<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-37019
PROSPECTUS SUPPLEMENT
(To Prospectus dated October 8, 1997)
$200,000,000
INGERSOLL-RAND COMPANY
6.443% DEBENTURES DUE 2027
The Debentures will mature on November 15, 2027. Interest on the Debentures is
payable semiannually on each November 15, and May 15, commencing on May 15,
1998. The Debentures will be redeemable as a whole or in part, at the option of
the Ingersoll-Rand Company (the "Company") at any time on or after November 15,
2007, at a redemption price equal to the greater of (i) 100% of the principal
amount of the Debentures to be redeemed and (ii) the sum of the present values
of the Remaining Scheduled Payments (as defined herein) discounted to the
redemption date on a semiannual basis at the Treasury Rate (as defined herein)
plus 10 basis points together in either case with accrued interest to the date
of redemption. See "Description of Debentures -- Optional Redemption". The
Debentures may be repaid in whole or in part at the option of the Holder thereof
on November 15, 2007 and each November 15 thereafter at their principal amount,
plus accrued and unpaid interest, if any, thereon to the applicable redemption
date. See "Description of Debentures -- Repayment at Option of Holder."
The Debentures will be represented by one or more global certificates (the
"Global Securities") registered in the name of a nominee of The Depository Trust
Company, as Depositary (the "Depositary"). Beneficial interests in the
Debentures will be shown on, and transfers thereof will be effected through,
records maintained by the participants in the Depositary. Except as described in
the Prospectus, Debentures in certificated form will not be issued in exchange
for the Global 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 SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
PRICE TO PROCEEDS TO
PUBLIC(1) UNDERWRITING COMPANY(1)(3)
DISCOUNT(2)
<S> <C> <C> <C>
Per Debenture......................... 100.00% .65% 99.35%
Total................................. $200,000,000 $1,300,000 $198,700,000
- ------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest from November 25, 1997 to the date of delivery.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deduction of expenses payable by the Company estimated at $200,000.
The Debentures are offered subject to receipt and acceptance by the
Underwriters, to prior sale and to the Underwriters' right to reject any order
in whole or in part and to withdraw, cancel or modify the offer without notice.
It is expected that delivery of the Global Securities will be made through the
book-entry facilities of the Depositary on or about November 25, 1997.
SALOMON BROTHERS INC
CHASE SECURITIES INC.
DEUTSCHE MORGAN GRENFELL
The Date of this Prospectus Supplement is November 20, 1997.
<PAGE> 2
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE DEBENTURES.
SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT IN CONNECTION WITH THE OFFERING,
MAY BID FOR AND PURCHASE DEBENTURES IN THE OPEN MARKET AND MAY IMPOSE PENALTY
BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING".
---------------------------
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the
Debentures offered hereby will be used to repay short-term commercial paper
indebtedness incurred in connection with the acquisition of Thermo King
Corporation ("Thermo King").
RECENT DEVELOPMENTS
On October 31, 1997, the Company completed the acquisition of Thermo King
in a cash transaction. Thermo King designs, manufactures and distributes
transport temperature control systems and service parts for a variety of mobile
applications, including trailers, truck bodies, sea-going containers, buses and
light rail cars.
DESCRIPTION OF DEBENTURES
GENERAL
The Debentures are to be issued under an Indenture dated August 1, 1986
(as supplemented, the "Indenture") between the Company and The Bank of New York,
as trustee (the "Trustee"). Provisions of the Indenture are more fully described
under "Description of Debt Securities" in the Prospectus to which reference is
made.
The Debentures will mature on November 15, 2027. Interest on the
Debentures will accrue from November 25, 1997, and will be payable semiannually,
on each November 15, and May 15, beginning May 15, 1998 ("Interest Payment
Date"), to the persons in whose names the Debentures are registered at the close
of business on the November 1 or May 1, prior to the payment date at the annual
rate set forth on the cover page of this Prospectus Supplement. Other than as
described under the caption "Optional Redemption", the Debentures may not be
redeemed prior to maturity and will not be subject to any sinking fund.
The Debentures will be issued only in book-entry form through the
facilities of the Depositary, and will be in denominations of $1,000 and
integral multiples thereof. Transfers or exchanges of beneficial interests in
Debentures in book-entry form may be effected only through a participating
member of the Depositary. See "Global Securities" below. As described in the
Prospectus, under certain circumstances Debentures may be issued in certificated
form in exchange for the Global Securities. In the event that Debentures are
issued in certificated form, such Debentures may be transferred or exchanged at
the offices described in the immediately following paragraph.
Payments on Debentures issued in book-entry form will be made to the
Depositary. In the event Debentures are issued in certificated form, principal
and interest, if any, will be payable, the transfer of the Debentures will be
registrable, and Debentures will be exchangeable for Debentures bearing
identical terms and provisions at the office of the Trustee in The City of New
York designated for such purpose, provided that payment of interest may be made
at the option of the Company by check mailed to the address of the person
entitled thereto as shown on the Securities Register.
The terms of the Debentures do not afford the holders special protection
in the event of a highly leveraged transaction.
OPTIONAL REDEMPTION
The Debentures will be redeemable as a whole or in part, at the option of
the Company at any time on or after November 15, 2007 and from time to time, on
not less than 30 or more than 60 days' notice mailed to registered Holders
thereof, at a redemption price equal to the greater of (i) 100% of the principal
amount of the Debentures to be redeemed or (ii) the sum of the present values of
the Remaining Scheduled Payments (as defined below) thereon (disregarding the
Holders' optional repayment right) discounted to the redemption date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at
the Treasury Rate (as defined below) plus 10 basis points, together in either
case with accrued interest on the principal amount being redeemed to the date of
redemption.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity (computed as of the
second business day immediately preceding such redemption date) of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
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"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Debentures to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Debentures. "Independent Investment Banker" means Salomon
Brothers Inc.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest of such Reference Treasury Dealer Quotations,
or (B) if the Trustee obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Quotations or (C) if the Trustee is able to
obtain only one Reference Treasury Dealer Quotation from the Reference Treasury
Dealers, such Quotation. "Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any redemption date, the average,
as determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer as of 5:00
p.m., New York City time on the third business day preceding such redemption
date.
"Reference Treasury Dealer" means each of Salomon Brothers Inc, Chase
Securities Inc. and Deutsche Morgan Grenfell Inc. and their respective
successors; provided, however, that if any of the foregoing shall cease to be a
primary U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another nationally recognized
investment banking firm that is a Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to each Debenture to be
redeemed, the remaining scheduled payments of the principal thereof and interest
thereon that would be due after the related redemption date but for such
redemption; provided, however, that, if such redemption date is not an Interest
Payment Date with respect to such Debenture, the amount of the next succeeding
scheduled interest payment thereon will be reduced by the amount of interest
accrued thereon to such redemption date.
From and after notice has been given as provided in the Indenture, if
funds for the redemption of any Debentures called for redemption shall have been
made available on such redemption date, such Debentures will cease to bear
interest on the date fixed for such redemption specified in such notice, and the
only right of Holders of the Debentures will be to receive payment of the
redemption price.
REPAYMENT AT OPTION OF HOLDER
The Debentures may be repaid in whole or in part in increments of $1,000,
at the option of the Holder thereof, on November 15, 2007 and each November 15
thereafter at their principal amount plus accrued and unpaid interest to the
repayment date (the "Repayment Amount"). If a repayment date is not a business
day, the Company will pay the Repayment Amount for Debentures with respect to
which it has received the required notice (as hereinafter described) on the next
succeeding business day.
In order for a Holder to be repaid, the Company must receive at the office
of the Trustee's New York facility, at 101 Barclay Street, 21st Floor, New York,
New York 10286, not less than 30 or more than 60 days prior to the repayment
date (the "Election Period") (i) a Debenture with the form entitled "Option to
Elect Repayment" on the reverse side of the Debenture duly completed, or (ii) a
facsimile transmission or letter from a member of a national securities exchange
or the NASD or a commercial bank or a trust company in the United States of
America setting forth the name of the Holder of the Debenture, the principal
amount of the Debenture, the amount of the Debenture to be repaid, a statement
that the option to elect repayment is being exercised thereby and a guarantee
that the Debenture to be repaid with the entitled "Option to Elect Repayment "
on the reverse of the Debenture duly completed will be received by the Company
not later than five business days after the date of such facsimile transmission
or letter and such Debenture and form duly completed are received by the Company
by such fifth business day. Any such election shall be irrevocable. All
questions as to the validity, eligibility (including time of receipt) and
acceptance of any Debenture for repayment will be determined by the Company,
whose determination will be final and binding.
GLOBAL SECURITIES
The Debentures will be issued in whole or in part in the form of one or
more Global Securities deposited with, or on behalf of the Depositary, and
registered in the name of a nominee of the Depositary. Except under the limited
circumstances described in the Prospectus under "Description of Debt
Securities--Global Notes," owners of beneficial interests in the Global
Securities
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will not be entitled to physical delivery of Debentures in certificated form.
Global Securities will not be entitled to physical delivery of Debentures in
certificated form. Global Securities may not be transferred except as a whole by
the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or
any nominee to a successor of the Depositary or a nominee of such successor.
The Depositary has advised the Company and the Underwriters as follows:
The Depositary is a limited-purpose trust company organized under the Banking
Law of the State of New York, 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. The Depositary was created to hold
securities of its participants and to facilitate the clearance and settlement of
securities transactions among its participants in such securities through
electronic computerized book-entry changes in accounts of the participants,
thereby eliminating the need for physical movement of securities certificates.
Direct participants include securities brokers and dealers (including the
Underwriters), banks, trust companies, clearing corporations, and certain other
organizations ("Direct Participants"). The Depositary is owned by a number of
its Direct Participants and by the New York Stock Exchange, Inc., the American
Stock Exchange, Inc. and the National Association of Securities Dealers, Inc.
Access to the Depositary's book-entry system is also available to others, such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Direct Participant, either directly or indirectly.
Persons who are not participants may beneficially own securities held by the
Depositary only through Direct Participants. The rules applicable to the
Depositary and its participants are on file with the Securities and Exchange
Commission.
UNDERWRITING
Subject to the terms and conditions contained in an Underwriting Agreement
dated the date hereof, the Company has agreed to sell to each of the
Underwriters named below and each of the Underwriters has severally agreed to
purchase, the principal amount of Debentures set forth opposite its name below:
<TABLE>
<CAPTION>
Principal Amount
Underwriter of Debentures
----------- ----------------
<S> <C>
Salomon Brothers Inc.............................................$66,800,000
Chase Securities Inc..............................................66,600,000
Deutsche Morgan Grenfell Inc......................................66,600,000
------------
Total...................$200,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligation of the
Underwriters to pay for and accept delivery of the Debentures is subject to the
approval of certain legal matters by its counsel and to certain other
conditions. The Underwriters are obligated to take and pay for all the
Debentures if any are taken.
The Underwriters have advised the Company that they propose to offer the
Debentures directly to the public at the public offering price set forth on the
cover page hereof and to certain dealers at a price that represents a concession
not in excess of .40% of the principal amount of the Debentures. The
Underwriters may allow, and such dealers may reallow, a concession not in excess
of .25% of the principal amount of the Debentures to certain other dealers.
After the initial public offering, the public offering price and the concession
and discount to dealers may be changed.
The Company has agreed to indemnify the Underwriters against certain
liabilities including liabilities under the Securities Act of 1933, as amended,
or contribute to payments the Underwriters may be required to make in respect
thereof.
The Company does not intend to apply for listing of the Debentures on a
national securities exchange but has been advised by the Underwriters that they
presently intend to make a market in the Debentures, as permitted by applicable
laws and regulations. The Underwriters are not obligated, however, to make a
market in the Debentures and any such market making may be discontinued at any
time at the sole discretion of the Underwriters. Accordingly, no assurance can
be given as to the liquidity of or trading markets for the Debentures.
In connection with the sale of the Debentures, the Underwriters may engage
in transactions that stabilize, maintain or otherwise affect the price of the
Debentures. Specifically, the Underwriters may overallot the offering, creating
a syndicate short position. In addition, the Underwriters may bid for, and
purchase, the Debentures in the open market to cover syndicate short positions
or to stabilize the price of the Debentures, and in connection therewith impose
a penalty bid on certain Underwriters and selling group members. This means that
if the Underwriters purchase Debentures in the open market to reduce any short
position or to stabilize the price of the Debentures, they may reclaim the
amount of the selling concession from the Underwriter or Underwriters who sold
those Debentures as part of the offering. Any of these activities
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may stabilize or maintain the market price of the Debentures above independent
market levels. The Underwriters will not be required to engage in these
activities, and may end any of these activities at any time.
The Underwriters receive customary fees for ordinary brokerage
transactions with the Company and its affiliates. The Underwriters and their
affiliates have performed investment and commercial banking services in the
ordinary course of their respective businesses for the Company and its
affiliates in the past, for which they have received customary compensation, and
may continue to do so in the future.
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PROSPECTUS
$1,050,000,000
INGERSOLL-RAND COMPANY
COMMON STOCK
PREFERENCE STOCK
DEBT SECURITIES
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
INGERSOLL-RAND FINANCING I
INGERSOLL-RAND FINANCING II
TRUST PREFERRED SECURITIES, GUARANTEED
TO THE EXTENT SET FORTH HEREIN BY
INGERSOLL-RAND COMPANY
---------------------------
Ingersoll-Rand Company ("Ingersoll-Rand" or the "Company") from time to
time may sell, up to an aggregate initial offering price of $1,050,000,000, in
each case on terms to be determined by market conditions at the time of sale,
its (i) common stock, $2 par value per share (the "Common Stock"), (ii)
preference stock, without par value, in one or more series (the "Preference
Stock"), (iii) debt securities in one or more series, which may be either senior
(the "Senior Debt Securities"), senior subordinated (the "Senior Subordinated
Debt Securities") or junior subordinated (the "Junior Subordinated Debt
Securities", and together with the Senior Debt Securities and the Senior
Subordinated Debt Securities, the "Debt Securities"), (iv) Stock Purchase
Contracts (the "Stock Purchase Contracts") to purchase Common Stock and (v)
Stock Purchase Units (the "Stock Purchase Units"), each representing ownership
of a Stock Purchase Contract and Debt Securities or Trust Preferred Securities
(as defined) or debt obligations of third parties, including U.S. Treasury
Securities, securing the holder's obligation to purchase the Common Stock under
the Stock Purchase Contract.
Ingersoll-Rand Financing I and Ingersoll-Rand Financing II, each of which
is a statutory business trust created under the laws of the State of Delaware
(each a "Trust" or an "Ingersoll-Rand Trust"), the Trust Common Securities (as
defined herein) of which will be wholly-owned by the Company at the time of
issuance of any Trust Preferred Securities, may offer preferred securities
representing undivided beneficial ownership interests in the assets of the
respective Ingersoll-Rand Trust (the "Trust Preferred Securities"). The payment
of periodic cash distributions with respect to Trust Preferred Securities of
each of the Ingersoll-Rand Trusts out of moneys held by each of the
Ingersoll-Rand Trusts, and payments on liquidation, redemption or otherwise with
respect to such Trust Preferred Securities, will be guaranteed by the Company to
the extent described herein (each a "Trust Preferred Guarantee"). See
"Description of Trust Preferred Guarantees." The Company's obligations under the
Trust Preferred Guarantees are subordinate and junior in right of payment to all
other liabilities of the Company and rank pari passu with the most senior
Preference Stock, if any, issued from time to time by the Company. In the event
an Ingersoll-Rand Trust issues Trust Preferred Securities or Trust Common
Securities, the proceeds to such Ingersoll-Rand Trust from such offering will be
invested in Junior Subordinated Debt Securities (the "Corresponding Junior
Subordinated Debt Securities"), which will be issued and sold in one or more
series by the Company to such Ingersoll-Rand Trust or the trustee of such trust
and which will have terms corresponding to the terms of the related Trust
Preferred Securities (the "Related Trust Preferred Securities"). The
Corresponding Junior Subordinated Debt Securities purchased by an Ingersoll-Rand
Trust may be subsequently distributed pro rata to holders of the Related Trust
Preferred Securities or Trust Common Securities in connection with the
dissolution of such Ingersoll-Rand Trust upon the occurrence of certain events
as may be described in the related Prospectus Supplement. The Trust Preferred
Securities, together with the Common Stock, the Preference Stock, the Debt
Securities, the Stock Purchase Contracts, the Stock Purchase Units and the Trust
Preferred Guarantees, are collectively referred to as the "Securities."
With respect to each series of Securities, a supplement to this Prospectus
will be delivered (a "Prospectus Supplement") together with this Prospectus
setting forth the terms of such 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, whether the Debt Securities will be subordinated, 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
Securities on a securities exchange and the other terms in connection with the
offering and sale of such Securities. With respect to the Stock Purchase
Contracts, the related Prospectus Supplement will set forth, among other things,
the designation and number of shares of Common Stock issuable thereunder, the
purchase price of Common Stock, the date or dates on which the Common Stock is
required to be purchased by the holders of the Stock Purchase Contracts, and any
periodic payments required to be made by the Company to the holders of the Stock
Purchase Contracts or vice-versa. With respect to the Stock Purchase Units, the
related Prospectus Supplement will set forth, among other things, the specific
terms of
<PAGE> 7
the Stock Purchase Contracts and any Debt Securities or Trust Preferred
Securities or debt obligations of third parties securing the holder's obligation
to purchase the Common Stock under the Stock Purchase Contracts. With respect to
the Trust Preferred Securities, the related Prospectus Supplement will set
forth, among other things, the specific designation, rights, preferences,
privileges and restrictions thereof, including distribution rate or rates (or
method of ascertaining the same), distribution payment dates, voting rights,
liquidation preference, and any conversion, exchange, redemption or sinking fund
provisions, the terms upon which the proceeds of the sale of the Trust Preferred
Securities will be used to purchase a specific series of Junior Subordinated
Debt Securities of the Company and the terms upon which the obligations of the
Ingersoll-Rand Trust to make periodic cash distributions on the Trust Preferred
Securities or make payments upon liquidation or dissolution of the
Ingersoll-Rand Trust or upon redemption of the Trust Preferred Securities, to
the extent funds are available therefor, shall be unconditionally guaranteed by
Ingersoll-Rand.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTA-
TION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------------
The 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 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 or any Ingersoll-Rand Trust from
sales of Securities will be set forth in the related Prospectus Supplement and
will be the purchase price of such 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 October 8, 1997.
<PAGE> 8
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.
No separate financial statements of the Ingersoll-Rand Trusts have been
included herein. The Company does not consider that such financial statements
would be material to holders of the Securities because: (i) the Company, a
reporting company under the 1934 Act, owns, directly or indirectly, all of the
voting securities of each Ingersoll-Rand Trust, (ii) neither Ingersoll-Rand
Trust has any independent operations but exists for the sole purpose of issuing
securities representing undivided beneficial interests in the assets of the
Ingersoll-Rand Trusts and investing the proceeds thereof in Subordinated Debt
Securities and (iii) the obligations of each Ingersoll-Rand Trust to make
periodic cash payments on Trust Preferred Securities and payments upon
liquidation or dissolution of such Ingersoll-Rand Trust or upon redemption of
the Trust Preferred Securities, to the extent funds are available therefor, are
unconditionally guaranteed by the Company. See "Description of Trust Preferred
Guarantees" and "Description of Debt Securities."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997, the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997 and the Company's Current Report on Form 8-K dated
September 17, 1997 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 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 was organized in 1905 under the laws of the State of New
Jersey as a consolidation of Ingersoll-Sergeant Drill Company and the Rand Drill
Company, whose businesses were established in the early 1870s. Over the years,
the Company has supplemented its original business, which consisted primarily of
the manufacture and sale of rock drilling equipment, with additional products
which have been developed internally or obtained through acquisition.
Ingersoll-Rand manufactures and sells primarily non-electrical machinery
and equipment, including air compression systems, air tools, pumps, antifriction
bearings, construction equipment, architectural hardware and drilling equipment.
The products
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<PAGE> 9
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.
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.
Pursuant to a Stock Purchase Agreement dated as of September 12, 1997, the
Company has agreed to purchase from Westinghouse Electric Corporation all the
outstanding capital stock of Thermo King Corporation ("Thermo King"), together
with other equity interests and assets related to Thermo King, for an aggregate
purchase price of $2.56 billion. Thermo King designs, manufactures and
distributes transport temperature control systems and service parts for a
variety of mobile applications, including trailers, truck bodies, sea-going
containers, buses and light rail cars.
THE INGERSOLL-RAND TRUSTS
Each of Ingersoll-Rand Financing I and Ingersoll-Rand Financing II is a
statutory business trust created under Delaware law pursuant to (i) a separate
trust agreement executed by the Company, as Depositor for such trust (the
"Depositor"), and the trustees of such trust and (ii) the filing of a
certificate of trust with the Secretary of State of the State of Delaware. The
trust agreements will be amended and restated in their entirety (each as so
amended and restated, a "Trust Agreement") substantially in the form filed as an
exhibit to the Registration Statement of which this Prospectus is a part and
will be qualified as Indentures under the Trust Indenture Act of 1939. Each
Ingersoll-Rand Trust exists for the exclusive purposes of (i) issuing the Trust
Preferred Securities and common securities representing undivided beneficial
interests in the assets of the Trust (the "Trust Common Securities" and,
together with the Trust Preferred Securities, the "Trust Securities"), (ii)
investing the proceeds received by the Ingersoll-Rand Trust from the sale of the
Trust Securities in Corresponding Junior Subordinated Debt Securities and (iii)
engaging in only those other activities necessary or incidental thereto. All of
the Trust Common Securities will be directly or indirectly owned by the Company.
The Trust Common Securities will rank pari passu, and payments will be made
thereon pro rata, with the Trust Preferred Securities, except that, upon an
event of default under a Trust Agreement, the rights of the holders of the Trust
Common Securities to payment in respect of distributions and payments upon
liquidation, redemption and otherwise will be subordinated to the rights of the
holders of the Trust Preferred Securities. The Company will directly or
indirectly acquire Trust Common Securities in an aggregate liquidation amount
equal to 3% of the total capital of each Ingersoll-Rand Trust. Each
Ingersoll-Rand Trust has a term of approximately 55 years but may dissolve
earlier, as provided in each Trust Agreement. Each Ingersoll-Rand Trust's
business and affairs will be conducted by its trustees, including a Property
Trustee (as defined below), a Delaware Trustee (as defined below) and three
individual trustees (the "Administrative Trustees") who are employees or
officers of or affiliated with the Company (collectively, the "Ingersoll-Rand
Trustees") appointed by the Company as the direct or indirect holder of all the
Trust Common Securities. The holder of the Trust Common Securities of a Trust,
or the holders of a majority in liquidation amount of the Related Trust
Preferred Securities if an event of default under the Trust Agreement for such
Trust has occurred and is continuing, will be entitled to appoint, remove or
replace the Property Trustee and/or the Delaware Trustee for such Trust. In no
event will the holders of the Trust Preferred Securities have the right to vote
to appoint, remove or replace the Administrative Trustees; such voting rights
are vested exclusively in the holder of the Trust Common Securities. The duties
and obligations of the Ingersoll-Rand Trustees shall be governed by the Trust
Agreement of such Ingersoll-Rand Trust. One Ingersoll-Rand Trustee of each
Ingersoll-Rand Trust will be a financial institution that is not affiliated with
the Company and has combined capital and surplus of not less than $50,000,000,
which shall act as property trustee and as indenture trustee for the purposes of
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
pursuant to the terms set forth in the related Prospectus Supplement (the
"Property Trustee"). In addition, unless the Property Trustee maintains a
principal place of business in the State of Delaware and otherwise meets the
requirements of applicable law, one Ingersoll-Rand Trustee of each
Ingersoll-Rand Trust will have a principal place of business or reside in the
State of Delaware (the "Delaware Trustee"). The Company will pay all fees and
expenses related to the Ingersoll-Rand Trusts and the offering of the Trust
Securities.
The office of the Delaware Trustee for each Ingersoll-Rand Trust is c/o
The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801.
The address for each Ingersoll-Rand Trust is c/o the Company, the Depositor of
each Trust, at 200 Chestnut Ridge Road, Woodcliff Lake, New Jersey 07675.
3
<PAGE> 10
USE OF PROCEEDS
The Company intends to apply the net proceeds from the sale of the
Securities to which this Prospectus relates to its general funds to be used for
capital expenditures, acquisitions and other general corporate purposes,
including, without limitation, the acquisition of Thermo King. 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.
SELECTED FINANCIAL DATA
The following table sets forth selected financial data of the Company for
each of the years in the five year period ended December 31, 1996 and the six
month periods ended June 30, 1997 and 1996. Information on a per share basis is
presented as reported and restated to reflect the 3-for-2 stock split which was
effected in the form of a stock dividend, declared on August 6, 1997 and paid on
September 2, 1997 to shareholders of record on August 19, 1997:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEARS ENDED DECEMBER 31,
----------------------- ------------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
--------- --------- ----------- --------- --------- --------- ---------
(IN MILLIONS OF DOLLARS, EXCEPT PER SHARE DATA)
(UNAUDITED)
----------------------- ------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales $ 3,476.8 $ 3,366.7 $ 6,702.9 $ 5,729.0 $ 4,507.5 $ 4,021.1 $ 3,783.8
Net earnings (loss) 189.4 166.8 358.0 270.3 211.1 142.5 (234.4)
Total assets 5,903.7 5,695.8 5,621.6 5,563.3 3,596.9 3,375.3 3,387.6
Long-term debt 1,164.9 1,303.7 1,163.8 1,304.4 315.9 314.1 355.6
Shareholders' equity 2,231.8 1,927.5 2,090.8 1,795.5 1,531.3 1,349.8 1,293.4
Earnings (loss) per common share (1) 1.75 1.56 3.33 2.55 2.00 1.36 (2.25)
Earnings (loss) per common share (2) 1.16 1.04 2.22 1.70 1.33 0.91 (1.50)
Dividends per common share (1) 0.41 0.37 0.78 0.74 0.72 0.70 0.69
Dividends per common share (2) 0.27 0.25 0.52 0.49 0.48 0.47 0.46
</TABLE>
- ------------------
(1) Prior to the 3-for-2 stock split.
(2) Restated to give effect to the 3-for-2 stock split.
4
<PAGE> 11
RATIOS 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,
1996 and for the six month period ended June 30, 1997. 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>
SIX MONTH
PERIOD ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
------------ ----------------------------------------------------
1997 1996 1995 1994 1993 1992
------------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
5.26 5.01(1) 4.51 5.46 3.69(2) 2.45(3)
</TABLE>
- ------------------
(1) The 1996 calculation includes the effect of a $42.4 million pretax charge
mainly relating to the realignment of the Company's foreign operations.
The 1996 calculation also includes $55 million of pretax income relating
to the sales of the Process Systems Group. Excluding these amounts, the
ratio would have been 4.93.
(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%. 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.
DESCRIPTION OF CAPITAL STOCK
The following description of the Company's capital stock summarizes
certain provisions of the Company's Restated Certificate of Incorporation (as it
may be amended, the "Certificate of Incorporation"), the Rights Agreement, as
amended, between the Company and The Bank of New York, as Rights Agent (the
"Rights Agreement") and the New Jersey Business Corporation Act (the "NJBCA")
and is subject to and is qualified in its entirety by reference to such
documents and provisions.
GENERAL
The authorized capital stock of the Company consists of 600,000,000 shares
of Common Stock and 10,000,000 shares of preference stock, of which 563,000
shares of Series A Preference Stock (the "Series A Preference Stock") have been
reserved for issuance. At June 30, 1997, no shares of the authorized Preference
Stock were issued and outstanding and 110,550,296 shares of the authorized
Common Stock were issued and outstanding. The Company also had outstanding, as
of such date, 55,275,148 Series A Preference Stock Purchase Rights (the
"Rights"). On August 6, 1997, the Board of Directors of the Company declared a
three-for-two stock split which was paid on September 2, 1997 to shareholders of
record on August 19, 1997. See "--Rights Plan."
COMMON STOCK
Dividends. Subject to the rights of holders of Preference Stock, the Board
of Directors may, in its discretion, out of funds legally available for the
payment of dividends and at such times and in such manner as determined by the
Board of Directors, declare and pay dividends on the Common Stock.
Liquidation, Dissolution and Winding Up. In the event of any liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary,
after payment in full has been made to the holders of Preference Stock of the
amounts to which they are respectively entitled or sufficient sums have been set
apart for the payment thereof, the holders of Common Stock shall be entitled to
receive ratably any and all assets remaining to be paid or distributed, and the
holders of Preference Stock shall not be entitled to share therein.
5
<PAGE> 12
Voting. Except as otherwise expressly provided in the Certificate of
Incorporation or as may be required by law, the holders of Common Stock of the
Company shall be entitled at all meetings of stockholders to one vote for each
share of such stock held by them respectively and shall vote together with the
holders of Preference Stock as one class. At all elections of directors, each
holder of Common Stock shall be entitled to as many votes as shall equal the
number of votes which such holder would be entitled to cast, multiplied by the
number of directors to be elected, and such holder may cast all such votes for a
single director, or may distribute them, among the number to be voted for or any
two or more of such directors.
Preemptive Rights. No holder of shares of Common Stock shall have any
preemptive or preferential rights to subscribe to or purchase any shares of any
class or series of stock of the Company, now or hereafter authorized, or any
series convertible into, or warrants or other evidences of optional rights to
purchase or subscribe to, shares of any class or series of the Company, now or
hereafter authorized.
All the outstanding shares of Common Stock are fully paid and
non-assessable.
The registrar and transfer agent for the Common Stock is The Bank of New
York.
PREFERENCE STOCK
The Certificate of Incorporation provides for Preference Stock which may
be issued, from time to time, in one or more series with certain rights and
limitations as may be fixed by the Board of Directors of the Company. The
Company has no present plan to issue any Preference Stock other than in
accordance with the Rights Plan (as defined herein). However, the Board of
Directors of the Company, without stockholder approval, may issue Preference
Stock that could adversely affect the voting power of holders of the Common
Stock. Issuance of Preference Stock could be utilized, under certain
circumstances, in an attempt to prevent a takeover of the Company.
The following description sets forth certain general terms and provisions
of the Preference Stock to which a Prospectus Supplement may relate. Certain
terms of a series of the Preference Stock offered by a Prospectus Supplement
will be described in such Prospectus Supplement. If so indicated in the
Prospectus Supplement and if permitted by the Certificate of Incorporation and
by law, the terms of any such series may differ from the terms set forth below.
The following description of the Preference Stock summarizes certain provisions
of the Certificate of Incorporation and is subject to and qualified in its
entirety by reference to the Certificate of Incorporation and the Certificate of
Amendment thereto which will be filed with the Commission promptly after any
offering of such series of Preference Stock. The following description, together
with any description of the terms of a series of Preference Stock set forth in
the related Prospectus Supplement, summarizes all of the material terms of such
series of Preference Stock.
General. The Board of Directors may cause Preference Stock to be issued
from time to time in one or more series and is expressly authorized to fix:
(i) the distinctive designation of such series and the number of
shares which shall constitute such series, which number may be increased
(except as otherwise provided by the Board of Directors in creating such
series) or decreased (but not below the number of shares thereof then
outstanding) from time to time by the Board of Directors;
(ii) the rate of dividends payable on shares of such series and the
date or dates from which dividends shall accumulate;
(iii) the terms, if any, on which shares of such series may be
redeemed, including, without limitation, the redemption price or prices
for such series, which may consist of a redemption price or scale of
redemption prices applicable only to redemption in connection with a
sinking fund (which term as used herein shall include any fund or
requirement for the periodic purchase or redemption of shares), and the
same or a different redemption price or scale of redemption prices
applicable to any other redemption;
(iv) the terms and amount of any sinking fund provided for the
purchase or redemption of shares of such series;
(v) the amount or amounts which shall be paid to the holders of
shares of such series in case of liquidation, dissolution or winding up of
the Company, whether voluntary or involuntary;
6
<PAGE> 13
(vi) the terms, if any, upon which the holders of shares of such
series may convert shares thereof into stock of any other class or classes
or of any one or more series of the same class or of another class or
classes; and
(vii) such other rights, preferences and limitations as may be
permitted to be fixed by the Board of Directors of the Company under the
laws of the State of New Jersey as in effect at the time of the creation
of such series.
All shares of Preference Stock, irrespective of series, shall be of equal
rank, and shall be identical in all respects except for the terms fixed by the
Board of Directors as permitted in the Certificate of Incorporation. The Board
of Directors is authorized to change the designation, rights, preferences and
limitations of any series of Preference Stock theretofore established, no shares
of which have been issued. The Board of Directors is authorized to amend the
Certificate of Incorporation to set forth the designation, number of shares,
rights, preferences and limitations of any series of Preference Stock fixed by
the Board of Directors, or to reflect any change therein made by the Board of
Directors, as permitted in the Certificate of Incorporation.
Dividends. The holders of Preference Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the payment of dividends, cumulative dividends in cash at the
annual rate for each particular series theretofore fixed by the Board of
Directors, payable in respect of each series on the date or dates which shall be
fixed by the Board of Directors with respect to each particular series.
If at any time there are two or more series of Preference Stock
outstanding, any dividend paid upon shares of Preference Stock in an amount less
than all dividends accrued and unpaid on all outstanding shares of Preference
Stock shall be paid ratably among all series of Preference Stock in proportion
to the full amount of dividends accrued and unpaid on each such series.
So long as any Preference Stock is outstanding, no dividend shall be paid
or declared, nor any distribution be made, on the Common Stock or any other
stock of the Company ranking junior to the Preference Stock in the payment of
dividends (other than a dividend payable in stock of junior rank), nor shall any
shares of Common Stock or any other stock of junior rank be acquired for
consideration by the Company or by any subsidiary except in exchange for shares
of stock of junior rank unless (i) full dividends on the Preference Stock for
all past dividend periods shall have been paid or shall have been declared and a
sufficient sum set apart for the payment thereof and (ii) all obligations of the
Company, if any, with respect to the redemption or purchase of shares of
Preference Stock in accordance with the requirements of any sinking fund have
been met. Subject to the foregoing provisions, such dividends (payable in cash,
stock or otherwise) as may be determined from time to time by the Board of
Directors may be declared and paid on the Common Stock or any other stock of
junior rank out of the remaining funds of the Company legally available for the
payment of dividends; and the Preference Stock shall not be entitled to
participate in any such dividends, whether payable in cash, stock or otherwise.
Redemption. If so provided by the Board of Directors, the Company, at the
option of the Board of Directors, or in accordance with the requirements of any
sinking fund for the Preference Stock or any series thereof, may redeem the
whole or any part of the Preference Stock at any time outstanding, or the whole
or any part of any series thereof, at such time or times and from time to time
and at such redemption price or prices as may be fixed by the Board of Directors
pursuant to the Certificate of Incorporation, together in each case with an
amount equal to all unpaid dividends accrued thereon to the date fixed for such
redemption, and otherwise upon the terms and conditions fixed by the Board of
Directors for any such redemption; provided, however, that no optional
redemption of less than all of the Preference Stock shall take place unless (i)
full dividends on the Preference Stock for all past dividend periods shall have
been paid or declared and a sufficient sum set apart for the payment thereof and
(ii) all obligations of the Company, if any, with respect to the redemption or
purchase of shares of Preference Stock in accordance with the requirements of
any sinking fund have been met. If at any time there are two or more series of
Preference Stock outstanding, any amount expended in purchasing or redeeming
shares of Preference Stock pursuant to the provisions of sinking funds therefor
which is less than the amount then required to be so expended under all such
funds shall be expended ratably among all series of Preference Stock in
proportion to the full amount of expenditures of such funds then required in
respect of each such series.
Liquidation, Dissolution and Winding Up. In the event of any liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary, the
holders of each series of Preference Stock then outstanding shall be entitled to
receive out of the assets of the Company, before any distribution or payment
shall be made to the holders of the Common Stock or any other stock of Company
ranking junior to the Preference Stock with respect to the distribution of
assets, the amount determined by the Board of Directors in creating such series,
plus in each case an amount equal to all unpaid dividends accrued thereon to the
date fixed for such payment to the holders of the Preference Stock. If upon any
such liquidation, dissolution or winding up, two or more series of Preference
Stock are outstanding, any distribution to holders of Preference Stock in an
aggregate amount less than the total
7
<PAGE> 14
payable with respect to all outstanding Preference Stock shall be made ratably
among all series of Preference Stock in proportion to the full amount payable
upon such liquidation, dissolution or winding up in respect of each such series.
Voting. The holders of Preference Stock shall have the voting rights set
forth below:
(a) Except as otherwise expressly provided in the Certificate of
Incorporation or as may be required by law, the holders of Preference Stock
shall be entitled at all meetings of stockholders to three votes for each five
shares of such stock held by them respectively (a holder of less than five
shares being entitled to no vote) and the holders of all series of Preference
Stock shall vote together with the holders of Common Stock as one class. At all
elections of directors, each holder of Preference Stock shall be entitled to as
many votes as shall equal the number of votes which such holder would be
entitled to cast, multiplied by the number of directors to be elected, and such
holder may cast all such votes for a single director, or may distribute them
among the number to be voted for or any two or more of them as such holder may
see fit.
(b) If and whenever dividends on the Preference Stock shall be in
arrears in an amount equivalent to six quarterly dividends or mandatory sinking
fund payments shall be in arrears in an amount equal to the aggregate of all
such payments required during one year, then, at any ensuing annual meeting of
stockholders at which at least a majority of the outstanding shares of
Preference Stock are represented, the holders of Preference Stock of all series
thereof then outstanding, voting separately as a class, shall be entitled to
elect two directors. Such right of the holders of Preference Stock shall
continue to be exercisable until all dividends in arrears on Preference Stock
shall have been paid in full or declared and a sum sufficient for the payment
thereof set apart and all mandatory sinking fund payments in arrears shall have
been paid in full, whereupon such right shall cease. During any time that the
holders of Preference Stock are entitled to elect two such directors, they shall
also be entitled to participate with the Common Stock in the election of any
other directors.
(c) Notwithstanding any other provision of the Certificate of
Incorporation:
(i) the affirmative approval of the holders of at least two-thirds
in interest of Preference Stock of all series thereof then outstanding present
and voting at a meeting, acting as a single class without regard to series,
shall be required for any amendment of the Certificate of Incorporation altering
materially and adversely any existing provision of the Preference Stock or for
the creation, or an increase in the authorized amount, of any class of stock
ranking, as to dividends or assets, prior to the Preference Stock; and
(ii) the affirmative approval of the holders of at least a majority
in interest of Preference Stock of all series thereof then outstanding present
and voting at a meeting, acting as a single class without regard to series,
shall be required for an increase in the authorized amount of Preference Stock,
or for the creation, or an increase in the authorized amount, of any class of
stock ranking, as to dividends or assets, on a parity with the Preference Stock;
provided, however, that if any amendment to the Certificate of Incorporation
shall affect adversely the rights or preferences of one or more, but not all, of
the series of Preference Stock at the time outstanding, or shall unequally
adversely affect the rights or preferences of different series of Preference
Stock at the time outstanding, the affirmative approval of the holders of at
least two-thirds in interest of the shares of each such series so adversely or
unequally adversely affected present and voting at a meeting shall be required
in lieu of or (if such affirmative approval is required by law) in addition to
the affirmative approval of the holders of at least two-thirds in interest of
the shares of Preference Stock as a class present and voting at such meeting.
Preemptive Rights. No holder of shares of any series of Preference Stock
shall have any preemptive or preferential rights to subscribe to or purchase
shares of any class or series of stock of the Company, now or hereafter
authorized, or any securities convertible into, or warrants or other evidences
of optional rights to purchase or subscribe to, shares of any laws or series of
the Company, now or hereafter authorized.
Other Provisions. Subject to the requirements of paragraph (c) under
"--Voting" above, but notwithstanding any other provisions of the Certificate of
Incorporation, the Board of Directors, in the resolution or resolutions
providing for the issue of any series of Preference Stock, may determine, to the
extent that the Board of Directors may be permitted to do so under the laws of
the State of New Jersey as in effect at the time of the creation of such series:
8
<PAGE> 15
(i) the voting rights, full or limited, if any, of the shares of such
series; and whether or not and under what conditions the shares of such series
(alone or together with the shares of one or more other series having similar
provisions) shall be entitled to vote separately as a single class, for the
election of one or more additional directors of the Company in case of dividend
arrearages or other specified events, or upon other matters;
(ii) whether or not and upon what conditions dividends on shares of
such series shall be cumulative and, if cumulative, the date or dates from which
dividends shall accumulate;
(iii) whether or not the holders of shares of such series shall have
any preemptive or preferential rights to subscribe to or purchase shares of any
class or series of stock of the Company, now or hereafter authorized, or any
securities convertible into, or warrants or other evidences of optional rights
to purchase or subscribe to, shares of any class or series of the Company, now
or hereafter authorized; and
(iv) whether or not the issuance of additional shares of such series,
or of any shares of any other series, shall be subject to restrictions as to
issuance, or as to the preferences, rights and qualifications of any such other
series.
VOTING REQUIREMENTS
Majority Voting Requirements. Subject to the provisions described below
under "--Greater Voting Requirements" and except as otherwise expressly provided
in the Certificate of Incorporation or as may be required by law, the majority
voting requirements prescribed in subsections 14A:10-3(2) and 14A:12-4(4) and in
paragraphs 14A:9-2(4)(c) and 14A:10-11(1)(c) of the NJBCA shall apply to the
Company. As a result, in the case of each of (i) a plan of merger or
consolidation, (ii) a dissolution of the Company, (iii) an amendment to the
Certificate of Incorporation and (iv) a sale, lease, exchange or other
disposition of all, or substantially all, of the assets of the Company, any such
action shall be approved upon receiving the affirmative vote of a majority of
the votes cast by the holders of shares of the Company entitled to vote therein,
and, in addition, if any class or series is entitled to vote thereon as a class,
the affirmative vote of a majority of the votes cast in each class vote. Such
voting requirements shall generally be subject to such greater requirements as
are provided in the NJBCA for specific amendments or as may be provided in the
Certificate of Incorporation.
Greater Voting Requirements. The affirmative vote of the holders of
four-fifths of the outstanding shares of all classes of stock of the Company
entitled to vote, considered for the purposes of this paragraph as one class,
shall be required to authorize (i) the merger or consolidation of the Company or
a subsidiary of the Company with or into any other corporation, person or other
entity, (ii) any sale, lease, exchange or other disposition of all or any
material part of the assets of the Company or of any subsidiary of the Company
to or with any other corporation, person or other entity or (iii) any issuance
or transfer of securities of the Company upon conversion of or in exchange for
the securities or assets of any other corporation, person or entity if (as of
the date of any action taken by the Board of Directors with respect to such
transaction or as of any record date for the determination of stockholders
entitled to notice and to vote with respect thereto or immediately prior to the
consummation of such transaction) such other corporation, person or other entity
referred to in clause (i), clause (ii) or clause (iii) above is the beneficial
owner, directly or indirectly, of more than 10% of any class of capital stock of
the Company. For the purposes hereof, any corporation, person or other entity
shall be deemed to be the beneficial owner of any shares of capital stock of the
Company, (x) which it has the right to acquire pursuant to any agreement, or
upon exercise of conversion rights, warrants or options, or otherwise, or (y)
which are beneficially owned, directly or indirectly (including shares deemed
owned through application of clause (x) above) by any other corporation, person
or other entity with which it has any agreement, arrangement or understanding
with respect to the acquisition, holding, voting or disposition of stock or of
any material part of the assets of the Company or of it, or which is its
"affiliate" or "associate" as those terms are defined in Rule 12b-2 of the
General Rules and Regulations under the 1934 Act, as in effect on January 1,
1970. Any determination made in good faith by the Board of Directors, on the
basis of information at the time available to it, as to whether any corporation,
person or other entity is the beneficial owner of more than 10% of any class of
capital stock of the Company, or is an "affiliate" or "associate", as above
defined, shall be conclusive and binding for all purposes of this paragraph. The
provisions described in this paragraph shall not apply to any agreement for the
merger of any subsidiary of the Company with the Company or with another
subsidiary of the Company where the Company or such other subsidiary shall be
the surviving corporation and where the provisions described in this paragraph
shall not be changed or otherwise affected by or by virtue of the merger.
DIRECTORS
9
<PAGE> 16
The Board of Directors shall be divided as equally as may be into three
classes, each of which shall consist of such number as the by-laws may from time
to time provide, but no class shall consist of less than two members. At each
annual election, the successors of the directors of the class whose terms expire
in that year are elected to hold office for the term of three years, so that the
term of office of one class of directors shall expire in each year. If the
number of directors is changed, any newly created directorships or decrease in
directorships shall be so apportioned among the classes as to make all classes
as nearly equal in number as possible. In case of any increase in the number of
directors of any class or classes, the additional directors may be elected by
the Board of Directors, but any such director so elected shall hold office only
until the next succeeding annual meeting of stockholders and until his successor
shall have been elected and qualified. No decrease in the number of directors
shall shorten the term of any incumbent director. Directors may be removed
without cause only upon the affirmative vote of the holders of at least
four-fifths of the shares of capital stock entitled to vote for the election of
directors. Directors may be removed for cause upon the affirmative vote of
two-thirds of the entire Board. The affirmative vote of the holders of at least
four-fifths of the shares of capital stock entitled to vote for the election of
the directors shall be required for any amendment or deletion of this provision,
unless such amendment or deletion shall have been approved by the unanimous vote
of the directors then in office, in which case the majority voting requirements
of the NJBCA described above shall apply thereto.
The provisions of the Certificate of Incorporation relating to
directors shall have no application to any directors who may be elected by the
holders of Preference Stock or any series thereof, voting as a class or series,
as the case may be, pursuant to a right to elect directors conferred upon such
holders by reason of default in the payment of dividends, failure to discharge
sinking fund obligations or otherwise. Any such directors shall be in addition
to the directors to be elected pursuant to the paragraph immediately above and
shall be elected in the manner, and serve for such term, as may be provided in
the Certificate of Incorporation.
RIGHTS PLAN
On December 7, 1988, the Board of Directors of the Company declared a
dividend distribution of one Right for each outstanding share of Common Stock of
the Company. The dividend was payable on December 22, 1988 to shareholders of
record on that date. Each Right entitles the registered holder to purchase from
the Company one-hundredth (1/100) of a share of a series of preference stock of
the Company, designated as Series A Preference Stock, without par value (the
"Series A Preference Stock"), at a price of $130 (the "Purchase Price").
On May 6, 1992, the Board of Directors of the Company declared a
two-for-one stock split in the form of a dividend distribution of one share of
Common Stock for each outstanding share of Common Stock (the "First Common Stock
Dividend"). The First Common Stock Dividend was payable on June 1, 1992 to
shareholders of record on May 19, 1992. After giving effect to receipt of the
First Common Stock Dividend, each holder of a Right was deemed to be the holder
of (i) one-half of a Right in respect of the share of Common Stock pursuant to
which such Right originally had been issued and (ii) one-half of a Right in
respect of the share of Common Stock received by such holder pursuant to the
First Common Stock Dividend.
On August 6, 1997, the Board of Directors of the Company declared a
three-for-two stock split in the form of a dividend distribution of one share of
Common Stock for every two outstanding shares of Common Stock (the "Second
Common Stock Dividend"). The Second Common Stock Dividend was paid on September
2, 1997 to shareholders of record on August 19, 1997. After giving effect to
receipt of the Second Common Stock Dividend, each holder of a Right will be
deemed to be the holder of (i) one-third of a Right in respect of the share of
Common Stock pursuant to which such Right originally had been issued, (ii)
one-third of a Right in respect of the share of Common Stock received by such
holder pursuant to the First Common Stock Dividend and (iii) one-third of a
Right in respect of the share of Common Stock received by such holder pursuant
to the Second Common Stock Dividend.
Until the close of business on the Distribution Date, which will occur on
the earlier to occur of (i) the tenth day following a public announcement that a
person or group of affiliated or associated persons (an "Acquiring Person")
other than the Company, any subsidiary of the Company or any employee benefit
plan or employee stock plan of the Company or of any subsidiary of the Company
(an "Exempt Person"), has acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding Common Stock (the "Stock Acquisition
Date"), (ii) the declaration by the Board of Directors that any Person is an
Adverse Person or (iii) the tenth day after the date of the commencement of, or
the first public announcement of the intent of any person (other than an Exempt
Person) to commence, a tender offer or exchange offer (other than a tender or
exchange offer by an Exempt Person) which would result in the ownership of 15%
or more of the outstanding Common Stock (the earlier of such dates being called
the "Distribution Date"), the Rights will be represented by and transferred
with, and only with, the Common Stock. Until the Distribution Date, new
certificates issued for Common Stock after December 22, 1988 contain a legend
incorporating the
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<PAGE> 17
Rights Agreement by reference, and the surrender for transfer of any of the
Company's Common Stock certificates constitute the transfer of the Rights
associated with the Common Stock represented by such certificates. As soon as
practicable following the Distribution Date, separate Right Certificates will be
mailed to holders of record of the Common Stock at the close of business on the
Distribution Date, and thereafter the separate certificates alone will evidence
the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on December 22, 1998, unless earlier
redeemed by the Company as described below.
The Series A Preference Stock will be nonredeemable and, unless otherwise
provided in connection with the creation of a subsequent series of Preference
Stock, subordinate to any other series of Preference Stock. The Series A
Preference Stock will, however, rank prior to the Common Stock. The Series A
Preference Stock may not be issued except upon exercise of Rights. Each share of
Series A Preference Stock will be entitled to receive when, as and if declared,
a quarterly dividend in an amount per share equal to 100 times the cash
dividends declared on the Company's Common Stock. In addition, the Series A
Preference Stock is entitled to 100 times any non-cash dividends (other than
dividends payable in equity securities) declared on the Common Stock, in like
kind. In the event of a default on such dividends, the holders of the Series A
Preference Stock (together with the holders of any other Preference Stock
similarly entitled) will be entitled to elect two directors. In the event of
liquidation, the holders of Series A Preference Stock will be entitled to
receive a liquidation payment in an amount equal to 100 times the payment made
per share of Common Stock. Each share of Series A Preference Stock will have 100
votes, voting together with the Common Stock and not as a separate class unless
otherwise required by law or the Certificate of Incorporation. In the event of
any merger, consolidation or other transaction in which common shares are
exchanged, each share of Series A Preference Stock will be entitled to receive
100 times the amount received per share of Common Stock. The rights of the
Series A Preference Stock as to dividends, liquidation and voting are protected
by antidilution provisions.
The Purchase Price payable, and the number of shares of Series A
Preference Stock or other securities or property issuable upon exercise of the
Rights, are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of the Series A Preference Stock, (ii) upon the grant to
holders of the Series A Preference Stock of certain rights or warrants to
subscribe for Series A Preference Stock or convertible securities at less than
the current market price of the Series A Preference Stock or (iii) upon the
distribution to holders of the Series A Preference Stock of evidences of
indebtedness or assets (excluding regular cash dividends and dividends payable
in Series A Preference Stock) or of subscription rights or warrants (other than
those referred to above).
If (i) any Person (other than an Exempt Person) becomes the beneficial
owner of 15% or more of the then outstanding shares of Common Stock, (ii) the
Board of Directors of the Company, by majority vote, shall declare any Person to
be an Adverse Person, (iii) any Acquiring Person, Adverse Person or any
affiliates or associates thereof engages in one or more "self-dealing"
transactions as described in the Rights Agreement, then each holder of a Right,
other than the Acquiring Person or Adverse Person, will have the right to
receive in lieu of Series A Preference Stock, upon payment of the Purchase
Price, a number of shares of Common Stock having a market value equal to twice
the Purchase Price. This same right will be available to each holder of record
of a Right, other than the Acquiring Person or Adverse Person, if, while there
is an Acquiring Person or Adverse Person, there occurs any reclassification of
securities, any recapitalization of the Company, or any merger or consolidation
or other transaction involving the Company or any of its subsidiaries which has
the effect of increasing by more than 1% the proportionate ownership interest of
the Company or any of its subsidiaries which is owned or controlled by the
Acquiring Person or Adverse Person. Alternatively, at any time after any person
or group acquires 15% or more of the Common Stock or the Board of Directors
determines that a Person is an Adverse Person, the Board of Directors of the
Company may exchange one share of the Common Stock (or an equivalent share of
the Series A Preference Stock) for each outstanding Right other than Rights held
by an Acquiring Person or Adverse Person, which become void. To the extent that
insufficient shares of Common Stock are available for the exercise in full of
the Rights, holders of Rights will receive upon exercise shares of Common Stock
to the extent available and then Series A Preference Stock, cash, property or
other securities of the Company (which may be accompanied by a reduction in the
Purchase Price), in proportions determined by the Company, so that the aggregate
value received is equal to twice the Purchase Price. Rights are not exercisable
following the occurrence of the events described in this paragraph until the
expiration of the period during which the Rights may be redeemed as described
below. Notwithstanding the foregoing, following the occurrence of the events
described in this paragraph, Rights that are (or, under certain circumstances,
Rights that were) beneficially owned by an Acquiring Person or an Adverse Person
will be void.
Unless the Rights are redeemed earlier, if, after the Stock Acquisition
Date or the declaration by the Board of Directors that a person is an Adverse
Person, the Company is acquired in a merger or other business combination (in
which any shares of the
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<PAGE> 18
Common Stock are changed into or exchanged for other securities or assets) or
more than 50% of the assets or earning power of the Company and its subsidiaries
(taken as a whole) were to be sold or transferred in one or a series of related
transactions, the Rights Agreement provides that proper provision shall be made
so that each holder of record of a Right will from and after that time have the
right to receive, upon payment of the Purchase Price, that number of shares of
common stock of the acquiring company which has a market value at the time of
such transaction equal to two times the Purchase Price.
Fractions of shares of Series A Preference Stock may, at the election of
the Company, be evidenced by depositary receipts. The Company may also issue
cash in lieu of fractional shares which are not integral multiples of one
one-hundredth of a share.
At any time until ten days following the Stock Acquisition Date or the
declaration by the Board of Directors that a person is an Adverse Person
(subject to extension by the Board of Directors), the Board of Directors (with
the concurrence of a majority of the Independent Directors) may cause the
Company to redeem the Rights in whole, but not in part, at a price of $0.01 per
Right. Under certain circumstances set forth in the Rights Agreement, the
decision to redeem shall require the concurrence of a majority of the
Independent Continuing Directors. Immediately upon the action of the Board of
Directors of the Company authorizing redemption of the Rights, the right to
exercise the Rights will terminate, and the only right of the holders of Rights
will be to receive the Redemption Price without any interest thereon. The term
"Independent Directors" means any member of the Board of Directors of the
Company who is not an officer of the Company. The term "Independent Continuing
Directors" means any Independent Director who was a member of the Board of
Directors immediately prior to the time that any Person shall become an
Acquiring Person or Adverse Person, and any Independent Director who becomes a
member of the Board of Directors subsequent to the time that any Person shall
become an Acquiring Person or Adverse Person if such Independent Director is
recommended or nominated to election on the Board of Directors by a majority of
the Independent Continuing Directors, but shall not include an Acquiring Person
or Adverse Person, or any representative of such Acquiring Person or Adverse
Person.
Until the close of business on the tenth day following the Stock
Acquisition Date or the declaration by the Board of Directors that a person is
an Adverse Person, and thereafter for as long as the Rights are redeemable, the
Board of Directors (with the concurrence of a majority of the Independent
Directors) may cause the Company to amend the Rights in any manner, including an
amendment to extend the time period in which the Rights may be redeemed, but no
such amendment shall alter the redemption price, the date of expiration of the
Rights, or the number of one one-hundredths of a share of Series A Preference
Stock for which a Right is exercisable. At any time when the Rights are not then
redeemable, the Company (with the concurrence of a majority of the Independent
Continuing Directors) may amend the Rights in any manner that does not adversely
affect the interests of holders of the Rights as such.
Until a Right is exercised, the holder, as such, will have no rights as a
shareholder of the Company, including, without limitation, the right to vote or
to receive dividends.
DESCRIPTION OF DEBT SECURITIES
The following description of Debt Securities sets forth certain general
terms and provisions of 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 Company may issue Debt Securities either separately, or together with,
or upon the conversion of or in exchange for, other Securities. The Debt
Securities may be (i) senior unsecured obligations (the "Senior Debt
Securities") of the Company issued in one or more series under an Indenture
dated as of August 1, 1986, as supplemented (as so supplemented, the "Senior
Indenture") between the Company and The Bank of New York, as Trustee (the
"Senior Trustee"), (ii) senior subordinated unsecured obligations (the "Senior
Subordinated Debt Securities") of the Company issued in one or more series under
an Indenture (the "Senior Subordinated Indenture") to be entered into between
the Company and a trustee to be named therein (the "Senior Subordinated
Trustee") or (iii) junior subordinated unsecured obligations (the "Junior
Subordinated Debt Securities") of the Company issued in one or more series under
an Indenture (the "Junior Subordinated Indenture") to be entered into between
the Company and a trustee to be named therein (the "Junior Subordinated
Trustee"). The Senior Indenture, the Senior Subordinated Indenture and the
Junior Subordinated Indenture are sometimes hereinafter referred to,
collectively, as the "Indentures, and, individually, as an "Indenture"; and the
Senior Trustee, Senior Subordinated Trustee and Junior Subordinated Trustee are
sometimes hereinafter referred to, collectively, as the "Trustees" or
individually, as a "Trustee."
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<PAGE> 19
The following summaries of certain provisions of the Indentures do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of each Indenture, including the definitions
therein of certain terms. Numerical references in parentheses below are to
sections in the applicable Indenture or Indentures. Whenever particular sections
or defined terms of an Indenture are referred to, such sections or defined terms
are incorporated herein by reference.
GENERAL
The Indentures do not limit the amount of Debt Securities which may be
issued thereunder and provide that Debt Securities may be issued thereunder from
time to time in one or more series up to the aggregate principal amount which
may be authorized from time to time by the Company. Except as described below,
the Indentures do 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; (9) whether such Offered Debt Securities will be
Senior Debt Securities, Senior Subordinated Debt Securities or Junior
Subordinated Debt Securities; (10) the terms, if any, upon which such Debt
Securities may be convertible into or exchangeable for other Securities; (11) in
the case of Corresponding Junior Subordinated Debt Securities, the form of Trust
Agreement and Guarantee Agreement and any other provisions relating to deferral
of interest, extension of maturity and any other covenants and provisions
applicable thereto; and (12) 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.
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.
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.
RANKING OF DEBT SECURITIES
The Senior Debt Securities will be unsecured unsubordinated obligations of
the Company and will rank on a parity in right of payment with all other
unsecured and unsubordinated indebtedness of the Company. The Senior
Subordinated Debt Securities will be unsecured senior subordinated obligations
of the Company and will be subordinated in right of payment to all existing and
future Senior Indebtedness (as defined in the supplemental indenture and the
applicable Prospectus Supplement) of the Company, including the Senior Debt
Securities. The Junior Subordinated Debt Securities will be unsecured junior
subordinated obligations of the Company and will be subordinated in right of
payment to all existing and future Senior Indebtedness (as defined in the
applicable Prospectus Supplement) of the Company, including the Senior Debt
Securities and the Senior Subordinated Debt Securities). See "--Subordination of
Senior Subordinated and Junior Subordinated Debt Securities."
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<PAGE> 20
CONVERSION AND EXCHANGE
The terms, if any, on which Debt Securities of any series are convertible
into or exchangeable for Common Stock, Preference Stock or other Debt Securities
will be set forth in the applicable Prospectus Supplement. Such terms may
include provisions for conversion or exchange, either mandatory, at the option
of the holders or at the option of the Company.
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 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
applicable 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 applicable 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
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<PAGE> 21
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.
CERTAIN COVENANTS OF THE COMPANY
SENIOR DEBT SECURITIES. The Senior Debt Securities will include the
following covenants:
Limitation on Liens. Unless otherwise indicated in the Prospectus
Supplement relating to a series of Senior 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 Senior 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 Senior Debt Securities) shall be secured equally and ratably
with or prior to such indebtedness. The Senior 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 Senior 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. See also "Exempted Indebtedness" below.
Limitation on Sale and Leaseback Transactions. Unless otherwise indicated
in the Prospectus Supplement relating to a series of Senior Debt Securities,
sale and leaseback transactions (which are defined in the Senior 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 Senior Debt Securities or Funded
Indebtedness of the Company or any Restricted Subsidiary on a parity with the
Senior Debt Securities or to purchase, improve or construct Principal
Properties. 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, and after giving effect thereto, the sum of such outstanding
secured indebtedness plus the Attributable
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<PAGE> 22
Debt in respect of such sale and leaseback transactions (other than sale and
leaseback transactions entered into prior to the date of the Senior 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. "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.
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 Senior 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 Senior
Indenture. 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 Senior 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 Senior 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.
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.
SENIOR SUBORDINATED DEBT SECURITIES. The Senior Subordinated Debt
Securities will include those covenants which may be set forth in the Prospectus
Supplement to which such Debt Securities relate, including the following:
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 Senior Subordinated 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
Senior Subordinated Indenture.
Anti-Layering Restriction. The Senior Subordinated Debt Securities will
also include a covenant prohibiting the Company from incurring indebtedness
which is subordinated to any other indebtedness of the Company unless such
indebtedness is made (i) pari passu in right of payment to such Senior
Subordinated Debt Securities or (ii) subordinate in right of payment to such
Senior Subordinated Debt Securities.
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JUNIOR SUBORDINATED DEBT SECURITIES. The Junior Subordinated Debt
Securities will include those covenants which may be set forth in the Prospectus
Supplement to which such Debt Securities relate, including the following:
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 Junior Subordinated 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
Junior Subordinated Indenture. In the case of Corresponding Junior Subordinated
Debt Securities, any such transaction must also be permitted under the related
Trust Agreement and Guarantee and must not give rise to any breach or violation
of the related Trust Agreement and Guarantee.
In addition, in the event Corresponding Junior Subordinated Debt
Securities are issued to an Ingersoll-Rand Trust or a trustee of such Trust in
connection with the issuance of Trust Securities by such Ingersoll-Rand Trust,
such Corresponding Junior Subordinated Debt Securities subsequently may be
distributed pro rata to the holders of such Trust Securities in connection with
the dissolution of such Ingersoll-Rand Trust upon the occurrence of certain
events described in the Prospectus Supplement relating to such Trust Securities.
Only one series of Corresponding Junior Subordinated Debt Securities will be
issued to an Ingersoll-Rand Trust or a trustee of such Trust in connection with
the issuance of Trust Securities by such Ingersoll-Rand Trust.
Unless otherwise provided in the applicable Prospectus Supplement, if
Corresponding Junior Subordinated Debt Securities are issued to an
Ingersoll-Rand Trust or a trustee of such Trust in connection with the issuance
of Trust Securities by such Ingersoll-Rand Trust and (i) there shall have
occurred an event that would constitute an Event of Default, (ii) the Company
shall be in default with respect to its payment of any obligations under the
related Trust Preferred Guarantee or Trust Common Guarantee or (iii) the Company
shall have given notice of its election to defer payments of interest on such
Corresponding Junior Subordinated Debt Securities by extending the interest
payment period as provided in the Indenture and such period, or any extension
thereof, shall be continuing, then (a) the Company shall not declare or pay any
dividend on, make any distribution with respect to, or redeem, purchase or make
a liquidation payment with respect to, any of its capital stock, and (b) the
Company shall not make any payment of interest, principal or premium, if any, on
or repay, repurchase or redeem any debt securities which rank pari passu with or
junior to such Corresponding Junior Subordinated Debt Securities; provided that
the foregoing restriction does not apply to any stock dividends paid by the
Company where the dividend stock is of the same class as that of the stock held
by the holders receiving the dividend.
If provided in the applicable Prospectus Supplement, the Company will have
the right at any time and from time to time during the term of any series of
Corresponding Junior Subordinated Debt Securities to defer payment of interest
for up to such number of consecutive interest payment periods as may be
specified in the applicable Prospectus Supplement (each, an "Extension Period"),
subject to the terms, conditions and covenants, if any, specified in such
Prospectus Supplement, provided that such Extension Period may not extend beyond
the Stated Maturity of such series of Corresponding Junior Subordinated Debt
Securities. Certain United States federal income tax consequences and special
considerations applicable to any such Corresponding Junior Subordinated Debt
Securities will be described in the applicable Prospectus Supplement.
In the Junior Subordinated Indenture, the Company, as borrower, will agree
to pay to each Trust all debts and other obligations (other than with respect to
the Trust Securities) and all costs and expenses of such Trust (including costs
and expenses relating to the organization of such Trust, the fees and expenses
of the related Ingersoll-Rand Trustees and the costs and expenses relating to
the operation of such Trust) and the offering of the Trust Preferred Securities,
and to pay any and all taxes, duties, assessments or other similar governmental
charges (other than United States withholding taxes), and all costs and expenses
with respect to the foregoing, to which such Trust might become subject.
EVENTS OF DEFAULT
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As to each series of Debt Securities, an Event of Default is defined in
each Indenture as being: default in payment of any interest or any sinking fund
payment on such series which continues for 30 days (subject to the deferral of
any interest payment in the case of an Extension Period in the case of the
Junior Subordinated Indenture); default in payment of any principal or premium,
if any, on such series; default after written notice in performance of any other
covenant in such 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 a supplemental
indenture. Each 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, 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.
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 and, in the case of Corresponding Junior Subordinated Debt
Securities, should the Trustee or the holders of such Corresponding Junior
Subordinated Debt Securities fail to make such declaration, the holders of at
least 25% in aggregate liquidation amount of the Related Trust Preferred
Securities shall have such right. 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. In the case of Corresponding Junior
Subordinated Debt Securities of a series, should the holders of such
Corresponding Junior Subordinated Debt Securities fail to annul a declaration or
waive such default, the holders of a majority in aggregate liquidation amount of
the series of Related Trust Preferred Securities affected shall have such right.
Subject to the provisions of each 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 such
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. Subject to such provisions for the indemnification of the
Trustee and certain limitations contained in each 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. In case an Event of Default shall occur and be continuing as to
a series of Corresponding Junior Subordinated Debt Securities, the Property
Trustee will have the right to declare the principal of and the interest on such
Corresponding Junior Subordinated Debt Securities, and any other amounts payable
under the Junior Subordinated Indenture, to be forthwith due and payable and to
enforce its other rights as a creditor with respect to such Corresponding Junior
Subordinated Debt Securities. 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.
If an Event of Default with respect to a series of Corresponding Junior
Subordinated Debt Securities has occurred and is continuing and such event is
attributable to the failure of the Company to pay interest, premium (if any) or
principal on such Corresponding Junior Subordinated Debt Securities on the date
such interest, premium (if any) on principal is due and payable, a holder of
Related Trust Preferred Securities may institute a legal proceeding directly
against the Company for enforcement of payment to such holder of the principal
of or interest or premium (if any) on such Corresponding Junior Subordinated
Debt Securities having a principal amount equal to the aggregate liquidation
amount of the Related Trust Preferred Securities of such holder (a "Direct
Action"). The Company may not amend the Junior Subordinated Indenture to remove
the foregoing right to bring a Direct Action without the prior written consent
of the holders of all of the Trust Preferred Securities outstanding. If the
right to bring a Direct Action is removed, the applicable Trust may become
subject to the reporting obligations under the Exchange Act. The Company shall
have the right under the Junior Subordinated Indenture to set-off any payment
made to such holder of Trust Preferred Securities by the Company in connection
with a Direct Action.
The holders of the Trust Preferred Securities will not be able to exercise
directly any remedies other than those set forth in the preceding paragraph
available to the holders of the Corresponding Junior Subordinated Debt
Securities unless there shall have been an event of default under the Trust
Agreement.
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DEFEASANCE
Each 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 such
Indenture as to any series of Debt Securities (in the case of Senior 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, or premium, 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 (the "IRS") to such effect or an opinion of counsel to such effect based
upon a ruling of the IRS.
MODIFICATION OF THE INDENTURES
Each 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 such Indenture or the rights of the holders of
the Debt 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 such Indenture, provided that, in the case of
Corresponding Junior Subordinated Debt Securities, so long as any Related Trust
Preferred Securities remain outstanding, (a) no such modification may be made
that adversely affects the holders of such Trust Preferred Securities in any
material respect, and no termination of the Junior Subordinated Indenture may
occur, and no waiver of any Event of Default or compliance with any covenant
under the Junior Subordinated Indenture may be effective, without the prior
consent of the holders of at least a majority of the aggregate liquidation
amount of all Related Trust Preferred Securities affected unless and until the
principal of the Corresponding Junior Subordinated Debt Securities and all
accrued and unpaid interest thereon have been paid in full and certain other
conditions have been satisfied, and (b) where a consent under the Junior
Subordinated Indenture would require the consent of each holder of Corresponding
Junior Subordinated Debt Securities, no such consent shall be given by the
Property Trustee without the prior consent of each holder of Related Trust
Preferred Securities.
SUBORDINATION OF SENIOR SUBORDINATED AND JUNIOR SUBORDINATED DEBT SECURITIES
The payment of the principal of, premium, if any, and interest, if any, on
the Senior Subordinated Debt Securities and the Junior Subordinated Debt
Securities will be subordinated, to the extent and in the manner set forth in
the Senior Subordinated Indenture and Junior Subordinated Indenture,
respectively, and as may be further described in the applicable Prospectus
Supplement, in right of payment to the prior payment in full in cash or cash
equivalents of all Senior Indebtedness which may at any time and from time to
time be outstanding.
Unless otherwise provided in the applicable Prospectus Supplement with
respect to an issue of Senior Subordinated Debt Securities or Junior
Subordinated Debt Securities, in the event of any insolvency or bankruptcy case
or proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relating to the Company or its
assets, or any liquidation, dissolution or other winding-up of the Company,
whether voluntary or involuntary, or any assignment for the benefit of creditors
or other marshalling of assets or liabilities of the Company, all Senior
Indebtedness of the Company must be paid in full or such payment must be
provided for before any payment or distribution (excluding the distribution of
certain permitted equity or subordinated securities) is made on account of the
principal, premium, if any, sinking fund, if any, or interest, if any, on any
Senior Subordinated Debt Securities or Junior Subordinated Debt Securities, as
the case may be.
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In addition, the applicable Prospectus Supplement may provide that no
payment on account of the Senior Subordinated Debt Securities or Junior
Subordinated Debt Securities offered thereby shall be made during the
continuance of certain defaults with respect to the Senior Indebtedness or
certain designated Senior Indebtedness of the Company.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets (excluding the distribution of certain permitted equity
or subordinated securities) of the Company is received by the Senior
Subordinated Trustee or the Junior Subordinated Trustee or the holders of any of
the Senior Subordinated Debt Securities or Junior Subordinated Debt Securities,
as the case may be, under the circumstances described above and before all
Senior Indebtedness is paid in full, such payment or distribution will be paid
over to the holders of such Senior Indebtedness or on their behalf for
application to the payment of all such Senior Indebtedness remaining unpaid
until all such Senior Indebtedness has been paid in full or such payment
provided for, after giving effect to any concurrent payment or distribution to
the holders of such Senior Indebtedness.
If the Company fails to make any payments on the Senior Subordinated Debt
Securities or the Junior Subordinated Debt Securities of any series when due or
within any applicable grace period, whether or not on account of any payment
blockage provisions that may be set forth in the applicable Prospectus
Supplement, such failure would constitute an Event of Default under the relevant
Indenture and would enable the holders of such Debt Securities to accelerate the
maturity thereof. See "--Events of Default."
By reason of such subordination, in the event of any distribution of
assets of the Company upon dissolution, winding up, liquidation, reorganization
or other similar proceedings of the Company, (i) holders of Senior Indebtedness
will be entitled to be paid in full before payments may be made on the Senior
Subordinated Debt Securities or the Junior Subordinated Debt Securities and the
holders of Senior Subordinated Debt Securities and Junior Subordinated Debt
Securities will be required to pay over their share of such distribution to the
holders of Senior Indebtedness until such Senior Indebtedness is paid in full
and (ii) creditors of the Company who are neither holders of Senior Subordinated
Debt Securities or Junior Subordinated Debt Securities nor holders of Senior
Indebtedness may recover less, ratably, than holders of Senior Indebtedness and
may recover more, ratably, than the holders of the Senior Subordinated Debt
Securities and Junior Subordinated Debt Securities. Furthermore, such
subordination may result in a reduction or elimination of payments to the
holders of Senior Subordinated Debt Securities and Subordinated Debt Securities.
The Senior Subordinated Indenture and Junior Subordinated Indenture provide that
the subordination provisions thereof will not apply to any money and securities
held in trust pursuant to the discharge, defeasance and covenant defeasance
provisions of such Indenture (see "--Defeasance" above).
If this Prospectus is being delivered in connection with the offering of a
series of Senior Subordinated Debt Securities or Junior Subordinated Debt
Securities, the accompanying Prospectus Supplement or the information
incorporated by reference herein will set forth the definitions of Senior
Indebtedness and Designated Senior Indebtedness applicable thereto, any payment
blockage provisions and the approximate amount of such Senior Indebtedness
outstanding as of a recent date.
CONCERNING THE TRUSTEE
The Company may from time to time maintain lines of credit and have other
customary banking relationships with each Trustee and its affiliated banks.
CORRESPONDING JUNIOR SUBORDINATED DEBT SECURITIES
The Corresponding Junior Subordinated Debt Securities may be issued in one
or more series of Junior Subordinated Debt Securities under the Junior
Subordinated Indenture with terms corresponding to the terms of a series of
Related Trust Preferred Securities. In that event, concurrently with the
issuance of the Related Trust Preferred Securities, such Trust will invest the
proceeds thereof and the consideration paid by the Company for the Trust Common
Securities of such Trust in such series of Corresponding Junior Subordinated
Debt Securities issued by the Company to such Trust. Each series of
Corresponding Junior Subordinated Debt Securities will be in the principal
amount equal to the aggregate stated liquidation amount of the Related Trust
Preferred Securities and the Trust Common Securities of such Trust and will rank
pari passu with all other series of Junior Subordinated Debt Securities. Holders
of the Related Trust Preferred Securities for a series of Corresponding Junior
Subordinated Debt Securities will have the rights, in connection with
modifications to the Junior Subordinated Indenture or upon occurrence of Events
of Default, as described above under "--Modification of the Indentures" and
"--Events of Default," unless provided otherwise in the Prospectus Supplement
for such Related Trust Preferred Securities.
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The applicable Prospectus Supplement will also set forth the terms of any
redemption provisions applicable to the Corresponding Junior Subordinated Debt
Securities and any other provisions and covenants.
The Company will covenant, as to each series of Corresponding Junior
Subordinated Debt Securities, (i) to maintain directly or indirectly 100%
ownership of the Trust Common Securities of the Trust to which such
Corresponding Junior Subordinated Debt Securities have been issued, provided
that certain successors which are permitted pursuant to the Junior Subordinated
Indenture may succeed to the Company's ownership of the Trust Common Securities,
(ii) not to voluntarily terminate, wind up or liquidate any Trust, except (a) in
connection with a distribution of Corresponding Junior Subordinated Debt
Securities to the holders of the Trust Preferred Securities in exchange therefor
upon liquidation of such Trust, or (b) in connection with certain mergers or
consolidations permitted by the related Trust Agreement and (iii) to use its
reasonable efforts, consistent with the terms and provisions of the related
Trust Agreement, to cause such Trust to remain classified as a grantor trust and
not as an association taxable as a corporation for United States federal income
tax purposes.
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, representing contracts
obligating holders to purchase from the Company, and the Company to sell to the
holders, a specified number of shares of Common Stock at a future date or dates.
The price per share of Common Stock may be fixed at the time the Stock Purchase
Contracts are issued or may be determined by reference to a specific formula set
forth in the Stock Purchase Contracts. The Stock Purchase Contracts may be
issued separately or as a part of Stock Purchase Units consisting of a Stock
Purchase Contract and Debt Securities or Trust Preferred Securities or debt
obligations of third parties, including U.S. Treasury securities, securing the
holders' obligations to purchase the Common Stock under the Stock Purchase
Contracts. The Stock Purchase Contracts may require the Company to make periodic
payments to the holders of the Stock Purchase Units or vice-versa, and such
payments may be unsecured or prefunded on some basis. The Stock Purchase
Contracts may require holders to secure their obligations thereunder in a
specified manner.
The applicable Prospectus Supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units.
DESCRIPTION OF TRUST PREFERRED SECURITIES
Each Ingersoll-Rand Trust may issue only one series of Trust Preferred
Securities having terms described in the Prospectus Supplement relating thereto.
The Trust Agreement of each Ingersoll-Rand Trust authorizes the Regular Trustees
of each Ingersoll-Rand Trust to issue on behalf of such Ingersoll-Rand Trust one
series of Trust Preferred Securities. The Trust Agreement will be qualified as
an indenture under the Trust Indenture Act. The Trust Preferred Securities will
have such terms, including distributions, redemption, voting, liquidation rights
and such other preferred, deferred or other special rights or such restrictions,
as shall be set forth in the Trust Agreement or made part of the Trust Agreement
by the Trust Indenture Act. Reference is made to any Prospectus Supplement
relating to the Trust Preferred Securities for specific terms including (i) the
distinctive designation of such Trust Preferred Securities, (ii) the number of
Trust Preferred Securities issued, (iii) the annual distribution rate (or method
of determining such rate) for Trust Preferred Securities and the date or dates
upon which such distributions shall be payable, (iv) whether distributions on
Trust Preferred Securities shall be cumulative, and, in the case of Trust
Preferred Securities having such cumulative distribution rights, the date or
dates or method determining the date or dates from which distributions on Trust
Preferred Securities shall be cumulative, (v) the amount or amounts which shall
be paid out of the assets of such trust to the holders of Trust Preferred
Securities upon voluntary or involuntary dissolution, winding-up or termination
of such Ingersoll-Rand Trust, (vi) the obligation, if any, of such
Ingersoll-Rand Trust to purchase or redeem Trust Preferred Securities and the
price or prices at which, the period or periods within which and the terms and
conditions upon which Trust Preferred Securities issued by such Ingersoll-Rand
Trust shall be purchased or redeemed, in whole or in part, pursuant to such
obligation, (vii) the voting rights, if any, of Trust Preferred Securities
issued by such Ingersoll-Rand Trust in addition to those required by law,
including the number of votes per Trust Preferred Security and any requirement
for the approval by the holders of Trust Preferred Securities, or of Trust
Preferred Securities issued by both Ingersoll-Rand Trusts, as a condition to
specified action or amendments to the Trust Agreement of such Ingersoll-Rand
Trust, (viii) whether the Trust Preferred Securities will be issued in the form
of one or more global securities and (ix) any other relevant rights,
preferences, privileges, limitations or restrictions of Trust Preferred
Securities issued by such Ingersoll-Rand Trust consistent with the Trust
Agreement of such Trust or with applicable law. All Trust Preferred Securities
offered hereby will be guaranteed by the Company to the extent set forth below
under "Description of Trust Preferred Guarantees." Certain United States federal
income tax consideration applicable to any offering of Trust Preferred
Securities will be described in the Prospectus Supplement relating thereto.
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In connection with the issuance of Trust Preferred Securities, each
Ingersoll-Rand Trust will issue one series of Trust Common Securities. The Trust
Agreement of each Ingersoll-Rand Trust authorizes the Regular Trustees to issue
on behalf of such Ingersoll-Rand Trust one series of Trust Common Securities
having such terms including distributions, redemption, voting, liquidation
rights or such restrictions as shall be set forth therein. The terms of the
Trust Common Securities issued by an Ingersoll-Rand Trust will be substantially
identical to the terms of the Trust Preferred Securities issued by such trust
and the Trust Common Securities will rank pari passu, and payments will be made
thereon pro rata, with the Trust Preferred Securities except that, upon the
occurrence and during the continuation of an event of default under the Trust
Agreement, the rights of the holders of the Trust Common Securities to payment
in respect of distributions and payments upon liquidation, redemption and
otherwise will be subordinated to the rights of the holders of the Trust
Preferred Securities. Except in certain limited circumstances, the Trust Common
Securities will also carry the right to vote and to appoint, remove or replace
any of the Ingersoll-Rand Trustees. All of the Trust Common Securities will be
directly or indirectly owned by the Company.
DESCRIPTION OF TRUST PREFERRED GUARANTEES
Set forth below is a summary of information concerning the Trust Preferred
Guarantees that will be executed and delivered by the Company for the benefit of
the holders, from time to time, of Trust Preferred Securities. Each Trust
Preferred Guarantee Agreement under which Trust Preferred Guarantees are issued
will be qualified as an indenture under the Trust Indenture Act. The trustee
under each Trust Preferred Guarantee (the "Guarantee Trustee") will be
identified in the relevant Prospectus Supplement, and will be a financial
institution not affiliated with the Company that has a combined capital and
surplus of not less than $50,000,000. The terms of each Trust Preferred
Guarantee will be those set forth in such Trust Preferred Guarantee and those
made part of such Trust Preferred Guarantee by the Trust Indenture Act. This
summary does not purport to be complete and makes use of certain terms defined
in the Trust Preferred Guarantee Agreement and is subject in all respects to the
provisions of, and is qualified in its entirety by reference to, the form of
Trust Preferred Guarantee, which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part, and the Trust Indenture Act.
Each Trust Preferred Guarantee will be held by the Trust Preferred Guarantee
Trustee for the benefit of the holders of the Trust Preferred Securities of the
applicable Ingersoll-Rand Trust.
GENERAL
Pursuant to each Trust Preferred Guarantee, the Company will
unconditionally agree, to the extent set forth herein, to pay in full to the
holders of the Trust Preferred Securities issued by each Ingersoll-Rand Trust,
the Trust Preferred Guarantee Payments (as defined herein) (except to the extent
paid by such Ingersoll-Rand Trust), as and when due, regardless of any defense,
right of set-off or counterclaim which such Ingersoll-Rand Trust may have or
assert. The following payments with respect to Trust Preferred Securities issued
by each Ingersoll-Rand Trust (the "Trust Preferred Guarantee Payments"), to the
extent not paid by such Ingersoll-Rand Trust, will be subject to the Trust
Preferred Guarantee (without duplication): (i) any accumulated and unpaid
distributions that are required to be paid on such Trust Preferred Securities,
but if and only to the extent that in each case the Company has made a payment
to the related Property Trustee of interest, principal and premium, if any, on
the subordinated Debt Securities held in such Ingersoll-Rand Trust as trust
assets, (ii) the redemption price, including all accrued and unpaid
distributions (the "Redemption Price"), but if and only to the extent that in
each case the Company has made a payment to the related Property Trustee of
interest and principal on the subordinated Debt Securities held in such
Ingersoll-Rand Trust as trust assets with respect to any Trust Preferred
Securities called for redemption by such Ingersoll-Rand Trust and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of such
Ingersoll-Rand Trust (other than in connection with the distribution of
Corresponding Junior Subordinated Debt Securities to the holders of Trust
Preferred Securities or the redemption of all of the Trust Preferred
Securities), the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid distributions on such Trust Preferred Securities to the date
of payment to the extent such Ingersoll-Rand Trust has funds available therefor
or (b) the amount of assets of such Ingersoll-Rand Trust remaining available for
distribution to holders of such Trust Preferred Securities in liquidation of
such Ingersoll-Rand Trust. The Company's obligation to make a Trust Preferred
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Company to the holders of Trust Preferred Securities or by causing the
applicable Ingersoll-Rand Trust to pay such amounts to such holders.
Each Trust Preferred Guarantee will be a guarantee with respect to the
Trust Preferred Securities issued by the applicable Ingersoll-Rand Trust from
the time of issuance of such Trust Preferred Securities but will not apply to
any payment of distributions except to the extent the Company has made a payment
to the related Property Trustee of interest or principal on the subordinated
Debt Securities held in such Ingersoll-Rand Trust as trust assets. If the
Company does not make interest payments on the
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Corresponding Junior Subordinated Debt Securities purchased by an Ingersoll-Rand
Trust, such Ingersoll-Rand Trust will not pay distributions on the Trust
Preferred Securities issued by such Ingersoll-Rand Trust and will not have funds
available therefor and such payment obligation will therefore not be guaranteed
by the Company under the Trust Preferred Guarantee. See "Description of Trust
Preferred Securities" and "Description of Debt Securities--Certain Covenants of
the Company."
The Company's obligations under the Trust Agreement for each
Ingersoll-Rand Trust, the Trust Preferred Guarantee issued with respect to Trust
Preferred Securities issued by that Ingersoll-Rand Trust, the Corresponding
Junior Subordinated Debt Securities purchased by that Ingersoll-Rand Trust and
the related Junior Subordinated Indenture in the aggregate will provide a full
and unconditional guarantee on a junior subordinated basis by the Company of
payments due on the Trust Preferred Securities issued by that Ingersoll-Rand
Trust.
The Company has also agreed to unconditionally guarantee the obligations
of the Ingersoll-Rand Trusts with respect to the Trust Common Securities (the
"Trust Common Guarantees") to the same extent as the Trust Preferred Guarantees,
except that, upon an event of default under the Subordinated Indenture, holders
of Trust Preferred Securities under the Trust Preferred Guarantees shall have
priority over holders of Trust Common Securities under the Trust Common
Guarantee with respect to distributions and payments on liquidation, redemption
or otherwise.
CERTAIN COVENANTS OF THE COMPANY
In each Trust Preferred Guarantee, the Company will covenant that, so long
as any Trust Preferred Securities issued by the applicable Ingersoll-Rand Trust
remain outstanding, if there shall have occurred any event that would constitute
an event of default under such Trust Preferred Guarantee or the Declaration of
such Ingersoll-Rand Trust, then (a) the Company shall not declare or pay any
dividend on, or make any distribution with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
and (b) the Company shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
the Company which rank junior to such Corresponding Junior Subordinated Debt
Securities. However, each Trust Preferred Guarantee will except from the
foregoing any stock dividends paid by the Company, or any of its subsidiaries,
where the dividend stock is of the same class as that on which the dividend is
being paid.
MODIFICATION OF THE TRUST PREFERRED GUARANTEES; ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of Trust Preferred Securities in any material respect (in which case
no vote will be required), each Trust Preferred Guarantee may be amended only
with the prior approval of the holders of not less than a majority in
liquidation amount of the outstanding Trust Preferred Securities issued by the
applicable Ingersoll-Rand Trust. The manner of obtaining any such approval of
holders of such Trust Preferred Securities will be set forth in an accompanying
Prospectus Supplement. All guarantees and agreements contained in a Trust
Preferred Guarantee shall bind the successor, assignees, receivers, trustees and
representatives of the Company and shall inure to the benefit of the holders of
the Trust Preferred Securities of the applicable Ingersoll-Rand Trust then
outstanding.
EVENTS OF DEFAULT
An Event of Default under the Trust Preferred Guarantee will occur upon
the failure of the Company to perform any of its payments or other obligations
thereunder. The holders of a majority in liquidation amount of the Trust
Preferred Securities to which a Trust Preferred Guarantee relates have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trust Preferred Guarantee Trustee in respect of the Trust
Preferred Guarantee or to direct the exercise of any trust or power conferred
upon the Trust Preferred Guarantee Trustee under the Trust Preferred Guarantee.
If the Trust Preferred Guarantee Trustee fails to enforce such Trust
Preferred Guarantee, any holder of Trust Preferred Securities relating to such
Trust Preferred Guarantee may, after a period of 30 days has elapsed from such
holder's written request to the Trust Preferred Guarantee Trustee to enforce the
Trust Preferred Guarantee, institute a legal proceeding directly against the
Company to enforce the Trust Preferred Guarantee Trustee's rights under such
Trust Preferred Guarantee without first instituting a legal proceeding against
the relevant Ingersoll-Rand Trust, the Trust Preferred Guarantee Trustee or any
other person or entity.
The Company will be required to provide annually to the Trust Preferred
Guarantee Trustee a statement as to the performance by the Company of certain of
its obligations under each of the Trust Preferred Guarantees and as to any
default in such performance and an officer's certificate as to the Company's
compliance with all conditions under each of the Trust Preferred Guarantees.
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TERMINATION OF TRUST PREFERRED GUARANTEES
Each Trust Preferred Guarantee will terminate as to the Trust Preferred
Securities issued by the applicable Ingersoll-Rand Trust upon full payment of
all distributions relating to the Trust Preferred Securities or the Redemption
Price of all Trust Preferred Securities of such Trust, upon distribution of the
Subordinated Debt Securities held by such Ingersoll-Rand Trust to the holders of
the Trust Preferred Securities of such Ingersoll-Rand Trust or upon full payment
of the amounts payable in accordance with the Declaration of such Ingersoll-Rand
Trust upon liquidation of such Ingersoll-Rand Trust. Each Trust Preferred
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of Trust Preferred Securities issued by the
applicable Ingersoll-Rand Trust must restore payment of any sums paid under such
Trust Preferred Securities or such Trust Preferred Guarantee.
STATUS OF TRUST PREFERRED GUARANTEES
Each Trust Preferred Guarantee will constitute an unsecured obligation of
the Company and will rank (i) subordinate and junior in right of payment to all
other liabilities of the Company, (ii) pari passu with the most senior
Preference Stock now or hereafter issued by the Company and with any guarantee
now or hereafter entered into by the Company in respect of any Preference Stock
of any affiliate of the Company and (iii) senior to the Company's Common Stock.
The terms of the Trust Preferred Securities provide that each holder of Trust
Preferred Securities issued by such Ingersoll-Rand Trust by acceptance thereof
agrees to the subordination provisions and other terms of the applicable Trust
Preferred Guarantee.
The Trust Preferred Guarantee Trustee shall enforce the Trust Preferred
Guarantee on behalf of the holders of the Trust Preferred Securities issued by
the applicable Ingersoll-Rand Trust. The holders of not less than a majority in
aggregate liquidation amount of the Trust Preferred Securities issued by the
applicable Ingersoll-Rand Trust have the right to direct the time, method and
place of conducting any proceeding for any remedy available in respect of the
related Trust Preferred Guarantee, including the giving of directions of the
Trust Preferred Guarantee Trustee. If the Trust Preferred Guarantee Trustee
fails to enforce such Trust Preferred Guarantee, any holder of Trust Preferred
Securities issued by the applicable Ingersoll-Rand Trust may institute a legal
proceeding directly against the Company, as Guarantor, to enforce its rights
under such Trust Preferred Guarantee, without first instituting a legal
proceeding against the applicable Ingersoll-Rand Trust or any other person or
entity.
Each Trust Preferred Guarantee will constitute a guarantee of payment and
not of collection (that is, the guaranteed party may institute a legal
proceeding directly against the guarantor to enforce its rights under a Trust
Preferred Guarantee without instituting a legal proceeding against any other
person or entity).
PLAN OF DISTRIBUTION
The Company or any Ingersoll-Rand Trust may sell the 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 Securities directly to other
purchasers or dealers or through agents. The distribution of 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 Securities.
In connection with the sale of Securities, such underwriters, dealers and
agents may receive compensation from the Company or an Ingersoll-Rand Trust, or
from purchasers of 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 Securities and, in certain cases, direct
purchasers from the Company or from an Ingersoll-Rand Trust, may be deemed to be
"underwriters" and any discounts or commissions received by them and any profit
on the resale of 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 or by an
Ingersoll-Rand Trust, underwriters, dealers and agents who participate in the
distribution of 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 Securities in respect of which this
Prospectus is delivered are set forth in the accompanying Prospectus Supplement.
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<PAGE> 31
LEGAL MATTERS
Certain legal matters with respect to the Securities (other than the Trust
Preferred Securities) will be passed upon for the Company by Patricia Nachtigal,
Esq., Vice President and General Counsel of the Company. The validity of the
Trust Preferred Securities will be passed upon for the Company and the
Ingersoll-Rand Trusts by Richards, Layton & Finger. Certain legal matters will
be passed upon 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, 1996 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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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR BY THE UNDERWRITERS. NEITHER THIS PROSPECTUS
SUPPLEMENT NOR THE ACCOMPANYING PROSPECTUS CONSTITUTES AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH
SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS NOR ANY SALE MADE HEREUNDER OR
THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE OF SUCH INFORMATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Use of Proceeds....................... S-2
Recent Developments................... S-2
Description of Debentures............. S-2
Underwriting.......................... S-4
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
The Company........................... 2
The Ingersoll-Rand Trusts............. 3
Use of Proceeds....................... 4
Selected Financial Data............... 4
Ratios of Earnings to Fixed Charges... 5
Description of Capital Stock.......... 5
Description of Debt Securities........ 13
Description of Stock Purchase
Contracts and Stock Purchase
Units............................... 22
Description of Trust Preferred
Securities.......................... 22
Description of Trust Preferred
Guarantees.......................... 23
Plan of Distribution.................. 25
Legal Matters......................... 26
Experts............................... 26
</TABLE>
$200,000,000
INGERSOLL-RAND COMPANY
6.443% DEBENTURES DUE 2027
SALOMON BROTHERS INC
CHASE SECURITIES INC.
DEUTSCHE MORGAN GRENFELL
PROSPECTUS SUPPLEMENT
NOVEMBER 20, 1997
