuer).
In determining whether the Holders of the requisite aggregate principal
amount of Outstanding Securities of any or all series have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, the
principal amount of an Original Issue Discount Security that shall be deemed
to be Outstanding for such purposes shall be the amount of the principal
thereof that would be due and payable as of the date of such determination (as
certified by the Issuer to the Trustee) upon a declaration of acceleration of
the maturity thereof pursuant to Section 5.1.
"Paying Agent" shall have the meaning set forth in Section 3.2.
"Periodic Offering" means an offering of Securities of a series from time to
time, the specific terms of which Securities, including, without limitation,
the rate or rates of interest, if any, thereon, the stated maturity or
maturities thereof and the redemption provisions, if any, with respect
thereto, are to be determined by the Issuer or its agents upon the issuance of
such Securities.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, estate, unincorporated organization
or government or any agency or political subdivision thereof.
3
<PAGE>
"Place of Payment", when used with respect to the Securities of any series,
means the place or places where the principal of and interest, if any, on the
Securities of such series are payable as specified in accordance with Section
2.3.
"principal", whenever used with reference to the Securities or any Security
or any portion thereof, shall be deemed to include "and premium, if any,".
"Principal Property" means any real property, any manufacturing plant,
warehouse, office building or other physical facility, or any item of marine,
transportation or construction equipment or other like depreciable asset of
the Issuer or of any Restricted Subsidiary whether owned at January , 1991 or
thereafter acquired (other than any facility thereafter acquired for the
control or abatement of atmospheric pollutants or contaminants or water,
noise, odor or other pollution) which in the opinion of the Board of Directors
is of material importance to the total business conducted by the Issuer and
its Restricted Subsidiaries, as a whole.
"record date" shall have the meaning set forth in Section 2.7.
"Registrar" shall have the meaning set forth in Section 3.2.
"Responsible Officer", when used with respect to the Trustee, means any
officer assigned by the Trustee to administer its corporate trust matters.
"Restricted Subsidiary" means (a) any Subsidiary other than an Unrestricted
Subsidiary, and (b) any Subsidiary which was an Unrestricted Subsidiary but
which, subsequent to the date hereof, is designated by the Issuer (by
certified resolution of the Board of Directors delivered to the Trustee) to be
a Restricted Subsidiary; provided, however, that the Issuer may not designate
any such Subsidiary to be a Restricted Subsidiary if the Issuer would thereby
breach any covenant or agreement herein contained (on the assumptions that any
outstanding Secured Debt of such Subsidiary was incurred at the time of such
designation and that any Sale and Leaseback Transaction (as defined in Section
3.7) to which such Subsidiary is then a party was entered into at the time of
such designation).
"Sale and Leaseback Transaction" shall have the meaning set forth in Section
3.7.
"Secured Debt" means indebtedness for money borrowed by the Issuer or a
Restricted Subsidiary, and any other indebtedness of the Issuer or a
Restricted Subsidiary on which interest is paid or payable (other than
indebtedness owed by a Restricted Subsidiary to the Issuer, by a Restricted
Subsidiary to another Restricted Subsidiary or by the Issuer to a Restricted
Subsidiary), which in any such case is secured by (a) a mortgage or other lien
on any Principal Property of the Issuer or a Restricted Subsidiary, or (b) a
pledge, lien or other security interest on any shares of stock or indebtedness
of a Restricted Subsidiary, or (c) in the case of any such indebtedness of the
Issuer, a guaranty by any Restricted Subsidiary; provided, that any
indebtedness of the Company issued prior to the Reorganization shall not, by
virtue of the assumption of such indebtedness by the Holding Company at the
time of the Reorganization, constitute indebtedness secured by a guarantee of
a Restricted Subsidiary within the meaning of clause (c) above.
"Security" or "Securities" (except as otherwise provided in Section 6.8) has
the meaning stated in the first recital of this Indenture or, as the case may
be, Securities that have been authenticated and delivered pursuant to this
Indenture.
"Subsidiary" means any corporation of which the Issuer, or the Issuer and
one or more Subsidiaries, or any one or more Subsidiaries, directly or
indirectly own voting securities entitling any one or more of the Issuer and
its Subsidiaries to elect a majority of the directors, either at all times or
so long as there is no default or contingency which permits the holders of any
other class or classes of securities to vote for the election of one or more
directors.
"Trust Indenture Act of 1939" (except as otherwise provided in Sections 8.1
and 8.2) means the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990, as in force at the date as of which this
Indenture is originally executed.
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"Trustee" means the Person identified as "Trustee" in the first paragraph
hereof and, subject to the provisions of Article Six, shall also include any
successor trustee. "Trustee" shall also mean or include each Person who is
then a trustee hereunder and, if at any time there is more than one such
Person, "Trustee" as used with respect to the Securities of any series shall
mean the trustee with respect to the Securities of such series.
"Unrestricted Subsidiary" means (a) any Subsidiary acquired or organized
after the date hereof, provided, however, that such Subsidiary shall not be a
successor, directly or indirectly, to any Restricted Subsidiary, and (b) any
Subsidiary whose principal business and assets are located outside the United
States of America, its territories and possessions and Canada or are located
in Puerto Rico, and (c) any Subsidiary the principal business of which
consists of financing or assisting in financing the acquisition or disposition
of products of the Issuer or a Subsidiary by dealers, distributors or other
customers, and (d) any Subsidiary the principal business of which is owning,
leasing, dealing in or developing real property, and (e) any Subsidiary
substantially all the assets of which consist of stock or other securities of
a Subsidiary or Subsidiaries of the character described in clauses (a) through
(d) of this paragraph, unless and until such Subsidiary shall have been
designated to be a Restricted Subsidiary pursuant to clause (b) of the
definition of "Restricted Subsidiary".
"U.S. Government Obligations" shall have the meaning set forth in Section
10.1(B).
"Yield to Maturity" means the yield to maturity on a series of Securities,
calculated at the time of issuance of such series, or, if applicable, at the
most recent redetermination of interest on such series, and calculated in
accordance with generally accepted financial practice.
ARTICLE TWO
Securities
Section 2.1 Forms Generally. The Securities of each series shall be
substantially in such form (not inconsistent with this Indenture) as shall be
established by or pursuant to one or more Board Resolutions (as set forth in a
Board Resolution or, to the extent established pursuant to rather than set
forth in a Board Resolution, an Officer's Certificate detailing such
establishment) or in one or more indentures supplemental hereto, in each case
with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have
imprinted or otherwise reproduced thereon such legend or legends or
endorsements, not inconsistent with the provisions of this Indenture, as may
be required to comply with any law or with any rules or regulations pursuant
thereto, or with any rules of any securities exchange or to conform to general
usage, all as may be determined by the officers executing such Securities, as
evidenced by their execution of such Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Section 2.2 Form of Trustee's Certificate of Authentication. The Trustee's
certificate of authentication on all Securities shall be substantially as
follows:
This is one of the Securities of the series designated herein referred to in
the within-mentioned Indenture.
Texas Commerce Bank National
Association, as Trustee
By __________________________________
Authorized Signatory
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If at any time there shall be an Authenticating Agent appointed with respect
to any series of Securities, then the Securities of such series shall bear, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication which shall be substantially as follows:
This is one of the Securities of the series designated herein referred to
in the within-mentioned Indenture.
Texas Commerce Bank National
Association, as Trustee
By __________________________________
as Authenticating Agent
By __________________________________
Authorized Signatory
Section 2.3 Amount Unlimited, Issuable in Series. The aggregate principal
amount of Securities which may be authenticated and delivered under this
Indenture is unlimited.
The Securities may be issued in one or more series and the Securities of
each such series shall rank equally and pari passu with the Securities of each
other series and with all other unsecured and unsubordinated debt of the
Issuer. There shall be established in or pursuant to one or more Board
Resolutions (and to the extent established pursuant to rather than set forth
in a Board Resolution, in an Officer's Certificate detailing such
establishment) or established in one or more indentures supplemental hereto,
prior to the initial issuance of Securities of any series:
(1) the designation of the Securities of the series, which shall
distinguish the Securities of the series from the Securities of all other
series;
(2) any limit upon the aggregate principal amount of the Securities of
the series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 2.8, 2.9, 2.11, 8.5 or 12.3);
(3) the date or dates on which the principal of the Securities of the
series is payable;
(4) the rate or rates at which the Securities of the series shall bear
interest, if any, the date or dates from which any such interest shall
accrue, on which any such interest shall be payable and on which a record
shall be taken for the determination of Holders to whom any such interest
is payable or the method by which such rate or rates or date or dates shall
be determined or both;
(5) the place or places where and the manner in which the principal of
and interest, if any, on Securities of the series shall be payable (if
other than as provided in Section 3.2) and the office or agency for the
Securities of the series maintained by the Issuer pursuant to Section 3.2;
(6) the right, if any, of the Issuer to redeem, purchase or repay
Securities of the series, in whole or in part, at its option and the period
or periods within which, the price or prices (or the method by which such
price or prices shall be determined or both) at which and any terms and
conditions upon which and the manner in which (if different from the
provisions of Article Twelve) Securities of the series may be so redeemed,
purchased or repaid, in whole or in part, pursuant to any sinking fund or
otherwise;
(7) the obligation, if any, of the Issuer to redeem, purchase or repay
Securities of the series, in whole or in part, pursuant to any mandatory
redemption, sinking fund or analogous provisions or at the option of a
Holder thereof and the period or periods within which, the price or prices
(or the method by which such
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price or prices shall be determined or both) at which and any terms and
conditions upon which and the manner in which (if different from the
provisions of Article Twelve) Securities of the series shall be redeemed,
purchased or repaid, in whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(9) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the maturity thereof;
(10) whether Securities of the series will be issuable as Global
Securities;
(11) if the Securities of such series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Security
of such series) only upon receipt of certain certificates or other
documents or satisfaction of other conditions, the form and terms of such
certificates, documents or conditions;
(12) any trustees, depositaries, authenticating or paying agents,
transfer agents or registrars or any other agents with respect to the
Securities of such series;
(13) any additional events of default or covenants with respect to the
Securities of such series;
(14) whether the provisions of Section 10.1(C) will be applicable to
Securities of such series; and
(15) any other terms of the series (which terms shall not be inconsistent
with the provisions of this Indenture).
All Securities of any one series shall be substantially identical, except as
to denomination and except as may otherwise be provided by or pursuant to the
Board Resolution or Officer's Certificate referred to above or as set forth in
any such indenture supplemental hereto. All Securities of any one series need
not be issued at the same time and may be issued from time to time, consistent
with the terms of this Indenture, if so provided by or pursuant to such Board
Resolution, such Officer's Certificate or in any such indenture supplemental
hereto.
Any such Board Resolution or Officer's Certificate referred to above with
respect to Securities of any series filed with the Trustee on or before the
initial issuance of the Securities of such series shall be incorporated herein
by reference with respect to Securities of such series and shall thereafter be
deemed to be a part of this Indenture for all purposes relating to Securities
of such series as fully as if such Board Resolution or Officer's Certificate
were set forth herein in full.
Section 2.4 Authentication and Delivery of Securities. The Issuer may
deliver Securities of any series executed by the Issuer to the Trustee for
authentication together with the applicable documents referred to below in
this Section 2.4, and the Trustee shall thereupon authenticate and deliver
such Securities to or upon the order of the Issuer (contained in the Issuer
Order referred to below in this Section 2.4) or pursuant to such procedures
acceptable to the Trustee and to such recipients as may be specified from time
to time by an Issuer Order. The maturity date, original issue date, interest
rate, if any, and any other terms of the Securities of such series shall be
determined by or pursuant to such Issuer Order and procedures. If provided for
in such procedures, such Issuer Order may authorize authentication and
delivery pursuant to oral instructions from the Issuer or its duly authorized
agent, which instructions shall be promptly confirmed in writing. In
authenticating the Securities of such series and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive (in the case of subparagraphs (2), (3)
and (4) below only at or before the time of the first request of the Issuer to
the Trustee to authenticate Securities of such series) and (subject to
Section 6.1) shall be fully protected in relying upon, unless and until such
documents have been superceded or revoked:
(1) an Issuer Order requesting such authentication and setting forth
delivery instructions if the Securities of such series are not to be
delivered to the Issuer, provided that, with respect to Securities of a
series subject to a Periodic Offering, (a) such Issuer Order may be
delivered by the Issuer to the Trustee prior to the delivery to the Trustee
of such Securities for authentication and delivery, (b) the Trustee shall
authenticate and deliver Securities of such series for original issue from
time to time, in an aggregate
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principal amount not exceeding the aggregate principal amount established
for such series, pursuant to an Issuer Order or pursuant to procedures
acceptable to the Trustee as may be specified from time to time by an
Issuer Order, (c) the maturity date or dates, original issue date or dates,
interest rate or rates, if any, and any other terms of Securities of such
series shall be determined by an Issuer Order or pursuant to such
procedures, (d) if provided for in such procedures, such Issuer Order may
authorize authentication and delivery pursuant to oral or electronic
instructions from the Issuer or its duly authorized agent or agents, which
oral instructions shall be promptly confirmed in writing and (e) after the
original issuance of the first Security of such series to be issued, any
separate request by the Issuer that the Trustee authenticate Securities of
such series for original issuance will be deemed to be a certification by
the Issuer that it is in compliance with all conditions precedent provided
for in this Indenture relating to the authentication and delivery of such
Securities;
(2) the Board Resolution, Officer's Certificate or executed supplemental
indenture referred to in Sections 2.1 and 2.3 by or pursuant to which the
form and terms of the Securities of such series were established;
(3) an Officer's Certificate setting forth the form or forms and terms of
the Securities stating that the form or forms and terms of the Securities
have been established pursuant to Sections 2.1 and 2.3 and comply with this
Indenture and covering such other matters as the Trustee may reasonably
request; and
(4) at the option of the Issuer, either an Opinion of Counsel, or a
letter from legal counsel addressed to the Trustee permitting it to rely on
an Opinion of Counsel, substantially to the effect that:
(a) the forms of the Securities of such series have been duly
authorized and established in conformity with the provisions of this
Indenture;
(b) in the case of an underwritten offering, the terms of the
Securities of such series have been duly authorized and established in
conformity with the provisions of this Indenture, and, in the case of
an offering that is not underwritten, certain terms of the Securities
of such series have been established pursuant to a Board Resolution, an
Officer's Certificate or a supplemental indenture in accordance with
this Indenture, and when such other terms as are to be established
pursuant to procedures set forth in an Issuer Order shall have been
established, all such terms will have been duly authorized by the
Issuer and will have been established in conformity with the provisions
of this Indenture;
(c) when the Securities of such series have been executed by the
Issuer and authenticated by the Trustee in accordance with the
provisions of this Indenture and delivered to and duly paid for by the
purchasers thereof, they will have been duly issued under this
Indenture and will be valid and legally binding obligations of the
Issuer, enforceable in accordance with their respective terms, and will
be entitled to the benefits of this Indenture; and
(d) the execution and delivery by the Issuer of, and the performance
by the Issuer of its obligations under, the Securities of such series
will not contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Issuer or any agreement or other
instrument binding upon the Issuer or any of its Subsidiaries that is
material to the Issuer and its Subsidiaries, considered as one
enterprise, or, to such counsel's knowledge after the inquiry indicated
therein, any judgment, order or decree of any governmental agency or
any court having jurisdiction over the Issuer or any subsidiary, and no
consent, approval or authorization of any governmental body or agency
is required for the performance by the Issuer of its obligations under
the Securities, except such as are specified and have been obtained and
such as may be required by the securities or blue sky laws of the
various states in connection with the offer and sale of the Securities.
In rendering such opinions, such counsel may qualify any opinions as to
enforceability by stating that such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium and other
similar laws affecting the rights and remedies of creditors and is subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). Such counsel may rely, as to
all matters governed by the laws of jurisdictions other than the State of
Texas and the federal law of the United States, upon opinions of other counsel
(copies of which shall be delivered to the Trustee), who shall
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be counsel reasonably satisfactory to the Trustee, in which case the opinion
shall state that such counsel believes that both such counsel and the Trustee
are entitled so to rely. Such counsel may also state that, insofar as such
opinion involves factual matters, such counsel has relied, to the extent such
counsel deems proper, upon certificates of officers of the Issuer and its
Subsidiaries and certificates of public officials.
The Trustee shall have the right to decline to authenticate and deliver any
Securities of any series under this Section 2.4 if the Trustee, being advised
by counsel determines that such action may not lawfully be taken by the Issuer
or if the Trustee in good faith by its board of directors or board of
trustees, executive committee or a trust committee of directors or trustees or
Responsible Officers shall determine that such action would expose the Trustee
to personal liability to existing Holders or would adversely affect the
Trustee's own rights, duties or immunities under the Securities, this
Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that the Securities of
a series are to be issued in the form of one or more Global Securities, then
the Issuer shall execute and the Trustee shall, in accordance with this
Section 2.4 and the Issuer Order with respect to such series, authenticate and
deliver one or more Global Securities that (i) shall represent and shall be
denominated in an amount equal to the aggregate principal amount of all of the
Securities of such series to be issued in the form of Global Securities and
not yet cancelled, (ii) shall be registered in the name of the Depositary for
such Global Security or Securities or the nominee of such Depositary, (iii)
shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary's instructions, and (iv) shall bear a legend substantially to the
following effect: "Unless and until it is exchanged in whole or in part for
Securities in definitive registered form, this Security may not be transferred
except as a whole by the Depositary to the nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary."
Each Depositary designated pursuant to Section 2.3 must, at the time of its
designation and at all times while it serves as Depositary, be a clearing
agency registered under the Securities Exchange Act of 1934 and any other
applicable statute or regulation.
Section 2.5 Execution of Securities. The Securities shall be signed on
behalf of the Issuer by the chairman of the Board of Directors, the president,
any senior vice president, any vice president or the treasurer of the Issuer,
under its corporate seal which may, but need not, be attested. Such signatures
may be the manual or facsimile signatures of the present or any future such
chairman or officers. The seal of the Issuer may be in the form of a facsimile
thereof and may be impressed, affixed, imprinted or otherwise reproduced on
the Securities. Typographical and other minor errors or defects in any such
reproduction of the seal or any such signature shall not affect the validity
or enforceability of any Security that has been duly authenticated and
delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities shall cease to be such officer before the Security so signed shall
be authenticated and delivered by the Trustee or disposed of by the Issuer,
such Security nevertheless may be authenticated and delivered or disposed of
as though the person who signed such Security had not ceased to be such
officer of the Issuer; and any Security may be signed on behalf of the Issuer
by such persons as, at the actual date of the execution of such Security,
shall be the proper officers of the Issuer, although at the date of the
execution and delivery of this Indenture any such person was not such an
officer.
Section 2.6 Certificate of Authentication. Only such Securities as shall
bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one
of its authorized signatories or its Authenticating Agent, shall be entitled
to the benefits of this Indenture or be valid or obligatory for any purpose.
The execution of such certificate by the Trustee, or its Authenticating Agent,
upon any Security executed by the Issuer shall be conclusive evidence that the
Security so authenticated has been duly authenticated and delivered hereunder
and that the Holder is entitled to the benefits of this
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Indenture. Each reference in this Indenture to authentication by the Trustee
includes authentication by an agent appointed pursuant to Section 6.14.
Section 2.7 Denomination and Date of Securities, Payments of Interest. The
Securities of each series shall be issuable in registered form in
denominations established as contemplated by Section 2.3 or, with respect to
the Securities of any series, if not so established, in denominations of
$1,000 and any integral multiple thereof. The Securities of each series shall
be numbered, lettered or otherwise distinguished in such manner or in
accordance with such plan as the chairman of the Board of Directors or the
officers of the Issuer executing the same may determine with the approval of
the Trustee, as evidenced by the execution and authentication thereof.
Each Security shall be dated the date of its authentication. The Securities
of each series shall bear interest, if any, from the date, and such interest,
if any, shall be payable on the dates, established as contemplated by Section
2.3.
The Person in whose name any Security of any series is registered at the
close of business on any record date applicable to a particular series with
respect to any interest payment date for such series shall be entitled to
receive the interest, if any, payable on such interest payment date
notwithstanding any transfer or exchange of such Security subsequent to the
record date and prior to such interest payment date, except if and to the
extent the Issuer shall default in the payment of the interest due on such
interest payment date for such series, in which case such defaulted interest
shall be paid to the Persons in whose names Outstanding Securities for such
series are registered (a) at the close of business on a subsequent record date
(which shall be not less than five Business Days prior to the date of payment
of such defaulted interest) established by notice given by mail by or on
behalf of the Issuer to the Holders of Securities not less than 15 days
preceding such subsequent record date or (b) as determined by such other
procedure as is mutually acceptable to the Issuer and the Trustee. The term
"record date" as used with respect to any interest payment date (except a date
for payment of defaulted interest) for the Securities of any series shall mean
the date specified as such in the terms of the Securities of such series
established as contemplated by Section 2.3, or, if no such date is so
established, if such interest payment date is the first day of a calendar
month, the fifteenth day of the next preceding calendar month or, if such
interest payment date is the fifteenth day of a calendar month, the first day
of such calendar month, whether or not such record date is a Business Day.
Section 2.8 Registration, Transfer and Exchange. The Issuer will keep at the
office of each Registrar for each series of Securities a register or registers
in which, subject to such reasonable regulations as it may prescribe, it will
provide for the registration of Securities of each series and the registration
of transfer of Securities of such series. Such register shall be in written
form in the English language or in any other form capable of being converted
into such form within a reasonable time. At all reasonable times such register
or registers shall be open for inspection and available for copying by the
Trustee.
Upon due presentation for registration of transfer of any Security of any
series at the office of any Registrar, the Issuer shall execute and the
Trustee shall authenticate and deliver in the name of the transferee or
transferees a new Security or Securities of the same series, maturity date,
interest rate, if any, and original issue date in authorized denominations for
a like aggregate principal amount.
All Securities presented for registration of transfer shall (if so required
by the Issuer or the Trustee) be duly endorsed by, or be accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Issuer and the Trustee duly executed by, the Holder or his attorney duly
authorized in writing.
At the option of the Holder thereof, Securities of any series (other than a
Global Security, except as set forth below) may be exchanged for a Security or
Securities of such series having authorized denominations and an equal
aggregate principal amount, upon surrender of such Securities to be exchanged
at the office of the Registrar.
The Issuer may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer of Securities. No service charge shall be made for any
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such transaction or for any exchange of Securities of any series as
contemplated by the immediately preceding paragraph.
The Issuer shall not be required to exchange or register a transfer of (a)
any Securities of any series for a period of 15 days next preceding the first
mailing or publication of notice of redemption of Securities of such series to
be redeemed, (b) any Securities selected, called or being called for
redemption, in whole or in part, except, in the case of any Security to be
redeemed in part, the portion thereof not so to be redeemed or (c) any
Security if the Holder thereof has exercised his right, if any, to require the
Issuer to repurchase such Security in whole or in part, except the portion of
such Security not required to be repurchased.
Notwithstanding any other provision of this Section 2.8, unless and until it
is exchanged in whole or in part for Securities in definitive registered form,
a Global Security representing all or a part of the Securities of a series may
not be transferred except as a whole by the Depositary for such series to a
nominee of such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by such Depositary or any
such nominee to a successor Depositary for such series or a nominee of such
successor Depositary.
If at any time the Depositary for any Securities of a series represented by
one or more Global Securities notifies the Issuer that it is unwilling or
unable to continue as Depositary for such Securities or if at any time the
Depositary for such Securities shall no longer be eligible under Section 2.4,
the Issuer shall appoint a successor Depositary with respect to such
Securities. If a successor Depositary for such Securities is not appointed by
the Issuer within 90 days after the Issuer receives such notice or becomes
aware of such ineligibility, the Issuer's election pursuant to Section 2.3
that such Securities be represented by one or more Global Securities shall no
longer be effective and the Issuer shall execute, and the Trustee, upon
receipt of an Officer's Certificate for the authentication and delivery of
definitive Securities of such series, will authenticate and deliver Securities
of such series in definitive registered form, in any authorized denominations,
in an aggregate principal amount equal to the principal amount of the Global
Security or Securities representing such Securities in exchange for such
Global Security or Securities.
The Issuer may at any time and in its sole discretion determine that the
Securities of any series issued in the form of one or more Global Securities
shall no longer be represented by a Global Security or Securities. In such
event the Issuer shall execute, and the Trustee, upon receipt of an Officer's
Certificate for the authentication and delivery of definitive Securities of
such series, shall authenticate and deliver, Securities of such series in
definitive registered form, in any authorized denominations, in an aggregate
principal amount equal to the principal amount of the Global Security or
Securities representing such Securities, in exchange for such Global Security
or Securities.
If specified by the Issuer pursuant to Section 2.3 with respect to
Securities represented by a Global Security, the Depositary for such Global
Security may surrender such Global Security in exchange in whole or in part
for Securities of the same series in definitive registered form on such terms
as are acceptable to the Issuer and such Depositary. Thereupon, the Issuer
shall execute, and the Trustee shall authenticate and deliver, without service
charge,
(i) to the Person specified by such Depositary, a new Security or
Securities of the same series, of any authorized denominations as requested
by such Person, in an aggregate principal amount equal to and in exchange
for such Person's beneficial interest in the Global Security; and
(ii) to such Depositary a new Global Security in a denomination equal to
the difference, if any, between the principal amount of the surrendered
Global Security and the aggregate principal amount of Securities
authenticated and delivered pursuant to clause (ii) above.
Upon the exchange of a Global Security for Securities in definitive
registered form in authorized denominations, such Global Security shall be
cancelled by the Trustee or an agent of the Issuer or the Trustee. Securities
in definitive registered form issued in exchange for a Global Security
pursuant to this Section 2.8 shall
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be registered in such names and in such authorized denominations as the
Depositary for such Global Security, pursuant to instructions from its direct
or indirect participants or otherwise, shall instruct the Trustee or an agent
of the Issuer or the Trustee. The Trustee or such agent shall deliver at its
office such Securities to or as directed by the Persons in whose names such
Securities are so registered.
All Securities issued upon any transfer or exchange of Securities shall be
valid and legally binding obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
Section 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen Securities. In
case any temporary or definitive Security shall become mutilated, defaced or
be destroyed, lost or stolen, the Issuer in its discretion may execute, and
upon the written request of any officer of the Issuer, the Trustee shall
authenticate and deliver a new Security of the same series, maturity date,
interest rate, if any, and original issue date, bearing a number or other
distinguishing symbol not contemporaneously outstanding, in exchange and
substitution for the mutilated or defaced Security, or in lieu of and in
substitution for the Security so destroyed, lost or stolen. In every case the
applicant for a substitute Security shall furnish to the Issuer and to the
Trustee and any agent of the Issuer or the Trustee such security or indemnity
as may be required by the Trustee to indemnify and defend and to save each of
the Trustee and the Issuer harmless and, in every case of destruction, loss or
theft, evidence to their satisfaction of the destruction, loss or theft of
such Security and of the ownership thereof and in the case of mutilation or
defacement, shall surrender the Security to the Trustee or such agent.
Upon the issuance of any substitute Security, the Issuer may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee or its agent) connected therewith. In case any
Security which has matured or is about to mature or has been called for
redemption in full shall become mutilated or defaced or be destroyed, lost or
stolen, the Issuer may instead of issuing a substitute Security, pay or
authorize the payment of the same (without surrender thereof except in the
case of a mutilated or defaced Security), if the applicant for such payment
shall furnish to the Issuer and to the Trustee and any agent of the Issuer or
the Trustee such security or indemnity as any of them may require to hold each
of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Issuer and the Trustee and any agent of
the Issuer or the Trustee evidence to the Trustee's satisfaction of the
destruction, loss or theft of such Security and of the ownership thereof
Every substitute Security of any series issued pursuant to the provisions of
this Section 2.9 by virtue of the fact that any such Security is destroyed,
lost or stolen shall constitute an additional contractual obligation of the
Issuer, whether or not the destroyed, lost or stolen Security shall be at any
time enforceable by anyone and shall be entitled to all the benefits of (but
shall be subject to all the limitations of rights set forth in) this Indenture
equally and proportionately with any and all other Securities of such series
duly authenticated and delivered hereunder. All Securities shall be held and
owned upon the express condition that, to the extent permitted by law, the
foregoing provisions are exclusive with respect to the replacement or payment
of mutilated, defaced or destroyed, lost or stolen Securities and shall
preclude any and all other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.
Section 2.10 Cancellation of Securities; Disposition Thereof. All Securities
surrendered for payment, redemption, registration of transfer or exchange, or
for credit against any payment in respect of a sinking or analogous fund, if
surrendered to the Issuer or any agent of the Issuer or the Trustee or any
agent of the Trustee, shall be delivered to the Trustee or its agent for
cancellation or, if surrendered to the Trustee, shall be cancelled by it; and
no Securities shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Indenture. The Trustee or its agent shall
dispose of cancelled Securities held by it, or hold such Securities in
accordance with its standard retention policy, and deliver a certificate of
disposition or retention to the Issuer. If the Issuer or its agent shall
acquire any of the Securities, such acquisition shall not operate as a
redemption or
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satisfaction of the indebtedness represented by such Securities unless and
until the same are delivered to the Trustee or its agent for cancellation.
Section 2.11 Temporary Securities. Pending the preparation of definitive
Securities for any series, the Issuer may execute and the Trustee shall
authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable in any authorized denomination, and substantially in the form of the
definitive Securities of such series but with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Issuer with the concurrence of the Trustee as evidenced by
the execution and authentication thereof. Temporary Securities may contain
such references to any provisions of this Indenture as may be appropriate.
Every temporary Security shall be executed by the Issuer and be authenticated
by the Trustee upon the same conditions and in substantially the same manner,
and with like effect, as the definitive Securities. Without unreasonable delay
the Issuer shall execute and shall furnish definitive Securities of such
series and thereupon temporary Securities of such series may be surrendered in
exchange therefor without charge at each office or agency to be maintained by
the Issuer for that purpose pursuant to Section 3.2 and the Trustee shall
authenticate and deliver in exchange for such temporary Securities of such
series an equal aggregate principal amount of definitive Securities of the
same series having authorized denominations. Until so exchanged, the temporary
Securities of any series shall be entitled to the same benefits under this
Indenture as definitive Securities of such series, unless otherwise
established pursuant to Section 2.3.
ARTICLE THREE
Covenants of the Issuer
Section 3.1. Payment of Principal, Premium and Interest. The Issuer
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and interest, if any, on each of the Securities at the place,
at the respective times and in the manner provided in the Securities.
Section 3.2. Office for Notices and Payments, etc. So long as any of the
Securities are Outstanding, the Issuer will maintain in each Place of Payment,
an office or agency where the Securities may be presented for payment ("Paying
Agent"), an office or agency where the Securities may be presented for
registration of transfer and for exchange ("Registrar") as in this Indenture
provided, and an office or agency where notices and demands to or upon the
Issuer in respect of the Securities or of this Indenture may be served. In
case the Issuer shall at any time fail to maintain any such office or agency,
or shall fail to give notice to the Trustee of any change in the location
thereof, presentation may be made and notice and demand may be served in
respect of the Securities or of this Indenture at the Corporate Trust Office.
In addition, the Issuer hereby initially appoints the Trustee as Registrar,
Paying Agent and as the agent where notices and demands may be served with
respect to the Securities.
Section 3.3. No Interest Extension. In order to prevent any accumulation of
claims for interest after maturity thereof, the Issuer will not directly or
indirectly extend or consent to the extension of the time for the payment of
any claim for interest on any of the Securities and will not directly or
indirectly be a party to or approve any such arrangement by the purchase or
funding of said claims or in any other manner; provided, however, that this
Section 3.3 shall not apply in any case where an extension shall be made
pursuant to a plan proposed by the Issuer to the Holders of all Securities of
any series then Outstanding.
Section 3.4. Appointments to Fill Vacancies in Trustee's Office. The Issuer,
whenever necessary to avoid or fill a vacancy in the office of the Trustee,
will appoint, in the manner provided in Section 6.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
Section 3.5. Provision as to Paying Agent. (a) if the Issuer shall appoint a
Paying Agent other than the Trustee, it will cause such Paying Agent to
execute and deliver to the Trustee an instrument in which such agent shall
agree with the Trustee, subject to the provisions of this Section 3.5:
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(1) that it will hold all sums held by it as such agent for the payment
of the principal of or interest, if any, on the Securities (whether such
sums have been paid to it by the Issuer or by any other obligor on the
Securities) in trust for the benefit of the Holders of the Securities; and
(2) that it will give the Trustee notice of any failure by the Issuer (or
by any other obligor on the Securities) to make any payment of the
principal of or interest, if any, on the Securities when the same shall be
due and payable; and
(3) that it will, at any time during the continuance of any such failure,
upon the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such paying agent.
(b) if the Issuer shall act as its own Paying Agent, it will, on or before
each due date of the principal of or interest, if any, on the Securities, set
aside, segregate and hold in trust for the benefit of the Holders of the
Securities a sum sufficient to pay such principal or interest, if any, so
becoming due and will notify the Trustee of any failure to take such action
and of any failure by the Issuer (or by any other obligor under the
Securities) to make any payment of the principal of or interest, if any, on
the Securities when the same shall become due and payable.
(c) Anything in this Section 3.5 to the contrary notwithstanding, the Issuer
may, at any time, for the purpose of obtaining a satisfaction and discharge of
this Indenture, or for any other reason, pay or cause to be paid to the
Trustee all sums held in trust by it, or any Paying Agent hereunder, as
required by this Section 3.5, such sums to be held by the Trustee upon the
trusts herein contained.
(d) Anything in this Section 3.5 to the contrary notwithstanding, any
agreement of the Trustee or any Paying Agent to hold sums in trust as provided
in this Section 3.5 is subject to Sections 10.3 and 10.4.
(e) Whenever the Issuer shall have one or more Paying Agents, it will, on or
before each due date of the principal of or interest, if any, on any
Securities, deposit with a Paying Agent a sum sufficient to pay the principal
or interest, if any, so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal or interest, if any, and
(unless such Paying Agent is the Trustee) the Issuer will promptly notify the
Trustee of its action or failure so to act.
Section 3.6. Restriction on Creation of Secured Debt. So long as any of the
Securities are outstanding, the Issuer shall not at any time create, incur,
assume or guarantee, and shall not cause, suffer or permit a Restricted
Subsidiary to create, incur, assume or guarantee, any Secured Debt without
making effective provision (and the Issuer covenants that in such case it will
make or cause to be made such effective provision) whereby the Securities then
Outstanding and any other indebtedness of or guaranteed by the Issuer or such
Restricted Subsidiary then entitled thereto, subject to applicable priorities
of payment, shall be secured by such mortgage, security interest, pledge, lien
or encumbrance equally and ratably with any and all other obligations and
indebtedness thereby secured, so long as any such other obligations and
indebtedness shall be so secured; provided, however, that the foregoing
covenants shall not be applicable to the following:
(a) (i) Any mortgage, security interest, pledge, lien or encumbrance on
any property hereafter acquired (including acquisition through merger or
consolidation) or constructed by the Issuer or a Restricted Subsidiary and
created contemporaneously with, or within twelve months after, such
acquisition or the completion of construction to secure or provide for the
payment of all or any part of the purchase price of such property or the
cost of construction thereof, as the case may be; or (ii) any mortgage on
property (including any unimproved portion of partially improved property)
of the Issuer or a Restricted Subsidiary created within twelve months of
completion of construction of a new plant or plants on such property to
secure all or part of the cost of such construction if, in the opinion of
the Board of Directors, such property or such portion thereof was prior to
such construction substantially unimproved for the use intended by the
Issuer; or (iii) the acquisition of property subject to any mortgage,
security interest, pledge, lien or encumbrance upon such property existing
at the time of acquisition thereof, whether or not assumed by the Issuer or
such Restricted Subsidiary; or (iv) any mortgage, security interest,
pledge, lien or encumbrance existing on the property or on the outstanding
shares or indebtedness of a corporation at the time such
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corporation shall become a Restricted Subsidiary; or (v) any mortgage,
security interest, pledge, lien or encumbrance on property of a corporation
existing at the time such corporation is merged into or consolidated with
the Issuer or a Restricted Subsidiary or at the time of a sale, lease or
other disposition of the properties of a corporation or firm as an entirety
or substantially as an entirety to the Issuer or a Restricted Subsidiary;
or
(b) Mortgages on property of the Issuer or a Restricted Subsidiary in
favor of the United States of America or any State thereof or any foreign
government, or any department, agency or instrumentality or political
subdivision of any thereof, to secure partial, progress, advance or other
payments pursuant to any contract or statute or to secure any indebtedness
incurred for the purpose of financing all or any part of the purchase price
or the cost of construction of the property subject to such mortgages; or
(c) Any extension, renewal or replacement (or successive extensions,
renewals or replacements) in whole or in part of any mortgage, security
interest pledge, lien or encumbrance referred to in the foregoing
subparagraphs (a) and (b); provided, however, that the principal amount of
Secured Debt secured thereby shall not exceed the principal amount
outstanding at the time of such extension, renewal or replacement, and that
such extension, renewal or replacement shall be limited to the property
which secured the mortgage, security interest, pledge, lien or encumbrance
so extended, renewed or replaced and additions to such property.
Notwithstanding the foregoing provisions of this Section 3.6, the Issuer and
any one or more Restricted Subsidiaries may create, incur, assume or guarantee
Secured Debt which would otherwise be subject to the foregoing restrictions in
an aggregate amount which, together with all other Secured Debt of the Issuer
and its Restricted Subsidiaries which would otherwise be subject to the
foregoing restrictions (not including Secured Debt permitted to be secured
under subparagraphs (a) through (c) above) and the aggregate value of the Sale
and Leaseback Transactions (as defined in Section 3.7) in existence at such
time (not including Sale and Leaseback Transactions the proceeds of which have
been or will be applied in accordance with clause (b) of Section 3.7), does
not at the time exceed five percent of Consolidated Net Tangible Assets.
Section 3.7. Restriction on Sale and Leaseback Transactions. The Issuer will
not, and will not permit any Restricted Subsidiary to, sell or transfer
(except to the Issuer or to one or more Restricted Subsidiaries, or both) any
Principal Property owned by it and which has been in full operation for more
than 120 days prior to such sale or transfer with the intention (i) of taking
back a lease on such property, except a lease for a temporary period (not
exceeding 36 months), and (ii) that the use by the Issuer or such Restricted
Subsidiary of such property will be discontinued on or before the expiration
of the term of such lease (any such transaction being herein referred to as a
"Sale and Leaseback Transaction"), unless (a) the Issuer or such Restricted
Subsidiary would be entitled, pursuant to the provisions of Section 3.6, to
incur Secured Debt equal in amount to the amount realized or to be realized
upon such sale or transfer secured by a mortgage on the property to be leased
without equally and ratably securing the Securities, or (b) the Issuer or a
Restricted Subsidiary shall apply an amount equal to the value of the property
so leased to the retirement (other than any mandatory retirement), within 120
days of the effective date of any such arrangement, of indebtedness for money
borrowed by the Issuer or any Restricted Subsidiary (other than such
indebtedness owned by the Issuer or any Restricted Subsidiary) which was
recorded as funded debt as of the date of its creation and which, in the case
of such indebtedness of the Issuer, is not subordinate and junior in right of
payment to the prior payment of the Securities; provided, however, that the
amount to be so applied to the retirement of such indebtedness shall be
reduced by (i) the aggregate principal amount of any Securities delivered
within 120 days of the effective date of any such arrangement to the Trustee
for retirement and cancellation, and (ii) the aggregate principal amount of
such indebtedness (other than the Securities) retired by the Issuer or a
Restricted Subsidiary within 120 days of the effective date of any such
arrangement.
The term "value" shall mean, with respect to a Sale and Leaseback
Transaction, as of any particular time, the amount equal to the greater of (i)
the net proceeds of the sale of the property leased pursuant to such Sale and
Leaseback Transaction, or (ii) the fair value of such property at the time of
entering into such Sale and
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Leaseback Transaction, as determined by the Board of Directors, in either case
divided first by the number of full years of the term of the lease and then
multiplied by the number of full years of such term remaining at the time of
determination, without regard to any renewal or extension options contained in
the lease.
Section 3.8. Restriction on Transfer of Principal Property to Unrestricted
Subsidiary. The Issuer will not itself, and will not permit any Restricted
Subsidiary to transfer (whether by merger, consolidation or otherwise) any
Principal Property to any Unrestricted Subsidiary, except for fair value as
determined by the Board of Directors, unless it shall apply an amount equal to
the fair value of such property at the time of such transfer, as so
determined, to the retirement (other than any mandatory retirement), within
120 days of the effective date of such transfer, of indebtedness for money
borrowed by the Issuer or any Restricted Subsidiary (other than such
indebtedness owned by the Issuer or any Restricted Subsidiary) which was
recorded as funded debt as of the date of its creation and which, in case of
such indebtedness of the Issuer, is not subordinate and junior in right of
payment to the prior payment of the Securities; provided, however, that the
amount to be so applied to the retirement of such indebtedness shall be
reduced by (i) the aggregate principal amount of any Securities delivered
within 120 days of the effective date of any such arrangement to the Trustee
for retirement and cancellation, and (ii) the aggregate principal amount of
such indebtedness (other than Securities) retired by the Issuer or a
Restricted Subsidiary within 120 days of the effective date of any such
arrangement.
ARTICLE FOUR
Securityholders Lists and Reports by the
Issuer and the Trustee
Section 4.1 Issuer to Furnish Trustee Information as to Names and Addresses
of Securityholders. The Issuer and any other obligor on the Securities
covenant and agree that they will furnish or cause to be furnished to the
Trustee a list in such form as the Trustee may reasonably require of the names
and addresses of the Holders of the Securities of each series as of a date not
more than 15 days prior to the time such list is furnished:
(a) semiannually and not more than 15 days after each March 1 and
September 1; and
(b) at such other times as the Trustee may request in writing, within 30
days after receipt by the Issuer of any such request;
provided that if and so long as the Trustee shall be the Registrar for such
series, such list shall not be required to be furnished.
Section 4.2 Preservation and Disclosure of Securityholders Lists. (a) The
Trustee shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the Holders of each series of
Securities (i) contained in the most recent list furnished to it as provided
in Section 4.1, and (ii) received by it in the capacity of Registrar for such
series, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 4.1 upon receipt of a new list so furnished.
(b) In case three or more Holders of Securities (hereinafter referred to as
"applicants") apply in writing to the Trustee and furnish to the Trustee
reasonable proof that each such applicant has owned a Security for a period of
at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other
Holders of Securities of a particular series (in which case the applicants
must all hold Securities of such series) or with Holders of all Securities
with respect to their rights under this Indenture or under such Securities and
such application is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee
shall, within five Business Days after the receipt of such application, at its
election, either
(i) afford to such applicants access to the information preserved at the
time by the Trustee in accordance with the provisions of subsection (a) of
this Section 4.2, or
(ii) inform such applicants as to the approximate number of Holders of
Securities of such series or of all Securities, as the case may be, whose
names and addresses appear in the information preserved at the
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time by the Trustee, in accordance with the provisions of subsection (a) of
this Section 4.2, and as to the approximate cost of mailing to such
Securityholders the form of proxy or other communication, if any, specified
in such application.
If the Trustee shall elect not to afford to such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Securityholder of such series or all Holders of Securities, as
the case may be, whose name and address appears in the information preserved
at the time by the Trustee in accordance with the provisions of subsection (a)
of this Section 4.2 a copy of the form of proxy or other communication which
is specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender, the Trustee shall mail to such applicants and file with the
Commission, together with a copy of the material to be mailed, a written
statement to the effect that in the opinion of the Trustee, such mailing would
be contrary to the best interests of the Holders of Securities of such series
or of all Securities, as the case may be, or would be in violation of
applicable law. Such written statement shall specify the basis of such
opinion. If the Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, the Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met, and shall enter an order so declaring, the Trustee shall mail copies
of such material to all such Securityholders with reasonable promptness after
the entry of such order and the renewal of such tender; otherwise the Trustee
shall be relieved of any obligation or duty to such applicants respecting
their application.
(c) Each and every Holder of Securities, by receiving and holding the same,
agrees with the Issuer and the Trustee that neither the Issuer nor the Trustee
nor any agent of the Issuer or the Trustee shall be held accountable by reason
of the disclosure of any such information as to the names and addresses of the
Holders of Securities in accordance with the provisions of subsection (b) of
this Section 4.2, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of
mailing any material pursuant to a request made under such subsection (b).
Section 4.3 Reports by the Issuer. The Issuer covenants:
(a) to file with the Trustee, within 15 days after the Issuer is required
to file the same with the Commission, copies of the annual reports and of
the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Issuer may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934; or, if the Issuer is not required to file
information, documents or reports pursuant to either of such Sections, then
to file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Securities Exchange Act of 1934 in
respect of a debt security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and
regulations;
(b) to file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Issuer with the conditions and covenants provided for in this Indenture
as may be required from time to time by such rules and regulations;
(c) to transmit by mail to the Holders of Securities within 30 days after
the filing thereof with the Trustee, in the manner and to the extent
provided in Section 4.4(c), such summaries of any information, documents
and reports required to be filed by the Issuer pursuant to subsections (a)
and (b) of this Section 4.3 as may be required to be transmitted to such
Holders by rules and regulations prescribed from time to time by the
Commission; and
(d) furnish to the Trustee, not less than annually, a brief certificate
from the principal executive officer, principal financial officer or
principal accounting officer as to his knowledge of the Issuer's compliance
with
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all conditions and covenants under this Indenture. For purposes of this
subsection (d), such compliance shall be determined without regard to any
period of grace or requirement of notice provided under this Indenture.
Section 4.4 Reports by the Trustee. (a) Within 60 days after September 15 of
each year commencing with the year 1997, the Trustee shall transmit by mail to
the Holders of Securities, as provided in subsection (c) of this Section 4.4 a
brief report dated as of such September 15 with respect to any of the
following events which may have occurred within the last 12 months (but if no
such event has occurred within such period, no report need be transmitted):
(i) any change to its eligibility under Section 6.9 and its qualification
under Section 6.8;
(ii) the creation of, or any material change to, a relationship specified
in paragraph (i) through (x) of Section 6.8(c);
(iii) the character and amount of any advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof) made by the
Trustee (as such) which remain unpaid on the date of such report and for
the reimbursement of which it claims or may claim a lien or charge, prior
to that of the Securities of any series, on any property or funds held or
collected by it as Trustee, except that the Trustee shall not be required
(but may elect) to report such advances if such advances so remaining
unpaid aggregate not more than 1/2 of 1% of the principal amount of all
Securities Outstanding on the date of such report;
(iv) the amount, interest rate, if any, and maturity date of all other
indebtedness owing by the Issuer (or by any other obligor on the
Securities) to the Trustee in its individual capacity on the date of such
report, with a brief description of any property held as collateral
security therefor, except any indebtedness based upon a creditor
relationship arising in any manner described in Section 6.13(b)(2), (3),
(4) or (6);
(v) any change to the property and funds, if any, physically in the
possession of the Trustee (as such) on the date of such report;
(vi) any additional issue of Securities which the Trustee has not
previously reported; and
(vii) any action taken by the Trustee in the performance of its duties
under this Indenture which it has not previously reported and which in its
opinion materially affects the Securities, except action in respect of a
default, notice of which has been or is to be withheld by it in accordance
with the provisions of Section 5.8.
(b) The Trustee shall transmit to the Securityholders of each series, as
provided in subsection (c) of this Section 4.4, a brief report with respect to
the character and amount of any advances (and if the Trustee elects so to
state, the circumstances surrounding the making thereof) made by the Trustee,
as such, since the date of the last report transmitted pursuant to the
provisions of subsection (a) of this Section 4.4 (or if no such report has yet
been so transmitted, since the date of this Indenture) for the reimbursement
of which it claims or may claim a lien or charge prior to that of the
Securities of such series on property or funds held or collected by it as
Trustee and which it has not previously reported pursuant to this subsection
(b), except that the Trustee shall not be required (but may elect) to report
such advances if such advances remaining unpaid at any time aggregate 10% or
less of the principal amount of all Securities Outstanding at such time, such
report to be transmitted within 90 days after such time.
(c) Reports pursuant to this Section shall be transmitted by mail:
(i) to all Holders of Securities, as the names and addresses of such
Holders appear upon the registry books of the Issuer; and
(ii) except in the case of reports pursuant to subsection (b), to each
Holder of a Security whose name and address are preserved at the time by
the Trustee as provided in Section 4.2(a).
(d) A copy of each such report shall, at the time of such transmission to
Securityholders, be furnished to the Issuer and be filed by the Trustee with
each stock exchange upon which the Securities of any applicable series are
listed and also with the Commission. The Issuer agrees to notify the Trustee
with respect to any series when and as the Securities of such series become
admitted to trading on any national securities exchange.
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ARTICLE FIVE
Remedies of the Trustee and Securityholder on Event of Default
Section 5.1 Events of Default. "Event of Default", wherever used herein with
respect to Securities of any series, means any one or more of the following
events, unless it is either inapplicable to a particular series or it is
specifically deleted or modified in or pursuant to the Board Resolution or
supplemental indenture establishing such series of Securities or in the form
of Security for such series:
(a) default in the payment of any installment of interest upon any of the
Securities of such series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; or
(b) default in the payment of the principal of any of the Securities of
such series as and when the same shall become due and payable either at
maturity, upon redemption, by declaration or otherwise; or
(c) default in the payment or satisfaction of any sinking fund obligation
with respect to Securities of such series, as and when such sinking fund
obligation shall become due and payable as in this Indenture expressed; or
(d) failure on the part of the Issuer duly to observe or perform any
other of the covenants or agreements on the part of the Issuer in the
Securities of such series or in this Indenture contained for a period of 60
days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Issuer by the Trustee by
registered mail, or to the Issuer and the Trustee by the Holders of at
least 25 percent in aggregate principal amount of the Securities of such
series then Outstanding; or
(e) without the consent of the Issuer a court having jurisdiction shall
enter an order for relief with respect to the Issuer under the Bankruptcy
Code or without the consent of the Issuer a court having jurisdiction shall
enter a judgement, order or decree adjudging the Issuer a bankrupt or
insolvent, or enter an order for relief for reorganization, arrangement,
adjustment or composition of or in respect of the Issuer under the
Bankruptcy Code or applicable state insolvency law and the continuance of
any such judgment, order or decree is unstayed and in effect for a period
of 90 consecutive days; or
(f) the Issuer shall institute proceedings for entry of an order for
relief with respect to the Issuer under the Bankruptcy Code or for an
adjudication of insolvency, or shall consent to the institution of
bankruptcy or insolvency proceedings against it, or shall file a petition
seeking, or seek or consent to reorganization, arrangement, composition or
relief under the Bankruptcy Code or any applicable state law, or shall
consent to filing of such petition or to the appointment of a receiver,
custodian, liquidator, assignee, trustee, sequestrator or similar official
(other than a custodian pursuant to 8 Delaware Code (S)226 or any similar
statute under other state laws) of the Issuer or of substantially all of
its property, or the Issuer shall make a general assignment for the benefit
of creditors as recognized under the Bankruptcy Code; or
(g) any other Event of Default provided with respect to the Securities of
such series.
If an Event of Default with respect to Securities of any series then
Outstanding occurs and is continuing, then and in each and every such case,
unless the principal of all of the Securities of such series shall have
already become due and payable, either the Trustee or the Holders of not less
than 25 percent in aggregate principal amount of the Securities of such series
then Outstanding, by notice in writing to the Issuer (and to the Trustee if
given by Securityholders), may declare the principal (or, if the Securities of
such series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such series) of all the
Securities of such series and the interest, if any, accrued thereon to be due
and payable immediately, and upon any such declaration the same shall become
and shall be immediately due and payable, anything in this Indenture or in the
Securities of such series contained to the contrary notwithstanding. This
provision, however, is subject to the condition that if at any time after the
principal (or such specified amount) of the Securities of such series shall
have been so declared due and payable and before any judgment or decree for
the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the Issuer shall pay or shall deposit
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with the Trustee a sum sufficient to pay all matured installments of interest
if any, upon all of the Securities of such series and the principal of on any
and all Securities of such series which shall have become due otherwise than
by acceleration (with interest on overdue installments of interest, if any, to
the extent that payment of such interest is enforceable under applicable law
and on such principal at the rate borne by the Securities of such series to
the date of such payment or deposit) and the reasonable compensation,
disbursements, expenses and advances of the Trustee, and any and all defaults
under this Indenture, other than the nonpayment of principal of and accrued
interest, if any, on Securities of such series which shall have become due by
acceleration, shall have been cured or shall have been waived in accordance
with Section 5.7 or provision deemed by the Trustee to be adequate shall have
been made therefor--then and in every such case the Holders of a majority in
aggregate principal amount of the Securities of such series then Outstanding,
by written notice to the Issuer and to the Trustee, may rescind and annul such
declaration and its consequences; but no such rescission and annulment shall
extend to or shall affect any subsequent default, or shall impair any right
consequent thereon. If any Event of Default with respect to the Issuer
specified in Section 5.1(e) or 5.1(f) occurs, all unpaid principal and accrued
interest on all Securities of each series then Outstanding shall ipso facto
become and be immediately due and payable without any declaration or other act
by the Trustee or any Securityholder.
If the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Issuer, the Trustee and the Securityholders shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Issuer, the Trustee and the Securityholders shall continue as
though no such proceeding had been taken.
Except with respect to an Event of Default pursuant to Section 5.1 (a), (b)
or (c), the Trustee shall not be charged with knowledge of any Event of
Default unless written notice thereof shall have been given to a Responsible
Officer by the Issuer, a Paying Agent or any Securityholder.
Section 5.2 Payment of Securities On Default; Suit Therefor. The Issuer
covenants that (a), if default shall be made in the payment of any installment
of interest upon any of the Securities of any series then Outstanding as and
when the same shall become due and payable, and such default shall have
continued for a period of 30 days, or (b) if default shall be made in the
payment of the principal of any of the Securities of such series as and when
the same shall have become due and payable, whether at maturity of the
Securities of such series or upon redemption or by declaration or otherwise--
then, upon demand of the Trustee, the Issuer will pay to the Trustee, for the
benefit of the Holders of the Securities, the whole amount that then shall
have become due and payable on all such Securities of such series for
principal or interest, if any, or both, as the case may be, with interest upon
the overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) upon the overdue installments of interest,
if any, at the rate borne by the Securities of such series; and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including a reasonable compensation to the Trustee,
its agents, attorneys and counsel and any expenses or liabilities incurred by
the Trustee hereunder other than through its negligence or bad faith.
If the Issuer shall fail forthwith to pay such amounts upon such demand, the
Trustee, in its own name and as trustee of an express trust, shall be entitled
and empowered to institute any actions or proceedings at law or in equity for
the collection of the sums so due and unpaid, and may prosecute any such
action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or any other obligor on the
Securities of such series and collect in the manner provided by law out of the
property of the Issuer or any other obligor on the Securities of such series,
wherever situated, the moneys adjudged or decreed to be payable.
If there shall be pending proceedings for the bankruptcy or for the
reorganization of the Issuer or any other obligor on the Securities of any
series then Outstanding under any bankruptcy, insolvency or other similar law
now or hereafter in effect, or if a receiver or trustee or similar official
shall have been appointed for the property of the Issuer or such other
obligor, or in the case of any other similar judicial proceedings relative to
the Issuer
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or other obligor upon the Securities of such series, or to the creditors or
property of the Issuer or such other obligor, the Trustee, irrespective of
whether the principal of the Securities of such series shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand pursuant to the provisions
of this Section 5.2, shall be entitled and empowered by intervention if such
proceedings or otherwise to file and prove a claim or claims for the whole
amount of principal and interest, if any, owing and unpaid in respect of the
Securities of such series, and, in case of any judicial proceedings, to file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and of the
Securityholders allowed in such judicial proceedings relative to the Issuer or
any other obligor on the Securities of such series, its or their creditors, or
its or their property, and to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute the same after
the deduction of its charges and expenses, and any receiver, assignee or
trustee or similar official in bankruptcy or reorganization is hereby
authorized by each of the Securityholders to make such payments to the
Trustee, and, if the Trustee shall consent to the making of such payments
directly to the Securityholders, to pay to the Trustee any amount due it for
compensation and expenses, including counsel fees incurred by it up to the
date of such distribution. To the extent that such payment of reasonable
compensation, expenses and counsel fees out of the estate in any such
proceedings shall be denied for any reason, payment of the same shall be
secured by a lien on, and shall be paid out of, any and all distributions,
dividends, moneys, securities and other property which the Holders of the
Securities of such series may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
All rights of action and of asserting claims under this Indenture, or under
any of the Securities, may be enforced by the Trustee without the possession
of any of the Securities, or the production thereof at any trial or other
proceeding relative thereto, and any such suit or proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall be for the ratable benefit of the Holders of
the Securities of the series in respect of which such judgment has been
recovered.
Section 5.3 Application of Moneys Collected by Trustee. Any moneys collected
by the Trustee pursuant to Section 5.2 with respect to Securities of any
series then Outstanding shall be applied in the order following, at the date
or dates fixed by the Trustee for the distribution of such moneys, upon
presentation of the several Securities of such series, and stamping thereon
the payment, if only partially paid, and upon surrender thereof, if fully
paid:
First: To the payment of costs and expenses of collection and reasonable
compensation to the Trustee, its agents, attorneys and counsel, and of all
other expenses and liabilities incurred, and all advances made, by the
Trustee pursuant to Section 6.6 except as a result of its negligence or bad
faith;
Second: If the principal of the Outstanding Securities of such series
shall not have become due and be unpaid, to the payment of interest, if
any, on the Securities of such series, in the order of the maturity of the
instalments of such interest, if any, with interest (to the extent that
such interest has been collected by the Trustee) upon the overdue
instalments of interest, if any, at the rate borne by the Securities of
such series, such payment to be made ratably to the Persons entitled
thereto;
Third: If the principal of the Outstanding Securities of such series
shall have become due, by declaration or otherwise, to the payment of the
whole amount then owing and unpaid upon the Securities of such series for
principal and interest, if any, with interest on the overdue principal and
(to the extent that such interest has been collected by the Trustee) upon
overdue instalments of interest, if any, at the rate borne by the
Securities of such series; and in case such moneys shall be insufficient to
pay in full the whole amounts so due and unpaid upon the Securities of such
series, then to the payment of such principal and interest, if any, without
preference or priority of principal over interest or of interest over
principal, or of any instalment of interest over any other instalment of
interest, or of any Security over any other Security, ratably to the
aggregate of such principal and accrued and unpaid interest; and
Fourth: To the payment of any surplus then remaining to the Issuer, its
successors or assigns, or to whomsoever may be lawfully entitled to receive
the same.
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No claim for interest which in any manner at or after maturity shall have
been transferred or pledged separate or apart from the Securities to which it
relates, or which in any manner shall have been kept alive after maturity by
an extension (otherwise than pursuant to an extension made pursuant to a plan
proposed by the Issuer to the Holders of all Securities of any series then
Outstanding), purchase, funding or otherwise by or on behalf or with the
consent or approval of the Issuer shall be entitled, in case of a default
hereunder, to any benefit of this Indenture, except after prior payment in
full of the principal of all Securities of any series then Outstanding and of
all claims for interest not so transferred, pledged, kept alive, extended,
purchased or funded.
Section 5.4 Proceedings by Securityholders. No Holder of any Securities of
any series then Outstanding shall have any right by virtue of or by availing
of any provision of this Indenture to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Indenture or the
Securities or for the appointment of a receiver or trustee or similar
official, or for any other remedy hereunder or thereunder, unless such Holder
previously shall have given to the Trustee written notice of default and of
the continuance thereof, as hereinbefore provided, and unless the Holders of
not less than 25 percent in aggregate principal amount of the Securities of
such series then Outstanding shall have made written request to the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding, it being understood and intended, and being
expressly covenanted by the Holder of every Security of such series with every
other taker and Holder and the Trustee, that no one or more Holders of
Securities of such series shall have any right in any manner whatever by
virtue of or by availing of any provision of this Indenture or of the
Securities to affect, disturb or prejudice the rights of any other Holder of
such Securities of such series, or to obtain or seek to obtain priority over
or preference as to any other such Holder, or to enforce any right under this
Indenture or the Securities, except in the manner herein provided and for the
equal, ratable and common benefit of all Holders of Securities of such series.
Notwithstanding any other provisions in this Indenture, however, the right
of any Holder of any Security to receive payment of the principal of and
interest, if any, on such Security, on or after the respective due dates
expressed in such Security, or to institute suit for the enforcement of any
such payment on or after such respective dates shall not be impaired or
affected without the consent of such Holder.
Section 5.5 Proceedings by Trustee. In case of an Event of Default
hereunder, the Trustee may in its discretion proceed to protect and enforce
the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce
any of such rights, either by suit in equity or by action at law or by
proceedings in bankruptcy or otherwise, whether for the specific enforcement
of any covenant or agreement contained in this Indenture or in aid of the
exercise of any power granted in this Indenture, or to enforce any other legal
or equitable right vested in the Trustee by this Indenture or by law.
Section 5.6 Remedies Cumulative and Continuing. All powers and remedies
given by this Article Five to the Trustee or to the Securityholders shall, to
the extent permitted by law, be deemed cumulative and not exclusive of any
thereof or of any other powers and remedies available to the Trustee or the
Securityholders, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture, and no delay or omission of the Trustee or of any Securityholder to
exercise any right or power accruing upon any default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be
a waiver of any such default or an acquiescence therein; and, subject to the
provisions of Section 5.4, every power and remedy given by this Article Five
or by law to the Trustee or to the Securityholders may be exercised from time
to time, and as often as shall be deemed expedient, by the Trustee or by the
Securityholders.
Section 5.7 Direction of Proceedings; Waiver of Defaults by Majority of
Securityholders. The Holders of a majority in aggregate principal amount of
the Securities of any series then Outstanding shall have the right to direct
the time, method, and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee with respect to Securities of such Series; provided,
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however, that (subject to the provisions of Section 6.1) the Trustee shall
have the right to decline to follow any such direction if the Trustee shall
determine upon advice of counsel that the action or proceeding so directed may
not lawfully be taken or if the Trustee in good faith by its board of
directors, its executive committee, or a trust committee of directors or
Responsible Officers or both shall determine that the action or proceeding so
directed would involve the Trustee in personal liability. The Holders of a
majority in aggregate principal amount of the Securities of any series then
Outstanding may on behalf of the Holders of all of the Securities of such
series waive any past default or Event of Default hereunder and its
consequences except a default in the payment of interest, if any, on, or the
principal of, the Securities of such series. Upon any such waiver the Issuer,
the Trustee and the Holders of the Securities of such series shall be restored
to their former positions and rights hereunder, respectively; but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon. Whenever any default or Event of Default
hereunder shall have been waived as permitted by this Section 5.7, said
default or Event of Default shall for all purposes of the Securities and this
Indenture be deemed to have been cured and to be not continuing.
Section 5.8 Notice of Defaults. The Trustee shall, within 90 days after the
occurrence of a default, with respect to Securities of any series then
Outstanding, mail to all Holders of Securities of such series, as the names
and the addresses of such Holders appear upon the Securities register, notice
of all defaults known to the Trustee with respect to such series, unless such
defaults shall have been cured before the giving of such notice (the term
"defaults" for the purpose of this Section 5.8 being hereby defined to be the
events specified in clauses (a), (b), (c), (d), (e), (f) and (g) of Section
5.1, not including periods of grace, if any, provided for therein and
irrespective of the giving of the written notice specified in said clause (d)
but in the case of any default of the character specified in said clause (d)
no such notice to Securityholders shall be given until at least 60 days after
the giving of written notice thereof to the Issuer pursuant to said clause
(d)); provided, however, that, except in the case of default in the payment of
the principal of or interest, if any, on any of the Securities, or in the
making of any sinking fund payment, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the
executive committee, or a trust committee of directors or Responsible Officers
or both of the Trustee in good faith determines that the withholding of such
notice is in the best interests of the Securityholders.
Section 5.9 Undertaking to Pay Costs. All parties to this Indenture agree,
and each Holder of any Security by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the cost of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorney's fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made
by such party litigant; but the provisions of this Section 5.9 shall not apply
to any suit instituted by the Trustee, to any suit instituted by any
Securityholder or group of Securityholders, holding in the aggregate more than
ten percent in principal amount of the Securities of any series then
Outstanding, or to any suit instituted by any Securityholders for the
enforcement of the payment of the principal of or interest, if any, on any
Security against the Issuer on or after the due date expressed in such
Security.
ARTICLE SIX
Concerning the Trustee
Section 6.1 Duties and Responsibilities of the Trustee; During Default;
Prior to Default. With respect to the Holders of any series of Securities
issued hereunder, the Trustee, prior to the occurrence of an Event of Default
with respect to the Securities of a particular series and after the curing or
waiving of all Events of Default which may have occurred with respect to such
series, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default with
respect to the Securities of a series has occurred (which has not been cured
or waived) the Trustee shall exercise with respect to such series of
Securities such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of his own
affairs.
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No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act
or its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default with respect to the
Securities of any series and after the curing or waiving of all such Events
of Default with respect to such series which may have occurred:
(i) the duties and obligations of the Trustee with respect to the
Securities of any series shall be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any statements,
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such statements,
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining
the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of
the Holders pursuant to Section 5.7 relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture.
None of the provisions contained in this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that
the repayment of such funds or adequate indemnity against such liability is
not reasonably assured to it.
Section 6.2 Certain Rights of the Trustee. Subject to Section 6.1:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, Officer's Certificate or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request, direction, order or demand of the Issuer mentioned
herein shall be sufficiently evidenced by an Officer's Certificate or
Issuer Order (unless other evidence in respect thereof be herein
specifically prescribed); and any resolution of the Board of Directors may
be evidenced to the Trustee by a copy thereof certified by the secretary or
an assistant secretary of the Issuer;
(c) the Trustee may consult with counsel and any written advice or any
Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in reliance thereon in accordance with such
advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this
Indenture (including, without limitation, pursuant to Section 5.1), unless
such Securityholders shall have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities which might be
incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by it
in good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture;
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(f) prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all Events of Default, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, debenture, note,
coupon, security, or other paper or document unless requested in writing so
to do by the Holders of not less than a majority in aggregate principal
amount of the Securities of all series affected then Outstanding; provided
that, if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of every
such investigation shall be paid by the Issuer or, if paid by the Trustee
or any predecessor Trustee, shall be repaid by the Issuer upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent
or attorney appointed with due care by it hereunder.
Section 6.3 Trustee Not Responsible for Recitals, Disposition of Securities
or Application of Proceeds Thereof. The recitals contained herein and in the
Securities, except the Trustee's certificates of authentication, shall be
taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture, the
Securities or of any prospectus used to sell the Securities. The Trustee shall
not be accountable for the use or application by the Issuer of any of the
Securities or of the proceeds thereof.
Section 6.4 Trustee and Agents May Hold Securities; Collections, etc. The
Trustee or any agent of the Issuer or the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Securities with the same
rights it would have if it were not the Trustee or such agent and, subject to
Sections 6.8 and 6.13, may otherwise deal with the Issuer and receive,
collect, hold and retain collections from the Issuer with the same rights it
would have if it were not the Trustee or such agent.
Section 6.5 Moneys Held by Trustee. Subject to the provisions of Section
10.4 hereof, all moneys received by the Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were
received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
Section 6.6 Compensation and Indemnification of Trustee and Its Prior
Claim. The Issuer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation of
a trustee of an express trust) and the Issuer covenants and agrees to pay or
reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on
behalf of it in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of
its counsel and of all agents and other persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Issuer also covenants to indemnify the Trustee
and each predecessor Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
Indenture or the trusts hereunder and its duties hereunder, including the
costs and expenses of defending itself against or investigating any claim or
liability in the premises. The obligations of the Issuer under this Section
6.6 to compensate and indemnify the Trustee and each predecessor Trustee and
to pay or reimburse the Trustee and each predecessor Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder
and shall survive the satisfaction and discharge of this Indenture or the
resignation or removal of the Trustee. Such additional indebtedness shall be a
senior claim to that of the
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Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the benefit of the Holders of particular
Securities, and the Securities are hereby subordinated to such senior claim.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 5.1 or in connection with Article Five
hereof, the expenses (including the reasonable fees and expenses of its
counsel) and the compensation for the service in connection therewith are
intended to constitute expenses of administration under any bankruptcy law.
Section 6.7 Right of Trustee to Rely on Officer's Certificate, etc. Subject
to Sections 6.1 and 6.2, whenever in the administration of the trusts of this
Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officer's Certificate delivered to the Trustee, and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted by it under
the provisions of this Indenture upon the faith thereof.
Section 6.8 Qualification of Trustee; Conflicting Interests. (a) if the
Trustee has or shall acquire any conflicting interest (as defined in
subsection (c)), (i) then within 90 days after ascertaining that it has such
conflicting interest, and if the default (as defined in subsection (c)) to
which such conflicting interest relates has not been cured or duly waived or
otherwise eliminated before the end of such 90-day period, the Trustee shall
either eliminate such conflicting interest or, except as otherwise provided
below, resign, and the Issuer shall take prompt steps to have a successor
appointed in the manner provided in Section 6.10.
(b) If the Trustee shall fail to comply with the provisions of subsection
(a), the Trustee shall, within 10 days after the expiration of such 90-day
period, transmit notice of such failure to the Securityholders in the manner
and to the extent provided in Section 4.4 and, subject to the provisions of
Section 5.9, unless the Trustee's duty to resign is stayed as provided below,
any Securityholder who has been a bona fide holder of Securities for at least
six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee,
and the appointment of a successor, if the Trustee fails, after written
request thereof by such Securityholder to comply with the provisions of
subsection (a).
Except in the case of a default in the payment of the principal of or
interest on any Security, or in the payment of any sinking or purchase fund
instalment, the Trustee shall not be required to resign as provided by this
Section 6.8 if the Trustee shall have sustained the burden of proving, on
application to the Commission and after opportunity for hearing thereon, that
(i) the default under the Indenture may be cured or waived during a
reasonable period and under the procedures described in such application,
and
(ii) a stay of the Trustee's duty to resign will not be inconsistent with
the interests of Holders of the Securities.
The filing of such an application shall automatically stay the performance
of the duty to resign until the Commission orders otherwise. Any resignation
of the Trustee shall become effective only upon the appointment of a successor
trustee in accordance with the provisions of Section 6.10 and such successor's
acceptance of such an appointment.
(c) For the purposes of this Section 6.8, the Trustee shall be deemed to
have a conflicting interest with respect to Securities of any series if the
Securities of such series are in default (as determined in accordance with the
provisions of Section 5.1, but exclusive of any period of grace or requirement
of notice) and
(i) the Trustee is trustee under this Indenture with respect to the
Outstanding securities of any other series or is a trustee under another
indenture under which any other securities, or certificates of interest or
participation in any other securities, of the Issuer are outstanding,
unless such other indenture is a collateral trust indenture under which the
only collateral consists of Securities issued under this Indenture;
provided
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that there shall be excluded from the operation of this paragraph, this
Indenture with respect to the Securities of any other series and there
shall also be so excluded any other indenture or indentures under which
other securities, or certificates of interest or participation in other
securities, of the Issuer are outstanding if (x) this Indenture is and, if
applicable, this Indenture and any series issued pursuant to this Indenture
and such other indenture or indentures are wholly unsecured and rank
equally and such other indenture or indentures are hereafter qualified
under the Trust Indenture Act of 1939, unless the Commission shall have
found and declared by order pursuant to Section 305(b) or Section 307(c) of
the Trust Indenture Act of 1939 that differences exist between the
provisions of this Indenture with respect to Securities of such series and
one or more other series, or the provisions of this Indenture and the
provisions of such other indenture or indentures which are so likely to
involve a material conflict of interest as to make it necessary in the
public interest or for the protection of investors to disqualify the
Trustee from acting as such under this Indenture with respect to Securities
of such series and such other series, or under this Indenture or such other
indenture or indentures, or (y) the Issuer shall have sustained the burden
of proving, on application to the Commission and after opportunity for
hearing thereon, that trusteeship under this Indenture with respect to
Securities of such series and such other series, or under this Indenture
and such other indenture or indentures is not so likely to involve a
material conflict of interest as to make it necessary in the public
interest or for the protection of investors to disqualify the Trustee from
acting as such under this Indenture with respect to Securities of such
series and such other series, or under this Indenture and such other
indentures;
(ii) the Trustee or any of its directors or executive officers is an
underwriter for the Issuer;
(iii) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control with
an underwriter for the Issuer;
(iv) the Trustee or any of its directors or executive officers is a
director, officer, partner, employee, appointee, or representative of the
Issuer, or of an underwriter (other than the Trustee itself) for the Issuer
who is currently engaged in the business of underwriting, except that (x)
one individual may be a director or an executive officer, or both, of the
Trustee and a director or an executive officer, or both, of the Issuer, but
may not be at the same time an executive officer of both the Trustee and
the Issuer; (y) if and so long as the number of directors of the Trustee in
office is more than nine, one additional individual may be a director or an
executive officer, or both, of the Trustee and a director of the Issuer;
and (z) the Trustee may be designated by the Issuer or by any underwriter
for the Issuer to act in the capacity of transfer agent, registrar,
custodian, paying agent, fiscal agent, escrow agent, or depositary, or in
any other similar capacity, or, subject to the provisions of subsection (c)
(i) of this Section, to act as trustee, whether under an indenture or
otherwise;
(v) 10% or more of the voting securities of the Trustee is beneficially
owned either by the Issuer or by any director, partner or executive officer
thereof, or 20% or more of such voting securities is beneficially owned,
collectively, by any two or more of such persons; or 10% or more of the
voting securities of the Trustee is beneficially owned either by an
underwriter for the Issuer or by any director, partner, or executive
officer thereof, or is beneficially owned, collectively, by any two or more
such persons;
(vi) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default, (x) 5% or more of the
voting securities or 10% or more of any other class of security of the
Issuer, not including the Securities issued under this Indenture and
securities issued under any other indenture under which the Trustee is also
trustee, or (y) 10% or more of any class of security of an underwriter for
the Issuer;
(vii) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default, 5% or more of the voting
securities of any person who, to the knowledge of the Trustee, owns 10% or
more of the voting securities of, or controls directly or indirectly or is
under direct or indirect common control with, the Issuer;
(viii) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default, 10% or more of any class of
security of any Person who, to the knowledge of the Trustee, owns 50% or
more of the voting securities of the Issuer;
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(ix) the Trustee owns on the date of default (as determined in accordance
with the provisions of Section 5.1, but exclusive of any period of grace or
requirement of notice) or on any anniversary of such default while such
default remains outstanding, in the capacity of executor, administrator,
testamentary or inter vivos trustee, guardian, committee or conservator, or
in any other similar capacity, an aggregate of 25% or more of the voting
securities, or of any class of security, of any Person, the beneficial
ownership of a specified percentage of which would have constituted a
conflicting interest under paragraphs (vi), (vii) or (viii) of this
subsection. As to any such securities of which the Trustee acquired
ownership through becoming executor, administrator, or testamentary trustee
of an estate which included them, the provisions of the preceding sentence
shall not apply, for a period of two years from the date of such
acquisition, to the extent that such securities included in such estate do
not exceed 25% of such voting securities or 25% of any such class of
security. Promptly alter the dates of any such default and annually in each
succeeding year that the Securities remain in default, the Trustee shall
make a check of its holdings of such securities in any of the above-
mentioned capacities as of such dates. If the Issuer fails to make payment
in full of principal of or interest on any of the Securities when and as
the same becomes due and payable, and such failure continues for 30 days
thereafter, the Trustee shall make a prompt check of its holdings of such
Securities in any of the above-mentioned capacities as of the date of the
expiration of such 30-day period, and after such date, notwithstanding the
foregoing provisions of this paragraph, all such Securities so held by the
Trustee, with sole or joint control over such Securities vested in it,
shall, but only so long as such failure shall continue, be considered as
though beneficially owned by the Trustee for the purposes of paragraphs
(vi), (vii) and (viii) of this subsection; or
(x) except under the circumstances described in paragraphs (1), (3), (4),
(5) or (6) of Section 6.13(b), the Trustee shall be or shall become a
creditor of the Issuer.
For purposes of subsection (c) (i), the term "series of securities" or
"series" means a series, class or group of securities issuable under an
indenture pursuant to whose terms holders of one such series may vote to
direct the Trustee, or otherwise take action pursuant to a vote of such
holders, separately from holders of another such series; provided, that
"series of securities" or "series" shall not include any series of securities
issuable under an indenture if all such series rank equally and are wholly
unsecured.
The specification of percentages in subsections (c) (v) to (ix) inclusive of
this Section 6.8 shall not be construed as indicating that the ownership of
such percentages of the securities of a person is or is not necessary or
sufficient to constitute direct or indirect control for the purposes of
subsections (c) (iii) or (vii) of this Section 6.8.
For the purposes of subsections (c) (vi), (vii), (viii) and (ix), of this
Section 6.8, only,
(i) the terms "security" and "securities" shall include only such
securities as are generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies, or banking firms, or any certificate of interest or
participation in any such note or evidence of indebtedness;
(ii) an obligation shall be deemed to be in default when a default in
payment of principal shall have continued for 30 days or more and shall not
have been cured; and
(iii) the Trustee shall not be deemed to be the owner or holder of (x)
any security which it holds as collateral security, as trustee or
otherwise, for an obligation which is not in default as defined in clause
(ii) above, or (y) any security which it holds as collateral security under
this Indenture, irrespective of any default hereunder, or (z) any security
which it holds as agent for collection, or as custodian, escrow agent, or
depositary, or in any similar representative capacity.
Except as provided above, the word "security" or "securities" as used in
this Section 6.8 shall mean any note, stock, treasury stock, bond, debenture,
evidence of indebtedness, certificate of interest or participation in any
profit-sharing agreement, collateral trust certificate, preorganization
certificate or subscription, transferable share, investment contract, voting
trust certificate, certificate of deposit for a security, fractional undivided
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interest in oil, gas or other mineral rights, or, in general, any interest or
instrument commonly known as a "security", or any certificate of interest or
participation in, temporary or interim certificate for, receipt for, guarantee
of, or warrant or right to subscribe to or purchase, any of the foregoing.
(d) For purposes of this Section 6.8:
(i) the term "underwriter" when used with reference to the Issuer shall
mean every person who, within a one year period prior to the time as of
which the determination is made, was an underwriter of any security of the
Issuer outstanding at the time of the determination;
(ii) the term "director" shall mean any director of a corporation or any
individual performing similar functions with respect to any organization
whether incorporated or unincorporated;
(iii) the term "person" shall mean an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an
unincorporated organization, or a government or political subdivision
thereof; as used in this paragraph, the term "trust" shall include only a
trust where the interest or interests of the beneficiary or beneficiaries
are evidenced by a security;
(iv) the term "voting security" shall mean any security presently
entitling the owner or holder thereof to vote in the direction or
management of the affairs of a person, or any security issued under or
pursuant to any trust, agreement or arrangement whereby a trustee or
trustees or agent or agents for the owner or holder of such security are
presently entitled to vote in the direction or management of the affairs of
a person;
(v) the term "Issuer" shall mean any obligor upon the Securities; and
(vi) the term "executive officer" shall mean the president, every vice
president, every trust officer, the cashier, the secretary, and the
treasurer of a corporation, and any individual customarily performing
similar functions with respect to any organization whether incorporated or
unincorporated, but shall not include the chairman of the board of
directors.
(e) The percentages of voting securities and other securities specified in
this Section 6.8 shall be calculated in accordance with the following
provisions:
(i) a specified percentage of the voting securities of the Trustee, the
Issuer or any other person referred to in this Section 6.8 (each of whom is
referred to as a "person" in this paragraph) means such amount of the
outstanding voting securities of such person as entitles the holder or
holders thereof to cast such specified percentage of the aggregate votes
which the holders of all the outstanding voting securities of such person
are entitled to cast in the direction or management of the affairs of such
person;
(ii) a specified percentage of a class of securities of a person means
such percentage of the aggregate amount of securities of the class
outstanding;
(iii) the term "amount", when used in regard to securities, means the
principal amount if relating to evidences of indebtedness, the number of
shares if relating to capital shares, and the number of units if relating
to any other kind of security;
(iv) the term "outstanding" means issued and not held by or for the
account of the issuer; the following securities shall not be deemed
outstanding within the meaning of this definition:
(A) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
(B) securities of an issuer held in a sinking fund relating to
another class of securities of the issuer, if the obligation evidenced
by such other class of securities is not in default as to principal or
interest or otherwise;
(C) securities pledged by the issuer thereof as security for an
obligation of the issuer not in default as to principal or interest or
otherwise; and
(D) securities held in escrow if placed in escrow by the issuer
thereof;
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provided, that any voting securities of an issuer shall be deemed
outstanding if any person other than the issuer is entitled to exercise the
voting rights thereof; and
(v) a security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges; provided, that, in the case
of secured evidences of indebtedness, all of which are issued under a
single indenture, differences in the interest rates or maturity dates of
various series thereof shall not be deemed sufficient to constitute such
series different classes and provided, further, that, in the case of
unsecured evidences of indebtedness, differences in the interest rates or
maturity dates thereof shall not be deemed sufficient to constitute them
securities of different classes, whether or not they are issued under a
single indenture.
Section 6.9 Persons Eligible for Appointment as Trustee. The Trustee for
each series of Securities hereunder shall at all times be a corporation
organized and doing business under the laws of the United States of America or
of any state or the District of Columbia having a combined capital and surplus
of at least $5,000,000, and which is authorized under such laws to exercise
corporate trust powers and is subject to supervision or examination by
federal, state or District of Columbia authority, or a corporation or other
Person permitted to act as trustee by the Commission. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 6.9, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. No obligor upon the
Securities or a Person directly or indirectly controlling, controlled by, or
under common control with such obligor shall serve as Trustee upon the
Securities. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.9, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.10.
Section 6.10 Resignation and Removal; Appointment of Successor Trustee. (a)
The Trustee, or any trustee or trustees hereafter appointed, may at any time
resign with respect to one or more or all series of securities by giving
written notice of resignation to the Issuer and by mailing notice of such
resignation to the Holders of then outstanding Securities of each series
affected at their addresses as they shall appear on the registry books. Upon
receiving such notice of resignation, the Issuer shall promptly appoint a
successor trustee or trustees with respect to the applicable series by written
instrument in duplicate, executed by authority of the Board of Directors, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee or trustees. If no successor trustee shall have
been so appointed with respect to any series and have accepted appointment
within 30 days after the mailing of such notice of resignation, the resigning
trustee may petition any court of competent jurisdiction for the appointment
of a successor trustee, or any Securityholder who has been a bona fide Holder
of a Security or Securities of the applicable series for at least six months
may, subject to the provisions of Section 5.9, on behalf of himself and all
others similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of Section 6.8
with respect to any series of Securities after written request therefor by
the Issuer or by any Securityholder who has been a bona fide Holder of a
Security or Securities of such series for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 6.9 and shall fail to resign after written request
therefor by the Issuer or by any such Securityholder; or
(iii) the Trustee shall become incapable of acting with respect to any
series of Securities, or shall be adjudged a bankrupt or insolvent, or a
receiver or liquidator of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such
series by written instrument, in duplicate, executed by order of the Board
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of Directors one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions
of Section 5.9, any Securityholder who has been a bona fide Holder of a
Security or Securities of such series for at least six months may on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
trustee with respect to such series. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities of each series then Outstanding may at any time remove the Trustee
with respect to Securities of such series and appoint a successor trustee with
respect to the Securities of such series by delivering to the Trustee so
removed, to the successor trustee so appointed and to the Issuer the evidence
provided for in Section 7.1 of the action in that regard taken by the
Securityholders.
(d) Any resignation or removal of the Trustee with respect to any series and
any appointment of a successor trustee with respect to such series pursuant to
any of the provisions of this Section 6.10 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section
6.11.
Section 6.11 Acceptance of Appointment by Successor Trustee. Any successor
trustee appointed as provided in Section 6.10 shall execute and deliver to the
Issuer and to its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
with respect to all or any applicable series shall become effective and such
successor trustee, without any further act, deed or conveyance, shall become
vested with all rights, powers, duties and obligations with respect to such
series of its predecessor hereunder, with like effect as if originally named
as trustee for such series hereunder; but, nevertheless, on the written
request of the Issuer or of the successor trustee, upon payment of its charges
then unpaid, the trustee ceasing to act shall, subject to Section 10.4, pay
over to the successor trustee all moneys at the time held by it hereunder and
shall execute and deliver an instrument transferring to such successor trustee
all such rights, powers, duties and obligations. Upon request of any such
successor trustee, the Issuer shall execute any and all instruments in writing
for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a prior claim upon all property or funds held or
collected by such trustee to secure any amounts then due it pursuant to the
provisions of Section 6.6.
If a successor trustee is appointed with respect to the Securities of one or
more (but not all) series, the Issuer, the predecessor trustee and each
successor trustee with respect to the Securities of any applicable series
shall execute and deliver an indenture supplemental hereto which shall contain
such provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the predecessor trustee with respect
to the Securities of any series as to which the predecessor trustee is not
retiring shall continue to be vested in the predecessor trustee, and shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such trustees co-trustees of the same
trust and that each such trustee shall be trustee of a trust or trusts under
separate indentures.
No successor trustee with respect to any series of Securities shall accept
appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be qualified under the provisions of
Section 6.8 and eligible under the provisions of Section 6.9.
Upon acceptance of appointment by any successor trustee as provided in this
Section 6.11, the Issuer shall give notice thereof to the Holders of
Securities of each series affected, by mailing such notice to such Holders at
their addresses as they shall appear on the registry books. If the acceptance
of appointment is substantially contemporaneous with the resignation, then the
notice called for by the preceding sentence may be combined with the notice
called for by Section 6.10. If the Issuer fails to give such notice within ten
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be given at the expense of the Issuer.
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Section 6.12 Merger, Conversion, Consolidation or Succession to Business of
Trustee. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder, provided that such
corporation shall be qualified under the provisions of Section 6.8 and
eligible under the provisions of Section 6.9, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities of any series shall
have been authenticated but not delivered, any such successor to the Trustee
may adopt the certificate of authentication of any predecessor Trustee and
deliver such Securities so authenticated; and, in case at that time any of the
Securities of any series shall not have been authenticated, any successor to
the Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee; and in all such
cases such certificate shall have the full force which it is anywhere in the
securities of such series or in this Indenture provided that the certificate
of the Trustee shall have; provided, that the right to adopt the certificate
of authentication of any predecessor Trustee or to authenticate Securities of
any series in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, conversion or consolidation.
Section 6.13 Preferential Collection of Claims Against the Issuer. (a)
Subject to the provisions of this Section, if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the Issuer
within three months prior to a default, as defined in subsection (c) of this
Section 6.13, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Securities and the holders of other indenture securities (as defined in this
Section 6.13):
(1) an amount equal to any and all reductions in the amount due and owing
upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such three month period and valid as
against the Issuer and its other creditors, except any such reduction
resulting from the receipt or disposition of any property described in
subsection (a) (2) of this Section 6.13, or from the exercise of any right
of set-off which the Trustee could have exercised if a petition in
bankruptcy had been filed by or against the Issuer upon the date of such
default; and
(2) all property received by the Trustee in respect of any claim as such
creditor, either as security therefor, or in satisfaction or composition
thereof, or otherwise, after the beginning of such three month period, or
an amount equal to the proceeds of any such property, if disposed of,
subject, however, to the rights, if any, of the Issuer and its other
creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account of any
such claim by any person (other than the Issuer) who is liable thereon,
(ii) the proceeds of the bona fide sale of any such claim by the Trustee to
a third Person, and (iii) distributions made in cash, securities or other
property in respect of claims filed against the Issuer in bankruptcy or
receivership or in proceedings for reorganization pursuant to the
Bankruptcy Code or applicable state law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such three month period;
(C) to realize, for its own account, but only to the extent of the claim
hereinafter mentioned, upon any property held by it as security for any
such claim, if such claim was created after the beginning of such three
month period and such property was received as security therefor
simultaneously with the creation thereof and if the Trustee shall sustain
the burden of proving that at the time such property was so received the
Trustee had no reasonable cause to believe that a default as defined in
subsection (c) of this Section would occur within three months; or
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(D) to receive payment on any claim referred to in paragraph (B) or (C),
against the release of any property held as security for such claim as
provided in such paragraph (B) or (C), as the case may be, to the extent of
the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted after
the beginning of such three month period for property held as security at the
time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property held in
such special account and the proceeds thereof shall be apportioned between the
Trustee, the Securityholders and the holders of other indenture securities in
such manner that the Trustee, such Securityholders and the holders of other
indenture securities realize, as a result of payments from such special
account and payments of dividends on claims filed against the Issuer in
bankruptcy or receivership or in proceedings for reorganization pursuant to
the Bankruptcy Code or applicable state law, the same percentage of their
respective claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Issuer of the funds and
property in such special account and before crediting to the respective claims
of the Trustee, such Securityholders and the holders of other indenture
securities dividends on claims filed against the Issuer in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Bankruptcy
Code or applicable state law, but after crediting thereon receipts on account
of the indebtedness represented by their respective claims from all sources
other than from such dividends and from the funds and property so held in such
special account. As used in this paragraph, with respect to any claim, the
term "dividends" shall include any distribution with respect to such claim, in
bankruptcy or receivership or in proceedings for reorganization pursuant to
the Bankruptcy Code or applicable state law, whether such distribution is made
in cash, securities or other property, but shall not include any such
distribution with respect to the secured portion, if any, of such claim. The
court in which such bankruptcy, receivership or proceeding for reorganization
is pending shall have jurisdiction (i) to apportion between the Trustee, such
Securityholders and the holders of other indenture securities, in accordance
with the provisions of this paragraph, the funds and property held in such
special account and the proceeds thereof or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of this
paragraph due consideration in determining the fairness of the distributions
to be made to the Trustee, such Securityholders and the holders of other
indenture securities with respect to their respective claims, in which event
it shall not be necessary to liquidate or to appraise the value of any
securities or other property held in such special account or as security for
any such claim, or to make a specific allocation of such distributions as
between the secured and unsecured portions of such claims, or otherwise to
apply the provisions of this paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the beginning of such
three month period shall be subject to the provisions of this subsection (a)
as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such three month period, it
shall be subject to the provisions of this subsection (a) if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim which would have given
rise to the obligation to account, if such Trustee had continued as
trustee, occurred after the beginning of such three month period; and
(ii) such receipt of property or reduction of claim occurred within three
months after such resignation or removal.
(b) There shall be excluded from the operation of this Section 6.13 a
creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any indenture
or any security or securities having a maturity of one year or more at the
time of acquisition by the Trustee;
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(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction or by this Indenture for the purpose of preserving
any property which shall at any time be subject to the lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advance and of the circumstances surrounding the
making thereof is given to the Securityholders at the time and in the
manner provided in this Indenture;
(3) disbursements made in the ordinary course of business in the capacity
of trustee under an indenture, transfer agent registrar, custodian, paying
agent, fiscal agent or depositary, or other similar capacity;
(4) an indebtedness created as a result of services rendered or premises
rented or an indebtedness created as a result of goods or securities sold
in a cash transaction as defined in subsection (c) (3) of this Section
6.13;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve Act,
as amended, which is directly or indirectly a creditor of the Issuer; or
(6) the acquisition, ownership, acceptance or negotiation of any drafts,
bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper as defined in subsection (c) (3)
of this Section 6.13.
(c) As used in this Section 6.13:
(1) the term "default" shall mean any failure to make payment in full of
the principal of or interest on any of the Securities when and as such
principal or interest becomes due and payable;
(2) the term "cash transaction" shall mean any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand;
(3) the term "self-liquidating paper" shall mean any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Issuer for the purpose of financing the purchase,
processing, manufacture, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Issuer arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation; and
(4) the term "Issuer" shall mean any obligor upon the Securities.
Section 6.14 Appointment of Authenticating Agent. As long as any Securities
of a series remain Outstanding, the Trustee may, by an instrument in writing,
appoint with the approval of the Issuer an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee to authenticate Securities, including Securities issued upon exchange,
registration of transfer, partial redemption or pursuant to Section 2.9.
Securities of each such series authenticated by such Authenticating Agent
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee. Whenever
reference is made in this Indenture to the authentication and delivery of
Securities of any series by the Trustee or to the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent for such series
and a certificate of authentication executed on behalf of the Trustee by such
Authenticating Agent. Such Authenticating Agent shall at all times be a
corporation organized and doing business under the laws of the United States
of America or of any state or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $5,000,000 (determined as provided in Section 6.9 with respect to
the Trustee) and subject to supervision or examination by federal or state
authority.
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Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency
business of any Authenticating Agent, shall continue to be the Authenticating
Agent with respect to all series of Securities for which it served as
Authenticating Agent without the execution or filing of any paper or any
further act on the part of the Trustee or such Authenticating Agent. Any
Authenticating Agent may at any time, and if it shall cease to be eligible
shall, resign by giving written notice of resignation to the Trustee and to
the Issuer. The Trustee may at any time terminate the agency of an
Authenticating Agent by giving written notice thereof to such Authenticating
Agent and to the Issuer.
Upon receiving such a notice of resignation or upon such a termination, or
in case at any time any Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 6.14 with respect to one or
more series of Securities, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Issuer and the Issuer shall provide
notice of such appointment to all Holders of Securities of such series in the
manner and to the extent provided in Section 11.4. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all rights, powers, duties and responsibilities of its predecessor
hereunder, with like effect as if originally named as Authenticating Agent.
The Issuer agrees to pay to the Authenticating Agent for such series from time
to time reasonable compensation. The Authenticating Agent for the Securities
of any series shall have no responsibility or liability for any action taken
by it as such at the direction of the Trustee.
Sections 6.2, 6.3, 6.4 and 7.3 shall be applicable to any Authenticating
Agent.
ARTICLE SEVEN
Concerning the Securityholders
Section 7.1 Evidence of Action Taken by Securityholders. Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by a specified percentage in
principal amount of the Securityholders of any or all series may be embodied
in and evidenced by one or more instruments of substantially similar tenor
signed by such specified percentage of Securityholders in person or by agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee. Proof of execution of any instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Sections 6.1 and 6.2) conclusive in favor of the
Trustee and the Issuer, if made in the manner provided in this Article Seven.
Section 7.2 Proof of Execution of Instruments and of Holding of
Securities. Subject to Sections 6.1 and 6.2, the execution of any instrument
by a Securityholder or his agent or proxy may be proved in the following
manner:
(a) The fact and date of the execution by any Holder of any instrument
may be proved by the certificate of any notary public or other officer of
any jurisdiction authorized to take acknowledgments of deeds or administer
oaths that the person executing such instruments acknowledged to him the
execution thereof, or by an affidavit of a witness to such execution sworn
to before any such notary or other such officer. Where such execution is by
or on behalf of any legal entity other than an individual, such certificate
or affidavit shall also constitute sufficient proof of the authority of the
person executing the same.
(b) The ownership of Securities shall be proved by the Security register
or by a certificate of the Security registrar.
Section 7.3 Holders to be Treated as Owners. The Issuer, the Trustee and any
agent of the Issuer or the Trustee may deem and treat the Person in whose name
any Security shall be registered upon the Security register for such series as
the absolute owner of such Security (whether or not such Security shall be
overdue and
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notwithstanding any notation of ownership or other writing thereon) for the
purpose of receiving payment of or on account of the principal of and, subject
to the provisions of this Indenture, interest, if any, on such Security and
for all other purposes; and neither the Issuer nor the Trustee nor any agent
of the Issuer or the Trustee shall be affected by any notice to the contrary.
Section 7.4 Securities Owned by Issuer Deemed Not Outstanding. In
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all series have concurred in any direction,
consent or waiver under this Indenture, Securities which are owned by the
Issuer or any other obligor on the Securities with respect to which such
determination is being made or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Issuer or any other obligor on the Securities with respect to which such
determination is being made shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in relying on
any such direction, consent or waiver only Securities which the Trustee knows
are so owned shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Issuer or any
other obligor upon the Securities or any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Issuer or any other obligor on the Securities. In case of a dispute as to
such right, the advice of counsel shall be full protection in respect of any
decision made by the Trustee in accordance with such advice. Upon request of
the Trustee, the Issuer shall furnish to the Trustee promptly an Officer's
Certificate listing and identifying all Securities, if any, known by the
Issuer to be owned or held by or for the account of any of the above-described
Persons; and, subject to Sections 6.1 and 6.2, the Trustee shall be entitled
to accept such Officer's Certificate as conclusive evidence of the facts
therein set forth and of the fact that all Securities not listed therein are
Outstanding for the purpose of any such determination.
Section 7.5 Right of Revocation of Action Taken. At any time prior to (but
not after) the evidencing to the Trustee, as provided in Section 7.1, of the
taking of any action by the Holders of the percentage in aggregate principal
amount of the Securities of any or all series, as the case may be, specified
in this Indenture in connection with such action, any Holder of a Security the
serial number of which is shown by the evidence to be included among the
serial numbers of the Securities the Holders of which have consented to such
action may, by filing written notice at the Corporate Trust Office and upon
proof of holding as provided in this Article Seven, revoke such action so far
as concerns such Security provided that such revocation shall not become
effective until three business days after such filing. Except as aforesaid any
such action taken by the Holder of any Security shall be conclusive and
binding upon such Holder and upon all future Holders and owners of such
Security and of any Securities issued in exchange or substitution therefor or
on registration of transfer thereof, irrespective of whether or not any
notation in regard thereto is made upon any such Security. Any action taken by
the Holders of the percentage in aggregate principal amount of the Securities
of any or all series, as the case may be, specified in this Indenture in
connection with such action shall be conclusively binding upon the Issuer, the
Trustee and the Holders of all the Securities affected by such action.
Section 7.6 Record Date for Consents and Waivers. The Issuer may, but shall
not be obligated to, direct the Trustee to establish a record date for the
purpose of determining the record date for the purpose of determining the
Persons entitled to (i) waive any past default with respect to the Securities
of such series in accordance with Section 5.7 of this Indenture, (ii) consent
to any supplemental indenture in accordance with Section 8.2 of this Indenture
or (iii) waive compliance with any term, condition or provision of any
covenant hereunder. If a record date is fixed, the Holders on such record
date, or their duly designated proxies, and any such Persons, shall be
entitled to waive any such past default, consent to any such supplemental
indenture or waive compliance with any such term, condition or provision,
whether or not such Holder remains a Holder after such record date; provided,
however, that unless such waiver or consent is obtained from the Holders, or
duly designated proxies, of the requisite principal amount of Outstanding
Securities of such series prior to the date which is the 90th day after such
record date, any such waiver or consent previously given shall automatically
and without further action by any Holder be cancelled and of no further
effect.
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ARTICLE EIGHT
Supplemental Indentures
Section 8.1 Supplemental Indentures Without Consent of Securityholders. The
Issuer, when authorized by a resolution of the Board of Directors (which
resolution may provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined in accordance
with or pursuant to an Issuer Order), and the Trustee may from time to time
and at any time enter into an indenture or indentures supplemental hereto
(which shall conform to the provisions of the Trust Indenture Act of 1939 as
in force at the date of the execution thereof) for one or more of the
following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Securities of one or more series any property or assets;
(b) to evidence the succession of another corporation to the Issuer, or
successive successions, and the assumption by the successor corporation of
the covenants, agreements and obligations of the Issuer pursuant to Article
Nine;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as the Issuer and the Trustee shall
consider to be for the protection of the Holders of Securities, and to make
the occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions, conditions or provisions an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, that in respect
of any such additional covenant, restriction, condition or provision such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the
case of other defaults) or may provide for an immediate enforcement upon
such an Event of Default or may limit the remedies available to the Trustee
upon such an Event of Default or may limit the right of the Holders of a
majority in aggregate principal amount of the Securities of such series to
waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture, or to make any other provisions as the Issuer may
deem necessary or desirable, provided that no such action shall adversely
affect the interests of the Holders of the Securities;
(e) to establish the form or terms of Securities of any series as
permitted by Sections 2.1 and 2.3; and
(f) to evidence and provide for the acceptance of appointment hereunder
by a successor trustee with respect to the Securities of one or more series
and to add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of Section
6.11.
The Trustee is hereby authorized to join with the Issuer in the execution of
any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section 8.1
may be executed without the consent of the Holders of any of the Securities
then Outstanding, notwithstanding any of the provisions of Section 8.2.
Section 8.2 Supplemental Indentures With Consent of Securityholders. With
the consent (evidenced as provided in Article Seven) of the Holders of not
less than a majority in aggregate principal amount of the Securities then
Outstanding of any series affected by such supplemental indenture, the Issuer,
when authorized by a resolution of the Board of Directors (which resolution
may provide general terms or parameters for such action and may provide that
the specific terms of such action may be determined in accordance with or
pursuant
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to an Issuer Order), and the Trustee may, from time to time and at any time,
enter into an indenture or indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act of 1939 as in force at the date
of execution thereof) for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the Holders
of the Securities of such Series; provided, that no such supplemental
indenture shall (a) extend the final maturity of any Security, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest, if any, thereon, or reduce or alter the method of computation of any
amount payable on redemption or repayment thereof (or the time at which any
such redemption may be made), or make the principal thereof (including any
amount in respect of original issue discount), or interest, if any, thereon
payable in any coin or currency other than that provided in the Securities or
in accordance with the terms of the Securities, or reduce the amount of the
principal of an Original Issue Discount Security that would be due and payable
upon an acceleration of the maturity thereof pursuant to Section 5.1 or the
amount thereof provable in bankruptcy pursuant to Section 5.2, or impair or
affect the right of any Securityholder to institute suit for the payment
thereof or, if the Securities provide therefor, any right of repayment at the
option of the Securityholder, in each case without the consent of the Holder
of each Security so affected, or (b) reduce the aforesaid percentage of
Securities of any series, the consent of the Holders of which is required for
any such supplemental indenture, without the consent of the Holders of each
Security so affected. No consent of any Holder of any Security shall be
necessary under this Section 8.2 to permit the Trustee and the Issuer to
execute supplemental indentures pursuant to Sections 8.1 and 9.2.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of Holders of Securities of such series, with respect to such covenant
or provision, shall be deemed not to affect the rights under this Indenture of
the Holders of Securities of any other series.
Upon the request of the Issuer, accompanied by a copy of a resolution of the
Board of Directors (which resolution may provide general terms or parameters
for such action and may provide that the specific terms of such action may be
determined in accordance with or pursuant to an Issuer Order) certified by the
secretary or an assistant secretary of the Issuer authorizing the execution of
any such supplemental indenture, and upon the filing with the Trustee of
evidence of the consent of the Holders of the Securities as aforesaid and
other documents, if any, required by Section 7.1, the Trustee shall join with
the Issuer in the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Securityholders under this
Section 8.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 8.2, the
Trustee shall give notice thereof to the Holders of then Outstanding
Securities of each series affected thereby, by mailing a notice thereof by
first-class mail to such Holders at their addresses as they shall appear on
the Security register. Any failure of the Issuer to give such notice, or any
defect therein, shall not, however, in any way impair or affect the validity
of any such supplemental indenture.
Section 8.3 Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Issuer and the Holders of Securities
of each series affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of
this Indenture for any and all purposes.
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Section 8.4 Documents to Be Given to Trustee. The Trustee, subject to the
provisions of Sections 6.1 and 6.2, shall be entitled to receive an Officer's
Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article Eight complies with
the applicable provisions of this Indenture.
Section 8.5 Notation on Securities in Respect of Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article Eight may bear a notation in form approved by the Trustee for such
series as to any matter provided for by such supplemental indenture or as to
any action taken by Securityholders. If the Issuer or the Trustee shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Issuer, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Issuer,
authenticated by the Trustee and delivered in exchange for the Securities of
each series then Outstanding.
ARTICLE NINE
Consolidation, Merger, Sale, Conveyance and Lease
Section 9.1 Issuer May Consolidate, etc., on Certain Terms. Subject to the
provisions of Section 9.2, nothing contained in this Indenture or in any of
the Securities shall prevent any consolidation or merger of the Issuer with or
into any other corporation or corporations (whether or not affiliated with the
Issuer), or successive consolidations or mergers in which the Issuer or its
successor or successors shall be a party or parties, or shall prevent any
sale, conveyance or lease of all or substantially all the property of the
Issuer to any other corporation (whether or not affiliated with the Issuer)
authorized to acquire and operate the same; provided, however, and the Issuer
hereby covenants and agrees, that any such consolidation, merger, sale,
conveyance or lease shall be upon the conditions that (a) immediately after
such consolidation, merger, sale, conveyance or lease the corporation (whether
the Issuer or such other corporation) formed by or surviving any such
consolidation or merger, or to which such sale, conveyance or lease shall have
been made, shall not be in default in the performance or observance of any of
the terms, covenants and conditions of this Indenture to be kept or performed
by the Issuer; (b) the corporation (if other than the Issuer) formed by or
surviving any such consolidation or merger, or to which such sale, conveyance
or lease shall have been made, shall be a corporation organized under the laws
of the United States of America, any state thereof or the District of
Columbia; and (c) the due and punctual payment of the principal of and
interest, if any, on all the Securities, according to their tenor, and the due
and punctual performance and observance of all the covenants and conditions of
this Indenture to be performed by the Issuer, shall be expressly assumed, by
supplemental indenture satisfactory in form to the Trustee executed and
delivered to the Trustee, by the corporation (if other than the Issuer) formed
by such consolidation, or into which the Issuer shall have been merged, or by
the corporation which shall have acquired or leased such property.
Section 9.2 Securities to be Secured in Certain Events. If, upon any such
consolidation or merger, or upon any such sale, conveyance or lease, or upon
any acquisition by the Issuer by purchase or otherwise of all or any part of
the properties of any other corporation, any Principal Property owned by the
Issuer or a Restricted Subsidiary immediately prior thereto would thereupon
become subject to any mortgage, security interest, pledge, lien or
encumbrance, not permitted by Section 3.6 hereof, the Issuer, prior to such
consolidation, merger, sale, conveyance, lease or acquisition, will by
indenture supplemental hereto secure the due and punctual payment of the
principal of and interest, if any, on the Securities then outstanding (equally
and ratably with any other indebtedness of or guaranteed by the Issuer then
entitled thereto) by a direct lien on such Principal Property, together with
any other properties and assets of the Issuer or of any such Restricted
Subsidiary, whichever shall be the owner of any such Principal Property, which
would thereupon become subject to any such mortgage, security interest,
pledge, lien or encumbrance, prior to all liens other than any theretofore
existing thereon.
Section 9.3 Successor Corporation to be Substituted. In case of any such
consolidation, merger, sale, conveyance or lease and upon the assumption by
the successor corporation, by supplemental indenture, executed
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and delivered to the Trustee and satisfactory in form to the Trustee, of the
due and punctual payment of the principal of and interest, if any, on all of
the Securities and the due and punctual performance of all of the covenants
and conditions of this Indenture to be performed by the Issuer, such successor
corporation shall succeed to and be substituted for the Issuer, with the same
effect as if it had been named herein as the party of the first part, and the
Issuer (including any intervening successor to the Issuer which shall have
become the obligor hereunder) shall be relieved of any further obligation
under this Indenture and the Securities; provided, however, that in the case
of a sale, lease or conveyance of the Property of the Issuer (including any
such intervening successor) in connection with which there is not a plan
providing for the complete liquidation of the Issuer (including any such
intervening successor), the Issuer (including any such intervening successor)
shall continue to be liable on its obligations under this Indenture and the
Securities to the extent, but only to the extent, of liability to pay the
principal of and interest, if any, on the Securities at the time, places and
rate prescribed in this Indenture and the Securities. Such successor
corporation thereupon may cause to be signed, and may issue either in its own
name or in the name of the Issuer, any or all of the Securities issuable
hereunder which theretofore shall not have been signed by the Issuer and
delivered to the Trustee; and, upon the order of such successor corporation
instead of the Issuer and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities which previously shall have been signed and delivered by the
officers of the Issuer to the Trustee for authentication, and any Securities
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Securities so issued shall
in all respects have the same legal rank and benefit under this Indenture as
the Securities theretofore or thereafter issued in accordance with the terms
of this Indenture as though all of such Securities had been issued at the date
of the execution hereof.
In case of any such consolidation, merger, sale, conveyance or lease such
changes in phraseology and form (but not in substance) may be made in the
Securities, thereafter to be issued, as may be appropriate.
Section 9.4 Opinion of Counsel to be Given Trustee. The Trustee, subject to
Sections 6.1 and 6.2, may receive an Opinion of Counsel as conclusive evidence
that any such consolidation, merger, sale, conveyance or lease and any such
assumption complies with the provisions of this Article Nine.
ARTICLE TEN
Satisfaction and Discharge of Indenture; Unclaimed Moneys
Section 10.1 Satisfaction and Discharge of Indenture. (A) If at any time (a)
the Issuer shall have paid or caused to be paid the principal of and interest,
if any, on all the Securities Outstanding (other than Securities which have
been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 2.9) as and when the same shall have become due and
payable, or (b) the Issuer shall have delivered to the Trustee for
cancellation all Securities theretofore authenticated (other than Securities
which have been destroyed, lost or stolen and which have been replaced or paid
as provided in Section 2.9); and if, in any such case, the Issuer shall also
pay or cause to be paid all other sums payable hereunder by the Issuer, then
this Indenture shall cease to be of further effect, and the Trustee, on demand
of the Issuer accompanied by an Officer's Certificate and an Opinion of
Counsel, each stating that all conditions precedent relating to the
satisfaction and discharge contemplated by this provision have been complied
with, and at the cost and expense of the Issuer, shall execute proper
instruments acknowledging such satisfaction and discharging this Indenture.
The Issuer agrees to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred, and to compensate the Trustee for
any services thereafter reasonably and properly rendered, by the Trustee in
connection with this Indenture or the Securities.
(B) If at any time (a) the Issuer shall have paid or caused to be paid the
principal of and interest, if any, on all the Securities of any series
Outstanding (other than Securities of such series which have been destroyed,
lost or stolen and which have been replaced or paid as provided in Section
2.9) as and when the same shall have become due and payable, or (b) the Issuer
shall have delivered to the Trustee for cancellation all Securities of
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any series theretofore authenticated (other than any Securities of such series
which have been destroyed, lost or stolen and which have been replaced or paid
as provided in Section 2.9), or (c) in the case of any series of Securities
with respect to which the exact amount described in clause (ii) below can be
determined at the time of making the deposit referred to in such clause (ii),
(i) all the Securities of such series not theretofore delivered to the Trustee
for cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption
within one year under arrangements satisfactory to the Trustee for the giving
of notice of redemption, and (ii) the Issuer shall have irrevocably deposited
or caused to be deposited with the Trustee as funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the Holders
of Securities of such series, cash in an amount (other than moneys repaid by
the Trustee or any Paying Agent to the Issuer in accordance with Section 10.4)
or direct obligations of the United States of America, backed by its full
faith and credit ("U.S. Government Obligations"), maturing as to principal and
interest, if any, at such times and in such amounts as will insure the
availability of cash, or a combination thereof, sufficient in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (A) the
principal of and interest, if any, on all Securities of such series on each
date that such principal or interest, if any, is due and payable, and (B) any
mandatory sinking fund payments on the dates on which such payments are due
and payable in accordance with the terms of this Indenture and the Securities
of such series; then the Issuer shall be deemed to have paid and discharged
the entire indebtedness on all the Securities of such series on the date of
the deposit referred to in clause (ii) above and the provisions of this
Indenture with respect to the Securities of such series shall no longer be in
effect (except, in the case of clause (c) of this Section 10.1(B), as to (i)
rights of registration of transfer and exchange of Securities of such series,
(ii) substitution of mutilated, defaced, destroyed, lost or stolen Securities
of such series, (iii) rights of Holders of Securities of such series to
receive payments of principal thereof and interest; if any, thereon upon the
original stated due dates therefor (but not upon acceleration), and remaining
rights of the Holders of Securities of such series to receive mandatory
sinking fund payments, if any, (iv) the rights, obligations, duties and
immunities of the Trustee hereunder, (v) the rights of the Holders of
Securities of such series as beneficiaries hereof with respect to the property
so deposited with the Trustee payable to all or any of them and (vi) the
obligations of the Issuer under Section 3.2 with respect to Securities of such
series) and the Trustee, on demand of the Issuer accompanied by an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent contemplated by this provision have been complied with, and at the
cost and expense of the Issuer, shall execute proper instruments acknowledging
the same.
(C) The following provisions shall apply to the Securities of each series
unless specifically otherwise provided in a Board Resolution, Officer's
Certificate or indenture supplemental hereto provided pursuant to Section
2.3. In addition to discharge of this Indenture pursuant to the next preceding
paragraph, in the case of any series of Securities with respect to which the
exact amount described in subparagraph (a) below can be determined at the time
of making the deposit referred to in such subparagraph (a), the Issuer shall
be deemed to have paid and discharged the entire indebtedness on all the
Securities of such a series on the 91st day after the date of the deposit
referred to in subparagraph (a) below, and the provisions of this Indenture
with respect to the Securities of such series shall no longer be in effect
(except as to (i) rights of registration of transfer and exchange of
Securities of such series, (ii) substitution of mutilated, defaced, destroyed,
lost or stolen Securities of such series, (iii) rights of Holders of
Securities of such series to receive payments of principal thereof and
interest, if any, thereon upon the original stated due dates therefor (but not
upon acceleration), and remaining rights of the Holders of Securities of such
series to receive mandatory sinking fund payments, if any, (iv) the rights,
obligations, duties and immunities of the Trustee hereunder, (v) the rights of
the Holders of Securities of such series as beneficiaries hereof with respect
to the property so deposited with the Trustee payable to all or any of them
and (vi) the obligations of the Issuer under Section 3.2 with respect to
Securities of such series) and the Trustee, on demand of the Issuer
accompanied by an Officer's Certificate and an Opinion of Counsel, each
stating that all conditions precedent contemplated by this provision have been
complied with, and at the cost and expense of the Issuer, shall execute proper
instruments acknowledging the same, if
(a) with reference to this provision the Issuer has irrevocably deposited
or caused to be irrevocably deposited with the Trustee as funds in trust,
specifically pledged as security for, and dedicated solely to, the benefit
of the Holders of Securities of such series (i) cash in an amount, or (ii)
U.S. Government
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Obligations, maturing as to principal and interest, if any, at such times
and in such amounts as will insure the availability of cash, or (iii) a
combination thereof, sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay (A) the principal of and interest,
if any, on all Securities of such series on each date that such principal
or interest, if any, is due and payable, and (B) any mandatory sinking fund
payments on the dates on which such payments are due and payable in
accordance with the terms of this Indenture and the Securities of such
series;
(b) such deposit will not result in a breach or violation of, or
constitute a default under, any agreement or instrument to which the Issuer
is a party or by which it is bound; and
(c) the Issuer has delivered to the Trustee an Opinion of Counsel based
on the fact that (x) the Issuer has received from, or there has been
published by, the Internal Revenue Service a ruling or (y), since the date
hereof, there has been a change in the applicable United States federal
income tax law, in either case to the effect that, and such opinion shall
confirm that, the Holders of the Securities of such series will not
recognize income, gain or loss for federal income tax purposes as a result
of such deposit, defeasance and discharge and will be subject to federal
income tax on the same amount and in the same manner and at the same times,
as would have been the case if such deposit, defeasance and discharge had
not occurred.
Section 10.2 Application by Trustee of Funds Deposited for Payment of
Securities. Subject to Section 10.4, all moneys deposited with the Trustee
pursuant to Section 10.1 shall be held in trust and applied by it to the
payment, either directly or through any Paying Agent (including the Issuer
acting as its own paying agent), to the Holders of the particular Securities
of such series for the payment or redemption of which such moneys have been
deposited with the Trustee, of all sums due and to become due thereon for
principal and interest, if any, but such money need not be segregated from
other funds except to the extent required by law.
Section 10.3 Repayment of Moneys Held by Paying Agent. In connection with
the satisfaction and discharge of this Indenture with respect to Securities of
any series, all moneys then held by any Paying Agent under the provisions of
this Indenture with respect to such series of Securities shall, upon demand of
the Issuer, be repaid to it or paid to the Trustee and thereupon such Paying
Agent shall be released from all further liability with respect to such
moneys.
Section 10.4 Return of Moneys Held by Trustee and Paying Agent Unclaimed for
Two Years. Any moneys deposited with or paid to the Trustee or any Paying
Agent for the payment of the principal of or interest, if any, on any Security
of any series and not applied but remaining unclaimed for two years after the
date upon which such principal or interest, if any, shall have become due and
payable, shall, upon the written request of the Issuer and unless otherwise
required by mandatory provisions of applicable escheat or abandoned or
unclaimed property law, be repaid to the Issuer by the Trustee for such series
or such Paying Agent, and the Holder of the Securities of such series shall,
unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property laws, thereafter look only to the Issuer for
any payment which such Holder may be entitled to collect, and all liability of
the Trustee or any Paying Agent with respect to such moneys shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment with respect to moneys deposited with it
for any payment in respect of Securities of any series, shall, at the expense
of the Issuer, mail by first-class mail to Holders of such Securities at their
addresses as they shall appear on the Security register notice that such
moneys remain and that, after a date specified therein, which shall not be
less than thirty days from the date of such mailing or publication, any
unclaimed balance of such money then remaining will be repaid to the Issuer.
Section 10.5 Indemnity for U.S. Government Obligations. The Issuer shall pay
and indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the U.S. Government Obligations deposited pursuant to Section
10.1 or the principal or interest received in respect of such obligations.
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ARTICLE ELEVEN
Miscellaneous Provisions
Section 11.1 Partners, Incorporators, Stockholders, Officers and Directors
of Issuer Exempt from Individual Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had
against any incorporator, as such or against any past, present or future
stockholder, officer or director, as such, of the Issuer, or any partner of
the Issuer or of any successor, either directly or through the Issuer or any
successor, under any rule of law, statute or constitutional provision or by
the enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities by the Holders thereof and as part of the
consideration for the issue of the Securities.
Section 11.2 Provisions of Indenture for the Sole Benefit of Parties and
Holders of Securities. Nothing in this Indenture or in the Securities,
expressed or implied, shall give or be construed to give to any person, firm
or corporation, other than the parties hereto and their successors and the
Holders of the Securities, any legal or equitable right, remedy or claim under
this Indenture or under any covenant or provision herein contained, all such
covenants and provisions being for the sole benefit of the parties hereto and
their successors and of the Holders of the Securities.
Section 11.3 Successors and Assigns of Issuer Bound by Indenture. All the
covenants, stipulations, promises and agreements in this Indenture contained
by or on behalf of the Issuer shall bind its successors and assigns, whether
so expressed or not.
Section 11.4 Notices and Demands on Issuer, Trustee and Holders of
Securities. Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the Holders
of Securities to or on the Issuer, or as required pursuant to the Trust
Indenture Act of 1939, may be given or served by being deposited postage
prepaid, first-class mail (except as otherwise specifically provided herein)
addressed (until another address of the Issuer is filed by the Issuer with the
Trustee) to Halliburton Company, 3600 Lincoln Plaza, 500 North Akard Street,
Dallas, Texas 75201-3391, Attention: Vice President and Secretary. Any notice,
direction, request or demand by the Issuer or any Holder of Securities to or
upon the Trustee shall be deemed to have been sufficiently given or served by
being deposited postage prepaid, first-class mail (except as otherwise
specifically provided herein) addressed (until another address of the Trustee
is filed by the Trustee with the Issuer) to Texas Commerce Bank National
Association, 600 Travis, 8th Floor, Houston, Texas 77002, Attention: Vice
President, Corporate Trust Department, Taxable Bond Section.
Where this Indenture provides for notice to Holders of Securities, such
notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Holder entitled thereto, at his last address as it appears in the Security
register. Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken
in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular mail
service, it shall be impracticable to mail notice to the Issuer when such
notice is required to be given pursuant to any provision of this Indenture,
then any manner of giving such notice as shall be reasonably satisfactory to
the Trustee shall be deemed to be sufficient notice.
Section 11.5 Officer's Certificates and Opinions of Counsel; Statements to
be Contained Therein. Upon any application or demand by the Issuer to the
Trustee to take any action under any of the provisions of this Indenture, or
as required pursuant to the Trust Indenture Act of 1939, the Issuer shall
furnish to the Trustee an Officer's Certificate stating that all conditions
precedent provided for in this Indenture relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of
such counsel all such
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conditions precedent have been complied with, except that in the case of any
such application or demand as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
Each certificate or opinion provided for in this Indenture (other than a
certificate provided pursuant to Section 4.3(d)) and delivered to the Trustee
with respect to compliance with a condition or covenant provided for in this
Indenture shall include (a) a statement that the person making such
certificate or opinion has read such covenant or condition, (b) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
opinion as to whether or not such covenant or condition has been complied
with, and (d) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of or representations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous. Any certificate, statement or opinion of counsel may be based,
insofar as it relates to factual matters, information with respect to which is
in the possession of the Issuer, upon the certificate, statement or opinion of
or representations by an officer or officers of the Issuer, unless such
counsel knows that the certificate, statement or opinion or representations
with respect to the matters upon which his certificate, statement or opinion
may be based as aforesaid are erroneous, or in the exercise of reasonable care
should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer or of
counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as
the case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public accountants
filed with and directed to the Trustee shall contain a statement that such
firm is independent.
Section 11.6 Payments Due on Saturdays, Sundays and Holidays. If the date of
maturity of principal of or interest, if any, on the Securities of any series
or the date fixed for redemption or repayment of any such Security shall not
be a Business Day, then payment of interest, if any, or principal need not be
made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the date of maturity or the date fixed
for redemption or repayment, and, in the case of payment no interest shall
accrue for the period after such date.
Section 11.7 Conflict of Any Provision of Indenture with Trust Indenture Act
of 1939. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included in this Indenture which
is required to be included herein by any of Sections 310 to 317, inclusive, or
is deemed applicable to this Indenture by virtue of the provisions, of the
Trust Indenture Act of 1939, such required provision shall control.
Section 11.8 GOVERNING LAW. THIS INDENTURE AND EACH SECURITY SHALL BE DEEMED
TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE, EXCEPT AS MAY
OTHERWISE BE REQUIRED BY MANDATORY PROVISIONS OF LAW.
Section 11.9 Counterparts. This Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
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Section 11.10 Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
ARTICLE TWELVE
Redemption of Securities and Sinking Funds
Section 12.1 Applicability of Article. The provisions of this Article shall
be applicable to the Securities of any series which are redeemable before
their maturity or to any sinking fund for the retirement of Securities of a
series except as otherwise specified, as contemplated by Section 2.3 for
Securities of such series.
Section 12.2 Notice of Redemption, Partial Redemptions. Notice of redemption
to the Holders of Securities of any series to be redeemed as a whole or in
part at the option of the Issuer shall be given by mailing notice of such
redemption by first-class mail, postage prepaid, at least 30 days and not more
than 60 days prior to the date fixed for redemption to such Holders of
Securities of such series at their last addresses as they shall appear upon
the registry books. Any notice which is mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the
Holder receives the notice. Failure to give notice by mail, or any defect in
the notice to the Holder of any Security of a series designated for redemption
as a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security of such series.
The notice of redemption to each such Holder shall specify the principal
amount of each Security of such series held by such Holder to be redeemed, the
date fixed for redemption, the redemption price, the place or places of
payment, that payment will be made upon presentation and surrender of such
Securities, that such redemption is pursuant to the mandatory or optional
sinking fund, or both, if such be the case, that interest, if any, accrued to
the date fixed for redemption will be paid as specified in such notice and
that on and after said date interest, if any, thereon or on the portions
thereof to be redeemed will cease to accrue. In case any Security of a series
is to be redeemed in part only, the notice of redemption shall state the
portion of the principal amount thereof to be redeemed and shall state that on
and after the date fixed for redemption, upon surrender of such Security, a
new Security or Securities of such series in principal amount equal to the
unredeemed portion thereof will be issued.
The notice of redemption of Securities of any series to be redeemed at the
option of the Issuer shall be given by the Issuer or, at the Issuer's request,
by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the notice of redemption given
as provided in this Section 12.2, the Issuer will deposit with the Trustee or
with one or more Paying Agents (or, if the Issuer is acting as its own paying
agent, set aside, segregate and hold in trust as provided in Section 3.5) an
amount of money sufficient to redeem on the redemption date all the Securities
of such series so called for redemption at the appropriate redemption price,
together with accrued interest, if any, to the date fixed for redemption. The
Issuer will deliver to the Trustee at least 45 days prior to the date fixed
for redemption an Officer's Certificate stating the aggregate principal amount
of Securities to be redeemed. In case of a redemption at the election of the
Issuer prior to the expiration of any restriction on such redemption, the
Issuer shall deliver to the Trustee, prior to the giving of any notice of
redemption (unless a shorter notice shall be satisfactory to the Trustee) to
Holders pursuant to this Section, an Officer's Certificate stating that such
restriction has been complied with.
If less than all the Securities of a series are to be redeemed, the Trustee
shall select, in such manner as it shall deem appropriate and fair, Securities
of such series to be redeemed. Securities may be redeemed in part in multiples
equal to the minimum authorized denomination for Securities of such series or
any multiple thereof. The Trustee shall promptly notify the Issuer in writing
of the Securities of such series selected for redemption and, in the case of
any Securities of such series selected for partial redemption, the principal
amount thereof to be redeemed. For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to the redemption of
Securities of any series shall relate, in the case of any Security redeemed or
to be redeemed only in part, to the portion of the principal amount of such
Security which has been or is to be redeemed.
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Section 12.3 Payment of Securities Called for Redemption. If notice of
redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date
and at the place stated in such notice at the applicable redemption price,
together with interest, if any, accrued to the date fixed for redemption, and
on and after said date (unless the Issuer shall default in the payment of such
Securities at the redemption price, together with interest, if any, accrued to
said date) interest on the Securities or portions of Securities so called for
redemption shall cease to accrue, and, except as provided in Sections 6.5 and
10.4, such Securities shall cease from and after the date fixed for redemption
to be entitled to any benefit or security under this Indenture, and the
Holders thereof shall have no right in respect of such Securities except the
right to receive the redemption price thereof and unpaid interest to the date
fixed for redemption. On presentation and surrender of such Securities at a
place of payment specified in said notice, said Securities or the specified
portions thereof shall be paid and redeemed by the Issuer at the applicable
redemption price, together with interest, if any, accrued thereon to the date
fixed for redemption; provided that payment of interest if any, becoming due
on or prior to the date fixed for redemption shall be payable to the Holders
of Securities registered as such on the relevant record date subject to the
terms and provisions of Sections 2.3 and 2.7 hereof.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid or duly provided for,
bear interest from the date fixed for redemption at the rate of interest or
Yield to Maturity (in the case of an Original Issue Discount Security) borne
by such Security.
Upon presentation of any Security redeemed in part only, the Issuer shall
execute and the Trustee shall authenticate and deliver to or on the order of
the Holder thereof, at the expense of the Issuer, a new Security or Securities
of such series, of authorized denominations, in principal amount equal to the
unredeemed portion of the Security so presented.
Section 12.4 Exclusion of Certain Securities from Eligibility for Selection
for Redemption. Securities shall be excluded from eligibility for selection
for redemption if they are identified by registration and certificate number
in an Officer's Certificate delivered to the Trustee at least 45 days prior to
the last date on which notice of redemption may be given as being owned of
record and beneficially by, and not pledged or hypothecated by either (a) the
Issuer, or (b) a Person specifically identified in such written statement as
directly or indirectly controlling or controlled by or under direct or
indirect common control with the Issuer.
Section 12.5 Mandatory and Optional Sinking Funds. The minimum amount of any
sinking fund payment provided for by the terms of the Securities of any series
is herein referred to as a "mandatory sinking fund payment", and any payment
in excess of such minimum amount provided for by the terms of the Securities
of any series is herein referred to as an "optional sinking fund payment". The
date on which a sinking fund payment is to be made is herein referred to as
the "sinking fund payment date".
In lieu of making all or any part of any mandatory sinking fund payment with
respect to any series of Securities in cash, the Issuer may at its option (a)
deliver to the Trustee Securities of such series theretofore purchased or
otherwise acquired (except upon redemption pursuant to the mandatory sinking
fund) by the Issuer or receive credit for Securities of such series (not
previously so credited) theretofore purchased or otherwise acquired (except as
aforesaid) by the Issuer and delivered to the Trustee for cancellation
pursuant to Section 2.10, (b) receive credit for optional sinking fund
payments (not previously so credited) made pursuant to this Section 12.5, or
(c) receive credit for Securities of such series (not previously so credited)
redeemed by the Issuer through any optional redemption provision contained in
the terms of such series. Securities so delivered or credited shall be
received or credited by the Trustee at the sinking fund redemption price
specified in such Securities.
On or before the 60th day next preceding each sinking fund payment date for
any series, the Issuer will deliver to the Trustee an Officer's Certificate
(a) specifying the portion of the mandatory sinking fund payment to be
satisfied by payment of cash and the portion to be satisfied by credit of
Securities of such series and the basis for such credit, (b) stating that none
of the Securities of such series to be so credited has theretofore been
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so credited, (c) stating that no defaults in the payment of interest or Events
of Default with respect to such series have occurred (which have not been
waived or cured or otherwise ceased to exist) and are continuing, and (d)
stating whether or not the Issuer intends to exercise its right to make an
optional sinking fund payment with respect to such series and, if so,
specifying the amount of such optional sinking fund payment which the Issuer
intends to pay on or before the next succeeding sinking fund payment date. Any
Securities of such series to be credited and required to be delivered to the
Trustee in order for the Issuer to be entitled to credit therefor as aforesaid
which have not theretofore been delivered to the Trustee shall be delivered
for cancellation pursuant to Section 2.10 to the Trustee with such Officer's
Certificate (or reasonably promptly thereafter if acceptable to the Trustee).
Such Officer's Certificate shall be irrevocable and upon its receipt by the
Trustee the Issuer shall become unconditionally obligated to make all the cash
payments or payments therein referred to, if any, on or before the next
succeeding sinking fund payment date. Failure of the Issuer, on or before any
such 60th day, to deliver such Officer's Certificate and Securities (subject
to the parenthetical clause in the second preceding sentence) specified in
this paragraph, if any, shall not constitute a default but shall constitute,
on and as of such date, the irrevocable election of the Issuer (i) that the
mandatory sinking fund payment for such series due on the next succeeding
sinking fund payment date shall be paid entirely in cash without the option to
deliver or credit Securities of such series in respect thereof, and (ii) that
the Issuer will make no optional sinking fund payment with respect to such
series as provided in this Section 12.5.
If the sinking fund payment or payments (mandatory or optional or both) to
be made in cash on the next succeeding sinking fund payment date plus any
unused balance of any preceding sinking fund payments made in cash shall
exceed $50,000 or a lesser sum if the Issuer shall so request with respect to
the Securities of any particular series, such cash shall be applied on the
next succeeding sinking fund payment date to the redemption of Securities of
such series at the sinking fund redemption price together with accrued
interest, if any, to the date fixed for redemption. If such amount shall be
$50,000 or less and the Issuer makes no such request, then it shall be carried
over until a sum in excess of $50,000 is available. The Trustee shall select,
in the manner provided in Section 12.2, for redemption on such sinking fund
payment date a sufficient principal amount of Securities of such series to
absorb said cash, as nearly as may be, and shall (if requested in writing by
the Issuer) inform the Issuer of the serial numbers of the Securities of such
series (or portions thereof) so selected. The Trustee, in the name and at the
expense of the Issuer (or the Issuer, if it shall so request the Trustee in
writing) shall cause notice of redemption of the Securities of such series to
be given in substantially the manner provided in Section 12.2 (and with the
effect provided in Section 12.3) for the redemption of Securities of such
series in part at the option of the Issuer. The amount of any sinking fund
payments not so applied or allocated to the redemption of Securities of such
series shall be added to the next cash sinking fund payment for such series
and, together with such payment, shall be applied in accordance with the
provisions of this Section 12.5. Any and all sinking fund moneys held on the
stated maturity date of the Securities of any particular series (or earlier,
if such maturity is accelerated), which are not held for the payment or
redemption of particular Securities of such series shall be applied, together
with other moneys, if necessary, sufficient for the purpose, to the payment of
the principal of, and interest, if any, on, the Securities of such series at
maturity.
On or before each sinking fund payment date, the Issuer shall pay to the
Trustee in cash or shall otherwise provide for the payment of all interest, if
any, accrued to the date fixed for redemption on Securities to be redeemed on
the next following sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities of a
series with sinking fund moneys or give any notice of redemption of Securities
for such series by operation of the sinking fund during the continuance of a
default in payment of interest on such Securities or of any Event of Default
except that, where the giving of notice of redemption of any Securities shall
theretofore have been made, the Trustee shall redeem or cause to be redeemed
such Securities, provided that it shall have received from the Issuer a sum
sufficient for such redemption. Except as aforesaid, any moneys in the sinking
fund for such series at the time when any such default or Event of Default
shall occur, and any moneys thereafter paid into the sinking fund, shall,
during the continuance of such default or Event of Default, be deemed to have
been collected under Article Five and held for the payment of all such
Securities. In case such Event of Default shall have been waived as provided
in
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Section 5.7 or the default cured on or before the 60th day preceding the
sinking fund payment date in any year, such moneys shall thereafter be applied
on the next succeeding sinking fund payment date in accordance with this
Section 12.5 to the redemption of such Securities.
IN WITNESS WHEREOF, the parties hereto have caused this Second Senior
Indenture to be duly executed, and the appropriate corporate seals to be
hereunto affixed and attested, all as of December 1, 1996.
HALLIBURTON COMPANY
By __________________________________
Title:
Attest:
By __________________________________
Title:
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Trustee
By __________________________________
Title:
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HALLIBURTON COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
EXHIBIT 12.1
(Prior to restatement for acquisition of Landmark Graphics Corporation)
(Millions of dollars, except ratios)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEARS ENDED DECEMBER 31
30-SEP-96 ----------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
----------- ------ ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Income (loss) from
continuing operations
before provision for
income taxes, minority
interest, and cumulative
effect of changes in
accounting methods...... $245.2 $366.6 $291.5 $(147.7) $(135.1) $ 84.4
Add (deduct):
Interest expense........ 17.4 45.6 46.4 49.3 53.0 52.8
Amortization of debt
discount and issue
costs.................. 0.1 0.6 0.7 0.8 0.6 0.5
One-third of long-term
fixed rent............. 17.0 29.3 41.0 57.1 65.0 60.2
Equity in income of
joint venture
operations............. (66.1) (88.4) (93.0) (76.3) (40.5) (43.3)
Dividends received from
joint venture
operations............. 3.0 7.3 12.0 9.3 26.9 6.8
------ ------ ------ ------- ------- ------
Total earnings......... $216.6 $361.0 $298.6 $(107.5) $ (30.1) $161.4
====== ====== ====== ======= ======= ======
Fixed charges:
Interest expense........ $ 17.4 $ 45.6 $ 46.4 $ 49.3 $ 53.0 $ 52.8
Amortization of debt
discount and issue
costs.................. 0.1 0.6 0.7 0.8 0.6 0.5
One-third of long-term
fixed rent............. 17.0 29.3 41.0 57.1 65.0 60.2
------ ------ ------ ------- ------- ------
Total fixed charges.... $ 34.5 $ 75.5 $ 88.1 $ 107.2 $ 118.6 $113.5
====== ====== ====== ======= ======= ======
Ratio of earnings to
fixed charges........... 6.3 4.8 3.4 (A) (B) 1.4
====== ====== ====== ======= ======= ======
</TABLE>
(A) Earnings were inadequate to cover fixed charges in 1993 by $214.7 million
(B) Earnings were inadequate to cover fixed charges in 1992 by $148.7 million
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated January 23, 1996,
incorporated by reference in Halliburton Company's Form 10-K for the year ended
December 31, 1995 and to all references to our Firm included in this
Registration Statement.
Arthur Andersen LLP
Dallas, Texas
December 3, 1996
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned, a Director of Halliburton
Company ("Company"), does hereby constitute and appoint Richard B. Cheney,
Dale P. Jones, David J. Lesar, Lester L. Coleman, Robert M. Kennedy and Susan
S. Keith, or any of them acting alone, his true and lawful attorneys and
attorney, with full power of substitution or resubstitution, to do any and all
acts and things and execute any and all instruments which said attorneys or
attorney may deem necessary or advisable to enable the Company to comply with
the Securities Act of 1933, as amended, the Trust Indenture Act of 1939, as
amended, and other federal or state securities laws, and any rules,
regulations and requirements of the Securities and Exchange Commission or
state regulatory authorities in respect thereof, in connection with the
registration for offering under said Securities Act of 1933, as amended, of a
principal amount not to exceed $500,000,000 of debentures or other evidences
of indebtedness or such amount of debentures or other evidences of
indebtedness where the principal amount thereof at maturity discounted to the
date of issuance and sale will result in the Company receiving net proceeds of
$500,000,000 ("Debentures"), whether such Debentures by their terms when
issued contain provisions for convertibility into the Company's Common Stock,
subordination to existing or future indebtedness, redemption or establishment
of a sinking fund for retirement of the indebtedness created thereby, or all,
some or none of such provisions or features, of the Company, or such lesser
amount of Debentures, all upon such terms and in such amounts as may be deemed
appropriate by proper officers of the Company, and subsequent offering for
sale and sale thereof, including specifically, but without limitation thereof,
power and authority to sign my name as a Director of the Company to a
Registration Statement on the appropriate Form and on any other applications
and statements to be filed with the Securities and Exchange Commission with
respect to the offering or sale of Debentures or the Common Stock of the
Company into which such Debentures may be converted, if such a filing should
be deemed appropriate by the proper officers of the Company, and all
amendments thereto, including without limitation post effective amendments
thereto, and to any instruments or documents filed as a part of or in
connection therewith.
IN TESTIMONY HEREOF, witness my hand this the 17th day of October, 1996.
/s/ Delano E. Lewis
_____________________________________
Delano E. Lewis
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned, a Director of Halliburton
Company ("Company"), does hereby constitute and appoint Richard B. Cheney,
Dale P. Jones, David J. Lesar, Lester L. Coleman, Robert M. Kennedy and Susan
S. Keith, or any of them acting alone, his true and lawful attorneys and
attorney, with full power of substitution or resubstitution, to do any and all
acts and things and execute any and all instruments which said attorneys or
attorney may deem necessary or advisable to enable the Company to comply with
the Securities Act of 1933, as amended, the Trust Indenture Act of 1939, as
amended, and other federal or state securities laws, and any rules,
regulations and requirements of the Securities and Exchange Commission or
state regulatory authorities in respect thereof, in connection with the
registration for offering under said Securities Act of 1933, as amended, of a
principal amount not to exceed $500,000,000 of debentures or other evidences
of indebtedness or such amount of debentures or other evidences of
indebtedness where the principal amount thereof at maturity discounted to the
date of issuance and sale will result in the Company receiving net proceeds of
$500,000,000 ("Debentures"), whether such Debentures by their terms when
issued contain provisions for convertibility into the Company's Common Stock,
subordination to existing or future indebtedness, redemption or establishment
of a sinking fund for retirement of the indebtedness created thereby, or all,
some or none of such provisions or features, of the Company, or such lesser
amount of Debentures, all upon such terms and in such amounts as may be deemed
appropriate by proper officers of the Company, and subsequent offering for
sale and sale thereof, including specifically, but without limitation thereof,
power and authority to sign my name as a Director of the Company to a
Registration Statement on the appropriate Form and on any other applications
and statements to be filed with the Securities and Exchange Commission with
respect to the offering or sale of Debentures or the Common Stock of the
Company into which such Debentures may be converted, if such filing should be
deemed appropriate by the proper officers of the Company, and all amendments
thereto, including without limitation post effective amendments thereto, and
to any instruments or documents filed as part of or in connection therewith.
IN TESTIMONY HEREOF, witness my hand this the 18 day of October, 1996.
/s/ C. J. Silas
_____________________________________
C. J. Silas
2
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned, a Director of Halliburton
Company ("Company"), does hereby constitute and appoint Richard B. Cheney,
Dale P. Jones, David J. Lesar, Lester L. Coleman, Robert M. Kennedy and Susan
S. Keith, or any of them acting alone, his true and lawful attorneys and
attorney, with full power of substitution or resubstitution, to do any and all
acts and things and execute any and all instruments which said attorneys or
attorney may deem necessary or advisable to enable the Company to comply with
the Securities Act of 1933, as amended, the Trust Indenture Act of 1939, as
amended, and other federal or state securities laws, and any rules,
regulations and requirements of the Securities and Exchange Commission or
state regulatory authorities in respect thereof, in connection with the
registration for offering under said Securities Act of 1933, as amended, of a
principal amount not to exceed $500,000,000 of debentures or other evidences
of indebtedness or such amount of debentures or other evidences of
indebtedness where the principal amount thereof at maturity discounted to the
date of issuance and sale will result in the Company receiving net proceeds of
$500,000,000 ("Debentures"), whether such Debentures by their terms when
issued contain provisions for convertibility into the Company's Common Stock,
subordination to existing or future indebtedness, redemption or establishment
of a sinking fund for retirement of the indebtedness created thereby, or all,
some or none of such provisions or features, of the Company, or such lesser
amount of Debentures, all upon such terms and in such amounts as may be deemed
appropriate by proper officers of the Company, and subsequent offering for
sale and sale thereof, including specifically, but without limitation thereof,
power and authority to sign my name as a Director of the Company to a
Registration Statement on the appropriate Form and on any other applications
and statements to be filed with the Securities and Exchange Commission with
respect to the offering or sale of Debentures or the Common Stock of the
Company into which such Debentures may be converted, if such a filing should
be deemed appropriate by the proper officers of the Company, and all
amendments thereto, including without limitation post effective amendments
thereto, and to any instruments or documents filed as a part of or in
connection therewith.
IN TESTIMONY HEREOF, witness my hand this the 16th day of October, 1996.
/s/ Richard J. Stegmeier
_____________________________________
Richard J. Stegmeier
3
