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Filed pursuant to Rule 424(b)(5)
Registration No. 33-60249
PROSPECTUS SUPPLEMENT
(To Prospectus Dated June 27, 1995)
$600,000,000
INGERSOLL-RAND COMPANY
MEDIUM-TERM NOTES, SERIES A,
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
Ingersoll-Rand Company (the "Company") may offer from time to time its
Medium-Term Notes, Series A, (the "Notes"), having an aggregate initial offering
price of up to $600,000,000 (or such greater amount if Notes are issued at an
original issue discount as shall result in aggregate gross proceeds to the
Company of $600,000,000), subject to reduction under certain circumstances as a
result of the sale of other securities of the Company under the Prospectus to
which this Prospectus Supplement relates. The Notes will be offered in varying
maturities of nine months or more from their date of issue and may be subject to
redemption at the option of the Company or repayment at the option of the
Holder, in each case, in whole or in part prior to the maturity date (as further
defined below, the "Stated Maturity") thereof as set forth in a pricing
supplement to this Prospectus Supplement (a "Pricing Supplement"). The Notes may
be issued as "Amortizing Notes" or "Original Issue Discount Notes." See
"Description of Notes."
(Continued on next page)
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, ANY PRICING SUPPLEMENT
HERETO OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
PRICE TO AGENTS' COMMISSION PROCEEDS TO
PUBLIC(1) OR DISCOUNT(2) COMPANY(2)(3)
<S> <C> <C> <C>
Per Note.................... 100% 0.125%-0.750% 99.250%-99.875%
Total....................... $600,000,000 $750,000-$4,500,000 $595,500,000-$599,250,000
- ---------------------------------------------------------------------------------------------
</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 Salomon Brothers Inc, Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Chase Securities, Inc., Goldman,
Sachs & Co. and J.P. Morgan Securities Inc. (each an "Agent," and,
collectively, the "Agents") a commission ranging from 0.125% to 0.750% of
the principal amount of any Note, depending on its Stated Maturity, sold
through such Agent. Any Agent, acting as principal, may also purchase Notes
at a discount for resale to one or more investors or purchasers or one or
more broker-dealers (acting as principal for purposes of resale) at varying
prices related to prevailing market prices at the time of resale, as
determined by such Agent, or, if so agreed, at a fixed public offering
price. In addition, any Agent may offer Notes purchased by it as principal
to other dealers and may reallow a portion of their commission. The Company
has agreed to reimburse the Agents for certain expenses. The Company has
agreed to indemnify the Agents against certain liabilities, including
liabilities under the Securities Act of 1933, as amended.
(3) Before deducting offering expenses payable by the Company estimated at U.S.
$500,000.
The Notes are being offered on a continuing basis by the Company through the
Agents, each of which has agreed to use its reasonable efforts to solicit offers
to purchase the Notes. The Company has reserved the right to sell Notes directly
to investors on its own behalf, and on such sales no commissions will be paid.
The Notes will not be listed on any securities exchange, and there can be no
assurance that the Notes will be sold or that there will be a secondary market
for the Notes. The Company reserves the right to withdraw, cancel or modify the
offer made hereby without notice. The Company or any Agent may reject any offer
to purchase Notes in whole or in part. See "Supplemental Plan of Distribution."
SALOMON BROTHERS INC MERRILL LYNCH & CO.
CHASE SECURITIES, INC. GOLDMAN, SACHS & CO. J.P. MORGAN SECURITIES INC.
The date of this Prospectus Supplement is July 14, 1995.
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(from preceding page)
Each Note will bear interest at a fixed rate (a "Fixed Rate Note"), which
may be zero in the case of certain Notes issued at a price representing a
discount from the principal amount payable at maturity (a "Zero Coupon Note"),
or at a variable rate (a "Floating Rate Note") determined by reference to one or
more of the Commercial Paper Rate, CD Rate, Federal Funds Rate, CMT Rate, LIBOR,
Prime Rate or Treasury Rate or such other interest rate formula (the "Interest
Rate Basis") as may be indicated in the applicable Pricing Supplement, as
adjusted by a Spread and/or Spread Multiplier, if any, applicable to such Notes.
See "Description of Notes." Unless otherwise specified in the applicable Pricing
Supplement, interest on Fixed Rate Notes will be payable semi-annually on each
January 15 and July 15 (each an "Interest Payment Date" with respect to such
Fixed Rate Notes) and at Maturity (as defined herein). Interest on Floating Rate
Notes will be payable on such dates indicated in the applicable Pricing
Supplement (each an "Interest Payment Date" with respect to such Floating Rate
Notes).
Each Note will be represented by either a Global Security (a "Book-Entry
Note") registered in the name of a nominee of The Depository Trust Company
("DTC") or other depositary (DTC or such other depositary as is indicated in the
applicable Pricing Supplement is referred to herein as the "Depositary"), or a
certificate issued in definitive form (a "Certificated Note"), as indicated in
the applicable Pricing Supplement. Beneficial interests in Book-Entry Notes will
be shown on, and transfers thereof will be effected only through, records
maintained by the Depositary and its Participants (as defined herein). Owners of
beneficial interests in Book-Entry Notes will be entitled to physical delivery
of Certificated Notes only under the limited circumstances described herein. See
"Description of Notes -- Book-Entry System." Unless otherwise indicated in the
applicable Pricing Supplement, Notes will be issued in denominations of $1,000
and integral multiples of $1,000 in excess thereof.
IN CONNECTION WITH THIS OFFERING, THE AGENTS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES 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.
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DESCRIPTION OF NOTES
THE FOLLOWING DESCRIPTION OF THE PARTICULAR TERMS OF THE NOTES OFFERED
HEREBY SUPPLEMENTS AND, TO THE EXTENT INCONSISTENT THEREWITH REPLACES, THE
DESCRIPTION OF THE GENERAL TERMS AND PROVISIONS OF THE DEBT SECURITIES (AS
DEFINED IN THE ACCOMPANYING PROSPECTUS) SET FORTH UNDER THE HEADING "DESCRIPTION
OF DEBT SECURITIES" IN THE ACCOMPANYING PROSPECTUS, TO WHICH DESCRIPTION
REFERENCE IS HEREBY MADE. THE PROVISIONS OF THE NOTES SUMMARIZED HEREIN WILL
APPLY TO EACH NOTE UNLESS OTHERWISE INDICATED IN THE APPLICABLE PRICING
SUPPLEMENT. CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN HAVE THE MEANINGS
SPECIFIED IN THE INDENTURE AND/OR THE NOTES.
GENERAL
The Notes offered hereby will be issued under the Indenture referred to in
the accompanying Prospectus. The summary contained herein of certain provisions
of the Notes does not purport to be complete and is qualified in its entirety by
reference to the provisions of the Indenture and the forms of Notes, each of
which has been filed as an exhibit to the Registration Statement (the
"Registration Statement"), of which the accompanying Prospectus is a part, to
which exhibits reference is hereby made.
The Notes constitute a single series for purposes of the Indenture and are
limited to an aggregate initial offering price of up to $600,000,000 (or such
greater amount if Notes are issued at an original discount as shall result in
aggregate gross proceeds to the Company of $600,000,000).
The Notes 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 Notes are offered on a continuing basis and will mature on a day nine
months or more from their date of issue, as selected by the initial purchaser
and agreed to by the Company, and may be subject to redemption at the option of
the Company or repayment at the option of the Holder prior to Stated Maturity.
See "Redemption and Repayment" below.
Unless otherwise indicated in the applicable Pricing Supplement, the Notes
will be denominated in U.S. dollars, and payments of principal of, premium, if
any, and any interest on the Notes will be made in U.S. dollars.
Each Note will be issued initially as either a Book-Entry Note or a
Certificated Note. Except as set forth under "Book-Entry System" below,
Book-Entry Notes will not be issuable in certificated form. Notes will be issued
in denominations of $1,000 and integral multiples of $1,000 in excess thereof.
Interest rates offered by the Company with respect to the Notes may differ
depending upon, among other things, the aggregate principal amount of the Notes
purchased in any single transaction.
Payments of interest and principal (and premium, if any) to Beneficial
Owners (as defined below) of Book-Entry Notes are expected to be made in
accordance with the Depositary's and its Participants' procedures in effect from
time to time as described below under "Book-Entry System."
Unless otherwise specified in the applicable Pricing Supplement, payments
of principal and interest, if any, and premium, if any, with respect to any
Certificated Note will be made by mailing a check to the Holder at the address
of such Holder appearing on the Security Register for the Notes on the
applicable Regular Record Date (as defined below). Notwithstanding the
foregoing, at the option of the Company, all payments on the Notes may be made
by wire transfer of immediately available funds as designated by each Holder not
less than 15 calendar days prior to the applicable Interest Payment Date. A
Holder of $10,000,000 or more in aggregate principal amount of Notes of like
tenor and terms with the same Interest Payment Date may demand payment by wire
transfer but only if appropriate payment instructions have been received in
writing by the Trustee not less than 15 calendar days prior to the applicable
Interest Payment Date. In the event that payment is so made in accordance with
instructions of the Holder, such wire transfer shall be deemed to constitute
full and complete payment of such interest and principal on the Notes. Payment
of the principal and interest, if any, with respect to any Certificated Note
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at Maturity will be made in immediately available funds upon surrender of such
Note at the principal office of the Trustee in the Borough of Manhattan, The
City of New York accompanied by wire transfer instructions, provided that the
Certificated Note is presented to the Trustee in time for the Trustee to make
such payments in such funds in accordance with its normal procedures.
Certificated Notes may be presented for registration of transfer or exchange at
the Corporate Trust Office of the Trustee in the Borough of Manhattan, The City
of New York.
Notwithstanding anything in this Prospectus Supplement to the contrary,
unless otherwise specified in the applicable Pricing Supplement, if a Note is an
Original Issue Discount Note, the amount payable on such Note in the event the
principal thereof is declared to be due and payable immediately as described in
the accompanying Prospectus under "Description of Debt Securities -- Events of
Default," or in the event of the redemption or repayment thereof prior to its
Stated Maturity shall be the Amortized Face Amount of such Note as of the date
of declaration, redemption or repayment, as the case may be. The "Amortized Face
Amount" of an Original Issue Discount Note shall be the amount equal to (i) the
principal amount of such Note multiplied by the Issue Price set forth in the
applicable Pricing Supplement plus (ii) the portion of the difference between
the dollar amount determined pursuant to the preceding clause (i) and the
principal amount of such Note that has accreted at the yield to maturity set
forth in the Pricing Supplement (computed in accordance with generally accepted
United States bond yield computation principles) to such date of declaration,
redemption or repayment, but in no event shall the Amortized Face Amount of an
Original Issue Discount Note exceed its principal amount.
The Pricing Supplement relating to each Note will describe, among other
things, the following items: (i) the price (expressed as a percentage of the
aggregate principal amount thereof) at which such Note will be issued (the
"Issue Price"); (ii) the date on which such Note will be issued (the "Original
Issue Date"); (iii) the date on which such Note will mature (the "Stated
Maturity"); (iv) whether such Note is a Fixed Rate Note or a Floating Rate Note;
(v) if such Note is a Fixed Rate Note, the rate per annum at which such Note
will bear interest, if any, the interest payment date or dates, if different
from those set forth below under "Fixed Rate Notes"; (vi) if such Note is a
Floating Rate Note, the Initial Interest Rate, the Interest Rate Basis, the
Interest Reset Dates, the Interest Payment Dates, the Index Maturity, the
maximum interest rate, if any, the minimum interest rate, if any, the Spread, if
any, the Spread Multiplier, if any (all as defined herein), and any other terms
relating to the particular method of calculating the interest rate for such
Note; (vii) whether such Note is an Original Issue Discount Note, and if so, the
yield to maturity; (viii) whether such Note is an Amortizing Note (as defined
below), and if so, the basis or formula for the amortization of principal and/or
interest and the payment dates for such periodic principal payments; (ix) the
regular record date or dates (a "Regular Record Date") if other than as set
forth below; (x) whether such Note may be redeemed at the option of the Company,
or repaid at the option of the Holder, prior to Stated Maturity and, if so, the
provisions relating to such redemption or repayment; (xi) whether such Note will
be issued initially as a Book-Entry Note or a Certificated Note; and (xii) any
other terms of such Note not inconsistent with the provisions of the Indenture.
All percentages resulting from any calculation with respect to any Notes
will be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point rounded upward
(e.g., 9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655)), and
all dollar amounts used in or resulting from such calculation on any Notes will
be rounded to the nearest cent with one half cent being rounded upward.
As used herein, "Business Day" means, unless otherwise specified in the
applicable Pricing Supplement, any Monday, Tuesday, Wednesday, Thursday or
Friday that in The City of New York is not a day on which banking institutions
are authorized or required by law, regulation or executive order to close and,
with respect to Notes as to which LIBOR (as defined below) is an applicable Base
Rate (as defined below), is also a London Business Day. As used herein, "London
Business Day" means any day on which dealings in deposits denominated in U.S.
dollars are transacted in the London interbank market.
The Notes are referred to in the accompanying Prospectus as the "Debt
Securities." For a description of the rights attaching to different series of
Securities under the Indenture, see "Description of
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Debt Securities" in the Prospectus. Unless otherwise indicated in the applicable
Pricing Supplement, the Notes will have the terms described below.
INTEREST AND INTEREST RATES
Unless otherwise specified in the applicable Pricing Supplement, each Note
(other than a Zero-Coupon Note) will bear interest from its Original Issue Date
or from and including the most recent Interest Payment Date to which interest on
such Note has been paid or duly provided for at a fixed rate per annum or at a
rate per annum determined pursuant to an Interest Rate Basis, stated therein and
in the applicable Pricing Supplement, that may be adjusted by a Spread and/or
Spread Multiplier, until the principal thereof is paid or made available for
payment. Unless otherwise set forth in the applicable Pricing Supplement,
interest will be payable on each Interest Payment Date and at Maturity.
"Maturity" means the date on which the principal of a Note becomes due and
payable in full in accordance with its terms and the terms of the Indenture,
whether at Stated Maturity, upon acceleration, redemption, repayment or
otherwise. Interest (other than defaulted interest which may be paid on a
special record date) will be payable to the Holder at the close of business on
the Regular Record Date next preceding such Interest Payment Date, provided,
however, that the first payment of interest on any Note originally issued
between a Regular Record Date and the next Interest Payment Date will be made on
the Interest Payment Date following the next succeeding Regular Record Date to
the Holder on such next succeeding Regular Record Date.
Interest rates, interest rate formulae and other variable terms of the
Notes are subject to change by the Company from time to time, but no such change
will affect any Note already issued or as to which an offer to purchase has been
accepted by the Company. Unless otherwise indicated in the applicable Pricing
Supplement, the Interest Payment Dates and the Regular Record Dates for Fixed
Rate Notes shall be as described below under "Fixed Rate Notes." The Interest
Payment Dates for Floating Rate Notes shall be as indicated in the applicable
Pricing Supplement, and unless otherwise indicated in the applicable Pricing
Supplement, each Regular Record Date for a Floating Rate Note will be the
fifteenth day (whether or not a Business Day) preceding each Interest Payment
Date.
Unless otherwise specified in the applicable Pricing Supplement, each Note
(other than a Zero-Coupon Note) will bear interest at either (a) a fixed rate or
(b) a floating rate determined by reference to an Interest Rate Basis which may
be adjusted by a Spread and/or Spread Multiplier. Any Floating Rate Note may
also have either or both of the following: (i) a maximum numerical interest rate
limitation, or ceiling, on the rate of interest which may accrue during any
interest period, and (ii) a minimum numerical interest rate limitation, or
floor, on the rate of interest which may accrue during any interest period. The
applicable Pricing Supplement relating to each Note will designate either a
fixed rate of interest per annum on the applicable Fixed Rate Note or one or
more of the following Interest Rate Bases as applicable to the relevant Floating
Rate Note: (a) the CD Rate, in which case such Note will be a "CD Rate Note,"
(b) the Commercial Paper Rate, in which case such Note will be a "Commercial
Paper Rate Note," (c) the Federal Funds Rate, in which case such Note will be a
"Federal Funds Rate Note," (d) LIBOR, in which case such Note will be a "LIBOR
Note," (e) the Treasury Rate, in which case such Note will be a "Treasury Rate
Note," (f) the Prime Rate, in which case such Note will be a "Prime Rate Note,"
(g) the CMT Rate, in which case such Note will be a "CMT Rate Note," or (h) such
other Interest Rate Basis or formula as is set forth in such Pricing Supplement.
Notwithstanding the determination of the interest rate as provided below,
the interest rate on the Notes for any interest period shall not be greater than
the maximum interest rate, if any, or less than the minimum interest rate, if
any, specified in the applicable Pricing Supplement. The interest rate on the
Notes will in no event be higher than the maximum rate permitted by New York or
other applicable law, as the same may be modified by United States law of
general application. Under present New York law, the maximum rate of interest is
25% per annum on a simple interest basis. This limit may not apply to Notes in
which $2,500,000 or more has been invested.
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FIXED RATE NOTES
Each Fixed Rate Note (other than a Zero-Coupon Note) will bear interest
from its date of issue at the annual rate stated on the face thereof, unless
otherwise specified in the applicable Pricing Supplement. Payments of interest
on any Fixed Rate Note with respect to any Interest Payment Date will include
interest accrued from and including the Original Issue Date, or from and
including the next preceding Interest Payment Date, to but excluding the
applicable Interest Payment Date or Maturity. Fixed Rate Notes may bear one or
more annual rates of interest during the periods or under the circumstances
specified therein and in the applicable Pricing Supplement. Interest on Fixed
Rate Notes will be computed and paid on the basis of a 360-day year of twelve
30-day months.
Unless otherwise specified in the applicable Pricing Supplement, the
Interest Payment Dates for Fixed Rate Notes will be semi-annually on each
January 15 and July 15 and the Regular Record Dates will be each January 1 and
July 1 (whether or not a Business Day). If the Interest Payment Date or Maturity
for any Fixed Rate Note is a day that is not a Business Day, all payments to be
made on such day will be made on the next succeeding Business Day with the same
force and effect as if made on the due date, and no additional interest shall be
payable as a result of such delayed payment.
FLOATING RATE NOTES
Unless otherwise specified in the applicable Pricing Supplement, the
interest rate on each Floating Rate Note will be equal to (i) the interest rate
calculated by reference to the specified Interest Rate Basis plus or minus the
Spread, if any, and/or (ii) the interest rate calculated by reference to the
specified Interest Rate Basis multiplied by the Spread Multiplier, if any. The
"Spread" is the number of basis points (one basis point equals one-hundredth of
a percentage point) specified in the applicable Pricing Supplement as being
applicable to such Note, and the "Spread Multiplier" is the percentage specified
in the applicable Pricing Supplement as being applicable to such Note. The
applicable Pricing Supplement will specify the Interest Rate Basis and the
Spread and/or Spread Multiplier, if any, and the maximum or minimum interest
rate limitation, if any, applicable to each Floating Rate Note. In addition,
such Pricing Supplement will contain particulars as to the Calculation Agent
(unless specified in the applicable Pricing Supplement, The Bank of New York (in
such capacity, the "Calculation Agent")), Index Maturity, Original Issue Date,
the interest rate in effect for the period from the Original Issue Date to the
first Interest Reset Date set forth in the applicable Pricing Supplement (the
"Initial Interest Rate"), Interest Determination Dates, Interest Payment Dates,
Regular Record Dates and Interest Reset Dates with respect to such Note.
Except as provided below or in the applicable Pricing Supplement, interest
on Floating Rate Notes will be payable, (i) in the case of Floating Rate Notes
that reset 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 on the face thereof and in the applicable Pricing Supplement; (ii) in
the case of Floating Rate Notes that reset quarterly, on the third Wednesday of
March, June, September and December of each year; (iii) in the case of Floating
Rate Notes that reset semi-annually, on the third Wednesday of each of two
months of each year specified on the face thereof and in the applicable Pricing
Supplement; and (iv) in the case of Floating Rate Notes that reset annually, on
the third Wednesday of one month of each year specified on the face thereof and
in the applicable Pricing Supplement (each such day being an "Interest Payment
Date") and, in each case, at Maturity. If any Interest Payment Date, other than
at Maturity, for any Floating Rate Note would otherwise be a day that is not a
Business Day, such Interest Payment Date shall be postponed to the next day that
is a Business Day, except that in the case of a LIBOR Note, if such Business Day
is in the next succeeding calendar month, such Interest Payment Date shall be
the immediately preceding London Business Day. If the Maturity for any Floating
Rate Note falls on a day that is not a Business Day, payment of principal,
premium, if any, and interest with respect to such Note will be made on the next
succeeding Business Day with the same force and effect is if made on the due
date, and no additional interest shall be payable as a result of such delayed
payment.
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Unless otherwise specified in the applicable Pricing Supplement, the rate
of interest on each Floating Rate Note will be reset daily, weekly, monthly,
quarterly, semi-annually or annually (such period being the "Reset Period" for
such Note, and the first day of each Reset Period being an "Interest Reset
Date"), as specified in the applicable Pricing Supplement. The Interest Reset
Date will be, in the case of Floating Rate Notes which reset daily, each
Business Day; in the case of Floating Rate Notes (other than Treasury Rate
Notes) which reset weekly, the Wednesday of each week; in the case of Treasury
Rate Notes which reset weekly, the Tuesday of each week, except as provided
below; in the case of Floating Rate Notes which reset monthly, the third
Wednesday of each month; in the case of Floating Rate Notes which reset
quarterly, the third Wednesday of each March, June, September and December; in
the case of Floating Rate Notes which reset semi-annually, the third Wednesday
of the two months of each year specified in the applicable Pricing Supplement;
and in the case of Floating Rate Notes which reset annually, the third Wednesday
of one month of each year specified in the applicable Pricing Supplement;
provided, however, that the interest rate in effect from the date of issue to
the first Interest Reset Date with respect to a Floating Rate Note will be the
Initial Interest Rate (as set forth in the applicable Pricing Supplement). If
any Interest Reset Date for any Floating Rate Note would otherwise be a day that
is not a Business Day for such Floating Rate Note, the Interest Reset Date for
such Floating Rate Note shall be postponed to the next day that is a Business
Day for such Floating Rate Note, except that in the case of a LIBOR Note, if
such Business Day is in the next succeeding calendar month, such Interest Reset
Date shall be the immediately preceding Business Day. Each adjusted rate shall
be applicable on and after the Interest Reset Date to which it relates, to, but
not including, the next succeeding Interest Reset Date or until Stated Maturity
or the date of redemption or repayment, as the case may be.
The interest rate for each Reset Period will be the rate determined by the
Calculation Agent on the Calculation Date (as defined below) pertaining to the
Interest Determination Date pertaining to the Interest Reset Date for such Reset
Period. Unless otherwise specified in the applicable Pricing Supplement, the
"Interest Determination Date" pertaining to an Interest Reset Date for (a) a
Commercial Paper Rate Note (the "Commercial Paper Interest Determination Date"),
(b) a Federal Funds Rate Note (the "Federal Funds Interest Determination Date"),
(c) a CD Rate Note (the "CD Interest Determination Date"), (d) a Prime Rate Note
(the "Prime Interest Determination Date") or (e) a CMT Rate Note (the "CMT
Interest Determination Date") will be the second Business Day prior to such
Interest Reset Date. Unless otherwise specified in the applicable Pricing
Supplement, the Interest Determination Date pertaining to an Interest Reset Date
for a LIBOR Note (the "LIBOR Interest Determination Date") will be the second
London Business Day immediately preceding each Interest Reset Date. Unless
otherwise specified in the applicable Pricing Supplement, the Interest
Determination Date pertaining to an Interest Reset Date for a Treasury Rate Note
(the "Treasury Interest Determination Date") will be the day of the week in
which such Interest Reset Date falls on which Treasury bills would normally be
auctioned. Treasury bills are usually sold at auction on Monday of each week,
unless that day is a legal holiday, in which case the auction is usually held on
the following Tuesday, except that such auction may be held on the preceding
Friday. If, as a result of a legal holiday, an auction is so held on the
preceding Friday, such Friday will be the Treasury Interest Determination Date
pertaining to the Reset Period commencing in the next succeeding week. If an
auction date shall fall on any Interest Reset Date for a Treasury Rate Note,
then such Interest Reset Date shall instead be the first Business Day
immediately following such auction date. Unless otherwise specified in the
applicable Pricing Supplement, the "Calculation Date" pertaining to any Interest
Determination Date shall be the earlier of (i) the tenth calendar day after the
Interest Determination Date or, if such day is not a Business Day, the next
succeeding Business Day, or (ii) the Business Day preceding the applicable
Interest Payment Date or Maturity, as the case may be.
"Index Maturity" means, with respect to a Floating Rate Note, the period to
maturity of the instrument or obligation on which the interest rate formula is
based as specified in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, interest
on Floating Rate Notes will accrue from and including the date of issue or from
and including the immediately preceding Interest Payment Date in respect of
which interest has been paid or duly provided for, as the case may be, to but
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excluding the Interest Payment Date or Maturity, as the case may be. With
respect to Floating Rate Notes, accrued interest is calculated by multiplying
the face amount of a Note by an accrued interest factor. This accrued interest
factor is computed by adding the interest factors calculated for each day from
the date of issue, or from the last date to which interest has been paid, to the
date for which accrued interest is being calculated. Unless otherwise indicated
in the applicable Pricing Supplement, the interest factor for each such day
(unless otherwise specified) is computed by dividing the interest rate
applicable to such day by 360, in the case of Commercial Paper Rate Notes, CD
Rate Notes, Federal Funds Rate Notes, LIBOR Notes and Prime Rate Notes or by the
actual number of days in the year, in the case of Treasury Rate Notes or CMT
Rate Notes.
Unless otherwise specified in the applicable Pricing Supplement, the
Calculation Agent shall calculate the interest rate on the Floating Rate Notes,
as provided below. The Calculation Agent will, upon the request of the Holder of
any Floating Rate Note, provide the interest rate then in effect and, if then
determined, the interest rate which will become effective as a result of a
determination made with respect to the most recent Interest Determination Date
with respect to such Note. For purposes of calculating the rate of interest
payable on Floating Rate Notes, the Company will enter into an agreement with
the Calculation Agent. The Calculation Agent's determination of any interest
rate shall be final and binding in the absence of manifest error.
Commercial Paper Rate Notes
Each Commercial Paper Rate Note will bear interest at the interest rate
(calculated with reference to the Commercial Paper Rate and the Spread and/or
Spread Multiplier, if any) specified in the Commercial Paper Rate Note and in
the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
"Commercial Paper Rate" means, with respect to any Commercial Paper Interest
Determination Date, the Money Market Yield (calculated as described below) of
the rate on such date for commercial paper 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 of the Board of Governors ("H.15(519)")
under the heading "Commercial Paper." In the event that such rate is not
published prior to 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Commercial Paper Interest Determination Date, then the
Commercial Paper Rate with respect to such Commercial Paper Interest
Determination Date shall be the Money Market Yield of the rate on such
Commercial Paper Interest Determination Date for commercial paper having 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 "Commercial Paper." If by
3:00 P.M., New York City time, on such Calculation Date such rate is not yet
published in either H.15(519) or Composite Quotations, then the Commercial Paper
Rate for such Commercial Paper Interest Determination Date shall be calculated
by the Calculation Agent and shall be the Money Market Yield of the arithmetic
mean of the offered rates (quoted on a bank discount basis) as of 11:00 A.M.,
New York City time, on such Commercial Paper Interest Determination Date of
three leading dealers of commercial paper in The City of New York selected by
the Calculation Agent for commercial paper having the Index Maturity designated
in the applicable Pricing Supplement placed for an industrial issuer whose bond
rating is "AA," or the equivalent, from a nationally recognized statistical
rating agency; provided, however, that if the dealers selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this sentence, the
Commercial Paper Rate with respect to such Commercial Paper Interest
Determination Date will be the Commercial Paper Rate in effect immediately prior
to such Commercial Paper Interest Determination Date.
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"Money Market Yield" shall be a yield (expressed as a percentage rounded,
if necessary, to the nearest one hundred-thousandth of a percent) calculated in
accordance with the following formula:
D X 360
Money Market Yield = --------------- X 100
360 - (D X M)
where "D" refers to the 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 period for which accrued interest is being calculated.
CD Rate Notes
Each CD Rate Note will bear interest at the interest rate (calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any)
specified in the CD Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "CD Rate"
means, with respect to any CD Interest Determination Date, the rate on such date
for negotiable certificates of deposit having the Index Maturity specified in
the applicable Pricing Supplement as published in H.15(519) under the heading
"CDs (Secondary Market)." In the event that such rate is not published prior to
9:00 A.M., New York City time, on the Calculation Date pertaining to such CD
Interest Determination Date, then the CD Rate with respect to such CD Interest
Determination Date shall be the rate on such CD Interest Determination Date for
negotiable certificates of deposit having the Index Maturity specified in the
applicable Pricing Supplement as published in Composite Quotations under the
heading "Certificates of Deposit." If by 3:00 P.M., New York City time, on such
Calculation Date such rate is not published in either H.15(519) or Composite
Quotations, then the CD Rate on such CD Interest Determination Date shall be
calculated by the Calculation Agent and shall be the arithmetic mean of the
secondary market offered rates as of 10:00 A.M., New York City time, on such CD
Interest Determination Date of three leading nonbank dealers in negotiable U.S.
dollar certificates of deposit in The City of New York selected by the
Calculation Agent for negotiable certificates of deposit of major United States
money market banks (in the market for negotiable certificates of deposit) with a
remaining maturity closest to the Index Maturity designated in the applicable
Pricing Supplement in a denomination of $5,000,000; provided, however, that if
the dealers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the CD Rate with respect to such CD Interest
Determination Date will be the CD Rate in effect immediately prior to such CD
Interest Determination Date.
CMT Rate Notes
Each CMT Rate Note will bear interest at the interest rate (calculated with
reference to the CMT Rate and the Spread and/or Spread Multiplier, if any)
specified in the CMT Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "CMT Rate"
means, with respect to any CMT Interest Determination Date, the rate displayed
on the Designated CMT Telerate Page (as defined below) 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
Maturity Index (as defined below) for (i) if the Designated CMT Telerate Page is
7055, the rate on such CMT Interest Determination Date and (ii) if the
Designated CMT Telerate Page is 7052, the week, or the month, as applicable,
ended immediately preceding the week in which the applicable CMT Interest
Determination Date occurs. If such rate is no longer displayed on the relevant
page, or if not displayed by 3:00 P.M., New York City time, on the Calculation
Date pertaining to such CMT Interest Determination Date, then the CMT Rate for
such CMT Interest Determination Date will be such treasury constant maturity
rate for the Designated CMT Maturity Index as published in the relevant
H.15(519). If such rate is no longer published, or if not published by 3:00
P.M., New York City time, on the Calculation Date pertaining to such CMT
Interest Determination Date, then the CMT Rate for such CMT Interest
Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index (or other United States
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Treasury rate for the Designated CMT Maturity Index) for the CMT Interest
Determination Date with respect to such Interest Reset 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 that the Calculation Agent determines
to be comparable to the rate formerly displayed on the Designated CMT Telerate
Page and published in the relevant H.15(519). If such information is not
provided by 3:00 P.M., New York City time, on the Calculation Date pertaining to
such CMT Interest Determination Date, then the CMT Rate for the CMT Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity, based on the arithmetic mean of the secondary market closing
offer side prices as of approximately 3:30 P.M., New York City time, on the CMT
Interest Determination Date reported, according to their written records, by
three leading primary United States government securities dealers (each, a
"Reference Dealer") in The City of New York 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 Maturity Index and a remaining term to maturity
of not less than such Designated CMT Maturity Index minus one year. If the
Calculation Agent cannot obtain three such Treasury Note quotations, the CMT
Rate for such CMT Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity based on the arithmetic mean
of the secondary market offer side prices as of approximately 3:30 P.M., New
York City time, on the CMT 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 Maturity
Index and a remaining term to maturity closest to the Designated CMT Maturity
Index and in an amount of at least $100,000,000. 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 offer prices obtained and neither the
highest nor the lowest of such quotes will be eliminated; provided, however,
that if fewer than three Reference Dealers selected by the Calculation Agent are
quoting as described herein, the CMT Rate will be the CMT Rate in effect on such
CMT 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 Maturity Index, the quotes for the Treasury
Note with the shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service on the page specified in the applicable Pricing Supplement (or any other
page as may replace such page on that service for the purpose of displaying
Treasury Constant Maturities as published in H.15(519)), for the purpose of
displaying Treasury Constant Maturities as published 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 Maturity Index" means the original period to maturity of
the Treasury Notes (either one, two, three, five, seven, ten, twenty or thirty
years) specified in the applicable Pricing Supplement with respect to which the
CMT Rate will be calculated. If no such maturity is specified in the applicable
Pricing Supplement, the Designated CMT Maturity Index shall be two years.
Federal Funds Rate Notes
Each Federal Funds Rate Note will bear interest at the interest rate
(calculated with reference to the Federal Funds Rate and the Spread and/or
Spread Multiplier, if any) specified in the Federal Funds Rate Note and in the
applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any Federal Funds Rate Interest Determination
Date, the rate on such date for Federal Funds as published in H.15(519) under
the heading "Federal Funds (Effective)." In the event that such rate is not
published prior to 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Federal
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Funds Interest Determination Date, then the Federal Funds Rate with respect to
such Federal Funds Interest Determination Date shall be the rate on such Federal
Funds Interest Determination Date as published in Composite Quotations under the
heading "Federal Funds/Effective Rate." If by 3:00 P.M., New York City time, on
such Calculation Date such rate is not published in either H.15(519) or
Composite Quotations, then the Federal Funds Rate with respect to such Federal
Funds Interest Determination Date shall be calculated by the Calculation Agent
and shall be the arithmetic mean (each as rounded, if necessary, to the nearest
one hundred-thousandth of a percent) of the rates as of 9:00 A.M., New York City
time, on such Federal Funds Interest Determination Date for the last transaction
in overnight Federal Funds arranged by three leading brokers of Federal Funds
transactions in The City of New York selected by the Calculation Agent;
provided, however, that if the brokers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Federal Funds Rate with
respect to such Federal Funds Interest Determination Date will be the Federal
Funds Rate in effect immediately prior to such Federal Funds Interest
Determination Date.
LIBOR Notes
Each LIBOR Note will bear interest at the interest rate (calculated with
reference to LIBOR and the Spread and/or Spread Multiplier, if any) specified in
the LIBOR Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "LIBOR"
means, with respect to any LIBOR Interest Determination Date, the rate
determined in accordance with the following provisions:
(i) With respect to any LIBOR Interest Determination Date, LIBOR will
be either: (a) if "LIBOR Reuters" is specified in the Note and the
applicable Pricing Supplement, the arithmetic mean of the offered rates
(unless the specified designated LIBOR Page (as defined below) by its terms
provides only for a single rate, in which case such single rate shall be
used) for deposits denominated in U.S. Dollars (as defined below) having
the Index Maturity designated in the Note and the applicable Pricing
Supplement, commencing on the second London Business Day immediately
following the LIBOR Interest Determination Date, which appear on the
Designated LIBOR Page specified in the Note and the applicable Pricing
Supplement as of 11:00 A.M., London time, on that LIBOR Interest
Determination Date, if at least two such offered rates appear (unless, as
aforesaid, only a single rate is required) on such Designated LIBOR Page,
or (b) if "LIBOR Telerate" is specified in the Note and the applicable
Pricing Supplement, the rate for deposits denominated in U.S. Dollars
having the Index Maturity designated in the Note and the applicable Pricing
Supplement, commencing on the second London Business Day immediately
following such LIBOR Interest Determination Date, which appears on the
Designated LIBOR Page specified in the Note and the applicable Pricing
Supplement as of 11:00 A.M. London time on that LIBOR Interest
Determination Date. Notwithstanding the foregoing, if fewer than two
offered rates appear on the Designated LIBOR Page with respect to LIBOR
Reuters (unless the specified Designated LIBOR Page with respect to LIBOR
Reuters by its terms provides only for a single rate, in which case such
single rate shall be used), or if no rate appears on the Designated LIBOR
Page with respect to LIBOR Telerate, whichever may be applicable, LIBOR in
respect of the related LIBOR Interest Determination Date will be determined
as if the parties had specified the rate described in clause (ii) below.
(ii) With respect to any LIBOR Interest Determination Date on which
fewer than two offered rates appear on the Designated LIBOR Page with
respect to LIBOR Reuters (unless the Designated LIBOR Page by its terms
provides only for a single rate, in which case such single rate shall be
used), or if no rate appears on the Designated LIBOR Page with respect to
LIBOR Telerate, as the case may be, the Calculation Agent will request the
principal London office of each of four major banks in the London interbank
market selected by the Calculation Agent to provide the Calculation Agent
with its offered rate quotation for deposits denominated in U.S. Dollars
for the period of the Index Maturity designated in the Note and the
applicable Pricing Supplement, commencing on the second London Business Day
immediately following such LIBOR Interest Determination Date, to prime
banks in the London interbank market as of 11:00 A.M., London time, on such
LIBOR Interest
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Determination Date and in a principal amount that is representative for a
single transaction in U.S. Dollars in such market at such time. If at least
two such quotations are provided, LIBOR determined on such LIBOR Interest
Determination Date will be the arithmetic mean of such quotations. If fewer
than two quotations are provided, LIBOR determined on such LIBOR Interest
Determination Date will be the arithmetic mean of the rates quoted as of
11:00 A.M. in New York, on such LIBOR Interest Determination Date by three
major banks in U.S. Dollars selected by the Calculation Agent for loans in
New York City to leading European banks, having the Index Maturity
designated in the Note and the applicable Pricing Supplement in a principal
amount that is representative for a single transaction in U.S. 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 on such LIBOR Interest Determination Date will be LIBOR in
effect on such LIBOR Interest Determination Date.
"Designated LIBOR Page" means either (a) the display on the Reuters Monitor
Money Rates Service for the purpose of displaying the London interbank rates of
major banks for U.S. Dollar Deposits (if "LIBOR Reuters" is designated in the
Note and the applicable Pricing Supplement), or (b) the display on the Dow Jones
Telerate Service for the purpose of displaying the London interbank rates of
major banks for U.S. Dollar Deposits (if "LIBOR Telerate" is designated in the
Note and the applicable Pricing Supplement). If neither LIBOR Reuters nor LIBOR
Telerate is specified in the Note and applicable Pricing Supplement, LIBOR will
be determined as if LIBOR Telerate page 3750 had been chosen.
Prime Rate Notes
Each Prime Rate Note will bear interest at the interest rate (calculated
with reference to the Prime Rate and the Spread and/or Spread Multiplier, if
any) specified in the Prime Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Prime Interest Determination Date, the rate set
forth on such date in H.15(519) under the heading "Bank Prime Loan." In the
event that such rate is not published prior to 9:00 A.M., New York City time, on
the Calculation Date pertaining to such Prime Interest Determination Date, then
the Prime Rate with respect to such Prime Interest Determination Date shall be
the arithmetic mean of the rates of interest publicly announced by each bank
that appears on the Reuters Screen NYMF Page as such bank's prime rate or base
lending rate as in effect for that Prime Interest Determination Date. If fewer
than four such rates appear on the Reuters Screen NYMF Page for the Prime
Interest Determination Date, the Prime Rate with respect to such Prime Interest
Determination Date shall be the arithmetic mean of the prime rates quoted on the
basis of the actual number of days in the year divided by 360 as of the close of
business on such Prime Interest Determination Date by at least two of the three
major money center banks in The City of New York selected by the Calculation
Agent. If fewer than two quotations are provided, the Prime Rate with respect to
such Prime Interest Determination Date shall be determined on the basis of the
rates furnished in The City of New York by the appropriate number of substitute
banks or trust companies organized and doing business under the laws of the
United States, or any state thereof, having total equity capital of at least
U.S. $500 million and being subject to supervision or examination by Federal or
state authority, selected by the Calculation Agent to provide such rate or
rates; provided, however, that if the bank or trust company selected as
aforesaid is not quoting as mentioned in this sentence, the Prime Rate with
respect to such Prime Interest Determination Date will be the Prime Rate in
effect immediately prior to such Prime Interest Determination Date. "Reuters
Screen NYMF Page" means the display designated as page "NYMF" on the Reuters
Monitor Money Rate Service (or such other page as may replace the NYMF page on
the service for the purpose of displaying the prime rate or base lending rate of
major banks).
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Treasury Rate Notes
Each Treasury Rate Note will bear interest at the interest rate (calculated
with reference to the Treasury Rate and the Spread and/or Spread Multiplier, if
any) specified in the Treasury Rate Note and in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Treasury Interest Determination Date, the rate
for the most recent auction of direct obligations of the United States
("Treasury bills") having the Index Maturity specified in the applicable Pricing
Supplement as published in H.15(519) under the heading, "Treasury bills --
auction average (investment)" or, if not so published by 3:00 P.M., New York
City time, on the Calculation Date pertaining to such Treasury Interest
Determination Date, the average auction rate (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.
In the event that such rate is not available by 3:00 P.M., New York City time,
on such Treasury Interest Determination Date, or if no such auction is held in a
particular week, then the Treasury Rate with respect to such Treasury Interest
Determination Date shall be calculated by the Calculation Agent and shall be 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 Interest Determination Date, of three leading primary
U.S. government securities dealers selected by the Calculation Agent for the
issue of Treasury bills with a remaining maturity closest to the Index Maturity
designated in the applicable Pricing Supplement; provided, however, that if the
dealers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Treasury Rate with respect to such Treasury
Interest Determination Date will be the Treasury Rate in effect immediately
prior to such Treasury Interest Determination Date.
ORIGINAL ISSUE DISCOUNT NOTES
The Company may from time to time offer Original Issue Discount Notes. The
Pricing Supplement applicable to certain Original Issue Discount Notes may
provide that Holders of such Notes will not receive periodic payments of
interest. For purposes of determining whether Holders of the requisite principal
amount of Notes outstanding under the Indenture have made a demand or given a
notice or waiver or taken any other action, the outstanding principal amount of
Original Issue Discount Notes shall be deemed to be the amount of the principal
that would be due and payable upon declaration of acceleration of the Stated
Maturity thereof as of the date of such determination. See "General."
"Original Issue Discount Note" means (i) a Note that has a stated
redemption price at Maturity that exceeds its Issue Price (as defined for U.S.
Federal income tax purposes) by at least 0.25% of its stated redemption price at
maturity multiplied by the number of full years from the Original Issue Date to
the Stated Maturity for such Notes and (ii) any other Note designated by the
Company as issued with original issue discount for U.S. Federal income tax
purposes.
AMORTIZING NOTES
The Company may from time to time offer Notes for which payments of
principal and interest are made in installments over the life of the Note
("Amortizing Notes"). Interest on each Amortizing Note will be computed as set
forth in a Pricing Supplement or in the Book-Entry Note representing such
Amortizing Note. Unless otherwise provided in such Pricing Supplement or in such
Book-Entry Note, 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. A table setting forth repayment information with
respect to each Amortizing Note will be provided to the original purchaser of
such Note and will be available upon request to the subsequent Holders thereof.
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REDEMPTION AND REPAYMENT
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 only if an Initial Redemption
Date is specified in the applicable Pricing Supplement ("Initial Redemption
Date"). If so specified, the Notes 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 or the minimum
denomination specified in such Pricing Supplement (provided that any remaining
principal amount thereof shall be at least $1,000 or such minimum denomination),
at the applicable Redemption Price (as defined below) on notice given 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. "Redemption Price," with
respect to a Note, means an amount equal to the sum of (i) the Initial
Redemption Percentage specified in such Pricing Supplement (as adjusted by the
Annual Redemption Percentage Reduction, if applicable (as specified in such
Pricing Supplement)), multiplied by the unpaid principal amount or the portion
to be redeemed plus (ii) accrued interest to the date of redemption. 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 thereof or the portion thereof to
be redeemed.
The Pricing Supplement relating to each Note will indicate either that such
Note cannot be repaid prior to Stated Maturity or that such Note will be
repayable at the option of the Holder on a date or dates specified prior to
Stated Maturity at a price or prices set forth in the applicable Pricing
Supplement, together with accrued interest to the date of repayment.
In order for a Note that is repayable at the option of the Holder to be
repaid prior to Stated Maturity, the Paying Agent (initially, the Company has
appointed the Trustee as Paying Agent) must receive at least 30 but not more
than 45 calendar days prior to the repayment date (i) the Note with the form
entitled "Option to Elect Repayment" on the reverse of the Note duly completed
or (ii) a facsimile transmission or letter (first class, postage prepaid) from a
member of a national securities exchange or the National Association of
Securities Dealers, Inc. or a commercial bank or trust company in the United
States setting forth the name of the Holder of the Note, the principal amount of
the Note, the principal amount of the Note to be repaid, the certificate number
or a description of the tenor and terms of the Note, a statement that the option
to elect repayment is being exercised thereby and a guarantee that the Note to
be repaid with the form entitled "Option to Elect Repayment" on the reverse of
the Note duly completed will be received by the Paying Agent not later than five
Business Days after the date of such facsimile transmission or letter and such
Note and form duly completed are received by the Paying Agent by such fifth
Business Day. Exercise of the repayment option by the Holder of a Note shall be
irrevocable, except that a Holder who has tendered a Note for repayment may
revoke such tender for repayment by written notice to the Paying Agent received
prior to the close of business on the tenth calendar day prior to the repayment
date. The repayment option may be exercised by the Holder of a Note for less
than the entire principal amount of the Note provided that the principal amount
of the Note remaining outstanding after such repayment is an authorized
denomination.
While the Book-Entry Notes are represented by the Global Securities held by
or on behalf of the Depositary, and registered in the name of the Depositary or
the Depositary's nominee, the option for repayment may be exercised by the
applicable Participant (as defined herein) that has an account with the
Depositary, on behalf of the beneficial owners of the Global Security or
Securities representing such Book-Entry Notes, by delivering a written notice
substantially similar to the above mentioned form to the Trustee at its
Corporate Trust Office (or such other address of which the Company shall from
time to time notify the Holders), not more than 60 nor less than 30 days prior
to the date of repayment. Notices of elections from Participants on behalf of
beneficial owners of the Global Security or Securities representing such
Book-Entry Notes to exercise their option to have such Book-Entry Notes repaid
must be received by the Trustee by 5:00 P.M., New York City time, on the last
day for giving such notice. In order to ensure that a notice is received by the
Trustee on a particular day, the beneficial owner of the Global Security or
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Securities representing such Book-Entry Notes must so direct the applicable
Participant before such Participant's deadline for accepting instructions for
that day. Different firms may have different deadlines for accepting
instructions from their customers. Accordingly, beneficial owners of the Global
Security or Securities representing Book-Entry Notes should consult the
Participants through which they own their interest therein for the respective
deadlines for such Participants. All notices shall be executed by a duly
authorized officer of such Participant (with signatures guaranteed) and shall be
irrevocable. In addition, beneficial owners of the Global Security or Securities
representing Book-Entry Notes shall effect delivery at the time such notices of
election are given to the Depositary by causing the applicable Participant to
transfer such beneficial owner's interest in the Global Security or Securities
representing such Book-Entry Notes, on the Depositary's records, to the Trustee.
See "Book-Entry System."
If applicable, the Company will comply with the requirements of Rule 14e-1
under the Securities Exchange Act of 1934, as amended, and any other securities
laws or regulations in connection with any such repayment.
REPURCHASE
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 be held or
resold or, at the discretion of the Company, may be surrendered to the Trustee
for cancellation.
OTHER PROVISIONS
Any provisions with respect to the determination of an Interest Rate Basis,
the specifications of Interest Rate Basis, calculation of the interest rate
applicable to, or the principal payable at Maturity on, any Note, its Interest
Payment Dates or any other matter relating thereto may be modified by the terms
as specified under "Other Provisions" on the face of such Note, or in an
addendum relating thereto if so specified on the face thereof, and in the
applicable Pricing Supplement.
BOOK-ENTRY SYSTEM
DTC will act as securities depositary for the Book-Entry Notes. The
Book-Entry Notes will be issued as fully-registered securities registered in the
name of Cede & Co. (DTC's partnership nominee). One fully-registered Global
Security will be issued for each issue of the Notes, each in the aggregate
principal amount of such issue, and will be deposited with DTC. If, however, the
aggregate principal amount of any issue exceeds $200 million, one Global
Security will be issued with respect to each $200 million of principal amount
and an additional Global Security will be issued with respect to any remaining
principal amount of such issue.
DTC 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. DTC holds securities that its participants
("Participants") deposit with DTC. DTC 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 ("Direct Participants") include
securities brokers and dealers, banks, trust companies, clearing corporations,
and certain other organizations. DTC 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 DTC'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 DTC and its Participants are on file
with the Securities and Exchange Commission.
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Purchases of Book-Entry Notes under DTC's system must be made by or through
Direct Participants, which will receive a credit for the Book-Entry Notes on
DTC's records. The ownership interest of each actual purchaser of each
Book-Entry Note ("Beneficial Owner") is in time to be recorded on the Direct and
Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the transactions, as well as
periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Book-Entry Notes are to be accomplished by entries
made on the books of Participants acting on behalf of the Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in Book-Entry Notes, except in the event that use of the book-entry
system for one or more Book-Entry Notes is discontinued.
To facilitate subsequent transfers, all Global Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Global Securities with DTC and their registration in
the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Book-Entry Notes; DTC'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 DTC 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.
Redemption notices shall be sent to Cede & Co. If less than all of the
Book-Entry Notes within an issue are being redeemed, DTC's current practice is
to determine by lot the amount of the interest of each Direct Participant in
such issue to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to Book-Entry
Notes. Under its usual procedures, DTC will mail an "Omnibus Proxy" to the
Company as soon as possible after the 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 record date (identified in a
listing attached to the Omnibus Proxy).
Principal and interest payments on the Book-Entry Notes will be made to
DTC. DTC's practice is to credit Direct Participants' accounts on the payable
date in accordance with their respective holdings shown on DTC's records unless
DTC has reason to believe that it will not receive payment on the payable date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as in the case of 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 DTC, or the Company, subject
to any statutory or regulatory requirements as may be in effect from time to
time. Payment of principal and interest to DTC is the responsibility of the
Company, disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners shall be the responsibility of Direct and Indirect Participants.
A Beneficial Owner shall give notice to elect to have its Book-Entry Notes
purchased or tendered, 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 Book-Entry Notes, on DTC's records,
to the Paying Agent. The requirement for physical delivery of Book-Entry Notes
in connection with a demand for purchase or a mandatory purchase will be deemed
satisfied when the ownership rights in the Book-Entry Notes are transferred by a
Direct Participant on DTC's records.
DTC may discontinue providing its services as securities depositary with
respect to the Book-Entry Notes at any time by giving reasonable notice to the
Company or the Agents. Under such circumstances,
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in the event that a successor securities depositary is not obtained,
Certificated Notes will be printed and delivered in exchange for the Book-Entry
Notes represented by the Global Securities held by DTC.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depositary). In that event,
Certificated Notes will be printed and delivered in exchange for the Book-Entry
Notes represented by the Global Securities held by DTC.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof.
Neither the Company, the Trustee, any Paying Agent nor the registrar for
the Notes will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
DEFEASANCE
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will be subject to defeasance and discharge as described under "Description of
the Securities -- Defeasance" in the Prospectus.
CERTAIN UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES
The following summary describes certain United States federal income tax
consequences of the ownership of Notes as of the date hereof. Except where
noted, it deals only with Notes held as capital assets by United States Holders
and does not deal with special situations, such as those of dealers in
securities or currencies, financial institutions, life insurance companies,
persons holding Notes as a part of a hedging or conversion transaction or a
straddle or United States Holders whose "functional currency" is not the U.S.
dollar. Furthermore, the discussion below is based upon the provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), and regulations, rulings
and judicial decisions thereunder as of the date hereof, and such authorities
may be repealed, revoked or modified so as to result in federal income tax
consequences different from those discussed below. Any special United States
federal income tax considerations relevant to a particular issue of the Notes
will be provided in the applicable Pricing Supplement. PERSONS CONSIDERING THE
PURCHASE, OWNERSHIP OR DISPOSITION OF NOTES SHOULD CONSULT THEIR OWN TAX
ADVISORS CONCERNING THE FEDERAL INCOME TAX CONSEQUENCES IN LIGHT OF THEIR
PARTICULAR SITUATIONS AS WELL AS ANY CONSEQUENCES ARISING UNDER THE LAWS OF ANY
OTHER TAXING JURISDICTION.
PAYMENTS OF INTEREST
Except as set forth below, interest on a Note will generally be taxable to
a United States Holder as ordinary income from domestic sources at the time it
is paid or accrued in accordance with the United States Holder's method of
accounting for tax purposes. As used herein, a "United States Holder" of a Note
means a holder that is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof, or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source. A "Non-United States Holder" is a holder that is not a
United States Holder.
ORIGINAL ISSUE DISCOUNT
United States Holders of Notes issued with original issue discount ("OID")
will be subject to special tax accounting rules, as described in greater detail
below. United States Holders of such Notes should be aware that they generally
must include OID in gross income in advance of the receipt of cash attributable
to that income. However, United States Holders of such Notes generally will not
be required to include
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separately in income cash payments received on the Notes, even if denominated as
interest, to the extent such payments do not constitute qualified stated
interest (as defined below). Notes issued with OID will be referred to as
"Original Issue Discount Notes." Notice will be given in the applicable Pricing
Supplement when the Company determines that a particular Note will be an
Original Issue Discount Note.
This summary is based upon final Treasury regulations addressing debt
instruments issued with OID (the "OID Regulations"). The following discussion
does not address Notes providing for contingent payments other than Notes that
bear qualified stated interest.
A Note with an "issue price" that is less than its stated redemption price
at maturity (the sum of all payments to be made on the Note other than
"qualified stated interest") will be issued with OID if such difference is at
least 0.25 percent of the stated redemption price at maturity multiplied by the
number of complete years to maturity or, in the case of an Amortizing Note, the
weighted average maturity. The "issue price" of each Note in a particular
offering will be the first price at which a substantial amount of that
particular offering is sold (other than to an underwriter, placement agent or
wholesaler). The term "qualified stated interest" means stated interest that is
unconditionally payable in cash or in property (other than debt instruments of
the issuer) at least annually at a single fixed rate or, subject to certain
conditions, based on one or more interest indices. Interest is payable at a
single fixed rate only if the rate appropriately takes into account the length
of the interval between payments. Notice will be given in the applicable Pricing
Supplement when the Company determines that a particular Note will bear interest
that is not qualified stated interest.
In the case of a Note issued with de minimis OID (i.e., discount that is
not OID because it is less than 0.25 percent of the stated redemption price at
maturity multiplied by the number of complete years to maturity), the United
States Holder generally must include such de minimis OID in income as principal
payments on the Notes are made in proportion to the stated principal amount of
the Note. Any amount of de minimis OID that has been included in income shall be
treated as capital gain.
Certain of the Notes may be redeemed prior to their Stated Maturity at the
option of the Company and/or at the option of the holder. Original Issue
Discount Notes containing such features may be subject to rules that differ from
the general rules discussed herein. Persons considering the purchase of Original
Issue Discount Notes with such features should carefully examine the applicable
Pricing Supplement and should consult their own tax advisors with respect to
such features since the tax consequences with respect to OID will depend, in
part, on the particular terms and features of the Notes.
United States Holders of Original Issue Discount Notes with a maturity upon
issuance of more than one year must, in general, include OID in income in
advance of the receipt of some or all of the related cash payments. The amount
of OID includible in income by the initial United States Holder of an Original
Issue Discount Note is the sum of the "daily portions" of OID with respect to
the Note for each day during the taxable year or portion of the taxable year in
which such United States Holder held such Note ("accrued OID"). The daily
portion is determined by allocating to each day in any "accrual period" a pro
rata portion of the OID allocable to that accrual period. The "accrual period"
for an Original Issue Discount Note may be of any length and may vary in length
over the term of the Note, provided that each accrual period is no longer than
one year and each scheduled payment of principal or interest occurs on the first
day or the final day of an accrual period. The amount of OID allocable to any
accrual period is an amount equal to the excess, if any, of (a) the product of
the 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 properly adjusted for the length of the accrual period) over
(b) the sum of any qualified stated interest allocable to the accrual period.
OID allocable to a final accrual period is the difference between the amount
payable at maturity (other than a payment of qualified stated interest) and the
adjusted issue price at the beginning of the final accrual period. Special rules
will apply for calculating OID for an initial short accrual period. The
"adjusted issue price" of a Note at the beginning of any accrual period is equal
to its issue price increased by the accrued OID for each prior accrual period
(determined without regard to the amortization of any acquisition or bond
premium, as described below) and reduced by any payments made on such Note
(other than qualified stated interest) on or before the
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first day of the accrual period. Under these rules, a United States Holder will
have to include in income increasingly greater amounts of OID in successive
accrual periods. The Company is required to provide information returns stating
the amount of OID accrued on Notes held of record by persons other than
corporations and other exempt holders.
In the case of an Original Issue Discount Note that is a Floating Rate
Note, both the "yield to maturity" and "qualified stated interest" will be
determined solely for purposes of calculating the accrual of OID as though the
Note will bear interest in all periods at a fixed rate generally equal to the
rate that would be applicable to interest payments on the Note on its date of
issue or, in the case of certain Floating Rate Notes, the rate that reflects the
yield to maturity that is reasonably expected for the Note. Additional rules may
apply if interest on a Floating Rate Note is based on more than one interest
index. Persons considering the purchase of Floating Rate Notes should carefully
examine the applicable Pricing Supplement and should consult their own tax
advisors regarding the U.S. federal income tax consequences of the holding and
disposition of such Notes.
United States Holders may elect to treat all interest on any Note as OID
and calculate the amount includible in gross income under the constant yield
method described above. For the purposes of this election, interest includes
stated interest, acquisition discount, OID, de minimis OID, market discount, de
minimis market discount and unstated interest, as adjusted by any amortizable
bond premium or acquisition premium. The election is to be made for the taxable
year in which the United States Holder acquired the Note, and may not be revoked
without the consent of the Internal Revenue Service (the "IRS"). UNITED STATES
HOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS ABOUT THIS ELECTION.
SHORT-TERM NOTES
In the case of Original Issue Discount Notes having a term of one year or
less ("Short-Term Notes"), under the OID Regulations all payments (including all
stated interest) will be included in the stated redemption price at maturity
and, thus, United States Holders will generally be taxable on the discount in
lieu of stated interest. The discount will be equal to the excess of the stated
redemption price at maturity over the issue price of a Short-Term Note, unless
the United States Holder elects to compute this discount using tax basis instead
of issue price. In general, individuals and certain other cash method United
States Holders of a Short-Term Note are not required to include accrued discount
in their income currently unless they elect to do so. United States Holders that
report income for federal income tax purposes on the accrual method and certain
other United States Holders are required to accrue discount on such Short-Term
Notes (as ordinary income) on a straight-line basis, unless an election is made
to accrue the discount according to a constant yield method based on daily
compounding. In the case of a United States Holder that is not required, and
does not elect, to include discount in income currently, any gain realized on
the sale, exchange or retirement of the Short-Term Note will be ordinary income
to the extent of the discount accrued through the date of sale, exchange or
retirement. In addition, a United States Holder that does not elect to currently
include accrued discount in income may be required to defer deductions for a
portion of the United States Holder's interest expense with respect to any
indebtedness incurred or continued to purchase or carry such Notes.
MARKET DISCOUNT
If a United States Holder purchases a Note (other than an Original Issue
Discount Note) for an amount that is less than its stated redemption price at
maturity or, in the case of an Original Issue Discount Note, its adjusted issue
price, the amount of the difference will be treated as "market discount" for
federal income tax purposes, unless such difference is less than a specified de
minimis amount. Under the market discount rules, a United States Holder will be
required to treat any principal payment on, or any gain on the sale, exchange,
retirement or other disposition of, a Note as ordinary income to the extent of
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. In addition, the United States Holder may be required to defer,
until the maturity of the Note or its earlier disposition in a taxable
transaction,
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the deduction of all or a portion of the interest expense on any indebtedness
incurred or continued to purchase or carry such Note.
Any 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 United
States Holder elects to accrue on a constant interest method. A United States
Holder of a Note may elect to include market discount in income currently as it
accrues (on either a ratable or constant interest method), in which case the
rule described above regarding deferral of interest deductions will not apply.
This election to include market discount in income currently, once made, applies
to all market discount obligations acquired on or after the first taxable year
to which the election applies and may not be revoked without the consent of the
IRS.
ACQUISITION PREMIUM; AMORTIZABLE BOND PREMIUM
A United States Holder that purchases a Note for an amount that is greater
than its adjusted issue price but equal to or less than the sum of all amounts
payable on the Note after the purchase date other than payments of qualified
stated interest will be considered to have purchased such Note at an
"acquisition premium." Under the acquisition premium rules, the amount of OID
which such holder must include in its gross income with respect to such Note for
any taxable year will be reduced by the portion of such acquisition premium
properly allocable to such year.
A United States Holder that purchases a Note for an amount in excess of the
sum of all amounts payable on the Note after the purchase date other than
qualified stated interest will be considered to have purchased the Note at a
"premium" and will not be required to include any OID in income. A United States
Holder generally may elect to amortize the premium over the remaining term of
the Note on a constant yield method. The amount amortized in any year will be
treated as a reduction of the United States Holder's interest income from the
Note. Bond premium on a Note held by a United States Holder that does not make
such an election will decrease the gain or increase the loss otherwise
recognized on disposition of the Note. The election to amortize premium on a
constant yield method once made applies to all debt obligations held or
subsequently acquired by the electing United States Holder on or after the first
day of the first taxable year to which the election applies and may not be
revoked without the consent of the IRS.
SALE, EXCHANGE AND RETIREMENT OF NOTES
A United States Holder's tax basis in a Note will, in general, be the
United States Holder's cost therefor, increased by OID, market discount or any
discount with respect to a Short-Term Note previously included in income by the
United States Holder and reduced by any amortized premium and any cash payments
on the Note other than qualified stated interest. Upon the sale, exchange or
retirement of a Note, a United States Holder will recognize gain or loss equal
to the difference between the amount realized upon the sale, exchange or
retirement (less any accrued qualified stated interest, which will be taxable as
such) and the adjusted tax basis of the Note. Except as described above with
respect to certain Short-Term Notes or with respect to market discount, such
gain or loss will be capital gain or loss and will be long-term capital gain or
loss if at the time of sale, exchange or retirement the Note has been held for
more than one year. Under current law, net capital gains of individuals are,
under certain circumstances, taxed at lower rates than items of ordinary income.
The deductibility of capital losses is subject to limitations.
NON-UNITED STATES HOLDERS
Under present United States federal income and estate tax law, and subject
to the discussion below concerning backup withholding:
(a) no withholding of United States federal income tax will be
required with respect to the payment by the Company or any Paying Agent of
principal, premium, if any, or interest (which for purposes of this
discussion includes OID) on a Note owned by a Non-United States Holder,
provided (i) that the beneficial owner does not actually or constructively
own 10% or more of the total
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combined voting power of all classes of stock of the Company entitled to
vote within the meaning of section 871(h)(3) of the Code and the
regulations thereunder, (ii) the beneficial owner is not a controlled
foreign corporation that is related to the Company through stock ownership,
(iii) the beneficial owner is not a bank whose receipt of interest on a
Note is described in section 881(c)(3)(A) of the Code and (iv) the
beneficial owner satisfies the statement requirement (described generally
below) set forth in section 871(h) and section 881(c) of the Code and the
regulations thereunder;
(b) no withholding of United States federal income tax will be
required with respect to any gain or income realized by a Non-United States
Holder upon the sale, exchange or retirement of a Note; and
(c) a Note beneficially owned by an individual who at the time of
death is a Non-United States Holder will not be subject to United States
federal estate tax as a result of such individual's death, provided that
such individual does not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of the company entitled
to vote within the meaning of section 871(h)(3) of the Code and provided
that the interest payments with respect to such Note would not have been,
if received at the time of such individual's death, effectively connected
with the conduct of a United States trade or business by such individual.
To satisfy the requirement referred to in (a)(iv) above, the beneficial
owner of such Note, or a financial institution holding the Note on behalf of
such owner, must provide, in accordance with specified procedures, a paying
agent of the Company with a statement to the effect that the beneficial owner is
not a U.S. person. Pursuant to current temporary Treasury regulations, these
requirements will be met if (1) the beneficial owner provides his name and
address, and certifies, under penalties of perjury, that he is not a U.S. person
(which certification may be made on an Internal Revenue Service Form W-8 (or
successor form)) or (2) a financial institution holding the Note on behalf of
the beneficial owner certifies, under penalties of perjury, that such statement
has been received by it and furnishes a paying agent with a copy thereof.
Payments to Non-United States Holders not meeting the requirements of
paragraph (a) above and thus subject to withholding of United States federal
income tax may nevertheless be exempt from such withholding if the beneficial
owner of the Note provides the Company with a properly executed Internal Revenue
Service Form 1001 (or successor form) claiming an exemption from withholding
under the benefit of a tax treaty.
If a Non-United States Holder is engaged in a trade or business in the
United States and premium, if any, and interest (including OID) on the Note is
effectively connected with the conduct of such trade or business, the Non-United
States Holder, although exempt from the withholding tax discussed above, may be
subject to United States federal income tax on such premium, interest and OID on
a net income basis in the same manner as if it were a United States Holder. Such
a holder will be required to provide to the Company a properly executed Internal
Revenue Service Form 4224 in order to claim an exemption from withholding tax.
In addition, if such holder is a foreign corporation, it may be subject to a
branch profits tax equal to 30% of its effectively connected earnings and
profits for the taxable year, subject to adjustments. For this purpose, interest
(including OID) on a Note will be included in such foreign corporation's
earnings and profits.
Any gain or income realized upon the sale, exchange or retirement of a Note
generally will not be subject to United States federal income tax unless (i)
such gain or income is effectively connected with a trade or business in the
United States of the Non-United States Holder, or (ii) in the case of a
Non-United States Holder who is an individual, such individual is present in the
United States for 183 days or more in the taxable year of such sale, exchange or
retirement, and certain other conditions are met.
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INFORMATION REPORTING AND BACKUP WITHHOLDING
In general, information reporting requirements will apply to certain
payments of principal, interest, OID and premium paid on Notes and to the
proceeds of sale of a Note made to United States Holders other than certain
exempt recipients (such as corporations). A 31 percent backup withholding tax
will apply to such payments if the United States Holder fails to provide a
taxpayer identification number or certification of foreign or other exempt
status or fails to report in full dividend and interest income.
No information reporting or backup withholding will be required with
respect to payments made by the Company or any paying agent to Non-United States
Holders if a statement described in (a)(iv) under "Non-United States Holders"
has been received and the payor does not have actual knowledge that the
beneficial owner is a United States person.
In addition, backup withholding and information reporting will not apply if
payments of the principal, interest, OID or premium on a Note are paid or
collected by a foreign office of a custodian, nominee or other foreign agent on
behalf of the beneficial owner of such Note, or if a foreign office of a broker
(as defined in applicable Treasury regulations) pays the proceeds of the sale of
a Note to the owner thereof. If, however, such nominee, custodian, agent or
broker is, for United States federal income tax purposes, a U.S. person, a
controlled foreign corporation or a foreign person that derives 50% or more of
its gross income for certain periods from the conduct of a trade or business in
the United States, such payments will not be subject to backup withholding but
will be subject to information reporting, unless (i) such custodian, nominee,
agent or broker has documentary evidence in its records that the beneficial
owner is not a U.S. person and certain other conditions are met or (ii) the
beneficial owner otherwise establishes an exemption. Temporary Treasury
regulations provide that the Treasury is considering whether backup withholding
will apply with respect to such payments of principal, interest or the proceeds
of a sale that are not subject to backup withholding under the current
regulations. Under proposed Treasury regulations not currently in effect backup
withholding will not apply to such payments absent actual knowledge that the
payee is a United States person.
Payments of principal, interest, OID and premium on a Note paid to the
beneficial owner of a Note by a United States office of a custodian, nominee or
agent, or the payment by the United States office of a broker of the proceeds of
sale of a Note, will be subject to both backup withholding and information
reporting unless the beneficial owner provides the statement referred to in
(a)(iv) above and the payor does not have actual knowledge that the beneficial
owner is a United States person or otherwise establishes an exemption.
Any amounts withheld under the backup withholding rules will be allowed as
a refund or a credit against such holder's U.S. federal income tax liability
provided the required information is furnished to the IRS.
SUPPLEMENTAL PLAN OF DISTRIBUTION
The Notes are offered on a continuing basis by the Company through the
Agents, each of which has agreed to use its reasonable efforts to solicit
purchases of the Notes. Pursuant to the terms of the Selling Agency Agreement,
the Company reserves the right to appoint additional agents in which case the
term Agent shall include such additional agents, provided, that each such
additional agent shall be named in the applicable Pricing Supplement and shall
become a party to the Selling Agency Agreement or shall enter into a separate
agreement with the Company on terms substantially similar to those contained in
the Selling Agency Agreement. The Company will pay each Agent a commission of
from .125% to .750% of the principal amount of each Note, depending upon its
Stated Maturity, sold through such Agent. The Company will have the sole right
to accept offers to purchase Notes and may reject any such offer in whole or in
part. 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 such Agent.
The Company also may sell Notes to any Agent, acting as principal, at a discount
to be agreed upon at the time of sale, for resale to one or more investors or to
one or more broker-dealers (acting as principal for purposes of resale) at
varying prices
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related to prevailing market prices at the time of resale, as determined by such
Agent, or, if so agreed, at a fixed public offering price. Unless otherwise
indicated in the applicable Pricing Supplement, if any Note is resold by an
Agent to any broker-dealer at a discount, such discount will not be in excess of
the discount or commission received by such Agent from the Company. In addition,
unless otherwise indicated in the applicable Pricing Supplement, any Note
purchased by an Agent as principal will be purchased at 100% of the principal
amount thereof less a percentage equal to the commission applicable to an agency
sale of a Note having an identical Stated Maturity. After the initial public
offering of the Notes, the public offering price (in the case of Notes to be
resold on a fixed public offering price basis), the concession and the discount
may be changed. The Company also reserves the right to sell the Notes directly
to investors on its own behalf in those jurisdictions where it is authorized to
do so or as otherwise provided in the applicable Pricing Supplement. In such
circumstances, the Company will have the sole right to accept offers to purchase
Notes and may reject any proposed purchase of Notes in whole or in part. In the
case of sales made directly by the Company, no commission will be payable.
The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Act"). The Company has agreed to
indemnify each Agent against certain liabilities, including liabilities under
the Act, or to contribute to payments each Agent may be required to make in
respect thereof. The Company has agreed to reimburse the Agents for certain of
the Agents' expenses, including, but not limited to, the fees and expenses of
counsel to the Agents.
The Company has been advised by each Agent that it may from time to time
purchase and sell Notes in the secondary market, but that it is not obligated to
do so. There can be no assurance that there will be a secondary market for the
Notes or liquidity in the secondary market if one develops. From time to time,
each Agent may make a market in the Notes.
The Agents and their affiliates may engage in transactions with and perform
services for the Company in the ordinary course of business. Affiliates of Chase
Securities, Inc. and J.P. Morgan Securities Inc. are lenders under the Company's
bank facilities and, to the extent that the proceeds hereof are used to repay
bank indebtedness, may receive a portion of the net proceeds from this offering
as a result of the repayment of a portion of the bank indebtedness. See "Use of
Proceeds" in the accompanying Prospectus. Because more than 10% of the net
proceeds of this offering may be paid to affiliates of Chase Securities, Inc.
and J.P. Morgan Securities Inc., each a member of the National Association of
Securities Dealers, Inc. (the "NASD") and a participant in the distribution of
the Notes, this offering is being made pursuant to the provisions of Article
III, Section 44(c)(8) of the NASD Rules of Fair Practice.
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PROSPECTUS
$750,000,000
INGERSOLL-RAND COMPANY
DEBT SECURITIES
------------------------
Ingersoll-Rand Company ("Ingersoll-Rand" or the "Company") from time to
time may sell its debt securities (the "Debt Securities"), in one or more
series, up to an aggregate principal amount of $750,000,000, on terms to be
determined by market conditions at the time of sale.
With respect to each series of Debt Securities, 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, denominations,
maturity, interest rate (which may be fixed or variable) and time of payment of
interest, if any, coin or currency in which principal, premium, if any, and
interest, if any, will be payable, any terms for redemption, any terms for
sinking fund payments, the initial public offering price, the names of, the
principal amounts to be purchased by, and the compensation of underwriters,
dealers or agents, if any, 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.
------------------------
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 directly to purchasers or to or through
underwriters, dealers or agents. If any underwriters, dealers or agents are
involved in the sale of any Debt Securities, their names and any applicable fee,
commission or discount arrangements will be set forth in the Prospectus
Supplement. The net proceeds to the Company from sales of Debt Securities will
be set forth in the Prospectus Supplement and will be the purchase price of such
Debt Securities less attributable issuance expenses, including underwriters',
dealers' or agents' compensation arrangements. See "Plan of Distribution" for
indemnification arrangements for underwriters, dealers and agents.
------------------------
The date of this Prospectus is June 27, 1995.
<PAGE> 25
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements and other
information filed by the Company can be inspected and copied at the Commission's
public reference facilities at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's regional offices located
at Seven World Trade Center, Suite 1300, New York, New York 10048, and the
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Common Stock of the Company is listed on the New
York Stock Exchange, Inc., and reports, proxy statements and other information
concerning the Company may be inspected at the office of such Exchange, 20 Broad
Street, New York, N.Y. 10005. This Prospectus does not contain all information
set forth in the Registration Statement (of which this Prospectus is a part) and
the exhibits thereto which the Company has filed with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"), and to which
reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1994, the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995 and the Company's Current Report on Form 8-K dated June 5, 1995,
as amended, are incorporated herein by reference and made a part of this
Prospectus, and all documents filed by the Company with the Commission pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent to the date of
this Prospectus but prior to the termination of the offering of the Debt
Securities shall be deemed to be incorporated herein by reference and made a
part of this Prospectus 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 and any amendment or supplement hereto 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 statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus or any
such amendment or supplement.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of any such person, a copy of any or all of the foregoing documents
incorporated herein by reference (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into such documents).
Requests should be directed to Ingersoll-Rand Company, P.O. Box 8738, Woodcliff
Lake, New Jersey 07675, Attention: R.G. Heller, Secretary (telephone
201-573-0123).
THE COMPANY
Ingersoll-Rand manufactures and sells primarily non-electrical machinery
and equipment, including air compression systems, air tools, pumps, antifriction
bearings, pulp processing machinery, construction equipment, door hardware and
drilling equipment. The products manufactured by Ingersoll-Rand and its
subsidiaries and affiliates are sold principally under the name Ingersoll-Rand
and also under other names. The manufacturing and sales operations of
Ingersoll-Rand are conducted throughout the world.
Ingersoll-Rand was organized in 1905 under the laws of the State of New
Jersey as a consolidation of IngersollSergeant Drill Company and the Rand Drill
Company, whose businesses were established in the early 1870s. The Company's
principal executive offices are at 200 Chestnut Ridge Road, Woodcliff Lake, New
Jersey 07675 (telephone 201-573-0123). Unless the context otherwise requires,
the terms "Ingersoll-Rand" and "Company" refer to Ingersoll-Rand Company and its
consolidated subsidiaries.
2
<PAGE> 26
On May 31, 1995, the Company completed the acquisition of Clark Equipment
Company ("Clark") in a cash merger transaction. Clark's business is the design,
manufacture and sale of skid steer loaders, asphalt paving equipment, and axles
and transmissions for off-highway equipment. Through its Club Car Inc. ("Club
Car") subsidiary, Clark is one of the largest manufacturers of golf cars and
light utility vehicles.
USE OF PROCEEDS
The Company intends to apply the net proceeds from the sale of the Debt
Securities to which this Prospectus relates to its general funds to be used by
its management for capital expenditures and general corporate purposes,
including the repayment of debt incurred by the Company in connection with the
acquisition of Clark. Funds not required immediately for such purposes may be
invested in short-term obligations or used to reduce the future level of the
Company's commercial paper obligations.
3
<PAGE> 27
SELECTED FINANCIAL INFORMATION
The following table sets forth certain additional financial information for
the Company for the three month period ended March 31, 1995 and the years ended
December 31, 1994, 1993 and 1992 and is qualified in its entirety by the
detailed information and financial statements included in the documents
incorporated herein by reference. See "Incorporation of Certain Documents by
Reference" herein.
<TABLE>
<CAPTION>
THREE MONTH
PERIOD ENDED YEAR ENDED DECEMBER 31,
MARCH 31, ------------------------------------
1995 1994 1993 1992
------------ ---------- ---------- ----------
(THOUSANDS OF DOLLARS (EXCEPT PER SHARE DATA))
<S> <C> <C> <C> <C>
Net sales.................................. $ 1,185,585 $4,507,470 $4,021,071 $3,783,787
Cost of goods sold......................... 893,111 3,377,049 3,016,690 2,881,861
Administrative, selling and service
engineering expenses..................... 203,277 753,414 707,867 646,687
Restructure of operations -- charge........ -- -- (5,000) (80,000)
---------- ---------- ---------- ----------
Operating income........................... 89,197 377,007 291,514 175,239
Interest expense........................... (8,964) (43,751) (51,955) (54,129)
Other income (expense), net................ (5,996) (14,734) (7,536) (734)
Dresser-Rand income........................ 300 24,600 33,090 27,630
Ingersoll-Dresser Pump Company minority
interest................................. (2,245) (13,182) (11,589) 34,988
---------- ---------- ---------- ----------
Earnings before income taxes, extraordinary
item and effect of accounting changes.... 72,292 329,940 253,524 182,994
Provision for income taxes................. 26,025 118,800 90,000 67,400
---------- ---------- ---------- ----------
Earnings before extraordinary item and
effect of accounting changes............. 46,267 211,140 163,524 115,594
Effect of accounting changes:
Postemployment benefits (net of income
tax benefit).......................... -- -- (21,000) --
Postretirement benefits other than
pensions
(net of income tax benefit)........... -- -- -- (332,000)
Income taxes............................. -- -- -- (18,000)
---------- ---------- ---------- ----------
Net earnings (loss)........................ $ 46,267 $ 211,140 $ 142,524 $ (234,406)
========== ========== ========== ==========
Earnings per share of common stock:
Earnings before effect of accounting
changes............................... $ 0.44 $ 2.00 $ 1.56 $ 1.11
Effect of accounting changes:
Postemployment benefits............... -- -- (0.20) --
Postretirement benefits other than
pensions............................ -- -- -- (3.19)
Income taxes.......................... -- -- -- (0.17)
---------- ---------- ---------- ----------
Net earnings (loss) per share.... $ 0.44 $ 2.00 $ 1.36 $ (2.25)
========== ========== ========== ==========
</TABLE>
4
<PAGE> 28
SELECTED UNAUDITED PRO FORMA FINANCIAL DATA
The following selected unaudited pro forma income statement data for the
year ended December 31, 1994 and for the three months ended March 31, 1995 gives
effect to the acquisition of Clark as if it had occurred at the beginning of the
periods presented. The unaudited pro forma balance sheet data gives effect to
the acquisition of Clark as if it had occurred on March 31, 1995. The pro forma
data presented below should be read in conjunction with the Company's
Consolidated Financial Statements and Pro Forma Condensed Consolidated Financial
Information and accompanying assumptions incorporated by reference herein or
included elsewhere herein. Such data is not necessarily indicative of the
results of operations that would have been achieved had the transactions
described above occurred on the dates indicated or that may be expected to occur
in the future as a result of such transactions.
PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENTS(1)
<TABLE>
<CAPTION>
THREE MONTH PERIOD ENDED MARCH 31, 1995 YEAR ENDED DECEMBER 31, 1994
---------------------------------------------------- ----------------------------------------------------
INGERSOLL-RAND CLARK HISTORICAL INGERSOLL-RAND INGERSOLL-RAND CLARK HISTORICAL INGERSOLL-RAND
HISTORICAL AND PRO FORMA PRO FORMA HISTORICAL AND PRO FORMA PRO FORMA
AMOUNTS ADJUSTMENTS(2)(3) AMOUNTS AMOUNTS ADJUSTMENTS(2)(3) AMOUNTS
-------------- ------------------ -------------- -------------- ------------------ --------------
(THOUSANDS OF DOLLARS (EXCEPT RATIO AND PER SHARE DATA))
<S> <C> <C> <C> <C> <C> <C>
Net sales........... $ 1,185,585 $361,929 $ 1,547,514 $ 4,507,470 $1,182,008 $ 5,689,478
Cost of goods
sold.............. 893,111 292,831 1,185,942 3,377,049 958,208 4,335,257
Administrative,
selling and
service
engineering
expenses.......... 203,277 40,611 243,888 753,414 140,037 893,451
--------- ------- --------- --------- ------- ---------
Operating income.... 89,197 28,487 117,684 377,007 83,763 460,770
Interest expense.... (8,964) (23,793) (32,757) (43,751) (95,721) (139,472)
Other income
(expense), net.... (5,996) 2,743 (3,253) (14,734) 5,794 (8,940)
Dresser-Rand
income............ 300 -- 300 24,600 -- 24,600
Ingersoll-Dresser
Pump Company
minority
interest.......... (2,245) -- (2,245) (13,182) -- (13,182)
--------- ------- --------- --------- ------- ---------
Earnings before
taxes............. 72,292 7,437 79,729 329,940 (6,164) 323,776
Provision for income
taxes............. 26,025 4,753 30,778 118,800 6,231 125,031
--------- ------- --------- --------- ------- ---------
Earnings from
continuing
operations........ $ 46,267 $ 2,684 $ 48,951 $ 211,140 $ (12,395) $ 198,745
========= ======= ========= ========= ======= =========
Earnings per common
share from
continuing
operations........ $ 0.44 $ 0.02 $ 0.46 $ 2.00 $ (0.13) $ 1.87
========= ======= ========= ========= ======= =========
Average common
shares outstanding
for the period.... 105,566,461 999,616 106,566,077 105,458,116 999,616 106,457,732
Ratio of earnings to
fixed charges..... 5.54 2.97 5.45 2.80
</TABLE>
- ---------------
(1) Reference is made to the Company's Current Report on Form 8-K dated June 5,
1995, as amended, for the discussion of assumptions used in preparing the
pro forma presentation.
(2) Pro forma adjustments include both the Clark pro forma adjustments for Blaw
Knox Equipment Corporation, Club Car and VME Group N.V. ("VME"), where
appropriate, and the Company's pro forma adjustments for the acquisition of
Clark.
(3) Clark's historical pro forma income statement includes only the results of
its operations through the "Income from continuing operations" line. Results
of discontinued operations and gains on the sale of VME and CAPCO Automotive
Products Corporation have not been included in the pro forma information
presented.
5
<PAGE> 29
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
MARCH 31, 1995
------------------------------------------------------------------
INGERSOLL-RAND CLARK HISTORICAL AND INGERSOLL-RAND
HISTORICAL AMOUNTS PRO FORMA ADJUSTMENTS PRO FORMA AMOUNTS
------------------ --------------------- -----------------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents and
marketable securities.......... $ 249,718 $ (36,101) $ 213,617
Accounts and notes receivable..... 986,027 188,511 1,174,538
Inventories....................... 755,820 203,495 959,315
Prepaid expenses and deferred
taxes.......................... 169,063 41,964 211,027
--------- --------- ---------
Current assets................. 2,160,628 397,869 2,558,497
Investments and advances............ 268,853 8,957 277,810
Property, plant and equipment,
net............................... 980,638 259,470 1,240,108
Intangible assets, net.............. 130,356 1,152,150 1,282,506
Other assets and deferred taxes..... 258,138 104,812 362,950
--------- --------- ---------
Total Assets.............. $3,798,613 $ 1,923,258 $ 5,721,871
========= ========= =========
LIABILITIES AND EQUITY
Current Liabilities:
Loans payable..................... $ 214,357 $ 115,765(1) $ 330,122(1)
Accounts payable and accruals..... 930,834 298,336 1,229,170
--------- --------- ---------
Current liabilities............... 1,145,191 414,101 1,559,292
Long-term debt...................... 318,226 1,072,628(1) 1,390,854(1)
Other noncurrent liabilities........ 730,487 400,542 1,131,029
--------- --------- ---------
Total liabilities......... 2,193,904 1,887,271 4,081,175
--------- --------- ---------
Shareowners' equity:
Common stock...................... 218,529 -- 218,529
Capital in excess of par.......... 45,175 64,532(2) 109,707(2)
Retained earnings................. 1,430,404 -- 1,430,404
--------- --------- ---------
1,694,108 64,532 1,758,640
Less -- Treasury stock, at cost..... (53,035) 43,221(2) (9,814)(2)
-- LESOP...................... -- (71,766)(2) (71,766)(2)
-- Foreign currency
adjustments....................... (36,364) -- (36,364)
--------- --------- ---------
Shareowners' equity................. 1,604,709 35,987 1,640,696
--------- --------- ---------
Total liabilities and
shareowners' equity..... $3,798,613 $ 1,923,258 $ 5,721,871
========= ========= =========
</TABLE>
- ---------------
(1) On May 31, 1995, the Company completed the acquisition of Clark at a cost of
approximately $1.5 billion, including transaction expenses. On such date,
the Company borrowed $1.5 billion under a bank credit facility to finance
the acquisition. On June 1, 1995, the Company used excess cash funds to pay
down the credit facility to $1 billion. On June 9, 1995, the Company
completed the issuance of $150 million of 6.48% debentures due June 1, 2025
and $150 million of 7.20% debentures due June 1, 2025 and used the proceeds
thereof to pay down the credit facility to $700 million. The pro forma
amounts in the pro forma condensed consolidated balance sheet reflect the
refinancing of a portion of the debt used by the Company to finance the
acquisition under its five year credit facility, to a longer term
instrument.
(2) Reflects the assumed sale of the unallocated Clark shares in the Clark
Leveraged Employee Stock Ownership Plan ("LESOP") to the Company for $86 per
share and the assumed reinvestment of these funds by the LESOP after the
acquisition in 2,993,129 shares of Company treasury stock at an assumed
price of $36 per share. In addition, 1,993,513 of these shares will remain
as unallocated shares within the LESOP and accordingly, they are reflected
as a reduction of the Company's equity in this pro forma condensed
consolidated balance sheet.
6
<PAGE> 30
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company for each of the years in the five year period ended December 31,
1994 and for the three month period ended March 31, 1995. For the purpose of
computing the ratios of earnings to fixed charges, earnings consist of earnings
before income taxes and fixed charges, excluding the Company's proportionate
share in the undistributed earnings (losses) of less than fifty-percent-owned
affiliates (accounted for using the equity method), minority interests and
capitalized interest. Fixed charges consist of interest (including capitalized
interest), amortization of debt discount and expense and that portion
(one-third) of rental expense deemed to be representative of an interest factor
included therein.
<TABLE>
<CAPTION>
THREE MONTH
PERIOD ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
- ------------ --------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990
- ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
5.54(1) 5.45(1) 3.69(2) 2.45(3)(4) 3.42(3)(5) 3.89(3)
</TABLE>
- ---------------
(1) See "Selected Unaudited Pro Forma Financial Data" for information concerning
the pro forma impact of the Clark acquisition.
(2) The 1993 calculation includes the effect of the $5 million pretax charge
relating to the restructure of the Company's underground mining machinery
business. Excluding this amount, the ratio would have been 3.75.
(3) The Company's portion of the earnings and fixed charges of Dresser-Rand
Company (a joint venture formed effective January 1, 1987 with Dresser
Industries, Inc.) is included through September 30, 1992. Effective October
1, 1992, the Company's ownership interest in Dresser-Rand Company was
reduced from 50% to 49%.
(4) The 1992 calculation includes (i) the effect of the $10 million pretax
charge relating to the restructure of the Company's aerospace bearings
business and (ii) the full effect of the $70 million pretax restructure of
operations charge relating to Ingersoll-Dresser Pump Company. Excluding the
1992 restructure charges the ratio would have been 3.35.
(5) The 1991 ratio includes a $7.1 million net pretax benefit from a restructure
of operations. Excluding this amount the ratio would have been 3.34.
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which any Prospectus Supplement
may relate. The particular terms of the Debt Securities offered by any
Prospectus Supplement (the "Offered Debt Securities") and the extent, if any, to
which such general provisions do not apply to the Offered Debt Securities will
be described in the Prospectus Supplement relating to such Offered Debt
Securities.
The Debt Securities to which this Prospectus relates will be issued under
an Indenture dated as of August 1, 1986, as supplemented (as so supplemented,
the "Indenture"), between the Company and The Bank of New York, as Trustee (the
"Trustee"), which is filed as an exhibit to the Registration Statement. The
following summaries of certain provisions of the Indenture do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Indenture, including the definitions therein of
certain terms. Numerical references in parentheses below are to sections in the
Indenture. Whenever particular sections or defined terms of the Indenture are
referred to, such sections or defined terms are incorporated herein by
reference.
GENERAL
The Indenture does not limit the amount of Debt Securities which may be
issued thereunder and provides that Debt Securities may be issued thereunder
from time to time in one or more series up to the
7
<PAGE> 31
aggregate principal amount which may be authorized from time to time by the
Company. All Debt Securities will be unsecured and will rank pari passu with all
other unsecured unsubordinated indebtedness of the Company. Except as described
below, the Indenture does not limit the amount of other indebtedness or
securities which may be issued by the Company.
Reference is made to the Prospectus Supplement relating to the particular
series of Offered Debt Securities offered thereby for the following terms of
such series of Offered Debt Securities: (1) the designation, aggregate principal
amount and authorized denominations of such Offered Debt Securities; (2) the
purchase price of such Offered Debt Securities (expressed as a percentage of the
principal amount thereof); (3) the date or dates on which such Offered Debt
Securities will mature; (4) the rate or rates per annum, if any (which may be
fixed or variable), at which such Offered Debt Securities will bear interest or
the method by which such rate or rates will be determined; (5) the dates on
which such interest will be payable and the record dates for payment of
interest, if any; (6) the coin or currency in which payment of the principal of
(and premium, if any) or interest, if any, on such Offered Debt Securities will
be payable; (7) the terms of any mandatory or optional redemption (including any
sinking fund) or any obligation of the Company to repurchase Offered Debt
Securities; (8) whether such Offered Debt Securities are to be issued in whole
or in part in the form of one or more temporary or permanent global Debt
Securities ("Global Notes") and, if so, the identity of the depositary, if any,
for such Global Note or Notes; and (9) any other additional provisions or
specific terms which may be applicable to that series of Offered Debt
Securities.
Principal, premium, if any, and interest, if any, will be payable, and the
Debt Securities will be transferable or exchangeable, at the office or agency of
the Company maintained for such purposes in the Borough of Manhattan, The City
of New York, provided that payment of interest on any Debt Securities may, at
the option of the Company, be made by check mailed to the registered holders.
Interest, if any, will be payable on any interest payment date to the persons in
whose names the Debt Securities are registered at the close of business on the
record date with respect to such interest payment date. (Sections 202, 305, 307
and 1002)
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Debt Securities will be issued only in fully registered form without coupons
in denominations of $1,000 or any integral multiple thereof. No service charge
will be made for any registration of, transfer or exchange of the Debt
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. (Sections 302
and 305)
Some or all of the Debt Securities may be issued as discounted Debt
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 consequences and other special
considerations applicable to any such discounted Debt Securities will be
described in the Prospectus Supplement relating thereto.
GLOBAL NOTES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Notes that will be deposited with or on behalf of a
depositary located in the United States (a "U.S. Depositary") identified in the
Prospectus Supplement relating to such series.
The specific terms of the depositary arrangement with respect to any Debt
Securities of a series will be described in the Prospectus Supplement relating
to such series. The Company anticipates that the following provisions will apply
to all depositary arrangements.
Unless otherwise specified in an applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Note to be deposited with or
on behalf of a U.S. Depositary will be represented by a Global Note registered
in the name of such depositary or its nominee. Upon the issuance of a Global
Note in registered form, the U.S. Depositary for such Global Note will credit,
on its book-entry registration and transfer system, the respective principal
amounts of the Debt Securities represented by such Global
8
<PAGE> 32
Note to the accounts of institutions that have accounts with such depositary or
its nominee ("participants"). The accounts to be credited shall be designated by
the underwriters or agents of such Debt Securities or by the Company, if such
Debt Securities are offered and sold directly by the Company. Ownership of
beneficial interests in such Global Notes will be limited to participants or
persons that may hold interests through participants. Ownership of beneficial
interests by participants in such Global Notes will be shown on, and the
transfer of that ownership interest will be effected only through, records
maintained by the U.S. Depositary or its nominee for such Global Notes.
Ownership of beneficial interests in Global Notes by persons that hold such
beneficial interests through participants will be shown on, and the transfer of
that ownership interest within such participant will be effected only through,
records maintained by such participant. The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in a Global Note.
So long as the U.S. Depositary for a Global Note in registered form, or its
nominee, is the registered owner of such Global Note, such depositary or such
nominee, as the case may be, will be considered the sole owner or holder of the
Debt Securities represented by such Global Note for all purposes under the
Indenture governing such Debt Securities. Except as set forth below, owners of
beneficial interests in such Global Notes will not be entitled to have Debt
Securities of the series represented by such Global Notes registered in their
names, will not receive or be entitled to receive physical delivery of Debt
Securities of such series in definitive form and will not be considered the
owners or holders thereof under the Indenture.
Payment of principal of, premium, if any, and any interest on Debt
Securities registered in the name of or held by a U.S. Depositary or its nominee
will be made to the U.S. Depositary or its nominee, as the case may be, as the
registered owner or the holder of the Global Note representing such Debt
Securities. None of the Company, the Trustee, any Paying Agent or 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 in a Global Note for such Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Company expects that the U.S. Depositary for Debt Securities of a
series, upon receipt of any payment of principal, premium or interest in respect
of a permanent Global Note, will credit immediately participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Note as shown on the records of such
depositary. The Company also expects that payments by participants to owners of
beneficial interests in such Global Note 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.
A Global Note may not be transferred except as a whole by the U.S.
Depositary for such Global Note 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 of such depositary or a
nominee of such successor. If a U.S. Depositary for Debt Securities of a series
is at any time unwilling or unable to continue as a depositary and a successor
depositary is not appointed by the Company within ninety days, the Company will
issue Debt Securities in definitive registered form in exchange for the Global
Note or Notes representing such Debt Securities. In addition, the Company may at
any time and in its sole discretion determine not to have any Debt Securities in
registered form represented by one or more Global Notes and, in such event, will
issue Debt Securities in definitive form in exchange for the Global Note or
Notes representing such Debt Securities. In any such instance, an owner of a
beneficial interest in a Global Note will be entitled to physical delivery in
definitive form of Debt Securities of the series represented by such Global Note
equal in principal amount to such beneficial interest and to have such Debt
Securities registered in its name.
9
<PAGE> 33
CERTAIN COVENANTS OF THE COMPANY
Limitation on Liens. Unless otherwise indicated in the Prospectus
Supplement relating to a series of Debt Securities, the Company will not, and
will not permit any Restricted Subsidiary to, create, assume or guarantee any
indebtedness for money borrowed, secured by any mortgage, lien, pledge, charge
or other security interest or encumbrance (hereinafter referred to as a
"Mortgage" or "Mortgages") on any Principal Property of the Company or a
Restricted Subsidiary or on any shares or Funded Indebtedness of a Restricted
Subsidiary (whether such Principal Property, shares or Funded Indebtedness are
now owned or hereafter acquired) without, in any such case, effectively
providing concurrently with the creation, assumption or guaranteeing of such
indebtedness that the Debt Securities (together, if the Company shall so
determine, with any other indebtedness then or thereafter existing, created,
assumed or guaranteed by the Company or such Restricted Subsidiary ranking
equally with the Debt Securities) shall be secured equally and ratably with or
prior to such indebtedness. The Indenture excludes, however, from the foregoing
any indebtedness secured by a Mortgage (including any extension, renewal or
replacement of any Mortgage hereinafter specified or any indebtedness secured
thereby, without increase of the principal of such indebtedness) (i) on
property, shares or Funded Indebtedness of any corporation existing at the time
such corporation becomes a Restricted Subsidiary; (ii) on property existing at
the time of acquisition of such property, or to secure indebtedness incurred for
the purpose of financing the purchase price of such property or improvements or
construction thereon which indebtedness is incurred prior to or within 180 days
after the later of such acquisition, completion of such construction or the
commencement of commercial operation of such property; (iii) on property, shares
or Funded Indebtedness of a corporation existing at the time such corporation is
merged into or consolidated with the Company or a Restricted Subsidiary, or at
the time of a sale, lease or other disposition of the properties of a
corporation as an entirety or substantially as an entirety to the Company or a
Restricted Subsidiary; (iv) on property of a Restricted Subsidiary to secure
indebtedness of such Restricted Subsidiary to the Company or another Restricted
Subsidiary; (v) on property of the Company or a Restricted Subsidiary in favor
of the United States of America or any State thereof, or any department, agency
or instrumentality or political subdivision of the United States of America or
any State thereof, 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
constructing or improving the property subject to such Mortgage; or (vi)
existing at the date of the Indenture; provided, however, that any Mortgage
permitted by any of the foregoing clauses (i), (ii), (iii) and (v) shall not
extend to or cover any property of the Company or such Restricted Subsidiary, as
the case may be, other than the property specified in such clauses and
improvements thereto. (Section 1004) See also "Exempted Indebtedness" below.
Limitation on Sale and Leaseback Transactions. Unless otherwise indicated
in the Prospectus Supplement relating to a series of Debt Securities, sale and
leaseback transactions (which are defined in the Indenture to exclude leases
expiring within three years of making, leases between the Company and a
Restricted Subsidiary or between Restricted Subsidiaries and any lease of part
of a Principal Property, which has been sold, for use in connection with the
winding up or termination of the business conducted on such Principal Property)
by the Company or any Restricted Subsidiary of any Principal Property are
prohibited, unless (a) the Company would be entitled to incur indebtedness
secured by a Mortgage on such Principal Property (see "Limitations on Liens"
above) or (b) an amount equal to the fair value of the Principal Property so
leased (as determined by the Board of Directors of the Company) is applied
within 180 days to the retirement (otherwise than by payment at maturity or
pursuant to mandatory sinking funds) of Debt Securities or Funded Indebtedness
of the Company or any Restricted Subsidiary on a parity with the Debt Securities
or to purchase, improve or construct Principal Properties. (Section 1005) See
also "Exempted Indebtedness" below.
Exempted Indebtedness. Notwithstanding the limitations on Mortgages and
sale and leaseback transactions described above, the Company or any Restricted
Subsidiary may, in addition to amounts permitted under such restrictions,
create, assume or guarantee secured indebtedness or enter into sale and
leaseback transactions which would otherwise be prohibited, provided that at the
time of such event,
10
<PAGE> 34
and after giving effect thereto, the sum of such outstanding secured
indebtedness plus the Attributable Debt in respect of such sale and leaseback
transactions (other than sale and leaseback transactions entered into prior to
the date of the Indenture and sale and leaseback transactions whose proceeds
have been applied in accordance with clause (b) under "Limitation on Sale and
Leaseback Transactions") does not exceed 5% of the shareholders' equity in the
Company and its consolidated Subsidiaries. (Section 1004) "Attributable Debt"
means, as of any particular time, the then present value of the total net amount
of rent required to be paid under such leases during the remaining terms thereof
(excluding any renewal term unless the renewal is at the option of the lessor),
discounted at the actual interest factor included in such rent, or, if such
interest factor is not readily determinable, then at the rate of 8 3/8% per
annum. (Section 1004)
Restrictions Upon Merger and Sales of Assets. Upon any consolidation or
merger of the Company with or into any other corporation or any sale, conveyance
or lease of all or substantially all the property of the Company to any other
corporation, the corporation (if other than the Company) formed by such
consolidation, or into which the Company shall have been merged, or the
corporation which shall have acquired or leased such property (which corporation
shall be a solvent corporation organized under the laws of the United States of
America or a State thereof or the District of Columbia) shall expressly assume
the due and punctual payment of the principal of and premium, if any, and
interest, if any, on all of the Debt Securities. The Company will not so
consolidate or merge, or make any such sale, lease or other disposition, and the
Company will not permit any other corporation to merge into the Company, unless
immediately after giving effect thereto, the Company or such successor
corporation, as the case may be, will not be in default under the Indenture.
(Section 801) If, upon any such consolidation, merger, sale, conveyance or
lease, or upon any consolidation or merger of any Restricted Subsidiary, or upon
the sale, conveyance or lease of all or substantially all the property of any
Restricted Subsidiary to any other corporation, any Principal Property or any
shares or Funded Indebtedness of any Restricted Subsidiary would become subject
to any Mortgage, the Company will secure the due and punctual payment of the
principal of, premium, if any, and interest, if any, on the Debt Securities
(together with, if the Company shall so determine, any other indebtedness of or
guarantee by the Company or such Restricted Subsidiary ranking equally with the
Debt Securities) by a Mortgage, the lien of which will rank prior to the lien of
such Mortgage of such other corporation on all assets owned by the Company or
such Restricted Subsidiary. (Section 802)
Certain Definitions. The term "Principal Property" means any manufacturing
plant or other manufacturing facility of the Company or any Restricted
Subsidiary, which plant or facility is located within the United States of
America, except any such plant or facility which the Board of Directors by
resolution declares is not of material importance to the total business
conducted by the Company and its Restricted Subsidiaries. The term "Funded
Indebtedness" means indebtedness created, assumed or guaranteed by a person for
money borrowed which matures by its terms, or is renewable by the borrower to a
date, more than one year after the date of its original creation, assumption or
guarantee. The term "Restricted Subsidiary" means any Subsidiary which owns a
Principal Property excluding, however, any corporation the greater part of the
operating assets of which are located or the principal business of which is
carried on outside the United States of America. The term "Subsidiary" means any
corporation of which at least a majority of the outstanding stock having voting
power under ordinary circumstances to elect a majority of the board of directors
of said corporation shall at the time be owned by the Company or by the Company
and one or more Subsidiaries or by one or more Subsidiaries. (Section 101)
EVENTS OF DEFAULT
As to each series of Debt Securities, an Event of Default is defined in the
Indenture as being: default in payment of any interest or any sinking fund
payment on such series which continues for 30 days; default in payment of any
principal or premium, if any, on such series; default after written notice in
performance of any other covenant in the Indenture (other than a covenant
included solely for the benefit of Debt Securities of another series) which
continues for 90 days; certain events in bankruptcy, insolvency or
reorganization; or other Events of Default specified in or pursuant to a Board
Resolution or in
11
<PAGE> 35
a supplemental indenture. The Indenture provides that the Trustee may withhold
notice to the holders of Debt Securities of such series of any default (except
in payment of principal of or interest, if any, or premium, if any, on such
series or in payment of any sinking fund installment on such series) if the
Trustee considers it in the interest of such holders to do so. (Sections 501 and
602)
In case an Event of Default shall occur and be continuing with respect to
the Debt Securities of any series, the Trustee or the holders of not less than
25% in aggregate principal amount of the Debt Securities then outstanding of
that series may declare the principal of the Debt Securities of such series (or,
if the Debt Securities of that series were issued as discounted Debt Securities,
such portion of the principal as may be specified in the terms of that series)
to be due and payable. Any Event of Default with respect to the Debt Securities
of any series (except defaults in payment of principal or premium, if any, or
interest, if any, on the Debt Securities of such series) may be waived by the
holders of a majority in aggregate principal amount of the Debt Securities of
that series then outstanding. (Sections 502 and 513)
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 Trustee
is under no obligation to exercise any of the rights or powers under the
Indenture at the request, order or direction of any of the holders of Debt
Securities, unless such holders shall have offered to the Trustee reasonable
security or indemnity. (Section 603) Subject to such provisions for the
indemnification of the Trustee and certain limitations contained in the
Indenture, the holders of a majority in principal amount of the Debt 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 the
Debt Securities of such series. (Sections 512 and 603) The Company is required
annually to deliver to the Trustee an officers' certificate stating whether or
not the signers have knowledge of any default in performance by the Company of
the covenants described above. (Section 1007)
DEFEASANCE
The Indenture provides that the Company, at its option, (a) will be
discharged from any and all obligations with respect to any series of Debt
Securities (except for certain obligations which include registering the
transfer or exchange of the Debt Securities, replacing stolen, lost or mutilated
Debt Securities, maintaining payment agencies and holding monies for payment in
trust) or (b) need not comply with certain restrictive covenants of the
Indenture as to any series of Debt Securities (as described above under "Certain
Covenants of the Company--Limitation on Liens", "Limitation on Sale and
Leaseback Transactions" and the last sentence of "Restrictions Upon Merger and
Sales of Assets"), in each case upon the deposit with the Trustee (and in the
case of a discharge 91 days after such deposit), in trust, of money, or U.S.
Government Obligations, or a combination thereof, which, through the payment of
interest thereon and principal thereof in accordance with their terms, will
provide money, in an amount sufficient to pay all the principal (including any
mandatory sinking fund payments, if any) of, and interest, if any, on the Debt
Securities of such series on the dates such payments are due in accordance with
the terms of such Debt Securities to their stated maturities or to and including
a redemption date which has been irrevocably designated by the Company for
redemption of such Debt Securities. To exercise any such option, the Company is
required to meet certain conditions, including delivering to the Trustee an
opinion of counsel to the effect that the deposit and related defeasance would
not cause the holders of the Debt Securities to recognize income, gain or loss
for Federal income tax purposes and, in the case of a discharge pursuant to
clause (a), accompanied by a ruling of the United States Internal Revenue
Service ("IRS") to such effect or an opinion of counsel to such effect based
upon a ruling of the IRS. (Sections 403 and 1006)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than 66 2/3% in principal
amount of the outstanding Debt Securities of all series affected by such
modification (voting as one class), to modify the Indenture or the rights of the
holders of the Debt
12
<PAGE> 36
Securities, except that no such modification shall, without the consent of the
holder of each Debt Security so affected, (i) change the maturity of any Debt
Security, or reduce the rate or extend the time of payment of interest thereon,
or reduce the principal amount thereof (including, in the case of a discounted
Debt Security, the amount payable thereon in the event of acceleration) or any
redemption premium thereon, or change the place or medium of payment of such
Debt Security, or impair the right of any holder to institute suit for payment
thereof or (ii) reduce the percentage of Debt Securities, the consent of the
holders of which is required for any such modification or for certain waivers
under the Indenture. (Section 902)
CONCERNING THE TRUSTEE
The Company may from time to time maintain lines of credit and have other
customary banking relationships with the Trustee and its affiliated banks.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities to which this Prospectus relates
to or for resale to the public through one or more underwriters, acting alone or
in underwriting syndicates led by one or more managing underwriters, and also
may sell such Debt Securities directly to other purchasers or dealers or through
agents.
The distribution of Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed 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. Each Prospectus
Supplement will describe the method of distribution of the Offered Debt
Securities.
In connection with the sale of Debt Securities, such underwriters, dealers
and agents may receive compensation from the Company, or from purchasers of Debt
Securities for whom they may act as agents, in the form of discounts,
concessions or commissions. Underwriters, dealers and agents that participate in
the distribution of Debt Securities and, in certain cases, direct purchasers
from the Company, may be deemed to be "underwriters" and any discounts or
commissions received by them and any profit on the resale of Debt Securities by
them may be deemed to be underwriting discounts and commissions under the
Securities Act. Any such underwriters, dealers or agents will be identified and
any such compensation will be described in the Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of Debt Securities may be
entitled to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act. The place and time of delivery
for Offered Debt Securities in respect of which this Prospectus is delivered are
set forth in the accompanying Prospectus Supplement.
LEGAL MATTERS
Certain legal matters with respect to the Debt Securities will be passed
upon for the Company by Patricia Nachtigal, Vice President and General Counsel
of the Company, and for the underwriters, dealers or other agents, if any, by
Simpson Thacher & Bartlett (a partnership which includes professional
corporations), 425 Lexington Avenue, New York, New York 10017. Simpson Thacher &
Bartlett renders legal services to the Company on a regular basis.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
Ingersoll-Rand Company's Annual Report on Form 10-K for the year ended December
31, 1994 and the audited financial statements of Clark included in the Company's
Current Report on Form 8-K dated June 5, 1995, as amended, have been so
incorporated in reliance on the reports of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
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<PAGE> 37
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND
SUCH PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING 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 OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
PROSPECTUS SUPPLEMENT
Description of Notes................... S-3
Certain United States Federal Income
Tax Consequences..................... S-17
Supplemental Plan of Distribution...... S-22
PROSPECTUS
Available Information.................. 2
Incorporation of Certain Documents by
Reference............................ 2
The Company............................ 2
Use of Proceeds........................ 3
Selected Financial Information......... 4
Selected Unaudited Pro Forma Financial
Data................................. 5
Ratio of Earnings to Fixed Charges..... 7
Description of Debt Securities......... 7
Plan of Distribution................... 13
Legal Matters.......................... 13
Experts................................ 13
</TABLE>
$600,000,000
INGERSOLL-RAND
COMPANY
MEDIUM-TERM NOTES,
SERIES A,
DUE NINE MONTHS
OR MORE
FROM DATE OF ISSUE
SALOMON BROTHERS INC
MERRILL LYNCH & CO.
CHASE SECURITIES, INC.
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
PROSPECTUS SUPPLEMENT
DATED JULY 14, 1995
