<PAGE>
FILED PURSUANT TO RULE 424(b)(5)
REGISTRATION NO. 33-51027
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED AUGUST 15, 1996
$150,000,000
INDIANA BELL TELEPHONE COMPANY, INCORPORATED
7.30% DEBENTURES DUE AUGUST 15, 2026
----------------
Interest on the Debentures is payable on February 15 and August 15 of each
year, commencing February 15, 1997. The Debentures will not be redeemable
prior to maturity. The Debentures will be represented by one or more global
securities registered in the name of a nominee of The Depository Trust
Company. Beneficial interests in the global securities will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depository and its participants. Except as described herein, Debentures in
definitive form will not be issued. See "Certain Terms of the Debentures."
----------------
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 OR
THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) DISCOUNT(2) COMPANY(1)(3)
----------------- ------------ -------------
<S> <C> <C> <C>
Per Debenture...................... 99.829% 0.875% 98.954%
Total.............................. $149,743,500 $1,312,500 $148,431,000
</TABLE>
- --------
(1) Plus accrued interest from August 15, 1996.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting estimated expenses of $175,000 payable by the Company.
----------------
The Debentures offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to
their right to reject any order in whole or in part. It is expected that the
Debentures will be ready for delivery in book-entry form only through the
facilities of the Depository in New York, New York, on or about August 20,
1996, against payment therefor in immediately available funds.
GOLDMAN, SACHS & CO.
ABN AMRO SECURITIES (USA) INC.
FIRST CHICAGO CAPITAL MARKETS, INC.
----------------
The date of this Prospectus Supplement is August 15, 1996.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBENTURES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
USE OF PROCEEDS
The net proceeds from the sale of the Debentures offered hereby will be used
to repay short-term indebtedness of Indiana Bell Telephone Company,
Incorporated (the "Company") borrowed under financing arrangements between the
Company and Ameritech Corporation, the Company's parent ("Ameritech"), which
provide that the Company may borrow or repay amounts on a daily basis at
market rates.
CERTAIN TERMS OF THE DEBENTURES
The Debentures are to be issued under an Indenture, dated as of August 1,
1996 (the "Indenture"), between the Company and Harris Trust and Savings Bank,
as trustee (the "Trustee"). The following summaries of certain provisions of
the Indenture and the Debentures offered hereby (referred to in the
accompanying Prospectus as "Debt Securities" and "Offered Debt Securities")
supplement, and to the extent inconsistent therewith replace, the description
of the general terms and provisions of the Debt Securities set forth in the
accompanying Prospectus, to which description reference is hereby made. The
following summaries do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all the provisions of the
Indenture. Capitalized terms used but not defined herein or in the
accompanying Prospectus shall have the meanings given to them in the
Indenture.
GENERAL
The Debentures will represent unsecured and unsubordinated obligations of
the Company and will rank on a parity with all other unsecured and
unsubordinated indebtedness of the Company. The Debentures will be limited to
$150,000,000 aggregate principal amount and will mature on August 15, 2026.
The Debentures will bear interest at the rate per annum shown on the cover
page of this Prospectus Supplement from August 15, 1996 or from the most
recent Interest Payment Date to which interest has been paid or provided for,
payable semi-annually on February 15 and August 15 of each year, commencing
February 15, 1997, to the persons in whose names such Debentures were
registered at the close of business on the next preceding January 31 and July
31, respectively.
Until the Debentures are paid or payment thereof is duly provided for, the
Company will, at all times, maintain a paying agent (the "Paying Agent") in
The City of New York, New York, Chicago, Illinois, or Indianapolis, Indiana
capable of performing the duties described herein to be performed by the
Paying Agent. The Company has initially appointed Harris Trust and Savings
Bank, 311 West Monroe Street, Chicago, Illinois 60606, as the Paying Agent.
The Company will notify the holders of the Debentures, in accordance with the
Indenture, of any change in the Paying Agent or its address. Harris Trust and
Savings Bank also serves as Trustee under the Indenture.
Any payment otherwise required to be made in respect of a Debenture on a
date that is not a Business Day for such Debenture 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 such date, and no additional interest shall accrue as
a result of such delayed payment.
The Indenture does not contain covenants or other provisions designed to
afford holders of the Debentures protection in the event of a highly leveraged
transaction, change in credit or other similar occurrence.
S-2
<PAGE>
The Debentures are not subject to redemption prior to maturity and are not
entitled to any sinking fund.
BOOK-ENTRY PROCEDURES
The Debentures will be issued initially in the form of fully registered
global securities which will be deposited with, or on behalf of, The
Depository Trust Company, New York, New York (the "Depository"), and
registered in the name of the Depository's nominee. Except as set forth in the
Prospectus under "Description of Debt Securities--Global Securities," the
Debentures will not be issuable in certificated form.
The Depository has advised the Company and Goldman, Sachs & Co., ABN AMRO
Securities (USA) Inc. and First Chicago Capital Markets, Inc. (collectively,
the "Underwriters") as follows: The Depository 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 Securities Exchange Act of 1934, as amended.
The Depository holds securities that its participants ("Participants") deposit
with the Depository. The Depository 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. The Depository's direct Participants include
securities brokers and dealers (including the Underwriters), banks, trust
companies, clearing corporations and certain other organizations. The
Depository 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 Depository'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. The rules applicable to the
Depository and its Participants are on file with the Securities and Exchange
Commission.
A further description of the Depository's procedures with respect to global
securities is set forth in the Prospectus under "Description of Debt
Securities--Global Securities." The Depository has confirmed to the Company,
the Underwriters and the Trustee that it intends to follow such procedures.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
and the Pricing Agreement, the Company has agreed to sell to each of the
Underwriters, and each of such Underwriters has severally agreed to purchase,
the principal amount of the Debentures set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OF
UNDERWRITER DEBENTURES
----------- ------------
<S> <C>
Goldman, Sachs & Co. ........................................ $ 50,000,000
ABN AMRO Securities (USA) Inc................................ 50,000,000
First Chicago Capital Markets, Inc........................... 50,000,000
------------
Total...................................................... $150,000,000
============
</TABLE>
Under the terms and conditions of the Underwriting Agreement and the Pricing
Agreement, the Underwriters are committed to take and pay for all of the
Debentures, if any are taken.
S-3
<PAGE>
The Underwriters propose to offer the Debentures in part directly to the
public at the initial public offering price set forth on the cover page of
this Prospectus Supplement and in part to certain securities dealers at such
price less a concession of 0.50% of the principal amount of the Debentures.
The Underwriters may allow, and such dealers may reallow, a concession not to
exceed 0.25% of the principal amount of the Debentures to certain brokers and
dealers. After the Debentures are released for sale to the public, the
offering price and other selling terms may from time to time be varied by the
Underwriters.
The Debentures are a new issue of securities with no established trading
market. The Company has been advised by the Underwriters that the Underwriters
intend to make a market in the Debentures but are not obligated to do so and
may discontinue market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Debentures.
Goldman, Sachs & Co., ABN AMRO Securities (USA) Inc. and First Chicago
Capital Markets, Inc. and certain of their affiliates have engaged and may in
the future engage in transactions with and perform services for the Company
and for affiliates of the Company in the ordinary course of business.
The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
S-4
<PAGE>
PROSPECTUS
INDIANA BELL TELEPHONE COMPANY, INCORPORATED
DEBT SECURITIES
Indiana Bell Telephone Company, Incorporated (the "Company") from time to
time may offer its unsecured notes, debentures, or other debt securities (the
"Debt Securities"), in one or more series, in an aggregate principal amount
sufficient to result in net proceeds to the Company of up to U.S. $225,000,000
(or its equivalent in foreign denominated currencies or European Currency
Units or other composite currencies). Debt Securities may be issued in
registered form without coupons ("Registered Securities"), in bearer form with
or without coupons attached ("Bearer Securities") or in the form of one or
more global securities (each a "Global Security").
When a particular series of Debt Securities is offered, a supplement to this
Prospectus will be delivered (the "Prospectus Supplement") together with this
Prospectus setting forth the terms of such Debt Securities, including, where
applicable, the specific designation, aggregate principal amount, currency or
currencies in which the principal, premium, if any, and interest are payable,
denominations, maturity, rate (which may be fixed or variable) and time of
payment of interest, any terms for redemption, any terms for repayment at the
option of the holder, any terms for sinking fund payments, the initial public
offering price, the names of, and the principal amounts to be purchased by or
sold through, underwriters, agents or dealers and the compensation of such
underwriters, agents or dealers, any listing of the Debt Securities on a
securities exchange and the other terms in connection with the offering and
sale of such Debt Securities.
The Company may sell the Debt Securities to or through dealers or
underwriters, directly to other purchasers or through agents. If an agent of
the Company or a dealer or an underwriter is involved in the sale of the Debt
Securities in respect of which this Prospectus is being delivered, the agent's
commission or dealer's or underwriter's discount will be set forth in, or may
be calculated from, the Prospectus Supplement. The net proceeds to the Company
from such sale, which will be set forth in the Prospectus Supplement, will be
the purchase price of such Debt Securities less such commission in the case of
an agent, the purchase price of such Debt Securities in the case of a dealer
or the public offering price less such discount in the case of an underwriter,
and less, in each case, the other attributable issuance expenses. See "Plan of
Distribution" for possible indemnification arrangements for any agents,
dealers or underwriters.
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by the Prospectus Supplement applicable to the Debt
Securities being sold.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is August 15, 1996.
<PAGE>
IN CONNECTION WITH ANY OFFERING OF DEBT SECURITIES, UNDERWRITERS OR AGENTS
MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICES OF THE DEBT SECURITIES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
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 and other information with the Securities and Exchange
Commission (the "Commission"). Reports and other information filed by the
Company with the Commission may be inspected and copied at the public
reference facilities maintained by the Commission at its principal office at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549,
and at the Commission's regional offices located at 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511 and at Seven World Trade Center,
Suite 1300, New York, New York 10048. Copies of such materials can be obtained
by mail from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Such material may
also be inspected and copied at the offices of the New York Stock Exchange, 20
Broad Street, New York, New York 10005, on which exchange certain of the
Company's debt securities are listed. The Commission also maintains a Web site
(http://www.sec.gov) that contains reports and other information regarding
registrants that file electronically with the Commission.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is hereby made to the Registration Statement.
The Company is not required to, nor does it intend to, provide annual or
other reports to holders of the Debt Securities.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
1-6746) are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995.
2. The Company's Quarterly Reports on Form 10-Q and Form 10-Q/A for the
quarter ended March 31, 1996 and on Form 10-Q for the quarter ended June
30, 1996.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Debt Securities shall be deemed to
be incorporated by reference into this Prospectus and to be a part hereof from
the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
2
<PAGE>
The Company will provide without charge to each person, including any
beneficial owner, to whom a Prospectus is delivered, upon written or oral
request of such person, a copy of any or all of the documents which are
incorporated by reference herein, other than exhibits to such documents which
are not specifically incorporated by reference therein. Requests should be
directed to the Vice President-Investor Relations, Ameritech Corporation, 30
South Wacker Drive, Chicago, Illinois 60606 (telephone number (312) 750-5353).
INDIANA BELL TELEPHONE COMPANY, INCORPORATED
The Company is incorporated under the laws of the State of Indiana and has
its principal executive offices at 240 North Meridian Street, Indianapolis,
Indiana 46204 (telephone number (800) 257-0902). The Company was an associated
company of the Bell System and a wholly-owned subsidiary of American Telephone
and Telegraph Company ("AT&T") through December 31, 1983. Effective January 1,
1984, the Company became a wholly-owned subsidiary of Ameritech Corporation
("Ameritech") pursuant to a court-ordered divestiture of certain AT&T assets.
Ameritech was incorporated in October 1983 under the laws of the State of
Delaware and has its principal executive offices at 30 South Wacker Drive,
Chicago, Illinois 60606 (telephone number (800) 257-0902). In May 1990, the
Company elected to operate without a Board of Directors as a statutory close
corporation as permitted under Indiana law. The responsibility for decisions
formerly made by the Board of Directors of the Company has been assumed by
Ameritech as sole shareholder through Ameritech's Board of Directors and a
management team comprised of senior officers of Ameritech.
The Company is engaged in the business of furnishing telecommunications
services within Indiana, primarily consisting of local exchange, intraLATA
toll and network access services. The Company primarily markets its services
under the names "Ameritech" and "Ameritech Indiana."
RATIOS OF EARNINGS TO FIXED CHARGES OF THE COMPANY
The following table sets forth the ratio of earnings to fixed charges of the
Company for the periods indicated.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
------------------ ----------------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
----- ----- ----- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
23.07 20.11 20.61 8.59 8.06 6.95 6.27
</TABLE>
For the purpose of calculating this ratio, earnings consist of income before
interest expense, income tax, extraordinary charge, the cumulative effect of
change in accounting principles, undistributed equity earnings and the portion
of rental expense representative of the interest factor. Fixed charges
comprise total interest expense including capital lease obligations, together
with capitalized interest, and the portion of rental expense (one-third) the
Company considers to be the amount representing return on capital.
The results for 1995 reflect a $36.5 million pretax credit primarily from
settlement gains resulting from lump sum pension payments from the Ameritech
pension plan to former employees who left the Company in a nonmanagement work
force restructuring, partially offset by increased work force costs related to
the restructuring started in 1994, as well as a write-down of certain data
processing equipment to net realizable value. Results for 1994 reflect a $93.5
million pretax charge associated with the nonmanagement work force
restructuring. Costs of the work force restructuring program have largely been
funded from the Amertitech pension plan.
USE OF PROCEEDS
The Company expects to use the net proceeds from the sale of the Debt
Securities to refund outstanding indebtedness.
3
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms and provisions of the series of Debt Securities offered by a
Prospectus Supplement (the "Offered Debt Securities"), and the extent to which
such general terms and provisions described below may apply thereto, will be
described in the Prospectus Supplement relating to such Offered Debt
Securities.
The Debt Securities are to be issued under an Indenture (the "Indenture"),
between the Company and Harris Trust and Savings Bank, as trustee (the
"Trustee"), a form of which is incorporated by reference as an exhibit to the
Registration Statement of which this Prospectus is a part.
The following summaries of certain provisions of the Debt Securities and the
Indenture do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all provisions of the Debt Securities and
the Indenture, including the definitions therein of capitalized terms which
are used but are not defined herein. All section references used herein are to
sections in the Indenture.
GENERAL
The Indenture does not limit the amount of Debt Securities that may be
issued thereunder and provides that Debt Securities may be issued thereunder
from time to time in one or more series. (Section 301). The Indenture does not
limit the amount of other indebtedness or securities which may be issued by
the Company.
Each series of Debt Securities will constitute unsecured and unsubordinated
indebtedness of the Company and will rank on a parity with the Company's other
unsecured and unsubordinated indebtedness.
The Indenture does not contain covenants or other provisions designed to
afford Holders (as defined in the Indenture) of the Debt Securities protection
in the event of a highly leveraged transaction, change in credit rating or
other similar occurrence.
Reference is made to the Prospectus Supplement relating to the particular
Offered Debt Securities offered thereby for the following terms of the Offered
Debt Securities: (i) the title of the Offered Debt Securities or the
particular series thereof; (ii) any limit on the aggregate principal amount of
the Offered Debt Securities; (iii) whether the Offered Debt Securities are to
be issuable as Registered Securities or Bearer Securities or both, whether any
of the Offered Debt Securities are to be issuable initially in temporary
global form and whether any of the Offered Debt Securities are to be issuable
in permanent global form; (iv) the price or prices (generally expressed as a
percentage of the aggregate principal amount thereof) at which the Offered
Debt Securities will be issued; (v) the date or dates on which the Offered
Debt Securities will mature; (vi) the rate or rates per annum, or the formula
by which such rate or rates shall be determined, at which the Offered Debt
Securities will bear interest, if any, and the dates from which any such
interest will accrue; (vii) the Interest Payment Dates on which any such
interest on the Offered Debt Securities will be payable, the Regular Record
Date for any interest payable on any Offered Debt Securities that are
Registered Securities on any Interest Payment Date and the extent to which, or
the manner in which, any interest payable on a Global Security on an Interest
Payment Date will be paid if other than in the manner described below under
"Global Securities"; (viii) any mandatory or optional sinking fund or
analogous provisions; (ix) each office or agency where, subject to the terms
of the Indenture as described below under "Payments and Paying Agents", the
principal of and any premium and interest on the Offered Debt Securities will
be payable and each office or agency where, subject to the terms of the
Indenture as described below under "Denominations, Registration and Transfer",
the Offered Debt Securities may be presented for registration of transfer or
exchange; (x) the date, if any, after which and the price or prices at which
4
<PAGE>
the Offered Debt Securities may, pursuant to any optional or mandatory
redemption provisions, be redeemed, in whole or in part, and the other
detailed terms and provisions of any such optional or mandatory redemption
provisions; (xi) the date, if any, after which and the price or prices at
which the Offered Debt Securities will be repayable at the option of the
holder thereof prior to maturity; (xii) the denominations in which any Offered
Debt Securities which are Registered Securities will be issuable, if other
than denominations of U.S. $1,000 and any integral multiple thereof, and the
denominations in which any Offered Debt Securities which are Bearer Securities
will be issuable, if other than denominations of U.S. $5,000; (xiii) the
currency or currencies of payment of principal of and any premium and interest
on the Offered Debt Securities; (xiv) any index used to determine the amount
of payments of principal of and any premium and interest on the Offered Debt
Securities; (xv) any additional covenants applicable to the Offered Debt
Securities; and (xvi) any other terms and provisions of the Offered Debt
Securities not inconsistent with the terms and provisions of the Indenture.
Any such Prospectus Supplement will also describe any special provisions for
the payment of additional amounts with respect to the Offered Debt Securities.
(Section 301).
If the purchase price of any of the Debt Securities is denominated in a
foreign currency or currencies or foreign currency unit or units or if the
principal of and any premium and interest on any series of Debt Securities is
payable in a foreign currency or currencies or foreign currency unit or units,
the restrictions, elections, general tax considerations, specific terms and
other information with respect to such issue of Debt Securities and such
foreign currency or currencies or foreign currency unit or units will be set
forth in the applicable Prospectus Supplement.
Some of the Debt Securities may be issued as original issue discount
securities (bearing no interest or interest at a rate which at the time of
issuance is below market rates) to be sold at a substantial discount below
their stated principal amount. Federal income tax considerations and other
special considerations applicable to original issue discount securities will
be set forth in the applicable Prospectus Supplement.
DENOMINATIONS, REGISTRATION AND TRANSFER
The Debt Securities will be issuable as Registered Securities, Bearer
Securities or both. Debt Securities may be issuable in the form of one or more
Global Securities, as described below under "Global Securities". Unless
otherwise provided in the applicable Prospectus Supplement, Registered
Securities denominated in U.S. dollars will be issued only in denominations of
$1,000 or any integral multiple thereof and Bearer Securities denominated in
U.S. dollars will be issued only in denominations of $5,000 with coupons
attached. A Global Security will be issued in a denomination equal to the
aggregate principal amount of outstanding Debt Securities represented by such
Global Security. The Prospectus Supplement relating to Debt Securities
denominated in a foreign or composite currency will specify the denominations
thereof. (Sections 201, 203, 301 and 302).
In connection with its original issuance, no Bearer Security shall be mailed
or otherwise delivered to any location in the United States (as defined below
under "Certain Limitations on Issuance of Bearer Securities") and a Bearer
Security may be delivered in connection with its original issuance only if the
person entitled to receive such Bearer Security furnishes written
certification, in the form required by the Indenture, to the effect that such
Bearer Security is not being acquired by or on behalf of a United States
person (as defined below under "Certain Limitations on Issuance of Bearer
Securities"), or, if a beneficial interest in such Bearer Security is being
acquired by or on behalf of a United States person, that such United States
person is a financial institution which agrees to comply with the requirements
of Section 165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code
of 1986, as amended (the "Code"), and the regulations thereunder. (Sections
303 and 304). See "Global Securities" and "Certain Limitations on Issuance of
Bearer Securities" below.
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations.
5
<PAGE>
In addition, if Debt Securities of any series are issuable as both Registered
Securities and as Bearer Securities, at the option of the holder upon request
confirmed in writing, and subject to the terms of the Indenture, Bearer
Securities (with all unmatured coupons, except as provided below, and all
matured coupons in default attached) of such series will be exchangeable for
Registered Securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor. Unless otherwise indicated in
an applicable Prospectus Supplement, any Bearer Security surrendered in
exchange for a Registered Security between a Regular Record Date or a Special
Record Date and the relevant date for payment of interest shall be surrendered
without the coupon relating to such date for payment of interest attached and
interest will not be payable in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the holder of
such coupon when due in accordance with the terms of the Indenture. Except as
provided in an applicable Prospectus Supplement, Bearer Securities will not be
issued in exchange for Registered Securities. (Section 305).
Debt Securities may be presented for exchange as provided above, and
Registered Securities (other than a Global Security) may be presented for
registration of transfer (with the form of transfer duly executed), at the
office of the Security Registrar designated by the Company or at the office of
any transfer agent designated by the Company for such purpose with respect to
any series of Debt Securities and referred to in an applicable Prospectus
Supplement, without service charge and upon payment of any taxes and other
governmental charges as described in the Indenture. Such transfer or exchange
will be effected upon the Security Registrar or such transfer agent, as the
case may be, being satisfied with the documents of title and identity of the
person making the request. The Company has initially appointed the Trustee as
the Security Registrar under the Indenture. (Section 305). If a Prospectus
Supplement refers to any transfer agent (in addition to the Security
Registrar) initially designated by the Company with respect to any series of
Debt Securities, the Company may at any time rescind the designation of any
such transfer agent or approve a change in the location through which any such
transfer agent acts, except that, if Debt Securities of a series are issuable
only as Registered Securities, the Company will be required to maintain a
transfer agent in each Place of Payment for such series and, if Debt
Securities of a series are issuable as Bearer Securities, the Company will be
required to maintain (in addition to the Security Registrar) a transfer agent
in a Place of Payment for such series located outside the United States. The
Company may at any time designate additional transfer agents with respect to
any series of Debt Securities. (Section 1002).
In the event of any redemption in part, the Company shall not be required to
(i) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of Debt Securities of that series
selected to be redeemed and ending at the close of business on (a) if Debt
Securities of the series are issuable only as Registered Securities, the day
of mailing of the relevant notice of redemption and (b) if Debt Securities of
the series are issuable only as Bearer Securities, the day of the first
publication of the relevant notice of redemption or, if Debt Securities of
that series are also issuable as Registered Securities and there is no
publication, the mailing of the relevant notice of redemption; (ii) register
the transfer of or exchange any Registered Security, or portion thereof,
called for redemption, except the unredeemed portion of any Registered
Security being redeemed in part; or (iii) exchange any Bearer Security called
for redemption, except to exchange such Bearer Security for a Registered
Security of that series and like tenor which is immediately surrendered for
redemption. (Section 305).
PAYMENTS AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Registered Securities (other
than a Global Security) will be made at the office of such Paying Agent or
Paying Agents as the Company may designate from time to time, except that, at
the option of the Company, payment of any interest may be made (i) by check
mailed to the
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address of the payee entitled thereto as such address shall appear in the
Security Register or (ii) by wire transfer to an account maintained by such
payee as specified in the Security Register. (Sections 305, 307 and 1002).
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
any installment of interest on Registered Securities will be made to the
person in whose name such Registered Security is registered at the close of
business on the Regular Record Date for such interest payment. (Section 307).
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Bearer Securities will be
payable (subject to applicable laws and regulations) at the offices of such
Paying Agent or Paying Agents outside the United States as the Company may
designate from time to time, except that, at the option of the Company,
payment of any interest may be made by check or by wire transfer to an account
maintained by the payee outside the United States. (Sections 307 and 1002).
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
interest on Bearer Securities on any Interest Payment Date will be made only
against surrender of the coupon relating to such Interest Payment Date.
(Section 1001). No payment with respect to any Bearer Security will be made at
any office or agency of the Company in the United States or by check mailed to
any address in the United States or by transfer to an account maintained in
the United States. Payments will not be made in respect of Bearer Securities
or coupons appertaining thereto pursuant to presentation to the Company or its
Paying Agents within the United States or any other demand for payment to the
Company or its Paying Agents within the United States. Notwithstanding the
foregoing, payment of principal of and any premium and interest on Bearer
Securities denominated and payable in U.S. dollars will be made at the office
of the Company's Paying Agent in the United States if, and only if, payment of
the full amount thereof in U.S. dollars at all offices or agencies outside the
United States is illegal or effectively precluded by exchange controls or
other similar restrictions. (Section 1002).
Unless otherwise indicated in an applicable Prospectus Supplement, the
principal office of the Trustee in Chicago, Illinois will be designated as the
Company's Paying Agent office for payments with respect to Debt Securities
which are issuable solely as Registered Securities. Any Paying Agent outside
the United States and any other Paying Agent in the United States initially
designated by the Company for the Debt Securities will be named in the
applicable Prospectus Supplement. The Company may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent acts, except
that, if Debt Securities of a series are issuable only as Registered
Securities, the Company will be required to maintain a Paying Agent in each
Place of Payment for such series and, if Debt Securities of a series are
issuable as Bearer Securities, the Company will be required to maintain (i) a
Paying Agent in each Place of Payment for such series in the United States for
payments with respect to any Registered Securities of such series (and for
payments with respect to Bearer Securities of such series in the circumstances
described above, but not otherwise), (ii) a Paying Agent in each Place of
Payment located outside the United States where (subject to applicable laws
and regulations) Debt Securities of such series and any coupons appertaining
thereto may be presented and surrendered for payment; provided that if the
Debt Securities of such series are listed on The International Stock Exchange,
London or the Luxembourg Stock Exchange or any other stock exchange located
outside the United States and such stock exchange shall so require, the
Company will maintain a Paying Agent in London or Luxembourg City or any other
required city located outside the United States, as the case may be, for Debt
Securities of such series, and (iii) a Paying Agent in each Place of Payment
located outside the United States where (subject to applicable laws and
regulations) Registered Securities of such series may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company may be served. (Section 1002).
All moneys paid by the Company to a Paying Agent for the payment of
principal of and any premium or interest on any Debt Security that remains
unclaimed at the end of two years after such
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principal, premium or interest shall have become due and payable will be
repaid to the Company and thereafter the holder of such Debt Security or any
coupon appertaining thereto will look only to the Company for payment thereof.
(Section 1003).
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 that will be deposited with, or on
behalf of, a depository identified in the applicable Prospectus Supplement
(the "Depository"). Global Securities may be issued in either registered or
bearer form and in either temporary or permanent form. (Section 305). Unless
and until it is exchanged for Debt Securities in definitive form, a temporary
Global Security in registered form may not be transferred except as a whole by
the Depository for such Global Security to a nominee of such Depository or by
a nominee of such Depository to such Depository or another nominee of such
Depository or by such Depository or any such nominee to a successor of such
Depository or a nominee of such successor. (Section 304).
The specific terms of the depository arrangement with respect to a series of
Debt Securities or any part thereof will be described in the applicable
Prospectus Supplement. The Company anticipates that the following provisions
will apply to all depository arrangements relating to Global Securities.
Upon the issuance of a Global Security, the Depository for such Global
Security or its nominee will credit the accounts of persons holding beneficial
interests in such Global Security with the respective principal amounts of the
Debt Securities represented by such Global Security. Such accounts shall be
designated by the underwriters or agents with respect to such Debt Securities
or by the Company if such Debt Securities are offered and sold directly by the
Company. Ownership of beneficial interests in a Global Security will be
limited to persons that have accounts with the Depository for such Global
Security or its nominee ("participants") or persons that may hold interests
through participants. Ownership of beneficial interests in such Global
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the Depository or its nominee (with
respect to interests of participants) for such Global Security and on the
records of participants (with respect to interests of persons other than
participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limitation and such laws may impair the ability to transfer beneficial
interests in a Global Security.
So long as the Depository for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. (Section 308). Except as provided below, owners of beneficial
interests in a Global Security will not be entitled to have Debt Securities
represented by such Global Security registered in their names, will not
receive or be entitled to receive physical delivery of such Debt Securities in
definitive form and will not be considered the owners or holders thereof under
the Indenture.
Payment of principal of and any premium and interest on Debt Securities
registered in the name of a Depository or its nominee will be made to the
Depository or its nominee, as the case may be, as the registered owner of the
Global Security representing such Debt Securities. Neither the Company, the
Trustee, any Paying Agent nor the Security Registrar for such Debt Securities
will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of
the Global Security for such Debt Securities or for maintaining, supervising
or receiving any records relating to such beneficial ownership interests.
Subject to the restrictions discussed under "Certain Limitations on Issuance
of Bearer Securities" below, the Company expects that the Depository or its
nominee, as the case may be, upon receipt of any payment of principal, premium
or interest, will credit immediately participants' accounts with
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payments in amounts proportionate to their respective beneficial interests in
the principal amount of the Global Security for such Debt Securities as shown
on the records of such Depository or its nominee. The Company also expects
that payments by participants to owners of beneficial interests in such Global
Security held through such participants will be governed by standing
instructions and customary practices, as is now 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 participants. Receipt by owners of
beneficial interests in a temporary Global Security of payments in respect of
such temporary Global Security will be subject to restrictions discussed under
"Certain Limitations on Issuance of Bearer Securities" below.
If the Depository is at any time unwilling or unable to continue as
depository and a successor depository is not appointed by the Company within
90 days, the Company will issue Debt Securities of such series in definitive
form in exchange for the Global Security representing such series of Debt
Securities. In addition, the Company may at any time and in its sole
discretion determine not to have the Registered Securities of a series
represented by a Global Security and, in such event, the Company will issue
Registered Securities of such series in definitive form in exchange for the
Global Security representing such series of Registered Securities. Further, if
the Company so specifies with respect to the Debt Securities of a series, an
owner of a beneficial interest in a Global Security representing Debt
Securities of such series may, on terms acceptable to the Company and the
Depository, receive Debt Securities of such series in definitive form. In any
such instance, an owner of a beneficial interest in a Global Security will be
entitled to physical delivery in definitive form of Debt Securities of the
series represented by such Global Security equal in principal amount to such
beneficial interest and to have such Debt Securities registered in its name
(if the Debt Securities of such series are issuable as Registered Securities).
Debt Securities of such series so issued in definitive form will be issued (i)
as Registered Securities in denominations, unless otherwise specified by the
Company, of U.S. $1,000 and integral multiples thereof if the Debt Securities
of such series are issuable as Registered Securities, (ii) as Bearer
Securities in denominations, unless otherwise specified by the Company, of
U.S. $5,000 with coupons attached if the Debt Securities of such series are
issuable as Bearer Securities, or (iii) as either Registered or Bearer
Securities, if the Debt Securities of such series are issuable in either form.
(Section 305). See, however, "Certain Limitations on Issuance of Bearer
Securities" below for a description of certain restrictions on the issuance of
a Bearer Security in definitive form in exchange for an interest in a Global
Security.
CERTAIN LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Securities may not be offered, sold, resold or delivered in connection with
their original issue in the United States or to United States persons (each as
defined in the Code and the regulations thereunder) other than to offices
located outside of the United States of United States financial institutions
which agree to comply with the requirements of Section 165(j)(3)(A), (B) or
(C) of the Code and the regulations thereunder, and any underwriters, agents
and dealers participating in the offering of Debt Securities must agree that
they will not offer any Bearer Securities for sale or resale in the United
States or to United States persons (other than the financial institutions
described above) nor deliver Bearer Securities within the United States.
Bearer Securities and any coupons appertaining thereto will bear a legend
substantially to the following effect: "Any United States person who holds
this obligation will be subject to limitations under the United States income
tax laws, including the limitations provided in Sections 165(j) and 1287(a) of
the Internal Revenue Code". Under Sections 165(j) and 1287(a) of the Code,
holders that are United States persons, with certain exceptions, will not be
entitled to deduct any loss on Bearer Securities and must treat as ordinary
income any gain realized on the sale or other disposition (including the
receipt of principal) of Bearer Securities.
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Other restrictions and additional tax considerations may apply to the
issuance and holding of Bearer Securities. A description of such restrictions
and tax consequences will be set forth in the applicable Prospectus
Supplement.
LIENS ON ASSETS
If at any time the Company mortgages, pledges, or otherwise subjects to any
lien the whole or any part of any property or assets now owned or hereafter
acquired by it, except as hereinafter provided, the Company will secure the
outstanding Debt Securities, and any other obligations of the Company which
may be then outstanding and entitled to the benefit of a covenant similar in
effect to this covenant, equally and ratably with the indebtedness or
obligations secured by such mortgage, pledge, or lien, for as long as any such
indebtedness or obligation is so secured. The foregoing covenant does not
apply to the creation, extension, renewal or refunding of purchase-money
mortgages or liens, landlords' liens, liens with respect to the sale or
financing of accounts or chattel paper, other liens to which any property or
asset acquired by the Company is subject as of the date of its acquisition by
the Company, to the making of any deposit or pledge to secure public or
statutory obligations or with any governmental agency at any time required by
law in order to qualify the Company to conduct its business or any part
thereof or in order to entitle it to maintain self-insurance or to obtain the
benefits of any law relating to workers' compensation, unemployment insurance,
old age pensions or other social security, or with any court, board,
commission, or governmental agency as security incident to the proper conduct
of any proceeding before it or to certain other liens referenced in the
Indenture. Nothing contained in the Indenture prevents any entity other than
the Company from mortgaging, pledging, or subjecting to any lien any of its
property or assets, whether or not acquired by such Person from the Company.
(Section 1006).
RESTRICTIONS ON MERGERS AND SALES OF ASSETS
The Company may not consolidate with or merge into any other corporation, or
convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and the Company may not permit any Person to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company unless (i)
the corporation formed by such consolidation or into which the Company is
merged or the Person to which the properties and assets of the Company are
transferred substantially as an entirety shall be a corporation organized and
existing under the laws of the United States, any State thereof or the
District of Columbia and shall expressly assume the payment of the principal
of, premium, if any, and interest, if any, on the Debt Securities and the
performance of the other covenants of the Company under the Indenture, (ii)
after giving effect to such transaction, no Event of Default (as defined
below), or event which after notice or lapse of time or both would become an
Event of Default, shall have occurred and be continuing and (iii) if, as a
result of such transaction, properties or assets of the Company would become
subject to a Mortgage not permitted by Section 1006 of the Indenture without
equally and ratably securing the Debt Securities as provided therein (see
"Liens on Assets" above), steps shall have been taken to secure the Debt
Securities equally and ratably with (or prior to) all indebtedness secured
thereby pursuant to Section 1006 of the Indenture. (Section 801).
MODIFICATION AND WAIVER
Certain modifications and amendments of the Indenture, including the rights
of Holders of a series of Outstanding Debt Securities, may be made by the
Company and the Trustee only with the consent of the Holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by the modification or amendment, provided that no such modification
or amendment may, without the consent of the Holder of each Outstanding Debt
Security affected thereby: (i) change the stated maturity date of the
principal of, or any installment of principal or interest on, any such Debt
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Security; (ii) reduce the principal amount of, premium, if any, or interest,
if any, on any such Debt Security (including in the case of an Original Issue
Discount Security the amount payable upon acceleration of the Maturity
thereof); (iii) change the Place of Payment where, or the coin or currency in
which, any principal of, premium, if any, or interest, if any, on any such
Debt Security is payable; (iv) impair the right to institute suit for the
enforcement of any payment on or with respect to any such Debt Security; (v)
reduce the above-stated percentage of Outstanding Debt Securities of any
series the consent of the Holders of which is necessary to modify or amend the
Indenture; or (vi) modify the foregoing requirements or reduce the percentage
of aggregate principal amount of Outstanding Debt Securities of any series
necessary for waiver of compliance with certain provisions of the Indenture or
for waiver of certain defaults. (Section 902).
The Holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of any series may, on behalf of the Holders of all Debt
Securities of such series, waive, insofar as such series is concerned,
compliance by the Company with certain restrictive provisions of the
Indenture. (Section 1007). The Holders of a majority in aggregate principal
amount of the Outstanding Debt Securities of any series may, on behalf of the
Holders of all Debt Securities of such series, waive any past default under
the Indenture with respect to such series, except a default in the payment of
the principal of, premium, if any, or interest, if any, on any Debt Security
of such series or in respect of a provision under which the Indenture cannot
be modified or amended without consent of the Holder of each Outstanding Debt
Security of such series affected. (Section 513).
EVENTS OF DEFAULT
The Indenture defines an Event of Default with respect to any series of Debt
Securities as being any one of the following events: (i) default for 90 days
in any payment of interest on such series; (ii) default in any payment of
principal of, or premium, if any, on such series when due; (iii) default in
the payment of any sinking fund installment with respect to such series when
due; (iv) default for 90 days after appropriate notice by the Holders of not
less than 25% in aggregate principal amount of the Outstanding Debt Securities
in performance of any other covenant or warranty in the Indenture (other than
a covenant or warranty included in the Indenture solely for the benefit of
series of Debt Securities other than such series); or (v) certain events in
bankruptcy, insolvency or reorganization with respect to the Company. In case
an Event of Default shall occur and be continuing with respect to any series
of Debt Securities, the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Outstanding Debt Securities of such series
may declare the principal of such series (or, if the Debt Securities of such
series are Original Issue Discount Securities, such portion of the principal
as may be specified in the terms of such series) to be due and payable. Any
Event of Default with respect to a particular series of Debt Securities may be
waived by the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of such series, except in each case a failure to
pay the principal of, premium, if any, or interest, if any, on such Debt
Security. (Sections 501, 502 and 513).
The Company is required to furnish the Trustee, not less often than
annually, with a certificate as to the Company's compliance with all
conditions and covenants under the Indenture. (Section 704(d)).
Reference is made to the Prospectus Supplement relating to each series of
Offered Debt Securities which are Original Issue Discount Securities for the
particular provisions relating to acceleration of the Maturity of a portion of
the principal amount of such Original Issue Discount Securities upon the
occurrence of an Event of Default and the continuation thereof.
The Indenture provides that the Trustee may withhold notice to the Holders
of the Debt Securities of any default (except in the payment of principal,
premium, if any, or interest, if any, or any sinking fund installment) if it
considers it in the interest of the Holders of the Debt Securities to do so.
(Section 602).
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Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the
Indenture provides that the Trustee shall be under no obligation to exercise
any of its rights or powers under the Indenture at the request, order or
direction of the Holders of the Debt Securities unless such Holders shall have
offered to the Trustee reasonable indemnity. (Sections 601 and 603(e)).
Subject to such provisions for indemnification and certain other rights of the
Trustee, the Indenture provides that the Holders of a majority in aggregate
principal amount of the Outstanding Debt Securities of any series affected
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Debt Securities of such
series. (Sections 512 and 603).
No Holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless (i) such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to Debt
Securities of such series, (ii) the Holders of not less than 25% in aggregate
principal amount of the Outstanding Debt Securities of such series shall have
made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee, and (iii) the Trustee shall not have
received from the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of such series a direction inconsistent with such
request and shall have failed to institute such proceeding within 60 days.
(Section 507). However, the Holder of any Debt Security will have an absolute
right to receive payment of the principal of, premium, if any, and interest,
if any, on such Debt Security on or after the due dates expressed in such Debt
Security and to institute suit for the enforcement of any such payment.
(Section 508).
DEFEASANCE
Defeasance and Discharge. If the terms of a series of Debt Securities so
provide and the Company deposits or causes to be deposited with the Trustee as
trust funds in trust for that purpose money and/or U.S. Government Obligations
which through the payment of interest and principal in respect thereof in
accordance with their terms will provide money in an amount sufficient to pay
and discharge (i) the principal of, and premium, if any, and each installment
of principal and premium, if any, and interest, if any, on the Outstanding
Debt Securities of such series on the Stated Maturity of such principal or
installment of principal or interest (or on the Redemption Date of the
Outstanding Debt Securities of such series if the Company has elected to
redeem such Outstanding Debt Securities in accordance with Section 1102 of the
Indenture), and (ii) any mandatory (or, if applicable, optional) sinking fund
payments applicable to the Outstanding Debt Securities of such series on the
day on which such payments are due and payable, then the Indenture will cease
to be of further effect with respect to such series (except for certain
obligations to compensate, reimburse and indemnify the Trustee, to register
the transfer or exchange of Debt Securities, to replace stolen, lost or
mutilated Debt Securities, to maintain paying agencies and to hold monies for
payment in trust and to pay any tax indemnity), and the Company will be deemed
to have satisfied and discharged the Indenture with respect to such series.
(Section 403). In the event of any such defeasance, holders of Debt Securities
of such series would be able to look only to such trust fund for payment of
principal of, premium, if any, and interest, if any, on such Debt Securities.
Under current United States federal income tax law, such defeasance will be
treated as a taxable exchange of the related Debt Securities for an interest
in the trust. As a consequence, each holder of such Debt Securities will
recognize gain or loss equal to the difference between the holder's adjusted
tax basis for the Debt Securities and the fair market value of the holder's
interest in the trust. To the extent attributable to accrued but unpaid
interest, the fair market value of the holder's interest in the trust will be
treated as a payment of interest and will not be taken into account in
determining such
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gain or loss. Thereafter will be required to include in income a share of the
income, gain and loss of the trust, including gain or loss recognized in
connection with any substitution of collateral, as described below under
Substitution of Collateral. Prospective investors are urged to consult their
own tax advisors as to the specific consequences of such a defeasance.
Defeasance of Certain Covenants and Certain Events of Default. If the terms
of the Debt Securities of any series so provide, the Company may omit to
comply with certain restrictive covenants in Section 801 (Consolidation,
Merger, Conveyance, Transfer or Lease) and Sections 1005 (Purchase of
Securities by Company or Subsidiary) and 1006 (Lien on Assets), and Sections
501(d), 501(e) and 501(f) of the Indenture, as described in clauses (iv) and
(v) under "Events of Default" above, shall not be deemed to be Events of
Default under the Indenture with respect to such series, upon the deposit with
the Trustee, in trust, of money and/or U.S. Government Obligations which
through the payment of interest and principal in respect thereof in accordance
with their terms will provide money in an amount sufficient to pay and
discharge (i) the principal (and premium, if any) and each installment of
principal, and premium, if any, and interest on the Outstanding Debt
Securities of such series on the Stated Maturity of such principal or
installment of principal or interest (or on the Redemption Date of the
Outstanding Debt Securities of such series if the Company has elected to
redeem such Outstanding Debt Securities in accordance with Section 1102 of the
Indenture) and (ii) any mandatory (or, if applicable, optional) sinking fund
payments applicable to the Outstanding Debt Securities of such series on the
day on which such payments are due and payable. The obligations of the Company
under the Indenture and the Debt Securities other than with respect to the
covenants referred to above and the Events of Default other than the Events of
Default referred to above shall remain in full force and effect. (Section
1008).
In the event the Company exercises its option to omit compliance with
certain covenants of the Indenture with respect to the Debt Securities of any
series as described above and the Debt Securities of such series are declared
due and payable because of the occurrence of any Event of Default other than
Events of Default described in clauses (iv) and (v) under "Events of Default"
above, the amount of money and/or U.S. Government Obligations on deposit with
the Trustee will be sufficient to pay amounts due on the Debt Securities of
such series on their Stated Maturity or Redemption Date, but may not be
sufficient to pay amounts due on such Debt Securities at the time of the
acceleration resulting from such Event of Default. However, the Company shall
remain liable for such payments. (Section 1008).
Limitation on Defeasance. To exercise either option referred to above under
Defeasance and Discharge and Defeasance of Certain Covenants and Certain
Events of Default, the Company is required to deliver to the Trustee an
opinion of outside counsel (which opinion, in the case of the option referred
to under Defeasance and Discharge above, is based on there having been, since
the date of the Indenture, a change in the applicable United States federal
income tax law (including a change in official interpretation thereof)), or a
ruling from or published by the Internal Revenue Service, to the effect that
the exercise of such option will not cause holders of Debt Securities to
recognize income, gain or loss for United States federal income tax purposes,
and that such holders of Debt Securities will be subject to United States
federal income tax on the same amount and in the same manner and at the same
time as would have been the case if such option had not been exercised.
Substitution of Collateral. If the terms of a series of Debt Securities so
provide, the Company will be permitted at any time to withdraw any money or
U.S. Government Obligations deposited pursuant to the foregoing defeasance
provisions, provided that the Company in substitution therefor simultaneously
deposits money and/or U.S. Government Obligations which would then be
sufficient to satisfy the Company's payment obligations in respect of the Debt
Securities in the manner contemplated by such defeasance provisions.
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NOTICES
Except as may otherwise be set forth in an applicable Prospectus Supplement,
notices to holders of Bearer Securities will be given by publication in a
daily newspaper in the English language of general circulation in The City of
New York and in London, and so long as such Bearer Securities are listed on
the Luxembourg Stock Exchange and the Luxembourg Stock Exchange shall so
require, in a daily newspaper of general circulation in Luxembourg City or, if
not practical, elsewhere in Western Europe. Such publication is expected to be
made in The Wall Street Journal, the Financial Times and the Luxemburger Wort.
Notices to holders of Registered Securities will be given by mail to the
addresses of such holders as they appear in the Security Register. (Sections
101 and 106).
TITLE
Title to any temporary global Debt Security, any permanent global Debt
Security, any Bearer Securities and any coupons appertaining thereto will pass
by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security, the bearer of any coupon
and the registered owner of any Registered Security as the absolute owner
thereof (whether or not such Debt Security or coupon shall be overdue and
notwithstanding any notice to the contrary) for the purpose of making payment
and for all other purposes. (Section 308).
REPLACEMENT OF SECURITIES AND COUPONS
Any mutilated Security or a Security with a mutilated coupon appertaining
thereto will be replaced by the Company at the expense of the Holder upon
surrender of such Security to the Trustee. Securities or coupons that become
destroyed, stolen or lost will be replaced by the Company at the expense of
the Holder upon delivery to the Trustee of the Security and coupons or
evidence of the destruction, loss or theft thereof satisfactory to the Company
and the Trustee; in the case of any coupon which becomes destroyed, stolen or
lost, such coupon will be replaced by issuance of a new Security in exchange
for the Security to which such coupon appertains. In the case of a destroyed,
lost or stolen Security or coupon, an indemnity satisfactory to the Trustee
and the Company may be required at the expense of the Holder of such Security
or coupon before a replacement Security will be issued. (Section 306).
GOVERNING LAW
The Indenture and the Debt Securities are governed by and construed in
accordance with the laws of the State of Indiana. The interest rate on the
Debt Securities will in no event be higher than the maximum rate permitted by
Indiana law as the same may be modified by United States law of general
application. Under present Indiana law, no maximum rate of interest would
apply to the Debt Securities.
CONCERNING THE TRUSTEE
The Company, Ameritech and certain of Ameritech's subsidiaries maintain
banking relationships in the ordinary course of business with the Trustee, and
the Trustee has a commitment of $50,000,000 under a revolving credit facility
available to Ameritech. The Trustee also serves as indenture trustee under a
mortgage granted by Illinois Bell Telephone Company, a wholly-owned subsidiary
of Ameritech, in connection with its publicly issued First Mortgage Bonds and
under certain other unsecured indentures entered into with other subsidiaries
of Ameritech.
14
<PAGE>
PLAN OF DISTRIBUTION
GENERAL
The Company may sell the Debt Securities being offered hereby: (i) directly
to purchasers, (ii) through agents, (iii) through underwriters, (iv) through
dealers or (v) through a combination of any such methods of sale.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions either (i) at a fixed price or prices, which may be
changed; (ii) at market prices prevailing at the time of sale; (iii) at prices
related to such prevailing market prices; or (iv) at negotiated prices.
Offers to purchase Debt Securities may be solicited directly by the Company
or by agents designated by the Company from time to time. Any such agent,
which may be deemed to be an underwriter, as that term is defined in the
Securities Act, involved in the offer or sale of the Debt Securities in
respect of which this Prospectus is delivered will be named, and any
commissions payable by the Company to such agent will be set forth, in the
Prospectus Supplement or in a pricing supplement thereto (the "Pricing
Supplement"). Unless otherwise indicated in the Prospectus Supplement or
Pricing Supplement, any such agent will be acting on a best efforts basis for
the period of its appointment.
If an underwriter or underwriters are utilized in the sale, the Company will
execute an underwriting agreement with such underwriters at the time of sale
to them and the names of the underwriters and the terms of the transaction
will be set forth in the Prospectus Supplement or Pricing Supplement, which
will be used by the underwriters to make resales of the Debt Securities.
If a dealer is utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, the Company will sell such Debt Securities
to the dealer, as principal. The dealer may then resell such Debt Securities
to the public at varying prices to be determined by such dealer at the time of
resale.
Underwriters, dealers, agents, and other persons may be entitled, under
agreements which may be entered into with the Company, to indemnification
against, or contribution with respect to, certain civil liabilities, including
liabilities under the Securities Act. Underwriters, dealers and agents may be
customers of, engage in transactions with, or perform services for, the
Company in the ordinary course of business.
DELAYED DELIVERY ARRANGEMENTS
If so indicated in the Prospectus Supplement, the Company will authorize
dealers or other persons acting as the Company's agents to solicit offers by
certain institutions to purchase Debt Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions
with which such contracts may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions, and others, but in all cases, such institutions must
be approved by the Company. The obligations of any purchaser under any such
contract will not be subject to any conditions except that (a) the purchase of
the Debt Securities shall not at the time of delivery be prohibited under the
laws of the jurisdiction to which such purchaser is subject; and (b) if the
Debt Securities are also being sold to underwriters, the Company shall have
sold to such underwriters the Debt Securities not sold for delayed delivery.
The dealers and such other persons will not have any responsibility in respect
of the validity or performance of such contracts.
15
<PAGE>
EXPERTS
The financial statements and financial statement schedule of the Company,
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995, have been audited by Arthur Andersen LLP, independent
public accountants, as set forth in the report of such firm. The financial
statements and financial statement schedule referred to above are incorporated
by reference herein in reliance upon the authority of Arthur Andersen LLP as
experts in giving said report.
LEGAL OPINIONS
Certain matters relating to the legality of the Debt Securities to be
offered hereby will be passed upon for the Company by A. David Stippler,
Counsel of the Company, and by Winston & Strawn, 35 West Wacker Drive,
Chicago, Illinois 60601, and for the agents or underwriters, if any, by Mayer,
Brown & Platt, 190 South LaSalle Street, Chicago, Illinois 60603. The opinions
of Mr. Stippler, Winston & Strawn and Mayer, Brown & Platt with respect to the
Debt Securities may be conditioned upon, and subject to certain assumptions
regarding, future action to be taken by the Company and the Trustee in
connection with the issuance and sale of particular Debt Securities, the
specific terms of Debt Securities and other matters that may affect the
validity of Debt Securities but that cannot be ascertained on the date of such
opinions. Mayer, Brown & Platt from time to time acts as counsel in certain
matters for the Company and certain of its affiliates. As of the date of this
Prospectus, Mr. Stippler owned beneficially and had options to acquire shares of
Common Stock of Ameritech which in the aggregate constituted less than .01% of
the total issued and outstanding shares of the Common Stock of Ameritech.
16
<PAGE>
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESEN-
TATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE PRO-
SPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PRO-
SPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUP-
PLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURI-
TIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEI-
THER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE
MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLI-
CATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE
DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO ITS DATE.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
Use of Proceeds............................................................ S-2
Certain Terms of the Debentures............................................ S-2
Underwriting............................................................... S-3
PROSPECTUS
Available Information ..................................................... 2
Incorporation of Certain Documents by Reference ........................... 2
Indiana Bell Telephone Company, Incorporated .............................. 3
Ratios of Earnings to Fixed Charges of the Company ........................ 3
Use of Proceeds ........................................................... 3
Description of Debt Securities ............................................ 4
Plan of Distribution ...................................................... 15
Experts ................................................................... 16
Legal Opinions ............................................................ 16
</TABLE>
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$150,000,000
INDIANA BELL
TELEPHONE COMPANY,
INCORPORATED
7.30% DEBENTURES DUE
AUGUST 15, 2026
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PROSPECTUS SUPPLEMENT
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GOLDMAN, SACHS & CO.
ABN AMRO SECURITIES
(USA) INC.
FIRST CHICAGO CAPITAL
MARKETS, INC.
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