As filed with the Securities and Exchange Commission on March 9, 1998
Registration No. 333-38367
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
Amendment No. 1
To
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
INGERSOLL-RAND COMPANY
(Exact name of Registrant as specified in its charter)
New Jersey 13-5156640
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
INGERSOLL-RAND FINANCING I
A Delaware Statutory Business Trust
(I.R.S. Employer Identification Number Pending)
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07675
(201) 573-0123
(Address, including zip code, and telephone number, including area code,
of principal executive offices)
-------------------------
Patricia Nachtigal, Esq.
Vice President and General Counsel
Ingersoll-Rand Company
P.O. Box 8738
Woodcliff Lake, New Jersey 07675
(201) 573-0123
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
-------------------------
Copies to:
John B. Tehan, Esq. John W. Osborn, Esq.
Simpson Thacher & Bartlett Skadden, Arps, Slate, Meagher & Flom LLP
425 Lexington Avenue 919 Third Avenue
New York, New York 10017 New York, New York 10022
(212) 455-2000 (212) 735-3000
-------------------------
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration
Statement.
-------------------------
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check
the following box: /_/
<PAGE>
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, please check the following
box: /x/
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering: /_/
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering: /_/
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box: /_/
-------------------------
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until this
Registration Statement shall become effective on such date as the
Commission, acting pursuant to Section 8(a), may determine.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus supplement and the accompanying prospectus shall
not constitute an offer to sell or the solicitation of an offer to buy nor
shall there be any sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such State.
- -------------------------------------------------------------------------------
Subject to Completion, Dated March 9, 1998
PROSPECTUS SUPPLEMENT
- ---------------------
(To Prospectus dated March , 1998)
14,000,000 FELINE PRIDES/SM/
(Consisting of Income PRIDES/SM/ and Growth PRIDES/SM/)
INGERSOLL-RAND COMPANY
1,400,000 Capital Securities
Ingersoll-Rand Financing I
(Liquidation Amount $25 per Capital Security)
fully and unconditionally guaranteed to
the extent set forth herein by
Ingersoll-Rand Company
-------------------------
The securities offered hereby are 14,000,000 FELINE PRIDES/SM/
("FELINE PRIDES") of Ingersoll-Rand Company, a New Jersey corporation
("Ingersoll-Rand Company" or the "Company"), and 1,400,000 ____% Capital
Securities (the "Capital Securities" and, together with the FELINE
PRIDES, the "Securities") of Ingersoll-Rand Financing I, a statutory
business trust created under the laws of the State of Delaware (the
"Trust"), having a stated liquidation amount per Capital Security equal
to $25. Initially, 12,600,000 of the
(continued on next page)
-------------------------
See "Risk Factors" beginning on page S-23 of this Prospectus
Supplement for certain information relevant to an investment in the
Securities.
Prior to the offering made hereby, there has been no public
market for the Securities. Application will be made to list the Income
PRIDES and the Growth PRIDES on the New York Stock Exchange ("NYSE"),
subject to official notice of issuance. On March 6, 1998, the last
reported sale price of the Common Stock on the NYSE was $47 per share.
-------------------------
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Price to Public<F1>
$ per Income PRIDES
$ per Growth PRIDES
$ per Capital Security
<TABLE>
<CAPTION>
Underwriting Proceeds to
Commission<F2> Company<F3>
<S> <C> <C>
Total(4) . . . . . . . . . . . $ $
<FN>
<F1> Plus, as applicable, accrued distributions, interest and Contract
Adjustment Payments, if any, from March __, 1998.
<F2> The Company and the Trust have agreed to indemnify the Underwriter
against certain liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
<F3> Before deducting expenses payable by the Company estimated at
$____________; such amount does not include $_____ used to purchase
the Treasury Securities Component of the 1,400,000 Growth PRIDES.
<F4> The Company and the Trust have granted to the Underwriter 30-day
options to purchase up to an additional 1,890,000 Income PRIDES,
210,000 Growth PRIDES and 210,000 Capital Securities, to cover
over-allotments, if any; provided, however, that the Underwriter
must purchase, proportionately, at least as many Capital Securities
as Growth PRIDES and must purchase, proportionately, at least as
many Growth PRIDES as Income PRIDES. If such options are exercised
in full, the total Underwriting Commission and Proceeds to Company
will be $ and $ (such amount does not include
$ used to purchase the Treasury Securities component of
the Growth PRIDES), respectively. See "Underwriting."
</TABLE>
<PAGE>
The Securities are offered by the Underwriter, subject to
prior sale, when, as and if issued to and accepted by it, and subject to
approval of certain legal matters by counsel for the Underwriter and
certain other conditions. The Underwriter reserves the right to withdraw,
cancel or modify such offer and to reject orders in whole or in part. It
is expected that delivery of the Securities offered hereby will be made
in New York, New York on or about March , 1998.
-------------------------
Merrill Lynch & Co.
-------------------------
The date of this Prospectus Supplement is March , 1998.
- -----------------------------------
/SM/Service Mark of Merrill Lynch & Co., Inc.
<PAGE>
(cover continued from previous page)
Capital Securities will be issued and held as a component of the FELINE
PRIDES. The FELINE PRIDES offered hereby will initially consist of (A)
12,600,000 units (referred to as "Income PRIDES ") with a Stated Amount,
per Income PRIDES, of $25 (the "Stated Amount") and (B) at least
1,400,000 units (referred to as "Growth PRIDES" ) with a face amount, per
Growth PRIDES, equal to the Stated Amount; to the extent the number of
Growth PRIDES offered hereby is increased, the number of separate Capital
Securities offered hereby will be increased by at least that number. Each
Income PRIDES will initially consist of a unit comprised of (a) a stock
purchase contract (a "Purchase Contract") under which (i) the holder will
purchase from the Company not later than , 2001 (the "Purchase
Contract Settlement Date"), for $25, a number of newly issued shares of
common stock, $2 par value per share (the "Common Stock"), of the Company equal
to the Settlement Rate described herein, and (ii) the Company will pay
the holder unsecured contract adjustment payments ("Contract Adjustment
Payments") at the rate of % of the Stated Amount per annum and (b)
either beneficial ownership of a Capital Security or upon the occurrence
of a Tax Event Redemption (as defined herein) prior to the Purchase
Contract Settlement Date, the Applicable Ownership Interest (as defined
herein). Each Growth PRIDES will initially consist of a unit comprised of
(a) a Purchase Contract under which (i) the holder will purchase from the
Company on the Purchase Contract Settlement Date, for $25, a number of
newly issued shares of Common Stock of the Company, equal to the
Settlement Rate, and (ii) the Company will pay the holder Contract
Adjustment Payments, at the rate of % of the Stated Amount per
annum, and (b) a 1/40 undivided beneficial interest in a %
zero-coupon U.S. Treasury Security having a principal amount equal to $1,000
and maturing on , 2001 (the "Treasury
Securities"). The Company will, directly or indirectly, own all the
common securities (the "Common Securities" and, together with the Capital
Securities, the "Trust Securities") representing undivided beneficial
ownership interests in the assets of the Trust. The Trust exists for the
sole purpose of issuing the Trust Securities and investing the proceeds
thereof in an equivalent amount of Debentures of the Company, due
, 2003 and initially bearing interest at % (the
"Debentures"). As long as the FELINE PRIDES are in the form of Income
PRIDES or Growth PRIDES, the related Capital Securities or the Treasury
Portfolio or a Treasury Security, as applicable, will be pledged to the
Collateral Agent (as defined herein), to secure the holder's obligation
to purchase Common Stock under the related Purchase Contracts.
The number of shares of Common Stock issuable upon settlement of
each Purchase Contract on the Purchase Contract Settlement Date (the
"Settlement Rate") will be calculated as follows: (a) if the Applicable
Market Value (as defined herein) is equal to or greater than $
(the "Threshold Appreciation Price," which is approximately above
the last reported sale price of the Common Stock set forth on the cover
page of the final Prospectus Supplement (the "Reference Price")), the
Settlement Rate will be ; (b) if the Applicable Market Value is
less than the Threshold Appreciation Price but greater than the Reference
Price, the Settlement Rate will be equal to the Stated Amount divided by
the Applicable Market Value; and (c) if the Applicable Market Value is
less than or equal to the Reference Price, the Settlement Rate will
be .
<PAGE>
Aggregate payments of % of the Stated Amount per annum will be
made or accrue on each Income PRIDES quarterly in arrears on February 16,
May 16, August 16 and November 16 of each year, commencing
1998, until the Purchase Contract Settlement Date. These
payments will consist of cumulative cash distributions on the related
Capital Securities or Treasury Portfolio, as applicable, payable at the
rate of % of the stated liquidation amount per annum, and Contract
Adjustment Payments payable by the Company at the rate of % of the
Stated Amount per annum, subject in the case of Capital Securities and
Contract Adjustment Payments, to the Company's right to defer payment of
such amounts. Contract Adjustment Payments, payable by the Company at the
rate of % of the Stated Amount per annum, will be made or accrued on
each Growth PRIDES quarterly in arrears on February 16, May 16, August 16
and November 16 of each year, commencing 1998, until the
Purchase Contract Settlement Date, subject to the Company's right to defer
such payments. In addition, original issue discount ("OID") will
accrue on the related Treasury Security subject to the Company's right to
defer such payments. Holders of each Capital Security will receive
cumulative cash distributions, payable quarterly in arrears, on February
16, May 16, August 16 and November 16 of each year, commencing
1998 at the rate of % of the stated liquidation
amount per annum. Such quarterly distributions on the Capital Securities
will constitute a portion of the quarterly distribution on the related
Income PRIDES. The ability of the Trust to make the quarterly
distributions on the Capital Securities will be solely dependent upon the
receipt of corresponding interest payments from the Company on the
Debentures. The Company will have the right at any time, and from time to
time, limited to a period not extending beyond the maturity date of the
Debentures, to defer the interest payments due on the Debentures. As a
consequence of such deferral, quarterly distributions on the Capital
Securities and the Income PRIDES (to the extent that a portion of the
quarterly distribution on the Income PRIDES is comprised of the quarterly
distributions on the Capital Securities) would be deferred, but would
continue to accrue with interest compounded quarterly. The Company will
have the right at any time, and from time to time, limited to a period
not extending beyond the Purchase Contract Settlement Date, to defer
Contract Adjustment Payments. As a consequence of such deferral, such
portion of the cumulative quarterly distributions on the Income PRIDES
that is comprised of the Contract Adjustment Payments and the quarterly
cash distributions on the Growth PRIDES would be deferred; however, such
deferred Contract Adjustment Payments, if any, would continue to accrue
at the rate of % per annum, compounded quarterly at the higher of
(i) the rate which would accrue on Income PRIDES for such payments and
(ii) the rate which would accrue on Growth PRIDES for such payments.
The distribution rate on the Capital Securities and the interest
rate on the related Debentures outstanding on and after the Purchase
Contract Settlement Date will be reset on the third Business Day (as
defined herein) immediately preceding the Purchase Contract Settlement
Date to a rate per annum (the "Reset Rate") to be determined by the Reset
Agent (as defined herein) equal to the sum of (x) a spread amount (the
"Reset Spread") and (y) the rate of interest on the Two-Year Benchmark
Treasury (as defined herein).
<PAGE>
The payment of distributions and certain redemptions out of monies
held by the Trust and payments on liquidation of the Trust will be
guaranteed by the Company (the "Guarantee") to the extent described herein
and under "Description of the Guarantee."
The Company's obligations in respect of the Debentures and the
Guarantee generally will be senior unsecured obligations of the Company.
The Contract Adjustment Payments will be subordinated and junior in right
of payment only to the Company's obligations under the Senior
Indebtedness (as defined herein). "Senior Indebtedness" means
indebtedness of any kind of the Company unless the instrument under which
such indebtedness is incurred expressly provides that it is in parity or
subordinate in right of payments to the Contract Adjustment Payments.
If the holder of an Income PRIDES has not notified the Purchase
Contract Agent (as defined herein), of its intention to settle the
related Purchase Contract with separate cash, the Remarketing Agent (as
defined herein), pursuant to the terms of the Remarketing Agreement (as
defined herein), will use its reasonable efforts to remarket the related
Capital Security (bearing the Reset Rate) on the third Business Day
immediately preceding the Purchase Contract Settlement Date for
settlement on the Purchase Contract Settlement Date at a price of
approximately 100.5% of such Capital Security's stated liquidation amount
plus accrued and unpaid distributions (including deferred distributions,
if any) thereon. The proceeds from such remarketing, in an amount equal
to the aggregate stated liquidation amount of such Capital Securities, will
automatically be applied to satisfy in full such holder's obligation
to purchase Common Stock under the related Purchase Contract. In
addition, after deducting as a remarketing fee (the "Remarketing Fee") an
amount not exceeding 25 basis points (.25%) of the aggregate stated
liquidation amount of the remarketed securities, from any amount received
in connection with such remarketing in excess of the aggregate stated
liquidation amount of such Capital Securities plus any accrued and unpaid
distributions (including deferred distributions, if any), the Remarketing
Agent will remit the remaining portion of the proceeds, if any, to the
Purchase Contract Agent for the benefit of such holder. If, despite using
its reasonable efforts the Remarketing Agent fails to remarket the
Capital Securities (other than to the Company) at a price not less than 100%
of their aggregate stated liquidation amount plus accrued and unpaid
distributions (including deferred distributions, if any), the remarketing
will be deemed to have failed (a "Failed Remarketing") and the Company will
exercise its rights as a secured party to dispose of the Capital
Securities in accordance with applicable law and satisfy in full, from
the proceeds of such disposition, such holder's obligation to purchase
Common Stock under the related Purchase Contracts; provided, that if the
Company exercises such rights as a secured Party with respect to such
Capital Securities, any accrued and unpaid distributions (including any
deferred distributions, if any) on such Capital Securities will be paid
in cash by the Company to the holder of record of such Capital
Securities. Holders of Capital Securities which are not components of
Income PRIDES may elect, in the manner described herein, to have their
Capital Securities remarketed by the Remarketing Agent.
<PAGE>
On or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, each holder (including an Underwriter)
of an Income PRIDES may substitute for the related Capital Securities
zero-coupon U.S. Treasury Securities, which are principal strips of the
% U.S. Treasury Securities that mature on the Business Day
immediately preceding the Purchase Contract Settlement Date (the
"Treasury Securities"), thereby creating Growth PRIDES. Such Treasury
Securities will be pledged with the Collateral Agent to secure the
holder's obligation to purchase Common Stock under the related Purchase
Contracts. In the event that Contract Adjustment Payments are at a higher
rate for Growth PRIDES than for Income PRIDES, holders of Income PRIDES
wishing to recreate Growth PRIDES will also be required to deliver cash
in an amount equal to the excess of the Contract Adjustment Payments that
would have accrued since the last Payment Date through the date of
substitution on the Growth PRIDES being created by such holders, over the
Contract Adjustment Payments that have accrued over the same time period
on the related Incoming PRIDES.
If a Failed Remarketing has occurred, each holder of Trust
Securities (or, following the distribution of the Debentures upon a
dissolution of the Trust as described herein, the holders of such
Debentures) holding such Trust Securities (or Debentures, as the case may
be) following the Purchase Contract Settlement Date will have the right,
in the case of the Trust Securities, to require the Trust to distribute
their pro rata share of the Debentures to The Bank of New York, as
exchange agent (the "Exchange Agent") and the Exchange Agent will put
such Debentures to the Company on behalf of such holders, (or, in the
case of the persons who hold the Debentures directly, such persons will
have the right to put their Debentures directly to the Company)
on , 2001, upon at least three Business Days' prior notice,
at a price equal to the principal amount thereof, plus accrued and unpaid
interest (including deferred interest), if any, thereon.
On the Business Day immediately preceding the Purchase Contract
Settlement Date, unless a holder of Income PRIDES or Growth PRIDES (i)
has settled the related Purchase Contracts through the early delivery of
cash to the Purchase Contract Agent in the manner described herein, (ii)
in the case of Income PRIDES, has settled the related Purchase Contracts
with separate cash on the Business Day immediately preceding the Purchase
Contract Settlement Date pursuant to prior notification to the Purchase
Contract Agent, (iii) has had the Capital Securities related to such
holder's Purchase Contract remarketed in the manner described herein in
connection with settling such Purchase Contracts, or (iv) an event
<PAGE>
described under "Description of the Purchase Contracts--Termination" has
occurred, then (A) in the case of Income PRIDES (unless a Tax Event
Redemption has occurred) the Company will exercise its rights as a
secured party to dispose of the Capital Securities in accordance with
applicable law and (B) in the case of Growth PRIDES or Income PRIDES (in
the event that a Tax Event Redemption has occurred), the principal amount
of the related Treasury Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as applicable, when paid at
maturity, will automatically be applied, pursuant to the exercise of such
rights by the Company to satisfy in full such holder's obligation to
purchase Common Stock under the related Purchase Contracts.
In the event that a holder of either Income PRIDES or Growth PRIDES
effects the early settlement of the related Purchase Contracts through
the delivery of cash or settles (in the case of Income PRIDES) such Purchase
Contracts with cash on the Business Day immediately preceding
the Purchase Contract Settlement Date, the related Capital Securities,
the appropriate Applicable Ownership Interest of the Treasury Portfolio
or Treasury Securities, as the case may be, will be released to the
holder as described herein.
The Company will have the right at any time to dissolve the Trust
and, after satisfaction of liabilities to creditors, cause the Debentures
to be distributed to the holders of the Trust Securities. If the
Debentures are distributed to the holders of the Capital Securities, the
Company will use its best efforts to cause the Debentures to be listed on
such exchange on which the Capital Securities are then listed, including,
if applicable, the New York Stock Exchange.
The Debentures (and, thus, the Trust Securities) are redeemable at
the option of the Company, in whole but not in part, upon the occurrence
and continuation of a Tax Event (as defined herein) under the
circumstances described herein (a "Tax Event Redemption"). If the Company
so redeems all of the Debentures, the Trust must redeem all of the Trust
Securities at a redemption price (the "Redemption Price") per Trust
Security equal to the Redemption Amount (as defined herein) plus accrued
and unpaid distributions including deferred distributions, if any,
thereon to the date fixed for redemptions and pay in cash such Redemption
Price to the holders of such Trust Securities. If such Tax Event
Redemption occurs prior to the Purchase Contract Settlement Date, the
Redemption Price payable in liquidation of the Income PRIDES holders'
interests in the Trust or in the Debentures will be distributed to the
Collateral Agent, who in turn will apply an amount equal to the
Redemption Amount of such Redemption Price to purchase, on behalf of the
holders of Income PRIDES, the Treasury Portfolio and remit the remaining
portion, if any, of such Redemption Price to the Purchase Contract Agent
for payment to the holder of such Income PRIDES. See "Description of the
Debentures--Tax Event Redemption." Such Treasury Portfolio will be
substituted for the Capital Securities and will be pledged to the
<PAGE>
Collateral Agent to secure such Income PRIDES holders' obligations to
purchase the Common Stock under their Purchase Contracts.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF
THE SECURITIES AND THE COMMON STOCK OF THE COMPANY. SUCH TRANSACTIONS MAY
INCLUDE STABILIZING TRANSACTIONS, THE PURCHASE OF SECURITIES TO COVER
SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
<PAGE>
PROSPECTUS SUPPLEMENT SUMMARY
-----------------------------
The following summary information is qualified in its entirety by
the more detailed information and consolidated financial statements of
the Company appearing elsewhere in the accompanying Prospectus, this
Prospectus Supplement or in the documents incorporated herein or in the
accompanying Prospectus by reference. A listing of the pages on which
certain definitions of capitalized terms used in this Prospectus
Supplement Summary and elsewhere in this Prospectus Supplement are
defined is set forth in the "Index of Terms for Prospectus Supplement"
herein. Except as otherwise noted, all information in this Prospectus
Supplement assumes no exercise of the Underwriter's over-allotment
options.
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 nonelectrical
machinery and equipment. Principal products include the following:
Agricultural sprayers
Air balancers
Air compressors & accessories
Air dryers
Air logic controls
Air motors
Air and electric tool
Architectural hardware trim
Asphalt compactors
Asphalt pavers
Automated production systems
Automotive components
Ball bearings
Blasthole drills
Blowers
Centrifugal pumps
Compact hydraulic excavators
Construction equipment
Diaphragm pumps
Directional drills
Door closers
Door control hardware
Door locks, latches & locksets
Doors and door frames (steel)
Drilling equipment and accessories
Electrical security systems
Engineered pumps
Engine-starting systems
Exit devices
Extrusion pump systems
Fastener-tightening systems
Fluid-handling equipment
Foundation drills
<PAGE>
Golf cars
Hoists
Hydraulic breakers
Lubrication equipment
Material handling equipment
Mining equipment
Multistage pumps
Needle roller bearings
Parts-washing systems
Paving equipment
Pneumatic breakers
Pneumatic cylinders
Pneumatic valves
Portable compressors
Portable generators
Portable light towers
Reciprocating pumps
Road-building machinery
Rock drills
Rock stabilizers
Roller bearings
Rotary drills
Rotary pumps
Rough-terrain forklifts
Skid-steer loaders
Soil compactors
Spray-coating systems
Submersible pumps
Transport temperature control systems
Utility vehicles
Vacuum pumps
Vertical turbine pumps
Waterjet-cutting systems
Water-well drills
Winches
These products are sold primarily under the Company's name and also
under other names including ABG, Aro, Beebe, Blaw-Knox, Bobcat, Carryall,
Centac, Charles Maire, Club Car, Crawlair, Cyclone, Ecoair, Elite, Dixie-
Pacific Fafnir, Falcon, Glynn-Johnson, Ingersoll-Dresser Pumps, Jeumont-
Schneider Pumps, Kilian, Klemm, LCN, McCartney, Melroe, Montabert, NREC,
Newman Tonks, Normbau, Pacific, Phoenix, Pleuger, Promaxx, Samiia,
Schlage, Sensor I, Sierra, Spra-Coupe, Steelcraft, Tensor I, Thermo King,
Torrington, Von Duprin, Worthington and Zimmerman.
The Company employs approximately 47,000 people. It has over 100
manufacturing plants throughout the world.
During the last three years, the Company has been involved in an
aggressive acquisition and divestment program. The larger acquisitions
included the following:
<PAGE>
-- the May 1995 acquisition of Clark Equipment Company for
approximately $1.5 billion.
-- the April 1997 acquisition of Newman Tonks Group PLC ("Newman
Tonks") for approximately $370 million. Newman Tonks is based
in the United Kingdom and is a leading manufacturer, specifier
and supplier of a wide range of branded architectural products
in the building industry.
-- the October 1997 acquisition of Thermo King Corporation
("Thermo King") for approximately $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 larger divestitures included:
-- the February 1997 sale of the Company's Clark-Hurth Group to
Dana Corporation for approximately $260 million.
-- the March 1996 sale of the Company's Pulp Machinery Division
for approximately $122 million to Beloit Corporation, a
subsidiary of Harnischfeger Industries, Inc.
-- the December 1996 sale of the remainder of the Process Systems
Group for approximately $58 million to Gencor Industries, Inc.
The Company's principal executive offices are at 200 Chestnut Ridge
Road, Woodcliff Lake, New Jersey 07675 (telephone 201-573-0123).
The Trust
---------
The Trust is a statutory business trust created under Delaware law
pursuant to (i) a trust agreement, executed by the Company, as depositor
(the "Sponsor"), and certain of the trustees of the Trust (the
"Ingersoll-Rand Trustees") and (ii) the filing of a certificate of trust
with the Secretary of State of the State of Delaware on August 18, 1997.
Such trust agreement will be amended and restated in its entirety (as so
amended and restated, the "Declaration") substantially in the form filed
as an exhibit to the Registration Statement of which this Prospectus
Supplement forms a part. The Declaration will be qualified as an indenture
under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). The Trust exists for the exclusive purposes of (i)
issuing the Trust Securities representing undivided beneficial ownership
interests in the assets of the Trust, (ii) investing the gross proceeds
of the Trust Securities in the Debentures and (iii) engaging in only
those other activities necessary or incidental thereto. See "The Trust."
The Offering
------------
Securities Offered . . . . . . . . . . . . . . . 14,000,000 FELINE
PRIDES,
consisting of
12,600,000 Income
PRIDES and at
least 1,400,000
Growth PRIDES,
and at least
1,400,000
separate Capital
Securities.
<PAGE>
12,600,000
Capital
Securities will
be initially
issued and held
as a component of
the Income
PRIDES.
Issuers . . . . . . . . . . . . . . . . . . . . . Ingersoll-Rand
Company and
Ingersoll-Rand
Financing I.
Stated Amount . . . . . . . . . . . . . . . . . . $25 per FELINE
PRIDES.
Listing of the Income
PRIDES and Growth PRIDES . . . . . . . . . . . Application will
be made to list
the Income PRIDES
and the Growth
PRIDES on the
NYSE, subject to
official notice
of issuance. If
Capital
Securities are
separately traded
to a sufficient
extent that the
applicable
exchange listing
requirements are met,
the Company
will endeavor to
cause such
securities to be
listed on such
exchange on which
the Income PRIDES
and the Growth
PRIDES are then
listed,
including, if
applicable, the
NYSE. See
"Underwriting."
NYSE Symbol of Common Stock . . . . . . . . . . . "IR"
Use of Proceeds . . . . . . . . . . . . . . . . . All of the proceeds
from the sale of
the Income
PRIDES, the
Capital
Securities which
are not
components of the
Income PRIDES and
the Common
<PAGE>
Securities will
be invested by
the Trust in
Debentures of the
Company. The
Company currently
anticipates using
substantially all of
the net proceeds
from the
sale of the
Debentures,
estimated to be
approximately $
million
(after deducting
the underwriting
commission and
expenses), to
repay commercial
paper
indebtedness
having an average
interest rate of
approximately
5.7% incurred in
connection with
the acquisition of
Thermo King.
All of the proceeds
from the sale of
the Growth PRIDES
will be used to
purchase the
underlying
Treasury
Securities to be
transferred to
holders of the
Growth PRIDES
pursuant to the
terms thereof,
and the Company
will receive no
proceeds from the
sale of the
Growth PRIDES.
Components of FELINE PRIDES . . . . . . . . . . . The 14,000,000
FELINE PRIDES
offered hereby
will initially
consist of (A)
12,600,000 units
referred to as
Income PRIDES and
(B) at least
1,400,000 units
referred to as
Growth PRIDES; to
the extent the
<PAGE>
number of Growth
PRIDES offered hereby
is increased, the
number of separate
Capital Securities
offered hereby will
be increased by
at least that
number. Each
Income PRIDES
will initially
consist of a unit
comprised of (a)
a Purchase
Contract under
which (i) the
holder will
purchase from the
Company on the
Purchase Contract
Settlement Date,
for an amount of
cash equal to the
Stated Amount, a
number of newly
issued shares of
Common Stock of
the Company equal to
the Settlement
Rate, and (ii)
the Company will
pay Contract
Adjustment
Payments at the
rate of % of
the Stated Amount
per annum to the
holder, and (b)
either a
beneficial
interest in
a % Capital
Security, having
a stated
liquidation
amount equal to
$25 representing
an undivided
beneficial
ownership
interest in the
assets of the
Trust or, upon
the occurrence of
a Tax Event
Redemption prior
to the Purchase
Contract
Settlement Date,
the appropriate
Applicable
<PAGE>
Ownership
Interest in the
Treasury
Portfolio.
The Company may
at any time
dissolve the
Trust and, after
satisfaction of
liabilities to
creditors of the
Trust, if any,
cause the
Debentures to be
distributed to
the holders of
the Capital
Securities.
References herein
to Capital
Securities,
unless the
context otherwise
requires, mean
(i) the Capital
Securities or
(ii) the
Debentures which
have been
delivered to the
holders of the
Capital
Securities upon
dissolution of
the Trust.
In addition, as
described below,
upon the
occurrence of a
Tax Event (as
defined herein)
prior to the
Purchase Contract
Settlement Date,
the Company may
at its option
cause the
Debentures (and,
thus, the Capital
Securities) to be
redeemed at the
Redemption Price
and the Treasury
Portfolio will be
substituted for
the redeemed
Capital
Securities in the
manner described
herein to secure
<PAGE>
the Income PRIDES
holders'
obligations under
their related
Purchase
Contracts. The
distribution rate
and the payment
dates for the
Capital Securit-
ies will be the
same as the
interest rate and
the payment dates
for the
Debentures, which
will be the sole
assets of the
Trust.
As long as a
FELINE PRIDES is
in the form of an
Income PRIDES,
the related
Capital
Securities, or
the Treasury
Portfolio, as
applicable, will
be pledged
pursuant to a
pledge agreement,
to be dated as of
March , 1998
(the "Pledge
Agreement"),
between the
Company and The
Chase Manhattan
Bank, as
collateral agent
for the Company
(together with
any successor
thereto in such
capacity, the
"Collateral
Agent"), to
secure the
holder's
obligation to
purchase Common
Stock under the
related Purchase
Contract.
Each Growth
PRIDES will
consist of a unit
with a face
amount of $25
<PAGE>
comprised of (a)
a Purchase
Contract under
which (i) the
holder will
purchase from the
Company not later
than the Purchase
Contract
Settlement Date
for an amount of
cash equal to the
Stated Amount of
such Growth
PRIDES a number
of newly issued
shares of Common
Stock equal to
the Settlement
Rate and (ii) the
Company will pay
the holder
Contract
Adjustment
Payments at the
rate of % of
the Stated Amount
per annum to the
holder; and (b) a
1/40 undivided
beneficial
ownership
interest in a
Treasury Security
having a
principal amount
at maturity equal
to $1,000 and
maturing on the
Business Day
immediately
preceding the
Purchase Contract
Settlement Date.
The FELINE PRIDES
will be issued
under a Purchase
Contract
Agreement, to be
dated as of March
, 1998 (the
"Purchase
Contract
Agreement"),
between the
Company and The
Bank of New York,
as agent for the
holders of the
FELINE PRIDES
(together with
<PAGE>
any successor
thereto in such
capacity, the
"Purchase
Contract Agent").
Creating Growth PRIDES . . . . . . . . . . . . . Each holder of an
Income PRIDES may
substitute for
the related
Capital
Securities or the
Applicable
Ownership
Interest of the
Treasury
Portfolio held by
the Collateral
Agent zero-coupon
U.S. Treasury
Securities in an
amount per Income
PRIDES equal to
the Stated Amount
per Capital
Security. Such
substitution may
be made on or
prior to the
fifth Business
Day immediately
preceding the
Purchase Contract
Settlement Date
but only in
integral
multiples of 40
Income PRIDES;
provided,
however, if the
Treasury
Portfolio has
become a
component of the
Income PRIDES,
holders of Income
PRIDES may make
such
substitutions
only in integral
multiples of
320,000 Income
PRIDES at any
time on or prior
to the second
Business Day
immediately
preceding the
Purchase Contract
Settlement Date.
In the event that
Contract
<PAGE>
Adjustment
Payments are at a
higher rate for
Growth PRIDES
than for Income
PRIDES, holders
of Income PRIDES
wishing to create
Growth PRIDES
also will be
required to
deliver cash in
an amount equal
to the excess of
the Contract
Adjustment
Payments that
would have
accrued since the
last Payment Date
through the date
of substitution
on the Growth
PRIDES being
created by such
holders, over the
Contract
Adjustment Payments
that have
accrued over the
same time period
on the related
Income PRIDES.
Creating Income PRIDES . . . . . . . . . . . . . On or prior to
the fifth
Business Day
immediately
preceding the
Purchase Contract
Settlement Date,
a holder of
Growth PRIDES
will have the
right to create
Income PRIDES by
delivering 40
Growth PRIDES to
the Purchase
Contract Agent
plus 40 Capital
Securities to the
Collateral Agent
in exchange for
40 Income PRIDES
and the release
of the related
Treasury Security
to such holder;
provided,
however, if a Tax
Event Redemption
<PAGE>
has occurred
prior to the
Purchase Contract
Settlement Date
and the Treasury
Portfolio has
become a
component of the
Income PRIDES,
holders of Growth
PRIDES may make
such substitution
(but using the
Applicable Owner-
ship Interest of
the Treasury
Portfolio rather
than Capital
Securities) only
in integral
multiples of
320,000 Growth
PRIDES at any
time on or prior
to the second
Business Day
immediately
preceding the
Purchase Contract
Settlement Date.
Such Capital
Securities or the
appropriate
Applicable Owner-
ship Interest of
the Treasury
Portfolio, as the
case may be, will
be pledged with
the Collateral
Agent to secure
the holder's
obligation to
purchase Common
Stock under the
related Purchase
Contracts.
<PAGE>
Current Payments . . . . . . . . . . . . . . . . Holders of Income
PRIDES will be
entitled to
receive aggregate
cash
distributions at
a rate of %
of the Stated
Amount, payable
quarterly in
arrears,
consisting of
cumulative cash
distributions on
the related
Capital Securi-
ties payable at
the rate of %
of the Stated
Amount per annum,
or on the
Treasury
Portfolio,
payable at the
rate of % of
the Stated Amount
per annum, as
applicable, and
Contract
Adjustment
Payments, payable
by the Company at
the rate of
% of the
Stated Amount per
annum, subject
(in the case of
both the
distributions on
the Capital
<PAGE>
Securities and of
the Contract
Adjustment
Payments), to the
Company's right
to defer the
payment of such
amounts. The
ability of the
Trust to make the
quarterly
distributions on
the related
Capital
Securities will
be solely
dependent upon
the receipt of
corresponding
interest payments
from the Company
on the
Debentures. The
Company's
obligations with
respect to the
Debentures will
be senior and
unsecured and
will rank on a
parity in right
of payment with
all other senior
unsecured
obligations of
the Company. If a
Tax Event
Redemption has
occurred,
quarterly
distributions on
the appropriate
quarterly
distribution to
the holders of
Income PRIDES
will not be
deferred.
Holders of Growth
PRIDES will be
entitled to
receive quarterly
cash
distributions of
Contract
Adjustment
Payments, payable
by the Company at
the rate of
% of the
Stated Amount per
<PAGE>
annum, subject to
the Company's
rights of
deferral
described herein.
In addition, OID
would continue to
accrue on the
related Treasury
Securities. See
"Risk Factors--
Right to Defer
Current
Payments."
Contract Adjustment Payments . . . . . . . . . . Contract
Adjustment
Payments will be
fixed at a rate
per annum of
% of the
Stated Amount per
Purchase Contract
in the case of
Income PRIDES,
and % of the
Stated Amount per
Purchase
Contract, in the
case of Growth
PRIDES. The
Contract
Adjustment
Payments, will be
subordinated and
junior in right
of payment to the
Senior
Indebtedness. See
"Description of
the Purchase
Contracts--
Contract
Adjustment
Payments."
Option to Defer Current Payments . . . . . . . . The Company has
the right at any
time, and from
time to time,
limited to a
period not
extending beyond
the maturity date
of the
Debentures, to
defer the
interest payments
due on the
Debentures. As a
consequence of
such deferral,
<PAGE>
the corresponding
quarterly
distributions to
holders of
Capital
Securities and
Income PRIDES
would be deferred
(but despite such
deferral, would
continue to
accumulate
quarterly and
would accrue
interest thereon
compounded
quarterly at the
rate of %
per annum through
and including
,
2001, and at the
Reset Rate
thereafter). The
Company also has
the right to
defer the payment
of Contract
Adjustment
Payments on the
related Purchase
Contracts until
no later than the
Purchase Contract
Settlement Date;
however, such
deferred Contract
Adjustment
Payments will
bear additional
Contract
Adjustment
Payments at the
rate of %
per annum (the
higher of (i) the
rate which would
accrue on Income
PRIDES for such
payments and (ii)
the rate which
would accrue on
Growth PRIDES for
such payments)
(such deferred
Contract
Adjustment
Payments together
with such
additional
Contract
<PAGE>
Adjustment
Payments shall be
referred to as
the "Deferred
Contract
Adjustment
Payments"). See
"Description of
the Purchase
Contracts --
Contract
Adjustment
Payments." If
interest payments
on the Debentures
or the Contract
Adjustment
Payments are
deferred, the
Company has
agreed, among
other things, not
to declare or pay
any dividend on
or repurchase its
capital stock
(subject to
certain
exceptions)
during the period
of such deferral.
If a Tax Event
Redemption has
occurred prior to
the Purchase
Contract
Settlement Date
and the Treasury
Portfolio has
become a
component of the
Income PRIDES,
quarterly
distributions on
the appropriate
Applicable
Ownership
Interest of the
Treasury
Portfolio as a
portion of the
cumulative
quarterly
distributions to
the holders of
Income PRIDES
will not be
deferred.
In the event that
the Company
elects to defer
<PAGE>
the payment of
Contract
Adjustment
Payments on the
related Purchase
Contracts until
the Purchase
Contract
Settlement Date,
each holder of
the related
Income PRIDES or
Growth PRIDES
will receive on
the Purchase
Contract
Settlement Date
in respect of
such Deferred
Contract
Adjustment
Payments, in lieu
of a cash
payment, a number
of shares of
Common Stock
equal to (x) the
aggregate amount
of Deferred
Contract
Adjustment
Payments payable
to such holder
divided by (y)
the Applicable
Market Value (as
defined herein).
See "Description
of the Purchase
Contracts--Option
to Defer Contract
Adjustment
Payments."
Payment Dates . . . . . . . . . . . . . . . . . . Subject to the
deferral
provisions
described herein,
the current
payments
described above
in respect of the
Income PRIDES and
Growth PRIDES
will be payable
quarterly in
arrears on
February 16, May
16, August 16 and
November 16 of
each year,
commencing
<PAGE>
,
1998, through and
including (i) in
the case of the
Contract
Adjustment
Payments, the
earlier of the
Purchase Contract
Settlement Date
or the most
recent such
quarterly date on
or prior to any
early settlement
of the related
Purchase
Contracts and
(ii) in the case
of Capital
Securities that
are components of
Income PRIDES,
the most recent
such quarterly
date on or prior
to the earlier of
the Purchase
Contract
Settlement Date
and the date the
liquidation
amount of such
Capital Security,
together with all
accumulated and
unpaid
distributions
thereon (each, a
"Payment Date")
is paid in full.
Remarketing . . . . . . . . . . . . . . . . . . . Unless a Tax
Event Redemption
has occurred,
pursuant to a
remarketing
agreement (the
"Remarketing
Agreement") dated
as of March ,
1998, among the
Company, the
Trust, the
Purchase Contract
Agent and a
nationally
recognized in-
vestment banking
firm chosen by
the Company (the
"Remarketing
<PAGE>
Agent"), and
subject to the
terms of a
Remarketing
Underwriting
Agreement to be
dated as of the
third Business
Day immediately
preceding the
Purchase Contract
Settlement Date
among such
parties (the
"Remarketing
Underwriting
Agreement"), the
Capital
Securities of
such Income
PRIDES holders
who have failed
to notify the
Purchase Contract
Agent on or prior
to the fifth
Business Day
immediately
preceding the
Purchase Contract
Settlement Date
of their
intention to
settle the
related Purchase
Contracts with
separate cash
will be
remarketed on the
third Business
Day immediately
preceding the
Purchase Contract
Settlement Date.
The Remarketing
Agent will use
its reasonable
efforts to
remarket such
Capital
Securities
(bearing the
Reset Rate) on
such date for
settlement on the
Purchase Contract
Settlement Date
at a price of ap-
proximately
100.5% of the
aggregate stated
<PAGE>
liquidation
amount of such
Capital Security,
plus accrued and
unpaid
distributions
(including any
deferred
distributions),
if any, thereon.
The portion of
the proceeds from
such remarketing
equal to the
aggregate stated
liquidation
amount of such
Capital
Securities will
be automatically
applied to
satisfy in full
such Income
PRIDES holders'
obligations to
purchase Common
Stock under the
related Purchase
Contracts. In
addition, after
deducting as the
Remarketing Fee
an amount not
exceeding 25
basis points
(.25%) of the
aggregate stated
liquidation
amount of the
remarketed
securities from
any amount of
such proceeds in
excess of the
aggregate stated
liquidation
amount of the
remarketed
Capital
Securities plus
any accrued and
unpaid
distributions
(including any
deferred
distributions),
the Remarketing
Agent will remit
the remaining
portion of the
proceeds, if any,
<PAGE>
for the benefit
of such holder.
Income PRIDES
holders, whose
Capital
Securities are so
remarketed will
not otherwise be
responsible for
any Remarketing
Fee in connection
therewith. If,
despite using its
reasonable
efforts, the
Remarketing Agent
cannot remarket
the related Capital
Securities (other than
to the Company) of
such holders of
Income PRIDES at
a price not less
than 100% of the
aggregate stated
liquidation
amount of such
Capital
Securities plus
accrued and
unpaid
distributions,
including
deferred
distributions, if
any, resulting in
a Failed
Remarketing, the
Company will
exercise its
rights as a
secured party to
dispose of the
Capital
Securities in
accordance with
applicable law
and to satisfy in
full, from the
proceeds of such
disposition, such
holder's
obligation to
purchase Common
Stock under the
related Purchase
Contracts;
provided, that if
the Company
exercises such
rights as a
<PAGE>
secured party
with respect to
such Capital
Securities, any
accrued and
unpaid
distributions
(including any
deferred
distributions) on
such Capital
Securities will
be paid in cash
by the Company to
the holder of
record of such
Capital
Securities. The
Company will
cause a notice of
such Failed
Remarketing to be
published on the
second Business
Day immediately
preceding the
Purchase Contract
Settlement Date.
It is currently
anticipated that
Merrill Lynch,
Pierce, Fenner &
Smith
Incorporated will
be the
Remarketing
Agent. See
"Description of
the Purchase
Contracts--
Remarketing."
Settlement of Purchase Contracts . . . . . . . . The Purchase
Contract
Settlement Date
is ,
2001. On the
Business Day
immediately
preceding the
Purchase Contract
Settlement Date,
unless a holder
of Income PRIDES
or Growth PRIDES
(i) has settled
the related
Purchase
Contracts through
the early
delivery of cash
to the Purchase
<PAGE>
Contract Agent in
the manner
described herein,
(ii) in the case
of Income PRIDES,
has settled the
related Purchase
Contracts with
separate cash on
the Business Day
prior to the
Purchase Contract
Settlement Date
pursuant to prior
notification to
the Purchase
Contract Agent,
(iii) in the case
of Income Prides,
has had the
Capital
Securities
related to such
holder's Purchase
Contracts
remarketed in the
manner described
herein in
connection with
settling such
Purchase
Contracts (and
such remarketing
has not "failed"
(as described
herein)), or (iv)
an event
described under
"Description of
the Purchase
Contracts--
Termination" has
occurred, (A) in
the case of
Income PRIDES
(unless a Tax
Event Redemption
has occurred),
the Company will
exercise its
rights as a
secured party to
dispose of the
related Capital
Securities in
accordance with
the applicable
law, and (B) in
the case of
Growth PRIDES or
Income PRIDES (if
<PAGE>
a Tax Event
Redemption has
occurred) the
principal amount
of the related
Treasury
Securities or the
appropriate
Applicable
Ownership
Interest of the
Treasury
Portfolio, as
applicable, when
paid at maturity,
will
automatically be
applied pursuant
to the exercise
of such rights by
the Company to
satisfy in full
such holder's
obligation to
purchase Common
Stock under the
related Purchase
Contracts.
In the event that
a holder of
either Income
PRIDES or Growth
PRIDES effects
the early
settlement of the
related Purchase
Contracts through
the delivery of
cash or, in the
case of an Income
PRIDES, settles
such Purchase
Contracts with
cash on the
Business Day
immediately
preceding the
Purchase Contract
Settlement Date,
the related
Capital
Securities, the
appropriate
Applicable
Ownership
Interest of the
Treasury
Portfolio or the
Treasury
Securities, as
the case may be,
<PAGE>
will be released
to such holder as
described herein.
Settlement Rate . . . . . . . . . . . . . . . . . The number of
newly issued
shares of Common
Stock issuable
upon settlement
of each Purchase
Contract on the
Purchase Contract
Settlement Date
(the "Settlement
Rate") will be
calculated as
follows (subject
to adjustment
under certain
circumstances):
(a) if the
Applicable Market
Value is equal to
or greater than
the Threshold
Appreciation
Price of $
which is
approximately
% above the
Reference Price,
the Settlement
Rate will be
; (b)
if the Applicable
Market Value is
less than the
Threshold
Appreciation
Price but greater
than the
Reference Price,
the Settlement
Rate will be
equal to the
Stated Amount
divided by the
Applicable Market
Value; and (c) if
the Applicable
Market Value is
less than or
equal to the
Reference Price,
the Settlement
Rate (which will
be equal to the
Stated Amount
divided by the
Reference Price)
will be .
"Applicable
<PAGE>
Market Value"
means the average
of the Closing
Price (as defined
herein) per share
of Common Stock
on each of the
twenty
consecutive
Trading Days (as
defined herein)
ending on the
third Trading Day
immediately
preceding the
Purchase Contract
Settlement Date.
See "Description
of the Purchase
Contracts--
General."
Early Settlement . . . . . . . . . . . . . . . . A holder of
Income PRIDES may
settle the
related Purchase
Contracts on or
prior to the
fifth Business
Day immediately
preceding the
Purchase Contract
Settlement Date
in the manner
described herein,
but only in
integral
multiples of 40
Income PRIDES;
provided,
however, if a Tax
Event Redemption
has occurred
prior to the
Purchase Contract
Settlement Date
and the Treasury
Portfolio has
become a
component of the
Income PRIDES,
holders of Income
PRIDES may settle
early only in
integral
multiples of
320,000 Income
PRIDES, at any
time on or prior
to the second
Business Day
immediately
<PAGE>
preceding the
Purchase Contract
Settlement Date.
A holder of
Growth PRIDES may
settle the
related Purchase
Contracts on or
prior to the
second Business
Day immediately
preceding the
Purchase Contract
Settlement Date
in the manner
described herein
(in either case,
an "Early
Settlement").
Upon Early
Settlement, (i)
the holder's
rights to receive
Deferred Contract
Adjustment
Payments, if any,
on the Purchase
Contracts being
settled will be
forfeited, (ii)
the holder's
right to receive
additional
Contract
Adjustment
Payments, if any,
in respect of
such Purchase
Contracts will
terminate and
(iii) no
adjustment will
be made to or for
the holder on
account of
Deferred Contract
Adjustment
Payments, or any
amount accrued in
respect of
Contract
Adjustment
Payments. See
"Description of
the Purchase
Contracts--Early
Settlement."
Termination . . . . . . . . . . . . . . . . . . . The Purchase
Contracts and the
rights and
obligations of
<PAGE>
The Company and
the holders of
the FELINE PRIDES
thereunder
(including the
right thereunder
to receive
accrued or
Deferred Contract
Adjustment
Payments, if any,
and the
obligation to
purchase Common
Stock) will
automatically
terminate upon
the occurrence of
certain events of
bankruptcy,
insolvency or
reorganization
with respect to
the Company. Upon
such termination,
the Collateral
Agent will
release the
related Capital
Securities, the
appropriate
Applicable
Ownership
Interest of the
Treasury
Portfolio or
Treasury
Securities, as
the case may be,
held by it to the
Purchase Contract
Agent for
distribution to
the holders,
subject in the
case of the
Treasury
Portfolio to the
Purchase Contract
Agent's
disposition of
the subject
securities for
cash, and the
payment of such
cash to the
holders, to the
extent that the
holder would
otherwise have
been entitled to
<PAGE>
receive less than
$1,000 of any
such security.
Upon such
termination,
there may be a
delay before such
release and
distribution. In
the event that
the Company
becomes the
subject of a case
under the United
States Bankruptcy
Code of 1978, as
amended (the
"Bankruptcy
Code"), such
delay may occur
as a result of
the automatic
stay under the
Bankruptcy Code
and continue
until such
automatic stay
has been lifted.
The Company
expects any such
delay to be
limited. See
"Description of
the Purchase
Contracts--
Termination."
Voting and Certain Other Rights . . . . . . . . . Holders of
Capital
Securities will
not be entitled
to vote to
appoint, remove
or replace, or to
increase or
decrease the
number of Regular
Trustees (as
defined herein)
and will
generally have no
voting rights
except in the
limited cir-
cumstances
described under
"Description of
Capital
Securities--
Voting Rights."
Holders of
Purchase
<PAGE>
Contracts forming
part of the
Income PRIDES or
Growth PRIDES in
their capacities
as such holders
will have no
voting or other
rights in respect
of the Common
Stock.
Capital Securities
Amount and Designation . . . . . . . . . . . % Capital
Securities
(liquidation
amount $25 per
Capital
Security),
representing
undivided
beneficial
ownership
interests in the
assets of the
Trust.
Distributions . . . . . . . . . . . . . . . Distributions on
the Capital
Securities that
are components of
Income PRIDES
will constitute a
portion of the
distributions on
the Income
PRIDES, will be
cumulative, will
accrue from the
first date of
issuance of the
Capital
Securities and
will be payable
initially at the
annual rate of
% of the
liquidation
amount of $25 per
Capital Security
to but excluding
the Purchase
Contract
Settlement Date,
and in the case
of Capital
Securities that
remain outstan-
ding on and after
the Purchase
Contract
<PAGE>
Settlement Date,
from the Purchase
Contract
Settlement Date
to but excluding
,
2003, at the
Reset Rate, in
each case, when,
as and if funds
are available for
payment. Subject
to the distribut-
ion deferral
provisions,
distributions
will be payable
quarterly in
arrears on each
February 16, May
16, August 16 and
November 16,
commencing
, 1998.
Market Rate Reset . . . . . . . . . . . . . The applicable
quarterly
distribution rate
on the Capital
Securities and
the interest rate
on the Debentures
on and after the
Purchase Contract
Settlement Date,
will be reset on
the third
Business Day
immediately
preceding the
Purchase Contract
Settlement Date
to the Reset Rate
determined by the
Reset Agent as
the rate the
Capital
Securities should
bear in order for
a Capital
Security to have
an approximate
market value of
100.5% of the
Stated Amount on
the third
Business Day
immediately
preceding the
Purchase Contract
Settlement Date,
<PAGE>
provided, that
the Company may
limit such Reset
Rate to be no
higher than the
rate on the Two-
Year Benchmark
Treasury plus 200
basis points
(2%). Such market
value may be less
than 100.5% including
where the Reset Spread
is limited to the
maximum of 2%.
The Reset Rate
will be
determined by
Merrill Lynch,
Pierce, Fenner &
Smith
Incorporated as
the Reset Agent.
See "Description
of the Trust
Preferred
Securities--
Market Rate
Reset."
Optional Remarketing . . . . . . . . . . . . Pursuant to the
Remarketing
Agreement and
subject to the
terms of
Remarketing
Underwriting
Agreement, on or
prior to the
fifth Business
Day immediately
preceding the
Purchase Contract
Settlement Date,
but no earlier
than the Payment
Date immediately
preceding the
Purchase Contract
Settlement Date,
holders of
separate Capital
Securities that
are not
components of
Income PRIDES may
elect to have
their Capital
Securities
remarketed, by
delivering their
Capital
<PAGE>
Securities along
with a notice of
such election to
The Chase
Manhattan Bank,
as custodial
agent (the
"Custodial
Agent"). Holders
of Capital
Securities
electing to have
their Capital
Securities
remarketed will
also have the
right to withdraw
such election on
or prior to the
fifth Business
Day immediately
preceding the
Purchase Contract
Settlement Date.
Distribution Deferral Provisions . . . . . . The ability of
the Trust to pay
distributions on
the Capital
Securities will
be solely
dependent on the
receipt of
interest payments
from the Company
on the
Debentures. The
Company will have
the right at any
time, and from
time to time, to
defer the
interest payments
due on the
Debentures for
successive
extension periods
(the "Extension
Periods")
limited, in the
aggregate, to a
period not
extending beyond
the maturity date
of the
Debentures. The
corresponding
quarterly
distributions on
the Capital
Securities would
be deferred by
<PAGE>
the Trust (but
would continue to
accumulate
quarterly and
would accrue
interest,
compounded
quarterly, at the
rate of %
per annum through
and including
, 2001, and at
the Reset Rate
thereafter) until
the end of any
such Extension
Period. If a
deferral of an
interest payment
occurs, the
holders of the
Capital
Securities will
be required to
accrue interest
income for United
States federal
income tax
purposes in
advance of the
receipt of any
corresponding
cash distribution
with respect to
such deferred
interest payment.
See "Risk
Factors--Right to
Defer Current
Payments,"
"Description of
the Capital
Securities--
Distributions"
and "Certain
Federal Income
Tax Consequence--Income
PRIDES--Capital
Securities--
Interest Income
and Original
Issue Discount."
Rights Upon Deferral of
Distribution . . . . . . . . . . . . . . . During any period
in which interest
payments on the
Debentures are
deferred,
interest will
<PAGE>
accrue on the
Debentures
(compounded
quarterly) and
the corresponding
quarterly
distributions on
the Capital
Securities will
continue to ac-
cumulate at the
rate of %
per annum through
and including
, 2001, and at
the Reset Rate
thereafter, com-
pounded
quarterly.
Liquidation Amount . . . . . . . . . . . . . In the event of
any liquidation
of the Trust, and
after satisfac-
tion of
liabilities to
creditors of the
Trust, if any,
holders will be
entitled to
receive
Debentures in an
aggregate
principal amount
equal to the
aggregate stated
liquidation
amount of the
Capital
Securities.
Put Option Upon a Failed Remarketing . . . . If a Failed
Remarketing has
occurred, each
holder of Trust
Securities (or,
following the
distribution of
the Debentures
upon a
dissolution of
the Trust as
described herein,
the holders of
such Debentures),
holding such
Trust Securities
(or Debentures,
as the case may
be), following
the Purchase
<PAGE>
Contract
Settlement Date
will have the
right, in the
case of Trust
Securities, to
require the Trust
to distribute
their pro rata
share of the
Debentures to the
Exchange Agent
who will put such
Debentures to the
Company on behalf
of such holders
(or, in the case
of persons who
hold the
Debentures
directly, such
persons shall
have the right to
put such
Debentures
directly to the
Company) on
2001, upon at
least three
Business Days'
prior notice, at
a price equal to
the principal
amount, plus
accrued and
unpaid interest
(including
deferred
interest), if
any, thereon.
Distribution of Debentures . . . . . . . . . In certain
circumstances
involving an
Investment
Company Event,
the Trust would
be dissolved,
with the result
that, after
satisfaction of
liabilities to
creditors of the
Trust, if any,
Debentures with
an aggregate
principal amount
equal to the
aggregate stated
liquidation
amount of the
<PAGE>
Capital
Securities would
be distributed to
the holders of
the Capital
Securities on a
pro rata basis
including the
Collateral Agent.
In such event an
Income PRIDES
would thereafter
consist of
beneficial
ownership of a
Debenture with a
principal amount
equal to $25 and
the related
Purchase
Contract, and
such Debenture
would be
otherwise treated
as if it were a
Capital Security.
See "Description
of the Capital
Securities--
Distribution of
Debentures."
Tax Event Redemption . . . . . . . . . . . . The Debentures
(and, thus, the
Trust Securities)
are redeemable,
at the option of
the Company, on
not less than 30
days or more than
60 days prior
written notice in
whole but not in
part upon the
occurrence and
continuation of a
Tax Event under
the circumstances
described herein
at a Redemption
Price equal to,
for each
Debenture, the
Redemption Amount
together with
accrued and
unpaid
distributions
(including
deferred
distributions).
See "Description
<PAGE>
of the
Debentures--Tax
Event Redem-
ption." If the
Company so
redeems all of
the Debentures,
the Trust must
redeem all of the
Trust Securities
and pay in cash
such Redemption
Price to the
holders of such
Trust Securities.
If such Tax Event
Redemption occurs
prior to the
Purchase Contract
Settlement Date,
the Redemption
Price payable in
liquidation of
any Income PRIDES
holders' interest
in the Trust will
be distributed to
the Collateral
Agent, who in
turn will apply
an amount equal
to the Redemption
Amount of such
Redemption Price
to purchase the
Treasury
Portfolio on
behalf of the
holders of Income
PRIDES and remit
the remaining
portion, if any,
of such
Redemption Price
to the Purchase
Contract Agent
for payment to
holders of such
Income PRIDES.
The Treasury
Portfolio will be
substituted for
the Capital
Security and will
be pledged with
the Collateral
Agent to secure
such Income
PRIDES holders'
obligations to
purchase the
<PAGE>
Common Stock
under their
Purchase
Contracts.
Other than in the
event of a Tax
Event Redemption,
the Company will
not have the
ability to redeem
the Debentures
prior to their
stated maturity
date. See
"Description of
the Debentures--
Tax Event
Redemption of
Capital
Securities."
Guarantee . . . . . . . . . . . . . . . . . The Company will
irrevocably and
unconditionally
guarantee
pursuant to the
Guarantee,
generally on a
senior unsecured
basis, the
payment in full
of (i)
distributions on
the Trust
Securities to the
extent the Trust
has funds
available
therefor, (ii)
the redemption
price of Trust
Securities in
respect of which
the related
Debentures have
been repurchased
by the Company on
the Purchase
Contract
Settlement Date,
to the extent the
Trust has funds
available
therefor, and
(iii) generally,
the liquidation
amount of the
Trust Securities
or the Redemption
Price upon a Tax
Event Redemption,
<PAGE>
to the extent the
Trust has assets
available for
distribution to
holders of Trust
Securities in the
event of a
dissolution of
the Trust. The
Company's
obligations under
the Guarantee
will be a senior
unsecured
obligation of the
Company and will
rank on a parity
with all of the
Company's other
senior unsecured
obligations. See
"Description of
the Guarantee."
Debentures . . . . . . . . . . . . . . . . . . . Unless a Tax
Event Redemption
has occurred, the
Debentures will
mature on
,
2003, and will
bear interest
initially at the
rate of %
per annum,
payable quarterly
in arrears on
each February 16,
May 16, August 16
and November 16
commencing
, 1998. The
interest rate on
the Debentures,
and the
distribution rate
on the Capital
Securities that
remain
outstanding after
the Purchase
Contract
Settlement Date
will be reset on
the third
Business Day
immediately
preceding the
Purchase Contract
Settlement Date
to the Reset Rate
<PAGE>
determined by the
Reset Agent. See
"Description of
Debentures--
Interest."
Interest payments
on the Debentures
may be deferred
from time to time
by the Company
for successive
Extension Periods
not extending, in
the aggregate,
beyond the stated
maturity date of
the Debentures.
During any
Extension Period,
interest at the
rate of %
per annum through
and including
, 2001, and at
the Reset Rate
thereafter would
continue to
accrue and
compound
quarterly. Upon
the termination
of any Extension
Period and the
payment of all
amounts then due,
the Company may
commence a new
Extension Period,
provided such new
Extension Period
does not extend
beyond the stated
maturity date of
the Debentures.
No interest shall
be due during an
Extension Period
until the end of
such period.
During an
Extension Period,
the Company will
be prohibited
(subject to
certain
exceptions) from
paying dividends
on or purchasing
any of its
capital stock and
<PAGE>
making certain
other restricted
payments until
quarterly
interest payments
are resumed and
all amounts then
due on the
Debentures are
paid. The
Debentures will
be senior
unsecured
obligations of
the Company and
will rank on a
parity with all
of the Company's
other senior
unsecured
obligations. See
"Description of
the Debentures."
Federal Income Tax Consequences
Related to the Income PRIDES,
Growth PRIDES and Capital Securities . . . . . Provided the
Company does not
exercise its
right to defer
interest on the
Debentures, a
beneficial owner
of Income PRIDES
and Capital
Securities will
include in gross
income its pro
rata share of the
stated interest
on the Debentures
when such
interest income
is paid or
accrued in
accordance with
its regular
method of tax
accounting. The
Company intends
to report the
Contract
Adjustment
Payments as
income to holders
of Income PRIDES
and Growth
PRIDES, but
holders should
consult their tax
advisors
concerning the
<PAGE>
possibility that
the Contract
Adjustment
Payments may be
treated as loans,
purchase price
adjustments,
rebates or option
premiums rather
than being
includible in
income on a
current basis. A
beneficial owner
of Growth PRIDES
will be required
to include in
gross income its
allocable share
of any OID with
respect to the
Treasury
Securities as it
accrues on a
constant yield to
maturity basis.
If a Tax Event
Redemption has
occurred, a
beneficial owner
of Income PRIDES
will be required
to include in
gross income its
allocable share
of OID on the
Treasury
Portfolio as it
accrues on a
constant yield to
maturity basis.
See "Certain
Federal Income
Tax Consequen-
ces."
<PAGE>
Explanatory Diagrams
For illustrative purposes only, the following diagrams demonstrate
some of the key features of Purchase Contracts, Income PRIDES and Growth
PRIDES and the transformation of Income PRIDES into Growth PRIDES and
Capital Securities. The hypothetical percentages, coupon rates and time
periods below are for illustration only. There can be no assurance that
the actual percentage of shares delivered will be limited by the range of
hypothetical percentages shown. In addition, there can be no assurance
that payment rates on the FELINE PRIDES will be at the levels set forth
below.
The following diagrams and the related text are not complete, are
general in nature and are qualified in their entirety by more detailed
information appearing elsewhere in the accompanying Prospectus, this
Prospectus Supplement and in documents which are on file with the
Commission.
FELINE PRIDES Purchase Contract
- Income PRIDES and Growth PRIDES both include a Purchase
Contract under which the investor agrees to purchase shares of
Common Stock of the Company at the end of three years. In
addition, such Purchase Contracts include specified Contract
Adjustment Payments shown in the diagrams on the following
pages.
Two graphs illustrating amount and value of shares delivered at maturity.
Income PRIDES
- Income PRIDES consist of two components as described below:
Illustrations of components of Income PRIDES
- The investor owns the Capital Security but will pledge it
to the Company to secure its obligations under the Purchase
Contract.
Growth PRIDES
- Growth PRIDES consist of two components as described below:
Illustrations of components of Growth PRIDES.
<PAGE>
- The investor owns the Zero-Coupon Treasury Security but will
pledge it to the Company to secure its obligations under the
Purchase Contract.
Capital Securities
- Capital Securities have the terms described below:
Illustrations of Capital Security.
- The holder of Capital Securities that are a component of
Income PRIDES has an option at the end of year 3 to either:
Cash settle each Purchase Contract for $25 and receive
Capital Securities whose rate has been reset at the end
of year 3, or
Cash settle each Purchase Contract by allowing the
Capital Securities to be included in the remarketing
process.
- The holder of Capital Securities that are separate and not a
component of Income PRIDES has the option at the end of year 3
to either:
Continue to hold the Capital Securities whose rate has
been reset at the end of year 3, or
Deliver the Capital Securities to the Custodial Agent to
be included in the remarketing process.
Transforming Income PRIDES into Growth PRIDES and Capital Securities
- To create a Growth PRIDES, the investor separates an Income
PRIDES into its components--the Purchase Contract and the
Capital Security--and then combines the Purchase Contract with
a specific Zero-Coupon Treasury Security which matures
concurrently with the maturity of the Purchase Contract.
- The investor owns the Zero-Coupon Treasury Security but will
pledge it to the Company to secure its obligations under the
Purchase Contract.
- The Zero-Coupon Treasury Security together with the Purchase
Contract constitute a Growth PRIDES. The Capital Securities
which are no longer a component of the Income PRIDES are
tradeable as separate securities.
Illustrations of transformation of Income PRIDES into Growth PRIDES
and Capital Securities.
<PAGE>
- The investor can also transform Growth PRIDES and Capital
Securities into Income PRIDES.
- The transformation of Income PRIDES into Growth PRIDES and
Capital Securities, and the transformation of Growth PRIDES
and Capital Securities into Income PRIDES, require certain
minimum amounts of securities, as more fully provided herein.
<PAGE>
RISK FACTORS
Potential purchasers of the FELINE PRIDES offered hereby should
carefully consider the risk factors set forth herein under "Risk Factors"
as well as other information contained in this Prospectus Supplement, the
accompanying Prospectus and the documents incorporated by reference
therein.
Investment in FELINE PRIDES Requires Holders to Purchase Common Stock;
Risk of Decline in Equity Value
Although holders of the FELINE PRIDES will be the beneficial owners
of the related Capital Securities, Treasury Portfolio or Treasury
Securities, as the case may be, prior to the Purchase Contract Settlement
Date, unless a holder of FELINE PRIDES settles the related Purchase
Contracts through the delivery of cash to the Purchase Contract Agent in
the manner described below or the Purchase Contracts are terminated (upon
the occurrence of certain events of bankruptcy, insolvency or
reorganization with respect to the Company), the proceeds derived from
the remarketing of the Capital Securities or the principal of the related
Treasury Securities, or the applicable Appropriate Ownership Interest of
the Treasury Portfolio, when paid at maturity, as the case may be, will
automatically be applied to the purchase of a specified number of shares
of Common Stock on behalf of such holder. Thus, unless a holder of Income
PRIDES has cash settled, following the Purchase Contract Settlement Date,
the holder will own shares of Common Stock rather than a beneficial
interest in Capital Securities, Treasury Securities or the Treasury
Portfolio, as the case may be. See "Description of the Purchase
Contracts--General." There can be no assurance that the market value of
the Common Stock receivable by the holder on the Purchase Contract
Settlement Date will be equal to or greater than the Stated Amount of the
FELINE PRIDES held by such holder. If the Applicable Market Value of the
Common Stock is less than the Reference Price, then the aggregate market
value of the Common Stock issued to the holder in settlement of each
Purchase Contract on the Purchase Contract Settlement Date (assuming that
such market value is the same as the Applicable Market Value of such
Common Stock) will be less than the Stated Amount paid for the FELINE
PRIDES and the market value per share of such Common Stock will be less
than the effective price per share paid by each holder for such Common
Stock on the date hereof, in which case an investment in the Securities
will result in a loss. Accordingly, a holder of the FELINE PRIDES assumes
the risk that the market value of the Common Stock may decline, and that
such decline could be substantial.
Limitations on Opportunity for Equity Appreciation
The opportunity for equity appreciation afforded by an investment
in the FELINE PRIDES is less than the opportunity for equity appreciation
afforded by a direct investment in the Common Stock because the market
value of the Common Stock to be received by a holder of Purchase
Contracts on the Purchase Contract Settlement Date (assuming that such
market value is the same as the Applicable Market Value of such Common
Stock) will only exceed the Stated Amount if the Applicable Market Value
of the Common Stock exceeds the Threshold Appreciation Price (which
represents an appreciation of % over the Reference Price).
Moreover, in such event, holders of FELINE PRIDES would receive on the
Purchase Contract Settlement Date only % (the percentage equal to
the Reference Price divided by the Threshold Appreciation Price) of the
shares of Common Stock that such holders would have received if they had
made a direct investment in the Common Stock on the date hereof, and
<PAGE>
therefore would receive on the Purchase Contract Settlement Date only
% of the appreciation in the value of the Common Stock in excess of
the Threshold Appreciation Price.
Factors Affecting Trading Prices
The trading prices of Income PRIDES and Growth PRIDES in the
secondary market will be directly affected by the trading prices of the
Common Stock in the secondary market, the general level of interest rates
and the credit quality of the Company. It is impossible to predict
whether the price of the Common Stock or interest rates will rise or
fall. Trading prices of the Common Stock will be influenced by the
Company's operating results and prospects and by economic, financial and
other factors and market conditions that can affect the capital markets
generally, including the level of, and fluctuations in, the trading
prices of stocks generally and sales of substantial amounts of Common
Stock in the market subsequent to the offering of the Securities or the
perception that such sales could occur. Fluctuations in interest rates
may give rise to opportunities of arbitrage based upon changes in the
relative value of the Common Stock underlying the Purchase Contracts and
of the other components of the FELINE PRIDES. Any such arbitrage could,
in turn, affect the trading prices of the Income PRIDES, Growth PRIDES,
Capital Securities and Common Stock.
Voting and Certain Other Rights
Holders of Capital Securities will not be entitled to vote to
appoint, remove or replace or to increase or decrease the number of
Ingersoll-Rand Trustees, and generally will have no voting rights except
in the limited circumstances described under "Description of the Capital
Securities--Voting Rights." Holders of FELINE PRIDES will not be
entitled to any rights with respect to the Common Stock (including,
without limitation, voting rights and rights to receive any dividends or
other distributions in respect thereof) unless and until such time as the
Company shall have delivered shares of Common Stock for FELINE PRIDES on
the Purchase Contract Settlement date or as a result of Early Settlement,
as the case may be, and unless the applicable record date, if any, for
the exercise of such rights occurs after such date. For example, in the
event that an amendment is proposed to the Articles of Incorporation or
By-Laws of the Company and the record date for determining the
stockholders of record entitled to vote on such amendment occurs prior to
such delivery, holders of FELINE PRIDES will not be entitled to vote on
such amendment.
Dilution of Common Stock
The number of shares of Common Stock that holders of the FELINE
PRIDES are entitled to receive on the Purchase Contract Settlement Date
or as a result of Early Settlement is subject to adjustment for certain
events arising from stock splits and combinations, stock dividends and
certain other actions of the Company that modify its capital structure.
See "Description of the Purchase Contracts--Anti-Dilution Adjustments."
Such number of shares of Common Stock to be received by such holders on
the Purchase Contract Settlement Date or as a result of Early Settlement
will not be adjusted for other events, such as offerings of Common Stock
for cash or in connection with acquisitions. The Company is not
restricted from issuing additional Common Stock during the term of either
the Purchase Contracts or the Capital Securities and has no obligation to
consider the interests of the holders of FELINE PRIDES for any reason.
Additional issuances may materially and adversely affect the price of the
Common Stock and, because of the relationship of the number of shares to
<PAGE>
be received on the Purchase Contract Settlement Date to the price of the
Common Stock, such other events may adversely affect the trading price of
Income PRIDES or Growth PRIDES.
Possible Illiquidity of the Secondary Market
It is not possible to predict how Income PRIDES, Growth PRIDES or
Capital Securities will trade in the secondary market or whether such
market will be liquid or illiquid. Income PRIDES and Growth PRIDES are
novel securities and there is currently no secondary market for either
Income PRIDES or Growth PRIDES. Application will be made to list the
Income PRIDES and Growth PRIDES on the NYSE. If Capital Securities are
separately traded to a sufficient extent that applicable exchange listing
requirements are met, the Company will endeavor to cause such securities
to be listed on such exchange on which the Income PRIDES and Growth
PRIDES are then listed, including, if applicable, the NYSE. There can be
no assurance as to the liquidity of any market that may develop for the
Income PRIDES, the Growth PRIDES or the Capital Securities, the ability
of holders to sell such securities or whether a trading market, if it
develops, will continue. In addition, in the event that holders of Income
PRIDES or Growth PRIDES were to substitute Treasury Securities for
Capital Securities or Capital Securities for Treasury Securities, thereby
converting their Income PRIDES to Growth PRIDES or their Growth PRIDES to
Income PRIDES, as the case may be, the liquidity of Income PRIDES or
Growth PRIDES could be adversely affected. There can be no assurance that
the Income PRIDES or Growth PRIDES will not be delisted from the NYSE or
that trading in the Income PRIDES or Growth PRIDES and Capital Securities
will not be suspended as a result of the election by holders to create
Income PRIDES or Growth PRIDES through the substitution of collateral,
which could cause the number of Income PRIDES or Growth PRIDES to fall
below the requirement for listing securities on the NYSE that at least
1,000,000 Income PRIDES or Growth PRIDES be outstanding at any time.
Pledged Securities Encumbered
Although the beneficial owners of FELINE PRIDES will be the beneficial
owners of the related Capital Securities, Treasury Portfolio
or Treasury Securities (together, the "Pledged Securities"), as
applicable, those Pledged Securities will be pledged with the Collateral
Agent to secure the obligations of the holders under the related Purchase
Contracts. Thus, rights of the holders to their Pledged Securities will
be subject to the Company's security interest. Additionally,
notwithstanding the automatic termination of the Purchase Contracts, in
the event that the Company becomes the subject of a case under the
Bankruptcy Code, the delivery of the Pledged Securities to holders of the
FELINE PRIDES may be delayed by the imposition of the automatic stay of
Section 362 of the Bankruptcy Code.
Investment Company Event Distribution
Upon the occurrence of an Investment Company Event, the Trust will
be dissolved (except in the limited circumstances described in the
following sentence) with the result that Debentures with an aggregate
principal amount equal to the aggregate stated liquidation amount of the
Capital Securities would be distributed to the holders of the Capital
Securities on a pro rata basis. Such dissolution and distribution shall
be conditioned on the Company being unable to avoid such Investment
Company Event within a 90-day period by taking some ministerial action or
pursuing some other reasonable measure that will have no adverse effect
on the Trust, the Company or the holders of the Capital Securities, and
will involve no material cost. In addition, the Company will have the
<PAGE>
right at any time to dissolve the Trust. See "Description of the Capital
Securities--Distribution of the Debentures."
There can be no assurance as to the impact on the market prices for
Income PRIDES of a distribution of the Debentures in exchange for Capital
Securities upon a dissolution of the Trust. Because Income PRIDES will
consist of Debentures and related Purchase Contracts upon the occurrence
of the dissolution of the Trust as a result of an Investment Company
Event or otherwise, prospective purchasers of Income PRIDES are also
making an investment decision with regard to the Debentures and should
carefully review all the information regarding the Debentures contained
herein. See "Description of the Capital Securities--Distribution of the
Debentures" and "Description of the Debentures--General."
Tax Event Redemption
The Debentures (and, thus, the Trust Securities) are redeemable, at
the option of the Company, on not less than 30 days or more than 60 days
prior written notice, in whole but not in part, at any time prior to the
Purchase Contract Settlement Date upon the occurrence and continuation of
a Tax Event under the circumstances described herein at a Redemption
Price equal to, for each Debenture, the Redemption Amount plus accrued
and unpaid distributions (including deferred distributions). See
"Description of the Debentures--Tax Event Redemption." If the Company so
redeems all of the Debentures, the Trust must redeem all of the Trust
Securities and pay in cash such Redemption Price to the holder of such
Trust Securities. If the Tax Event Redemption has occurred prior the
Purchase Contract Settlement Date, the Redemption Price payable in
liquidation of the Income PRIDES holders' interest in the Trust will be
distributed to the Collateral Agent, who in turn will apply an amount
equal to the Redemption Amount of such Redemption Price to purchase the
Treasury Portfolio on behalf of the holders of Income PRIDES. Holders of
Capital Securities not held in the form of Income PRIDES will receive
redemption payments directly. The Treasury Portfolio will be substituted
for the Capital Securities and will be pledged with the Collateral Agent
to secure such Income PRIDES holders' obligations to purchase the
Company's Common Stock under their Purchase Contracts. There can be no
assurance as to the impact on the market prices for the Income PRIDES of
the substitution of the Treasury Portfolio as collateral in replacement
of any Capital Securities so redeemed. See "Description of the Capital
Securities--Optional Redemption." A Tax Event Redemption will be a
taxable event to the beneficial owners of the Capital Securities. See
"Certain Federal Income Tax Consequences--Tax Event Redemption of Capital
Securities."
Right to Defer Current Payments
The Company may, at its option, defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date. However, deferred installments of Contract Adjustment
Payments will bear Deferred Contract Adjustment Payments at the rate of
% per annum (compounding on each succeeding Payment Date) until
paid (the higher of (i) the rate which would accrue on Income PRIDES for
such Payments and (ii) the rate which would accrue on Growth PRIDES for
such payments). If the Purchase Contracts are settled early or terminated
(upon the occurrence of certain events of bankruptcy, insolvency or
reorganization with respect to the Company), the right to receive
Contract Adjustment Payments and Deferred Contract Adjustment Payments,
if any, will also terminate.
<PAGE>
In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the Purchase
Contract Settlement Date, each holder of Purchase Contracts will receive
on the Purchase Contract Settlement Date in respect of the Deferred
Contract Adjustment Payments, in lieu of a cash payment, a number of
shares of Common Stock equal to (x) the aggregate amount of Deferred
Contract Adjustment Payments payable to such holder divided by (y) the
Applicable Market Value. See "Description of the Purchase Contracts--
Contract Adjustment Payments."
The Company also will have the right under the Indenture to defer
payments of interest on the Debentures by extending the interest payment
period at any time, and from time to time, on the Debentures. As a
consequence of such an extension, quarterly distributions on the Capital
Securities, held either as a component of the Income PRIDES or held
separately, would be deferred (but despite such deferrals would
accumulate at a rate of % per annum through and including
15, 2001, and at the Reset Rate thereafter, compounded on a
quarterly basis) by the Trust during any such Extension Period. Such
right to extend the interest payment period for the Debentures will be
limited such that an Extension Period may not extend beyond the stated
maturity of the Debentures. During any such Extension Period, (a) the
Company shall not declare or pay dividends on, make distributions with
respect to, or redeem, purchase or acquire, or make a liquidation payment
with respect to, any of its capital stock (other than (i) purchases or
acquisitions of capital stock of the Company in connection with the
satisfaction by the Company of its obligations under any employee benefit
plans or the satisfaction by the Company of its obligations pursuant to
any contract or security outstanding on the date of such event requiring
the Company to purchase capital stock of the Company, (ii) as a result of
a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for
another class or series of the Company's capital stock, (iii) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock
or the security being converted or exchanged, (iv) dividends or
distributions in capital stock of the Company (or rights to acquire
capital stock) or repurchases or redemptions of capital stock solely from
the issuance or exchange of capital stock or (v) redemptions or
repurchases of any rights outstanding under a shareholder rights plan or
the declaration thereunder of a dividend of rights in the future), (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 that rank junior to the Debentures and (c) the Company shall
not make any guarantee payments with respect to the foregoing (other than
payments pursuant to the Guarantee). Prior to the termination of any such
Extension Period, the Company may further extend the interest payment
period; provided, that such Extension Period may not extend beyond the
stated maturity of the Debentures. Upon the termination of any Extension
Period and the payment of all amounts then due, the Company may commence
a new Extension Period, subject to the above requirements. See
"Description of the Capital Securities--Distributions" and "Description
of the Debentures--Option to Extend Interest Payment Period."
The Company believes, and intends to take the position, that as of
the issue date of the Debentures, the likelihood that it will exercise
its right to defer payments of stated interest on the Debentures is
remote and that, therefore, the Debentures should not be considered to
have been issued with original issue discount ("OID") as a result of the
Company's right to defer payments of stated interest on the Debentures
until such time that the Company actually exercises such deferral right.
There is no assurance that the Internal Revenue Service will agree with
<PAGE>
such position. See "Certain Federal Income Tax Consequences--Capital
Securities--Interest Income and Original Issue Discount."
Should the Company exercise its right to defer payments of interest
by extending the interest payment period, each beneficial owner of
Capital Securities held either as a component of the Income PRIDES or
held separately would be required to include such beneficial owner's
share of the stated interest on the Capital Securities in gross income,
as OID, on daily economic accrual basis, regardless of such owner's
method of tax accounting and in advance of receipt of the cash
attributable to such income. As a result, each such beneficial owner of
Capital Securities would recognize income for United States federal
income tax purposes in advance of the receipt of cash attributable to
such income, and would not receive the cash from the Trust related to
such income if such holder disposes of its Capital Securities prior to
the record date for the date on which distributions of such amounts are
made. See "Certain Federal Income Tax Consequences--Capital Securities--
Interest Income and Original Issue Discount." The Company has no current
intention of exercising its right to defer payments of interest by
extending the interest payment period on the Debentures. However, should
the Company exercise such right in the future, the market price of the
Capital Securities is likely to be affected. A holder that disposes of
its Capital Securities during an Extension Period, therefore, might not
receive the same return on its investment as a holder that continues to
hold its Capital Securities. In addition, as a result of the existence of
the Company's right to defer interest payments, the market price of the
Capital Securities (which represent an undivided beneficial ownership
interest in the assets of the Trust) may be more volatile than the market
price of other securities that are not subject to such deferral. See
"Certain Federal Income Tax Consequences--Capital Securities--Interest
Income and Original Issue Discount."
United States Federal Income Tax Consequences
No statutory, judicial or administrative authority directly
addresses the treatment of the FELINE PRIDES or instruments similar to
the FELINE PRIDES for United States federal income tax purposes. As a
result, certain United States federal income tax consequences of the
purchase, ownership and disposition of FELINE PRIDES are not entirely
clear. See "Certain Federal Income Tax Consequences."
Purchase Contract Agreement not Qualified Under Trust Indenture Act;
Limited Obligations of Purchase Contract Agent
Although the Capital Securities constituting a part of the Income
PRIDES will be issued pursuant to the Declaration, which will be
qualified under the Trust Indenture Act, the Purchase Contract Agreement
will not be qualified as an indenture under the Trust Indenture Act and
the Purchase Contract Agent will not be required to qualify as a trustee
thereunder. Accordingly, holders of FELINE PRIDES will not have the
benefit of the protections of the Trust Indenture Act. The protections
generally afforded the holder of the security issued under an indenture
that has been qualified under the Trust Indenture Act include
disqualification of the indenture trustee for "conflicting interests" as
defined under the Trust Indenture Act, provisions preventing a trustee
that is also a creditor of the issuer from improving its own credit
position at the expense of the security holders immediately prior to or
after a default under such indenture and the requirement that the
indenture trustee deliver reports at least annually with respect to
certain matters concerning the indenture trustee and the securities.
Under the terms of the Purchase Contract Agreement, the Purchase Contract
<PAGE>
Agent will have only limited obligations to the holders of FELINE PRIDES.
See "Certain Provisions of the Purchase Contract Agreement and the Pledge
Agreement--Information Concerning the Purchase Contract Agent."
Rights Under the Guarantee
The Guarantee will be qualified as an indenture under the Trust
Indenture Act. The Guarantee Trustee will act as indenture trustee under
the Guarantee for the purposes of compliance with the provisions of the
Trust Indenture Act. The Guarantee Trustee will hold the Guarantee for
the benefit of the holders of the Trust Securities. The Guarantee
guarantees to the holders of the Trust Securities, generally on a
senior unsecured basis, the payment of (i) any accrued and unpaid distributions
that are required to be paid on the Trust Securities, to the extent the
Trust has funds available therefor, (ii) the redemption price, including
all accumulated and unpaid distributions to the date of redemption, of
Trust Securities in respect of which the related Debentures have been
repurchased by the Company on the Purchase Contract Settlement Date, to
the extent the Trust has funds available therefor, and (iii) upon a
voluntary or involuntary dissolution of the Trust (other than in
connection with the distribution of Debentures to the holders of Capital
Securities), the lesser of (a) the aggregate of the liquidation amount
and all accrued and unpaid distributions on the Trust Securities to the
date of payment to the extent the Trust has funds available therefor or
(b) the amount of assets of the Trust remaining available for
distribution to holders of the Trust Securities in liquidation of the
Trust. The majority in liquidation amount of the Trust Securities will
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee or to direct
the exercise of any trust or power conferred upon the Guarantee Trustee
under the Guarantee. Notwithstanding the foregoing, any holder of the
Trust Securities may institute a legal proceeding directly against the
Company to enforce such holder's rights under the Guarantee without first
instituting a legal proceeding against the Trust, the Guarantee Trustee
or any other person or entity. If the Company were to default on its
obligation to pay amounts payable on the Debentures or otherwise, the
Trust would lack funds for the payment of distributions or amounts
payable on redemption of the Trust Securities or otherwise, and, in such
event, holders of the Trust Securities would not be able to rely upon the
Guarantee for payment of such amounts. Instead, holders of the Trust
Securities would rely on the enforcement (1) by the Institutional Trustee
of its rights as registered holder of the Debentures against the Company
pursuant to the terms of the Indenture and the Debentures or (2) by such
holder of the Institutional Trustee's or such holder's own rights against
the Company to enforce payments on the Debentures. See "--Enforcement of
Certain Rights by Holders of Capital Securities," "Description of the
Debentures" and "Description of the Guarantee." The Declaration provides
that each holder of Trust Securities, by acceptance thereof, agrees to
the provisions of the Guarantee and the Indenture.
Enforcement of Certain Rights by Holders of Capital Securities
If a Declaration Event of Default (as defined herein) occurs and is
continuing, the holders of Capital Securities would rely on the
enforcement by the Institutional Trustee of its rights as registered
holder of the Debentures against the Company. In addition, the holders of
a majority in liquidation amount of the Capital Securities will have the
right to direct the time, method, and place of conducting any proceeding
for any remedy available to the Institutional Trustee or to direct the
exercise of any trust or power conferred upon the Institutional Trustee
under the Declaration, including the right to direct the Institutional
<PAGE>
Trustee to exercise the remedies available to it as the holder of the
Debentures. The Indenture provides that the Debt Trustee (as defined
herein) shall give holders of Debentures notice of all defaults or events
of default within 30 days after occurrence. However, except in the cases
of a default or an event of default in payment on the Debentures, the
Debt Trustee will be protected in withholding such notice if its officers
or directors in good faith determine that withholding of such notice is
in the interest of such holders.
If the Institutional Trustee fails to enforce its rights under the
Debentures in respect of an Indenture Event of Default (as defined
herein) after a holder of record of Capital Securities has made a written
request, such holder of record of Capital Securities may, to the extent
permitted by applicable law, institute a legal proceeding against the
Company to enforce the Institutional Trustee's rights under the
Debentures. In addition, if the Company fails to pay interest or
principal on the Debentures on the date such interest or principal is
otherwise payable, and such failure to pay is continuing, a holder of
Capital Securities may directly institute a proceeding for enforcement of
payment to such holder of the principal of or interest on the Debentures
having a principal amount equal to the aggregate stated liquidation
amount of the Capital Securities of such holder (a "Direct Action") after
the respective due date specified in the Debentures. In connection with
such a Direct Action, the Company shall have the right under the Indenture
to set off any payment made to such holder by the Company. The
holders of Capital Securities will not be able to exercise directly any
other remedy available to the holders of the Debentures. See "Description
of the Capital Securities--Declaration Events of Default."
Limited Rights of Acceleration
The Institutional Trustee, as holder of the Debentures, may
accelerate payment of the principal and accrued and unpaid interest on
the Debentures only upon the occurrence and continuation of a Declaration
Event of Default or Indenture Event of Default, which generally are
limited to payment defaults, breach of certain covenants, certain events
of bankruptcy, insolvency and reorganization of the Company and certain
events of dissolution of the Trust. See "Description of the Capital
Securities--Declaration Events of Default." Accordingly, there is no
right to acceleration upon default by the Company of its payment
obligations under the Guarantee.
Trading Price of the Capital Securities
The Capital Securities may trade at a price that does not fully
reflect the value of accrued but unpaid interest with respect to the
underlying Debentures. A holder who disposes of his Capital Securities
between record dates for payments of distributions thereon will be
required to include accrued but unpaid interest on the Debentures through
the date of disposition in income as ordinary income (i.e., interest or,
possibly, OID), and to add such amount to his adjusted tax basis in his
pro rata share of the underlying Debentures deemed disposed of. To the
extent the selling price is less than the holder's adjusted tax basis, a
holder will recognize a loss. See "Certain Federal Income Consequences--
Capital Securities--Interest Income and Original Issue Discount" and "--
Sales, Exchanges or Other Dispositions of Capital Securities."
<PAGE>
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 nonelectrical
machinery and equipment. Principal products include the following:
Agricultural sprayers
Air balancers
Air compressors & accessories
Air dryers
Air logic controls
Air motors
Air and electric tools
Architectural hardware trim
Asphalt compactors
Asphalt pavers
Automated production systems
Automotive components
Ball bearings
Blasthole drills
Blowers
Centrifugal pumps
Compact hydraulic excavators
Construction equipment
Diaphragm pumps
Directional drills
Door closers
Door control hardware
Door locks latches & locksets
Doors and door frames (steel)
Drilling equipment and accessories
Electric security systems
Engineered pumps
Engine-starting systems
Exit devices
Extrusion pump systems
Fastener-tightening systems
Fluid-handling equipment
<PAGE>
Foundation drills
Golf cars
Hoists
Hydraulic breakers
Lubrication equipment
Material handling equipment
Mining equipment
Multistage pumps
Needle roller bearings
Parts-washing systems
Paving equipment
Pneumatic breakers
Pneumatic cylinders
Pneumatic valves
Portable compressors
Portable generators
Portable light towers
Reciprocating pumps
Road-building machinery
Rock drills
Rock stabilizers
Roller bearings
Rotary drills
Rotary pumps
Rough-terrain forklifts
Skid-steer loaders
Soil compactors
Spray-coating systems
Submersible pumps
Transport temperature control systems
Utility vehicles
Vacuum pumps
Vertical turbine pumps
Waterjet-cutting systems
Water-well drills
Winches
<PAGE>
These products are sold primarily under the Company's name and also
under other names including ABG, Aro, Beebe, Blaw-Knox, Bobcat, Carryall,
Centac, Charles Maire, Club Car, Crawlair, Cyclone, Ecoair, Elite, Dixie-
Pacific Fafnir, Falcon, Glynn-Johnson, Ingersoll-Dresser Pumps, Jeumont-
Schneider Pumps, Kilian, Klemm, LCN, McCartney, Melroe, Montabert, NREC,
Newman Tonks, Normbau, Pacific, Phoenix, Pleuger, Promaxx, Samiia,
Schlage, Sensor I, Sierra, Spra-Coupe, Steelcraft, Tensor I, Thermo King,
Torrington, Von Duprin, Worthington and Zimmerman.
The Company employs approximately 47,000 people. It has over 100
manufacturing plants throughout the world.
During the last three years, the Company has been involved in an
aggressive acquisition and divestment program. The larger acquisitions
included the following:
-- the May 1995 acquisition of Clark Equipment Company for
approximately $1.5 billion.
-- the April 1997 acquisition of Newman Tonks for approximately
$370 million. Newman Tonks is based in the United Kingdom and
is a leading manufacturer, specifier and supplier of a wide
range of branded architectural products in the building
industry.
-- the October 1997 acquisition of Thermo King for approximately
$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 larger divestitures included:
-- the February 1997 sale of the Company's Clark-Hurth Group to
Dana Corporation for approximately $260 million.
-- the March 1996 sale of the Company's Pulp Machinery Division
for approximately $122 million to Beloit Corporation, a
subsidiary of Harnischfeger Industries, Inc.
-- the December 1996 sale of the remainder of the Process Systems
Group for approximately $58 million to Gencor Industries, Inc.
The Company's principal executive offices are at 200 Chestnut Ridge
Road, Woodcliff Lake, New Jersey 07675 (telephone 201-573-0123).
SUMMARY HISTORICAL AND PRO FORMA
FINANCIAL INFORMATION OF THE COMPANY
The following summary historical and pro forma consolidated
financial data of the Company should be read in conjunction with (i) the
Company's historical financial statements and notes thereto and (ii) the
pro forma financial information of the Company. Such information is
contained in the Company's Annual Report on Form 10-K and the Company's
Current Report on Form 8-K, dated March 9, 1998, and incorporated herein
by reference. See "Incorporation of Certain Documents by Reference" in
the Prospectus.
<PAGE>
<TABLE>
<CAPTION>
At and For the Years Ended December 31,
_______________________________________
Pro Forma
1995 1996 1997 1997<F1>
---- ---- ---- ---------
(In millions except per share amounts)
<S> <C> <C> <C> <C>
Income Statement Data:
Net sales . . . . . . . . . . . . . . . . . . . . $ 5,729.0 $6,702.9 $7,103.3 $ 7,965.4
Cost of goods sold . . . . . . . . . . . . . . . . 4,310.2 5,029.9 5,263.7 5,928.0
Administrative, selling and service engineering
expenses . . . . . . . . . . . . . . . . . . . . 921.8 989.5 1,079.3 1,169.1
--------- -------- -------- ---------
Operating income . . . . . . . . . . . . . . . . . 497.0 683.5 760.3 868.3
Interest expense . . . . . . . . . . . . . . . . . (86.6) (119.9) (136.6) (256.2)
Other income (expense), net . . . . . . . . . . . 11.2 0.6 (2.1) (16.8)
Dresser-Rand income . . . . . . . . . . . . . . . 22.0 23.0 9.4 9.4
Minority interests . . . . . . . . . . . . . . . . (14.5) (18.9) (17.3 (18.7)
--------- -------- -------- --------
Earnings before income taxes . . . . . . . . . . . 429.1 568.3 613.7 586.0
Provision for income taxes . . . . . . . . . . . . 158.8 210.3 233.2 195.9
--------- -------- -------- --------
Net earnings . . . . . . . . . . . . . . . . . . . $ 270.3 $ 358.0 $ 380.5 $ 390.1
--------- -------- -------- --------
Basic earnings per share<F2> . . . . . . . . . . . $ 1.70 $ 2.22 $ 2.33 $ 2.39
Diluted earnings per share<F2> . . . . . . . . . . $ 1.69 $ 2.21 $ 2.31 $ 2.37
Average number of common shares outstanding for
basic earnings per share<F2> . . . . . . . . . . 159.104 161.239 163.207 163.207
Average number of common shares outstanding for
diluted earnings per share<F2> . . . . . . . . . 159.599 162.270 164.825 164.825
Balance Sheet Data:
Total assets . . . . . . . . . . . . . . . . . . . $ 5,563.3 $5,621.6 $8,415.6
--------- -------- --------
Current liabilities . . . . . . . . . . . . . . . $ 1,329.2 $1,290.2 $2,327.8
Long-term debt . . . . . . . . . . . . . . . . . . $ 1,304.4 $1,163.8 $2,528.0
Minority interest . . . . . . . . . . . . . . . . $ 182.3 $ 127.9 $ 127.9
Shareholders' equity . . . . . . . . . . . . . . . $ 1,795.5 $2,090.8 $2,341.4
____________________
<FN>
<F1> Pro forma income statement data reflects the pro forma income
statement adjustments required to present the estimated combined
results of the Company and Thermo King as if the acquisition of
Thermo King took place on January 1, 1997.
<F2> Earnings per share and outstanding share amounts have been
adjusted for the 3-for-2 stock split paid on September 2, 1997, in
the form of a 50% stock dividend.
</TABLE>
THE TRUST
The Trust is a statutory business trust created under Delaware law
pursuant to (i) the trust agreement dated as of August 18, 1997, executed
by the Sponsor and certain of the Ingersoll-Rand Trustees and (ii) the
filing of a certificate of trust with the Secretary of State of the State
of Delaware on August 18, 1997. Such trust agreement will be amended and
restated in its entirety substantially in the form filed as an exhibit to
the Registration Statement of which this Prospectus Supplement forms a
part. The Declaration will be qualified as an indenture under the Trust
Indenture Act. Although upon issuance of the Capital Securities, the
holders of Income PRIDES will be the beneficial owners of the related
Capital Securities, such Capital Securities will be pledged with the
<PAGE>
Collateral Agent to secure the obligations of the holders under the
related Purchase Contracts. See "Description of the Purchase Contracts--
Pledged Securities and Pledge Agreement" and "Description of the Capital
Securities--Book-Entry Only Issuance--The Depository Trust Company." The
Company will directly or indirectly acquire Common Securities in an
aggregate liquidation amount equal to 3% of the total capital of the
Trust. The Trust exists for the exclusive purposes of (i) issuing the
Trust Securities representing undivided beneficial ownership interests in
the assets of the Trust, (ii) investing the proceeds of the Trust
Securities in the Debentures and (iii) engaging in only those other
activities necessary or incidental thereto. The Trust has a term of
approximately seven years, but may dissolve earlier as provided in the
Declaration.
The number of Ingersoll-Rand Trustees initially is five. Three of
the Ingersoll-Rand Trustees (the "Regular Trustees") are persons who are
employees or officers of or who are affiliated with the Company. Pursuant
to the Declaration, the fourth trustee is The First National Bank of
Chicago, a financial institution that is unaffiliated with the Company,
which trustee serves as institutional trustee under the Declaration and
as indenture trustee for the purposes of compliance with the provisions
of the Trust Indenture Act (the "Institutional Trustee"). The fifth
trustee, First Chicago Delaware Inc., a corporation that is unaffiliated
with the Company, will serve as the Delaware Trustee, until removed or
replaced by the holder of the Common Securities. For purposes of
compliance with the provisions of the Trust Indenture Act, The First
National Bank of Chicago will also act as the indenture trustee (the
"Guarantee Trustee") under the Guarantee. See "Description of the
Guarantee" and "Description of the Capital Securities--Voting Rights."
The Institutional Trustee will hold title to the Debentures for the
benefit of the holders of the Trust Securities and the Institutional
Trustee will have the power to exercise all rights, powers and privileges
under the Indenture as the holder of the Debentures. In addition, the
Institutional Trustee will maintain exclusive control of a segregated
noninterest bearing bank account (the "Property Account") to hold all
payments made in respect of the Debentures for the benefit of the holders
of the Trust Securities. The Institutional Trustee will make payments of
distributions and payments on liquidation, redemption and otherwise to the
holders of the Trust Securities out of funds from the Property
Account. The Guarantee Trustee will hold the Guarantee for the benefit of
the holders of the Capital Securities. The Company, as the direct or
indirect holder of all the Common Securities, will have the right to
appoint, remove or replace any Ingersoll-Rand Trustee and to increase or
decrease the number of Ingersoll-Rand Trustees; provided, however, that
the number of Ingersoll-Rand Trustees shall be at least two, at least one
of which shall be a Regular Trustee. The Company will pay all fees and
expenses related to the Trust and the offering of the Trust Securities.
See "Description of the Debentures--Miscellaneous."
The rights of the holders of the Capital Securities, including
economic rights, rights to information and voting rights, are set forth
in the Declaration, the Trust Act and the Trust Indenture Act. See
"Description of the Capital Securities."
The principal place of business of the Trust is c/o Ingersoll-Rand
Company, 200 Chestnut Ridge Road, Woodcliff Lake, New Jersey 07675 and
its telephone number shall be (201) 573-0123.
<PAGE>
USE OF PROCEEDS
All of the proceeds from the sale of the
Income PRIDES, the Capital Securities which are not components of the
Income PRIDES and the Common Securities will be invested by the Trust in
Debentures of the Company. The Company currently anticipates using
substantially all of the net proceeds from the sale of the Debentures,
estimated to be approximately $_________ million (after deducting the
underwriting commission and expenses), to repay commercial paper
indebtedness having an average interest rate of approximately 5.7%
incurred in connection with the acquisition of Thermo King.
All of the proceeds from the sale of the Growth PRIDES will be used to
purchase the underlying Treasury Securities to be transferred to holders
of the Growth PRIDES pursuant to the terms thereof, and the Company will
receive no proceeds from the sale of the Growth PRIDES.
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Common Stock is listed and traded on the NYSE, the London Stock
Exchange and the Amsterdam Stock Exchange under the symbol "IR". The
following table sets forth, for the periods indicated, the high and low
sales prices in dollars per share of the Common Stock, as adjusted for
the 3-for-2 stock split paid on September 2, 1997, as reported in the
NYSE Composite Transactions Tape and the cash dividend per share paid on
the Common Stock.
<TABLE>
<CAPTION>
Market Price
------------------
Cash Dividend
High Low Per Share
-------- -------- ----------------
<S> <C> <C> <C>
1996
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . $28-9/16 $ 23-3/8 $ 0.123
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . 29-9/16 24-13/16 0.123
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . 31-5/8 25-1/4 0.137
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . 31-3/4 27-1/16 0.137
1997
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . $ 32-7/8 $ 28-9/16 $ 0.137
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . 41-3/4 27-13/16 0.137
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . 45-9/16 37-1/2 0.150
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . 46-1/4 34-11/16 0.150
1998
First Quarter (through March 6, 1998) . . . . . . . . . . . . $ 48 $ 36-1/2 $ 0.150
</TABLE>
A recent closing sale price for the Common Stock as reported on the
NYSE Composite Transactions Tape is set forth on the cover page of this
Prospectus Supplement.
Subject to the rights of holders of the Company's preference stock,
without par value (the "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.
<PAGE>
CONDENSED CONSOLIDATED CAPITALIZATION
The following table summarizes (i) the actual capitalization of the
Company and its consolidated subsidiaries at December 31, 1997, and (ii)
such capitalization as adjusted to reflect (a) the sale of the FELINE
PRIDES and Capital Securities offered hereby (based on an assumed
aggregate public offering price of $25 per Security), (b) the concurrent
purchase by the Trust from the Company of the Debentures and (c) an
assumed application of the proceeds from the foregoing, after estimated
underwriting commissions and estimated expenses of this offering, to
repay short-term acquisition debt.
<TABLE>
<CAPTION>
As of December 31, 1997
-----------------------
Pro Forma
Adjustments
Historical for
Amounts at Issuance of Pro Forma as
December 31, 1997 Feline Prides Adjusted
----------------- ------------- ------------
(In Millions)
<S> <C> <C> <C>
Loans payable . . . . . . . . . . . . . . . . . . . . . . . . $ 925.1 $ (390.4)<F1> $ 534.7
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . 2,528.0 -- 2,528.0
-------- -------- -------
Total debt . . . . . . . . . . . . . . . . . . . . . . . . 3,453.1 (390.4) 3,062.7
------- -------- -------
Minority interest . . . . . . . . . . . . . . . . . . . . . . 127.9 -- 127.9
Company obligated mandatorily redeemable preferred
securities of subsidiary trust holding solely debentures
of the Company . . . . . . . . . . . . . . . . . . . . . . -- 402.5<F2> 402.5
-------- ------- ------
Shareholders' Equity:
Common Stock, $2 par value . . . . . . . . . . . . . . . . . 334.8 -- 334.8
Capital in excess of par value . . . . . . . . . . . . . . . 92.4 (16.9)<F3> 75.5
Earnings retained for use in the business . . . . . . . . . . 2,156.5 2,156.5
------- ----- -------
2,583.7 (16.9) 2,566.8
Less-Unallocated LESOP shares, at cost . . . . . . . . . . . (41.4) -- (41.4)
-Treasury stock, at cost . . . . . . . . . . . . . . . . . (44.5) -- (44.5)
-Foreign currency equity adjustment . . . . . . . . . . . (156.4) -- (156.4)
------- ----- -------
Total shareholders' equity . . . . . . . . . . . . . . . . 2,341.4 (16.9) 2,324.5
-------- ----- -------
Total capitalization . . . . . . . . . . . . . . . . . . $5,922.4 $ (4.8) $5,917.6
======== ======== =======
____________________
<FN>
<F1> Reflects the use of the anticipated net proceeds from the issuance of the FELINE PRIDES to reduce short-term
acquisition debt.
<F2> Assumes Underwriter's over-allotment options are exercised in full. If such options are not exercised, the following line
items under the "Pro Forma As Adjusted" column will change to equal the amounts indicated: Loans payable -$585.6; Total
<PAGE>
debt - $3,113.6; Company obligated mandatorily redeemable preferred securities of subsidiary trust -$350.0; Capital in
excess of par value -$77.7; Total shareholders' equity -$2,326.7 and Total capitalization -$5,918.2
<F3> Reflects certain issuance costs of the FELINE PRIDES and the present value of the Contract Adjustment Payments.
</TABLE>
<PAGE>
ACCOUNTING TREATMENT
The financial statements of the Trust will be reflected in the
Company's consolidated financial statements, with the Capital Securities
shown on the Company's balance sheet under the caption "Company obligated
mandatorily redeemable preferred securities of subsidiary trust holding
solely debentures of the Company." The financial statement footnotes to
the Company's consolidated financial statements will reflect that the
sole asset of the Trust will be the Debentures. Distributions on the
Capital Securities will be reflected as a charge to the Company's
consolidated income, identified as Minority Interest in Net Income of
Consolidated Subsidiaries, whether paid or accrued.
The Purchase Contracts are forward transactions in the Common
Stock. Upon settlement of a Purchase Contract, the Company will receive
the Stated Amount on such Purchase Contract and will issue the requisite
number of shares of Common Stock. The Stated Amount thus received will be
credited to shareholders' equity, allocated between the Common Stock and
paid-in capital accounts. The present value of the Contract Adjustment
Payments will initially be charged to equity, with an offsetting credit
to liabilities. Subsequent Contract Adjustment Payments will be allocated
between this liability account and interest expense based on a constant
rate calculation over the life of the transaction.
Prior to the issuance of shares of Common Stock upon settlement of
the Purchase Contracts, it is anticipated that the FELINE PRIDES will be
reflected in the Company's earnings per share calculations using the
treasury stock method. Under this method, the number of shares of Common
Stock used in calculating earnings per share is deemed to be increased by
the excess, if any, of the number of shares issuable upon settlement of
the Purchase Contracts over the number of shares that could be purchased
by the Company in the market (at the average market price during the
period) using the proceeds receivable upon settlement. Consequently, it
is anticipated there will be no dilutive effect on the Company's earnings
per share except during periods when the average market price of Common
Stock is above the Threshold Appreciation Price.
<PAGE>
DESCRIPTION OF THE FELINE PRIDES
The following descriptions of certain terms of the FELINE PRIDES
offered hereby supplements, and to the extent inconsistent therewith
replaces, the description of the general terms and provisions of the
Securities set forth in the accompanying Prospectus, to which reference
is hereby made. The summaries of certain provisions of documents
described below are not necessarily complete, and in each instance
reference is hereby made to the copies of such documents (including the
definitions therein of certain terms) which are on file with the
Commission. Wherever particular sections of, or terms defined in, such
documents are referred to herein, such sections or defined terms are
incorporated by reference herein. Capitalized terms not defined herein
have the meanings assigned to such terms in the accompanying Prospectus.
Each FELINE PRIDES will be issued under the Purchase Contract
Agreement between the Company and the Purchase Contract Agent. The FELINE
PRIDES offered hereby initially will consist of (A) 12,600,000 units
referred to as Income PRIDES and (B) at least 1,400,000 units referred to
as Growth PRIDES. Each Income PRIDES will initially consist of a unit
comprised of (a) a Purchase Contract under which (i) the holder
(including, initially, an Underwriter) will purchase from the Company on
the Purchase Contract Settlement Date, for an amount of cash equal to the
Stated Amount a number of newly issued shares of Common Stock equal to
the Settlement Rate described below under "Description of the Purchase
Contracts--General," and (ii) the Company will pay Contract Adjustment
Payments to the holder at the rate of % of the Stated Amount per
amount, and (b) (i) a beneficial ownership in a related % Capital
Security, having a stated liquidation amount per Capital Security equal
to the Stated Amount, representing an undivided beneficial ownership
interest in the assets of the Trust, which will consist solely of the
Debentures, (ii) in the case of a distribution of the Debentures upon the
dissolution of the Trust as a result of an Investment Company Event, as
described below, or otherwise, Debentures having a principal amount equal
to the stated liquidation amount or (iii) upon the occurrence of a Tax
Event Redemption prior to the Purchase Contract Settlement Date, the
appropriate Applicable Ownership Interest in the Treasury Portfolio.
"Applicable Ownership Interest" means, with respect to an Income PRIDES
and the U.S. Treasury Securities in the Treasury Portfolio, a 1/40, or
2.5%, undivided beneficial ownership interest in a $1,000 principal or
interest amount of a principal or interest strip in a U.S. Treasury
Security included in such Treasury Portfolio which matures on or prior to
, 2001 and (B) for each scheduled interest payment date on the
Debentures that occurs after the Tax Event Redemption Date, a %
undivided beneficial ownership interest in a $1,000 face amount of such
U.S. Treasury Security which is a principal or interest strip maturing on
such date.
Each Growth PRIDES will initially consist of a unit comprised of
(a) a Purchase Contract under which (i) the holder will purchase from the
Company on the Purchase Contract Settlement Date, for an amount in cash
equal to the Stated Amount, a number of newly issued shares of Common
Stock of the Company, equal to the Settlement Rate, and (ii) the Company
will pay the holder Contract Adjustment Payments at the rate of %
of the Stated Amount, and (b) a 1/40 undivided beneficial ownership
interest in a % Treasury Security.
The purchase price of each FELINE PRIDES will be allocated between
the related Purchase Contract and the related Capital Security or
interest in a Treasury Security in proportion to their respective fair
market values at the time of purchase. The Company expects that the
<PAGE>
entire purchase price of a FELINE PRIDES will be allocated to the related
Capital Security or interest in a Treasury Security and that no amount
will be allocated to the related Purchase Contract. Such position
generally will be binding on each beneficial owner of each Income PRIDES
(but not on the IRS (as defined herein)). See "Certain Federal Income Tax
Consequences--FELINE PRIDES--Allocation of Purchase Price." As long as a
FELINE PRIDES is in the form of an Income PRIDES or Growth PRIDES, the
related Capital Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio or the Treasury Securities, as
applicable, will be pledged to the Collateral Agent, to secure the
holder's obligation to purchase Common Stock under the related Purchase
Contracts.
Creating Growth PRIDES
Each holder of an Income PRIDES (unless a Tax Event Redemption has
occurred) will have the right, at any time on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date,
to substitute for the related Capital Securities held by the Collateral
Agent Treasury Securities in an aggregate principal amount equal to the
aggregate stated liquidation amount of such Capital Securities. Because
Treasury Securities are issued in integral multiples of $1,000, holders
of Income PRIDES may make such substitution only in integral multiples of
40 Income PRIDES; provided, however, if a Tax Event Redemption has
occurred prior to the Purchase Contract Settlement Date and the Treasury
Portfolio has become a component of the Income PRIDES, holders of such
Income PRIDES may make such substitutions only in integral multiples of
320,000 Income PRIDES (but obtaining the release of the Treasury
Portfolio rather than the Capital Securities), at any time on or prior to
the second Business Day immediately preceding the Purchase Contract
Settlement Date. FELINE PRIDES with respect to which Treasury Securities
have been substituted for the related Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, as collateral to secure such holder's obligation under
the related Purchase Contracts will be referred to as Growth PRIDES. To
create 40 Growth PRIDES, (unless a Tax Event Redemption has occurred),
the Income PRIDES holder will (a) deposit with the Collateral Agent a
Treasury Security having a principal amount at maturity of $1,000 and (b)
transfer 40 Income PRIDES to the Purchase Contract Agent accompanied by a
notice stating that the Income PRIDES holder has deposited a Treasury
Security with the Collateral Agent and requesting that the Purchase
Contract Agent instruct the Collateral Agent to release to such holder
the 40 Capital Securities relating to such 40 Income PRIDES. In the event
that Contract Adjustment Payments are at a higher rate for Growth PRIDES
than for Income PRIDES, holders of Income PRIDES wishing to create Growth
PRIDES will also be required to deliver cash in an amount equal to the
excess of the Contract Adjustment Payments that would have accrued since
the last Payment Date through the date of substitution on the Growth
PRIDES being created by such holders, over the Contract Adjustment
Payments that have accrued over the same period on the related Income
PRIDES. Upon such deposit and receipt of an instruction from the Purchase
Contract Agent, the Collateral Agent will effect the release of the
related Capital Security from the pledge under the Pledge Agreement free
and clear of the Company's security interest therein to the Purchase
Contract Agent, which will (i) cancel the 40 Income PRIDES, (ii) transfer
the 40 related Capital Securities to such holder and (iii) deliver 40
Growth PRIDES to the holder. The Treasury Security will be substituted
for the Capital Securities and will be pledged with the Collateral Agent
to secure the holder's obligation to purchase Common Stock under the
related Purchase Contracts. The related Capital Securities released to
the holder thereafter will trade separately from the resulting Growth
<PAGE>
PRIDES. Contract Adjustment Payments will be payable by the Company on
such Growth PRIDES on each Payment Date from the later of
, 1998 and the last Payment Date on which Contract
Adjustment Payments were paid. In addition, OID will accrue on the
related Treasury Securities.
Creating Income PRIDES
Each holder of a Growth PRIDES (unless a Tax Event Redemption has
occurred) will have the right, at any time on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date,
to substitute for the related Treasury Securities held by the Collateral
Agent Capital Securities in an aggregate principal amount equal to the
aggregate stated liquidation amount of such Capital Securities, thereby
creating Income PRIDES. Because Treasury Securities are issued in
integral multiples of $1,000, holders of Growth PRIDES may make such
substitutions only in integral multiples of 40 Growth PRIDES; provided,
however, if a Tax Event Redemption has occurred and the Treasury
Portfolio has become a component of the Income PRIDES, holders of the
Growth PRIDES, may make such substitution only in integral multiples of
320,000 Growth PRIDES, at any time, on or prior to the second Business
Day immediately preceding the Purchase Contract Settlement Date. To
create 40 Income PRIDES (unless a Tax Event Redemption has occurred), the
Growth PRIDES holder will (a) deposit with the Collateral Agent 40
Capital Securities and (b) transfer 40 Growth PRIDES certificates to the
Purchase Contract Agent accompanied by a notice stating that the Growth
PRIDES holder has deposited 40 Capital Securities with the Collateral
Agent and requesting that the Purchase Contract Agent instruct the
Collateral Agent to release to such Growth PRIDES holder the Treasury
Security relating to such Growth PRIDES. Upon such deposit and receipt of
an instruction from the Purchase Contract Agent, the Collateral Agent will
effect the release of the related Treasury Security from the pledge under
the Pledge Agreement free and clear of the Company's security interest
therein to the Purchase Contract Agent, which will (i) cancel the 40
Growth PRIDES, (ii) transfer the related Treasury Security to such holder
of Growth PRIDES and (iii) deliver 40 Income PRIDES to such holder of
Growth PRIDES. The substituted Capital Securities will be pledged with the
Collateral Agent to secure such Income PRIDES holder's obligation to purchase
Common Stock under the related Purchase Contracts. Cumulative cash
distributions, payable quarterly at a rate of % of the Stated Amount
per annum (subject to the Company's deferral rights) on such Income PRIDES,
will be payable on such Income PRIDES by the Company on each Payment Date
from the later of , 1998 and the last Payment Date on which
such cumulative cash distributions, if any, were paid.
Holders who elect to substitute Pledged Securities, thereby
creating Growth PRIDES or Income PRIDES or recreating Income PRIDES or
Growth PRIDES (as discussed below), shall be responsible for any fees or
expenses payable in connection with such substitution. See "Certain
Provisions of the Purchase Contract Agreement and the Pledge Agreement--
Miscellaneous."
<PAGE>
Current Payments
Holders of Income PRIDES are entitled to receive aggregate cash
distributions at a rate of % of the Stated Amount per annum from
and after , 1998, payable quarterly in arrears. The
quarterly payments on the Income PRIDES will consist of (i) cumulative
cash distributions on the related Capital Securities or the Treasury
Portfolio, as applicable, payable at the rate of % of the Stated
Amount per annum and (ii) Contract Adjustment Payments payable by the
Company at the rate of % of the Stated Amount per annum, subject
(in the case of distributions on the Capital Securities and the Contract
Adjustment Payments) to the Company's right of deferral as described
herein.
Each holder of Growth PRIDES will be entitled to receive quarterly
Contract Adjustment Payments payable by the Company at the rate of
% of the Stated Amount per annum, subject to the Company's rights
of deferral. In addition, OID will accrue on the related Treasury
Securities.
The ability of the Trust to make the quarterly distributions on the
Capital Securities is solely dependent upon the receipt of corresponding
interest payments from the Company on the Debentures. The Company has the
right at any time, and from time to time, limited to a period not
extending beyond the maturity of the Debentures, to defer the interest
payments on the Debentures. As a consequence of such deferral, quarterly
distributions (unless a Tax Event Redemption has occurred) to holders of
Income PRIDES (or any Capital Securities outstanding after the Purchase
Contract Settlement Date or after a substitution of collateral resulting
in the creation of Growth PRIDES) would be deferred (but despite such
deferral, would continue to accumulate quarterly and would accrue
interest thereon compounded quarterly at the rate of % per annum
through and including 15, 2001, and at the Reset Rate
thereafter). The Company also has the right to defer the payment of
Contract Adjustment Payments on the related Purchase Contracts until the
Purchase Contract Settlement Date; however, deferred Contract Adjustment
Payments will bear additional Contract Adjustment Payments at the rate of
% per annum (the higher of (i) the rate which would accrue on
Income PRIDES for such payments and (ii) the rate which would accrue on
Growth PRIDES for such payments) (such deferred installments of Contract
Adjustment Payments, together with the additional Contract Adjustment
Payments, shall be referred to as the "Deferred Contract Adjustment
Payments"). See "Description of the Purchase Contracts--Contract
Adjustment Payments" and "Description of the Capital Securities--
Distributions." If a Tax Event Redemption has occurred and the Treasury
Portfolio has become a component of the Income PRIDES, quarterly
distributions on the Treasury Portfolio, as a portion of the cumulative
quarterly distributions to the holders of Income PRIDES, will not be
deferred.
The Company's obligations with respect to the Debentures will be
senior and unsecured and will rank on a parity in right of payment with
all other senior unsecured obligations of the Company. The Company's
obligations with respect to the Contract Adjustment Payments will be
subordinated and junior in right of payment to the Company's Senior
Indebtedness.
Voting and Certain Other Rights
Holders of Capital Securities, in their capacities as such holders,
will not be entitled to vote to appoint, remove or replace, or to
increase or decrease the number of Regular Trustees and will generally
<PAGE>
have no voting rights except in the limited circumstances described under
"Description of the Capital Securities--Voting Rights." Holders of
Purchase Contracts relating to the Income PRIDES or Growth PRIDES, in
their capacities as such holders, will have no voting or other rights in
respect of the Common Stock.
Listing of the Securities
Application will be made to list the Income PRIDES and the Growth
PRIDES on the NYSE, subject to official notice of issuance. If Capital
Securities are separately traded to a sufficient extent that the
applicable exchange listing requirements are met, the Company will
endeavor to cause such securities to be listed on such exchange on which
the Income PRIDES and the Growth PRIDES are then listed, including, if
applicable, the NYSE. See "Underwriting."
NYSE Symbol of Common Stock
The Common Stock is listed on the NYSE under the symbol "IR."
Miscellaneous
The Company or its affiliates may from time to time purchase any of
the Securities offered hereby which are then outstanding by tender, in
the open market or by private agreement.
DESCRIPTION OF THE PURCHASE CONTRACTS
General
Each Purchase Contract underlying a FELINE PRIDES (unless earlier
terminated, or earlier settled at the holder's option) will obligate the
holder of such Purchase Contract to purchase, and the Company to sell, on
the Purchase Contract Settlement Date, for an amount in cash equal to the
Stated Amount of such FELINE PRIDES, a number of newly issued shares of
Common Stock equal to the Settlement Rate. The Settlement Rate will be
calculated as follows (subject to adjustment under certain
circumstances): (a) if the Applicable Market Value is equal to or
greater than the Threshold Appreciation Price of $ , which is
approximately % above the Reference Price, the Settlement Rate will
be ; accordingly, if, between the date of the final Prospectus
Supplement and the period during which the Applicable Market Value is
measured, the market price for the Common Stock increases to an amount
that is higher than the Threshold Appreciation Price, the aggregate
market value of the shares of Common Stock issued upon settlement of each
Purchase Contract (assuming that such market value is the same as the
Applicable Market Value of such Common Stock) will be higher than the
Stated Amount, and if such market price is the same as the Threshold
Appreciation Price, the aggregate market value of such shares (assuming
that such market value is the same as the Applicable Market Value of such
Common Stock) will be equal to the Stated Amount; (b) if the Applicable
Market Value is less than the Threshold Appreciation price but greater
than the Reference Price, the Settlement Rate will be equal to the Stated
Amount divided by the Applicable Market Value; accordingly, if the market
price for the Common Stock increases between the date of the final Prospectus
Supplement and the period during which the Applicable Market
Value is measured but such market price is less than the Threshold
Appreciation Price, the aggregate market value of the shares of Common
Stock issued upon settlement of each Purchase Contract (assuming that
such market value is the same as the Applicable Market Value of such
<PAGE>
Common Stock) will be equal to the Stated Amount; and (c) if the
Applicable Market Value is less than or equal to the Reference Price, the
Settlement Rate (which is equal to the Stated Amount divided by the
Reference Price) will be ; accordingly, if the market
price for the Common Stock decreases between the date of the final
Prospectus Supplement and the period during which the Applicable Market
Value is measured, the aggregate market value of the shares of Common
Stock issued upon settlement of each Purchase Contract (assuming that
such market value is the same as the Applicable Market Value of such
Common Stock) will be less than the Stated Amount, and if such market
price stays the same, the aggregate market value of such shares (assuming
that such market value is the same as the Applicable Market Value of such
Common Stock) will be equal to the Stated Amount. "Closing Price" of the
Common Stock on any date of determination means the closing sale price
(or, if no closing price is reported, the last reported sale price) of
the Common Stock on the NYSE on such date or, if the Common Stock is not
listed for trading on the NYSE on any such date, as reported in the
composite transactions for the principal United States securities
exchange on which the Common Stock is so listed, or if the Common Stock
is not so listed on a United States national or regional securities
exchange, as reported by the Nasdaq Stock Market, or, if the Common Stock
is not so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or
similar organization, or, if such bid price is not available, the market
value of the Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose
by the Company. A "Trading Day" means a day on which the Common Stock (A)
is not suspended from trading on any national or regional securities
exchange or association or over-the-counter market at the close of
business and (B) has traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the
primary market for the trading of the Common Stock.
No fractional shares of Common Stock will be issued by the Company
pursuant to the Purchase Contracts. In lieu of fractional shares
otherwise issuable (calculated on an aggregate basis) in respect of
Purchase Contracts being settled by a holder of Income PRIDES or Growth
PRIDES, the holder will be entitled to receive an amount of cash equal to
such fraction of a share times the Applicable Market Value.
On the Business Day immediately preceding the Purchase Contract
Settlement Date, unless a holder of Income PRIDES or Growth PRIDES (i)
has settled the related Purchase Contracts prior to the Purchase Contract
Settlement Date through the early delivery of cash to the Purchase
Contract Agent in the manner described under "--Early Settlement," (ii)
in the case of Income PRIDES, has settled the related Purchase Contracts
with separate cash on the Business Day immediately preceding the Purchase
Contract Settlement Date pursuant to prior notice in the manner described
under "--Notice to Settle with Cash", (iii) has had the Capital
Securities related to such holder's Purchase Contracts remarketed in the
manner described herein in connection with settling such Purchase
Contracts, or (iv) an event described under "--Termination" below has
occurred, then (A) in the case of Income PRIDES (unless a Tax Event
Redemption has occurred) the Company will exercise its rights as a
secured party to dispose of the Capital Securities in accordance with
applicable law and (B) in the case of Growth PRIDES or Income PRIDES (in
the event that a Tax Event Redemption has occurred), the principal amount
of the related Treasury Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as applicable, when paid at
maturity, will automatically be applied to satisfy in full the holder's
obligation to purchase Common Stock under the related Purchase Contracts.
Such Common Stock will then be issued and delivered to such holder or
<PAGE>
such holder's designee, upon presentation and surrender of the
certificate evidencing such FELINE PRIDES (a "FELINE PRIDES Certificate")
and payment by the holder of any transfer or similar taxes payable in
connection with the issuance of the Common Stock to any person other than
such holder.
Each holder of Income PRIDES or Growth PRIDES, by acceptance
thereof, will under the terms of the Purchase Contract Agreement and the
related Purchase Contracts be deemed to have (a) irrevocably agreed to be
bound by the terms of the related Purchase Contracts and the Pledge
Agreement for so long as such holder remains a holder of such FELINE
PRIDES, and (b) duly appointed the Purchase Contract Agent as such
holder's attorney-in-fact to enter into and perform the related Purchase
Contracts on behalf of and in the name of such holder. In addition, each
beneficial owner of Income PRIDES or Growth PRIDES, by acceptance of such
interest, will be deemed to have agreed to treat (i) itself as the owner
of the related Capital Securities, the appropriate Applicable Ownership
Interest of the Treasury Portfolio or Treasury Securities, as the case
may be, and (ii) the Debentures as indebtedness of the Company for all
United States federal tax purposes.
Remarketing
Pursuant to the Remarketing Agreement and subject to the terms of
the Remarketing Underwriting Agreement between the Remarketing Agent, the
Purchase Contract Agent, the Company and the Trust, the Capital
Securities of Income PRIDES holders' who have failed to notify the Purchase
Contract Agent on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date in the manner described
under "--Notice to Settle with Cash" of their intention to settle the
related Purchase Contracts with separate cash on the Business Day
immediately preceding the Purchase Contract Settlement Date will be
remarketed on the third Business Day immediately preceding the Purchase
Contract Settlement Date. The Remarketing Agent will use its reasonable
efforts to remarket such Capital Securities on such date at a price of
approximately 100.5% of the aggregate stated liquidation amount of such
Capital Securities, plus accrued and unpaid distributions (including
deferred distributions), if any, thereon. The portion of the proceeds
from such remarketing equal to the aggregate stated liquidation amount of
such Capital Securities will be applied automatically to satisfy in full
such Income PRIDES holders' obligations to purchase Common Stock under
the related Purchase Contracts. In addition, after deducting as the
Remarketing Fee an amount not exceeding 25 basis points (.25%) of the
aggregate stated liquidation amount of the remarketed securities, from
any amount of such proceeds in excess of the aggregate stated liquidation
amount of the remarketed Capital Securities plus any accrued and unpaid
distributions (including deferred distributions, if any), the Remarketing
Agent will remit the remaining portion of the proceeds, if any, for the
benefit of such holder. Income PRIDES holders whose Capital Securities
are so remarketed will not otherwise be responsible for the payment of
any Remarketing Fee in connection therewith. If, in spite of using its
reasonable efforts, the Remarketing Agent cannot remarket the related
Capital Securities (other than to the Company) of such holders of Income
PRIDES at a price not less than 100% of the aggregate stated liquidation
amount of such Capital Securities plus accrued and unpaid distributions
(including deferred distributions) and thus resulting in a Failed Remarketing,
the Company will exercise its rights as a secured party to dispose of the
Capital Securities in accordance with the applicable law and satisfy in full,
from the proceeds of such disposition, such holder's obligation to
purchase Common Stock under the related Purchase Contracts; provided,
that if the Company exercises such rights as a secured creditor, any
<PAGE>
accrued and unpaid distributions (including any deferred distributions)
on such Capital Securities will be paid in cash by the Company to the
holders of record of such Capital Securities. The Company will cause a
notice of such Failed Remarketing to be published on the second Business
Day immediately preceding the Purchase Contract Settlement Date by
publication in a daily newspaper in the English language of general
circulation in The City of New York, which is expected to be The Wall
Street Journal. In addition, the Company will request, not later than
seven nor more than 15 calendar days prior to the remarketing date, that
the Depository notify its participants holding Capital Securities, Income
PRIDES and Growth PRIDES of such remarketing, including, in the case of a
Failed Remarketing, the procedures that must be followed if a Capital
Security holder wishes to exercise its right to put its Capital Security
to the Company as described herein. If required, the Company will
endeavor to ensure that a registration statement with regard to the full
amount of the Capital Securities to be remarketed shall be effective in
such form as will enable the Remarketing Agent to rely on it in
connection with the remarketing process. It is currently anticipated that
Merrill Lynch, Pierce, Fenner & Smith Incorporated will be the
Remarketing Agent.
Early Settlement
A holder of Income PRIDES may settle the related Purchase Contracts
on or prior to the fifth Business Day immediately preceding the Purchase
Contract Settlement Date by presenting and surrendering the FELINE PRIDES
Certificate evidencing such Income PRIDES at the offices of the Purchase
Contract Agent with the form of "Election to Settle Early" on the reverse
side of such certificate completed and executed as indicated, accompanied
by payment (payable to the Company in immediately available funds) of an
amount equal to the Stated Amount times the number of Purchase Contracts
being settled; provided, however, if a Tax Event Redemption has occurred
prior to the Purchase Contract Settlement Date and the Treasury portfolio
has become a component of the Income PRIDES, holders of such Income
PRIDES may settle early only in integral multiples of 320,000 Income
PRIDES (and the related appropriate Applicable Ownership Interest of the
Treasury Portfolio) at any time on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date. A holder of
Growth PRIDES may settle the related Purchase Contracts on or prior to
the second Business Day immediately preceding the Purchase Contract
Settlement Date by presenting and surrendering the FELINE PRIDES
Certificate evidencing such Growth PRIDES at the offices of the Purchase
Contract Agent with the form of "Election to Settle Early" on the reverse
side of such certificate completed and executed as indicated, accompanied
by payment in immediately available funds of an amount equal to the
Stated Amount times the number of Purchase Contracts being settled. So
long as the FELINE PRIDES are evidenced by one or more global security
certificates deposited with the Depositary (as defined herein),
procedures for early settlement will also be governed by standing
arrangements between the Depositary and the Purchase Contract Agent.
Upon Early Settlement of the Purchase Contracts related to any
Income PRIDES or Growth PRIDES, (a) the holder will receive
newly issued shares of Common Stock per Income
PRIDES or Growth PRIDES having a Stated Amount of $25 (regardless of the
market price of the Common Stock on the date of such Early Settlement),
subject to adjustment under the circumstances described in "--
Anti-Dilution Adjustments" below, (b) the Capital Securities, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or
Treasury Securities, as the case may be, related to such Income PRIDES or
Growth PRIDES will thereupon be transferred to the holder free and clear
<PAGE>
of the Company's security interest therein, (c) the holder's right to
receive Deferred Contract Adjustment Payments, if any, on the Purchase
Contracts being settled will be forfeited, (d) the holder's right to
receive future Contract Adjustment Payments will terminate and (e) no
adjustment will be made to or for the holder on account of Deferred
Contract Adjustment Payments, if any, or any amounts accrued in respect
of Contract Adjustment Payments.
If the Purchase Contract Agent receives a FELINE PRIDES
Certificate, accompanied by the completed "Election to Settle Early" and
requisite immediately available funds, from a holder of FELINE PRIDES by
5:00 p.m., New York City time, on a Business Day, that day will be
considered the settlement date. If the Purchase Contract Agent receives
the foregoing after 5:00 p.m., New York City time, on a Business Day or
at any time on a day that is not a Business Day (other than from Income
PRIDES holders after the occurrence of a Tax Event Redemption), the next
Business Day will be considered the settlement date.
Upon Early Settlement of Purchase Contracts in the manner described
above, presentation and surrender of the FELINE PRIDES Certificate
evidencing the related Income PRIDES or Growth PRIDES and payment of any
transfer or similar taxes payable by the holder in connection with the
issuance of the related Common Stock to any person other than the holder
of such Income PRIDES or Growth PRIDES, the Company will cause the shares
of Common Stock being purchased to be issued, and the related Capital
Securities, the appropriate Applicable Ownership Interest of the Treasury
Portfolio or Treasury Securities, as the case may be, securing such
Purchase Contracts to be released from the pledge under the Pledge
Agreement (described in "--Pledged Securities and Pledge Agreement") and
transferred, within three Business Days following the settlement date, to
the purchasing holder or such holder's designee.
Notice to Settle with Cash
A holder of an Income PRIDES or Growth PRIDES wishing to settle the
related Purchase Contract with separate cash on the Business Day
immediately preceding the Purchase Contract Settlement Date must notify
the Purchase Contract Agent by presenting and surrendering the FELINE
PRIDES Certificate evidencing such Income PRIDES or Growth PRIDES at the
offices of the Purchase Contract Agent with the form of "Notice to Settle
by Separate Cash" on the reverse side of the certificate completed and
executed as indicated on or prior to 5:00 p.m., New York City time, on
the second Business Day immediately preceding the Purchase Contract
Settlement Date in the case of a Growth PRIDES holder or an Income PRIDES
holder (if a Tax Event Redemption has occurred) and on the fifth Business
Day immediately preceding the Purchase Contract Settlement Date in the
case of an Income PRIDES holder (if a Tax Event has not occurred). If a
holder that has given notice of such holder's intention to settle the
related Purchase Contract with separate cash fails to deliver such cash
to the Collateral Agent on the Business Day immediately preceding the
Purchase Contract Settlement Date, then the Company will exercise its
right as a secured party to dispose of, in accordance with applicable
law, the related Capital Security or Treasury Security, as the case may
be, to satisfy in full, from the disposition of such Capital Security or
the appropriate Applicable Ownership Interest of the Treasury Portfolio,
such holder's obligation to purchase Common Stock under the related
Purchase Contracts.
<PAGE>
Contract Adjustment Payments
Contract Adjustment Payments will be fixed at a rate per annum of
% of the Stated Amount per Purchase Contract in the case of Income
PRIDES, and at a rate per annum of % of the Stated Amount per
Purchase Contract in the case of Growth Prides. Contract Adjustment
Payments that are not paid when due (after giving effect to any permitted
deferral thereof) will bear interest thereon at the rate per annum of
% thereof (the higher of (i) the rate which would accrue on Income
PRIDES for such payments and (ii) the rate which would accrue on Growth
PRIDES for such payments), compounded quarterly, until paid. Contract
Adjustment Payments payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. Contract Adjustment Payments
will accrue from , 1998 and will be payable quarterly in
arrears on February 16, May 16, August 16 and November 16 of each year,
commencing 16, 1998.
Contract Adjustment Payments will be payable to the holders of
Purchase Contracts as they appear on the books and records of the Purchase
Contract Agent on the relevant record dates, which, as long as
the Income PRIDES or Growth PRIDES remain in book-entry only form, will
be one Business Day prior to the relevant payment dates. Such
distributions will be paid through the Purchase Contract Agent who will
hold amounts received in respect of the Contract Adjustment Payments for
the benefit of the holders of the Purchase Contracts relating to such
Income PRIDES or Growth PRIDES. Subject to any applicable laws and
regulations, each such payment will be made as described under "--
Book-Entry System." In the event that the Income PRIDES or Growth PRIDES
do not continue to remain in book-entry only form, the Company shall have
the right to select relevant record dates, which shall be more than one
Business Day but less than 60 Business Days prior to the relevant payment
dates. In the event that any date on which Contract Adjustment Payments
are to be made on the Purchase Contracts related to the Income PRIDES or
Growth PRIDES is not a Business Day, then payment of the Contract
Adjustment Payments payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on
the immediately preceding Business Day, in each case with the same force
and effect as if made on such payment date. A "Business Day" shall mean
any day other than Saturday, Sunday or any other day on which banking
institutions in New York City (in the State of New York) are permitted or
required by any applicable law to close.
The Company's obligations with respect to Contract Adjustment
Payments will be subordinated and junior in right of payment to the
Company's obligations under any Senior Indebtedness.
Option to Defer Contract Adjustment Payments
The Company may, at its option and upon prior written notice to the
holders of the FELINE PRIDES and the Purchase Contract Agent, defer the
payment of Contract Adjustment Payments on the Purchase Contracts until
no later than the Purchase Contract Settlement Date. However, Deferred
Contract Adjustment Payments, if any, will bear additional Contract
Adjustment Payments at the rate of % per annum (the higher of (i)
the rate which would accrue on Income PRIDES for such payments and (ii)
the rate which would accrue on Growth PRIDES for such payments) (compounding
on each succeeding Payment Date) until paid. If the Purchase
Contracts are terminated (upon the occurrence of certain events of
bankruptcy, insolvency or reorganization with respect to the Company),
<PAGE>
the right to receive Contract Adjustment Payments and Deferred Contract
Adjustment Payments, if any, will also terminate.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the Purchase
Contract Settlement Date, each holder of FELINE PRIDES will receive on
the Purchase Contract Settlement Date in respect of the Deferred Contract
Adjustment Payments, in lieu of a cash payment, a number of shares of
Common Stock equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to such holder divided by (y) the Applicable
Market Value.
In the event the Company exercises its option to defer the payment
of Contract Adjustment Payments, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends
on, make distributions with respect to, or redeem, purchase or acquire,
or make a liquidation payment with respect to, any of its capital stock
or make guarantee payments with respect to the foregoing (other than (i)
purchases or acquisitions of capital stock of the Company in connection
with the satisfaction by the Company of its obligations under any
employee or agent benefit plans or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date
of such event requiring the Company to purchase capital stock of the
Company, (ii) as a result of a reclassification of the Company's capital
stock or the exchange or conversion of one class or series of the
Company's capital stock for another class or series of the Company
capital stock, (iii) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the conversion or exchange
provisions of the Company capital stock or the security being converted
or exchanged, (iv) dividends or distributions in capital stock of the
Company (or rights to acquire capital stock) or repurchases or
redemptions of capital stock solely from the issuance or exchange of
capital stock or (v) redemptions or repurchases of any rights outstanding
under a shareholder rights plan).
Anti-Dilution Adjustments
The formula for determining the Settlement Rate will be subject to
adjustment (without duplication) upon the occurrence of certain events,
including: (a) the payment of dividends (and other distributions) of
Common Stock on Common Stock; (b) the issuance to all holders of Common
Stock of rights, warrants or options entitling them, for a period of up
to 45 days, to subscribe for or purchase Common Stock at less than the
Current Market Price (as defined herein) thereof; (c) subdivisions,
splits and combinations of Common Stock; (d) distributions to all holders
of Common Stock of evidences of indebtedness of the Company, shares of
capital stock, securities, cash or property (excluding any dividend or
distribution covered by clause (a) or (b) above and any dividend or
distribution paid exclusively in cash); (e) distributions consisting
exclusively of cash to all holders of Common Stock in an aggregate amount
that, together with (i) other all-cash distributions made within the
preceding 12 months and (ii) any cash and the fair market value, as of
the expiration of the tender or exchange offer referred to below, of
consideration payable in respect of any tender or exchange offer by the
Company or a subsidiary thereof for the Common Stock concluded within the
preceding 12 months, exceeds 15% of the Company's aggregate market
capitalization (such aggregate market capitalization being the product of
the Current Market Price of the Common Stock multiplied by the number of
shares of Common Stock then outstanding) on the date of such
distribution; and (f) the successful completion of a tender or exchange
offer made by the Company or any subsidiary thereof for the Common Stock
which involves an aggregate consideration that, together with (i) any
<PAGE>
cash and the fair market value of other consideration payable in respect
of any tender or exchange offer by the Company or a subsidiary thereof
for the Common Stock concluded within the preceding 12 months and (ii)
the aggregate amount of any all-cash distributions to all holders of the
Company's Common Stock made within the preceding 12 months, exceeds 15%
of the Company's aggregate market capitalization on the expiration of
such tender or exchange offer. The "Current Market Price" per share of
Common Stock on any day means the average of the daily Closing Prices for
the five consecutive Trading Days selected by the Company commencing not
more than 30 Trading Days before, and ending not later than, the earlier
of the day in question and the day before the "ex date" with respect to
the issuance or distribution requiring such computation. For purposes of
this paragraph, the term "ex date," when used with respect to any
issuance or distribution, shall mean the first date on which the Common
Stock trades regular way on such exchange or in such market without the
right to receive such issuance or distribution.
In the case of certain reclassifications, consolidations, mergers,
sales or transfers of assets or other transactions pursuant to which the
Common Stock is converted into the right to receive other securities,
cash or property, each Purchase Contract then outstanding would, without
the consent of the holders of the related Income PRIDES or Growth PRIDES,
as the case may be, become a contract to purchase only the kind and
amount of securities, cash and other property receivable upon consummation
of the transaction by a holder of the number of shares of
Common Stock which would have been received by the holder of the related
Income PRIDES or Growth PRIDES immediately prior to the date of
consummation of such transaction if such holder had then settled such
Purchase Contract.
If at any time the Company makes a distribution of property to its
stockholders which would be taxable to such stockholders as a dividend
for United States federal income tax purposes (i.e., distributions of
evidences of indebtedness or assets of the Company, but generally not
stock dividends or rights to subscribe to capital stock) and, pursuant to
the Settlement Rate adjustment provisions of the Purchase Contract
Agreement, the Settlement Rate is increased, such increase may give rise
to a taxable dividend to holders of FELINE PRIDES. See "Certain Federal
Income Tax Consequences--Purchase Contracts--Adjustment to Settlement Rate."
In addition, the Company may make such increases in the Settlement
Rate as the Board of Directors of the Company deems advisable to avoid or
diminish any income tax to holders of its capital stock resulting from
any dividend or distribution of capital stock (or rights to acquire
capital stock) or from any event treated as such for income tax purposes
or for any other reasons.
Adjustments to the Settlement Rate will be calculated to the nearest
1/10,000th of a share. No adjustment in the Settlement Rate shall
be required unless such adjustment would require an increase or decrease
of at least one percent in the Settlement Rate; provided, however, that
any adjustments which by reason of the foregoing are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment.
The Company will be required, within ten Business Days following
the adjustment of the Settlement Rate, to provide written notice to the
Purchase Contract Agent of the occurrence of such event and a statement
in reasonable detail setting forth the method by which the adjustment to
the Settlement Rate was determined and setting forth the revised
Settlement Rate.
<PAGE>
Each adjustment to the Settlement Rate will result in a
corresponding adjustment to the number of shares of Common Stock issuable
upon early settlement of a Purchase Contract.
Termination
The Purchase Contracts, and the rights and obligations of the
Company and of the holders of the FELINE PRIDES thereunder (including the
right thereunder to receive accrued Contract Adjustment Payments or
Deferred Contract Adjustment Payments and the right and obligation to
purchase Common Stock), will automatically terminate upon the occurrence
of certain events of bankruptcy, insolvency or reorganization with respect
to the Company. Upon such termination, the Collateral Agent will
release the related Capital Securities, the appropriate Applicable
Ownership Interest of the Treasury Portfolio or Treasury Securities, as
the case may be, held by it to the Purchase Contract Agent for
distribution to the holders, subject in the case of the Treasury
Portfolio to the Purchase Contract Agent's disposition of the subject
securities for cash and the payment of such cash to the holders to the
extent that the holders would otherwise have been entitled to receive
less than $1,000 of any such security. Upon such termination, however,
such release and distribution may be subject to a delay. In the event
that the Company becomes the subject of a case under the Bankruptcy Code,
such delay may occur as a result of the automatic stay under the
Bankruptcy Code and continue until such automatic stay has been lifted.
The Company expects any such delay to be limited.
Pledged Securities and Pledge Agreement
Pledged Securities will be pledged to the Collateral Agent, for the
benefit of the Company, pursuant to the Pledge Agreement to secure the
obligations of holders of FELINE PRIDES to purchase Common Stock under
the related Purchase Contracts. The rights of holders of FELINE PRIDES to
the related Pledged Securities will be subject to the Company's security
interest therein created by the Pledge Agreement. No holder of Income
PRIDES or Growth PRIDES will be permitted to withdraw the Pledged Securities
related to such Income PRIDES or Growth PRIDES from the pledge
arrangement except (i) to substitute Treasury Securities for the related
Capital Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, (ii) to substitute Capital
Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, for the related Treasury
Securities (for both (i) and (ii), as provided for under "Description of
the FELINE PRIDES--Substitution of Pledged Securities" and "--Recreating
Income PRIDES or Growth PRIDES") or (iii) upon the termination or Early
Settlement of the related Purchase Contracts. Subject to such security
interest and the terms of the Purchase Contract Agreement and the Pledge
Agreement, each holder of Income PRIDES (unless a Tax Event Redemption
has occurred) will be entitled through the Purchase Contract Agent and
the Collateral Agent to all of the proportional rights and preferences of
the related Capital Securities (including distribution, voting,
redemption, repayment and liquidation rights), and each holder of Growth
PRIDES or Income PRIDES (if a Tax Event Redemption has occurred) will
retain beneficial ownership of the related Treasury Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as
applicable, pledged in respect of the related Purchase Contracts. The
Company will have no interest in the Pledged Securities other than its
security interest.
Except as described in "Description of the Purchase Contracts--
General," the Collateral Agent will, upon receipt of distributions on the
<PAGE>
Pledged Securities, distribute such payments to the Purchase Contract
Agent, which will in turn distribute those payments, together with
Contract Adjustment Payments received from the Company, to the persons in
whose names the related Income PRIDES or Growth PRIDES are registered at
the close of business on the Record Date immediately preceding the date
of such distribution.
Book Entry-System
The Depository Trust Company (the "Depositary") will act as
securities depositary for the FELINE PRIDES. The FELINE PRIDES will be
issued only as fully-registered securities registered in the name of
Cede& Co. (the Depositary's nominee). One or more fully-registered global
security certificates ("Global Security Certificates"), representing the
total aggregate number of FELINE PRIDES, will be issued and will be
deposited with the Depositary and will bear a legend regarding the
restrictions on exchanges and registration of transfer thereof referred
to below.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in the
FELINE PRIDES so long as such FELINE PRIDES are represented by Global
Security Certificates.
The Depositary is a limited-purpose trust company organized under
the New York Banking Law, a "banking organization" within the meaning of
the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The Depositary holds securities that its
participants ("Participants") deposit with the Depositary. The Depositary
also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in Participants'
accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers
and dealers, 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 NYSE, the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc.
Access to the Depositary system is also available to others, such as securities
brokers and dealers, banks and trust companies that clear
transactions through or maintain a direct or indirect custodial
relationship with a Direct Participant either directly or indirectly
("Indirect Participants"). The rules applicable to the Depositary and its
Participants are on file with the Commission.
No FELINE PRIDES represented by Global Security Certificates may be
exchanged in whole or in part for FELINE PRIDES registered, and no
transfer of Global Security Certificates in whole or in part may be
registered, in the name of any person other than the Depositary or any
nominee of the Depositary unless the Depositary has notified the Company
that it is unwilling or unable to continue as depositary for such Global
Security Certificates or has ceased to be qualified to act as such as
required by the Purchase Contract Agreement or there shall have occurred
and be continuing a default by the Company in respect of its obligations
under one or more Purchase Contracts. All FELINE PRIDES represented by
one or more Global Security Certificates or any portion thereof will be
registered in such names as the Depositary may direct.
<PAGE>
As long as the Depositary or its nominee is the registered owner of
the Global Security Certificates, such Depositary or such nominee, as the
case may be, will be considered the sole owner and holder of the Global
Security Certificates and all FELINE PRIDES represented thereby for all
purposes under the FELINE PRIDES and the Purchase Contract Agreement.
Except in the limited circumstances referred to above, owners of
beneficial interests in Global Security Certificates will not be entitled
to have such Global Security Certificates or the FELINE PRIDES represented
thereby registered in their names, will not receive or be
entitled to receive physical delivery of FELINE PRIDES Certificates in
exchange therefor and will not be considered to be owners or holders of
such Global Security Certificates or any FELINE PRIDES represented
thereby for any purpose under the FELINE PRIDES or the Purchase Contract
Agreement. All payments on the FELINE PRIDES represented by the Global
Security Certificates and all transfers and deliveries of Capital
Securities, Treasury Portfolio, Treasury Securities and Common Stock with
respect thereto will be made to the Depositary or its nominee, as the
case may be, as the holder thereof.
Ownership of beneficial interests in the Global Security
Certificates will be limited to Participants or persons that may hold
beneficial interests through institutions that have accounts with the
Depositary or its nominee. Ownership of beneficial interests in Global
Security Certificates will be shown only on, and the transfer of those
ownership interests will be effected only through, records maintained by
the Depositary or its nominee (with respect to Participants' interests)
or any such Participant (with respect to interests of persons held by
such Participants on their behalf). Procedures for settlement of Purchase
Contracts on the Purchase Contract Settlement Date or upon Early
Settlement will be governed by arrangements among the Depositary,
Participants and persons that may hold beneficial interests through
Participants designed to permit such settlement without the physical
movement of certificates. Payments, transfers, deliveries, exchanges and
other matters relating to beneficial interests in Global Security
Certificates may be subject to various policies and procedures adopted by
the Depositary from time to time. None of the Company, the Purchase
Contract Agent or any agent of the Company or the Purchase Contract Agent
will have any responsibility or liability for any aspect of the
Depositary's or any Participant's records relating to, or for payments
made on account of, beneficial interests in Global Security Certificates,
or for maintaining, supervising or reviewing any of the Depositary's
records or any Participant's records relating to such beneficial
ownership interests.
The information in this section concerning the Depositary and its
book-entry system has been obtained from sources that the Company and the
Trust believe to be reliable, but neither the Company nor the Trust takes
responsibility for the accuracy thereof.
CERTAIN PROVISIONS OF THE PURCHASE CONTRACT
AGREEMENT AND THE PLEDGE AGREEMENT
General
Distributions on the FELINE PRIDES will be payable, Purchase
Contracts (and documents related thereto) will be settled and transfers
of the FELINE PRIDES will be registrable at the office of the Purchase
Contract Agent in the Borough of Manhattan, The City of New York. In
addition, in the event that the FELINE PRIDES do not remain in book-entry
form, payment of distributions on the FELINE PRIDES may be made, at the
<PAGE>
option of the Company, by check mailed to the address of the person
entitled thereto as shown on the Security Register.
Shares of Common Stock will be delivered on the Purchase Contract
Settlement Date (or earlier upon Early Settlement), or, if the Purchase
Contracts have terminated, the related Pledged Securities will be
delivered potentially after a delay as a result of the imposition of the
automatic stay under the Bankruptcy Code (see "Description of the
Purchase Contracts--Termination"), in each case upon presentation and
surrender of the FELINE PRIDES Certificate at the office of the Purchase
Contract Agent. The Company expects any such delay to be limited.
If a holder of outstanding Income PRIDES or Growth PRIDES fails to
present and surrender the FELINE PRIDES Certificate evidencing such
Income PRIDES or Growth PRIDES to the Purchase Contract Agent on the
Purchase Contract Settlement Date, the shares of Common Stock issuable in
settlement of the related Purchase Contract and in payment of any
Deferred Contract Adjustment Payments will be registered in the name of
the Purchase Contract Agent and, together with any distributions thereon,
shall be held by the Purchase Contract Agent as agent for the benefit of
such holder, until such FELINE PRIDES Certificate is presented and
surrendered or the holder provides satisfactory evidence that such
certificate has been destroyed, lost or stolen, together with any
indemnity that may be required by the Purchase Contract Agent and the
Company.
If the Purchase Contracts have terminated prior to the Purchase
Contract Settlement Date, the related Pledged Securities have been
transferred to the Purchase Contract Agent for distribution to the
holders entitled thereto and a holder fails to present and surrender the
FELINE PRIDES Certificate evidencing such holder's Income PRIDES or
Growth PRIDES to the Purchase Contract Agent, the related Pledged
Securities delivered to the Purchase Contract Agent and payments thereon
shall be held by the Purchase Contract Agent as agent for the benefit of
such holder, until such FELINE PRIDES Certificate is presented or the
holder provides the evidence and indemnity described above.
The Purchase Contract Agent will have no obligation to invest or to
pay interest on any amounts held by the Purchase Contract Agent pending
distribution, as described above.
No service charge will be made for any registration of transfer or
exchange of the FELINE PRIDES, except for any tax or other governmental
charge that may be imposed in connection therewith.
Modification
The Purchase Contract Agreement and the Pledge Agreement will
contain provisions permitting the Company and the Purchase Contract Agent
or Collateral Agent, as the case may be, with the consent of the holders
of not less than a majority of the Purchase Contracts at the time
outstanding, to modify the terms of the Purchase Contracts, the Purchase
Contract Agreement and the Pledge Agreement, except that no such
modification may, without the consent of the holder of each outstanding
Purchase Contract affected thereby, (a) change any Payment Date, (b)
change the amount or type of Pledged Securities related to such Purchase
Contract, impair the right of the holder of any Pledged Securities to
receive distributions on such Pledged Securities (except for the rights
of holders of Income PRIDES to substitute Treasury Securities for the
related Capital Securities or Treasury Portfolio, as the case may be, or
the rights of holders of Growth PRIDES to substitute Capital Securities
or Treasury Portfolio, as the case may be, for the related Treasury
<PAGE>
Securities) or otherwise adversely affect the holder's rights in or to
such Pledged Securities, (c) change the place or currency of payment or
reduce any Contract Adjustment Payments or any Deferred Contract
Adjustment Payments, (d) impair the right to institute suit for the
enforcement of such Purchase Contract, (e) reduce the amount of Common
Stock purchasable under such Purchase Contract, increase the price to
purchase Common Stock on settlement of such Purchase Contract, change the
Purchase Contract Settlement Date or otherwise adversely affect the
holder's rights under such Purchase Contract or (f) reduce the
above-stated percentage of outstanding Purchase Contracts the consent of
whose holders is required for the modification or amendment of the
provisions of the Purchase Contracts, the Purchase Contract Agreement or
the Pledge Agreement; provided, that if any amendment or proposal
referred to above would adversely affect only the Income PRIDES or the
Growth PRIDES, then only the affected class of holder will be entitled to
vote on such amendment or proposal and such amendment or proposal shall
not be effective except with the consent of the holders of not less than
a majority of such class.
No Consent to Assumption
Each holder of Income PRIDES or Growth PRIDES, by acceptance
thereof, will under the terms of the Purchase Contract Agreement and the
Income PRIDES or Growth PRIDES, as applicable, be deemed expressly to
have withheld any consent to the assumption (i.e., affirmance) of the
related Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code.
Consolidation, Merger, Sale or Conveyance
The Company will covenant in the Purchase Contract Agreement that
it will not merge or consolidate with any other entity or sell, assign,
transfer, lease or convey all or substantially all of its properties and
assets to any person, firm or corporation unless the Company is the
continuing corporation or the successor corporation is a corporation
organized under the laws of the United States of America or a state
hereof and such corporation expressly assumes the obligations of the
Company under the Purchase Contracts, the Debentures, the Purchase
Contract Agreement and the Pledge Agreement, and the Company or such
successor corporation is not, immediately after such merger,
consolidation, sale, assignment, transfer, lease or conveyance, in
default in the performance of any of its obligations thereunder.
Title
The Company, the Purchase Contract Agent and the Collateral Agent
may treat the registered owner of any FELINE PRIDES as the absolute owner
thereof for the purpose of making payment and settling the related
Purchase Contracts and for all other purposes.
Replacement of FELINE PRIDES Certificates
In the event that physical certificates have been issued, any
mutilated FELINE PRIDES Certificate will be replaced by the Company at
the expense of the holder upon surrender of such certificate to the
Purchase Contract Agent. FELINE PRIDES Certificates that become
destroyed, lost or stolen will be replaced by the Company at the expense
of the holder upon delivery to the Company and the Purchase Contract
Agent of evidence of the destruction, loss or theft thereof satisfactory
to the Company and the Purchase Contract Agent. In the case of a
destroyed, lost or stolen FELINE PRIDES Certificate, an indemnity
<PAGE>
satisfactory to the Purchase Contract Agent and the Company may be
required at the expense of the holder of the FELINE PRIDES evidenced by
such certificate before a replacement will be issued.
Notwithstanding the foregoing, the Company will not be obligated to
issue any Income PRIDES or Growth PRIDES on or after the Purchase
Contract Settlement Date (or after Early Settlement) or after the
Purchase Contracts have terminated. The Purchase Contract Agreement will
provide that in lieu of the delivery of a replacement FELINE PRIDES
Certificate following the Purchase Contract Settlement Date, the Purchase
Contract Agent, upon delivery of the evidence and indemnity described
above, will deliver the Common Stock issuable pursuant to the Purchase
Contracts included in the Income PRIDES or Growth PRIDES evidenced by
such certificate, or, if the Purchase Contracts have terminated prior to
the Purchase Contract Settlement Date, transfer the principal amount of
the Pledged Securities included in the Income PRIDES or Growth PRIDES
evidenced by such certificate.
Governing Law
The Purchase Contract Agreement, the Pledge Agreement and the
Purchase Contracts will be governed by, and construed in accordance with,
the laws of the State of New York.
Information Concerning the Purchase Contract Agent
The Bank of New York will be the Purchase Contract Agent. The
Purchase Contract Agent will act as the agent for the holders of Income
PRIDES and Growth PRIDES from time to time. The Purchase Contract
Agreement will not obligate the Purchase Contract Agent to exercise any
discretionary actions in connection with a default under the terms of the
Income PRIDES and Growth PRIDES or the Purchase Contract Agreement.
The Purchase Contract will contain provisions limiting the
liability of the Purchase Contract Agent. The Purchase Contract Agreement
will contain provisions under which the Purchase Contract Agent may
resign or be replaced. Such resignation or replacement would be effective
upon the appointment of a successor.
The Purchase Contract Agent maintains commercial banking
relationships with the Company.
Information Concerning the Collateral Agent
The Chase Manhattan Bank will be the Collateral Agent. The
Collateral Agent will act solely as the agent of the Company and will
not assume any obligation or relationship of agency or trust for or with any
of the holders of the Income PRIDES and Growth PRIDES except for the
obligations owed by a pledgee of property to the owner thereof under the
Pledge Agreement and applicable law.
The Pledge Agreement will contain provisions limiting the liability
of the Collateral Agent. The Pledge Agreement will contain provisions
under which the Collateral Agent may resign or be replaced. Such
resignation or replacement would be effective upon the appointment of a
successor.
The Chase Manhattan Bank maintains commercial banking relationships
with the Company.
<PAGE>
Miscellaneous
The Purchase Contract Agreement will provide that the Company will
pay all fees and expenses related to (i) the offering of the FELINE PRIDES,
(ii) the retention of the Collateral Agent and (iii) the
enforcement by the Purchase Contract Agent of the rights of the holders
of the FELINE PRIDES; provided, however, that holders who elect to
substitute the related Pledged Securities, thereby creating Growth PRIDES
or Income PRIDES or recreating Income PRIDES or Growth PRIDES, shall be
responsible for any fees or expenses payable in connection with such
substitution, as well as any commissions, fees or other expenses incurred
in acquiring the Pledged Securities to be substituted, and the Company
shall not be responsible for any such fees or expenses.
DESCRIPTION OF THE CAPITAL SECURITIES
The Capital Securities, a certain portion of which form a component
of the Income PRIDES, and a certain portion of which will trade
separately, will be issued pursuant to the terms of the Declaration. See
"Description of the FELINE PRIDES--Substitution of Pledged Securities."
The Declaration will be qualified as an indenture under the Trust
Indenture Act. The Institutional Trustee, The First National Bank of
Chicago, an independent trustee, will act as indenture trustee for the
Capital Securities under the Declaration for purposes of compliance with
the provisions of the Trust Indenture Act. The terms of the Capital
Securities will include those stated in the Declaration and those made
part of the Declaration by the Trust Indenture Act. The following summary
of certain provisions of the Capital Securities and the Declaration is
not necessarily complete, and reference is hereby made to the copy of the
Declaration (including the definitions therein of certain terms) which is
filed as an exhibit to the Registration Statement relating to this
Prospectus Supplement, the Trust Act and the Trust Indenture Act.
Whenever particular defined terms are referred to in this Prospectus
Supplement, such defined terms are incorporated herein by reference. The
following descriptions of certain terms of the Capital Securities offered
hereby supplements and, to the extent inconsistent with, replaces the
description of the general terms and provisions of the Capital Securities
set forth in the accompanying Prospectus, to which reference is hereby
made.
General
The Declaration authorizes the Regular Trustees to issue on behalf
of the Trust the Trust Securities, which represent undivided beneficial
ownership interests in the assets of the Trust. All of the Common
Securities will be owned, directly or indirectly, by the Company. The
Common Securities rank on a parity, and payments will be made thereon on
a pro rata basis, with the Capital Securities, except that upon the
occurrence and during the continuance of an Indenture Event of Default,
the rights of the holders of the Common Securities to receive payment of
periodic distributions and payments upon liquidation, redemption and
otherwise will be subordinated to the rights of the holders of the
Capital Securities. The Declaration does not permit the issuance by the
Trust of any securities other than the Trust Securities or the incurrence
of any indebtedness by the Trust. Pursuant to the Declaration, the
Institutional Trustee will own the Debentures purchased by the Trust for
the benefit of the holders of the Trust Securities. The payment of
distributions out of money held by the Trust, and payments upon
redemption of the Capital Securities or liquidation of the Trust, are
guaranteed by the Company to the extent described under "Description of
the Guarantee." The Guarantee, when taken together with the Company's
<PAGE>
obligations under the Debentures and the Indenture and its obligations
under the Declaration, including the obligations to pay costs, expenses,
debts and liabilities of the Trust (other than with respect to the
Capital Securities), provides a full and unconditional guarantee of
amounts due on the Capital Securities. The Guarantee will be held by The
First National Bank of Chicago, the Guarantee Trustee, for the benefit of
the holders of the Capital Securities. The Guarantee does not cover
payment of distributions when the Trust does not have sufficient available
funds to pay such distributions. In such event, the remedy of a
holder of Capital Securities is to vote to direct the Institutional
Trustee to enforce the Institutional Trustee's rights under the
Debentures (except in the limited circumstances in which the holder may
take direct action). See "--Declaration Events of Default" and "--Voting
Rights."
Distributions
Distributions on the Capital Securities will be fixed initially at
a rate per annum of % of the stated liquidation amount of $25 per
Capital Security. Distributions applicable on the Capital Securities that
remain outstanding on and after the Purchase Contract Settlement Date
will be reset on the third Business Day immediately preceding the
Purchase Contract Settlement Date. See "--Market Rate Reset."
Distributions in arrears for more than one quarter will accumulate at the
rate of % per annum through and including , 2001 and
at the Reset Rate thereafter, compounded quarterly. The term
"distribution" as used herein includes any such accumulated distributions
unless otherwise stated. The amount of distributions payable for any
period will be computed on the basis of a 360-day year of twelve 30-day
months.
Distributions on the Capital Securities will be cumulative and will
accrue from March , 1998 and will be payable quarterly in arrears on
February 16, May 16, August 16, and November 16 of each year, commencing
, 1998, when, as and if funds are available for payment.
Distributions will be made by the Institutional Trustee, except as
otherwise described below.
The Company has the right under the Indenture to defer payments of
interest on the Debentures by extending the interest payment period from
time to time on the Debentures, which right, if exercised, would defer
quarterly distributions on the Capital Securities (though such
distributions would continue to accrue with interest at the rate of %
per annum through and including , 2001, and at the Reset
Rate thereafter) during any such extended interest payment period. Such
right to extend the interest payment period for the Debentures is limited
to a period, in the aggregate, not extending beyond the maturity date of
the Debentures. In the event that the Company exercises this right, then
(a) the Company shall not declare or pay dividends on, make distributions
with respect to, or redeem, purchase or acquire, or make a liquidation
payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of capital stock of the Company in connection
with the satisfaction by the Company of its obligations under any
employee benefit plans or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date
of such event requiring the Company to purchase capital stock of the
Company, (ii) as a result of a reclassification of the Company's capital
stock or the exchange or conversion of one class or series of the
Company's capital stock for another class or series of the Company's
capital stock, (iii) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or
<PAGE>
exchanged, (iv) dividends or distributions in capital stock of the
Company (or rights to acquire capital stock) or repurchases or
redemptions of capital stock solely from the issuance or exchange of
capital stock or (v) redemptions or repurchases of any rights outstanding
under a shareholder rights plan or the declaration thereunder of a
dividend of rights in the future), (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 that rank
junior to such Debentures, and (c) the Company shall not make any
guarantee payments with respect to the foregoing other than pursuant to
the Guarantee. Prior to the termination of any such Extension Period,
the Company may further extend the interest payment period; provided,
that such Extension Period, together with all such previous and further
extensions thereof, may not extend beyond the maturity date of the
Debentures. Upon the termination of any Extension Period and the payment
of all amounts then due, the Company may select a new Extension Period,
subject to the above requirements. See "Description of the Debentures--
Interest" and "--Option to Extend Interest Payment Period." If
distributions are deferred, the deferred distributions and accrued
interest thereon shall be paid to holders of record of the Capital
Securities as they appear on the books and records of the Trust on the
record date next following the termination of such Extension Period.
Distributions on the Capital Securities must be paid on the dates
payable to the extent that the Trust has funds available in the Property
Account for the payment of such distributions. The Trust's funds
available for distribution to the holders of the Capital Securities will
be limited to payments received from the Company on the Debentures. See
"Description of the Debentures." The payment of distributions out of
moneys held by the Trust is guaranteed by the Company to the extent set
forth under "Description of the Guarantee." Distributions on the Capital
Securities will be payable to the holders thereof, including the
Collateral Agent, as they appear on the books and records of the Trust on
the relevant record dates, which, as long as the Capital Securities
remain in book-entry only form, will be one Business Day prior to the
relevant payment dates. Such distributions will be paid through the
Institutional Trustee who will hold amounts received in respect of the
Debentures in the Property Account for the benefit of the holders of the
Capital Securities. Subject to any applicable laws and regulations and
the provisions of the Declaration, each such payment will be made as
described under "--Book-Entry Only Issuance--The Depository Trust
Company" below. With respect to Capital Securities not in book-entry
form, the Regular Trustees shall have the right to select relevant record
dates, which shall be more than one Business Day but less than 60 Business
Days prior to the relevant payment dates. In the event that any
date on which distributions are to be made on the Capital Securities is
not a Business Day, then payment of the distributions payable on such
date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such
record date.
Market Rate Reset
The applicable quarterly distribution rate on the Capital
Securities and the interest rate on the related Debentures that remain
outstanding on and after the Purchase Contract Settlement Date will be
reset on the third Business Day immediately preceding the Purchase
Contract Settlement Date to the Reset Rate, which will be equal to the
<PAGE>
sum of the Reset Spread and the rate on the Two-Year Benchmark Treasury
in effect on the third Business Day immediately preceding the Purchase
Contract Settlement Date and will be determined by the Reset Agent as the
rate the Capital Securities should bear in order for a Capital Security
to have an approximate market value on the third Business Day immediately
preceding the Purchase Contract Settlement Date of 100.5% of the Stated
Amount; provided that the Company may limit such Reset Rate to be no
higher than the rate on the Two-Year Benchmark Treasury on the Purchase
Contract Settlement Date plus 200 basis points (2%). Such market value
may be less than 100.5%, including where the Reset Spread is limited to the
maximum of 2%. The "Two-Year Benchmark Treasury" shall mean direct
obligations of the United States (which may be obligations traded on a
when-issued basis only) having a maturity comparable to the remaining term to
maturity of the Capital Securities, as agreed upon by the Company and the Reset
Agent. The rate for the Two-Year Benchmark Treasury will be the bid side
rate displayed at 10:00 A.M., New York City time, on the third Business
Day immediately preceding the Purchase Contract Settlement Date in the
Telerate system (or if the Telerate system is (a) no longer available on
the third Business Day immediately preceding the Purchase Contract
Settlement Date or (b) in the opinion of the Reset Agent (after
consultation with the Company) no longer an appropriate system from which
to obtain such rate, such other nationally recognized quotation system
as, in the opinion of the Reset Agent (after consultation with the
Company) is appropriate). If such rate is not so displayed, the rate for
the Two-Year Benchmark Treasury shall be, as calculated by the Reset
Agent, the yield to maturity for the Two-Year Benchmark Treasury,
expressed as a bond equivalent on the basis of a year of 365 or 366 days,
as applicable, and applied on a daily basis, and computed by taking the
arithmetic mean of the secondary market bid rates, as of 10:30 A.M., New
York City time, on the third Business Day immediately preceding the
Purchase Contract Settlement Date of three leading United States
government securities dealers selected by the Reset Agent (after
consultation with the Company) (which may include the Reset Agent or an
affiliate thereof). The Company may limit the Reset Rate to be no higher
than the rate on the Two-Year Benchmark Treasury on the third Business
Day immediately preceding the Purchase Contract Settlement Date plus 200
basis points (2%). It is currently anticipated that Merrill Lynch,
Pierce, Fenner & Smith Incorporated will be the investment banking firm
acting as the Reset Agent.
On the tenth Business Day immediately preceding the Purchase
Contract Settlement Date, the Two-Year Benchmark Treasury to be used to
determine the Reset Rate on the Purchase Contract Settlement Date will be
selected and the Reset Spread to be added to the rate on the Two-Year
Benchmark Treasury in effect on the third Business Day immediately
preceding the Purchase Contract Settlement Date will be established by
the Reset Agent, and the Reset Spread and the Two-Year Benchmark Treasury
will be announced by the Company (the "Reset Announcement Date"). The
Company will cause a notice of the Reset Spread and such Two-Year
Benchmark Treasury to be published on the Business Day following the
Reset Announcement Date by publication in a daily newspaper in the
English language of general circulation in The City of New York, which is
expected to be The Wall Street Journal. The Company will request, not
later than 7 nor more than 15 calendar days prior to the Reset
Announcement Date, that the Depositary notify its participants holding
Capital Securities, Income PRIDES or Growth PRIDES of such Reset
Announcement Date and of the procedures that must be followed if any
owner of FELINE PRIDES wishes to settle the related Purchase Contract
with cash on the Business Day immediately preceding the Purchase Contract
Settlement Date.
<PAGE>
Optional Remarketing
Pursuant to the Remarketing Agreement and subject to the terms of
the Remarketing Underwriting Agreement, on or prior to the fifth Business
Day immediately preceding the Purchase Contract Settlement Date, but no
earlier than the Payment Day immediately preceding the Purchase Contract
Settlement Date, holders of separate Capital Securities which are not
components of Income PRIDES may elect to have their Capital Securities
remarketed in the same manner as the Capital Securities which are
component of Income PRIDES, by delivering their Capital Securities along
with a notice of such election to the Custodial Agent. The Custodial
Agent will hold such Capital Securities in an account separate from the
collateral account in which the Pledged Securities will be held. Holders
of Capital Securities electing to have their Capital Securities
remarketed will also have the right to withdraw such election on or prior
to the fifth Business Day immediately preceding the Purchase Contract
Settlement Date.
Optional Redemption
The Debentures are redeemable at the option of the Company, in
whole but not in part, on not less than 30 days nor more than 60 days
notice, upon the occurrence and continuation of a Tax Event under the
circumstances described under "Description of the Debentures--Tax Event
Redemption". If the Company redeems the Debentures upon the occurrence
and continuation of a Tax Event, the proceeds from such repayment shall
simultaneously be applied on a pro rata basis to redeem Capital Securities
having an aggregate stated liquidation amount equal to the
aggregate principal amount of the Debentures so redeemed at a Redemption
Price, per Capital Security, equal to the Redemption Amount plus accrued
and unpaid interest thereon to the date of such redemption. Such proceeds
will be payable in cash to the holders of such Capital Securities. If the
Tax Event Redemption occurs prior to the Purchase Contract Settlement
Date, the Redemption Price payable to the Collateral Agent, in
liquidation of the Income PRIDES holders' interests in the Trust, will be
simultaneously applied by the Collateral Agent to purchase on behalf of
the holders' of the Income PRIDES the Treasury Portfolio. The Treasury
Portfolio will be pledged with the Collateral Agent to secure the
obligation of Income PRIDES holders' to purchase Common Stock under the
related Purchase Contracts.
Put Option Upon a Failed Remarketing
If a Failed Remarketing has occurred, holders of Trust Securities
(including, following the distribution of the Debentures upon a
dissolution of the Trust as described herein, such Debenture holders),
holding such Trust Securities (or Debentures, as the case may be),
following the Purchase Contract Settlement Date will have the right, in
the case of Trust Securities, to require the Trust to distribute their
pro rata share of the Debentures to the Exchange Agent, who will put such
Debentures to the Company on behalf of such holders (or in the case of
Debentures held directly, the holders of such Debentures shall have the
right to put such Debentures directly to the Company) on ,
2001, upon at least three Business Days' prior notice, at a price equal
to the principal amount, plus accrued and unpaid interest (including
deferred interest), if any, thereon.
<PAGE>
Redemption Procedures
If the Trust gives a notice of redemption (which notice will be
irrevocable) in respect of all of the Capital Securities, then, by
12:00 noon, New York City time, on the redemption date, provided that the
Company has paid to the Institutional Trustee sufficient amount of cash
in connection with the related redemption or maturity of the Debentures,
the Trust will irrevocably deposit with the Depositary, the Purchase
Contract Agent or the Collateral Agent, as applicable, funds sufficient
to pay the applicable Redemption Price and will give the Depositary, the
Purchase Contract Agent or the Collateral Agent, as applicable,
irrevocable instructions and authority to pay the Redemption Price to the
holders of the Capital Securities so called for redemption. If notice of
redemption shall have been given and funds deposited as required, then,
immediately prior to the close of business on the date of such deposit,
distributions will cease to accrue and all rights of holders of such
Capital Securities so called for redemption will cease, except the right
of the holders of such Capital Securities to receive the Redemption Price
but without interest on such Redemption Price. In the event that any date
fixed for redemption of Capital Securities is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the
next succeeding day that is a Business Day (without any interest or other
payment in respect of any such delay), except that, if such Business Day
falls in the next calendar year, such payment will be made on the
immediately preceding Business Day.
Distribution of the Debentures
"Investment Company Event" means that the Regular Trustees shall
have received an opinion from independent counsel experienced in practice
under the 1940 Act (as defined below) to the effect that, as a result of
the occurrence of a change in law or regulation or a written change in
interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority (a "Change in
1940 Act Law"), which Change in 1940 Act Law becomes effective on or
after the date of this Prospectus Supplement, there is more than an
insubstantial risk that the Trust is or will be considered an "investment
company" which is required to be registered under the Investment Company
Act of 1940, as amended (the "1940 Act").
If, at any time, an Investment Company Event shall occur and be
continuing, the Trust shall be dissolved, with the result that Debentures
with an aggregate principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the distribution rate of, and
accrued and unpaid interest equal to accrued and unpaid distributions on, the
Trust Securities, would be distributed to the holders of the Trust Securities
in liquidation of such holders' interests in the Trust on a pro rata basis
within 90 days following the occurrence of such Investment Company Event;
provided, however, that such dissolution and distribution shall be conditioned
on the Company being unable to avoid such Investment Company Event within such
90-day period by taking some ministerial action or pursuing some other similar
reasonable measure that will have no adverse effect on the Trust, the
Company or the holders of the Trust Securities and will involve no
material cost. If an Investment Company Event occurs, Debentures
distributed to the Collateral Agent in liquidation of such holder's
interest in the Trust would be pledged (in lieu of the Capital
Securities) to secure Income PRIDES holders' obligations to purchase
Common Stock under the Purchase Contracts.
The Company will have the right at any time to dissolve the Trust
and, after satisfaction of liabilities of creditors of the Trust as
<PAGE>
provided by applicable law, cause the Debentures to be distributed to the
holders of the Trust Securities. As of the date of any distribution of
Debentures upon dissolution of the Trust, (i) the Capital Securities will
no longer be deemed to be outstanding, (ii) the Depositary or its
nominee, as the record holder of the Capital Securities, will receive a
registered global certificate or certificates representing the Debentures
to be delivered upon such distribution, and (iii) any certificates
representing Capital Securities not held by the Depositary or its nominee
will be deemed to represent Debentures having an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the distribution rate of, and accrued and
unpaid interest equal to accrued and unpaid distributions on, such
Capital Securities until such certificates are presented to the Company
or its agent for transfer or reissuance. Debentures distributed to the
Collateral Agent in liquidation of the interest of the holders of the
Capital Securities in the Trust would be substituted for the Capital
Securities and pledged to secure Income PRIDES holders' obligations to
purchase Common Stock under the Purchase Contracts.
There can be no assurance as to the market prices for either the
Capital Securities or the Debentures that may be distributed in exchange
for the Capital Securities if a dissolution of the Trust were to occur.
Accordingly, the Capital Securities or such Debentures that an investor
may receive if a dissolution of the Trust were to occur may trade at a
discount to the price that the investor paid to purchase the Capital
Securities forming a part of the Income PRIDES offered hereby.
Liquidation Distribution Upon Dissolution
In the event of any voluntary or involuntary dissolution of the
Trust (unless a Tax Event Redemption has occurred), the then holders of
the Capital Securities will be entitled to receive out of the assets of
the Trust, after satisfaction of liabilities to creditors, Debentures in
an aggregate principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the distribution rate of,
and accrued and unpaid interest equal to accrued and unpaid distributions
on, the Capital Securities on a pro rata basis in exchange for such
Capital Securities.
The holders of the Common Securities will be entitled to receive
distributions upon any such dissolution pro rata with the holders of the
Capital Securities, except that if a Declaration Event of Default has
occurred and is continuing, the Capital Securities shall have a preference
over the Common Securities with regard to such distributions.
Pursuant to the Declaration, the Trust shall dissolve (i) on
, 2004, the expiration of the term of the Trust, (ii) upon the bankruptcy
of the Company or the holder of the Common Securities, (iii) upon the
filing of a certificate of dissolution or its equivalent with respect to
the Company or the revocation of the charter of the Company and the
expiration of 90 days after the date of revocation without a
reinstatement thereof, (iv) after the receipt by the Institutional
Trustee of written direction from the Company to dissolve the Trust, (v)
upon the distribution of Debentures, (vi) upon the occurrence and
continuation of a Tax Event Redemption or (vii) upon the entry of a
decree of a judicial dissolution of the holder of the Common Securities,
the Company or the Trust.
<PAGE>
Declaration Events of Default
An event of default under the Indenture (an "Indenture Event of
Default") constitutes an event of default under the Declaration with
respect to the Trust Securities (a "Declaration Event of Default");
provided, that pursuant to the Declaration, the holder of the Common
Securities will be deemed to have waived any Declaration Event of Default
with respect to the Common Securities until all Declaration Events of
Default with respect to the Capital Securities have been cured, waived or
otherwise eliminated. Until such Declaration Events of Default with
respect to the Capital Securities have been so cured, waived or otherwise
eliminated, the Institutional Trustee will be deemed to be acting solely
on behalf of the holders of the Capital Securities and only the holders
of the Capital Securities will have the right to direct the Institutional
Trustee with respect to certain matters under the Declaration and,
therefore, the Indenture. If a Declaration Event of Default with respect
to the Capital Securities is waived by holders of Capital Securities,
such waiver will also constitute the waiver of such Declaration Event of
Default with respect to the Common Securities without any further act,
vote or consent of the holders of the Common Securities. If the
Institutional Trustee fails to enforce its rights under the Debentures in
respect of an Indenture Event of Default after a holder of record of
Capital Securities has made a written request, such holder of record of
Capital Securities may, to the fullest extent permitted by applicable
law, institute a legal proceeding against the Company to enforce the
Institutional Trustee's rights under the Debentures without first
proceeding against the Institutional Trustee or any other person or
entity. Notwithstanding the foregoing, if a Declaration Event of Default
has occurred and is continuing and such event is attributable to the
failure of the Company to pay interest or principal on the Debentures on
the date such interest or principal is otherwise payable (after giving
effect to any right of deferral), then a holder of Capital Securities may
institute a Direct Action to such holder directly of the principal of or
interest on the Debentures having a principal amount equal to the
aggregate liquidation amount of the Capital Securities of such holder. In
connection with such Direct Action, the Company shall have the right
under the Indenture to set off any payment made to such holder of the
Company. The holders of Capital Securities will not be able to exercise
directly any other remedy available to the holders of the Debentures. See
"Effect of Obligations under the Debentures and the Guarantee."
Upon the occurrence of a Declaration Event of Default, the
Institutional Trustee as the sole holder of the Debentures will have the
right under the Indenture to declare the principal of and interest on the
Debentures to be immediately due and payable. The Company and the Trust
are each required to file annually with the Institutional Trustee an
officers' certificate as to its compliance with all conditions and
covenants under the Declaration.
Voting Rights
Except as described herein, under the Trust Act and the Trust
Indenture Act and under "Description of the Guarantee--Modification of
the Guarantee; Assignment," and as otherwise required by law and the
Declaration, the holders of the Capital Securities will have no voting
rights.
Subject to the requirement of the Institutional Trustee obtaining a
tax opinion in certain circumstances set forth in the last sentence of
this paragraph, the holders of a majority in aggregate stated liquidation
amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to
<PAGE>
the Institutional Trustee, or direct the exercise of any trust or power
conferred upon the Institutional Trustee under the Declaration, including
the right to direct the Institutional Trustee, as holder of the
Debentures, to (i) exercise the remedies available under the Indenture
with respect to the Debentures, (ii) waive any past Indenture Event of
Default that is waivable under the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Debentures
shall be due and payable or (iv) consent to any amendment, modification
or termination of the Indenture or the Debentures where such consent
shall be required; provided, however, that, where a consent or action
under the Indenture would require the consent or act of holders of more
than a majority in principal amount of the Debentures (a
"Super-Majority") affected thereby, only the holders of at least such
Super-Majority in aggregate stated liquidation amount of the Capital
Securities may direct the Institutional Trustee to give such consent or
take such action. The Institutional Trustee shall notify all holders of
the Capital Securities of any notice of default received from the Debt
Trustee (as defined herein) with respect to the Debentures. Such notice
shall state that such Indenture Event of Default also constitutes a
Declaration Event of Default. Except with respect to directing the time,
method and place of conducting a proceeding for a remedy, the
Institutional Trustee shall not take any of the actions described in
clauses (i), (ii) or (iii) above unless the Institutional Trustee has
obtained an opinion of tax counsel experienced in such matters to the
effect that, as a result of such action, the Trust will not fail to be
classified as a grantor trust for federal income tax purposes.
In the event the consent of the Institutional Trustee, as the
holder of the Debentures, is required under the Indenture with respect to
any amendment, modification or termination of the Indenture or the
Debentures, the Institutional Trustee shall request the direction of the
holders of the Capital Securities and the Common Securities with respect
to such amendment, modification or termination and shall vote with
respect to such amendment, modification or termination as directed by a
majority in stated liquidation amount of the Capital Securities and the
Common Securities voting together as a single class; provided, however,
that where a consent under the Indenture would require the consent of a
Super-Majority, the Institutional Trustee may only give such consent at
the direction of the holders of at least the proportion in stated
liquidation amount of the Capital Securities and the Common Securities
which the relevant Super-Majority represents of the aggregate principal
amount of the Debentures outstanding. The Institutional Trustee shall not
take any such action in accordance with the directions of the holders of
the Capital Securities and the Common Securities unless the Institutional
Trustee has obtained an opinion of tax counsel experienced in such
matters to the effect that, as a result of such action, the Trust will
not fail to be classified as a grantor trust for United States federal
income tax purposes.
A waiver of an Indenture Event of Default will constitute a waiver
of the corresponding Declaration Event of Default.
Any required approval or direction of holders of Capital Securities
may be given at a separate meeting of holders of Capital Securities
convened for such purpose, at a meeting of all of the holders of Trust
Securities or pursuant to written consent. The Regular Trustees will
cause a notice of any meeting at which holders of Capital Securities are
entitled to vote, or of any matter upon which action by written consent
of such holders is to be taken, to be mailed to each holder of record of
Capital Securities. Each such notice will include a statement setting
forth the following information: (i) the date of such meeting or the
date by which such action is to be taken; (ii) a description of any
<PAGE>
resolution proposed for adoption at such meeting on which such holders
are entitled to vote or of such matter upon which written consent is
sought; and (iii) instructions for the delivery of proxies or consents.
No vote or consent of the holders of Capital Securities will be required
for the Trust to cancel Capital Securities or distribute Debentures in
accordance with the Declaration.
Notwithstanding that holders of Capital Securities are entitled to
vote or consent under any of the circumstances described above, any of
the Capital Securities that are owned at such time by the Company or any
entity directly or indirectly controlling or controlled by, or under
direct or indirect common control with, the Company, shall not be
entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if such Capital Securities were not outstanding.
The procedures by which holders of Capital Securities may exercise
their voting rights are described below. See "--Book-Entry Only
Issuance--The Depository Trust Company."
Holders of the Capital Securities will have no rights to appoint or
remove the Ingersoll-Rand Trustees, who may be appointed, removed or
replaced solely by the Company as the indirect or direct holder of all of
the Common Securities.
Modification of the Declaration
The Declaration may be modified and amended if approved by the
Regular Trustees (and in certain circumstances the Institutional Trustee
or the Delaware Trustee), provided, that if any proposed amendment
provides for, or the Regular Trustees otherwise propose to effect, (i)
any action that would adversely affect the powers, preferences or special
rights of the Trust Securities, whether by way of amendment to the
Declaration or otherwise or (ii) the dissolution of the Trust other than
pursuant to the terms of the Declaration, then the holders of the Trust
Securities voting together as a single class will be entitled to vote on
such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of at least a majority in such stated
liquidation amount of the Trust Securities affected thereby; provided
further, that if any amendment or proposal referred to in clause (i)
above would adversely affect only the Capital Securities or the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be
effective except with the approval of a majority in stated liquidation
amount of such class of securities. In addition, the Declaration may be
amended without the consent of the holders of the Trust Securities to,
among other things, cause the Trust to continue to be classified for
United States federal income tax purposes as a grantor trust.
Notwithstanding the foregoing, no amendment or modification may be
made to the Declaration if such amendment or modification would (i) cause
the Trust to be classified as other than a grantor trust for purposes of
United States federal income taxation, (ii) reduce or otherwise adversely
affect the powers of the Institutional Trustee or (iii) cause the Trust to
be deemed an "investment company" which is required to be registered
under the 1940 Act.
Mergers, Consolidations or Amalgamations
The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety, to any corporation or other body, except as
described below or as described in "Liquidation Distribution Upon
<PAGE>
Dissolution." The Trust may, with the consent of the Regular Trustees
and without the consent of the holders of the Trust Securities,
consolidate, amalgamate, merge with or into, or be replaced by a trust
organized as such under the laws of any State; provided, that (i) if the
Trust is not the surviving entity, such successor entity either (x)
expressly assumes all of the obligations of the Trust under the Trust
Securities or (y) substitutes for the Trust Securities other securities
having substantially the same terms as the Trust Securities (the "Successor
Securities"), so long as the Successor Securities rank the
same as the Trust Securities with respect to distributions and payments
upon liquidation, redemption and otherwise, (ii) the Company expressly
acknowledges a trustee of such successor entity possessing the same
powers and duties as the Institutional Trustee as the holder of the
Debentures, (iii) if the Capital Securities are listed, any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or with another organization on which the Capital
Securities are then listed or quoted, (iv) such merger, consolidation,
amalgamation or replacement does not cause the Capital Securities
(including any Successor Securities) to be downgraded by any nationally
recognized statistical rating organization, (v) such merger,
consolidation, amalgamation or replacement does not adversely affect the
rights, preferences and privileges of the holders of the Trust Securities
(including any Successor Securities) in any material respect (other than
with respect to any dilution of the holders' interest in the new entity),
(vi) such successor entity has a purpose substantially identical to that
of the Trust, (vii) prior to such merger, consolidation, amalgamation or
replacement, the Company has received an opinion of a nationally
recognized independent counsel to the Trust experienced in such matters
to the effect that, (A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and
privileges of the holders of the Trust Securities (including any
Successor Securities) in any material respect (other than with respect to
any dilution of the holders' interest in the new entity), (B) following
such merger, consolidation, amalgamation or replacement, neither the
Trust nor such successor entity will be required to register as an
investment company under the 1940 Act and (C) following such merger,
consolidation, amalgamation or replacement, the Trust (or the successor
entity) will continue to be classified as a grantor trust for federal
income tax purposes, and (viii) the Company guarantees the obligations of
such successor entity under the Successor Securities at least to the
extent provided by the Guarantee and the Common Securities Guarantee (as
defined herein). Notwithstanding the foregoing the Trust shall not,
except with the consent of holders of 100% in stated liquidation amount
of the Trust Securities, consolidate, amalgamate, merge with or into, or
be replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it, if such
consolidation, amalgamation, merger or replacement would cause the Trust
or the successor entity to be classified as other than a grantor trust
for federal income tax purposes.
Book-Entry Only Issuance--The Depository Trust Company
In the event that the Capital Securities are issued as one or more
fully-registered global Capital Securities certificates representing the
total aggregate number of Capital Securities, the Depositary will act as
securities depositary for any Capital Securities that are held separately
from the Income PRIDES. In such event, the Capital Securities will be
issued only as fully-registered securities registered in the name of Cede
& Co. (the Depositary's nominee). However, under certain circumstances,
the Regular Trustees with the consent of the Company may decide not to
use the system of book-entry transfers through the DTC with respect to
<PAGE>
the Capital Securities. In that event, certificates of the Capital
Securities will be printed and delivered to the holders.
The laws of some jurisdictions require that certain purchasers
of securities take physical delivery of securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in the
global Capital Securities as represented by a global certificate.
Purchases of Capital Securities within the Depositary's system must
be made by or through Direct Participants, which will receive a credit
for the Capital Securities on the Depositary's records. The ownership
interest of each actual purchaser of each Capital Security (a "Beneficial
Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written
confirmation from the Depositary of their purchases, but Beneficial
Owners are expected to receive written confirmations providing details of
the transaction, as well as periodic statements of their holdings, from
the Direct or Indirect Participants through which the Beneficial Owners
purchased Capital Securities. Transfers of ownership interests in the
Capital Securities are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners
will not receive certificates representing their ownership interests in
the Capital Securities, except in the event that use of the book-entry
system for the Capital Securities is discontinued.
To facilitate subsequent transfers, all the Capital Securities
deposited by Participants with the Depositary will be registered in the
name of the Depositary's nominee, Cede & Co. The deposit of Capital
Securities with the Depositary and their registration in the name of Cede
& Co. effect no change in beneficial ownership. The Depositary has no
knowledge of the actual Beneficial Owners of the Capital Securities. The
Depositary's records reflect only the identity of the Direct Participants
to whose accounts such Capital Securities are credited, which may or may
not be the Beneficial Owners. The Participants will remain responsible
for keeping account of their holdings on behalf of their customers.
So long as the Depositary or its nominee is the registered owner or
holder of a global certificate, the Depositary or such nominee, as the
case may be, will be considered the sole owner or holder of the Capital
Securities represented thereby for all purposes under the Declaration and
the Capital Securities. No Beneficial Owner of an interest in a global
certificate will be able to transfer that interest except in accordance
with the Depositary applicable procedures, in addition to those provided
for under the Declaration.
The Depositary has advised the Company that it will take any action
permitted to be taken by a holder of Capital Securities (including the
presentation of Capital Securities for exchange as described below) only
at the direction of one or more Participants to whose account the
Depositary's interests in the global certificates are credited and only
in respect of such portion of the stated liquidation amount of Capital
Securities as to which such Participant or Participants has or have given
such directions. However, if there is a Declaration Event of Default
under the Capital Securities, the Depositary will exchange the global
certificates for certificated securities, which it will distribute to its
Participants.
Conveyance of notices and other communications by the Depositary to
Direct Participants and Indirect Participants and by Direct Participants
and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory
requirements that may be in effect from time to time.
<PAGE>
Although voting with respect to the Capital Securities is limited,
in those cases where a vote is required, neither the Depositary nor Cede
& Co. will itself consent or vote with respect to Capital Securities.
Under its usual procedures, the Depositary would mail an omnibus proxy to
the Trust as soon as possible after the record date. The omnibus proxy
assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Capital Securities are credited on the
record date (identified in a listing attached to the omnibus proxy). The
Company and the Trust believe that the arrangements among the Depositary,
Direct and Indirect Participants, and Beneficial Owners will enable the
Beneficial Owners to exercise rights equivalent in substance to the
rights that can be directly exercised by a record holder of a beneficial
interest in the Trust.
Distribution payments on the Capital Securities issued in the form
of one or more global certificates will be made to the Depositary in
immediately available funds. The Depositary's practice is to credit
Direct Participants' accounts on the relevant payment date in accordance
with their respective holdings shown on the Depositary's records unless
the Depositary has reason to believe that it will not receive payments on
such payment date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices, as is the case
with securities held for the account of customers in bearer form or
registered in "street name," and such payments will be the responsibility
of such Participant and not of the Depositary, the Trust or the Company,
subject to any statutory or regulatory requirements to the contrary that
may be in effect from time to time. Payment of distributions to the
Depositary is the responsibility of the Trust, disbursement of such
payments to Direct Participants is the responsibility of the Depositary,
and disbursement of such payments to the Beneficial Owners is the
responsibility of Direct and Indirect Participants.
Except as provided herein, a Beneficial Owner in a global Capital
Security certificate will not be entitled to receive physical delivery of
Capital Securities. Accordingly, each Beneficial Owner must rely on the
procedures of the Depositary to exercise any rights under the Capital
Securities.
Although the Depositary has agreed to the foregoing procedure in
order to facilitate transfer of interests in the global certificates
among Participants, the Depositary is under no obligation to perform or
continue to perform such procedures and such procedures may be
discontinued at any time. None of the Company, the Trust or any
Ingersoll-Rand Trustee will have any responsibility for the performance
by the Depositary or its Direct Participants or Indirect Participants
under the rules and procedures governing the Depositary. The Depositary
may discontinue providing its services as securities depositary with
respect to the Capital Securities at any time by giving reasonable notice
to the Trust. Under such circumstances, in the event that a successor
securities depositary is not obtained, Capital Securities certificates
are required to be printed and delivered to holders. Additionally, the
Regular Trustees (with the consent of the Company) may decide to
discontinue use of the system of book-entry transfers through the
Depositary (or any successor depositary) with respect to the Capital
Securities. In that event, certificates for the Capital Securities will
be printed and delivered to holders. In each of the above circumstances,
the Company will appoint a paying agent with respect to the Capital
Securities.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that the
<PAGE>
Company and the Trust believe to be reliable, but neither the Company nor
the Trust takes responsibility for the accuracy hereof.
Registrar, Transfer Agent and Paying Agent
Payments in respect of the Capital Securities represented by the
global certificates shall be made to the Depositary, which shall credit
the relevant accounts at the Depositary on the applicable distribution
dates, or, in the case of certificated securities, such payments shall be
made by check mailed to the address of the holder entitled thereto as
such address shall appear on the Register. The Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the
Ingersoll-Rand Trustees. In the event that The Bank of New York shall no
longer be the Paying Agent, the Regular Trustees shall appoint a
successor to act as Paying Agent (which shall be a bank or trust
company).
The Bank of New York will act as registrar, transfer agent and
paying agent for the Capital Securities. Registration of transfers of
Capital Securities will be effected without charge by or on behalf of the
Trust, but upon payment (and the giving of such indemnity as the Trust or
the Company may require) in respect of any tax or other government charge
which may be imposed in relation to it.
Information Concerning the Institutional Trustee
The Institutional Trustee prior to the occurrence of a default with
respect to the Trust Securities and after the curing and or waiver of any
defaults that may have occurred, undertakes to perform only such duties
as are specifically set forth in the Declaration and, after default,
shall exercise the same degree of care as a prudent individual would
exercise in the conduct of his or her own affairs. Subject to such
provisions, the Institutional Trustee is under no obligation to exercise
any of the powers vested in it by the Declaration at the request of any
holder of Capital Securities, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be
incurred thereby. The holders of Capital Securities will not be required
to offer such indemnity in the event such holders, by exercising their
voting rights, direct the Institutional Trustee to take any action it is
empowered to take under the Declaration following a Declaration Event of
Default. The Institutional Trustee also serves as trustee under the
Guarantee.
The Institutional Trustee maintains commercial banking
relationships with the Company.
Governing Law
The Declaration and the Capital Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
Miscellaneous
The Regular Trustees are authorized and directed to operate the Trust
in such a way so that the Trust will not be required to register as
an "investment company" under the 1940 Act or be characterized as other
than a grantor trust for federal income tax purposes. The Company is
authorized and directed to conduct its affairs so that the Debentures
will be treated as indebtedness of the Company for federal income tax
purposes. In this connection, the Company and the Regular Trustees are
authorized to take any action not inconsistent with applicable law, the
<PAGE>
Declaration, the certificate of trust of the Trust or the certificate of
incorporation of the Company, that each of the Company and the Regular
Trustees determines in its discretion to be necessary or desirable to
achieve such end, as long as such action does not adversely affect the
interests of the holders of the Capital Securities or vary the terms
thereof.
Holders of the Capital Securities have no preemptive or similar
rights.
DESCRIPTION OF THE GUARANTEE
Set forth below is a summary of information concerning the
Guarantee which will be executed and delivered by the Company for the
benefit of the holders from time to time of Trust Securities. The
Guarantee will be qualified as an indenture under the Trust Indenture
Act. The First National Bank of Chicago will act as the Guarantee Trustee
for the purposes of compliance with the provisions of the Trust Indenture
Act. The terms of the Guarantee will be those set forth in the Guarantee
and those made part of the Guarantee by the Trust Indenture Act. The
following summary is not necessarily complete, and reference is hereby
made to the copy of the form of Guarantee (including the definitions
therein of certain terms) which is filed as an exhibit to the
Registration Statement relating to this Prospectus Supplement, and to the
Trust Indenture Act. Whenever particular defined terms of the Guarantee
are referred to in this Prospectus Supplement, such defined terms are
incorporated herein by reference. The Guarantee will be held by the
Guarantee Trustee for the benefit of the holders of the Capital
Securities. The following descriptions of certain terms of the Guarantee
supplements and, to the extent inconsistent with, replaces the description
of the general terms and provisions of the Guarantee set
forth in the accompanying Prospectus, to which reference is hereby made.
General
Pursuant to the Guarantee, the Company will irrevocably and
unconditionally agree, to the extent set forth therein, to pay in full on
a senior unsecured basis, to the holders of the Trust Securities issued
by the Trust, the Guarantee Payments (as defined herein) (except to the
extent paid by the Trust), as and when due, regardless of any defense,
right of set-off or counterclaim which the Trust may have or assert. The
following payments or distributions with respect to Trust Securities
issued by the Trust to the extent not paid by or on behalf of the Trust
(the "Guarantee Payments"), will be subject to the Guarantee thereon
(without duplication): (i) any accrued and unpaid distributions which
are required to be paid on the Trust Securities, to the extent the Trust
shall have funds available therefor; (ii) the redemption price, including
all accumulated and unpaid distributions to the date of redemption, of
Trust Securities in respect of which the related Debentures have been
redeemed by the Company upon the occurrence of a Tax Event Redemption, to
the extent the Trust shall have funds available therefor; and (iii) upon
a voluntary or involuntary dissolution of the Trust (other than in
connection with the distribution of Debentures to the holders of Trust
Securities), the lesser of (a) the aggregate of the stated liquidation
amount and all accrued and unpaid distributions on such Trust Securities
to the date of payment, to the extent the Trust has funds available
therefor, and (b) the amount of assets of the Trust remaining available
for distribution to holders of the Trust Securities in liquidation of the
Trust. The Company's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Company to the
<PAGE>
holders of Trust Securities or by causing the Trust to pay such amounts
to such holders.
The Guarantee will be a full and unconditional guarantee on a
senior unsecured basis with respect to the Trust Securities issued by the
Trust, but will not apply to any payment of distributions except to the
extent the Trust shall have funds available therefor. If the Company does
not make interest payments on the Debentures purchased by the Trust, the
Trust will not pay distributions on the Trust Securities and will not
have funds available therefor. See "Effect of Obligations under the
Debentures and the Guarantee."
The Guarantee, when taken together with the Company's obligations
under the Debentures, the Indenture, and the Declaration, will have the
effect of providing a full and unconditional guarantee on a senior
unsecured basis by the Company of payments due on the Trust Securities.
The Guarantee is for the benefit of all the holders of the Trust
Securities (including the holders of the Common Securities), provided,
however, that upon an Indenture Event of Default, holders of Capital
Securities shall have priority over holders of Common Securities with
respect to distributions and payments on liquidation, redemption or
otherwise.
Certain Covenants of the Company
In the Guarantee, the Company will covenant that, so long as any
Capital Securities issued by the Trust remain outstanding, if there shall
have occurred any event that would constitute an event of default under
the Guarantee or the Declaration, then (a) the Company shall not declare
or pay any dividend on, make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to,
any of its capital stock (other than (i) purchases or acquisitions of
capital stock of the Company in connection with the satisfaction by the
Company of its obligations under any employee or agent benefit plans or
the satisfaction by the Company of its obligations pursuant to any
contract or security outstanding on the date of such event requiring the
Company to purchase capital stock of the Company, (ii) as a result of a
reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for
another class or series of the Company's capital stock, (iii) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock
or the security being converted or exchanged, (iv) dividends or
distributions in capital stock of the Company (or rights to acquire
capital stock) or repurchases or redemptions of capital stock solely from
the issuance or exchange of capital stock or (v) redemptions or
repurchases of any rights outstanding under a shareholder rights plan or
the declaration thereunder of a dividend of rights in the future), (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 the Debentures and (c) the Company shall
not make any guarantee payments with respect to the foregoing (other than
payments pursuant to the Guarantee or the Common Securities Guarantee).
Modification of the Guarantee; Assignment
Except with respect to any changes which do not adversely affect
the rights of holders of Trust Securities (in which case no vote will be
required), the Guarantee may be amended only with the prior approval of
the holders of not less than a majority in stated liquidation amount of
the outstanding Trust Securities issued by the Trust. All guarantees and
<PAGE>
agreements contained in the Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Company and shall inure to
the benefit of the holders of the Trust Securities then outstanding.
Termination
The Guarantee will terminate (a) upon distribution of the
Debentures held by the Trust to the holders of the Trust Securities, (b)
upon full payment of the redemption price of all the Trust Securities in
the event that all of the Debentures are repurchased by the Company upon
the occurrence of a Tax Event Redemption or (c) upon full payment of the
amounts payable in accordance with the Declaration upon liquidation of the
Trust. The Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of Trust
Securities must return payment of any sums paid under the Trust
Securities or the Guarantee.
Events of Default
An event of default under the Guarantee will occur upon the failure
of the Company to perform any of its payment or other obligations
thereunder.
The holders of a majority in stated liquidation amount of the Trust
Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee
Trustee in respect of the Guarantee or to direct the exercise of any
trust or power conferred upon the Guarantee Trustee under the Guarantee.
If the Guarantee Trustee fails to enforce such Guarantee, any holder of
Trust Securities may institute a legal proceeding directly against the
Company to enforce such holder's rights under the Guarantee, without
first instituting a legal proceeding against the Trust, the Guarantee
Trustee or any other person or entity. The Company waives any right or
remedy to require that any action be brought first against the Trust or
any other person or entity before proceeding directly against the
Company.
Status of the Guarantee
The Guarantee will constitute an unsecured obligation of the
Company and will rank on a parity with all of the Company's other senior
unsecured obligations.
Information Concerning the Guarantee Trustee
The Guarantee Trustee, prior to the occurrence of a default with
respect to the Guarantee, undertakes to perform only such duties as are
specifically set forth in the Guarantee and, after default, shall
exercise the same degree of care as a prudent individual would exercise
in the conduct of his or her own affairs. Subject to such provisions, the
Guarantee Trustee is under no obligation to exercise any of the powers
vested in it by the Guarantee at the request of any holder of Capital
Securities, unless offered reasonable indemnity against the costs,
expenses and liabilities which might be incurred thereby; but the
foregoing shall not relieve the Guarantee Trustee, upon the occurrence of
an event of default under the Guarantee, from exercising the rights and
powers vested in it by the Guarantee.
The Guarantee Trustee maintains commercial banking relationships
with the Company.
<PAGE>
Governing Law
The Guarantee will be governed by and construed in accordance with
the internal laws of the State of New York.
<PAGE>
DESCRIPTION OF THE DEBENTURES
Set forth below is a description of the specific terms of the
Debentures in which the Trust will invest the proceeds from the issuance
and sale of the Trust Securities. The following description is not
necessarily complete, and reference is hereby made to the copy of the
form of the Indenture to be entered into between the Company and The Bank
of New York, as trustee (the "Debt Trustee"), as supplemented or amended
from time to time (as so supplemented and amended, the "Indenture") which
is filed as an exhibit to the Registration Statement relating to this
Prospectus Supplement, and to the Trust Indenture Act. Certain
capitalized terms used herein are defined in the Indenture.
Under certain circumstances involving the dissolution of the Trust,
Debentures may be distributed to the holders of the Trust Securities in
liquidation of the Trust. See "Description of the Capital Securities--
Distribution of the Debentures." The following descriptions of certain
terms of the Debentures supplement and, to the extent inconsistent with,
replaces the description of the general terms and provisions of the Debt
Securities set forth in the accompanying Prospectus, to which reference
is hereby made.
General
The Debentures will be issued as senior unsecured debt under the
Indenture and will rank on a parity in right of payment with all of the
Company's other senior unsecured debt obligations. The Debentures will be
limited in aggregate principal amount to $ million.
The Debentures will not be subject to a sinking fund provision.
Unless a Tax Event Redemption has occurred prior to the Purchase Contract
Settlement Date, the entire principal amount of the Debentures will
mature and become due and payable, together with any accrued and unpaid
interest thereon including Compound Interest (as defined herein) and
expenses and taxes of the Trust, if any, on , 2003.
The Company will have the right at any time to dissolve the Trust
and cause the Debentures to be distributed to the holders of the Trust
Securities. If Debentures are distributed to holders of Trust Securities
in liquidation of such holders' interests in the Trust, such Debentures
will initially be issued as a Global Security (as defined herein). As
described herein, under certain limited circumstances, Debentures may be
issued in certificated form in exchange for a Global Security. See "--
Book-Entry and Settlement" below. In the event that Debentures are issued
in certificated form, such Debentures will be in denominations of $25 and
integral multiples thereof and may be transferred or exchanged at the
offices described below. Payments on Debentures issued as a Global
Security will be made to the Depositary, a successor depositary or, in
the event that no depositary is used, to a Paying Agent for the
Debentures. In the event Debentures are issued in certificated form,
principal and interest will be payable, the transfer of the Debentures
will be registrable and Debentures will be exchangeable for Debentures of
other denominations of a like aggregate principal amount, at the
corporate trust office or agency of the Debt Trustee, New York, New York;
provided, that at the option of the Company, payment of interest may be
made by check mailed to the address of the holder entitled thereto or by
wire transfer to an account appropriately designated by the holder
entitled thereto. Notwithstanding the foregoing, so long as the holder of
any Debentures is the Institutional Trustee, the payment of principal and
interest on the Debentures held by the Institutional Trustee will be made
<PAGE>
at such place and to such account as may be designated by the
Institutional Trustee.
The Indenture does not contain provisions that afford
holders of the Debentures protection in the event of a highly
leveraged transaction or other similar transaction involving
the Company that may adversely affect such holders.
Interest
Each Debenture shall bear interest initially at the rate of %
per annum from the original date of issuance, payable quarterly in
arrears on February 16, May 16, August 16 and November 16 of each year
(each an "Interest Payment Date"), commencing , 1998, to
the person in whose name such Debenture is registered, subject to certain
exceptions, at the close of business on the Business Day next preceding
such Interest Payment Date. The applicable interest rate on the
Debentures and the distribution rate on the related Capital Securities
outstanding on and after the Purchase Contract Settlement Date will be
reset on the third Business Day immediately preceding the Purchase
Contract Settlement Date to the Reset Rate. In the event the Debentures
shall not continue to remain in book-entry only form, the Company shall
have the right to select record dates, which shall be more than fifteen
Business Days but less than 60 Business Days prior to the Interest
Payment Date. The amount of interest payable for any period will be
computed on the basis of a 360-day year consisting of twelve 30-day
months. The amount of interest payable for any period shorter than a
full quarterly period for which interest is computed will be computed on the
basis of the actual number of days elapsed in such 90-day period. In the
event that any date on which interest is payable on the Debentures is not
a Business Day, then payment of the interest payable on such date will be
made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if
such Business Day is in the next succeeding calendar year, then such
payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date.
Tax Event Redemption
If a Tax Event shall occur and be continuing, the Company may, at
its option, redeem Debentures in whole (but not in part) at any time at a
Redemption Price equal to, for each Debenture, the Redemption Amount plus
accrued and unpaid interest thereon, including Compound Interest and
expenses and taxes of the Trust, if any, to the date of redemption (the
"Tax Event Redemption Date"). If, following the occurrence of a Tax
Event, the Company exercises its option to redeem the Debentures, then
the proceeds of such redemption will be applied to redeem Trust
Securities having a liquidation amount equal to the principal amount of
Debentures to be paid in accordance with their terms, at the Redemption
Price. Such Redemption Price will be payable in cash to the holders of
such Trust Securities. If such Tax Event Redemption occurs prior to the
Purchase Contract Settlement Date, the Redemption Price payable in
liquidation of the Income PRIDES holders' interest in the Trust will be
distributed to the Collateral Agent, who in turn will apply an amount
equal to the Redemption Amount of such Redemption Price to purchase the
Treasury Portfolio on behalf of the holders of Income PRIDES and remit
the remaining portion, if any, of such Redemption Price to the Purchase
Contract Agent for payment to the holders of such Income PRIDES. Such
Treasury Portfolio will be substituted for the Capital Securities and
will be pledged with the Collateral Agent to secure such Income PRIDES
holders' obligation to purchase the Company's Common Stock under the
<PAGE>
Purchase Contracts; provided, that if the Tax Event Redemption occurs
after the Purchase Contract Settlement Date, such Treasury Portfolio will
not be purchased.
"Tax Event" means the receipt by the Trust of an opinion of a
nationally recognized independent tax counsel experienced in such matters
to the effect that, as a result of (a) any amendment to, change in, or
announced proposed change in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority
thereof or therein affecting taxation, (b) any amendment to or change in
an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority or
(c) any interpretation or pronouncement that provides for a position with
respect to such laws or regulations that differs from the generally
accepted position on the date the Trust Securities are issued, which
amendment, change or proposed change is effective or which
interpretation or pronouncement is announced on or after the date of
issuance of the Trust Securities under the Declaration, there is more
than an insubstantial risk that (i) interest payable by the Company on
the Debentures would not be deductible, in whole or in part, by the
Company for United States federal income tax purposes or (ii) the income
of the Trust would be subject to United States federal income tax or the
Trust would be subject to more than a de minimis amount of other taxes,
duties or other governmental charges.
"Treasury Portfolio" means, with respect to the Applicable
Principal Amount of Debentures (a) if the Tax Event Redemption Date
occurs prior to the Purchase Contract Settlement Date, a portfolio of
zero-coupon U.S. Treasury Securities consisting of (i) interest or
principal strips of U.S. Treasury Securities which mature on or prior to
, 2001 in an aggregate amount equal to the Applicable Principal
Amount and (ii) with respect to each scheduled interest payment date on
the Debentures that occurs after the Tax Event Redemption Date interest
or principal strips of U.S. Treasury Securities which mature on or prior
to such date in an aggregate amount equal to the aggregate interest
payment that would be due on the Applicable Principal Amount of the
Debentures on such date, and (b) if the Tax Event Redemption Date occurs
after the Purchase Contract Settlement Date, a portfolio of zero-coupon
U.S. Treasury Securities consisting of (i) principal or interest strips
of U.S. Treasury Securities which mature on or prior to , 2003 in an
aggregate amount equal to the Applicable Principal Amount and (ii) with
respect to each scheduled interest payment date on the Debentures that
occurs after the Tax Event Redemption Date interest or principal strips
of such U.S. Treasury Securities which mature on or prior to such date in
an aggregate amount equal to the aggregate interest payment that would be
due on the Applicable Principal Amount of the Debentures on such date.
"Applicable Principal Amount" means either (i) if the Tax Event
Redemption Date occurs prior to the Purchase Contract Settlement Date,
the aggregate principal amount of the Debentures corresponding to the
aggregate stated liquidation amount of the Capital Securities which are
components of Income PRIDES on the Tax Event Redemption Date or (ii) if
the Tax Event Redemption occurs on or after the Purchase Contract
Settlement Date, the aggregate principal amount of the Debentures
corresponding to the aggregate stated liquidation amount of the Capital
Securities outstanding on such Tax Event Redemption Date.
"Redemption Amount" means for each Debenture, the product of (i)
the principal amount of such Debenture and (ii) a fraction whose
numerator is the Treasury Portfolio Purchase Price and whose denominator
is the Applicable Principal Amount.
<PAGE>
"Treasury Portfolio Purchase Price" means the lowest aggregate
price quoted by a primary U.S. government securities dealer in New York
City (a "Primary Treasury Dealer") to the Quotation Agent on the third
Business Day immediately preceding the Tax Event Redemption Date for the
purchase of the Treasury Portfolio for settlement on the Tax Event
Redemption Date.
"Quotation Agent" means (i) Merrill Lynch Government Securities,
Inc. and its respective successors, provided, however, that if the
foregoing shall cease to be a Primary Treasury Dealer, the Company shall
substitute therefor another Primary Treasury Dealer, and (ii) any other
Primary Treasury Dealer selected by the Company.
Notice of any redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each registered holder of
Debentures to be prepaid at its registered address. Unless the Company
defaults in payment of the Redemption Price, on and after the redemption
date interest shall cease to accrue on such Debentures.
Option to Extend Interest Payment Period
The Company shall have the right at any time, and from time to
time, during the term of the Debentures, to defer payments of interest by
extending the interest payment period for a period not extending beyond
the maturity date of the Debentures, at the end of which Extension
Period, the Company shall pay all interest then accrued and unpaid
(including any expenses and taxes of the Trust, as herein defined)
together with interest thereon compounded quarterly at the rate of %
per annum through and including , 2001, and at the Reset Rate
thereafter, to the extent permitted by applicable law ("Compound
Interest"); provided, that during any such Extension Period, (a) the
Company shall not declare or pay dividends or make any distribution with
respect to, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of its capital stock (other than (i) purchases or
acquisitions of capital stock of the Company in connection with the
satisfaction by the Company of its obligations under any employee or
agent benefit plans or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date of such
event requiring the Company to purchase capital stock of the Company,
(ii) as a result of a reclassification of the Company's capital stock or
the exchange or conversion of one class or series of the Company's
capital stock for another class or series of the Company capital stock,
(iii) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such
capital stock or the security being converted or exchanged, (iv)
dividends or distributions in capital stock of the Company (or rights to
acquire capital stock) or repurchases or redemptions of capital stock
solely from the issuance or exchange of capital stock or (v) redemptions
or repurchases of any rights outstanding under a shareholder rights plan
or the declaration thereunder of a dividend of rights in the future), (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 that rank junior to the Debentures, and (c) the Company shall
not make any guarantee payments with respect to the foregoing (other than
payments pursuant to the Guarantee). Prior to the termination of any such
Extension Period, the Company may further defer payments of interest by
extending the interest payment period; provided, however, that such
Extension Period, including all such previous and further extensions, may
not extend beyond the maturity of the Debentures. Upon the termination of
any Extension Period and the payment of all amounts then due, the Company
may commence a new Extension Period, subject to the terms set forth in
this section. No interest during an Extension Period, except at the end
<PAGE>
thereof, shall be due and payable, but the Company, at its option, may
prepay on any Interest Payment Date all of the interest accrued during
the then elapsed portion of an Extension Period. The Company has no
present intention of exercising its right to defer payments of interest
by extending the interest payment period on the Debentures. If the
Institutional Trustee shall be the sole holder of the Debentures, the
Company shall give the Regular Trustees and the Institutional Trustee
notice of its selection of such Extension Period one Business Day prior
to the earlier of (i) the date distributions on the Capital Securities
are payable or (ii) the date the Regular Trustees are required to give
notice, if applicable, to the NYSE (or other applicable self-regulatory
organization) or to holders of the Capital Securities of the record or
payment date of such distribution. The Regular Trustees shall give notice
of the Company's selection of such Extension Period to the holders of the
Capital Securities. If the Institutional Trustee shall not be the sole
holder of the Debentures, the Company shall give the holders of the
Debentures notice of its selection of such Extension Period ten Business
Days prior to the earlier of (i) the Interest Payment Date or (ii) the
date upon which the Company is required to give notice, if applicable, to
the NYSE (or other applicable self-regulatory organization) or to holders
of the Debentures of the record or payment date of such related interest
payment.
Expenses and Taxes of the Trust
In the Indenture, the Company, as borrower, has agreed to pay all
debts and other obligations (other than with respect to the Trust
Securities) and all costs and expenses of the Trust (including the costs
and expenses relating to the organization of the Trust, the fees and
expenses of the Trustees and the costs and expenses relating to the
operation of the Trust) and to pay any and all taxes and all costs and
expenses with respect thereto (other than United States withholding taxes)
to which the Trust might become subject. The Company also has
agreed in the Indenture to execute such additional agreements as may be
necessary or desirable to give full effect to the foregoing.
Indenture Events of Default
If any Indenture Event of Default shall occur and be continuing,
the Institutional Trustee, as the holder of the Debentures, will have the
right to declare the principal of and the interest on the Debentures
(including any Compound Interest and expenses and taxes of the Trust, if
any) and any other amounts payable under the Indenture to be forthwith
due and payable and to enforce its other rights as a creditor with
respect to the Debentures.
The following are Events of Default under the Indenture with
respect to the Debentures: (1) failure to pay interest on the Debentures
when due, continued for 30 days; provided, however, that if the Company
is permitted by the terms of the Debentures to defer the payment in
question, then the date on which such payment is due and payable shall be
the date on which the Company is required to make payment following such
deferral, if such deferral has been elected pursuant to the terms of the
Debentures; (2) failure to pay the principal of (or premium, if any, on)
the Debentures when due and payable at the stated maturity date, upon
redemption or otherwise; provided, however, if the Company is permitted
by the terms of the Debentures to defer the payment in question, the date
on which such payment is due and payable shall be the date on which the
Company is required to make payment following such deferral, if such
deferral has been elected pursuant to the terms of the Debentures; (3)
failure to observe or perform in any material respect certain other
<PAGE>
covenants contained in the Indenture, continued for a period of 90 days
after written notice has been given to the Company by the Debt Trustee or
holders of at least 25% in aggregate principal amount of the outstanding
Debentures; and (4) certain events of bankruptcy, insolvency or
reorganization relating to the Company.
The Indenture provides that the Debt Trustee shall, within 90 days
after the occurrence of any Default or Event of Default with respect to
the Debentures, give the holders of the Debentures notice of all uncured
Defaults or Events of Default known to it (the term "Default" includes
any event which after notice or passage of time or both would be an Event
of Default); provided, however, that, except in the case of a Default in
the payment of the principal of (or premium, if any, on) or interest on
the Debentures, the Debt Trustee shall be protected in withholding such
notice so long as the board of directors, the executive committee or
directors or responsible officers of the Debt Trustee in good faith
determine that the withholding of such notice is in the interest of the
holders of the Debentures.
If an Event of Default with respect to the Debentures occurs and is
continuing, the Debt Trustee or the holders of at least 25% in aggregate
principal amount of the outstanding Debentures, by notice in writing to
the Company (and to the Debt Trustee if given by the holders of at least
25% in aggregate principal amount of the Debentures), may declare the
unpaid principal of and accrued interest to the date of acceleration on
all the outstanding Debentures to be due and payable immediately and,
upon any such declaration, the Debentures shall become immediately due
and payable.
In addition, in the case of the Debentures held by the Trust, if an
Event of Default has occurred and is continuing and such event is
attributable to the failure of the Company to pay interest or principal,
then a holder of Capital Securities may directly institute a proceeding
against the Company for payment.
Any such declaration with respect to the Debentures may be annulled
and past Events of Default and Defaults (except, unless theretofore
cured, an Event of Default or a Default in payment of principal of or
interest on the Debentures) may be waived by the holders of a majority of
the principal amount of the outstanding Debentures, upon the conditions
provided in the Indenture.
An Indenture Event of Default also constitutes a Declaration Event
of Default. The holders of Capital Securities in certain circumstances
have the right to direct the Institutional Trustee to exercise its rights
as the holder of the Debentures. See "Description of the Capital
Securities--Declaration Events of Default" and "--Voting Rights."
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company
to pay interest or principal on the Debentures on the date such interest
or principal is otherwise payable, the Company acknowledges that a holder
of Capital Securities may directly institute a proceeding for enforcement
of payment to such holder directly of the principal of and interest on
the Debentures having a principal amount equal to the aggregate stated
liquidation amount of the Capital Securities of such holder after the
respective due date specified in the Debentures. In connection with such
action, the Company shall have the right under the Indenture to set-off
any payment made to such holder by the Company. The holders of Capital
Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
<PAGE>
Book-Entry and Settlement
If distributed to holders of Capital Securities in connection with
the involuntary or voluntary dissolution of the Trust, the Debentures
will be issued in the form of one or more global certificates (each a
"Global Security") registered in the name of the Depositary or its
nominee. Except under the limited circumstances described below,
Debentures represented by the Global Security will not be exchangeable
for, and will not otherwise be issuable as, Debentures in certificated
form. The Global Securities described above may not be transferred except
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 to a
successor depositary or its nominee.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in certificated
form. Such laws may impair the ability to transfer beneficial interests
in such a Global Security.
Except as provided below, owners of beneficial interests in such a
Global Security will not be entitled to receive physical delivery of
Debentures in certificated form and will not be considered the holders
(as defined in the Indenture) thereof for any purpose under the
Indenture, and no Global Security representing Debentures shall be
exchangeable, except for another Global Security of like denomination and
tenor to be registered in the name of the Depositary or its nominee or to
a successor Depositary or its nominee. Accordingly, each Beneficial Owner
must rely on the procedures of the Depositary or if such person is not a
Participant, on the procedures of the Participant through which such
person owns its interest to exercise any rights of a holder under the
Indenture.
The Depositary
If Debentures are distributed to holders of Capital Securities in
liquidation of such holders' interests in the Trust, the Depositary will
act as securities depositary for the Debentures. For a description of the
Depositary and the specific terms of the depositary arrangements, see
"Description of the Capital Securities--Book-Entry Only Issuance--The
Depository Trust Company." As of the date of this Prospectus Supplement,
the description therein of the Depositary's book-entry system and the
Depositary's practices as they relate to purchases, transfers, notices
and payments with respect to the Capital Securities apply in all material
respects to any debt obligations represented by one or more Global
Securities held by the Depositary. The Company may appoint a successor to
the Depositary or any successor depositary in the event the Depositary or
such successor depositary is unable or unwilling to continue as a
depositary for the Global Securities.
None of the Company, the Trust, the Institutional Trustee, any
paying agent and any other agent of the Company or the Debt Trustee will
have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests
in a Global Security for such Debentures or for maintaining, supervising
or reviewing any records relating to such beneficial ownership interests.
A Global Security shall be exchangeable for Debentures registered
in the names of persons other than the Depositary or its nominee only if
(i) the Depositary notifies the Company that it is unwilling or unable to
continue as a depositary for such Global Security and no successor
depositary shall have been appointed, (ii) the Depositary at any time,
ceases to be a clearing agency registered under the Exchange Act at which
<PAGE>
time the depositary is required to be so registered to act as such
depositary and no successor depositary shall have been appointed, (iii)
the Company, in its sole discretion, determines that such Global Security
shall be so exchangeable or (iv) there shall have occurred an Indenture
Event of Default with respect to such Debentures. Any Global Security
that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Debentures registered in such names as the Depositary
shall direct. It is expected that such instructions will be based upon
directions received by the Depositary from its Participants with respect
to ownership of beneficial interests in such Global Security.
Governing Law
The Indenture and the Debentures will be governed by, and construed
in accordance with, the internal laws of the State of New York.
Miscellaneous
The Company will pay all fees and expenses related to (i) the
offering of the Trust Securities and the Debentures, (ii) the
organization, maintenance and dissolution of the Trust, (iii) the
retention of the Ingersoll-Rand Trustees and (iv) the enforcement by the
Institutional Trustee of the rights of the holders of the Capital
Securities.
EFFECT OF OBLIGATIONS UNDER THE
DEBENTURES AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of the Trust is
to issue the Trust Securities evidencing undivided beneficial interests
in the assets of the Trust, and to invest the proceeds from such issuance
and sale in the Debentures and engage in only those other activities
necessary or incidental thereto.
As long as payments of interest and other payments are made when
due on the Debentures, such payments will be sufficient to cover
distributions and payments due on the Trust Securities because of the
following factors: (i) the aggregate principal amount of Debentures will
be equal to the sum of the aggregate stated liquidation amount of the
Trust Securities; (ii) the interest rate and the interest and other
payment dates on the Debentures will match the distribution rate and
distribution and other payment dates for the Trust Securities; (iii) the
Company shall pay, and the Trust shall not be obligated to pay, directly
or indirectly, all costs, expenses, debts, and obligations of the Trust
(other than with respect to the Trust Securities); and (iv) the
Declaration further provides that the Ingersoll-Rand Trustees shall not
take or cause or permit the Trust to, among other things, engage in any
activity that is not consistent with the purposes of the Trust.
Payments of distributions (to the extent funds therefor are
available) and other payments due on the Capital Securities (to the
extent funds therefor are available) are guaranteed by the Company as and
to the extent set forth under "Description of the Guarantee." If the
Company does not make interest payments on the Debentures purchased by
the Trust, the Trust will not have sufficient funds to pay distributions
on the Capital Securities. The Guarantee does not apply to any payment of
distributions unless and until the Trust has sufficient funds for the
payment of such distributions.
If the Company fails to make interest or other payments on the
Debentures when due (taking account of any Extension Period), the
<PAGE>
Declaration provides a mechanism whereby the holders of the Capital
Securities, using the procedures described in "Description of the Capital
Securities--Book-Entry Only Issuance--The Depository Trust Company" and
"--Voting Rights," may direct the Institutional Trustee to enforce its
rights under the Indenture. If the Institutional Trustee fails to enforce
its rights under the Indenture in respect of an Indenture Event of
Default, such holder of record of Capital Securities may, to the fullest
extent permitted by applicable law, institute a legal proceeding against
the Company to enforce the Institutional Trustee's rights under the
Indenture without first instituting any legal proceeding against the
Institutional Trustee or any other person or entity. Notwithstanding the
foregoing, if a Declaration Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company
to pay interest or principal on the Debentures on the date such interest
or principal is otherwise payable, then a holder of Capital Securities
may directly institute a proceeding against the Company for payment. The
Company, under the Guarantee, acknowledges that the Guarantee Trustee
shall enforce the Guarantee on behalf of the holders of the Capital
Securities. If the Company fails to make payments under the Guarantee,
the Guarantee provides a mechanism whereby the holders of the Capital
Securities may direct the Guarantee Trustee to enforce its rights
thereunder. Notwithstanding the foregoing, if the Company has failed to
make a payment under the Guarantee, any holder of Capital Securities may
institute a legal proceeding directly against the Company to enforce its
rights under the Guarantee without first instituting a legal proceeding
against the Trust, the Guarantee Trustee, or any other person or entity.
The Guarantee, when taken together with the Company's obligations
under the Debentures and the Indenture and its obligations under the
Declaration, including its obligations to pay costs, expenses, debts and
liabilities of the Trust (other than with respect to the Trust
Securities), has the effect of providing a full and unconditional
guarantee of amounts due on the Capital Securities. See "Description of
the Guarantee."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain of the material United States
federal income tax consequences of the purchase, ownership and
disposition of FELINE PRIDES, Capital Securities and Common Stock
acquired under a Purchase Contract. Unless otherwise stated, this summary
applies only to "U.S. Holders" who purchase Income PRIDES, Growth PRIDES
or Capital Securities upon original issuance for an amount equal to the
initial offering price thereof. The term "U.S. Holder" means the
beneficial owner of an Income PRIDES, Growth PRIDES or Capital Security
who is (i) a person who is a citizen or resident of the United States,
(ii) a corporation or partnership created or organized in or under the
laws of the United States or any state thereof or the District of
Columbia, (iii) an estate the income of which is subject to United States
federal income taxation, regardless of its source, or (iv) a trust if a
court within the United States is able to exercise primary supervision
over the administration of such trust and one or more United States
persons have the authority to control all substantial decisions of such
trust. The tax treatment of a U.S. Holder may vary depending on such U.S.
Holder's particular situation. This summary does not deal with special
classes of U.S. Holders such as banks, thrifts, real estate investment
trusts, regulated investment companies, insurance companies, dealers in
securities or currencies, tax-exempt investors, certain U.S. expatriates,
or U.S. Holders that will hold FELINE PRIDES, Capital Securities or
Common Stock acquired under a Purchase Contract as a position in a
"straddle," as part of a "synthetic security" or "hedge," as part of a
<PAGE>
"conversion transaction" or other integrated investment, or as other than
a capital asset. This summary does not address the tax consequences to
U.S. Holders that have a functional currency other than the U.S. dollar
or the tax consequences to shareholders, partners or beneficiaries of a
U.S. Holder of FELINE PRIDES, Capital Securities or Common Stock acquired
pursuant to a Purchase Contract. Further, it does not include any
description of any alternative minimum tax consequences or the tax laws
of any state, local or foreign government that may be applicable.
PROSPECTIVE INVESTORS THAT ARE NOT UNITED STATES PERSONS (WITHIN THE
MEANING OF SECTION 7701(a)(30) OF THE CODE) ARE URGED TO CONSULT THEIR
OWN TAX ADVISORS REGARDING THE UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES OF AN INVESTMENT IN FELINE PRIDES OR CAPITAL SECURITIES,
INCLUDING THE POTENTIAL APPLICATION OF UNITED STATES WITHHOLDING TAXES.
This summary is based upon the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury regulations (including proposed Treasury
regulations) issued thereunder, Internal Revenue Service ("IRS") rulings
and pronouncements and judicial decisions now in effect, all of which are
subject to change. Any such changes may be applied retroactively in a
manner that could cause the tax consequences to vary substantially from
the consequences described below, possibly adversely affecting a U.S.
Holder.
No statutory, administrative or judicial authority directly
addresses the treatment of FELINE PRIDES or instruments similar to FELINE
PRIDES for United States federal income tax purposes. As a result, no
assurance can be given that the IRS will agree with the tax consequences
described herein. PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN
TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF THE FELINE PRIDES OR CAPITAL
SECURITIES IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES, INCLUDING THE
TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE
POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR OTHER TAX LAWS.
FELINE PRIDES
Allocation of Purchase Price. A U.S. Holder's acquisition of FELINE
PRIDES will be treated as an acquisition of a unit consisting of two
components--in the case of an Income PRIDES, the Capital Security and the
Purchase Contract constituting such Income PRIDES and, in the case of a
Growth PRIDES, the Treasury Security interest and the Purchase Contract
constituting such Growth PRIDES. The purchase price of each FELINE PRIDES
will be allocated between the two components in proportion to their
respective fair market values at the time of purchase. Such allocation
will establish the U.S. Holder's initial tax basis in the Capital
Security or Treasury Security interest and the Purchase Contract. The
Company will report the fair market value of each Capital Security and
Treasury Security interest so that the entire purchase price of a FELINE
PRIDES will be allocable to the Capital Security or Treasury Security
interest, as the case may be, and no amount will be allocable to the
Purchase Contract. This position will be binding upon each U.S. Holder
(but not on the IRS) unless such U.S. Holder explicitly discloses a
different position on a statement attached to such U.S. Holder's timely
filed United States federal income tax return for the taxable year in
which a FELINE PRIDES is acquired. Thus, absent such disclosure, a U.S.
Holder should allocate the purchase price for a FELINE PRIDES in
accordance with the foregoing. The remainder of this discussion assumes
that this allocation of purchase price will be respected for United
States federal income tax purposes. A different allocation could affect
the timing and character of income to a U.S. Holder.
<PAGE>
Ownership of Capital Securities or Treasury Securities. A U.S.
Holder will be treated as owning the Capital Securities or Treasury
Securities constituting a part of the Income PRIDES or Growth PRIDES,
respectively. The Company and, by acquiring FELINE PRIDES, each U.S.
Holder agree to treat such U.S. Holder as the owner, for United States
federal, state and local income and franchise tax purposes, of the
Capital Securities or Treasury Securities constituting a part of the
FELINE PRIDES beneficially owned by such U.S. Holder. Based upon such
agreement, the Company intends to take the position, and the remainder of
this summary assumes, that U.S. Holders of FELINE PRIDES will be treated
as the owners of the Capital Securities or Treasury Securities
constituting a part of such FELINE PRIDES for United States federal, state
and local income and franchise tax purposes. The United States federal
income tax consequences of owning the Capital Securities or Treasury
Securities are discussed below (see "--Capital Securities," "--Treasury
Securities" and "--Tax Event Redemption of Capital Securities.").
Sale or Disposition of FELINE PRIDES. Upon a disposition of FELINE
PRIDES, a U.S. Holder will be treated as having sold, exchanged or
disposed of the Purchase Contract and the Capital Securities, Treasury
Portfolio or, in the case of Growth PRIDES, the Treasury Securities, that
constitute such FELINE PRIDES and generally will have gain or loss equal
to the difference between the portion of the proceeds to such U.S. Holder
allocable to the Purchase Contract and the Capital Securities, Treasury
Portfolio or Treasury Securities, as the case may be, and such U.S.
Holder's respective adjusted tax bases in the Purchase Contract and the
Capital Securities, Treasury Portfolio or Treasury Securities. Such gain
or loss generally will be capital gain or loss, except to the extent that
such U.S. Holder is treated as having received an amount with respect to
accrued but unpaid interest on the Capital Securities or the Treasury
Portfolio that such U.S. Holder has not included in gross income
previously, which amount will be treated as ordinary interest income, or
to the extent such U.S. Holder is treated as having received an amount
with respect to accrued Contract Adjustment Payments or Deferred Contract
Adjustment Payments, which may be treated as ordinary income, in each
case to the extent not previously included in income. Such gain or loss
generally will be capital gain or loss and generally will be long-term
capital gain or loss if the U.S. Holder held such Capital Securities for
more than one year immediately prior to such disposition. Long-term capital
gains of individuals are eligible for reduced rates of taxation depending
upon the holding period of such capital assets. The deductibility of capital
losses is subject to limitations. If the disposition of FELINE PRIDES occurs
when the Purchase Contract has negative value, the U.S. Holder should be
considered to have received additional consideration for the Capital Securities,
Treasury Portfolio or Treasury Securities in an amount equal to such negative
value and to have paid such amount to be released from the U.S. Holder's
obligation under the Purchase Contract. U.S. Holders should consult their
tax advisors regarding a disposition of the FELINE PRIDES at a time when
the Purchase Contract has negative value.
In determining gain or loss, payments to a U.S. Holder of Contract
Adjustment Payments or Deferred Contract Adjustment Payments that have
not previously been included in the income of such U.S. Holder should
either reduce such U.S. Holder's tax basis in the Purchase Contract or
result in an increase in the amount realized on the disposition of the
Purchase Contract. Any Contract Adjustment Payments or Deferred Contract
Adjustment Payments included in a U.S. Holder's income but not paid
should increase such U.S. Holder's tax basis in the Purchase Contract.
Payments in cash that have been made by a U.S. Holder to create Growth
PRIDES but not offset against payments of Contract Adjustment Payments or
Deferred Contract Adjustment Payments may increase such U.S. Holder's tax
basis in the Purchase Contract or result in a decrease in the amount
<PAGE>
realized on the disposition of the Purchase Contract (see "--Income from
Contract Adjustment Payments and Deferred Contract Adjustment Payments;
Delivery of Cash" above).
Capital Securities
Classification of the Trust. In connection with the issuance of the
FELINE PRIDES, Simpson Thacher & Bartlett ("Tax Counsel"), will deliver
an opinion that, under current law and assuming compliance with the terms
of the Declaration, and based on certain facts and assumptions contained
in such opinion, the Trust will be classified as a grantor trust and not
as an association taxable as a corporation for United States federal
income tax purposes. As a result, each U.S. Holder of Capital Securities
will be treated as owning an undivided beneficial ownership interest in
the Debentures. Accordingly, each U.S. Holder of Capital Securities will
be required to include in its gross income its pro rata share of the
interest income or OID that is paid or accrued on the Debentures. See "--
Interest Income and Original Issue Discount."
Classification of the Debentures. The Company, the Trust and, by
acquiring Income PRIDES or Capital Securities, each U.S. Holder agree to
treat the Debentures as indebtedness of the Company for all United States
tax purposes. In connection with the issuance of the Debentures, Tax
Counsel will deliver an opinion that, under current law, and based on
certain representations, facts and assumptions set forth in such opinion,
the Debentures will be classified as indebtedness for United States
federal income tax purposes.
Interest Income and Original Issue Discount. Under the applicable
Treasury regulations, the Debentures will not be considered to have been
issued with OID within the meaning of Section 1273(a) of the Code.
Accordingly, except as set forth below, stated interest on the Debentures
generally will be included in income by a U.S. Holder at the time such
interest income is paid or accrued in accordance with such U.S. Holder's
regular method of tax accounting. If, however, the Company exercises its
right to defer payments of interest on the Debentures, U.S. Holders will
be required to accrue the stated interest on the Debentures (as OID) on a
daily economic accrual basis (using the constant-yield-to-maturity method
of accrual set forth in Section 1272 of the Code) even though the Company
will not pay such interest during the deferral period, and even though
some U.S. Holders may use the cash method of tax accounting. Moreover,
thereafter the Debentures will be taxed as OID instruments for as long as
they remain outstanding. Thus, all U.S. Holders would be required to
continue to include the stated interest on the Debentures in income on a
daily economic accrual basis, regardless of their method of tax
accounting and in advance of the receipt of cash attributable to such
interest income. Under the OID economic accrual rules, a U.S. Holder
would accrue an amount of interest income each year that approximates the
stated interest payments called for under the terms of the Debentures,
and actual cash payments of interest on the Debentures would not be
reported separately as taxable income. Any amount of OID included in a
U.S. Holder's gross income will increase such U.S. Holder's tax basis in
its Capital Securities, and the amount of a distribution received by a
U.S. Holder with respect to such Capital Securities will reduce the tax
basis of such Capital Securities.
The Treasury regulations described above have not yet been
addressed in any rulings or other interpretations by the IRS, and it is
possible that the IRS could take a contrary position. If the IRS were to
assert successfully that the stated interest on the Debentures was OID
regardless of whether the Company exercises its right to defer payments
of interest on such Debentures, all U.S. Holders would be required to
<PAGE>
include such stated interest in income on a daily economic accrual basis
as described above.
U.S. Holders that are corporations will not be entitled to a
dividends received deduction with respect to any income recognized with
respect to the Capital Securities.
Distribution of Debentures to U.S. Holders of Capital Securities. A
distribution by the Trust of the Debentures as described under the
caption "Description of the Capital Securities--Liquidation Distribution
Upon Dissolution" would be non-taxable to U.S. Holders. In such event, a
U.S. Holder would have an aggregate tax basis in the Debentures received
in the liquidation equal to the aggregate tax basis such U.S. Holder had
in its Capital Securities surrendered therefor, and the holding period of
such Debentures would include the period during which such U.S. Holder
had held such Capital Securities. Also, a U.S. Holder would continue to
include interest (or OID) in respect of Debentures received from the
Trust in the manner described under "--Interest Income and Original Issue
Discount."
Sales, Exchanges or Other Dispositions of Capital Securities. Gain
or loss will be recognized by a U.S. Holder on a sale, exchange,
redemption or other taxable disposition (collectively, a "disposition")
of a Capital Security (including a redemption for cash or the remarketing
thereof) in an amount equal to the difference between the amount realized
by the U.S. Holder on the disposition of the Capital Security (except to
the extent that such amount realized is characterized as a payment in
respect of accrued but unpaid interest on such U.S. Holder's allocable
share of the Debentures that such U.S. Holder has not included in gross
income previously, which amount will be taxable as ordinary interest
income) and the U.S. Holder's adjusted tax basis in such Capital
Security. Selling expenses incurred by a U.S. Holder, including the
remarketing fee, will reduce the amount of gain or increase the amount of
loss recognized by such U.S. Holder upon a disposition of a Capital
Security. Gain or loss realized by a U.S. Holder on a disposition of a
Capital Security generally will be capital gain or loss and generally
will be long-term capital gain or loss if the U.S. Holder held such
Capital Security for more than one year immediately prior to such
disposition. Long-term capital gains of individuals are eligible for
reduced rates of taxation depending upon the holding period of such
capital assets. The deductibility of capital losses is subject to
limitations.
Treasury Securities
Original Issue Discount. A U.S. Holder of Growth PRIDES will be
required to treat its ownership interest in the Treasury Securities
comprising a Growth PRIDES as an interest in a bond originally issued on
the date such Growth PRIDES is purchased and having OID equal to the
excess of the Stated Amount of the Growth PRIDES over the purchase price
of the Growth PRIDES. A U.S. Holder will be required to include such OID
in income on a daily economic accrual basis over the period between the
issue date of the Growth PRIDES and the day immediately preceding the
Purchase Contract Settlement Date, regardless of such U.S. Holder's
method of tax accounting. Amounts of OID included in a U.S. Holder's
gross income will increase such U.S. Holder's tax basis in its Treasury
Security interest.
Sales, Exchanges or Other Dispositions of Treasury Securities. In
the event that a U.S. Holder obtains the release of Treasury Securities
by delivering Capital Securities to the Collateral Agent, gain or loss
will be recognized by the U.S. Holder on a subsequent disposition of the
<PAGE>
Treasury Securities in an amount equal to the difference between the amount
realized by the U.S. Holder on such disposition and the U.S. Holder's
adjusted tax basis in the Treasury Securities. Such gain or loss generally
will be capital gain or loss and generally will be long-term capital gain or
loss if the U.S. Holder held such Treasury Securities for more than one year
immediately prior to such disposition. Long-term capital gains of individuals
are eligible for reduced rates of taxation depending upon the holding period
of such capital assets. The deductibility of capital losses is subject to
limitations.
Purchase Contracts
Income From Contract Adjustment Payments and Deferred Contract
Adjustment Payments; Delivery of Cash. There is no direct authority
addressing the treatment, under current law, of the Contract Adjustment
Payments and Deferred Contract Adjustment Payments (if any), or the
delivery of cash in respect of excess accrued Contract Adjustment
Payments (if any) by a U.S. Holder of Income PRIDES upon the creation of
Growth PRIDES and such treatment is unclear. Contract Adjustment Payments
and Deferred Contract Adjustment Payments, if any, may constitute taxable
income to a U.S. Holder of FELINE PRIDES when received or accrued, in
accordance with the U.S. Holder's regular method of tax accounting. To
the extent the Company is required to file information returns with
respect to Contract Adjustment Payments or Deferred Contract Adjustment
Payments, it intends to report such payments as taxable income to each
U.S. Holder. If Contract Adjustment Payments are properly treated as taxable
income, the delivery of cash by a U.S. Holder in respect of excess accrued
Contract Adjustment Payments upon the creation of Growth PRIDES, should offset
the amount of income that such U.S. Holder would otherwise recognize for United
States federal income tax purposes with respect to such Contract Adjustment
Payments for the relevant taxable year. U.S. Holders should consult their own
tax advisors concerning the treatment of Contract Adjustment Payments and
Deferred Contract Adjustment Payments and the delivery of cash upon creation of
Growth PRIDES, including the possibility that any Contract Adjustment
Payment or Deferred Contract Adjustment Payment may be treated as a loan,
purchase price adjustment, rebate or payment analogous to an option
premium, rather than being includible in income on a current basis, and
that the delivery of cash upon creation of Growth PRIDES may be treated
as an offset to Contract Adjustment Payments or Deferred Contract
Adjustment Payments or as a purchase price adjustment. The treatment of
Contract Adjustment Payments, Deferred Contract Adjustment Payments and
the delivery of cash upon creation of Growth PRIDES could affect a U.S.
Holder's tax basis in a Purchase Contract or Common Stock received under
a Purchase Contract or the amount realized by a U.S. Holder upon the sale
or disposition of a FELINE PRIDES or the termination of a Purchase
Contract. See "--Acquisition of Common Stock under a Purchase Contract,"
"--Sale or Disposition of FELINE PRIDES" and "--Termination of Purchase
Contract."
Acquisition of Common Stock Under a Purchase Contract. A U.S.
Holder of FELINE PRIDES generally will not recognize gain or loss on the
purchase of Common Stock under a Purchase Contract, except with respect
to any cash paid in lieu of a fractional share of Common Stock. Subject
to the following discussion, a U.S. Holder's aggregate initial tax basis
in the Common Stock received under a Purchase Contract generally should
equal the purchase price paid for such Common Stock plus such U.S.
Holder's tax basis in the Purchase Contract (if any), less the portion of
such purchase price and tax basis allocable to the fractional share.
Payments of Contract Adjustment Payments or Deferred Contract Adjustment
Payments that have been received in cash by a U.S. Holder but not
included in income by such U.S. Holder should reduce such U.S. Holder's
tax basis in the Purchase Contract or the Common Stock to be received
thereunder; payments in cash that have been made by a U.S. Holder to
create Growth PRIDES but not offset against payments of Contract
Adjustment Payments or Deferred Contract Adjustment Payments may increase
<PAGE>
such U.S. Holder's tax basis in the Purchase Contract or the Common Stock
to be received thereunder (see "--Income from Contract Adjustment
Payments and Deferred Contract Adjustment Payments" above). The holding
period for Common Stock received under a Purchase Contract will commence
on the day of the acquisition of such Common Stock.
Ownership of Common Stock Acquired Under the Purchase Contract. Any
dividend on Common Stock paid by the Company out of its current or
accumulated earnings and profits (as determined for United States federal
income tax purposes) will be includible in income by a U.S. Holder when
received. Any such dividend will be eligible for the dividends received
deduction if received by an otherwise qualifying corporate U.S. Holder
that meets the holding period and other requirements for the dividends
received deduction.
Upon a disposition of Common Stock, a U.S. Holder generally will
recognize capital gain or loss equal to the difference between the amount
realized and such U.S. Holder's adjusted tax basis in the Common Stock.
Such gain or loss generally will be capital gain or loss and generally will
be long-term capital gain or loss if the U.S. Holder held such Common Stock
for more than one year immediately prior to such disposition. Long-term
capital gains of individuals are eligible for reduced rates of taxation
depending upon the holding period of such capital assets. The
deductibility of capital losses is subject to limitations.
Early Settlement of Purchase Contract. A U.S. Holder of FELINE
PRIDES will not recognize gain or loss on the receipt of such U.S.
Holder's proportionate share of Capital Securities, Treasury Securities
or the Treasury Portfolio upon Early Settlement of a Purchase Contract and will
have the same tax basis in such Capital Securities, Treasury Securities or the
Treasury Portfolio as before such Early Settlement.
Termination of Purchase Contract. If a Purchase Contract
terminates, a U.S. Holder of FELINE PRIDES will recognize gain or loss
equal to the difference between the amount realized (if any) upon such
termination and such U.S. Holder's adjusted tax basis (if any) in the
Purchase Contract at the time of such termination. Payments of Contract
Adjustment Payments or Deferred Contract Adjustment Payments, if any,
received by a U.S. Holder but not included in income by such U.S. Holder
should either reduce such U.S. Holder's tax basis in the Purchase
Contract or result in an amount realized on the termination of the
Purchase Contract. Any Contract Adjustment Payments or Deferred Contract
Adjustment Payments included in a U.S. Holder's income but not paid
should increase such U.S. Holder's tax basis in the Purchase Contract;
payments in cash that have been made by a U.S. Holder to create Growth
PRIDES but not offset against payments of Contract Adjustment Payments or
Deferred Contract Adjustment Payments may increase such U.S. Holder's tax
basis in the Purchase Contract or result in a deduction on the
termination of the Purchase Contract (see "--Income from Contract
Adjustment Payments and Deferred Contract Adjustment Payments" above).
Such gain or loss generally will be capital gain or loss and generally will be
long-term capital gain or loss if the U.S. Holder held such Purchase
Contract for more than one year immediately prior to such disposition.
Long-term capital gains of individuals are eligible for reduced rates of
taxation depending upon the holding period of such capital assets. The
deductibility of capital losses is subject to limitations. A U.S. Holder
will not recognize gain or loss on the receipt of such U.S. Holder's
proportionate share of the Capital Securities, Treasury Securities or
Treasury Portfolio upon termination of the Purchase Contract and will
have the same tax basis in such Capital Securities, Treasury Securities
or Treasury Portfolio as before such distribution.
<PAGE>
Adjustment to Settlement Rate. U.S. Holders of FELINE PRIDES might
be treated as receiving a constructive distribution from the Company if
(i) the Settlement Rate is adjusted and as a result of such adjustment
the proportionate interest of U.S. Holders of FELINE PRIDES in the assets
or earnings and profits of the Company is increased and (ii) the
adjustment is not made pursuant to a bona fide, reasonable anti-dilution
formula. An adjustment in the Settlement Rate would not be considered
made pursuant to such a formula if the adjustment were made to compensate
a U.S. Holder for certain taxable distributions with respect to the
Common Stock. Thus, under certain circumstances, an increase in the
Settlement Rate might give rise to a taxable dividend to U.S. Holders of
FELINE PRIDES even though such U.S. Holders would not receive any cash
related thereto.
Substitution of Treasury Securities to Create or Recreate Growth PRIDES
A U.S. Holder of an Income PRIDES that delivers Treasury Securities
to the Collateral Agent in substitution for Capital Securities generally
will not recognize gain or loss upon the delivery of such Treasury
Securities or the release of the Capital Securities to such U.S. Holder.
Such U.S. Holder will continue to take into account items of income or
deduction otherwise includible or deductible, respectively, by such U.S.
Holder with respect to such Treasury Securities and Capital Securities,
and such U.S. Holder's tax basis in the Treasury Securities, the Capital
Securities and the Purchase Contract will not be affected by such
delivery and release. Cash payments, if any, made by a U.S. Holder of
Income PRIDES which is creating Growth PRIDES in respect of any rate
differential on the Contract Adjustment Payment due on an Income PRIDES
and a Growth PRIDES should offset the amount of income that such U.S. Holder
may be required to recognize for United States federal income tax purposes
with respect to such Contract Adjustment Payments. See "Purchase Contracts--
Income From Contract Adjustment Payments and Deferred Contract Adjustment
Payments; Delivery of Cash".
Substitution of Capital Securities to Create or Recreate Income PRIDES
A U.S. Holder of a Growth PRIDES that delivers Capital Securities
to the Collateral Agent in substitution for Treasury Securities generally
will not recognize gain or loss upon the delivery of such Capital
Securities or the release of the Treasury Securities to the U.S. Holder.
Such U.S. Holder will continue to take into account items of income or
deduction otherwise includible or deductible, respectively, by such U.S.
Holder with respect to such Treasury Securities and Capital Securities,
and such U.S. Holder's tax bases in the Treasury Securities, the Capital
Securities and the Purchase Contract will not be affected by such
delivery and release. Cash payments, if any, made by a U.S. Holder of
Income PRIDES which is creating Growth PRIDES in respect of any rate
differential on the Contract Adjustment Payments due on an Income PRIDES
and a Growth PRIDES should offset the amount of income that such U.S.
Holder may be required to recognize for United States federal income tax
purposes with respect to such Contract Adjustment Payments.
Tax Event Redemption of Capital Securities
A Tax Event Redemption will be a taxable event for U.S. Holders of
Capital Securities. Gain or loss will be recognized by a U.S. Holder in
an amount equal to the difference between the Redemption Price (whether
paid directly to such U.S. Holder or applied by the Collateral Agent to
the purchase of the Treasury Portfolio on behalf of holders of Income
PRIDES), except to the extent of amounts paid in respect of accrued but
unpaid interest not previously included in income, which will be taxable
as ordinary interest income, and the U.S. Holder's adjusted tax basis in
the Capital Securities. Gain or loss realized by a U.S. Holder upon a Tax
Event Redemption generally will be capital gain or loss and generally
will be long-term capital gain or loss if the U.S. Holder held such
Capital Securities for more than one year immediately prior to such Tax
Event Redemption. Long-term capital gains of individuals are eligible
for reduced rates of taxation depending upon the holding period of such
<PAGE>
capital assets. The deductibility of capital losses is subject to
limitations.
Ownership of Treasury Portfolio. The Company, the Trust and,
by acquiring Income PRIDES, each U.S. Holder agree to treat such U.S. Holder
as the owner, for United States federal, state and local income and
franchise tax purposes, of the Applicable Ownership Interest of the
Treasury Portfolio constituting a part of the Income PRIDES beneficially
owned by such U.S. Holder in the event of a Tax Event Redemption prior to the
Purchase Contract Settlement Date. Based on such agreement, each U.S.
Holder will include in income any amount earned on such pro rata portion
of the Treasury Portfolio for all United States federal, state and local
income and franchise tax purposes. The remainder of this summary assumes
that U.S. Holders of Income PRIDES will be treated as the owners of the
Applicable Ownership Interest of the Treasury Portfolio constituting a
part of such Income PRIDES for United States federal, state and local
income and franchise tax purposes.
Interest Income and Original Issue Discount. The Treasury Portfolio
will consist of stripped U.S. Treasury Securities. Following a Tax Event
Redemption prior to the Purchase Contract Settlement Date, a U.S. Holder
of Income PRIDES will be required to treat its pro rata portion of each
U.S. Treasury Security in the Treasury Portfolio as a bond that was
originally issued on the date the Collateral Agent acquired the relevant
U.S. Treasury Securities and will include OID in income over the life of
the U.S. Treasury Securities in an amount equal to the U.S. Holder's pro
rata portion of the excess of the amounts payable on such U.S. Treasury
Securities over the value of the U.S. Treasury Securities at the time the
Collateral Agent acquires them on behalf of holders of Income PRIDES. The
amount of such excess will constitute only a portion of the total amounts
payable in respect of the Treasury Portfolio. Consequently, a portion of
each scheduled interest payment to U.S. Holders will be treated as a
tax-free return of the U.S. Holder's investment in the Treasury Portfolio
and will not be considered current income for United States federal
income tax purposes.
A U.S. Holder, whether on the cash or accrual method of tax
accounting, will be required to include OID (other than OID on short-term
U.S. Treasury Securities as defined below) in income for United States
federal income tax purposes as it accrues on a constant yield to maturity
basis. See "--Interest Income and Original Issue Discount" above. In the
case of any U.S. Treasury Security with a maturity of one year or less
from the date it is purchased (a "short-term U.S. Treasury Security"), in
general only accrual basis taxpayers will be required to include OID in
income as it is accrued. Unless such an accrual basis U.S. Holder elects
to accrue the OID on a short-term U.S. Treasury Security according to the
constant-yield-to-maturity method, such OID will be accrued on a
straight-line basis.
Tax Basis of the Treasury Portfolio. A U.S. Holder's initial tax
basis in such U.S. Holder's Applicable Ownership Interest of the Treasury
Portfolio will equal such U.S. Holder's pro rata portion of the amount
paid by the Collateral Agent for the Treasury Portfolio. A U.S. Holder's
tax basis in the Treasury Portfolio will be increased by the amount of
OID included in income with respect thereto and decreased by the amount
of cash received in respect of the Treasury Portfolio.
Backup Withholding Tax and Information Reporting
Payments under the FELINE PRIDES, Capital Securities or Common
Stock acquired under a Purchase Contract, the proceeds received with
respect to a fractional share of Common Stock upon the settlement of a
<PAGE>
Purchase Contract, and the sale of FELINE PRIDES, Capital Securities or
Common Stock acquired under a Purchase Contract, may be subject to
information reporting and United States federal backup withholding tax at
the rate of 31% if the U.S. Holder thereof fails to supply an accurate
taxpayer identification number or otherwise fails to comply with
applicable United States information reporting or certification
requirements. Any amounts so withheld will be allowed as a credit against
such U.S. Holder's United States federal income tax liability.
UNDERWRITING
Subject to the terms and conditions set forth in an Underwriting
Agreement (the "Underwriting Agreement") among the Company, the Trust and
Merrill Lynch, Pierce, Fenner & Smith Incorporated, (the "Underwriter"),
the Company and the Trust have agreed to sell to the Underwriter, and the
Underwriter has agreed to purchase from the Company and the Trust,
12,600,000 Income PRIDES, 1,400,000 Growth PRIDES and 1,400,000 Capital
Securities. In the Underwriting Agreement, the Underwriter has agreed,
subject to the terms and conditions set forth therein, to purchase all of
the Income PRIDES, Growth PRIDES and Capital Securities offered hereby if
any of the Income PRIDES, Growth PRIDES or Capital Securities are
purchased.
The Underwriter has advised the Company and the Trust that it
proposes initially to offer the Income PRIDES, Growth PRIDES and Capital
Securities to the public at the public offering price set forth on the
cover page of this Prospectus Supplement and to certain dealers at such
price less a concession not in excess of $ per Income PRIDES,
$ per Growth PRIDES and $ per Capital Security. The
Underwriter may allow, and such dealers may reallow, a discount not in
excess of $ per Income PRIDES, $ per Growth PRIDES and
$ per Capital Security on sales to certain other dealers. After
the initial public offering, the public offering prices, concessions and
discounts may be changed.
Until the distribution of the Securities is completed, rules of the
Commission may limit the ability of the Underwriter and any selling group
members to bid for and purchase the Securities or shares of Common Stock.
As an exception to these rules, the Underwriter is permitted to engage in
certain transactions that stabilize the price of the Securities or the
Common Stock. Such transactions consist of bids or purchases for the
purpose of pegging, fixing or maintaining the price of the Securities or
the Common Stock.
If the Underwriter creates a short position in the Securities in
connection with the Offering, i.e., if it sells more Securities than are
set forth on the cover page of this Prospectus Supplement, the
Underwriter may reduce that short position by purchasing Securities in
the open market. The Underwriter may also elect to reduce any short
position by exercising all or part of the over-allotment options
described below.
The Underwriter may also impose a penalty bid on certain selling
group members. This means that if the Underwriter purchases Securities in
the open market to reduce the Underwriter's short position or to
stabilize the price of the Securities, it may reclaim the amount of the
selling concession from any selling group members who sold those
Securities as part of the Offering.
In general, purchases of a security for the purpose of
stabilization or to reduce a short position could cause the price of the
security and the Common Stock of the Company to be higher than it might
<PAGE>
be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that
it were to discourage resales of the security.
Neither the Company, the Trust nor the Underwriter makes any
representation or prediction as to the direction or magnitude of any
effect that the transactions described above may have on the price of the
Securities or the Common Stock. In addition, neither the Company nor the
Underwriter makes any representation that the Underwriter will engage in
such transaction or that such transactions, once commenced, will not be
discontinued without notice.
The Company and the Trust have granted to the Underwriter options,
exercisable for 90 days following the date of this Prospectus Supplement,
to purchase up to an additional 1,890,000 Income PRIDES, 210,000 Growth
PRIDES and 210,000 Capital Securities from the Company and the Trust at
the Price to Public set forth on the cover page of this Prospectus
Supplement less the underwriting discount; provided, however, that the
Underwriter must purchase, proportionally, at least as many Capital
Securities as Growth PRIDES and must purchase, proportionately, at least
as many Growth PRIDES as Income PRIDES. The Underwriter may exercise
these options only to cover over-allotments, if any, made on the sale of
the Income PRIDES, Growth PRIDES and Capital Securities offered hereby.
The Company and the Trust have agreed, for a period of 90 days
after the date of this Prospectus Supplement, to not, without the prior
written consent of the Underwriter, directly or indirectly, sell, offer
to sell, grant any option for the sale of, or otherwise dispose of, or
enter into any agreement to sell, any Income PRIDES, Growth PRIDES,
Purchase Contracts, Capital Securities or Common Stock, as the case may
be, or any securities of the Company similar to the Income PRIDES, Growth
PRIDES, Purchase Contracts, Capital Securities or Common Stock or any
security convertible into or exchangeable or exercisable for Income
PRIDES, Growth PRIDES, Purchase Contracts, Capital Securities or Common
Stock other than shares of Common Stock or options for shares of Common
Stock issued pursuant to or sold in connection with any employee benefit,
dividend reinvestment and stock option and stock purchase plans of the
Company and its subsidiaries and other than the Growth PRIDES or Income
PRIDES to be created or recreated upon substitution of Pledged
Securities, or shares of Common Stock issuable upon early settlement of
the Income PRIDES or Growth PRIDES or upon exercise of stock options.
Prior to this offering, there has been no public market for the
Income PRIDES, Growth PRIDES and the Capital Securities. The public
offering price for the Income PRIDES, Growth PRIDES and the Capital
Securities was determined in negotiations between the Company, the Trust
and the Underwriter. In determining the terms of the Income PRIDES,
Growth PRIDES and the Capital Securities including the public offering
price, the Company, the Trust and the Underwriter considered the market
price of the Common Stock and also considered the Company's recent
results of operations, the future prospects of the Company and the
industry in general, market prices and terms of, and yields on,
securities of other companies considered to be comparable to the Company
and prevailing conditions in the securities markets. Application will be
made to list the Income PRIDES and Growth PRIDES on the NYSE. If Capital
Securities are separately traded to a sufficient extent that the
applicable exchange listing requirements are met, the Company will
endeavor to cause such securities to be listed on such exchange on which
the Income PRIDES and the Growth PRIDES are then listed, including, if
applicable, the NYSE. There can be no assurance that an active trading
market will develop for the Income PRIDES, the Growth PRIDES or the
Capital Securities or that the Income PRIDES, Growth PRIDES or Capital
<PAGE>
Securities will trade in the public market subsequent to the offering at
or above the initial public offering price.
The Company and the Trust have agreed to indemnify the Underwriter
against, or to contribute to payments that the Underwriters may be
required to make in respect of, certain liabilities, including
liabilities under the Securities Act of 1933, as amended.
This Prospectus Supplement, as amended or stickered, may be used by
the Remarketing Agent for remarketing the Capital Securities at such time
as is necessary.
In the ordinary course of their respective businesses, the
Underwriter and its affiliates have performed, and may in the future
perform, investment banking and/or commercial banking services for the
Company.
LEGAL OPINIONS
The validity of the Purchase Contracts, the Debentures and
Guarantee will be passed upon for the Company and the Trust by Simpson,
Thacher & Bartlett, New York, New York. Certain matters of Delaware law
with respect to the validity of the Capital Securities offered hereby
will be passed upon for the Company and the Trust by Richards, Layton &
Finger P.A., special Delaware counsel to the Company and the Trust. The
validity of the Common Stock will be passed upon by Patricia Nachtigal,
Vice President and General Counsel of the Company. As of February 27,
1998, Ms. Nachtigal owned 26,735 shares of Common Stock and had options
to purchase an additional 162,000 shares. The validity of the Purchase
Contracts, the Common Stock issuable upon settlement thereof, the
Debentures and the Capital Securities, will be passed upon for the
Underwriter by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New
York.
<PAGE>
INDEX OF TERMS FOR PROSPECTUS SUPPLEMENT
1940 Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-51
Applicable Market Value . . . . . . . . . . . . . . . . . . . . . . S-13
Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . . . . . S-14
Beneficial Owner . . . . . . . . . . . . . . . . . . . . . . . . . S-55
Capital Securities . . . . . . . . . . . . . . . . . . . . . . . . . S-1
Change in 1940 Act Law . . . . . . . . . . . . . . . . . . . . . . S-51
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-66
Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . . . . S-8
Common Securities . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
Compound Interest . . . . . . . . . . . . . . . . . . . . . . . . . S-62
Contract Adjustment Payments . . . . . . . . . . . . . . . . . . . . S-2
Custodial Agent . . . . . . . . . . . . . . . . . . . . . . . . . . S-15
Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Debt Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . S-60
Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-6
Declaration Events of Default . . . . . . . . . . . . . . . . . . . S-52
Deferred Contract Adjustment Payments . . . . . . . . . . . . . . . S-10
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-44
Direct Action . . . . . . . . . . . . . . . . . . . . . . . . . . . S-28
Direct Participants . . . . . . . . . . . . . . . . . . . . . . . . S-44
Disposition . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-68
Early Settlement . . . . . . . . . . . . . . . . . . . . . . . . . S-13
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . S-44
Extension Periods . . . . . . . . . . . . . . . . . . . . . . . . . S-15
Failed Remarketing . . . . . . . . . . . . . . . . . . . . . . . . . S-3
FELINE PRIDES . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
FELINE PRIDES Certificate . . . . . . . . . . . . . . . . . . . . . S-39
Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . S-64
Global Security Certificates. . . . . . . . . . . . . . . . . . . . S-44
Growth PRIDES . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3
Guarantee Payments . . . . . . . . . . . . . . . . . . . . . . . . S-58
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-60
Indenture Event of Default . . . . . . . . . . . . . . . . . . . . S-52
Indirect Participants . . . . . . . . . . . . . . . . . . . . . . . S-44
Ingersoll-Rand Company . . . . . . . . . . . . . . . . . . . . . . . S-1
Ingersoll-Rand Trustees . . . . . . . . . . . . . . . . . . . . . . . S-6
Institutional Trustee . . . . . . . . . . . . . . . . . . . . . . . S-31
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . S-60
IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-66
NYSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
OID . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . S-44
Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . S-11
Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . S-8
Pledged Securities . . . . . . . . . . . . . . . . . . . . . . . . S-24
Preference Stock . . . . . . . . . . . . . . . . . . . . . . . . . S-32
Primary Treasury Dealer . . . . . . . . . . . . . . . . . . . . . . S-62
Property Account . . . . . . . . . . . . . . . . . . . . . . . . . S-31
Purchase Contract . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Purchase Contract Agent . . . . . . . . . . . . . . . . . . . . . . . S-8
Purchase Contract Agreement . . . . . . . . . . . . . . . . . . . . . S-8
Purchase Contract Settlement Date . . . . . . . . . . . . . . . . . . S-2
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . S-4
<PAGE>
Reference Price . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Regular Trustees . . . . . . . . . . . . . . . . . . . . . . . . . S-31
Remarketing Agent . . . . . . . . . . . . . . . . . . . . . . . . . S-11
Remarketing Agreement . . . . . . . . . . . . . . . . . . . . . . . S-11
Remarketing Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3
Remarketing Underwriting Agreement . . . . . . . . . . . . . . . . S-11
Reset Announcement Date . . . . . . . . . . . . . . . . . . . . . . S-50
Reset Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3
Reset Spread . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . S-3
Settlement Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Short-term U.S. Treasury Security . . . . . . . . . . . . . . . . . S-71
Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-6
Stated Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Successor Securities . . . . . . . . . . . . . . . . . . . . . . . S-54
Super-Majority . . . . . . . . . . . . . . . . . . . . . . . . . . S-53
Tax Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-67
Tax Event Redemption . . . . . . . . . . . . . . . . . . . . . . . . S-4
Tax Event Redemption Date . . . . . . . . . . . . . . . . . . . . . S-61
Threshold Appreciation Price . . . . . . . . . . . . . . . . . . . . S-2
Treasury Securities . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . S-6
Trust Securities . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Underwriter . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-72
Underwriting Agreement . . . . . . . . . . . . . . . . . . . . . . S-72
<PAGE>
[THIS PAGE LEFT INTENTIONALLY BLANK]
<PAGE>
Subject to Completion, Dated March 9, 1998
PROSPECTUS
$600,000,000
INGERSOLL-RAND COMPANY
Stock Purchase Contracts,
Stock Purchase Units and Debentures
INGERSOLL-RAND
FINANCING I
Capital Securities
Guaranteed as Set Forth Herein By
INGERSOLL-RAND COMPANY
Ingersoll-Rand Company (the "Company") may from time to time offer
together or separately (i) Stock Purchase Contracts ("Stock Purchase
Contracts") to purchase shares of common stock, $2 par value per share
("Common Stock"), of the Company, (ii) Stock Purchase Units, each
representing ownership of a Stock Purchase Contract and Capital
Securities (as defined below) or debt obligations of third parties,
including U.S. Treasury securities, securing the holder's obligation to
purchase Common Stock under the Stock Purchase Contracts ("Stock Purchase
Units"), and (iii) its subordinated debentures (the "Debentures").
Ingersoll-Rand Financing I, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), may offer capital securities
("Capital Securities"), representing undivided beneficial ownership
interests in the assets of the Trust. The Stock Purchase Contracts, Stock
Purchase Units, Debentures and Capital Securities are collectively called
the "Securities."
The Securities offered pursuant to this Prospectus may be issued in
one or more series or issuances and will be limited to U.S.$600,000,000
aggregate public offering price (or, in the case of Debentures, its
equivalent (based on the applicable exchange rate at the time of issue)
if issued with principal amounts denominated in one or more foreign
currencies, or such greater amount if issued at an original issue
discount, as shall result in aggregate proceeds of U.S.$600,000,000).
Certain specific terms of the particular Securities in respect of which
this Prospectus is being delivered are set forth in the accompanying
Prospectus Supplement (the "Prospectus Supplement"), including, where
applicable, (i) in the case of Stock Purchase Contracts, the number of
shares of Common Stock issuable thereunder, the purchase price of the
Common Stock, the date or dates on which the Common Stock is required to
be purchased by the holders of the Stock Purchase Contracts, any periodic
payments required to be made by the Company to the holders of the Stock
Purchase Contracts or vice versa, and the terms of the offering and sale
thereof, (ii) in the case of Stock Purchase Units, the specific terms of
the Stock Purchase Contracts and any Capital Securities or debt
obligations of third parties securing the holder's obligation to purchase
the Common Stock under the Stock Purchase Contracts, and the terms of the
offering and sale thereof, (iii) in the case of Debentures, the specific
designation, aggregate principal amount, denominations, maturity,
interest payment dates, interest rate (which may be fixed or variable) or
method of calculating interest, if any, applicable Extension Period (as
defined below) or interest deferral terms, if any, place or places where
principal, premium, if any, and interest, if any, will be payable, any
terms of redemption, any sinking fund provisions, terms for any
conversion or exchange into other securities, initial offering or
<PAGE>
purchase price, methods of distribution and any other special terms, and
(iv) in the case of Capital Securities, the specific title, aggregate
amount, stated liquidation preference, number of securities, the rate of
payment of periodic cash distributions ("Distributions") or method of
calculating such rate, applicable Extension Period or Distribution
deferral terms, if any, place or places where Distributions will be
payable, any terms of redemption, initial offering or purchase price,
methods of distribution and any other special terms. If so specified in
the applicable Prospectus Supplement, the Securities offered thereby may
be issued in whole or in part in the form of one or more temporary or
permanent global securities ("Global Securities").
The Debentures will be senior unsecured obligations of the Company
and will rank pari passu in right of payment with all of the Company's
other senior unsecured obligations. If provided in an accompanying
Prospectus Supplement, the Company will have the right to defer payments
of interest on any series of Debentures by extending the interest payment
period thereon at any time or from time to time for such number of
consecutive interest payment periods (which shall not extend beyond the
maturity of the Debentures) with respect to each deferral period as may
be specified in such Prospectus Supplement (each, an "Extension Period").
See "Description of Debentures--Option to Defer Interest Payments."
The Company will be the owner of the common securities (the "Common
Securities," and, together with the Capital Securities, the "Trust
Securities") of the Trust. The payment of Distributions with respect to
the Capital Securities and payments on liquidation or redemption with
respect to the Capital Securities, in each case out of funds held by the
Trust, will be irrevocably guaranteed by the Company to the extent
described herein (the "Guarantee"). Certain payments in respect of the
Common Securities may also be guaranteed by the Company. See "Description
of the Guarantee." The obligations of the Company under the Guarantee
will be senior unsecured obligations of the Company and will rank pari
passu with all of the Company's other senior unsecured obligations.
Concurrently with the issuance by the Trust of the Capital Securities,
the Trust will invest the proceeds thereof and any contributions made in
respect of the Common Securities in the Debentures, which will have terms
corresponding to the terms of the Capital Securities. The Debentures will
be the sole assets of the Trust, and payments under the Debentures and
those made by the Company in respect of fees and expenses incurred by the
Trust will be the only revenue of the Trust. Upon the occurrence of
certain events as are described herein and in the accompanying Prospectus
Supplement, the Company may redeem the Debentures and cause the
redemption of the Trust Securities. In addition, if provided in the
applicable Prospectus Supplement, the Company may dissolve the Trust at
any time and, after satisfaction of the liabilities to creditors of the
Trust as provided by applicable law, cause the Debentures to be
distributed to the holders of the Capital Securities in liquidation of
their interest in the Trust. See "Description of Capital Securities--
Redemption--Distribution of Debentures" and "--Liquidation Distribution
Upon Dissolution."
Holders of the Capital Securities will be entitled to receive
cumulative cash Distributions accruing from the date of original issuance
and payable periodically as specified in an accompanying Prospectus
Supplement. If provided in an accompanying Prospectus Supplement, the
Company will have the right to defer payments of interest on the
Debentures by extending the interest payment period thereon at any time
or from time to time for one or more Extension Periods (which shall not
<PAGE>
extend beyond the maturity of the Debentures). If interest payments are
so deferred, Distributions on the Capital Securities will also be
deferred and the Company will not be permitted, subject to certain
exceptions set forth herein, to declare or pay any cash distributions
with respect to the Company's capital stock or debt securities that rank
pari passu with or junior to the Debentures. During an Extension Period,
Distributions will continue to accumulate (and the Capital Securities
will accumulate additional Distributions thereon at the rate per annum if
and as specified in the related Prospectus Supplement). See "Description
of Capital Securities--Distributions."
Taken together, the Company's obligations under the Debentures, the
Indenture (as defined herein), the Declaration (as defined herein) and
the Guarantee, in the aggregate, have the effect of providing a full,
irrevocable and unconditional guarantee of payments of Distributions and
other amounts due on the Capital Securities. See "Relationship Among the
Capital Securities, the Debentures and the Guarantee."
The Common Stock is listed on the New York Stock Exchange, the
London Stock Exchange and the Amsterdam Stock Exchange under the trading
symbol "IR." The Prospectus Supplement will state whether any Securities
offered thereby will be listed on any national securities exchange. If
such Securities are not listed on any national securities exchange, there
can be no assurance that there will be a secondary market for any such
Securities.
_________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The Company may sell the Securities to or through underwriters,
through dealers or agents, directly to purchasers or through a
combination of such methods. See "Plan of Distribution." The accompanying
Prospectus Supplement sets forth the names of any underwriters, dealers
or agents, if any, involved in the sale of the Securities in respect of
which this Prospectus is being delivered and any applicable fee,
commission or discount arrangements with them.
_________________________
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
_________________________
THE DATE OF THIS PROSPECTUS IS MARCH , 1998.
<PAGE>
No dealer, salesperson or other person has been authorized to give any
information or make any representations, other than those contained or
incorporated by reference in this Prospectus and the applicable
Prospectus Supplement, and if given or made such information or
representations must not be relied upon as having been authorized by the
Company or the Trust or any agent, underwriter or dealer. This Prospectus
and the applicable Prospectus Supplement do not constitute an offer of
any securities other than those to which they relate, or an offer to sell
or a solicitation of an offer to buy those to which they relate in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. The delivery of this Prospectus and/or
the applicable Prospectus Supplement at any time does not imply that the
information herein or therein is correct as of any time subsequent to its
date.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other
information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information filed
by the Company with the Commission can be inspected and copied at the
public reference facilities of the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the regional offices of the
Commission located at 7 World Trade Center, 13th Floor, Suite 1300, New
York, New York 10048 and Suite 1400, Citicorp Center, 14th Floor, 500
West Madison Street, Chicago, Illinois 60661. Copies of such material can
also be obtained at prescribed rates by writing to the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. The Commission also maintains a site on the world wide web at
http:www.sec.gov that contains reports, proxy and information statements
and other information filed electronically by the Company. In addition,
such reports, proxy statements and other information may be inspected at
the offices of the New York Stock Exchange, 20 Broad Street, New York,
New York 10005, upon which the Common Stock is traded.
This Prospectus constitutes a part of a registration statement on
Form S-3 (together with all amendments and exhibits thereto, the
"Registration Statement") filed by the Company and the Trust with the
Commission under the Securities Act of 1933, as amended (the "Securities
Act"). This Prospectus and any accompanying Prospectus Supplement do not
contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information with respect to
the Company, the Trust and the Securities offered hereby, reference is
made to the Registration Statement and the exhibits and the financial
statements, notes and schedules filed as a part thereof or incorporated
by reference therein, which may be inspected at the public reference
facilities of the Commission, at the addresses set forth above.
Statements made in this Prospectus and any Prospectus Supplement
concerning the contents of any documents referred to herein are not
necessarily complete, and in each instance reference is hereby made to
the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission.
No separate financial statements of the Trust have been included
herein. The Company and the Trust do not consider that such financial
<PAGE>
statements would be material to holders of the Capital Securities because
the Trust is a newly formed special purpose entity, has no operating
history or independent operations and is not engaged in and does not
propose to engage in any activity other than its holding as trust assets
the Debentures and the issuance of the Trust Securities. See "The Trust,"
"Description of Debentures," "Description of Capital Securities" and
"Description of the Guarantee."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, the Company's Current Reports on Form 8-K dated
October 31, 1997 and March 9, 1998 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 nonelectrical
machinery and equipment. Principal products include the following:
Agricultural sprayers Architectural hardware trim
Air balancers Asphalt compactors
Air compressors & accessories Asphalt pavers
Air dryers Automated production systems
Air logic controls Automotive components
Air motors Ball bearings
Air and electric tools Blasthole drills
<PAGE>
Blowers Paving equipment
Centrifugal pumps Pneumatic breakers
Compact hydraulic excavators Pneumatic cylinders
Construction equipment Pneumatic valves
Diaphragm pumps Portable compressors
Directional drills Portable generators
Door closers Portable light towers
Door control hardware Reciprocating pumps
Door locks, latches & locksets Road-building machinery
Doors and door frames (steel) Rock drills
Drilling equipment and accessories Rock stabilizers
Electrical security systems Roller bearings
Engineered pumps Rotary drills
Engine-starting systems Rotary pumps
Exit devices Rough-terrain forklifts
Extrusion pump systems Skid-steer loaders
Fastener-tightening systems Soil compactors
Fluid-handling equipment Spray-coating systems
Foundation drills Submersible pumps
Golf cars Transport temperature control systems
Hoists Utility vehicles
Hydraulic breakers Vacuum pumps
Lubrication equipment Vertical turbine pumps
Material handling equipment Waterjet-cutting systems
Mining equipment Water-well drills
Multistage pumps Winches
Needle roller bearings
<PAGE>
These products are sold primarily under the Company's name and also
under other names including ABG, Aro, Beebe, Blaw-Knox, Bobcat, Carryall,
Centac, Charles Maire, Club Car, Crawlair, Cyclone, Ecoair, Elite, Dixie-
Pacific Fafnir, Falcon, Glynn-Johnson, Ingersoll-Dresser Pumps, Jeumont-
Schneider Pumps, Kilian, Klemm, LCN, McCartney, Melroe, Montabert, NREC,
Newman Tonks, Normbau, Pacific, Phoenix, Pleuger, Promaxx, Samiia,
Schlage, Sensor I, Sierra, Spra-Coupe, Steelcraft, Tensor I, Thermo King,
Torrington, Von Duprin, Worthington and Zimmerman.
The Company employs approximately 47,000 people. It has over 100
manufacturing plants throughout the world.
During the last three years, the Company has been involved in an
aggressive acquisition and divestment program. The larger acquisitions
included the following:
-- the May 1995 acquisition of Clark Equipment Company for
approximately $1.5 billion.
-- the April 1997 acquisition of Newman Tonks Group PLC ("Newman
Tonks") for approximately $370 million. Newman Tonks is based
in the United Kingdom and is a leading manufacturer, specifier
and supplier of a wide range of branded architectural products
in the building industry.
-- the October 1997 acquisition of Thermo King for approximately
$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 larger divestitures included:
-- the February 1997 sale of the Company's Clark-Hurth Group to
Dana Corporation for approximately $260 million.
-- the March 1996 sale of the Company's Pulp Machinery Division
for approximately $122 million to Beloit Corporation, a
subsidiary of Harnischfeger Industries, Inc.
-- the December 1996 sale of the remainder of the Process Systems
Group for approximately $58 million to Gencor Industries, Inc.
The Company's principal executive offices are at 200 Chestnut Ridge
Road, Woodcliff Lake, New Jersey 07675 (telephone 201-573-0123).
THE TRUST
The Trust is a statutory business trust created under Delaware law
pursuant to (i) a trust agreement, dated as of August 18, 1997, executed
by the Company, as depositor (the "Sponsor"), and certain of the trustees
of the Trust (the "Ingersoll-Rand Trustees") and (ii) the filing of a
certificate of trust with the Secretary of State of the State of Delaware
on August 18, 1997. Such trust agreement will be amended and restated in
its entirety (as so amended and restated, the "Declaration")
substantially in the form filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. The Declaration will be
qualified as an indenture under the Trust Indenture Act of 1939, as
<PAGE>
amended (the "Trust Indenture Act"). The Company will directly or
indirectly acquire Common Securities in an aggregate liquidation amount
equal to 3% of the total of the Trust. The Trust exists for the exclusive
purposes of (i) issuing the Trust Securities representing undivided
beneficial interests in its assets, (ii) investing the proceeds of the
Trust Securities in the Debentures and (iii) engaging in only those other
activities necessary or incidental thereto. Unless otherwise specified in
the applicable Prospectus Supplement, the Trust has a term of
approximately seven years, but may dissolve earlier as provided in the
Declaration.
Pursuant to the Declaration, the number of Ingersoll-Rand Trustees
initially is five. Three of the Ingersoll-Rand Trustees (the "Regular
Trustees") are persons who are employees or officers of or who are
affiliated with the Company. Pursuant to the Declaration, the fourth
trustee will be a financial institution that is unaffiliated with the
Company, which trustee serves as institutional trustee under the
Declaration and as indenture trustee for the purposes of compliance with
the provisions of the Trust Indenture Act (the "Institutional Trustee").
For the purpose of compliance with the provisions of the Trust Indenture
Act, the Institutional Trustee will also act as trustee (the "Guarantee
Trustee") under the Guarantee and an affiliate of the Guarantee Trustee
will act as the trustee in the State of Delaware (the "Delaware Trustee")
for the purposes of the Trust Act (as defined herein), until removed or
replaced by the holder of the Common Securities. See "Description of the
Guarantee" and "Description of Capital Securities--Voting Rights;
Amendment of Declaration."
The Institutional Trustee will hold title to the Debentures for the
benefit of the holders of the Trust Securities and the Institutional
Trustee will have the power to exercise all rights, powers and privileges
under the Indenture (as defined herein) as the holder of the Debentures.
In addition, the Institutional Trustee will maintain exclusive control of
a segregated non-interest bearing bank account (the "Property Account")
to hold all payments made in respect of the Debentures for the benefit of
the holders of the Trust Securities. The Institutional Trustee will make
payments of distributions and payments on liquidation, redemption and
otherwise to the holders of the Trust Securities out of funds from the
Property Account. The Guarantee Trustee will hold the Guarantee for the
benefit of the holders of the Capital Securities. The Company, as the
direct or indirect holder of all the Common Securities, will have the
right to appoint, remove or replace any Ingersoll-Rand Trustee and to
increase or decrease the number of Ingersoll-Rand Trustees; provided,
that the number of Ingersoll-Rand Trustees shall be at least three, a
majority of which shall be Regular Trustees. The Company will pay all
fees and expenses related to the Trust and the offering of the Trust
Securities. See "Description of the Guarantee--Expenses of the Trust."
The rights of the holders of the Capital Securities, including
economic rights, rights to information and voting rights, are set forth
in the Declaration, the Delaware Business Trust Act, as amended (the
"Trust Act"), and the Trust Indenture Act. See "Description of Capital
Securities."
The principal place of business of the Trust is c/o Ingersoll-Rand
Company, 200 Chestnut Ridge Road, Woodcliff Lake, New Jersey 07675 and
its telephone number is (201) 573-0123.
<PAGE>
USE OF PROCEEDS
The Company intends to apply the net proceeds from the sale of the
Securities (including Debentures issued to the Trust in connection with
the investment by the Trust of all of the proceeds from the sale of the
Capital Securities) to which this Prospectus relates to its general funds
to be used for capital expenditures, acquisitions and other general
corporate purposes. 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.
DESCRIPTION OF DEBENTURES
The Debentures are to be issued in one or more series under an
Indenture, as supplemented or amended from time to time (as so
supplemented or amended, the "Indenture"), between the Company and The
Bank of New York, as trustee (the "Debt Trustee"). This summary of
certain terms and provisions of the Debentures and the Indenture is not
necessarily complete, and reference is hereby made to the copy of the
form of the Indenture which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part, and to the Trust
Indenture Act. Whenever particular defined terms of the Indenture are
referred to in this Section or in a Prospectus Supplement, such defined
terms are incorporated herein or therein by reference.
General
Unless otherwise specified in the applicable Prospectus Supplement,
each series of Debentures will be issued as senior unsecured debt under
the Indenture and will rank pari passu in right of payment with all of
the Company's other senior unsecured obligations. See "--Subordination."
Except as otherwise provided in the applicable Prospectus Supplement, the
Indenture does not limit the incurrence or issuance of other secured or
unsecured debt of the Company, whether under the Indenture, any other
indenture that the Company may enter into in the future or otherwise. See
the Prospectus Supplement relating to any offering of Securities.
The Debentures will be issuable in one or more series pursuant to
an indenture supplemental to the Indenture or a resolution of the
Company's Board of Directors or a committee thereof.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the Debentures: (i) the title of the
Debentures; (ii) any limit upon the aggregate principal amount of the
Debentures; (iii) the date or dates on which the principal of the
Debentures is payable or the method of determination thereof; (iv) the
rate or rates, if any, at which the Debentures shall bear interest
(including reset rates, if any, and the method by which any such rate
will be determined), the Interest Payment Dates on which any such
interest shall be payable, the right, if any, of the Company to defer or
extend an Interest Payment Date, and the Regular Record Date for any
interest payable on any Interest Payment Date or the method by which any
of the foregoing shall be determined; (v) the place or places where,
subject to the terms of the Indenture as described below under "--
Payment and Paying Agents," the principal of and premium, if any, and
interest, if any, on the Debentures will be payable and where, subject to
the terms of the Indenture as described below under "-- Denominations,
Registration and Transfer," the Debentures may be presented for
<PAGE>
registration of transfer or exchange and the place or places where
notices and demands to or upon the Company in respect of the Debentures
and the Indenture may be made ("Place of Payment"); (vi) any period or
periods within, or date or dates on which, the price or prices at which
and the terms and conditions upon which Debentures may be redeemed, in
whole or in part, at the option of the Company or a holder thereof; (vii)
the obligation or the right, if any, of the Company or a holder thereof
to redeem, purchase or repay the Debentures and the period or periods
within which, the price or prices at which, the currency or currencies
(including currency unit or units) in which and the other terms and
conditions upon which the Debentures shall be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation; (viii) the
denominations in which any Debentures shall be issuable if other than
denominations of $1,000 and any integral multiple thereof; (ix) if other
than in U.S. Dollars, the currency or currencies (including currency unit
or units) in which the principal of (and premium, if any) and interest,
if any, on the Debentures shall be payable, or in which the Debentures
shall be denominated; (x) any additions, modifications or deletions in
the Events of Default or covenants of the Company specified in the
Indenture with respect to the Debentures; (xi) if other than the
principal amount thereof, the portion of the principal amount of
Debentures that shall be payable upon declaration of acceleration of the
maturity thereof; (xii) any additions or changes to the Indenture with
respect to a series of Debentures as shall be necessary to permit or
facilitate the issuance of such series in bearer form, registrable or not
registrable as to principal, and with or without interest coupons; (xiii)
any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Debentures and the manner in
which such amounts will be determined; (xiv) the terms and conditions
relating to the issuance of a temporary Global Security representing all
of the Debentures of such series and exchange of such temporary Global
Security for definitive Debentures of such series; (xv) subject to the
terms described under "-- Global Debentures," whether the Debentures of
the series shall be issued in whole or in part in the form of one or more
Global Securities and, in such case, the depositary for such Global
Securities, which depositary shall be a clearing agency registered under
the Exchange Act; (xvi) the appointment of any paying agent or agents;
(xvii) the terms and conditions of any obligation or right of the Company
or a holder to convert or exchange Debentures into Capital Securities or
other securities; (xviii) the relative degree, if any, to which such
Debentures of the series shall be senior to or be subordinated to other
series of such Debentures or other indebtedness of the Company in right
of payment, whether such other series of Debentures or other indebtedness
are outstanding or not; and (xix) any other terms of the Debentures not
inconsistent with the provisions of the Indenture.
Debentures may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the
time of issuance is below market rates. Certain material U.S. federal
income tax consequences and special considerations applicable to any such
Debentures will be described in the applicable Prospectus Supplement.
If the purchase price of any of the Debentures is payable in one or
more foreign currencies or currency units or if any Debentures are
denominated in one or more foreign currencies or currency units or if the
principal of, premium, if any, or interest, if any, on any Debentures is
payable in one or more foreign currencies or currency units, the
restrictions, elections, certain material U.S. federal income tax
considerations, specific terms and other information with respect to such
<PAGE>
issue of Debentures and such foreign currency or currency units will be
set forth in the applicable Prospectus Supplement.
If any index is used to determine the amount of payments of
principal of, premium, if any, or interest on any series of Debentures,
certain material U.S. federal income tax, accounting and other
considerations applicable thereto will be described in the applicable
Prospectus Supplement.
Denominations, Registration and Transfer
Unless otherwise specified in the applicable Prospectus Supplement,
the Debentures will be issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof. Debentures
of any series will be exchangeable for other Debentures of the same issue
and series, of any authorized denominations, of a like aggregate
principal amount, of the same Original Issue Date and Stated Maturity and
bearing the same interest rate.
Debentures may be presented for exchange as provided above, and may
be presented for registration of transfer (with the form of transfer
endorsed thereon, or a satisfactory written instrument of transfer, duly
executed), at the office of the appropriate Securities Registrar or at
the office of any transfer agent designated by the Company for such
purpose with respect to any series of Debentures and referred to in the
applicable Prospectus Supplement, without service charge and upon payment
of any taxes and other governmental charges as described in the
Indenture. The Company will appoint the Debt Trustee as Securities
Registrar under the Indenture. If the applicable Prospectus Supplement
refers to any transfer agents (in addition to the Securities Registrar)
initially designated by the Company with respect to any series of
Debentures, the Company may at any time rescind the designation of any
such transfer agent or approve a change in the location through which any
such transfer agent acts, provided that the Company maintains a transfer
agent in each Place of Payment for such series. The Company may at any
time designate additional transfer agents with respect to any series of
Debentures.
In the event of any redemption, neither the Company nor the Debt
Trustee shall be required to (i) issue, register the transfer of or
exchange Debentures of any series during a period beginning at the
opening of business 15 days before the day of selection for redemption of
Debentures of that series and ending at the close of business on the day
of mailing of the relevant notice of redemption or (ii) transfer or
exchange any Debentures so selected for redemption, except, in the case
of any Debentures being redeemed in part, any portion thereof not to be
redeemed.
Global Debentures
Unless otherwise specified in the applicable Prospectus Supplement,
the Debentures of a series may be issued in whole or in part in the form
of one or more Global Debentures that will be deposited with, or on
behalf of, a depositary identified in the Prospectus Supplement relating
to such series. Global Debentures may be issued only in fully registered
form and in either temporary or permanent form. Unless and until it is
exchanged in whole or in part for the individual Debentures represented
thereby, a Global Debenture may not be transferred except as a whole by
the depositary for such Global Debenture to a nominee of such depositary
<PAGE>
or by a nominee of such depositary to such depositary or another nominee
of such depositary or by the depositary or any nominee to a successor
depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a
series of Debentures will be described in the Prospectus Supplement
relating to such series. The Company anticipates that the following
provisions will generally apply to depositary arrangements.
Upon the issuance of a Global Debenture, and the deposit of such
Global Debenture with or on behalf of the applicable depositary, the
depositary for such Global Debenture or its nominee will credit on its
book-entry registration and transfer system, the respective principal
amounts of the individual Debentures represented by such Global Debenture
to the accounts of persons that have accounts with such depositary
("Participants"). Such accounts shall be designated by the dealers,
underwriters or agents with respect to such Debentures or by the Company
if such Debentures are offered and sold directly by the Company.
Ownership of beneficial interests in a Global Debenture will be limited
to Participants or persons that may hold interests through Participants.
Ownership of beneficial interests in such Global Debenture will be shown
on, and the transfer of that ownership will be effected only through,
records maintained by the applicable depositary or its nominee (with
respect to interests of Participants) and the records of Participants
(with respect to interests of persons who hold through Participants). The
laws of some states 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 Debenture.
So long as the depositary for a Global Debenture, or its nominee,
is the registered owner of such Global Debenture, such depositary or such
nominee, as the case may be, will be considered the sole owner or holder
of the Debentures represented by such Global Debenture for all purposes
under the Indenture. Except as provided below, owners of beneficial
interests in a Global Debenture will not be entitled to have any of the
individual Debentures of the series represented by such Global Debenture
registered in their names, will not receive or be entitled to receive
physical delivery of any such Debentures of such series in definitive
form and will not be considered the owners or holders thereof under the
Indenture.
Payments of principal of (and premium, if any) and interest on
individual Debentures represented by a Global Debenture registered in the
name of a depositary or its nominee will be made to such depositary or
its nominee, as the case may be, as the registered owner of the Global
Debenture representing such Debentures. None of the Company, the Debt
Trustee, any paying agent, or the Securities Registrar for such
Debentures will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial
ownership interest of the Global Debenture for such Debentures or for
maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The Company expects that the depositary for a series of Debentures
or its nominee, upon receipt of any payment of principal, premium or
interest in respect of a permanent Global Debenture representing any of
such Debentures, immediately will credit Participants' accounts with
payments in amounts proportionate to their respective beneficial interest
in the principal amount of such Global Debenture for such Debentures as
<PAGE>
shown on the records of such depositary or its nominee. The Company also
expects that payments by Participants to owners of beneficial interests
in such Global Debenture 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." Such payments will be the responsibility of
such Participants.
Unless otherwise specified in the applicable Prospectus Supplement,
if the depositary for a series of Debentures is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary
is not appointed by the Company within 90 days, the Company will issue
individual Debentures of such series in exchange for the Global Debenture
representing such series of Debentures. In addition, unless otherwise
specified in the applicable Prospectus Supplement, the Company may at any
time and in its sole discretion, subject to any limitations described in
the Prospectus Supplement relating to such Debentures, determine not to
have any Debentures of such series represented by one or more Global
Debentures and, in such event, will issue individual Debentures of such
series in exchange for such Global Debentures. Further, if the Company so
specifies with respect to the Debentures of a series, an owner of a
beneficial interest in a Global Debenture representing Debentures of such
series may, on terms acceptable to the Company, the Debt Trustee and the
depositary for such Global Debenture, receive individual Debentures of
such series in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such
Debentures. In any such instance, an owner of a beneficial interest in a
Global Debenture will be entitled to physical delivery of individual
Debentures of the series represented by such Global Debenture equal in
principal amount to such beneficial interest and to have such Debentures
registered in its name. Individual Debentures of such series so issued
will be issued in denominations, unless otherwise specified by the
Company, of $1,000 and integral multiples thereof. The applicable
Prospectus Supplement may specify other circumstances under which
individual Debentures may be issued in exchange for the Global Debenture
representing any Debentures.
Payment and Paying Agents
Unless otherwise indicated in the applicable Prospectus Supplement,
payment of principal of (and premium, if any) and any interest on
Debentures will be made at the office of the Debt Trustee or at the
office of such paying agent or paying agents as the Company may designate
from time to time in the applicable Prospectus Supplement, except that at
the option of the Company payment of any interest may be made (i) except
in the case of Global Debentures, by check mailed to the address of the
person or entity entitled thereto as such address shall appear in the
Securities Register or (ii) by transfer to an account maintained by the
person or entity entitled thereto as specified in the Securities
Register, provided that proper transfer instructions have been received
by the Regular Record Date. Unless otherwise indicated in the applicable
Prospectus Supplement, payment of any interest on Debentures will be made
to the person or entity in whose name such Debenture is registered at the
close of business on the Regular Record Date for such interest, except in
the case of Defaulted Interest. The Company may at any time designate
additional paying agents or rescind the designation of any paying agent;
however, the Company will at all times be required to maintain a paying
agent in each Place of Payment for each series of Debentures.
<PAGE>
Any moneys deposited with the Debt Trustee or any paying agent, or
held by the Company in trust, for the payment of the principal of (and
premium, if any) or interest on any Debenture and remaining unclaimed for
two years after such principal (and premium, if any) or interest has
become due and payable shall, at the request of the Company, be repaid to
the Company or released from such trust, as applicable, and the holder of
such Debenture shall thereafter look, as a general unsecured creditor,
only to the Company for payment thereof.
Redemption
Unless otherwise indicated in the applicable Prospectus Supplement,
Debentures will not be subject to any sinking fund.
Unless otherwise indicated in the applicable Prospectus Supplement,
the Company may, at its option, redeem the Debentures of any series in
whole at any time or in part from time to time, at the redemption price
set forth in the applicable Prospectus Supplement plus accrued and unpaid
interest to the date fixed for redemption, and Debentures in
denominations larger than $50 may be redeemed in part but only in
integral multiples of $50. If the Debentures of any series are so
redeemable only on or after a specified date or upon the satisfaction of
additional conditions, the applicable Prospectus Supplement will specify
such date or describe such conditions.
Except as otherwise specified in the applicable Prospectus
Supplement, if a Special Event (as defined in "Description of Capital
Securities--Redemption--Special Event Redemption" below or in the
applicable Prospectus Supplement) in respect of the Trust shall occur and
be continuing, the Company may, at its option, redeem such series of
Debentures, in whole (but not in part), at a redemption price equal to
the amount described in the applicable Prospectus Supplement. See
"Description of Capital Securities--Redemption--Special Event
Redemption."
Notice of any redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each holder of Debentures
to be redeemed at such holder's registered address. Unless the Company
defaults in the payment of the redemption price, on and after the
redemption date interest shall cease to accrue on such Debentures or
portions thereof called for redemption.
Option to Defer Interest Payments
If provided in the applicable Prospectus Supplement, the Company
shall have the right at any time and from time to time during the term of
any series of Debentures to defer the payment of interest for 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 the Debentures. Certain material U.S.
federal income tax consequences and special considerations applicable to
any such Debentures will be described in the applicable Prospectus
Supplement.
At the end of such Extension Period, the Company shall pay all
interest then accrued and unpaid together with interest thereon
compounded semiannually at the rate specified for the Debentures to the
<PAGE>
extent permitted by applicable law ("Compound Interest"); provided, that
during any such Extension Period, (a) the Company shall not declare or
pay dividends on, make any distribution with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of
its capital stock (other than (i) purchases or acquisitions of capital
stock of the Company in connection with the satisfaction by the Company
of its obligations under any employee benefit plans or the satisfaction
by the Company of its obligations pursuant to any contract or security
outstanding on the date of such event requiring the Company to purchase
capital stock of the Company, (ii) as a result of a reclassification of
the Company's capital stock or the exchange or conversion of one class or
series of the Company's capital stock for another class or series of the
Company's capital stock, (iii) the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted
or exchanged, (iv) dividends or distributions in capital stock of the
Company (or rights to acquire capital stock) or repurchases or
redemptions of capital stock solely from the issuance or exchange of
capital stock or (v) redemptions or repurchases of any rights outstanding
under a shareholder rights plan or the declaration thereunder of a
dividend of rights in the future), (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 that rank
junior to the Debentures, and (c) the Company shall not make any
guarantee payments with respect to the foregoing (other than payments
pursuant to the Guarantee). Prior to the termination of any such
Extension Period, the Company may further defer payments of interest by
extending the interest payment period; provided, however, that, such
Extension Period, including all such previous and further extensions, may
not extend beyond the maturity of the Debentures. Upon the termination of
any Extension Period and the payment of all amounts then due, the Company
may commence a new Extension Period, subject to the terms set forth in
this section. No interest during an Extension Period, except at the end
thereof, shall be due and payable, but the Company may prepay at any time
all or any portion of the interest accrued during an Extension Period.
The Company has no present intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Debentures. If the Institutional Trustee shall be the sole holder of the
Debentures, the Company shall give the Regular Trustees and the
Institutional Trustee notice of its selection of such Extension Period
one Business Day prior to the earlier of (i) the date distributions on
the Capital Securities are payable or (ii) the date the Regular Trustees
are required to give notice to the New York Stock Exchange (or other
applicable self-regulatory organization) or to holders of the Capital
Securities of the record or payment date of such distribution. The
Regular Trustees shall give notice of the Company's selection of such
Extension Period to the holders of the Capital Securities. If the
Institutional Trustee shall not be the sole holder of the Debentures, the
Company shall give the holders of the Debentures notice of its selection
of such Extension Period ten Business Days prior to the earlier of (i)
the Interest Payment Date or (ii) the date upon which the Company is
required to give notice to the New York Stock Exchange (or other
applicable self-regulatory organization) or to holders of the Debentures
of the record or payment date of such related interest payment.
<PAGE>
Modification of Indenture
From time to time, the Indenture may be modified by the Company and
the Debt Trustee without the consent of any holders of the Debentures
with respect to certain matters, including (i) to cure any ambiguity,
defect or inconsistency or to correct or supplement any provision which
may be inconsistent with any other provision of the Indenture, (ii) to
qualify, or maintain the qualification of, the Indenture under the Trust
Indenture Act and (iii) to make any change that does not materially
adversely affect the interests of any holder of Debentures. In addition,
under the Indenture, certain rights and obligations of the Company and
the rights of holders of the Debentures may be modified by the Company
and the Debt Trustee with the written consent of the holders of at least
a majority in aggregate principal amount of the outstanding Debentures;
but no extension of the maturity of Debentures, reduction in the interest
rate or extension of the time for payment of interest, change in the
optional redemption or repurchase provisions in a manner adverse to any
holder of Debentures, other modification in the terms of payment of the
principal of, or interest on, the Debentures, or reduction of the
percentage required for modification, will be effective against any
holder of any outstanding Debentures without the holder's consent.
In addition, the Company and the Debt Trustee may execute, without
the consent of any holder of Debentures, any supplemental Indenture for
the purpose of creating any new series of Debentures.
Indenture Events of Default
The Indenture provides that any one or more of the following
described events with respect to a series of Debentures that has occurred
and is continuing constitutes an "Indenture Event of Default" with
respect to such series of Debentures:
(i) failure for 30 days to pay any interest on such
series of the Debentures when due (subject to the deferral of any
due date in the case of an Extension Period); or
(ii) failure to pay any principal or premium, if any, on
such series of Debentures when due whether at maturity, upon
redemption, by declaration or otherwise; or
(iii) failure to observe or perform in any material
respect certain other covenants contained in the Indenture for 90
days after written notice has been given to the Company from the
Debt Trustee or the holders of at least 25% in principal amount of
such series of outstanding Debentures; or
(iv) certain events in bankruptcy, insolvency or
reorganization of the Company.
The holders of a majority in outstanding principal amount of such
series of Debentures have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Debt
Trustee. The Debt Trustee or the holders of not less than 25% in
aggregate outstanding principal amount of such series of Debentures may
declare the principal due and payable immediately upon an Indenture Event
of Default. The holders of a majority in aggregate outstanding principal
amount of such series of Debentures may annul such declaration and waive
the default if the default (other than the non-payment of the principal
of such series of Debentures which has become due solely by such
<PAGE>
acceleration) has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration
has been deposited with the Debt Trustee.
The holders of a majority in outstanding principal amount of the
Debentures affected thereby may, on behalf of the holders of all the
Debentures, waive any past default, except a default in the payment of
principal or interest (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debt Trustee)
or a default in respect of a covenant or provision which under the
Indenture cannot be modified or amended without the consent of the holder
of each outstanding Debenture.
In case an Indenture Event of Default shall occur and be continuing
as to a series of Debentures, all of which are held by the Trust, the
Institutional Trustee will have the right to declare the principal of and
the interest on such Debentures, and any other amounts payable under the
Indenture, to be forthwith due and payable and to enforce its other
rights as a creditor with respect to such Debentures.
Enforcement of Certain Rights by Holders of Capital Securities
If an Indenture Event of Default with respect to the Debentures has
occurred and is continuing and such event is attributable to the failure
of the Company to pay interest or principal on the Debentures on the date
such interest or principal is otherwise payable, a holder of the Capital
Securities may institute a legal proceeding directly against the Company
for enforcement of payment to such holder of the principal of or interest
on such Debentures having a principal amount equal to the aggregate
liquidation amount of the Capital Securities of such holder (a "Direct
Action"). The Company may not amend the Indenture to remove the foregoing
right to bring a Direct Action without the prior written consent of the
holders of all of the Capital Securities. If the right to bring a Direct
Action is removed, the Trust may become subject to the reporting
obligations under the Exchange Act. Unless otherwise specified in the
applicable Prospectus Supplement, the Company shall have the right under
the Indenture to set-off any payment made to such holder of Capital
Securities by the Company in connection with a Direct Action. The holders
of Capital Securities will not be able to exercise directly any other
remedy available to the holders of the Debentures unless there shall have
been an Event of Default under the Declaration. See "Description of
Capital Securities--Events of Default; Notice."
Consolidation, Merger, Sale of Assets and Other Transactions
The Indenture provides that the Company shall not consolidate with
or merge into any other person or entity or sell, assign, convey,
transfer or lease its properties and assets substantially as an entirety
to any person or entity unless (i) either the Company is the continuing
corporation, or any successor or purchaser is a corporation, partnership,
or trust or other entity organized under the laws of the United States of
America, any State thereof or the District of Columbia, and any such
successor or purchaser expressly assumes the Company's obligations on the
Debentures under a supplemental indenture; and (ii) immediately after
giving effect thereto, no Indenture Event of Default, and no event which,
after notice or lapse of time or both, would become an Indenture Event of
Default, shall have happened and be continuing.
<PAGE>
The general provisions of the Indenture do not afford holders of
the Debentures protection in the event of a highly leveraged or other
transaction involving the Company that may adversely affect holders of
the Debentures.
Satisfaction and Discharge; Defeasance
The Indenture provides that when, among other things, all
Debentures not previously delivered to the Debt Trustee for cancellation
(i) have become due and payable or (ii) will become due and payable at
their Stated Maturity within one year, and the Company deposits or causes
to be deposited with the Debt Trustee, as trust funds in trust for the
purpose, an amount in the currency or currencies in which the Debentures
are payable sufficient to pay and discharge the entire indebtedness on
the Debentures not previously delivered to the Debt Trustee for
cancellation, for the principal (and premium, if any) and interest to the
date of the deposit or to the Stated Maturity, as the case may be, then
the Indenture will cease to be of further effect (except as to the
Company's obligations to pay all other sums due pursuant to the Indenture
and to provide the officers' certificates and opinions of counsel
described therein), and the Company will be deemed to have satisfied and
discharged the Indenture. The Company will also have the right to decease
the Debentures if and to the extent indicated in the applicable
Prospectus Supplement.
Conversion or Exchange
If and to the extent indicated in the applicable Prospectus
Supplement, the Debentures of any series may be convertible or
exchangeable into Capital Securities or other securities. The specific
terms on which Debentures of any series may be so converted or exchanged
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 holder, or at the option of the Company, in which case the
number of shares of Capital Securities or other securities to be received
by the holders of Debentures would be calculated as of a time and in the
manner stated in the applicable Prospectus Supplement.
Governing Law
The Indenture and the Debentures will be governed by and construed
in accordance with the laws of the State of New York.
Miscellaneous
The Company will pay all fees and expenses related to (i) the
offering of the Trust Securities and the Debentures, (ii) the
organization, maintenance and dissolution of the Trust, (iii) the
retention of the Ingersoll-Rand Trustees and (iv) the enforcement by the
Institutional Trustee of the rights of the holders of the Capital
Securities.
Information Concerning the Debt Trustee
The Debt Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the
Trust Indenture Act. Subject to such provisions, the Debt Trustee is
<PAGE>
under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Debentures, unless offered
reasonable indemnity by such holder against the costs, expenses and
liabilities which might be incurred thereby. The Debt Trustee is not
required to expend or risk its own funds or otherwise incur personal
financial liability in the performance of its duties if the Debt Trustee
reasonably believes that repayment or adequate indemnity is not
reasonably assured to it.
The Company maintains trust and other business relationships in the
ordinary course of business with The Bank of New York.
DESCRIPTION OF CAPITAL SECURITIES
Pursuant to the terms of the Declaration, the Ingersoll-Rand
Trustees on behalf of the Trust will issue the Capital Securities and the
Common Securities. The Capital Securities will represent undivided
beneficial ownership interests in the assets of the Trust. This summary
of certain provisions of the Capital Securities and the Declaration is
not necessarily complete, and reference is hereby made to the copy of the
Declaration, including the definitions therein of certain terms, which is
filed as an exhibit to the Registration Statement of which this
Prospectus forms a part, and to the Trust Indenture Act. Wherever
particular defined terms of the Declaration are referred to in this
Section or in a Prospectus Supplement, such defined terms are
incorporated herein by reference. The form of Declaration has been filed
as an exhibit to the Registration Statement of which this Prospectus
forms a part.
General
The Capital Securities of the Trust will rank pari passu, and
payments will be made thereon pro rata, with the Common Securities of the
Trust except as described under "--Subordination of Common Securities."
Legal title to the Debentures will be held by the Institutional Trustee
in trust for the benefit of the holders of the Capital Securities and
Common Securities. The Guarantee Agreement executed by the Company for
the benefit of the holders of the Trust's Capital Securities (the
"Guarantee") will not guarantee payment of Distributions or amounts
payable on redemption or liquidation of the Capital Securities when the
Trust does not have funds on hand available to make such payments. See
"Description of the Guarantee."
Distributions
The Trust's Capital Securities represent undivided beneficial
ownership interests in the assets of the Trust, and the Distributions on
each Capital Security will be payable at a rate specified in the
Prospectus Supplement for the Capital Securities. The amount of
Distributions payable for any period will be computed on the basis of a
360-day year of twelve 30-day months unless otherwise specified in the
applicable Prospectus Supplement. Distributions that are in arrears will
accumulate additional Distributions thereon at the rate per annum if and
as specified in the applicable Prospectus Supplement ("Additional
Amounts"). The term "Distributions" as used herein includes any
Additional Amounts unless otherwise stated.
<PAGE>
Distributions on the Capital Securities will be cumulative, will
accumulate from the date of original issuance and will be payable on such
dates as specified in the applicable Prospectus Supplement. In the event
that any date on which Distributions are payable on the Capital
Securities is not a Business Day (as defined below), payment of the
Distribution payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day is in the
next succeeding calendar year, payment of such Distribution shall be made
on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date (each date on which
Distributions are payable in accordance with the foregoing, a
"Distribution Date"). A "Business Day" shall mean any day other than a
Saturday or a Sunday, or a day on which banking institutions in The City
of New York are authorized or required by law or executive order to
remain closed or a day on which the corporate trust office of the
Institutional Trustee or the Debt Trustee is closed for business.
If provided in the applicable Prospectus Supplement, the Company
has the right under the Indenture to defer payments of interest on the
Debentures by extending the interest payment period thereon from time to
time for a period or periods that will be specified in the applicable
Prospectus Supplement. Such extension right, if exercised, would result
in the deferral of Distributions on the Capital Securities (though such
Distributions would continue to accumulate additional Distribution
thereon at the rate per annum if and as specified in the applicable
Prospectus Supplement) during any such extended interest payment period.
Such right to extend the interest payment period for the Debentures is
limited to a period not extending beyond the stated Maturity of the
Debentures. In the event that the Company exercises this right, then (a)
the Company shall not declare or pay dividends on, make distributions
with respect to, or redeem, purchase or acquire, or make a liquidation
payment with respect to, any of its capital stock other than (i)
purchases or acquisitions of capital stock (of the Company in connection
with the satisfaction by the Company of its obligations under any
employee benefit plans or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date
of such event requiring the Company to purchase capital stock of the
Company, (ii) as a result or a reclassification of the Company's capital
stock or the exchange or conversion of one class or a series of the
Company's capital stock for another class or a series of the Company's
capital stock, (iii) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or
exchanged, (iv) dividends or distributions in capital stock of the
Company (or rights to acquire capital stock) or repurchases or
redemptions of capital stock solely from the issuance or exchange of
capital stock or (v) redemptions or repurchases of any rights outstanding
under a shareholder rights plan or the declaration thereunder of a
dividend of rights in the future), (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 that rank
junior to the Debentures, and (c) the Company shall not make any
guarantee payments with respect to the foregoing (other than payments
pursuant to the Guarantee). Prior to the termination of any such
Extension Period, the Company may further extend the interest payment
period; provided, that such Extension Period, together with all such
previous and further extensions thereof, may not extend beyond the stated
Maturity of the Debentures. Upon the termination of any Extension Period
<PAGE>
and the payment of all amounts then due, the Company may select a new
Extension Period, subject to the above requirements. See "Description of
the Debentures--Option to Defer Interest Payments." If Distributions are
deferred, the deferred Distributions and accumulated additional
Distributions thereon shall be paid to holders of record of the Capital
Securities as they appear on the books and records of the Trust on the
record date next following the termination of such deferral period.
It is anticipated that the revenue of the Trust available for
distribution to holders of its Capital Securities will be limited to
payments under the Debentures in which the Trust will invest the proceeds
from the issuance and sale of the Capital Securities and the Common
Securities. See "Description of Debentures--Debentures." If the Company
does not make interest payments on such Debentures, the Institutional
Trustee will not have funds available to pay Distributions on the Capital
Securities. The payment of Distributions (if and to the extent the Trust
has funds legally available for the payment of such Distributions and
cash sufficient to make such payments) is guaranteed by the Company on a
limited basis as set forth herein under "Description of the Guarantee."
Distributions on the Capital Securities will be payable to the
holders thereof as they appear on the register of the Trust on the
relevant record dates, which, as long as the Capital Securities remain in
book-entry form, will be one Business Day prior to the relevant
Distribution Date. Subject to any applicable laws and regulations and the
provisions of the Declaration, unless otherwise specified in the
applicable Prospectus Supplement, each such payment will be made as
described under "Book-Entry Issuance." In the event any Capital
Securities are not in book-entry form, the relevant record date for such
Capital Securities shall be the date, at least 15 days prior to the
relevant Distribution Date, that is specified in the applicable
Prospectus Supplement.
Redemption
Mandatory Redemption
Unless otherwise specified in the applicable Prospectus Supplement,
upon any repayment or redemption, in whole or in part, of any Debentures
that are held by the Trust unless otherwise specified in the applicable
Prospectus Supplement, whether at maturity or upon earlier redemption as
provided in the Indenture, the proceeds from such repayment or redemption
shall be applied by the Institutional Trustee to redeem a Like Amount (as
defined below) of the related Trust Securities, upon not less than 30 nor
more than 60 days notice, at a redemption price (the "Redemption Price")
equal to the aggregate liquidation amount of such Trust Securities plus
accumulated and unpaid Distributions thereon to the date of redemption
(the "Redemption Date") and the related amount of the premium, if any,
paid by the Company upon the concurrent redemption of such Debentures.
See "Description of Debentures--Optional Redemption." If less than all of
any series of Debentures that are held by the Trust are to be repaid or
redeemed on a Redemption Date, then the proceeds from such repayment or
redemption shall be allocated to the redemption pro rata of the Capital
Securities and the Common Securities. The amount of premium, if any, paid
by the Company upon the redemption of all or any part of any Debentures
held by the Trust shall be allocated pro rata to the Capital Securities
and the Common Securities.
<PAGE>
Distribution of Debentures
Unless otherwise specified in the applicable Prospectus Supplement,
the Company will have the right at any time to dissolve the Trust and,
after satisfaction of the liabilities of creditors of the Trust as
provided by applicable law, to cause the Debentures in respect of the
Trust Securities issued by the Trust to be distributed to the holders of
the Trust Securities in liquidation of the Trust.
After the liquidation date fixed for any distribution of Debentures
held by the Trust, (i) the Capital Securities will no longer be deemed to
be outstanding, (ii) the depositary (if any) for the Capital Securities,
as the record holder of the Capital Securities, will receive a registered
global certificate or certificates representing the Debentures to be
delivered upon such distribution and (iii) any certificates representing
such Capital Securities not held by or on behalf of such depositary will
be deemed to represent the Debentures having a principal amount equal to
the liquidation amount of the Capital Securities, and bearing accrued and
unpaid interest in an amount equal to the accrued and unpaid
Distributions on the Capital Securities, until such certificates are
presented to the Regular Trustees or their agent for transfer or
reissuance.
There can be no assurance as to the market prices for the Capital
Securities or the Debentures that may be distributed in exchange for
Capital Securities if a dissolution or liquidation of the Trust were to
occur. Accordingly, the Capital Securities that an investor may purchase,
or the Debentures that the investor may receive on dissolution or
liquidation of the Trust, may trade at a discount to the price that the
investor paid to purchase the Capital Securities offered hereby.
Special Event Redemption
If a Tax Event or an Investment Company Event (each as defined in
the applicable Prospectus Supplement, a "Special Event") shall occur and
be continuing, unless otherwise specified in the applicable Prospectus
Supplement, the Company will have the right to redeem the Debentures in
whole (but not in part) and therefore cause a mandatory redemption of the
Trust Securities in whole (but not in part) at the Redemption Price
within 90 days following the occurrence of such Special Event.
If provided in the applicable Prospectus Supplement, the Company
shall have the right to extend or shorten the maturity of any series of
Debentures held by the Trust at the time that the Company exercises its
right to elect to dissolve the Trust and, after satisfaction of the
liability to creditors of the Trust as provided by applicable law, cause
such Debentures to be distributed to the holders of the Capital
Securities and Common Securities of the Trust in liquidation of the
Trust, provided that it can extend the maturity only if certain
conditions specified in the applicable Prospectus Supplement are met at
the time such election is made and at the time of such extension.
"Like Amount" means (i) with respect to a redemption of any
Trust Securities, Trust Securities having a liquidation amount equal to
that portion of the principal amount of Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to
the Common Securities and to the Capital Securities based upon the
relative liquidation amounts of such classes of Trust Securities, and the
proceeds of which will be used to pay the Redemption Price of such Trust
<PAGE>
Securities, and (ii) with respect to a distribution of Debentures to
holders of any Trust Securities in connection with a dissolution or
liquidation of Trust, Debentures having a principal amount equal to the
liquidation amount of the Trust Securities of the holder to whom such
Debentures are distributed.
Redemption Procedures
Capital Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the applicable proceeds from the
contemporaneous redemption of the Debentures. Redemptions of Capital
Securities shall be made and the Redemption Price shall be payable on
each Redemption Date only to the extent that the Trust has funds on hand
available for the payment of such Redemption Price. See also "--
Subordination of Common Securities."
If the Trust gives a notice of redemption in respect of the Capital
Securities, then, on the Redemption Date, to the extent funds are
available, the Institutional Trustee will deposit irrevocably with the
Depositary for the Capital Securities (if such Capital Securities are
issued in the form of one or more Global Capital Securities) funds
sufficient to pay the applicable Redemption Price and will give such
Depositary irrevocable instructions and authority to pay the Redemption
Price to the beneficial owners of the Capital Securities. See "-- Global
Capital Securities" and "Book-Entry Issuance." If the Capital Securities
are not issued in the form of one or more Global Capital Securities, the
Trust, to the extent funds are available, will irrevocably deposit with
the paying agent for the Capital Securities funds sufficient to pay the
applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the Redemption Price to the holders
thereof upon surrender of their certificates evidencing the Capital
Securities. Notwithstanding the foregoing, Distributions payable on or
prior to the Redemption Date for the Capital Securities called for
redemption shall be payable to the holders of the Capital Securities on
the relevant record dates for the related Distribution Dates. If notice
of redemption shall have been given and funds deposited as required, then
upon the date of such deposit, all rights of the holders of the Capital
Securities so called for redemption will cease, except the right of the
holders of the Capital Securities to receive the Redemption Price, but
without interest on such Redemption Price, and the Capital Securities
will cease to be outstanding. In the event that any date fixed for
redemption of Capital Securities is not a Business Day, then payment of
the Redemption Price payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day
falls in the next calendar year, such payment will be made on the
immediately preceding Business Day. In the event that payment of the
Redemption Price in respect of Capital Securities called for redemption
is improperly withheld or refused and not paid either by the Trust or by
the Company pursuant to the Guarantee as described under "Description of
the Guarantee", Distributions on such Capital Securities will continue to
accumulate at the then applicable rate, from the Redemption Date
originally established by the Trust for the Capital Securities to the
date such Redemption Price is actually paid, in which case the actual
payment date will be the date fixed for redemption for purposes of
calculating the Redemption Price.
Subject to applicable law (including, without limitation, U.S.
federal securities law), the Company or its subsidiaries may at any time
<PAGE>
and from time to time purchase outstanding Capital Securities by tender,
in the open market or by private agreement.
If less than all of the Capital Securities and Common Securities
issued by the Trust are to be redeemed on a Redemption Date, then the
aggregate liquidation amount of such Capital Securities and Common
Securities to be redeemed shall be allocated pro rata among the Capital
Securities and Common Securities of such Trust based on the relative
liquidation amounts of such classes of Trust Securities. The particular
Capital Securities to be redeemed shall be selected on a pro rata basis
not more than 60 days prior to the Redemption Date by the Institutional
Trustee from the outstanding Capital Securities not previously called for
redemption, by such method as the Institutional Trustee shall deem fair
and appropriate and which may provide for the selection for redemption of
portions (equal to $25 or an integral multiple of $25 in excess thereof)
of the liquidation amount of Capital Securities of a denomination larger
than $25. The Institutional Trustee shall promptly notify the registrar
in writing of the Capital Securities selected for redemption and, in the
case of any Capital Securities selected for partial redemption, the
liquidation amount thereof to be redeemed. For all purposes of each
Declaration, unless the context otherwise requires, all provisions
relating to the redemption of Capital Securities shall relate, in case of
any Capital Securities redeemed or to be redeemed only in part, to the
portion of the aggregate liquidation amount of Capital Securities which
has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not
more than 60 days before the Redemption Date to each holder of Capital
Securities to be redeemed at its registered address. Unless the Company
defaults in payment of the Redemption Price on the Debentures, on and
after the Redemption Date interest will cease to accrue on the Debentures
or portions thereof (and Distributions will cease to accumulate on the
Capital Securities or portions thereof) called for redemption.
Subordination of Common Securities
Payment of Distributions (including Additional Amounts, if
applicable) on, and the Redemption Price of, the Trust's Capital
Securities and Common Securities, as applicable, shall be made pro rata
based on the liquidation amount of the Capital Securities and Common
Securities; provided, however, that if on any Distribution Date or
Redemption Date an Indenture Event of Default shall have occurred and be
continuing, no payment of any Distribution (including Additional Amounts,
if applicable) on, or Redemption Price of, any of the Trust's Common
Securities, and no other payment on account of the redemption,
liquidation or other acquisition of such Common Securities, shall be made
unless payment in full in cash of all accumulated and unpaid
Distributions (including Additional Amounts, if applicable) on all of the
Trust's outstanding Capital Securities for all Distribution periods
terminating on or prior thereto, or in the case of payment of the
Redemption Price the full amount of such Redemption Price on all of the
Trust's outstanding Capital Securities then called for redemption, shall
have been made or provided for, and all funds available to the
Institutional Trustee shall first be applied to the payment in full in
cash of all Distributions (including Additional Amounts, if applicable)
on, or Redemption Price of, the Trust's Capital Securities then due and
payable.
<PAGE>
In the case of any Event of Default under the Declaration resulting
from an Indenture Event of Default, the Company as holder of the Trust's
Common Securities will be deemed to have waived any right to act with
respect to any such Event of Default under the Declaration until the
effect of all such Events of Default with respect to the Capital
Securities have been cured, waived or otherwise eliminated. Until any
such Events of Default under the Declaration have been so cured, waived
or otherwise eliminated, the Institutional Trustee shall act solely on
behalf of the holders of the Capital Securities and not on behalf of the
Company as holder of the Trust's Common Securities, and only the holders
of the Capital Securities will have the right to direct the Institutional
Trustee to act on their behalf.
Liquidation Distribution Upon Dissolution
Unless otherwise specified in the applicable Prospectus Supplement,
pursuant to the Declaration, the Trust shall dissolve (i) on
, 2004, the expiration of the term of the Trust, (ii) upon the bankruptcy
of the Company, (iii) upon the filing of a certificate of dissolution or
its equivalent with respect to the Company, after receipt by the
Institutional Trustee of written direction from the Company to dissolve
the Trust or after obtaining the consent of the holders of at least a
majority in liquidation amount of the Trust Securities affected thereby
voting together as a single class to dissolve the Trust, or the
revocation of the charter of the Company and the expiration of 90 days
after the date of revocation without a reinstatement thereof, (iv) upon
the distribution of Debentures, (v) upon the entry of a decree of a
judicial dissolution of the holder of the Common Securities, the Company
or the Trust, or (vi) upon the redemption of all the Trust Securities.
If an early dissolution occurs as described in clause (ii), (iii)
or (v) above, the Trust shall be liquidated by the Ingersoll-Rand
Trustees as expeditiously as the Ingersoll-Rand Trustees determine to be
possible by distributing, after satisfaction of liabilities to creditors
of the Trust as provided by applicable law, to the holders of the
applicable Trust Securities a Like Amount of the Debentures that are then
held by the Trust, unless such distribution is determined by the
Institutional Trustee not to be practical, in which event such holders
will be entitled to receive out of the assets of the Trust available for
distribution to holders, after satisfaction of liabilities to creditors
of the Trust as provided by applicable law, an amount equal to, in the
case of holders of Capital Securities, the aggregate of the liquidation
amount plus accrued and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"). If such
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Trust on the
Capital Securities shall be paid on a pro rata basis. The holder(s) of
the Trust's Common Securities will be entitled to receive distributions
upon any such liquidation pro rata with the holders of the Capital
Securities, except that if an Indenture Event of Default has occurred and
is continuing, the Capital Securities shall have a priority over the
Common Securities. If specified in the applicable Prospectus Supplement,
a supplemental Indenture may provide that if an early dissolution occurs
as described in clause (v) above, the Debentures that are then held by
the Trust may be subject to optional redemption in whole (but not in
part).
<PAGE>
Events of Default; Notice
Any one of the following events constitutes an "Event of Default"
under the Declaration (an "Event of Default") with respect to the Capital
Securities issued thereunder (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or
governmental body):
(i) the occurrence of an Indenture Event of Default
under the Indenture (see "Description of Debentures--Indenture
Events of Default"); or
(ii) default by the Trust in the payment of any
Distribution when it becomes due and payable, and continuation of
such default for a period of 30 days; or
(iii) default by the Trust in the Payment of any
Redemption Price of any Trust Security when it becomes due and
payable; or
(iv) default in the performance, or breach, in any
material respect, of any covenant or warranty of the Ingersoll-Rand
Trustees in the Declaration (other than a covenant or warranty a
default in the performance of which or the breach of which is dealt
with in clause (ii) or (iii) above), and continuation of such
default or breach for a period of 90 days after written notice has
been given to the defaulting Ingersoll-Rand Trustee or Trustees by
the holders of at least 25% in aggregate liquidation amount of the
outstanding Capital Securities, which notice shall specify such
default or breach and require it to be remedied and shall state
that such notice is a "Notice of Default" under the Declaration; or
(v) the occurrence of certain events of bankruptcy or
insolvency with respect to the Institutional Trustee and the
failure by the Company to appoint a successor Institutional Trustee
within 60 days thereof.
Within five Business Days after the occurrence of any Event of
Default actually known to the Institutional Trustee, the Institutional
Trustee shall transmit notice of such Event of Default to the holders of
the Capital Securities, the Regular Trustees and the Company, as Sponsor,
unless such Event of Default shall have been cured or waived. The
Company, as Sponsor, and the Regular Trustees are required to file
annually with the Institutional Trustee a certificate as to whether or
not they are in compliance with all the conditions and covenants
applicable to them under the Declaration.
If an Indenture Event of Default has occurred and is continuing,
the Capital Securities of the Trust shall have a preference over the
Common Securities of the Trust upon dissolution of the Trust as described
above. See "-- Liquidation Distribution Upon Dissolution." The existence
of an Event of Default does not entitle the holders of Capital Securities
to accelerate the maturity thereof.
Removal of Ingersoll-Rand Trustees
Unless an Indenture Event of Default shall have occurred and
be continuing, any Ingersoll-Rand Trustee may be removed at any time by
<PAGE>
the holder of the Common Securities. If an Indenture Event of Default
with respect to any series of Debentures has occurred and is continuing,
the Institutional Trustee and the Delaware Trustee may be removed at such
time by the holders of a majority in liquidation amount of the
outstanding Capital Securities of the Trust. In no event will the holders
of the Capital Securities of the Trust have the right to vote to appoint,
remove or replace the Administrative Trustees, which voting rights are
vested exclusively in the Company as the holder of the Common Securities
of the Trust. No resignation or removal of an Ingersoll-Rand Trustee and
no appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor trustee in accordance with the
provisions of the Declaration.
Co-Trustees and Separate Institutional Trustee
Unless an Event of Default with respect to the Capital Securities
of the Trust shall have occurred and be continuing, at any time or times,
for the purpose of meeting the legal requirements of the Trust Indenture
Act or of any jurisdiction in which any part of the Trust Property may at
the time be located, the Company, as the holder of the Common Securities
of the Trust, and the Regular Trustees shall have power to appoint one or
more persons either to act as a co-trustee, jointly with the
Institutional Trustee, of all or any part of such Trust Property, or to
act as separate trustee of any such property, in either case with such
powers as may be provided in the instrument of appointment, and to vest
in such person or persons in such capacity any property, title, right or
power deemed necessary or desirable, subject to the provisions of the
applicable Declaration. In case an Indenture Event of Default has
occurred and is continuing, the Institutional Trustee alone shall have
power to make such appointment.
Merger or Consolidation of Trust Trustees
Any entity into which the Institutional Trustee, the Delaware
Trustee or any Regular Trustee that is not a natural person may be merged
or converted or with which it may be consolidated, or any entity
resulting from any merger, conversion or consolidation to which such
Trustee shall be a party, or any entity succeeding to all or
substantially all the corporate trust business of such Trustee, shall be
the successor of such Trustee under the Declaration, provided such entity
shall be otherwise qualified and eligible.
Mergers, Consolidations or Amalgamations
The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety, to any corporation or other body, except as
described below or as described in "Liquidation Distribution Upon
Dissolution". The Trust may, with the consent of the Regular Trustees and
without the consent of the holders of the Trust Securities, the
Institutional Trustee or the Delaware Trustee, consolidate, amalgamate,
merge with or into, or be replaced by a trust organized as such under the
laws of any State; provided, that (i) if the Trust is not the survivor,
such successor entity either (x) assumes all of the obligations of the
Trust under the Trust Securities or (y) substitutes for the Trust
Securities other securities having substantially the same terms as the
Trust Securities (the "Successor Securities"), so long as the Successor
Securities rank the same as the Trust Securities rank with respect to
<PAGE>
distributions and payments upon liquidation, redemption and otherwise,
(ii) the Company expressly acknowledges a trustee of such successor
entity possessing the same powers and duties as the Institutional Trustee
as the holder of the Debentures, (iii) the Capital Securities or any
Successor Securities are listed, or any Successor Securities will be
listed upon notification of issuance, on any national securities exchange
or with another organization on which the Capital Securities are then
listed or quoted, (iv) such merger, consolidation, amalgamation or
replacement does not cause the Capital Securities (including any
Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation,
amalgamation or replacement does not adversely affect the rights,
preferences and privileges of the holders of the Trust Securities
(including any Successor Securities) in any material respect (other than
with respect to any dilution of the holders' interest in the new entity),
(vi) such successor entity has a purpose substantially identical to that
of the Trust, (vii) prior to such merger, consolidation, amalgamation or
replacement, the Company has received an opinion of independent counsel
to the Trust experienced in such matters to the effect that, (A) such
merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the holders of the Trust
Securities (including any Successor Securities) in any material respect
(other than with respect to any dilution of the holders' interest in the
new entity), (B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor such successor entity will be required
to register as an investment company under the 1940 Act and (C) following
such merger, consolidation, amalgamation or replacement, the Trust (or
the successor entity) will continue to be classified as a grantor trust
for United States federal income tax purposes and (viii) the Company
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee and the
Common Securities Guarantee. Notwithstanding the foregoing, the Trust
shall not, except with the consent of holders of 100% in liquidation
amount of the Trust Securities, consolidate, amalgamate, merge with or
into, or be replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it, if such
consolidation, amalgamation, merger or replacement would cause the Trust
or the successor entity to be classified as other than a grantor trust
for United States federal income tax purposes.
Voting Rights; Amendment of Declaration
Except as provided below and under "Description of the Guarantee--
Modification of the Guarantee; Assignment" and as otherwise required by
law and the Declaration, the holders of the Capital Securities will have
no voting rights.
Subject to the requirement of the Institutional Trustee obtaining a
tax opinion in certain circumstances set forth in the last sentence of
this paragraph, the holders of a majority in aggregate liquidation amount
of the Capital Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the
Institutional Trustee, or direct the exercise of any trust or power
conferred upon the Institutional Trustee under the Declaration including
the right to direct the Institutional Trustee, as holder of the
Debentures, to (i) exercise the remedies available under the Indenture
with respect to the Debentures, (ii) waive any past Indenture Event of
Default that is waivable under Section 513 of the Indenture, (iii)
<PAGE>
exercise any right to rescind or annul a declaration that the principal
of all the Debentures shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or the Debentures
where such consent shall be required; provided, however, that, where a
consent or action under the Indenture would require the consent or act of
holders of more than a majority in principal amount of the Debentures (a
"Super-Majority") affected thereby, only the holders of at least such
Super-Majority in aggregate liquidation amount of the Capital Securities
may direct the Institutional Trustee to give such consent or take such
action. The Institutional Trustee shall notify all holders of the Capital
Securities of any notice of default received from the Debt Trustee with
respect to the Debentures. Such notice shall state that such Indenture
Event of Default also constitutes an Event of Default. Except with
respect to directing the time, method and place of conducting a
proceeding for a remedy, the Institutional Trustee shall not take any of
the actions described in clause (i), (ii) or (iii) above unless the
Institutional Trustee has obtained an opinion of tax counsel experienced
in such matters to the effect that, as a result of such action, the Trust
will not fail to be classified as a grantor trust for United States
federal income tax purposes.
In the event the consent of the Institutional Trustee, as a holder
of the Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture, the
Institutional Trustee shall request the direction of the holders of the
Trust Securities with respect to such amendment, modification or
termination and shall vote with respect to such amendment, modification
or termination as directed by a majority in liquidation amount of the
Trust Securities voting together as a single class; provided, however,
that where a consent under the Indenture would require the consent of a
Super-Majority, the Institutional Trustee may only give such consent at
the direction of the holders of at least the proportion in liquidation
amount of the Trust Securities which the relevant Super-Majority
represents of the aggregate principal amount of the Debentures
outstanding. The Institutional Trustee shall be under no obligation to
take any such action in accordance with the directions of the holders of
the Trust Securities unless the Institutional Trustee has obtained an
opinion of tax counsel experienced in such matters to the effect that for
the purposes of United States federal income tax, the Trust will not be
classified as other than a grantor trust.
A waiver of an Indenture Event of Default will constitute a waiver
of the corresponding Event of Default.
Any required approval or direction of holders of Capital Securities
may be given at a separate meeting of holders of Capital Securities
convened for such purpose, at a meeting of all of the holders of Trust
Securities or pursuant to written consent. The Regular Trustees will
cause a notice of any meeting at which holders of Capital Securities are
entitled to vote, or of any matter upon which action by written consent
of such holders is to be taken, to be mailed to each holder of record of
Capital Securities. Each such notice will include a statement setting
forth the following information: (i) the date of such meeting or the date
by which such action is to be taken; (ii) a description of any resolution
proposed for adoption at such meeting on which such holders are entitled
to vote or of such matter upon which written consent is sought; and (iii)
instructions for the delivery of proxies or consents. No vote or consent
of the holders of Capital Securities will be required for the Trust to
<PAGE>
redeem and cancel Capital Securities or distribute Debentures in
accordance with the Declaration.
Notwithstanding that holders of Capital Securities are entitled to
vote or consent under any of the circumstances described above, any of
the Capital Securities that are owned at such time by the Company or any
entity directly or indirectly controlling or controlled by, or under
direct or indirect common control with, the Company, shall not be
entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if such Capital Securities were not outstanding.
The procedures by which holders of Capital Securities may exercise
their voting rights are described below. See "Book-Entry Issuance" below.
Global Capital Securities
The Capital Securities of the Trust may be issued in whole or in
part in the form of one or more Global Capital Securities that will be
deposited with, or on behalf of, the depositary identified in the
Prospectus Supplement relating to the Capital Securities. Unless
otherwise indicated in the applicable Prospectus Supplement for the
Capital Securities, the depositary will be The Depository Trust Company
("DTC"). Global Capital Securities may be issued only in fully registered
form and in either temporary or permanent form. Unless and until it is
exchanged in whole or in part for the individual Capital Securities
represented thereby, a Global Capital Security may not be transferred
except as a whole by the depositary for such Global Capital Security 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 nominee to a successor depositary or any nominee of such successor.
While the specific terms of the depositary arrangement with respect
to the Capital Securities of the Trust (if other than as described under
"Book-Entry Issuance") will be described in the Prospectus Supplement
relating to the Capital Securities, the Company anticipates that the
following provisions will generally apply to depositary arrangements.
Upon the issuance of a Global Capital Security, and the deposit of
such Global Capital Security with or on behalf of the applicable
depositary, the depositary for such Global Capital Security or its
nominee will credit, on its book-entry registration and transfer system,
the respective aggregate liquidation amounts of the individual Capital
Securities represented by such Global Capital Securities to the accounts
of Participants. Such accounts shall be designated by the dealers,
underwriters or agents with respect to such Capital Securities or by the
Company if such Capital Securities are offered and sold directly by the
Company. Ownership of beneficial interests in a Global Capital Security
will be limited to Participants or persons that may hold interests
through Participants. Ownership of beneficial interests in such Global
Capital Security will be shown on, and the transfer of that ownership
will be effected only through, records maintained by the applicable
depositary or its nominee (with respect to interests of Participants) and
the records of Participants (with respect to interests of persons who
hold through Participants). The laws of some states 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 Capital Security.
<PAGE>
So long as the depositary for a Global Capital Security, or its
nominee, is the registered owner of such Global Capital Security, such
depositary or such nominee, as the case may be, will be considered the
sole owner or holder of the Capital Securities represented by such Global
Capital Security for all purposes under the Declaration. Except as
provided below, owners of beneficial interests in a Global Capital
Security will not be entitled to have any of the individual Capital
Securities represented by such Global Capital Security registered in
their names, will not receive or be entitled to receive physical delivery
of any such Capital Securities in definitive form and will not be
considered the owners or holders thereof under the Declaration.
Payments of liquidation amount, premium or Distributions in respect
of individual Capital Securities represented by a Global Capital Security
registered in the name of a depositary or its nominee will be made to
such depositary or its nominee, as the case may be, as the registered
owner of the Global Capital Security representing such Capital
Securities. None of the Company, the Institutional Trustee, any paying
agent or the registrar for such Capital Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of the Global
Capital Security representing such Capital Securities or for maintaining,
supervising or reviewing any records relating to such beneficial
ownership interests.
The Company expects that the depositary for the Capital Securities
of the Trust, or its nominee, upon receipt of any payment of liquidation
amount, premium or Distributions in respect of a Global Capital Security
representing any of such Capital Securities, immediately will credit
Participants' accounts with payments in amounts proportionate to their
respective beneficial interest in the aggregate of such Global Capital
Security for such Capital Securities as shown on the records of such
depositary or its nominee. The Company also expects that payments by
Participants to owners of beneficial interests in such Global Capital
Security held through such Participants will be governed by standing
instructions and customary practices, as is now the case with securities
held for the accounts of customers in bearer form or registered in
"street name." Such payments will be the responsibility of such
Participants.
Unless otherwise specified in the applicable Prospectus Supplement,
if a Depositary for the Capital Securities of the Trust is at any time
unwilling, unable or ineligible to continue as a depositary and a
successor depositary is not appointed by the Company within 90 days, the
Trust will issue individual Capital Securities of the Trust in exchange
for the Global Capital Security representing such Capital Securities. In
addition, the Company may at any time and in its sole discretion, subject
to any limitations described in the Prospectus Supplement relating to the
Capital Securities, determine not to have any Capital Securities of the
Trust represented by one or more Global Capital Securities and, in such
event, the Trust will issue individual Capital Securities in exchange for
the Global Capital Security or Securities representing such Capital
Securities. Further, if the Company so specifies with respect to the
Capital Securities of the Trust, an owner of a beneficial interest in a
Global Capital Security representing such Capital Securities may, on
terms acceptable to the Company, the Institutional Trustee and the
Depositary for such Global Capital Security, receive individual Capital
Securities in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such
<PAGE>
Capital Securities. In any such instance, an owner of a beneficial
interest in a Global Capital Security will be entitled to physical
delivery of individual Capital Securities represented by such Global
Capital Security equal in liquidation amount to such beneficial interest
and to have such Capital Securities registered in its name. Individual
Capital Securities so issued will be issued in denominations, unless
otherwise specified by the Company, of $25 and integral multiples
thereof.
Payment and Paying Agency
Payments in respect of the Capital Securities shall be made to the
applicable depositary, which shall credit the relevant accounts at such
depositary on the applicable Distribution Dates or, if the Capital
Securities are not held by a depositary, such payments shall be made by
check mailed to the address of the holder entitled thereto as such
address shall appear on the Register. Unless otherwise specified in the
applicable Prospectus Supplement, the paying agent for the Capital
Securities shall initially be the Institutional Trustee and any co-paying
agent chosen by the Institutional Trustee and acceptable to the Regular
Trustees and the Company. The paying agent shall be permitted to resign
as paying agent upon 30 days' written notice to the Institutional
Trustees and the Company. In the event that the Institutional Trustee
shall no longer be the paying agent, the Regular Trustees shall appoint a
successor to act as paying agent (which shall be a bank or trust company
acceptable to the Regular Trustees and the Company).
Registrar and Transfer Agent
Unless otherwise specified in the applicable Prospectus Supplement,
the Institutional Trustee will act as registrar and transfer agent for
the Capital Securities.
Registration of transfers of Capital Securities will be effected
without charge by or on behalf of each Trust, but upon payment of any tax
or other governmental charges that may be imposed in connection with any
transfer or exchange. The Trust will not be required to register or cause
to be registered the transfer of the Capital Securities after the Capital
Securities have been called for redemption.
Information Concerning the Institutional Trustee
The Institutional Trustee, other than during the occurrence and
continuance of an Event of Default, undertakes to perform only such
duties as are specifically set forth in the Declaration and, after such
Event of Default, must exercise the same degree of care and skill as a
prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the Institutional Trustee is under no
obligation to exercise any of the powers vested in it by the Declaration
at the request of any holder of Capital Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby. If no Event of Default has occurred and is
continuing and the Institutional Trustee is required to decide between
alternative causes of action, construe ambiguous provisions in the
Declaration or is unsure of the application of any provision of the
Declaration, and the matter is not one on which holders of Capital
Securities are entitled under the Declaration to vote, then the
Institutional Trustee shall take such action as is directed by the
<PAGE>
Company and if not so directed, shall take such action as it deems
advisable and in the best interests of the holders of the Trust
Securities and will have no liability except for its own bad faith,
negligence or willful misconduct.
Miscellaneous
The Regular Trustees are authorized and directed to conduct the
affairs of and to operate the Trust in such a way that the Trust will not
be deemed to be an "investment company" required to be registered under
the Investment Company Act or fail to be classified as a grantor trust
for U.S. federal income tax purposes and so that the Debentures will be
treated as indebtedness of the Company for U.S. federal income tax
purposes. In this connection, the Company and the Regular Trustees are
authorized to take any action, not inconsistent with applicable law, the
certificate of trust of the Trust or the Declaration, that the Company
and the Regular Trustees determine in their discretion to be necessary or
desirable for such purposes, as long as such action does not materially
adversely affect the interests of the holders of the Capital Securities.
Holders of the Capital Securities have no preemptive or similar
rights.
The Trust may not borrow money or issue debt or mortgage or pledge
any of its assets.
DESCRIPTION OF THE GUARANTEE
Set forth below is a summary of information concerning the
Guarantee which will be executed and delivered by the Company for the
benefit of the holders from time to time of Trust Securities. The
Guarantee will be qualified as an indenture under the Trust Indenture
Act. The First National Bank of Chicago, an independent trustee, will act
as indenture trustee under the Guarantee (the "Guarantee Trustee") for
the purposes of compliance with the provisions of the Trust Indenture
Act. The terms of the Guarantee will be those set forth in the Guarantee
and those made part of the Guarantee by the Trust Indenture Act. The
following summary is not necessarily complete, and reference is hereby
made to the copy of the form of the Guarantee (including the definitions
therein of certain terms) which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, and to the
Trust Indenture Act. Whenever particular defined terms of the Guarantee
are referred to in this Prospectus, such defined terms are incorporated
herein by reference. The Guarantee will be held by the Trustee for the
benefit of the holders of the Trust Securities.
General
Pursuant to the Guarantee, unless otherwise specified in the
applicable Prospectus Supplement, the Company will irrevocably and
unconditionally agree, to the extent set forth therein, to pay in full to
the holders of the Trust Securities, the Guarantee Payments (as defined
herein) (except to the extent paid by the Trust), as and when due,
regardless of any defense, right of set-off or counterclaim which the
Trust may have or assert. The following payments or distributions with
respect to Trust Securities issued by the Trust, to the extent not paid
by or on behalf of the Trust (the "Guarantee Payments"), will be subject
to the Guarantee (without duplication): (i) any accrued and unpaid
<PAGE>
distributions which are required to be paid on the Trust Securities, to
the extent the Trust shall have funds available therefor; (ii) with
respect to any Trust Securities called for redemption by the Trust, the
redemption price (the "Redemption Price") and all accrued and unpaid
distributions to the date of redemption, to the extent the Trust has
funds available therefor and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Trust (other than in
connection with the distribution of Debentures to the holders of Trust
Securities or the redemption of all of the Trust Securities), the lesser
of (a) the aggregate of the liquidation amount and all accrued and unpaid
distributions on the Trust Securities to the date of payment, to the
extent the Trust has funds available therefor, and (b) the amount of
assets of the Trust remaining available for distribution to holders of
the Trust Securities in liquidation of the Trust. The Company's
obligation to make a Guarantee Payment may be satisfied by direct payment
of the required amounts by the Company to the holders of Trust Securities
or by causing the Trust to pay such amounts to such holders.
The Guarantee will be a full and unconditional guarantee of the
Guarantee Payments with respect to the Trust Securities, but will not
apply to any payment of distributions except to the extent the Trust
shall have funds available therefor. If the Company does not make
interest payments on the Debentures purchased by the Trust, the Trust
will not pay distributions on the Trust Securities issued by the Trust
and will not have funds available therefor. See "Relationship Among the
Capital Securities, the Debentures and the Guarantee." The Guarantee,
when taken together with the Company's obligations under the Indenture
and the Declaration, will have the effect of providing a full and
unconditional guarantee on a subordinated basis by the Company of
payments due on the Capital Securities.
The Company has also agreed to irrevocably and unconditionally
guarantee the obligations of the Trust with respect to the Common
Securities, except that upon an Indenture Event of Default, holders of
the Capital Securities shall have priority over holders of Common
Securities with respect to distributions and payments on liquidation,
redemption or otherwise.
Certain Covenants of the Company
In the Guarantee, the Company will covenant that, so long as any
Trust Securities issued by the Trust remain outstanding, if there shall
have occurred any event that would constitute an event of default under
the Guarantee or the Declaration, then (a) the Company shall not declare
or pay any dividend on, make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to,
any of its capital stock (other than (i) purchases or acquisitions of
capital stock of the Company in connection with the satisfaction by the
Company of its obligations under any employee benefit plans or the
satisfaction by the Company of its obligations pursuant to any contract
or security outstanding on the date of such event requiring the Company
to purchase capital stock of the Company, (ii) as a result of a
reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for
another class or series of the Company's capital stock, (iii) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock
or the security being converted or exchanged, (iv) dividends or
distributions in capital stock of the Company (or rights to acquire
<PAGE>
capital stock) or repurchases or redemptions of capital stock solely from
the issuance or exchange of capital stock or (v) redemptions or
repurchases of any rights outstanding under a shareholder rights plan or
the declaration thereunder of a dividend of rights in the future), (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 the Debentures and (c) the Company shall
not make any guarantee payments with respect to the foregoing (other than
payments pursuant to the Guarantee).
Modification of the Guarantee; Assignment
Except with respect to any changes which do not adversely affect
the rights of holders of Trust Securities (in which case no vote will be
required), the 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 Securities issued by the Trust. All guarantees and
agreements contained in the Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Company and shall inure to
the benefit of the holders of the Trust Securities then outstanding.
Termination
The Guarantee will terminate as to the Trust Securities (a) upon
full payment of the Redemption Price of all Trust Securities then
outstanding, (b) upon distribution of the Debentures held by the Trust to
the holders of the Trust Securities of the Trust or (c) upon full payment
of the amounts payable in accordance with the Declaration upon
liquidation of the Trust. The Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any holder of
Trust Securities must return payment of any sums paid under such Trust
Securities or the Guarantee.
Events of Default
An event of default under the Guarantee will occur upon the failure
of the Company to perform any of its payment or other obligations
thereunder.
The holders of a majority in liquidation amount of the Trust
Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee
Trustee in respect of the Guarantee or to direct the exercise of any
trust or power conferred upon the Guarantee Trustee under the Guarantee.
If the Guarantee Trustee fails to enforce the Guarantee, any holder of
Trust Securities may institute a legal proceeding directly against the
Company to enforce such holder's rights under the Guarantee, without
first instituting a legal proceeding against the Trust, the Guarantee
Trustee or any other person or entity. Notwithstanding the foregoing, if
the Company has failed to make a required guarantee payment, a holder of
Trust Securities may directly institute a proceeding against the Company
for enforcement of the Guarantee for such payment. The Company waives any
right or remedy to require that any action be brought first against the
Trust or any other person or entity before proceeding directly against
the Company.
<PAGE>
Status of the Guarantee
The Guarantee will constitute an unsecured obligation of the
Company and will rank on a parity with all of the Company's other senior
unsecured obligations.
Information Concerning the Guarantee Trustee
The Guarantee Trustee, prior to the occurrence of a default with
respect to the Guarantee, undertakes to perform only such duties as are
specifically set forth in the Guarantee and, after default, shall
exercise the same degree of care as a prudent individual would exercise
in the conduct of his or her own affairs. Subject to such provisions, the
Guarantee Trustee is under no obligation to exercise any of the powers
vested in it by the Guarantee at the request of any holder of Capital
Securities, unless offered reasonable indemnity against the costs,
expenses and liabilities which might be incurred thereby; but the
foregoing shall not relieve the Guarantee Trustee, upon the occurrence of
an event of default under the Guarantee, from exercising the rights and
powers vested in it by the Guarantee.
Governing Law
The Guarantee will be governed by and construed in accordance with
the internal laws of the State of New York.
RELATIONSHIP AMONG THE CAPITAL SECURITIES,
THE DEBENTURES AND THE GUARANTEE
As long as payments of interest and other payments are made when
due on the Debentures, such payments will be sufficient to cover
Distributions and other payments due on the Capital Securities, primarily
because (i) the aggregate principal amount of the Debentures will be
equal to the sum of the aggregate stated liquidation amount of the
Capital Securities and Common Securities; (ii) the interest rate and
interest and other payment dates on the Debentures will match the
Distribution rate and Distribution and other payment dates for the
Capital Securities; (iii) the Company shall be obligated to pay, directly
or indirectly, all costs, expenses, debts and obligations of the Trust
(other than with respect to the Trust Securities); and (iv) the
Declaration further provides that the Trust will not engage in any
activity that is not consistent with the limited purposes of the Trust.
Payments of Distributions and other amounts due on the Capital
Securities (to the extent the Trust has funds available for the payment
of such Distributions) are irrevocably guaranteed by the Company as and
to the extent set forth under "Description of the Guarantee." Taken
together, the Company's obligations under a series of Debentures, the
Indenture, the Declaration and the Guarantee have the effect of providing
a full, irrevocable and unconditional guarantee of payments of
Distributions and other amounts due on the Capital Securities. No single
document standing alone or operating in conjunction with fewer than all
of the other documents constitutes such guarantee. It is only the
combined operation of these documents that has the effect of providing a
full, irrevocable and unconditional guarantee of the Trust's obligations
under the Capital Securities. If and to the extent that the Company does
not make payments on the Debentures, the Trust will not pay Distributions
or other amounts due on the Capital Securities. The Guarantee does not
<PAGE>
cover payment of Distributions when the Trust does not have sufficient
funds to pay such Distributions. In such event, the remedy of a holder of
Capital Securities is to institute a legal proceeding directly against
the Company for enforcement of payment of such Distributions to such
holder.
Notwithstanding anything to the contrary in the Indenture, the
Company has the right to set-off any payment it is otherwise required to
make thereunder with and to the extent the Company has theretofore made,
or is concurrently on the date of such payment making, a payment under
the Guarantee.
A holder of any Capital Security may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Guarantee
Trustee, the Trust or any other person or entity.
The Trust's Capital Securities evidence preferred undivided
beneficial interests in the assets of the Trust, and each Trust exists
for the sole purpose of issuing the Capital Securities and Common
Securities and investing the proceeds thereof in Debentures. A principal
difference between the rights of a holder of a Capital Security and a
holder of a Debenture is that a holder of a Debenture will accrue, and
(subject to the permissible extension of the interest period) is entitled
to receive, interest on the principal amount of Debentures held, while a
holder of Capital Securities is only entitled to receive Distributions if
and to the extent the Trust has funds available for the payment of such
Distributions.
Upon any voluntary or involuntary dissolution of the Trust
involving the liquidation of the Debentures, the holders of Capital
Securities of the Trust will be entitled to receive, out of assets held
by the Trust, the Liquidation Distribution in cash. See "Description of
Capital Securities--Liquidation Distribution Upon Dissolution." Upon any
voluntary or involuntary liquidation or bankruptcy of the Company, the
Institutional Trustee as holder of the Debentures would be entitled to
receive payment in full of principal and interest, before any
stockholders of the Company receive payments or distributions.
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 December 31, 1997,
no shares of the authorized Preference Stock were issued and outstanding
and 165,408,751 shares of the authorized Common Stock were issued and
outstanding. The Company also had outstanding, as of such date,
<PAGE>
55,136,201 Series A Preference Stock Purchase Rights (the "Rights"). 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.
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.
<PAGE>
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;
(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 to the terms
fixed by the Board of Directors as permitted in the Certificate of
Incorporation. The Board of Directors is authorized to change the
<PAGE>
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
<PAGE>
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 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.
<PAGE>
(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:
(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;
<PAGE>
(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
<PAGE>
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
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.
<PAGE>
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
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
<PAGE>
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 anti-
dilution 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,
<PAGE>
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 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
<PAGE>
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 STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, including contracts
obligating holders to purchase from the Company, and the Company to sell
to the holders, a specified number of shares of Common Stock or
Preference Stock at a future date or dates. The consideration per share
of Preference Stock or 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 units ("Stock
Purchase Units") consisting of a Stock Purchase Contract and Debt
Securities, Capital Securities or debt obligations of third parties,
including U.S. Treasury securities, securing the holders' obligations to
purchase the Preference Stock or 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. The description in the
Prospectus Supplement will not necessarily be complete, and reference
will be made to the Stock Purchase Contracts, and, if applicable,
collateral arrangements and depositary arrangements, relating to such
Stock Purchase Contracts or Stock Purchase Units.
<PAGE>
BOOK-ENTRY ISSUANCE
Unless otherwise specified in the applicable Prospectus Supplement,
DTC will act as depositary for Securities issued in the form of Global
Securities. Such Securities will be issued only as fully-registered
securities registered in the name of Cede & Co. (DTC's nominee). One or
more fully-registered Global Securities will be issued for such
Securities representing in the aggregate the total number of such
Securities, and will be deposited with or on behalf of DTC.
DTC is a limited purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code,
and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC holds securities that its Participants
deposit with DTC. DTC also facilitates the settlement among Participants
of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include
securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC
is owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc. Access to the DTC system is also
available to others such as securities brokers and dealers, banks and
trust companies that clear through or maintain custodial relationships
with Direct Participants, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on
file with the Commission.
Purchases of Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for such
Securities on DTC's records. The ownership interest of each actual
purchaser of each Security ("Beneficial Owner") is in turn to be recorded
on the Direct and Indirect Participants' records. Beneficial Owners will
not receive written confirmation from DTC of their purchases, but
Beneficial Owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their
holdings, from the Direct or Indirect Participants through which the
Beneficial Owners purchased Securities. Transfers of ownership interests
in Securities issued in the form of Global Securities are to be
accomplished by entries made on the books of Participants acting on
behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in such Securities,
except in the event that use of the book-entry system for such Securities
is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the
Securities issued in the form of Global Securities; DTC's records reflect
only the identity of the Direct Participants to whose accounts such
Securities are credited, which may or may not be the Beneficial Owners.
The Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial Owners will
<PAGE>
be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. as the registered
holder of Securities issued in the form of Global Securities. If less
than all of a series of such Securities are being redeemed, DTC's current
practice is to determine by lot the amount of the interest of each Direct
Participant to be redeemed.
Although voting with respect to Securities issued in the form of
Global Securities is limited to the holders of record of such Securities,
in those instances in which a vote is required, neither DTC nor Cede &
Co. will itself consent or vote with respect to such Securities. Under
its usual procedures, DTC would mail an omnibus proxy (the "Omnibus
Proxy") to the issuer of such Securities as soon as possible after the
record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting
rights to those Direct Participants to whose accounts such Securities are
credited on the record date (identified in a listing attached to the
Omnibus Proxy).
Payments in respect of Securities issued in the form of Global
Securities will be made by the issuer of such Securities to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant
payment date in accordance with their respective holdings shown on DTC's
records unless DTC has reason to believe that it will not receive
payments on such payment date. Payments by Participants to Beneficial
Owners will be governed by standing instructions and customary practices
and will be the responsibility of such Participant and not of DTC, the
Institutional Trustee, either Trust or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to
time. Payments to DTC are the responsibility of the issuer of the
applicable Securities, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursements of such
payments to the Beneficial Owners is the responsibility of Direct and
Indirect Participants.
DTC may discontinue providing its services as depositary with
respect to any Securities at any time by giving reasonable notice to the
issuer of such Securities. In the event that a successor depositary is
not obtained, individual Security certificates representing such
Securities are required to be printed and delivered. The Company, at its
option, may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor depositary).
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Trust and the Company
believe to be accurate, but the Trust and the Company assume no
responsibility for the accuracy thereof. Neither the Trust nor the
Company has any responsibility for the performance by DTC or its
Participants of their respective obligations as described herein or under
the rules and procedures governing their respective operations.
PLAN OF DISTRIBUTION
Any of the Securities being offered hereby may be sold in any one
or more of the following ways from time to time: (i) through agents; (ii)
to or through underwriters; (iii) through dealers; and (iv) directly by
the Company or, in the case of Capital Securities, by the Trust to
purchasers.
<PAGE>
The distribution of the Securities may be effected from time to
time in one or more transactions at a fixed price or prices, which may be
changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
Offers to purchase Securities may be solicited by agents designated
by the Company from time to time. Any such agent involved in the offer or
sale of the Securities in respect of which this Prospectus is delivered
will be named, and any commissions payable by the Company or the Trust to
such agent will be set forth, in the applicable Prospectus Supplement.
Unless otherwise indicated in such Prospectus Supplement, any such agent
will be acting on a reasonable best efforts basis for the period of its
appointment. Any such agent may be deemed to be an underwriter, as that
term is defined in the Securities Act, of the Securities so offered and
sold.
If Securities are sold by means of an underwritten offering, the
Company and, in the case of an offering of Capital Securities, the Trust
will execute an underwriting agreement with an underwriter or
underwriters at the time an agreement for such sale is reached, and the
names of the specific managing underwriter or underwriters, as well as
any other underwriters, the respective amounts underwritten and the terms
of the transaction, including commissions, discounts and any other
compensation of the underwriters and dealers, if any, will be set forth
in the applicable Prospectus Supplement which will be used by the
underwriters to make resales of the Securities in respect of which this
Prospectus is being delivered to the public. If underwriters are utilized
in the sale of any Securities in respect of which this Prospectus is
being delivered, such Securities will be acquired by the underwriters for
their own account and may be resold from time to time in one or more
transactions, including negotiated transactions, at fixed public offering
prices or at varying prices determined by the underwriters at the time of
sale. Securities may be offered to the public either through underwriting
syndicates represented by managing underwriters or directly by one or
more underwriters. If any underwriter or underwriters are utilized in the
sale of Securities, unless otherwise indicated in the applicable
Prospectus Supplement, the underwriting agreement will provide that the
obligations of the underwriters are subject to certain conditions
precedent and that the underwriters with respect to a sale of such
Securities will be obligated to purchase all such Securities if any are
purchased.
The Company or the Trust, as applicable, may grant to the
underwriters options to purchase additional Securities, to cover over-
allotments, if any, at the initial public offering price (with additional
underwriting commissions or discounts), as may be set forth in the
Prospectus Supplement relating thereto. If the Company or the Trust, as
applicable, grants any over-allotment option, the terms of such over-
allotment option will be set forth in the Prospectus Supplement for such
Securities.
If a dealer is utilized in the sale of the Securities in respect of
which this Prospectus is delivered, the Company or the Trust, as
applicable, will sell such Securities to the dealer as principal. The
dealer may then resell such Securities to the public at varying prices to
be determined by such dealer at the time of resale. Any such dealer may
be deemed to be an underwriter, as such term is defined in the Securities
Act, of the Securities so offered and sold. The name of the dealer and
<PAGE>
the terms of the transaction will be set forth in the Prospectus
Supplement relating thereto.
Offers to purchase Securities may be solicited directly by the
Company or the Trust, as applicable, and the sale thereof may be made by
the Company or the Trust directly to institutional investors or others,
who may be deemed to be underwriters within the meaning of the Securities
Act with respect to any resale thereof. The terms of any such sales will
be described in the Prospectus Supplement relating thereto.
Securities may also be offered and sold, if so indicated in the
applicable Prospectus Supplement, in connection with a remarketing upon
their purchase, in accordance with a redemption or repayment pursuant to
their terms, or otherwise, by one or more firms ("remarketing firms"),
acting as principals for their own accounts or as agents for the Company
or the Trust, as applicable. Any remarketing firm will be identified and
the terms of its agreement, if any, with the Company or the Trust and its
compensation will be described in the applicable Prospectus Supplement.
Remarketing firms may be deemed to be underwriters, as that term is
defined in the Securities Act, in connection with the Securities
remarketed thereby.
If so indicated in the applicable Prospectus Supplement, the
Company or the Trust, as applicable, may authorize agents and
underwriters to solicit offers by certain institutions to purchase
Securities from the Company or the Trust at the public offering price set
forth in the applicable Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on the date or
dates stated in the applicable Prospectus Supplement. Such delayed
delivery contracts will be subject to only those conditions set forth in
the applicable Prospectus Supplement. A commission indicated in the
applicable Prospectus supplement will be paid to underwriters and agents
soliciting purchases of Securities pursuant to delayed delivery contracts
accepted by the Company or the Trust, as applicable.
Agents, underwriters, dealers and remarketing firms may be entitled
under relevant agreements with the Company or the Trust, as applicable,
to indemnification by the Company or the Trust against certain
liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which such agents, underwriters,
dealers and remarketing firms may be required to make in respect thereof.
Each series of Securities will be a new issue and, other than the
Common Stock, which is listed on the New York Stock Exchange, the London
Stock Exchange and the Amsterdam Stock Exchange, will have no established
trading market. The Company may elect to list any series of Securities on
an exchange, and in the case of the Common Stock, on any additional
exchange, but, unless otherwise specified in the applicable Prospectus
Supplement, the Company shall not be obligated to do so. No assurance can
be given as to the liquidity of the trading market for any of the
Securities.
Agents, underwriters, dealers and remarketing firms may be
customers of, engage in transactions with, or perform services for, the
Company and its subsidiaries in the ordinary course of business.
<PAGE>
LEGAL OPINIONS
Unless otherwise specified in a Prospectus Supplement relating to
particular Securities, the validity of the Securities offered hereby,
other than Capital Securities, will be passed upon for the Company by
Simpson Thacher & Bartlett, New York, New York, and certain matters of
Delaware law with respect to the validity of the Capital Securities
offered hereby will be passed upon for the Company and the Trust by
Richards, Layton & Finger P.A., special Delaware counsel to the Company
and the Trust. The validity of the Securities offered hereby will be
passed upon for the underwriters, dealers or agents, if any, by counsel
to be named in the applicable Prospectus Supplement.
EXPERTS
The financial statements incorporated in this Registration
Statement by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1997, 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. The
financial statements of Thermo King incorporated in this Registration
Statement by reference to the Company's Form 8-K, dated October 31, 1997,
have been so incorporated in reliance on the reports of KPMG Peat Marwick
LLP.
<PAGE>
No dealer, salesperson or other individual has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus Supplement or the Prospectus
in connection with the offer made by this Prospectus Supplement or the
Prospectus and, if given or made, such information or representations must
not be relied upon as having been authorized by the Company, the Trust or
the Underwriter. Neither the delivery of this Prospectus Supplement and
the Prospectus, nor any sale made hereunder and thereunder, shall under
any circumstances, create an implication that there has been no change in
the affairs of the Company or the Trust since the date hereof. This
Prospectus Supplement and the Prospectus shall not constitute an offer or
solicitation by anyone in any state in which such offer or solicitation is
not authorized or in which the person making such offer of solicitation is
not qualified to do so or to anyone to whom it is unlawful to make such
offer or solicitation.
_________________________
TABLE OF CONTENTS
Page
Prospectus Supplement
Prospectus Supplement Summary . . . . . . . . . . . . . . . . . . . . S-5
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-23
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-28
Summary Historical and Pro Forma
Financial Information of the Company . . . . . . . . . . . . . . . . S-30
The Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-31
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . S-32
Price Range of Common Stock and Dividends . . . . . . . . . . . . . . S-32
Condensed Consolidated Capitalization . . . . . . . . . . . . . . . . S-33
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . S-34
Description of the Feline Prides . . . . . . . . . . . . . . . . . . S-35
Description of the Purchase Contracts . . . . . . . . . . . . . . . . S-38
Certain Provisions of the Purchase Contract
Agreement and the Pledge Agreement . . . . . . . . . . . . . . . . S-45
Description of the Capital Securities . . . . . . . . . . . . . . . . S-48
Description of the Guarantee . . . . . . . . . . . . . . . . . . . . S-57
Description of the Debentures . . . . . . . . . . . . . . . . . . . . S-60
Effect of Obligations Under the
Debentures and the Guarantee . . . . . . . . . . . . . . . . . . . S-65
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . . S-66
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-72
Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . S-73
Index of Terms for Prospectus Supplement . . . . . . . . . . . . . . S-74
Available Information . . . . . . . . . . . . . . . . . . . . . . . . S-3
Incorporation of Certain Documents by Reference . . . . . . . . . . . S-3
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-4
The Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-5
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . S-6
Description of Debentures . . . . . . . . . . . . . . . . . . . . . . S-6
Description of Capital Securities . . . . . . . . . . . . . . . . . . S-12
Description of the Guarantee . . . . . . . . . . . . . . . . . . . . S-21
Relationship Among the Capital Securities,
the Debentures and the Guarantee . . . . . . . . . . . . . . . . . S-23
Description of Capital Stock . . . . . . . . . . . . . . . . . . . . S-24
Description of Stock Purchase Contracts
and Stock Purchase Units . . . . . . . . . . . . . . . . . . . . . S-31
Book-Entry Issuance . . . . . . . . . . . . . . . . . . . . . . . . . S-31
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . S-32
<PAGE>
Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . S-33
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-34
<PAGE>
INGERSOLL-RAND FINANCING I
14,000,000 FELINE PRIDES/SM/
1,400,000
CAPITAL SECURITIES
_________________________
PROSPECTUS SUPPLEMENT
_________________________
Merrill Lynch & Co.
March , 1998
/SM/Service Mark of Merrill Lynch & Co., Inc.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the Registrant's expenses in connection
with the issuance of the securities being registered. Except for the
registration fee, the amounts listed below are estimates.
Registration Fee--Securities and Exchange Commission . . . . . . $363,636
Printing of Registration Statement, Prospectus, Indenture, etc. . 50,000
Blue Sky Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Accountants' Fees and Expenses . . . . . . . . . . . . . . . . . 50,000
Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . 175,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . 41,364
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . $700,000
Item 15. Indemnification of Directors and Officers.
Article Seventh of the Company's Restated Certificate of Incorporation,
as amended, provides that, to the fullest extent permitted by the laws of
the State of New Jersey, directors and officers of the Company shall not
be personally liable to the Company or its shareholders for damages for
breach of any duty owed to the Company or its shareholders, except that
no such director or officer shall be relieved from liability for any
breach of duty based upon an act or omission (i) in breach of such
person's duty of loyalty to the Company or its shareholders, (ii) not in
good faith or involving a knowing violation of law or (iii) resulting in
receipt by such person of an improper personal benefit.
Article Seventh also provides that each person who was or is made a party
or is threatened to be made a party to or is involved in any pending,
threatened or completed civil, criminal, administrative or arbitrative
action, suit or proceeding, by reason of his or her being or having been
a director or officer of the Company, or by reason of his or her being or
having been a director, officer, trustee, employee or agent of any other
corporation or of any partnership, joint venture, employee benefit plan
or other entity or enterprise, serving as such at the request of the
Company, shall be indemnified and held harmless by the Company to the
fullest extent permitted by the New Jersey Business Corporation Act (the
"Act"), from and against all reasonable costs, disbursements and
attorneys' fees, and all amounts paid or incurred in satisfaction of
settlements, judgments, fines and penalties, incurred or suffered in
connection with any such proceeding, and such indemnification shall
continue as to a person who has ceased to be a director, officer,
trustee, employee or agent and shall inure to the benefit of his or her
heirs, executors, administrators and assigns; provided, however, that
there shall be no indemnification with respect to any settlement of any
proceeding unless the Company has given its prior consent to such
settlement or disposition. This right to indemnification includes the
right to be paid by the Company the expenses incurred in connection with
any proceeding in advance of the final disposition of such proceeding as
authorized by the Board of Directors; provided, however, that, if the Act
so requires, the payment of such expenses shall be made only upon receipt
<PAGE>
by the Company of an undertaking to repay all amounts so advanced unless
it shall ultimately be determined that such director or officer is
entitled to be indemnified.
Article Seventh also provides that the right to indemnification
thereunder is a contract right and gives claimants certain rights with
respect to claims for indemnification not paid by the Company after 30
days following a written request. Finally, Article Seventh provides that
the right to indemnification and advancement of expenses provided thereby
shall not exclude or be exclusive of any other rights to which any person
may be entitled under a certificate of incorporation, by-law, agreement,
vote of shareholders or otherwise. Sections 1 and 2 of Article IX of the
Company's By-Laws also provide directors and officers with certain rights
to indemnity that are substantially similar to the foregoing provisions
of Article Seventh.
Section 14A: 3-5 of the Act provides that no indemnification shall be
made if such person shall have been adjudged liable for negligence or
misconduct unless the court in which such proceeding was brought
determines upon application that the defendant, officers or directors are
fairly and reasonably entitled to indemnity for such expenses despite
such adjudication of liability. In any case, a corporation must indemnify
an officer director against expenses (including attorney's fees) to the
extent that he has been successful on the merits or otherwise or in
defense of any claim or issue.
The Company has a liability insurance policy in effect which covers
certain claims against any officer or director of the Company by reason
of certain breaches of duty, neglect, errors or omissions committed by
such person in his capacity as an officer or director.
Under the Declaration, the Company will agree to indemnify each of the
Regular Trustees, the Institutional Trustee and the Delaware Trustee, and
to hold harmless the Regular Trustees, the Institutional Trustee and the
Delaware Trustee against any loss, damage, claims, liability or expense
incurred without negligence or bad faith on its part arising out of or in
connection with the acceptance or administration of such Declaration ,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties under such Declaration.
Item 16. Exhibits.
*1.1-Form of Underwriting Agreement for the FELINE PRIDES.
4.1-Restated Certificate of Incorporation of Ingersoll-Rand Company, as
amended through May 28, 1992 (Incorporated by reference from Form 10-K of
Ingersoll-Rand Company for Fiscal Year Ended December 31, 1993).
4.2-Certificate of Amendment to Restated Certificate of Incorporation of
Ingersoll-Rand Company, filed August 20, 1997 (Incorporated by reference
from Exhibit 4.2 to the Company's Form S-3 Registration Statement No.
333-37019).
4.3-By-Laws of Ingersoll-Rand Company, as amended through September 1,
1997 (Incorporated by reference from Exhibit 4.3 to the Company's Form S-
3 Registration Statement No. 333-37019).
4.4-Rights Agreement, dated as of December 7, 1988, as amended by
Amendment No. 1 thereto dated as of December 7, 1994, between Ingersoll-
<PAGE>
Rand Company and The Bank of New York, as Rights Agent (Incorporated by
reference from Form 8-A of Ingersoll-Rand Company filed on December 12,
1988 and Form 8-A/A of Ingersoll-Rand Company filed on December 15,
1994.)
4.5-Certificate of Trust of Ingersoll-Rand Financing I (Incorporated by
reference from Exhibit 4.10 to the Company's Form S-3 Registration
Statement No. 333-34029).
4.6-Trust Agreement of Ingersoll-Rand Financing I (Incorporated by
reference from Exhibit 4.12 to the Company's Form S-3 Registration
Statement No. 333-34029).
**4.7-Form of Amended and Restated Declaration of Trust for Ingersoll-
Rand Financing I, with respect to the Capital Securities.
**4.8-Form of Capital Security Certificate for Ingersoll-Rand Financing
I, with respect to the Capital Securities (included as Exhibit A-1 to the
Amended and Restated Declaration of Trust (Exhibit 4.7)).
**4.9-Form of Guarantee Agreement in respect of Ingersoll-Rand Financing
I, with respect to the Capital Securities.
**4.10-Form of Indenture.
**4.11-Form of Debentures (included in Section 7.1 of the First
Supplemental Indenture (Exhibit 4.12)).
**4.12-Form of First Supplemental Indenture.
**4.13-Form of Purchase Contract Agreement (including as Exhibit A the
form of Income PRIDES and as Exhibit B the form of Growth PRIDES).
**4.14-Form of Pledge Agreement.
**5.1-Opinion of Simpson Thacher & Bartlett as to the validity of the
Debentures, Guarantees and Stock Purchase Contracts being registered.
**5.2-Opinion of Richards, Layton & Finger P.A., special Delaware
counsel, relating to the validity of the Capital Securities of Ingersoll-
Rand Financing I.
**5.3-Opinion of Patricia Nachtigal, Esq., General Counsel to the
Company, as to the validity of the Common Stock and Stock Purchase Units.
**8.1-Opinion of Simpson Thacher & Bartlett, as to United States tax
matters.
**12-Computation of Ratio of Earnings to Fixed Charges (Incorporated by
reference from Exhibit 11 to the Company's Form 10-K for the year ended
December 31, 1997)
**23.1-Consent of Simpson Thacher & Bartlett (included in Exhibit 5.1).
**23.2-Consent of Richards, Layton & Finger P.A. (included in Exhibit
5.2).
**23.3-Consent of Patricia Nachtigal (included in Exhibit 5.3)
**23.4-Consent of Price Waterhouse LLP, Independent Accountants.
**23.5 - Consent of KPMG Peat Marwick LLP, Independent Accountants.
***24.1-Powers of Attorney (Ingersoll-Rand Company).
<PAGE>
***24.2-Powers of Attorney (Ingersoll-Rand Financing I).
**25.1-Form T-1 Statement of Eligibility of The Bank of New York, as Debt
Trustee under the Indenture.
**25.2-Form T-1 Statement of Eligibility of The First National Bank of
Chicago, as Institutional Trustee under the Amended and Restated
Declaration of Trust of Ingersoll-Rand Financing I.
**25.3-Form T-1 Statement of Eligibility of The First National Bank of
Chicago, as Guarantee Trustee under the Guarantee for Ingersoll-Rand
Financing I.
__________________
*The Company will file any underwriting agreement that it may enter into
as an exhibit to a Current Report on Form 8-K which is incorporated by
reference into this Registration Statement.
**Filed herewith.
***Previously Filed.
<PAGE>
Item 17. Undertakings
The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section 10(a) (3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (i) and (ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8 and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering;
(4) That, for the purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's Annual Report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15 (d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the Registration Statement
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof;
(5) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the Registrant pursuant to Rule 424(b)
(1) or (4) or 497(h) under the Securities Act shall be deemed to be part
of this Registration Statement as of the time it was declared effective;
and
(6) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new Registration Statement relating to the
<PAGE>
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
Ingersoll-Rand Financing I hereby undertakes to provide to the
underwriter at the closing specified in the applicable underwriting
agreement, certificates in such denominations and registered in such
names as required by the underwriter to permit prompt delivery to each
purchaser.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions specified in Item 15
of this Registration Statement or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in said Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act, and will be governed by the final
adjudication of such issue.
The undersigned registrants hereby undertake to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance
with the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Act.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Woodcliff Lake, New Jersey, on
the 9th day of March, 1998.
INGERSOLL-RAND COMPANY
By James E. Perrella *
(James E. Perrella)
Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities indicated on the 9th day of March, 1998.
Signature Title
James E. Perrella* Chairman of the Board, President, Chief
(James E. Perrella) Executive Officer and Director (Principal
Executive Officer)
/s/ David W. Devonshire Senior Vice President and Chief Financial
(David W. Devonshire) Officer (Principal Financial and Accounting
Officer)
Joseph P. Flannery* Director
(Joseph P. Flannery)
Constance J. Horner* Director
(Constance J. Horner)
H. William Lichtenberger* Director
(H. William Lichtenberger)
Theodore E. Martin* Director
(Theodore E. Martin)
Orin R. Smith* Director
(Orin R. Smith)
Richard W. Swift* Director
(Richard W. Swift)
<PAGE>
J. Frank Travis* Director
(J. Frank Travis)
Tony L. White* Director
(Tony L. White)
*By: /s/ Patricia Nachtigal
(Patricia Nachtigal),
Attorney-in-Fact
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Ingersoll-
Rand Financing I certifies that it has reasonable grounds to believe that
it meets all the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Woodcliff Lake, New Jersey, on
the 9th day of March, 1998.
INGERSOLL-RAND FINANCING I
By: INGERSOLL-RAND COMPANY, as Depositor
By: /s/ Patricia Nachtigal
Name: Patricia Nachtigal
Title: Vice President and General Counsel
AMENDED AND RESTATED DECLARATION
OF TRUST
Ingersoll-Rand Financing I
Dated as of March __, 1998
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 DEFINITIONS . . . . . . . . . . . . . . . 5
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION . . . . . 13
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES . . . . . . 13
SECTION 2.3 REPORTS BY THE INSTITUTIONAL TRUSTEE . . . 14
SECTION 2.4 PERIODIC REPORTS TO INSTITUTIONAL
TRUSTEE . . . . . . . . . . . . . . . . 14
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS
PRECEDENT . . . . . . . . . . . . . . . 14
SECTION 2.6 EVENTS OF DEFAULT; WAIVER . . . . . . . . 14
SECTION 2.7 EVENT OF DEFAULT; NOTICE . . . . . . . . . 16
ARTICLE III
ORGANIZATION
SECTION 3.1 NAME . . . . . . . . . . . . . . . . . . . 16
SECTION 3.2 OFFICE . . . . . . . . . . . . . . . . . . 16
SECTION 3.3 PURPOSE . . . . . . . . . . . . . . . . . 17
SECTION 3.4 AUTHORITY . . . . . . . . . . . . . . . . 17
SECTION 3.5 TITLE TO PROPERTY OF THE TRUST . . . . . . 17
SECTION 3.6 POWERS AND DUTIES OF THE REGULAR
TRUSTEES . . . . . . . . . . . . . . . 17
SECTION 3.7 PROHIBITION OF ACTIONS BY THE TRUST AND
THE TRUSTEES . . . . . . . . . . . . . 20
SECTION 3.8 POWERS AND DUTIES OF THE INSTITUTIONAL
TRUSTEE . . . . . . . . . . . . . . . . 21
SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF
THE INSTITUTIONAL TRUSTEE . . . . . . . 23
SECTION 3.10 CERTAIN RIGHTS OF INSTITUTIONAL TRUSTEE . 25
SECTION 3.11 DELAWARE TRUSTEE . . . . . . . . . . . . . 27
SECTION 3.12 EXECUTION OF DOCUMENTS . . . . . . . . . . 27
SECTION 3.13 NOT RESPONSIBLE FOR RECITALS OR
ISSUANCE OF SECURITIES . . . . . . . . 27
SECTION 3.14 DURATION OF TRUST . . . . . . . . . . . . 27
SECTION 3.15 MERGERS . . . . . . . . . . . . . . . . . 27
ARTICLE IV
SPONSOR
SECTION 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES . 29
SECTION 4.2 RIGHTS AND RESPONSIBILITIES OF THE
SPONSOR . . . . . . . . . . . . . . . . 29
SECTION 4.3 RIGHT TO PROCEED . . . . . . . . . . . . . 30
SECTION 4.4 EXPENSES . . . . . . . . . . . . . . . . . 30
<PAGE>
ARTICLE V
TRUSTEES
SECTION 5.1 NUMBER OF TRUSTEES . . . . . . . . . . . . 31
SECTION 5.2 DELAWARE TRUSTEE . . . . . . . . . . . . . 31
SECTION 5.3 INSTITUTIONAL TRUSTEE; ELIGIBILITY . . . . 31
SECTION 5.4 CERTAIN QUALIFICATIONS OF REGULAR
TRUSTEES AND DELAWARE TRUSTEE
GENERALLY . . . . . . . . . . . . . . . 32
SECTION 5.5 REGULAR TRUSTEES . . . . . . . . . . . . . 32
SECTION 5.6 APPOINTMENT, REMOVAL AND RESIGNATION OF
TRUSTEES . . . . . . . . . . . . . . . 33
SECTION 5.7 VACANCIES AMONG TRUSTEES . . . . . . . . . 34
SECTION 5.8 EFFECT OF VACANCIES . . . . . . . . . . . 34
SECTION 5.9 MEETINGS . . . . . . . . . . . . . . . . . 35
SECTION 5.10 DELEGATION OF POWER . . . . . . . . . . . 35
SECTION 5.11 MERGER, CONVERSION. CONSOLIDATION OR
SUCCESSION TO BUSINESS . . . . . . . . 35
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 DISTRIBUTIONS . . . . . . . . . . . . . . 36
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 GENERAL PROVISIONS REGARDING SECURITIES . 36
SECTION 7.2 PAYING AGENT . . . . . . . . . . . . . . . 37
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 TERMINATION OF TRUST . . . . . . . . . . . 37
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 TRANSFER OF SECURITIES . . . . . . . . . . 38
SECTION 9.2 TRANSFER OF CERTIFICATES . . . . . . . . . 38
SECTION 9.3 DEEMED SECURITY HOLDERS . . . . . . . . . 39
SECTION 9.4 BOOK ENTRY INTERESTS . . . . . . . . . . . 39
SECTION 9.5 NOTICES TO CLEARING AGENCY . . . . . . . . 40
SECTION 9.6 APPOINTMENT OF SUCCESSOR CLEARING
AGENCY . . . . . . . . . . . . . . . . 40
SECTION 9.7 DEFINITIVE PREFERRED SECURITY
CERTIFICATES . . . . . . . . . . . . . 40
SECTION 9.8 MUTILATED, DESTROYED, LOST OR STOLEN
CERTIFICATES . . . . . . . . . . . . . 41
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 LIABILITY . . . . . . . . . . . . . . . . 41
SECTION 10.2 EXCULPATION . . . . . . . . . . . . . . . 41
SECTION 10.3 FIDUCIARY DUTY . . . . . . . . . . . . . . 42
<PAGE>
SECTION 10.4 INDEMNIFICATION . . . . . . . . . . . . . 43
SECTION 10.5 OUTSIDE BUSINESSES . . . . . . . . . . . . 45
ARTICLE XI
ACCOUNTING
SECTION 11.1 FISCAL YEAR . . . . . . . . . . . . . . . 46
SECTION 11.2 CERTAIN ACCOUNTING MATTERS . . . . . . . . 46
SECTION 11.3 BANKING . . . . . . . . . . . . . . . . . 46
SECTION 11.4 WITHHOLDING . . . . . . . . . . . . . . . 47
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 AMENDMENTS . . . . . . . . . . . . . . . . 47
SECTION 12.2 MEETINGS OF THE HOLDERS OF SECURITIES;
ACTION BY WRITTEN CONSENT . . . . . . . 49
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1 REPRESENTATIONS AND WARRANTIES OF
INSTITUTIONAL TRUSTEE . . . . . . . . . 50
SECTION 13.2 REPRESENTATIONS AND WARRANTIES OF
DELAWARE TRUSTEE . . . . . . . . . . . 51
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 NOTICES . . . . . . . . . . . . . . . . . 52
SECTION 14.2 GOVERNING LAW . . . . . . . . . . . . . . 53
SECTION 14.3 INTENTION OF THE PARTIES . . . . . . . . . 53
SECTION 14.4 HEADINGS . . . . . . . . . . . . . . . . . 53
SECTION 14.5 SUCCESSORS AND ASSIGNS . . . . . . . . . . 53
SECTION 14.6 PARTIAL ENFORCEABILITY . . . . . . . . . . 53
SECTION 14.7 COUNTERPARTS . . . . . . . . . . . . . . . 53
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
Ingersoll-Rand Financing I
March __, 1998
AMENDED AND RESTATED DECLARATION OF TRUST (the
"Declaration") dated and effective as of March __, 1998, by the Trustees (as
defined herein), the Sponsor (as defined herein) and by the Holders (as
defined herein), from time to time, of the securities representing undivided
beneficial interests in the assets of the Trust to be issued pursuant to this
Declaration;
WHEREAS, the Trustees and the Sponsor established Ingersoll-
Rand Financing I (the "Trust"), a trust under the Business Trust Act (as
defined herein) pursuant to a Declaration of Trust dated as of August 18,
1997 (the "Original Declaration"), and a Certificate of Trust filed with the
Secretary of State of the State of Delaware on August 18, 1997, for the sole
purpose of issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in certain Debentures of the Debenture Issuer (as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust
have been issued;
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the
Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act and
that this Declaration constitute the governing instrument of such business
trust, the Trustees declare that all assets contributed to the Trust will be
held in trust for the benefit of the Trust and Holders, from time to time, of
the securities representing undivided beneficial interests in the assets of
the Trust issued hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 DEFINITIONS
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not
defined in the preamble above have the respective meanings assigned to them
in this Section 1.1;
(b) a term defined anywhere in this Declaration has the
same meaning throughout;
(c) all references to "the Declaration" or "this
Declaration" are to this Declaration as modified, supplemented or amended
from time to time;
<PAGE>
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of and Annexes
and Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the
same meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and
vice versa.
"Affiliate" has the same meaning as given to that term in
Rule 405 of the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent.
"Applicable Ownership Interest" has the meaning set forth in
Annex I hereto.
"Applicable Principal Amount" has the meaning set forth in
Annex I hereto.
"Authorized Newspaper" means a daily newspaper, in the
English language, customarily published on each day that is a Business Day in
The City of New York, whether or not published on days that are Legal
Holidays, and of general circulation in The City of New York. The Authorized
Newspaper for the Purposes of the Reset Spread Announcement Date, is
currently anticipated to be The Wall Street Journal.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Book Entry Interest" means a beneficial interest in a
Global Certificate, ownership and transfers of which shall be maintained and
made through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than Saturday, Sunday or
any day on which banking institutions in New York City, in the State of New
York, are permitted or required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from
time to time, or any successor legislation.
"Certificate" means a Common Security Certificate or a
Preferred Security Certificate.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting
as depositary for the Preferred Securities and in whose name or in the name
of a nominee of that organization shall be registered a Global Certificate
and which shall undertake to effect book entry transfers and pledges of the
Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
<PAGE>
Clearing Agency effects book entry transfers and pledges of securities
deposited with the Clearing Agency.
"Closing Date" means the "Closing Time" and each "Date of
Delivery" under the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.1.
"Common Securities Guarantee" means the guarantee agreement
to be dated as of March __, 1998 of the Sponsor in respect of the Common
Securities.
"Common Security Certificate" means a definitive certificate
in fully registered form representing a Common Security substantially in the
form of Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee;
(b) any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Regular Trustee; or (d) any officer, employee or agent of the Trust or its
Affiliates.
"Corporate Trust Office" means the office of the
Institutional Trustee at which the corporate trust business of the
Institutional Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Declaration is
located at
"Covered Person" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the
Trust or (ii) the Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Ingersoll-Rand Company, a New
Jersey corporation, in its capacity as issuer of the Debentures under the
Indenture.
"Debenture Trustee" means The First National Bank of
Chicago, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Debentures" means the series of ____% Debentures to be
issued by the Debenture Issuer under the Indenture, a specimen certificate
for such series of Debentures being Exhibit B.
"Debenture Repayment Price" means, with respect to any
Debentures put to the Sponsor on ____________________, 2001, an amount per
Debenture equal to $10, plus accumulated and unpaid interest (including
deferred interest, if any).
"Definitive Preferred Security Certificates" has the meaning
set forth in Section 9.4.
<PAGE>
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Direction" by a Person means a written direction signed:
(a) if the Person is a natural person, by that Person;
or
(b) in any other case, in the name of such Person by one
or more Authorized Officers of that Person.
"Direct Action" has the meaning specified in Section 3.8(e).
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"Event of Default" in respect of the Securities means an
Event of Default (as defined in the Indenture) has occurred and is continuing
in respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Failed Remarketing" has the meaning specified in Section
5.4(b) of the Purchase Contract Agreement.
"FELINE PRIDES"SM means (A) 24,000,000 units referred to as
Income PRIDES with a Stated Amount, per Income PRIDES, of $10 and (B)
2,000,000 units referred to as Growth PRIDES with a face amount, per Growth
PRIDES, equal to the Stated Amount.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 10.4(b).
"Global Certificate" has the meaning set forth in Section
9.4.
"Holder" or "holder" means a Person in whose name a
Certificate representing a Security is registered, such Person being a
beneficial owner within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of March __, 1998,
among the Debenture Issuer and the Debenture Trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued.
"Institutional Trustee" means the Trustee meeting the
eligibility requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in
Section 3.8(c).
<PAGE>
"Investment Company" means an investment company as defined
in the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in
Annex I hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means,
except as provided in the terms and conditions of the Preferred Securities
set forth in Annex I hereto or by the Trust Indenture Act, Holder(s) of
outstanding Securities voting together as a single class or, as the context
may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the
record owners of more than 50% of the aggregate liquidation amount (including
the stated amount that would be paid on redemption, liquidation or otherwise,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of the relevant
class.
"Ministerial Action" has the meaning set forth in the terms
of the Securities as set forth in Annex I.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that the officers signing the Officers'
Certificate have read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by the officer in rendering the
Officers' Certificate;
(c) a statement that such officers have made such
examination or investigation as, in such officers' opinion, is necessary to
enable such officers to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of such
officers, such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 7.2.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"Pledge Agreement" means the Pledge Agreement dated as of
March __, 1998 among the Sponsor, The Chase Manhattan Bank, as collateral
<PAGE>
agent (the "Collateral Agent"), and The First National Bank of Chicago, as
purchase contract agent (the "Purchase Contract Agent").
"Preferred Securities Guarantee" means the guarantee
agreement to be dated as of March __, 1998 of the Sponsor in respect of the
Preferred Securities.
"Preferred Security" has the meaning specified in Section
7.1.
"Preferred Security Beneficial Owner" means, with respect to
a Book Entry Interest, a Person who is the beneficial owner of such Book
Entry Interest, as reflected on the books of the Clearing Agency, or on the
books of a Person maintaining an account with such Clearing Agency (directly
as a Clearing Agency Participant or as an indirect participant, in each case
in accordance with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate
representing a Preferred Security substantially in the form of Exhibit A-1.
"Pricing Agreement" means the pricing agreement between the
Trust, the Debenture Issuer, and the underwriters designated by the Regular
Trustees with respect to the offer and sale of the Preferred Securities.
"Primary Treasury Dealer" has the meaning set forth in Annex
I hereto.
"Purchase Contract Agreement" means the Purchase Contract
Agreement dated as of March __, 1998 among The First National Bank of
Chicago, as Purchase Contract Agent, and the Sponsor.
"Purchase Contract Settlement Date" means 16,
2001.
"Put Option" has the meaning set forth in Annex I hereto.
"Quorum" means a majority of the Regular Trustees or, if
there are only two Regular Trustees, both of them.
"Quotation Agent" has the meaning set forth in Annex I
hereto.
"Redemption Amount" has the meaning set forth in Annex I
hereto.
"Redemption Price" has the meaning set forth in Annex I
hereto.
"Regular Trustee" has the meaning set forth in Section 5.1.
"Related Party" means, with respect to the Sponsor, any
direct or indirect wholly owned subsidiary of the Sponsor or any other Person
that owns, directly or indirectly, 100% of the outstanding voting securities
of the Sponsor.
<PAGE>
"Reset Agent" means a nationally recognized investment
banking firm chosen by the Sponsor to determine the Reset Rate. It is
currently anticipated that Merrill Lynch & Co. will act in such capacity.
"Reset Announcement Date" means the tenth (10) Business Day
immediately preceding the Purchase Contract Settlement Date.
"Reset Rate" means the distribution rate per annum (to be
determined by the Reset Agent), equal to the sum of (X) the Reset Spread and
(Y) the rate of interest on the Two-Year Benchmark Treasury in effect on the
third Business Day immediately preceding the Purchase Contract Settlement
Date, that the Preferred Securities should bear in order for the Preferred
Securities to have an approximate market value of 100.5% of their aggregate
liquidation amount on the third Business Day immediately preceding the
Purchase Contract Settlement Date; provided, that the Sponsor may limit such
Reset Spread to be no higher than 200 basis points (2%).
"Reset Spread" means a spread amount to be determined by the
Reset Agent on the tenth (10) Business Day immediately preceding the Purchase
Contract Settlement Date.
"Responsible Officer" means, with respect to the
Institutional Trustee, any officer within the Corporate Trust Office of the
Institutional Trustee, including, without limitation, any vice-president, any
assistant vice-president, any assistant secretary, the treasurer, any
assistant treasurer or other officer of the Corporate Trust Office of the
Institutional Trustee assigned by the Institutional Trustee to administer its
corporate trust matters and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company
Act.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Guarantees" means the Common Securities
Guarantee and the Preferred Securities Guarantee.
"Securities Act" means the Securities Act of 1933, as
amended from time to time, or any successor legislation.
"Sponsor" means Ingersoll-Rand Company, a New Jersey
corporation, or any successor entity in a merger or consolidation, in its
capacity as sponsor of the Trust.
"Super Majority" has the meaning set forth in Section
2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"Tax Event Redemption" has the meaning set forth in Annex I
hereto.
<PAGE>
"Tax Event Redemption Date" has the meaning set forth in
Annex I hereto.
"10% in liquidation amount of the Securities" means, except
as provided in the terms of the Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a
single class or, as the context may require, Holders of outstanding Preferred
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of 10% or more of the aggregate liquidation
amount (including the stated amount that would be paid on repayment,
liquidation or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Termination Event" has the meaning set forth in Section 1
of the Purchase Contract Agreement.
"Treasury Portfolio" has the meaning set forth in Annex I
hereto.
"Treasury Portfolio Purchase Price" has the meaning set
forth in Annex I hereto.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by
the United States Treasury, as such regulations may be amended from time to
time (including corresponding provisions of succeeding regulations).
"Treasury Securities" has the meaning set forth in Section 1
of the Purchase Contract Agreement.
"Trustee" or "Trustees" means each Person who has signed
this Declaration as a trustee, so long as such Person shall continue in
office in accordance with the terms hereof, and all other Persons who may
from time to time be duly appointed, qualified and serving as Trustees in
accordance with the provisions hereof, and references herein to a Trustee or
the Trustees shall refer to such Person or Persons solely in their capacity
as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Two-Year Benchmark Treasury" means direct obligations of
the United States (which may be obligations traded on a when-issued basis
only) having a maturity comparable to the remaining term to maturity of the
Preferred Securities, as agreed upon by the Sponsor and the Reset Agent. The
rate for the Two-Year Benchmark Treasury will be the bid side rate displayed
at 10:00 A.M., New York City time, on the third Business Day immediately
preceding the Purchase Contract Settlement Date in the Telerate system (or if
the Telerate system is (a) no longer available on the third Business Day
immediately preceding the Purchase Contract Settlement Date or (b) in the
opinion of the Reset Agent (after consultation with the Sponsor) no longer an
appropriate system from which to obtain such rate, such other nationally
recognized quotation system as, in the opinion of the Reset Agent (after
consultation with the Sponsor) is appropriate). If such rate is not so
displayed, the rate for the Two-Year Benchmark Treasury shall be, as
calculated by the Reset Agent, the yield to maturity for the Two-Year
<PAGE>
Benchmark Treasury, expressed as a bond equivalent on the basis of a year of
365 or 366 days, as applicable, and applied on a daily basis, and computed by
taking the arithmetic mean of the secondary market bid rates, as of 10:30
A.M., New York City time, on the third Business Day immediately preceding the
Purchase Contract Settlement Date of three leading United States government
securities dealers selected by the Reset Agent (after consultation with the
Sponsor) (which may include the Reset Agent or an Affiliate thereof).
"Underwriting Agreement" means the Underwriting Agreement
for the offering and sale of Preferred Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Declaration is subject to the provisions of the
Trust Indenture Act that are required to be part of this Declaration and
shall, to the extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee
which is a Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
(d) Any application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity
securities representing undivided beneficial interests in the assets of the
Trust.
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES.
(a) Each of the Sponsor and the Regular Trustees, on
behalf of the Trust, shall provide the Institutional Trustee (i) within 14
days after each record date for payment of Distributions, a list, in such
form as the Institutional Trustee may reasonably require, of the names and
addresses of the Holders of the Securities ("List of Holders") as of such
record date, provided that neither the Sponsor nor the Regular Trustees, on
behalf of the Trust, shall be obligated to provide such List of Holders at
any time the List of Holders does not differ from the most recent List of
Holders given to the Institutional Trustee by the Sponsor and the Regular
Trustees on behalf of the Trust, and (ii) at any other time, within 30 days
of receipt by the Trust of a written request by the Institutional Trustee for
a List of Holders as of a date no more than 14 days before such List of
Holders is given to the Institutional Trustee. The Institutional Trustee
shall preserve, in as current a form as is reasonably practicable, all
information contained in the Lists of Holders given to it or which it
receives in the capacity as Paying Agent (if acting in such capacity),
provided that the Institutional Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
<PAGE>
(b) The Institutional Trustee shall comply with its
obligations under Sections 311(a), 310(b) and 312(b) of the Trust Indenture
Act.
SECTION 2.3 REPORTS BY THE INSTITUTIONAL TRUSTEE.
Within 60 days after May 15 of each year, commencing May 15,
1998, the Institutional Trustee shall provide to the Holders of the Preferred
Securities such reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form and in the manner provided by Section 313 of the
Trust Indenture Act. The Institutional Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO INSTITUTIONAL TRUSTEE.
Each of the Sponsor and the Regular Trustees, on behalf of
the Trust, shall provide to the Institutional Trustee such documents, reports
and information as required by Section 314 (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act.
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS
PRECEDENT.
Each of the Sponsor and the Regular Trustees, on behalf of
the Trust, shall provide to the Institutional Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this
Declaration that relate to any of the matters set forth in Section 314(c) of
the Trust Indenture Act. Any certificate or opinion required to be given by
an officer pursuant to Section 314(c) (1) may be given in the form of an
Officers' Certificate.
SECTION 2.6 EVENTS OF DEFAULT; WAIVER.
(a) The Holders of a Majority in liquidation amount of
Preferred Securities may, by vote, on behalf of the Holders of all of the
Preferred Securities, waive any past Event of Default in respect of the
Preferred Securities and its consequences, provided that, if the underlying
Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of
Default under this Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a
majority in principal amount of the holders of the Debentures (a
"Super Majority") to be waived under the Indenture, the Event of
Default under this Declaration may only be waived by the vote of the
Holders of at least the proportion in liquidation amount of the
Preferred Securities that the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of
Section 316(a) (1)(B) of the Trust Indenture Act and such Section 316(a) (1)
(B) of the Trust Indenture Act is hereby expressly excluded from this
Declaration and the Preferred Securities, as permitted by the Trust Indenture
Act. Upon such waiver, any such default shall cease to exist, and any Event
<PAGE>
of Default with respect to the Preferred Securities arising therefrom shall
be deemed to have been cured, for every purpose of this Declaration, but no
such waiver shall extend to any subsequent or other default or an Event of
Default with respect to the Preferred Securities or impair any right
consequent thereon. Any waiver by the Holders of the Preferred Securities of
an Event of Default with respect to the Preferred Securities shall also be
deemed to constitute a waiver by the Holders of the Common Securities of any
such Event of Default with respect to the Common Securities for all purposes
of this Declaration without any further act, vote, or consent of the Holders
of the Common Securities.
(b) The Holders of a Majority in liquidation amount of
the Common Securities may, by vote, on behalf of the Holders of all of the
Common Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where
the Holders of the Common Securities are deemed to have waived such
Event of Default under this Declaration as provided below in this
Section 2.6(b), the Event of Default under this Declaration shall
also not be waivable; or
(ii) requires the consent or vote of a Super Majority
to be waived, except where the Holders of the Common Securities are
deemed to have waived such Event of Default under this Declaration as
provided below in this Section 2.6(b), the Event of Default under
this Declaration may only be waived by the vote of the Holders of at
least the proportion in liquidation amount of the Common Securities
that the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to
the Common Securities and its consequences until all Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Institutional Trustee will be deemed to be acting
solely on behalf of the Holders of the Preferred Securities and only the
Holders of the Preferred Securities will have the right to direct the
Institutional Trustee in accordance with the terms of the Securities. The
foregoing provisions of this Section 2.6(b) shall be in lieu of
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by
the Trust Indenture Act. Subject to the foregoing provisions of this Section
2.6(b), upon such waiver, any such default shall cease to exist and any Event
of Default with respect to the Common Securities arising therefrom shall be
deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default
with respect to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture
by the Institutional Trustee at the direction of the Holders of the Preferred
Securities constitutes a waiver of the corresponding Event of Default with
respect to the Preferred Securities under this Declaration. Any waiver of an
Event of Default under the Indenture by the Institutional Trustee at the
<PAGE>
direction of the Holders of the Preferred Securities shall also be deemed to
constitute a waiver by the Holders of the Common Securities of the
corresponding Event of Default under this Declaration with respect to the
Common Securities for all purposes of this Declaration without further act,
vote or consent of the Holders of the Common Securities. The foregoing
provisions of this Section 2.6(c) shall be in lieu of Section 316(a)(1)(B) of
the Trust Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture
Act is hereby expressly excluded from this Declaration and the Securities, as
permitted by the Trust Indenture Act.
SECTION 2.7 EVENT OF DEFAULT; NOTICE.
(a) The Institutional Trustee shall, within 90 days
after the occurrence of an Event of Default, actually known to a Responsible
Officer of the Institutional Trustee, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of all such defaults with
respect to the Securities, unless such defaults have been cured before the
giving of such notice (the term "defaults" for the purposes of this Section
2.7(a) being hereby defined to be an Event of Default as defined in the
Indenture, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); provided that,
except for a default in the payment of principal of (or premium, if any) or
interest on any of the Debentures, the Institutional Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer
of the Institutional Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to
have knowledge of any default except:
(i) a default under Sections 5.1 and 5.3 of the
Indenture; or
(ii) any default as to which the Institutional Trustee
shall have received written notice or of which a Responsible Officer
of the Institutional Trustee charged with the administration of this
Declaration shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 NAME.
The Trust is named "Ingersoll-Rand Financing I," as such
name may be modified from time to time by the Regular Trustees following
written notice to the Holders of the Securities. The Trust's activities may
be conducted under the name of the Trust or any other name deemed advisable
by the Regular Trustees.
SECTION 3.2 OFFICE.
The address of the principal office of the Trust is c/o
Ingersoll-Rand Company, 200 Chestnut Ridge Road, Woodclliff, New Jersey
07675. On ten Business Days written notice to the Institutional Trustee and
Holders of the Securities, the Regular Trustees may designate another
principal office.
<PAGE>
SECTION 3.3 PURPOSE.
The exclusive purposes and functions of the Trust are (a) to
issue and sell the Securities and use the gross proceeds from such sale to
acquire the Debentures, and (b) except as otherwise set forth herein, to
engage in only those other activities necessary, appropriate, convenient or
incidental thereto. The Trust shall not borrow money, issue debt or reinvest
proceeds derived from investments, pledge any of its assets, or otherwise
undertake (or permit to be undertaken) any activity that would cause the
Trust not to be classified for United States federal income tax purposes as a
grantor trust. It is the intent of the parties to this Declaration for the
Trust to be classified as a grantor trust for United States federal income
tax purposes under Subpart E of Subchapter J of the Code, pursuant to which
the owners of the Preferred Securities and the Common Securities will be the
owners of the Trust for United States federal income tax purposes, and such
owners will include directly in their gross income the income, gain,
deduction or loss of the Trust as if the Trust did not exist. By the
acceptance of this Trust neither the Trustees, the Sponsor nor the Holders of
the Preferred Securities or Common Securities will take any position for
United States federal income tax purposes which is contrary to the
classification of the Trust as a grantor trust.
SECTION 3.4 AUTHORITY.
Subject to the limitations provided in this Declaration and
to the specific duties of the Institutional Trustee, the Regular Trustees
shall have exclusive and complete authority to carry out the purposes of the
Trust. An action taken by the Regular Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust and an action
taken by the Institutional Trustee on behalf of the Trust in accordance with
its powers shall constitute the act of and serve to bind the Trust. In
dealing with the Trustees acting on behalf of the Trust, no Person shall be
required to inquire into the authority of the Trustees to bind the Trust.
Persons dealing with the Trust are entitled to rely conclusively on the power
and authority of the Trustees as set forth in this Declaration.
SECTION 3.5 TITLE TO PROPERTY OF THE TRUST.
Except as provided in Section 3.8 with respect to the
Debentures and the Institutional Trustee Account or as otherwise provided in
this Declaration, legal title to all assets of the Trust shall be vested in
the Trust. A Holder shall not have legal title to any part of the assets of
the Trust, but shall have an undivided beneficial interest in the assets of
the Trust.
SECTION 3.6 POWERS AND DUTIES OF THE REGULAR TRUSTEES.
The Regular Trustees shall have the exclusive power, duty
and authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the
Common Securities in accordance with this Declaration; provided, however,
that the Trust may issue no more than one series of Preferred Securities and
no more than one series of Common Securities, and, provided further, that
there shall be no interests in the Trust other than the Securities, and the
issuance of Securities shall be limited to a simultaneous issuance of both
Preferred Securities and Common Securities on each Closing Date;
<PAGE>
(b) in connection with the issue and sale of the
Preferred Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the
registration statement and the prospectus relating to the
registration statement on Form S-3 prepared by the Sponsor, including
any amendments or supplements, thereto, pertaining to the Preferred
Securities and to take any other action relating to the registration
and sale of the Preferred Securities under federal and state
securities laws;
(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the Sponsor to be
necessary in order to qualify or register all or part of the FELINE
PRIDES in any State in which the Sponsor has determined to qualify or
register such FELINE PRIDES for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange, Inc. or any other national
stock exchange or the Nasdaq Stock Market's National Market for
listing upon notice of issuance of any Preferred Securities;
(iv) execute and file with the Commission a
registration statement on Form 8-A, including any amendments thereto,
prepared by the Sponsor, relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement
and Pricing Agreement providing for the sale of the FELINE PRIDES;
(c) to acquire the Debentures with the proceeds of the
sale of the Preferred Securities and the Common Securities; provided,
however, that the Regular Trustees shall cause legal title to the Debentures
to be held of record in the name of the Institutional Trustee for the benefit
of the Trust and the Holders of the Preferred Securities and the Holders of
Common Securities;
(d) to give the Sponsor and the Institutional Trustee
prompt written notice of the occurrence of a Tax Event or an Investment
Company Event; provided that the Regular Trustees shall consult with the
Sponsor before taking or refraining from taking any Ministerial Action in
relation to a Tax Event or Investment Company Event;
(e) to establish a record date with respect to all
actions to be taken hereunder that require a record date be established,
including and with respect to, for the purposes of Section 316(c) of the
Trust Indenture Act, Distributions, voting rights, repayments, redemptions
and exchanges, and to issue relevant notices to the Holders of Preferred
Securities and Holders of Common Securities as to such actions and applicable
record dates;
(f) to take all actions and perform such duties as may
be required of the Regular Trustees pursuant to the terms of the Securities
and this Declaration;
(g) to bring or defend, pay, collect, compromise,
arbitrate, resort to legal action, or otherwise adjust claims or demands of
<PAGE>
or against the Trust ("Legal Action"), unless pursuant to Section 3.8(e) the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents
(who may be designated as officers with titles) and managers, contractors,
advisors, and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's
obligations under the Trust Indenture Act;
(j) to give the certificate required by
Section 314(a)(4) of the Trust Indenture Act to the Institutional Trustee,
which certificate may be executed by any Regular Trustee;
(k) to incur expenses that are necessary, appropriate,
convenient or incidental to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as,
registrar and transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the
Securities of any notice received from the Debenture Issuer of its election
to defer payments of interest on the Debentures by extending the interest
payment period under the Indenture;
(n) to take all action that may be necessary or
appropriate for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory business trust
under the laws of the State of Delaware and of each other jurisdiction in
which such existence is necessary to protect the limited liability of the
Holders of the Preferred Securities or to enable the Trust to effect the
purposes for which the Trust was created;
(o) to take any action, not inconsistent with this
Declaration or with applicable law, that the Regular Trustees determine in
their discretion to be necessary or desirable in carrying out the activities
of the Trust, including, but not limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under the Investment
Company Act;
(ii) causing the Trust to be classified for United
States federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure
that the Debentures will be treated as indebtedness of the Debenture
Issuer for United States federal income tax purposes, provided that
such action relating to this clause (iii) does not adversely affect
the interests of Holders;
(p) to take all action necessary to cause all applicable
tax returns and tax information reports that are required to be filed with
respect to the Trust to be duly prepared and filed by the Regular Trustees,
on behalf of the Trust;
<PAGE>
(q) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in all
matters necessary, appropriate, convenient or incidental to the foregoing;
and
(r) if applicable, to solicit holders of Securities
which form a part of the Income PRIDES to timely instruct the Purchase
Contract Agent in order to enable the Purchase Contract Agent to vote such
Securities.
The Regular Trustees must exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and the Regular Trustees shall
not take any action that is inconsistent with the purposes and functions of
the Trust set forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have
none of the powers or the authority of the Institutional Trustee set forth in
Section 3.8. No permissive power or authority available to the Regular
Trustees shall be construed to be a duty.
Any expenses incurred by the Regular Trustees pursuant to
this Section 3.6 shall be reimbursed by the Sponsor.
SECTION 3.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE
TRUSTEES.
(a) The Trust shall not, and the Trustees (including the
Institutional Trustee) shall cause the Trust not to, engage in any activity
other than as required or authorized by this Declaration. In particular, the
Trust shall not and the Trustees (including the Institutional Trustee) shall
cause the Trust not to:
(i) invest any proceeds received by the Trust from
holding the Debentures, but shall distribute all such proceeds to
Holders of Securities pursuant to the terms of this Declaration and
of the Securities;
(ii) acquire any assets other than as expressly
provided herein;
(iii) possess Trust property for other than a Trust
purpose;
(iv) make any loans or incur any indebtedness for
borrowed money, other than loans represented by the Debentures;
(v) possess any power or otherwise act in such a way
as to vary the Trust assets or the terms of the Securities in any way
whatsoever;
(vi) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the Trust other
than the Securities; or
(vii) other than as provided in this Declaration or
Annex I, (A) direct the time, method and place of exercising any
<PAGE>
trust or power conferred upon the Debenture Trustee with respect to
the Debentures, (B) waive any past default that is waivable under the
Indenture, (C) exercise any right to rescind or annul any declaration
that the principal of all the Debentures shall be due and payable, or
(D) consent to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required
unless the Trust shall have received an opinion of counsel to the
effect that such modification will not cause more than an
insubstantial risk that for United States federal income tax purposes
the Trust will not be classified as a grantor trust.
SECTION 3.8 POWERS AND DUTIES OF THE INSTITUTIONAL
TRUSTEE.
(a) The legal title to the Debentures shall be owned by
and held of record in the name of the Institutional Trustee in trust for the
benefit of the Trust and the Holders of the Securities. The right, title and
interest of the Institutional Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as Institutional
Trustee in accordance with Section 5.6. Such vesting and cessation of title
shall be effective whether or not conveyancing documents with regard to the
Debentures have been executed and delivered.
(b) The Institutional Trustee shall not transfer its
right, title and interest in the Debentures to the Regular Trustees or to the
Delaware Trustee (if the Institutional Trustee does not also act as Delaware
Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "Institutional Trustee Account") in the
name of and under the exclusive control of the Institutional Trustee
on behalf of the Trust and the Holders of the Securities and, upon
the receipt of payments of funds made in respect of the Debentures
held by the Institutional Trustee, deposit such funds into the
Institutional Trustee Account and make payments to the Holders of the
Preferred Securities and Holders of the Common Securities from the
Institutional Trustee Account in accordance with Section 6.1. Funds
in the Institutional Trustee Account shall be held uninvested until
disbursed in accordance with this Declaration. The Institutional
Trustee Account shall be an account that is maintained with a banking
institution the rating on whose long-term unsecured indebtedness is
rated at least "A" or above by a "nationally recognized statistical
rating organization", as that term is defined for purposes of Rule
436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary, appropriate, convenient or incidental to effect the
repayment of the Preferred Securities and the Common Securities to
the extent the Debentures mature or are redeemed or the Put Option is
exercised; and
(iii) upon written notice of distribution issued by the
Regular Trustees in accordance with the terms of the Securities,
engage in such ministerial activities as shall be necessary,
appropriate, convenient or incidental to effect the distribution of
<PAGE>
the Debentures to Holders of Securities upon the occurrence of
certain special events (as may be defined in the terms of the
Securities) arising from a change in law or a change in legal
interpretation or other specified circumstances pursuant to the terms
of the Securities.
(d) The Institutional Trustee shall take all actions and
perform such duties as may be specifically required of the Institutional
Trustee pursuant to the terms of the Securities and this Declaration.
(e) The Institutional Trustee shall take any Legal
Action which arises out of or in connection with an Event of Default of which
a Responsible Officer of the Institutional Trustee has actual knowledge or
the Institutional Trustee's duties and obligations under this Declaration,
the Business Trust Act or the Trust Indenture Act; provided, however, that if
the Institutional Trustee fails to enforce its rights under the Debentures
after a Holder of Preferred Securities has made a written request, such
Holder of Preferred Securities may, to the fullest extent permitted by
applicable law, institute a legal proceeding against the Debenture Issuer
without first instituting any legal proceeding against the Institutional
Trustee or any other person or entity. Notwithstanding the foregoing, if an
Event of Default has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay interest on or
principal of the Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date),
then a Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on the
Debentures having a principal amount equal to the aggregate liquidation
amount of the Preferred Securities of such holder (a "Direct Action") on or
after the respective due date specified in the Debentures. In connection
with such Direct Action, the rights of the Holders of Common Securities will
be subrogated to the rights of such Holders of Preferred Securities. In
connection with such Direct Action, the Debenture Issuer shall be subrogated
to the rights of such Holder of Preferred Securities with respect to payments
on the Preferred Securities under this Declaration to the extent of any
payment made by the Debenture Issuer to such Holder of Preferred Securities
in such Direct Action. Except as provided in the preceding sentences, the
Holders of Preferred Securities will not be able to exercise directly any
other remedy available to the Holders of the Debentures.
(f) The Institutional Trustee shall continue to serve as
a Trustee until either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the Holders of Securities
pursuant to the terms of the Securities; or
(ii) a Successor Institutional Trustee has been
appointed and has accepted that appointment in accordance with
Section 5.6.
(g) The Institutional Trustee shall have the legal power
to exercise all of the rights, powers and privileges of a holder of
Debentures under the Indenture and, if an Event of Default actually known to
a Responsible Officer of the Institutional Trustee occurs and is continuing,
the Institutional Trustee shall, for the benefit of Holders of the
Securities, enforce its rights as holder of the Debentures subject to the
<PAGE>
rights of the Holders pursuant to the terms of such Securities and this
Declaration.
(h) Subject to this Section 3.8, the Institutional
Trustee shall have none of the duties, liabilities, powers or the authority
of the Regular Trustees set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth
in this Section 3.8 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and the Institutional Trustee
shall not take any action that is inconsistent with the purposes and
functions of the Trust set out in Section 3.3.
SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE
INSTITUTIONAL TRUSTEE.
(a) The Institutional Trustee, before the occurrence of
any Event of Default and after the curing or waiver of all Events of Default
that may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration and no implied covenants shall be
read into this Declaration against the Institutional Trustee. In case an
Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.6) of which a Responsible Officer of the Institutional Trustee has
actual knowledge, the Institutional Trustee shall exercise such of the rights
and powers vested in it by this Declaration, and use the same degree of care
and skill in their exercise, as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed
to relieve the Institutional Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct,
except that:
(i) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the
Institutional Trustee shall be determined solely by the
express provisions of this Declaration and the Institutional
Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in
this Declaration, and no implied covenants or obligations
shall be read into this Declaration against the
Institutional Trustee; and
(B) in the absence of bad faith on the part of
the Institutional Trustee, the Institutional Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Institutional
Trustee and conforming to the requirements of this
Declaration; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Institutional Trustee, the
Institutional Trustee shall be under a duty to examine the
<PAGE>
same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of
the Institutional Trustee, unless it shall be proved that the
Institutional Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Institutional Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of not less
than a Majority in liquidation amount of the Securities relating to
the time, method and place of conducting any proceeding for any
remedy available to the Institutional Trustee, or exercising any
trust or power conferred upon the Institutional Trustee under this
Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that the repayment of such
funds or liability is not reasonably assured to it under the terms of
this Declaration or indemnity reasonably satisfactory to the
Institutional Trustee against such risk or liability is not
reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect
to the custody, safe keeping and physical preservation of the
Debentures and the Institutional Trustee Account shall be to deal
with such property in a similar manner as the Institutional Trustee
deals with similar property for its fiduciary accounts generally,
subject to the protections and limitations on liability afforded to
the Institutional Trustee under this Declaration, the Business Trust
Act and the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or
liability for or with respect to the value, genuineness, existence or
sufficiency of the Debentures or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Institutional Trustee shall not be liable for
any interest on any money received by it except as it may otherwise
agree with the Sponsor. Money held by the Institutional Trustee need
not be segregated from other funds held by it except in relation to
the Institutional Trustee Account maintained by the Institutional
Trustee pursuant to Section 3.8(c)(i) and except to the extent
otherwise required by law; and
(viii) the Institutional Trustee shall not be responsible
for monitoring the compliance by the Regular Trustees or the Sponsor
with their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor.
<PAGE>
SECTION 3.10 CERTAIN RIGHTS OF INSTITUTIONAL TRUSTEE.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely
and shall be fully protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties;
(ii) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be sufficiently
evidenced by a Direction or an Officers' Certificate;
(iii) whenever in the administration of this
Declaration, the Institutional Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting
any action hereunder, the Institutional Trustee (unless other
evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Regular Trustees;
(iv) the Institutional Trustee shall have no duty to
see to any recording, filing or registration of any instrument
(including any financing or continuation statement or any filing
under tax or securities laws) or any rerecording, refiling or
registration thereof;
(v) the Institutional Trustee may consult with counsel
or other experts and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of
such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion. Such counsel may be counsel to the Sponsor or any
of its Affiliates, and may include any of its employees. The
Institutional Trustee shall have the right at any time to seek
instructions concerning the administration of this Declaration from
any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by
this Declaration at the request or direction of any Holder, unless
such Holder shall have provided to the Institutional Trustee security
and indemnity, reasonably satisfactory to the Institutional Trustee,
against the costs, expenses (including attorneys' fees and expenses
and the expenses of the Institutional Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying
with such request or direction, including such reasonable advances as
may be requested by the Institutional Trustee provided, that, nothing
contained in this Section 3.10(a)(vi) shall be taken to relieve the
Institutional Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Declaration;
<PAGE>
(vii) the Institutional Trustee shall be under no
obligation to conduct an investigation into the facts or matters
stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or
document, but the Institutional Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as
it may see fit;
(viii) the Institutional Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, custodians, nominees or attorneys
and the Institutional Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or
its agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Institutional Trustee or its
agents alone shall be sufficient and effective to perform any such
action and no third party shall be required to inquire as to the
authority of the Institutional Trustee to so act or as to its
compliance with any of the terms and provisions of this Declaration,
both of which shall be conclusively evidenced by the Institutional
Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration
the Institutional Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Institutional Trustee (i) may request
instructions from the Holders of the Securities which instructions
may only be given by the Holders of the same proportion in
liquidation amount of the Securities as would be entitled to direct
the Institutional Trustee under the terms of the Securities in
respect of such remedy, right or action, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in
conclusively relying on or acting in or accordance with such
instructions; and
(xi) except as otherwise expressly provided by this
Declaration, the Institutional Trustee shall not be under any
obligation to take any action that is discretionary under the
provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to
impose any duty or obligation on the Institutional Trustee to perform any act
or acts or exercise any right, power, duty or obligation conferred or imposed
on it, in any jurisdiction in which it shall be illegal, or in which the
Institutional Trustee shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts, or to exercise any such
right, power, duty or obligation. No permissive power or authority available
to the Institutional Trustee shall be construed to be a duty.
<PAGE>
SECTION 3.11 DELAWARE TRUSTEE.
Notwithstanding any other provision of this Declaration
other than Section 5.2, the Delaware Trustee shall not be entitled to
exercise any powers, nor shall the Delaware Trustee have any of the duties
and responsibilities of the Trustees (except as required under the Business
Trust Act) described in this Declaration. Except as set forth in Section 5.2,
the Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust Act.
SECTION 3.12 EXECUTION OF DOCUMENTS.
Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, a majority of or, if
there are only two, any Regular Trustee or, if there is only one, such
Regular Trustee is authorized to execute on behalf of the Trust any documents
that the Regular Trustees have the power and authority to execute pursuant to
Section 3.6; provided that, the registration statement referred to in Section
3.6(b)(i), including any amendments thereto, shall be signed by all of the
Regular Trustees.
SECTION 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES.
The recitals contained in this Declaration shall be taken as
the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of
this Declaration or the Securities.
SECTION 3.14 DURATION OF TRUST.
The Trust, unless terminated pursuant to the provisions of
Article VIII hereof, shall dissolve on March , 2005.
SECTION 3.15 MERGERS.
(a) The Trust may not consolidate, amalgamate, merge
with or into, or be replaced by, or convey, transfer or lease its properties
and assets substantially as an entirety to any corporation or other body,
except as described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular
Trustees or, if there are more than two, a majority of the Regular Trustees
and without the consent of the Holders of the Securities, the Delaware
Trustee or the Institutional Trustee, consolidate, amalgamate, merge with or
into, or be replaced by a trust organized as such under the laws of any
State; provided that if the Trust is not the surviving entity:
(i) such successor entity (the "Successor Entity")
either:
(A) expressly assumes all of the obligations of
the Trust under the Securities; or
<PAGE>
(B) substitutes for the Preferred Securities
other securities having substantially the same terms as the
Preferred Securities (the "Successor Securities"), so long
as the Successor Securities rank the same as the Preferred
Securities rank with respect to Distributions and payments
upon liquidation, redemption, repayment and otherwise and
substitutes for the Common Securities other securities
having substantially the same terms as the Common Securities
(the "Successor Common Securities"), so long as the
Successor Common Securities rank the same as the Common
Securities rank with respect to Distributions and payments
upon liquidation, redemption, repayment and otherwise;
(ii) the Debenture Issuer expressly acknowledges a
trustee of the Successor Entity that possesses the same powers and
duties as the Institutional Trustee as the holder of the Debentures;
(iii) if necessary, the Preferred Securities or any
Successor Securities will be listed, or any Successor Securities will
be listed upon notification of issuance, on any national securities
exchange or with another organization on which the Preferred
Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or
replacement does not cause the Preferred Securities (including any
Successor Securities) to be downgraded by any nationally recognized
statistical rating organization;
(v) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and
privileges of the Holders of the Securities (including any Successor
Securities and any Successor Common Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the new entity);
(vi) such Successor Entity has a purpose identical to
that of the Trust;
(vii) prior to such merger, consolidation, amalgamation
or replacement, the Sponsor has received an opinion of a nationally
recognized independent counsel to the Trust experienced in such
matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights,
preferences and privileges of the Holders of the Securities
(including any Successor Securities) in any material respect
(other than with respect to any dilution of the Holders'
interest in the new entity);
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an
Investment Company; and
(C) following such merger, consolidation,
amalgamation or replacement, the Trust (or the Successor
<PAGE>
Entity) will continue to be classified as a grantor trust
for United States federal income tax purposes; and
(viii) the Sponsor guarantees the obligations of such
Successor Entity under the Successor Securities at least to the
extent provided by the Securities Guarantees.
(c) Notwithstanding Section 3.15(b), the Trust shall
not, except with the consent of Holders of 100% in liquidation amount of the
Securities, consolidate, amalgamate, merge with or into, or be replaced by
any other entity or permit any other entity to consolidate, amalgamate, merge
with or into, or replace it if such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as
other than a grantor trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES.
On the Closing Date the Sponsor will purchase all of the
Common Securities issued by the Trust, in an amount at least equal to 3.0% of
the capital of the Trust, at the same time as the Preferred Securities are
sold.
SECTION 4.2 RIGHTS AND RESPONSIBILITIES OF THE SPONSOR.
In connection with the issue, sale and, if necessary, the
remarketing of the Preferred Securities, the Sponsor shall have the exclusive
right and responsibility to engage in the following activities:
(a) to prepare for filing by the Trust with the
Commission a registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments thereto;
(b) if necessary, to determine the States in which to
take appropriate action to qualify or register for sale all or part of the
FELINE PRIDES and to do any and all such acts, other than actions which must
be taken by the Trust, and advise the Trust of actions it must take, and
prepare for execution and filing any documents to be executed and filed by
the Trust, as the Sponsor deems necessary or advisable in order to comply
with the applicable laws of any such States;
(c) if necessary, to prepare for filing by the Trust of
an application to the New York Stock Exchange or any other national stock
exchange or the Nasdaq National Market for listing upon notice of issuance of
any Preferred Securities;
(d) if necessary, to prepare for filing by the Trust
with the Commission of a registration statement on Form 8-A relating to the
registration of the Preferred Securities under Section 12(b) of the Exchange
Act, including any amendments thereto; and
(e) to negotiate the terms of the Remarketing Agreement,
the Remarketing Underwriting Agreement, the Underwriting Agreement and the
Pricing Agreement providing for the sale of the FELINE PRIDES.
<PAGE>
SECTION 4.3 RIGHT TO PROCEED.
The Sponsor acknowledges the rights of Holders to institute
a Direct Action as set forth in Section 3.8(e) hereto.
SECTION 4.4 EXPENSES.
In connection with the offering, sale and issuance of the
Debentures to the Institutional Trustee and in connection with the sale of
the Securities by the Trust, the Sponsor, in its capacity as borrower with
respect to the Debentures, shall:
(a) pay all costs and expenses relating to the offering,
sale and issuance of the Debentures, including commissions to the
underwriters payable pursuant to the Underwriting Agreement and Pricing
Agreement and compensation of the Trustee under the Indenture in accordance
with the provisions of the Indenture;
(b) be responsible for and shall pay all debts and
obligations (other than with respect to the Securities) and all costs and
expenses of the Trust (including, but not limited to, costs and expenses
relating to the organization, maintenance and dissolution of the Trust, the
offering, sale and issuance of the Securities (including commissions to the
underwriters in connection therewith), the fees and expenses (including
reasonable counsel fees and expenses) of the Institutional Trustee, the
Delaware Trustee and the Regular Trustees (including any amounts payable
under Article X of this Declaration), the costs and expenses relating to the
operation of the Trust, including, without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, paying
agent(s), registrar(s), transfer agent(s), duplicating, travel and telephone
and other telecommunications expenses and costs and expenses incurred in
connection with the acquisition, financing, and disposition of Trust assets
and the enforcement by the Institutional Trustee of the rights of the Holders
of the Securities;
(c) be primarily liable for any indemnification
obligations arising under Section 10.4 with respect to this Declaration; and
(d) pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all
liabilities, costs and expenses with respect to such taxes of the Trust.
The Sponsor's obligations under this Section 4.4 shall be
for the benefit of, and shall be enforceable by, any person to whom such
debts, obligations, costs, expenses and taxes are owed (a "Creditor") whether
or not such Creditor has received notice hereof. Any such Creditor may
enforce the Sponsor's obligations under this Section 4.4 directly against the
Sponsor and the Sponsor irrevocably waives any right or remedy to require
that any such Creditor take any action against the Trust or any other Person
before proceeding against the Sponsor. The Debenture Issuer agrees to execute
such additional agreements as may be necessary or desirable in order to give
full effect to the provisions of this Section 4.4.
<PAGE>
ARTICLE V
TRUSTEES
SECTION 5.1 NUMBER OF TRUSTEES.
The number of Trustees initially shall be four (4), and:
(a) at any time before the issuance of any Securities,
the Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the holders of a majority
in liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities; provided, however, that, the number
of Trustees shall in no event be less than two (2), provided further that (1)
one Trustee, shall meet the requirements of Section 5.2 (a) and (b); (2)
there shall be at least one Trustee who is an employee or officer of, or is
affiliated with the Sponsor (a "Regular Trustee"); and (3) one Trustee shall
be the Institutional Trustee for so long as this Declaration is required to
qualify as an indenture under the Trust Indenture Act, and such Institutional
Trustee may also serve as Delaware Trustee if it meets the applicable
requirements.
SECTION 5.2 DELAWARE TRUSTEE.
If required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of
Delaware; or
(b) if not a natural person, an entity which has its
principal place of business in the State of Delaware, and otherwise meets the
requirements of applicable law, provided that, if the Institutional Trustee
has its principal place of business in the State of Delaware and otherwise
meets the requirements of applicable law, then the Institutional Trustee
shall also be the Delaware Trustee and Section 3.11 shall have no
application.
(c) The initial Delaware Trustee shall be:
" "
SECTION 5.3 INSTITUTIONAL TRUSTEE; ELIGIBILITY.
(a) There shall at all times be one Trustee which shall
act as Institutional Trustee for so long as this Declaration is required to
qualify as an Indenture under the Trust Indenture Act, which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any State or
<PAGE>
Territory thereof or of the District of Columbia, or a corporation or
Person permitted by the Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least 750 million U.S. dollars ($750,000,000), and subject to
supervision or examination by Federal, State, Territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to above, then for
the purposes of this Section 5.3(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Institutional Trustee shall cease
to be eligible to so act under Section 5.3(a), the Institutional Trustee
shall immediately resign in the manner and with the effect set forth in
Section 5.6(c).
(c) If the Institutional Trustee has or shall acquire
any "conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Institutional Trustee and the Holder of the Common
Securities (as if it were the obligor referred to in Section 310(b) of the
Trust Indenture Act) shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee and the Indenture
shall be deemed to be specifically described in this Declaration and the
Indenture for purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be:
" "
SECTION 5.4 CERTAIN QUALIFICATIONS OF REGULAR TRUSTEES
AND DELAWARE TRUSTEE GENERALLY.
Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a
natural person who is at least 21 years of age or a legal entity that shall
act through one or more Authorized Officers.
SECTION 5.5 REGULAR TRUSTEES.
The initial Regular Trustees shall be:
_____________________________
_____________________________
(a) Except as expressly set forth in this Declaration
and except if a meeting of the Regular Trustees is called with respect to any
matter over which the Regular Trustees have power to act, any power of the
Regular Trustees may be exercised by, or with the consent of, any one such
Regular Trustee.
<PAGE>
(b) Unless otherwise determined by the Regular Trustees,
and except as otherwise required by the Business Trust Act or applicable law,
any Regular Trustee is authorized to execute on behalf of the Trust any
documents which the Regular Trustees have the power and authority to cause
the Trust to execute pursuant to Section 3.6, provided, that, the
registration statement referred to in Section 3.6, including any amendments
thereto, shall be signed by all of the Regular Trustees; and
(c) a Regular Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purposes of signing any documents that the
Regular Trustees have power and authority to cause the Trust to execute
pursuant to Section 3.6.
SECTION 5.6 APPOINTMENT, REMOVAL AND RESIGNATION OF
TRUSTEES.
(a) Subject to Section 5.6(b), Trustees may be appointed
or removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of
the Holders of a Majority in liquidation amount of the Common
Securities voting as a class at a meeting of the Holders of the
Common Securities.
(b) (i) The Trustee that acts as
Institutional Trustee shall not be removed in
accordance with Section 5.6(a) until a successor
Institutional Trustee possessing the qualifications
to act as Institutional Trustee under Sections 5.2
and 5.3 (a "Successor Institutional Trustee") has
been appointed and has accepted such appointment by
written instrument executed by such Successor
Institutional Trustee and delivered to the Regular
Trustees and the Sponsor; and
(ii) The Trustee that acts as Delaware Trustee shall
not be removed in accordance with Section 5.6(a) until a successor
Trustee possessing the qualifications to act as Delaware Trustee
under Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has been
appointed and has accepted such appointment by written instrument
executed by such Successor Delaware Trustee and delivered to the
Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office
until such Trustee's successor shall have been appointed or until such
Trustee's death, removal or resignation. Any Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as
is specified therein; provided, however, that:
(i) no such resignation of the Trustee that acts as
the Institutional Trustee shall be effective:
<PAGE>
(A) until a Successor Institutional Trustee has
been appointed and has accepted such appointment by
instrument executed by such Successor Institutional Trustee
and delivered to the Trust, the Sponsor and the resigning
Institutional Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed
to the holders of the Securities; and
(ii) no such resignation of the Trustee that acts as
the Delaware Trustee shall be effective until a Successor Delaware
Trustee has been appointed and has accepted such appointment by
instrument executed by such Successor Delaware Trustee and delivered
to the Trust, the Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use all
reasonable efforts to promptly appoint a Successor Delaware Trustee or
Successor Institutional Trustee, as the case may be, if the Institutional
Trustee or the Delaware Trustee delivers an instrument of resignation in
accordance with this Section 5.6.
(e) If no Successor Institutional Trustee or Successor
Delaware Trustee shall have been appointed and accepted appointment as
provided in this Section 5.6 within 60 days after delivery to the Sponsor and
the Trust of an instrument of resignation, the resigning Institutional
Trustee or Delaware Trustee, as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Institutional Trustee
or Successor Delaware Trustee. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper and prescribe, appoint a Successor
Institutional Trustee or Successor Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall
be liable for the acts or omissions to act of any Successor Institutional
Trustee or Successor Delaware Trustee, as the case may be.
SECTION 5.7 VACANCIES AMONG TRUSTEES.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 5.1, or if the number
of Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Regular Trustees
or, if there are more than two Regular Trustees, a majority of the Regular
Trustees shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section
5.6.
SECTION 5.8 EFFECT OF VACANCIES.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of
a Trustee shall not operate to annul the Trust. Whenever a vacancy among the
Regular Trustees shall occur, until such vacancy is filled by the appointment
of a Regular Trustee in accordance with Section 5.6, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
<PAGE>
SECTION 5.9 MEETINGS.
If there is more than one Regular Trustee, meetings of the
Regular Trustees shall be held from time to time upon the call of any Regular
Trustee. Regular meetings of the Regular Trustees may be held at a time and
place fixed by resolution of the Regular Trustees. Notice of any in-person
meetings of the Regular Trustees shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 48 hours before such meeting. Notice of any telephonic
meetings of the Regular Trustees or any committee thereof shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a
hard copy by overnight courier) not less than 24 hours before a meeting.
Notices shall contain a brief statement of the time, place and anticipated
purposes of the meeting. The presence (whether in person or by telephone) of
a Regular Trustee at a meeting shall constitute a waiver of notice of such
meeting except where a Regular Trustee attends a meeting for the express
purpose of objecting to the transaction of any activity on the ground that
the meeting has not been lawfully called or convened. Unless provided
otherwise in this Declaration, any action of the Regular Trustees may be
taken at (i) a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or (ii) without a meeting by the
unanimous written consent of the Regular Trustees. In the event there is only
one Regular Trustee, any and all action of such Regular Trustee shall be
evidenced by a written consent of such Regular Trustee.
SECTION 5.10 DELEGATION OF POWER.
(a) Any Regular Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.6, including any registration statement or
amendment thereto filed with the Commission, or making any other governmental
filing; and
(b) the Regular Trustees shall have power to delegate
from time to time to such of their number or to officers of the Trust the
doing of such things and the execution of such instruments either in the name
of the Trust or the names of the Regular Trustees or otherwise as the Regular
Trustees may deem expedient, to the extent such delegation is not prohibited
by applicable law or contrary to the provisions of the Trust, as set forth
herein.
SECTION 5.11 MERGER, CONVERSION. CONSOLIDATION OR
SUCCESSION TO BUSINESS.
Any corporation into which the Institutional Trustee or the
Delaware Trustee, as the case may be, may be merged or converted or with
which either may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Institutional Trustee or the
Delaware Trustee, as the case may be, shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the
Institutional Trustee or the Delaware Trustee, as the case may be, shall be
the successor of the Institutional Trustee or the Delaware Trustee, as the
case may be, hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
<PAGE>
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 DISTRIBUTIONS.
Holders shall receive Distributions (as defined herein) in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Preferred Securities and the Common
Securities in accordance with the preferences set forth in their respective
terms. If and to the extent that the Debenture Issuer makes a payment of
interest (including Compounded Interest (as defined in the Indenture) and
Additional Interest (as defined in the Indenture)), premium and/or principal
on the Debentures held by the Institutional Trustee (the amount of any such
payment being a "Payment Amount"), the Institutional Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 GENERAL PROVISIONS REGARDING SECURITIES.
(a) The Regular Trustees shall, on behalf of the Trust,
issue one class of preferred securities representing undivided beneficial
interests in the assets of the Trust having such terms as are set forth in
Annex I (the "Preferred Securities") and one class of common securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Common Securities"). The Trust
shall issue no securities or other interests in the assets of the Trust other
than the Preferred Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the
Trust by a Regular Trustee. Such signature shall be the manual or facsimile
signature of any present or any future Regular Trustee. In case any Regular
Trustee who shall have signed any of the Securities shall cease to be such
Regular Trustee before the Certificates so signed shall be delivered by the
Trust, such Certificates nevertheless may be delivered as though the person
who signed such Certificates had not ceased to be such Regular Trustee; and
any Certificate may be signed on behalf of the Trust by such persons who, at
the actual date of execution of such Certificate, shall be the Regular
Trustees of the Trust, although at the date of the execution and delivery of
the Declaration any such person was not such a Regular Trustee. Certificates
shall be printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Regular Trustees, as evidenced by
their execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply with any law
or with any rule or regulation of any stock exchange on which Securities may
be listed, or to conform to usage.
(c) The consideration received by the Trust for the
issuance of the Securities shall constitute a contribution to the capital of
the Trust and shall not constitute a loan to the Trust.
<PAGE>
(d) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable.
(e) Every Person, by virtue of having become a Holder or
a Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the
terms of, and shall be bound by, this Declaration.
SECTION 7.2 PAYING AGENT.
In the event that the Preferred Securities are not in
book-entry only form, the Trust shall maintain in the borough of Manhattan,
City of New York, State of New York, an office or agency where the Preferred
Securities may be presented for payment ("Paying Agent"), and any such Paying
Agent shall comply with Section 317(b) of the Trust Indenture Act. The Trust
may appoint the Paying Agent and may appoint one or more additional paying
agents in such other locations as it shall determine. The term "Paying Agent"
includes any additional paying agent. The Trust may change any Paying Agent
without prior notice to any Holder. The Trust shall notify the Institutional
Trustee of the name and address of any Paying Agent not a party to this
Declaration. If the Trust fails to appoint or maintain another entity as
Paying Agent, the Institutional Trustee shall act as such. The Trust or any
of its Affiliates (including the Sponsor) may act as Paying Agent. The
Institutional Trustee shall initially act as Paying Agent for the Preferred
Securities and the Common Securities.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 TERMINATION OF TRUST.
(a) The Trust shall terminate:
(i) upon a Termination Event;
(ii) upon the filing of a certificate of dissolution or
its equivalent with respect to the Sponsor; or the revocation of the
Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution
of the Holder of the Common Securities, the Sponsor or the Trust;
(iv) upon the occurrence and continuation of an
Investment Company Event pursuant to which the Trust shall have been
dissolved in accordance with the terms of the Securities and all of
the Debentures endorsed thereon shall have been distributed to the
Holders of Securities in exchange for all of the Securities;
(v) when all the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall
have been paid to the Holders in accordance with the terms of the
Securities; or
<PAGE>
(vi) with the consent of all of the Regular Trustees
and the Sponsor.
(b) As soon as is practicable after the occurrence of an
event referred to in Section 8.1(a) and upon completion of the winding-up of
the Trust and its termination, the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 4.4 and Article X shall
survive the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 TRANSFER OF SECURITIES.
(a) Securities may only be transferred, in whole or in
part, in accordance with the terms and conditions set forth in this
Declaration and in the terms of the Securities. Any transfer or purported
transfer of any Security not made in accordance with this Declaration shall
be null and void.
(b) Subject to this Article IX, Preferred Securities
shall be freely transferable.
(c) Subject to this Article IX, the Sponsor and any
Related Party may only transfer Common Securities to the Sponsor or a Related
Party of the Sponsor; provided that, any such transfer is subject to the
condition precedent that the transferor obtain the written opinion of
nationally recognized independent counsel experienced in such matters that
such transfer would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United
States federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
SECTION 9.2 TRANSFER OF CERTIFICATES.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be
imposed in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to
be issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by
a written instrument of transfer in form satisfactory to the Regular Trustees
duly executed by the Holder or such Holder's attorney duly authorized in
writing. Each Certificate surrendered for registration of transfer shall be
canceled by the Regular Trustees. A transferee of a Certificate shall be
entitled to the rights and subject to the obligations of a Holder hereunder
upon the receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by
this Declaration.
<PAGE>
SECTION 9.3 DEEMED SECURITY HOLDERS.
The Trustees may treat the Person in whose name any
Certificate shall be registered on the books and records of the Trust as the
sole holder of such Certificate and of the Securities represented by such
Certificate for purposes of receiving Distributions and for all other
purposes whatsoever and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such Certificate or in the
Securities represented by such Certificate on the part of any Person, whether
or not the Trust shall have actual or other notice thereof.
SECTION 9.4 BOOK ENTRY INTERESTS.
The Preferred Securities Certificates, on original issuance,
in addition to being issued in the form of one or more definitive, fully
registered Preferred Securities Certificate (each a "Definitive Preferred
Securities Certificate") registered initially in the books and records of the
Trust in the name of The First National Bank of Chicago, as Purchase Contract
Agent, will be issued in the form of one or more, fully registered, global
Preferred Security Certificates (each a "Global Certificate"), to be
delivered to DTC, the initial Clearing Agency, by, or on behalf of, the
Trust. Such Global Certificate(s) shall initially be registered on the books
and records of the Trust in the name of Cede & Co., the nominee of DTC, and
no Preferred Security Beneficial Owner will receive a definitive Preferred
Security Certificate representing such Preferred Security Beneficial Owner's
interests in such Global Certificate(s), except as provided in Section 9.7.
Except for the Definitive Preferred Security Certificates as specified herein
and the definitive, fully registered Preferred Securities Certificates that
have been issued to the Preferred Security Beneficial Owners pursuant to
Section 9.7:
(a) the provisions of this Section 9.4 shall be in full
force and effect;
(b) the Trust and the Trustees shall be entitled to deal
with the Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificate(s) and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificate(s) and shall have no
obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section
9.4 conflict with any other provisions of this Declaration, the provisions of
this Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial
Owners shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such Preferred
Security Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants to receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants. DTC will make book entry
transfers among the Clearing Agency Participants; provided, that, solely for
the purposes of determining whether the Holders of the requisite amount of
Preferred Securities have voted on any matter provided for in this
Declaration, so long as Definitive Preferred Security Certificates have not
been issued, the Trustees may conclusively rely on, and shall be protected in
relying on, any written instrument (including a proxy) delivered to the
<PAGE>
Trustees by the Clearing Agency setting forth the Preferred Security
Beneficial Owners' votes or assigning the right to vote on any matter to any
other Persons either in whole or in part.
SECTION 9.5 NOTICES TO CLEARING AGENCY.
Whenever a notice or other communication to the Preferred
Security Holders is required under this Declaration, unless and until
definitive fully registered Preferred Security Certificates shall have been
issued to the Preferred Security Beneficial Owners pursuant to Section 9.7 or
otherwise, the Regular Trustees shall give all such notices and
communications specified herein to be given to the Preferred Security Holders
to the Clearing Agency, and shall have no notice obligations to the Preferred
Security Beneficial Owners.
SECTION 9.6 APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency
with respect to such Preferred Securities.
SECTION 9.7 DEFINITIVE PREFERRED SECURITY CERTIFICATES.
If:
(a) a Clearing Agency elects to discontinue its services
as securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with
the Sponsor to terminate the book entry system through the Clearing Agency
with respect to the Preferred Securities, then:
(c) definitive fully registered Preferred Security
Certificates shall be prepared by the Regular Trustees on behalf of the Trust
with respect to such Preferred Securities; and
(d) upon surrender of the Global Certificate(s) by the
Clearing Agency, accompanied by registration instructions, the Regular
Trustees shall cause definitive fully registered Preferred Securities
Certificates to be delivered to Preferred Security Beneficial Owners in
accordance with the instructions of the Clearing Agency. Neither the Trustees
nor the Trust shall be liable for any delay in delivery of such instructions
and each of them may conclusively rely on and shall be protected in relying
on, said instructions of the Clearing Agency. The definitive fully registered
Preferred Security Certificates shall be printed, lithographed or engraved or
may be produced in any other manner as is reasonably acceptable to the
Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as
may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on
which Preferred Securities may be listed, or to conform to usage.
<PAGE>
SECTION 9.8 MUTILATED, DESTROYED, LOST OR STOLEN
CERTIFICATES.
If:
(a) any mutilated Certificate should be surrendered to
the Regular Trustees, or if the Regular Trustees shall receive evidence to
their satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees
such security or indemnity as may be required by them to keep each of them
and the Trust harmless,
then, in the absence of notice that such Certificate shall have been acquired
by a bona fide purchaser, any Regular Trustee on behalf of the Trust shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like
denomination. In connection with the issuance of any new Certificate under
this Section 9.8, the Regular Trustees may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate Certificate issued pursuant to this
Section shall constitute conclusive evidence of an ownership interest in the
relevant Securities, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 LIABILITY.
(a) Except as expressly set forth in this Declaration,
the Debentures, the Securities Guarantees and the terms of the Securities,
the Sponsor shall not be:
(i) personally liable for the return of any portion of
the capital contributions (or any return thereon) of the Holders of
the Securities, which shall be made solely from assets of the Trust;
or
(ii) required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable
for all of the debts and obligations of the Trust (other than with respect to
the Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust
Act, the Holders of the Preferred Securities shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the
State of Delaware.
SECTION 10.2 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible
or accountable in damages or otherwise to the Trust or any Covered Person for
<PAGE>
any loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the Trust
and in a manner such Indemnified Person reasonably believed to be within the
scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for
any such loss, damage or claim incurred by reason of such Indemnified
Person's gross negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Trust and upon such
information, opinions, reports or statements presented to the Trust by any
Person as to matters the Indemnified Person reasonably believes are within
such other Person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Trust, including
information, opinions, reports or statements as to the value and amount of
the assets, liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which Distributions to Holders of
Securities might properly be paid.
SECTION 10.3 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust or to
any other Covered Person for its good faith reliance on the provisions of
this Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise
existing at law or in equity (other than the duties imposed on the
Institutional Trustee under the Trust Indenture Act), are agreed by the
parties hereto to replace such other duties and liabilities of such
Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest
of each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made,
taken or provided by the Indemnified Person shall not constitute a breach of
this Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person
is permitted or required to make a decision:
<PAGE>
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own interests, and
shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express
standard and shall not be subject to any other or different standard
imposed by this Declaration or by applicable law.
SECTION 10.4 INDEMNIFICATION.
(a)
(i) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a
party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the Trust) by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the Company
Indemnified Person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of
the Trust, and, with respect to any criminal action or proceeding,
had reasonable cause to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a
party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the Trust to
procure a judgment in its favor by reason of the fact that he is or
was a Company Indemnified Person against expenses (including
attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the Trust and except that
no such indemnification shall be made in respect of any claim, issue
or matter as to which such Company Indemnified Person shall have been
adjudged to be liable to the Trust unless and only to the extent that
the Court of Chancery of Delaware or the court in which such action
or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity
for such expenses which such Court of Chancery or such other court
shall deem proper.
<PAGE>
(iii) Any indemnification under paragraphs (i) and (ii)
of this Section 10.4(a) (unless ordered by a court) shall be made by
the Sponsor only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person
is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority
vote of a quorum consisting of such Regular Trustees who were not
parties to such action, suit or proceeding, (2) if such a quorum is
not obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a
written opinion, or (3) by the Common Security Holder of the Trust.
(iv) Expenses (including attorneys' fees) incurred by a
Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding referred
to in paragraphs (i) and (ii) of this Section 10.4(a) shall be paid
by the Debenture Issuer in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on
behalf of such Company Indemnified Person to repay such amount if it
shall ultimately be determined that such person is not entitled to
be indemnified by the Debenture Issuer as authorized in this Section
10.4(a). Notwithstanding the foregoing, no advance shall be made by
the Debenture Issuer if a determination is reasonably and promptly
made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a
written opinion or (iii) the Common Security Holder of the Trust,
that, based upon the facts known to the Regular Trustees, independent
legal counsel or Common Security Holder at the time such
determination is made, such person acted in bad faith or in a manner
that such person did not believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal proceeding,
that such Company Indemnified Person believed or had reasonable cause
to believe his conduct was unlawful. In no event shall any advance be
made in instances where the Regular Trustees, independent legal
counsel or Common Security Holder reasonably determine that such
person deliberately breached such person's duty to the Trust or its
Common or Preferred Security Holders.
(v) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this
Section 10.4(a) shall not be deemed exclusive of any other rights to
which those seeking indemnification and advancement of expenses may
be entitled under any agreement, vote of shareholders or
disinterested directors of the Sponsor or Preferred Security Holders
of the Trust or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office. All
rights to indemnification under this Section 10.4(a) shall be deemed
to be provided by a contract between the Sponsor and each Company
Indemnified Person who serves in such capacity at any time while this
Section 10.4(a) is in effect. Any repeal or modification of this
Section 10.4(a) shall not affect any rights or obligations then
existing.
<PAGE>
(vi) The Sponsor or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether
or not the Sponsor would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(vii) For purposes of this Section 10.4(a), references
to "the Trust" shall include, in addition to the resulting or
surviving entity, any constituent entity (including any constituent
of a constituent) absorbed in a consolidation or merger, so that any
person who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to the resulting or
surviving entity as such person would have with respect to such
constituent entity if its separate existence had continued.
(viii) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 10.4(a) shall,
unless otherwise provided when authorized or ratified, continue as to
a person who has ceased to be a Company Indemnified Person and shall
inure to the benefit of the successors, heirs, executors and
administrators of such a person.
(b) The Sponsor agrees to indemnify the (i)
Institutional Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the
Institutional Trustee or the Delaware Trustee, and (iv) any officers,
directors, shareholders, members, partners, employees, representatives,
custodians, nominees or agents of the Institutional Trustee or the Delaware
Trustee (each of the Persons in (i) through (iv) being referred to as a
"Fiduciary Indemnified Person") for, and to hold each Fiduciary Indemnified
Person harmless against, any loss, liability or expense incurred without
gross negligence and, in the case of the Institutional Trustee, pursuant to
Section 3.9, negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees
and expenses) of defending itself against or investigating any claim or
liability in connection with the exercise or performance of any of its powers
or duties hereunder. The provisions of this Section 10.4(b) shall survive the
satisfaction and discharge of this Declaration or the resignation or removal
of the Institutional Trustee or the Delaware Trustee, as the case may be.
SECTION 10.5 OUTSIDE BUSINESSES.
Any Covered Person, the Sponsor, the Delaware Trustee and
the Institutional Trustee may engage in or possess an interest in other
business ventures of any nature or description, independently or with others,
similar or dissimilar to the business of the Trust, and the Trust and the
Holders of Securities shall have no rights by virtue of this Declaration in
and to such independent ventures or the income or profits derived therefrom,
and the pursuit of any such venture, even if competitive with the business of
the Trust, shall not be deemed wrongful or improper. No Covered Person, the
Sponsor, the Delaware Trustee or the Institutional Trustee shall be obligated
to present any particular investment or other opportunity to the Trust even
if such opportunity is of a character that, if presented to the Trust, could
<PAGE>
be taken by the Trust, and any Covered Person, the Sponsor, the Delaware
Trustee and the Institutional Trustee shall have the right to take for its
own account (individually or as a partner or fiduciary) or to recommend to
others any such particular investment or other opportunity. Any Covered
Person, the Delaware Trustee and the Institutional Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for,
or act on any committee or body of holders of, securities or other
obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 FISCAL YEAR.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.2 CERTAIN ACCOUNTING MATTERS.
(a) At all times during the existence of the Trust, the
Trust shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted
accounting principles, consistently applied. The Trust shall use the accrual
method of accounting for United States federal income tax purposes. The books
of account and the records of the Trust shall be examined by and reported
upon as of the end of each Fiscal Year of the Trust by a firm of independent
certified public accountants selected by the Regular Trustees.
(b) The Trust shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States
federal income tax information statement required by the Code, containing
such information with regard to the Securities held by each Holder as is
required by the Code and the Treasury Regulations. Notwithstanding any right
under the Code to deliver any such statement at a later date, the Trust shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(c) The Trust shall cause to be duly prepared and filed
with the appropriate taxing authority an annual United States federal income
tax return, on a Form 1041 or such other form required by United States
federal income tax law, and any other annual income tax returns required to
be filed by the Trust on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3 BANKING.
The Trust shall maintain one or more bank accounts in the
name and for the sole benefit of the Trust; provided however, that all
payments of funds in respect of the Debentures held by the Institutional
Trustee shall be made directly to the Institutional Trustee Account and no
other funds of the Trust shall be deposited in the Institutional Trustee
Account. The sole signatories for such accounts shall be designated by the
<PAGE>
Regular Trustees; provided, however, that the Institutional Trustee shall
designate the signatories for the Institutional Trustee Account.
SECTION 11.4 WITHHOLDING.
The Trust shall comply with all withholding requirements
under United States federal, state and local law. The Trust shall request,
and the Holders shall provide to the Trust, such forms or certificates as are
necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Trust shall file required forms with applicable
jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the
Holder to applicable jurisdictions. To the extent that the Trust is required
to withhold and pay over any amounts to any authority with respect to
distributions or allocations to any Holder, the amount withheld shall be
deemed to be a distribution in the amount of the withholding to the Holder.
In the event of any claimed over withholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may
reduce subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 AMENDMENTS.
(a) Except as otherwise provided in this Declaration or
by any applicable terms of the Securities, this Declaration may only be
amended by a written instrument approved and executed by the Regular Trustees
(or, if there are more than two Regular Trustees, a majority of the Regular
Trustees); and
(i) if the amendment affects the rights, powers,
duties, obligations or immunities of the Institutional Trustee, also
by the Institutional Trustee; and
(ii) if the amendment affects the rights, powers,
duties, obligations or immunities of the Delaware Trustee, also by
the Delaware Trustee;
(b) no amendment shall be made:
(i) unless, in the case of any proposed amendment, the
Institutional Trustee shall have first received an Officer's
Certificate from each of the Trust and the Sponsor that such
amendment is permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment
which affects the rights, powers, duties, obligations or immunities
of the Institutional Trustee, the Institutional Trustee shall have
first received:
<PAGE>
(A) an Officer's Certificate from each of the
Trust and the Sponsor that such amendment is permitted by,
and conforms to, the terms of this Declaration (including
the terms of the Securities); and
(B) an opinion of counsel (who may be counsel
to the Sponsor or the Trust) that such amendment is
permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities); and
(iii) to the extent the result of such amendment would
be to:
(A) cause the Trust to fail to continue to be
classified for purposes of United States federal income
taxation as a grantor trust;
(B) reduce or otherwise adversely affect the
powers of the Institutional Trustee in contravention of the
Trust Indenture Act; or
(C) cause the Trust to be deemed to be an
Investment Company required to be registered under the
Investment Company Act;
(c) at such time after the Trust has issued any
Securities that remain outstanding, any amendment that would materially and
adversely affect the rights, privileges or preferences of any Holder of
Securities may be effected only with such additional requirements as may be
set forth in the terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be
amended without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent
of the Holders of a Majority in liquidation amount of the Common Securities;
(f) the rights of the holders of the Common Securities
under Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration
may be amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this
Declaration that may be defective or inconsistent with any other
provision of this Declaration;
(iii) add to the covenants, restrictions or obligations
of the Sponsor;
(iv) to conform to any change in Rule 3a-5 or written
change in interpretation or application of Rule 3a-5 by any
legislative body, court, government agency or regulatory authority
<PAGE>
which amendment does not have a material adverse effect on the right,
preferences or privileges of the Holders;
(v) to modify, eliminate and add to any provision of
the Declaration to such extent as may be necessary; and
(vi) cause the Trust to continue to be classified for
United States federal income tax purposes as a grantor trust.
SECTION 12.2 MEETINGS OF THE HOLDERS OF SECURITIES;
ACTION BY WRITTEN CONSENT.
(a) Meetings of the Holders of any class of Securities
may be called at any time by the Regular Trustees (or as provided in the
terms of the Securities) to consider and act on any matter on which Holders
of such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange
on which the Preferred Securities are listed or admitted for trading. The
Regular Trustees shall call a meeting of the Holders of such class if
directed to do so by the Holders of at least 10% in liquidation amount of
such class of Securities. Such direction shall be given by delivering to the
Regular Trustees one or more calls in a writing stating that the signing
Holders of Securities wish to call a meeting and indicating the general or
specific purpose for which the meeting is to be called. Any Holders of
Securities calling a meeting shall specify in writing the Security
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those Securities specified shall be counted for purposes of
determining whether the required percentage set forth in the second sentence
of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms
of the Securities, the following provisions shall apply to meetings of
Holders of Securities:
(i) notice of any such meeting shall be given to all
the Holders of Securities having a right to vote thereat at least 7
days and not more than 60 days before the date of such meeting.
Whenever a vote, consent or approval of the Holders of Securities is
permitted or required under this Declaration, the terms of the
Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities
may be taken without a meeting if a consent in writing setting forth
the action so taken is signed by the Holders of Securities owning not
less than the minimum amount of Securities in liquidation amount that
would be necessary to authorize or take such action at a meeting at
which all Holders of Securities having a right to vote thereon were
present and voting. Prompt notice of the taking of action without a
meeting shall be given to the Holders of Securities entitled to vote
who have not consented in writing. The Regular Trustees may specify
that any written ballot submitted to the Security Holder for the
purpose of taking any action without a meeting shall be returned to
the Trust within the time specified by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person
to act for it by proxy on all matters in which a Holder of Securities
<PAGE>
is entitled to participate, including waiving notice of any meeting,
or voting or participating at a meeting. No proxy shall be valid
after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at
the pleasure of the Holder of Securities executing it. Except as
otherwise provided herein, all matters relating to the giving, voting
or validity of proxies shall be governed by the General Corporation
Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a
Delaware corporation;
(iii) each meeting of the Holders of the Securities
shall be conducted by the Regular Trustees or by such other Person
that the Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration,
the terms of the Securities, the Trust Indenture Act or the listing
rules of any stock exchange on which the Preferred Securities are
then listed or trading otherwise provides, the Regular Trustees, in
their sole discretion, shall establish all other provisions relating
to meetings of Holders of Securities, including notice of the time,
place or purpose of any meeting at which any matter is to be voted on
by any Holders of Securities, waiver of any such notice, action by
consent without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1 REPRESENTATIONS AND WARRANTIES OF
INSTITUTIONAL TRUSTEE.
The Trustee that acts as initial Institutional Trustee
represents and warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Institutional Trustee represents and warrants
to the Trust and the Sponsor at the time of the Successor Institutional
Trustee's acceptance of its appointment as Institutional Trustee, that:
(a) the Institutional Trustee is a national banking
association with trust powers, duly organized, validly existing and in good
standing under the laws of the United States of America, with trust power and
authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
(b) the Institutional Trustee satisfies the requirements
set forth in Section 5.3(a);
(c) the execution, delivery and performance by the
Institutional Trustee of the Declaration has been duly authorized by all
necessary corporate action on the part of the Institutional Trustee. The
Declaration has been duly executed and delivered by the Institutional
Trustee, and it constitutes a legal, valid and binding obligation of the
Institutional Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium, insolvency, and
<PAGE>
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of whether
the enforcement of such remedies is considered in a proceeding in equity or
at law);
(d) the execution, delivery and performance of the
Declaration by the Institutional Trustee does not conflict with or constitute
a breach of the Articles of Organization or By-laws of the Institutional
Trustee; and
(e) no consent, approval or authorization of, or
registration with or notice to, any State or Federal banking authority is
required for the execution, delivery or performance by the Institutional
Trustee, of the Declaration.
SECTION 13.2 REPRESENTATIONS AND WARRANTIES OF DELAWARE
TRUSTEE.
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee represents and warrants to the Trust and
the Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee, that:
(a) The Delaware Trustee is a Delaware corporation, duly
organized, validly existing and in good standing under the laws of the State
of Delaware, with power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the
Delaware Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Delaware Trustee. The Declaration has
been duly executed and delivered by the Delaware Trustee, and it constitutes
a legal, valid and binding obligation of the Delaware Trustee, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
(c) No consent, approval or authorization of, or
registration with or notice to, any State or Federal banking authority is
required for the execution, delivery or performance by the Delaware Trustee
of the Declaration; and
(d) the execution, delivery and performance of the
Declaration by the Delaware Trustee does not conflict with or constitute a
breach of the Articles of Organization or By-laws of the Delaware Trustee;
and
<PAGE>
(e) The Delaware Trustee is a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity
which has its principal place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 NOTICES.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular
Trustees at the Trust's mailing address set forth below (or such other
address as the Trust may give notice of to the Holders of the Securities):
Ingersoll-Rand Financing I
c/o Ingersoll-Rand Company
200 Chestnut Ridge Road
Woodcliff, New Jersey 07675
(b) if given to the Delaware Trustee, at the mailing
address set forth below (or such other address as Delaware Trustee may give
notice of to the Holders of the Securities):
" "
(c) if given to the Institutional Trustee, at its
Corporate Trust Office to the attention of Corporate Trust Administration (or
such other address as the Institutional Trustee may give notice of to the
Holders of the Securities):
" "
(d) if given to the Holder of the Common Securities, at
the mailing address of the Sponsor set forth below (or such other address as
the Holder of the Common Securities may give notice to the Trust):
Ingersoll-Rand Company
200 Chestnut Ridge Road
Woodcliff, New Jersey 07675
Attn: Corporate Secretary
(e) if given to any other Holder, at the address set
forth on the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first
class mail, postage prepaid except that if a notice or other document is
refused delivery or cannot be delivered because of a changed address of which
<PAGE>
no notice was given, such notice or other document shall be deemed to have
been delivered on the date of such refusal or inability to deliver.
SECTION 14.2 GOVERNING LAW.
This Declaration and the rights of the parties hereunder
shall be governed by and interpreted in accordance with the laws of the State
of Delaware and all rights and remedies shall be governed by such laws
without regard to principles of conflict of laws.
SECTION 14.3 INTENTION OF THE PARTIES.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust.
The provisions of this Declaration shall be interpreted to further this
intention of the parties.
SECTION 14.4 HEADINGS.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 14.5 SUCCESSORS AND ASSIGNS.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be
deemed to be included, and all covenants and agreements in this Declaration
by the Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
SECTION 14.6 PARTIAL ENFORCEABILITY.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to
persons or circumstances other than those to which it is held invalid, shall
not be affected thereby.
SECTION 14.7 COUNTERPARTS.
This Declaration may contain more than one counterpart of
the signature page and this Declaration may be executed by the affixing of
the signature of each of the Trustees to one of such counterpart signature
pages. All of such counterpart signature pages shall be read as though one,
and they shall have the same force and effect as though all of the signers
had signed a single signature page.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused these
presents to be executed as of the day and year first above written.
_____________________________________
, as Regular Trustee
_____________________________________
, as Regular Trustee
" ",
as Delaware Trustee
By___________________________________
Name_________________________________
Title________________________________
" ",
as Institutional Trustee
By___________________________________
Name_________________________________
Title________________________________
INGERSOLL-RAND COMPANY,
as Sponsor
By___________________________________
Name_________________________________
Title________________________________
<PAGE>
ANNEX I
TERMS AND CONDITIONS OF
____% TRUST ORIGINATED PREFERRED SECURITIES
____% TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of March __, 1998 (as amended from time to
time, the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities and
the Common Securities are set out below (each capitalized term used but not
defined herein has the meaning set forth in the Declaration or, if not
defined in the Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
(a) Preferred Securities. 3,500,000 Preferred
Securities of the Trust, with an aggregate liquidation amount with respect to
the assets of the Trust of Three Hundred Fifty Million Dollars ($350,000,000)
and a liquidation amount with respect to the assets of the Trust of $10 per
preferred security, are hereby designated for the purposes of identification
only as "____% Trust Originated Preferred Securities" (the "Preferred
Securities"). The Preferred Security Certificates evidencing the Preferred
Securities shall be substantially in the form of Exhibit A-1 to the
Declaration, with such changes and additions thereto or deletions therefrom
as may be required by applicable law or the rules of any stock exchange on
which the Preferred Securities are listed or to conform to ordinary usage,
custom or practice.
(b) Common Securities. Common Securities of the Trust,
with an aggregate liquidation amount with respect to the assets of the Trust
of One Million Eighty-Two Thousand Five Hundred Dollars ($1,082,500) and a
liquidation amount with respect to the assets of the Trust of $10 per common
security, are hereby designated for the purposes of identification only as
"____% Trust Originated Common Securities" (the "Common Securities"). The
Common Security Certificates evidencing the Common Securities shall be
substantially in the form of Exhibit A-2 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
applicable law or to conform to ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed
initially at a rate per annum of ____% (the "Coupon Rate") of the stated
liquidation amount of $10 per Security until ________ 15, 2001, and at the
Reset Rate thereafter, such rates being the rates of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears
for more than one quarter will bear interest thereon compounded quarterly at
the rate of ____% until February 15, 2001, and at the Reset Rate thereafter
(to the extent permitted by applicable law). The term "Distributions" as used
herein includes such cash distributions and any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that payments
are made in respect of the Debentures held by the Institutional Trustee and
to the extent the Institutional Trustee has funds available therefor. The
amount of Distributions payable for any period will be computed for any full
quarterly Distribution period on the basis of a 360-day year consisting of
twelve 30-day months, and for any period shorter than a full quarterly
<PAGE>
Distribution period for which Distributions are computed, Distributions will
be computed on the basis of the actual number of days elapsed per 30-day
month.
(b) Distributions on the Securities will be cumulative,
will accrue from March __, 1998, and will be payable quarterly in arrears, on
February 16, May 16, August 16 and November 16 of each year, commencing on
16, 1998, except as otherwise described below. The Debenture
Issuer has the right under the Indenture to defer payments of interest by
extending the interest payment period from time to time on the Debentures for
a period not extending, in the aggregate, beyond the maturity date of the
Debentures (each an "Extension Period"). During such Extension Period no
interest shall be due and payable on the Debentures. As a consequence of such
deferral, Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accrue with interest thereon at the
rate of ____% until February 15, 2001, and at the Reset Rate thereafter,
compounded quarterly during any such Extension Period (to the extent
permitted by applicable law). Payments of accrued Distributions will be
payable to Holders as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period. Upon the
termination of any Extension Period and the payment of all amounts then due,
the Debenture Issuer may commence a new Extension Period; provided that such
Extension Period together with all such previous and further extensions
thereof may not exceed beyond the maturity date of the Debentures.
(c) Distributions on the Securities will be payable to
the Holders thereof as they appear on the books and records of the Trust at
the close of business on the Business Day immediately preceding each of the
relevant payment dates on the Securities. Subject to any applicable laws and
regulations and the provisions of the Declaration, each such payment in
respect of the Preferred Securities will be made as described under the
heading "Description of the Trust Preferred Securities -- Book Entry Only
Issuance -The Depository Trust Company" in the Prospectus Supplement dated
March __, 1998 to the Prospectus dated January __, 1998 (collectively, the
"Prospectus") of the Trust relating to the Registration Statement on Form S-3
(file no. 333- __________) of the Sponsor and the Trust. The relevant record
dates for the Common Securities shall be the same record date as for the
Preferred Securities. If the Preferred Securities shall not continue to
remain in book-entry only form or are not in book-entry only form at
issuance, the relevant record dates for the Preferred Securities, shall
conform to the rules of any securities exchange on which the securities are
listed and, if none, as shall be selected by the Regular Trustees, which
dates shall be at least more than one, but less than 60 Business Days before
the relevant payment dates, which payment dates correspond to the interest
payment dates on the Debentures. Distributions payable on any Securities that
are not punctually paid on any Distribution payment date, as a result of the
Debenture Issuer having failed to make a payment under the Debentures, will
cease to be payable to the Person in whose name such Securities are
registered on the relevant record date, and such defaulted Distribution will
instead be payable to the Person in whose name such Securities are registered
on the special record date or other specified date determined in accordance
with the Indenture. If any date on which Distributions are payable on the
Securities is not a Business Day, then payment of the Distribution payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except
that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
<PAGE>
with the same force and effect as if made on such date. So long as the Holder
of any Preferred Securities is the Collateral Agent, the payment of
Distributions on such Preferred Securities held by the Collateral Agent will
be made at such place and to such account as may be designated by the
Collateral Agent.
(d) The Coupon Rate on the Securities (as well as the
interest rate on the Debentures) will be reset on the third Business Day
immediately preceding the Purchase Contract Settlement Date to the Reset Rate
(which reset Rate will be in effect on and after the Purchase Contract
Settlement Date). On the Reset Announcement Date, the Reset Spread and the
Two-Year Benchmark Treasury to be used to determine the Reset Rate will be
announced by the Sponsor. On the Business Day immediately following the
Reset Announcement Date, the Holders of Securities will be notified of such
Reset Spread and Two-Year Benchmark Treasury by the Sponsor. Such notice
shall be sufficiently given to Holders of Securities if published in an
Authorized Newspaper.
(e) Not later than 7 calendar days nor more than 15
calendar days prior to the Reset Announcement Date, the Sponsor will notify
DTC (as defined herein) or its nominee (or any successor Clearing Agency or
its nominee) by first-class mail, postage prepaid, to notify the Preferred
Security Beneficial Owner or Clearing Agency Participants holding Preferred
Securities, Income PRIDES or Growth PRIDES, of such Reset Announcement Date
and the procedures to be followed by such Holders of Income PRIDES who intend
to settle their obligation under the Purchase Contract with separate cash.
(f) In the event that there is any money or other
property held by or for the Trust that is not accounted for hereunder, such
property shall be distributed Pro Rata (as defined herein) among the Holders
of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution of
the Trust (unless a Tax Event Redemption has occurred), the Holders of the
Securities on the date of the dissolution will be entitled to receive out of
the assets of the Trust, after satisfaction of liabilities to creditors,
Debentures in an aggregate principal amount equal to the aggregate stated
liquidation amount of such Securities, with an interest rate equal to the
rate of ____%, if on or prior to 15, 2001, and the Reset Rate
thereafter, and bearing accrued and unpaid interest in an amount equal to the
accrued and unpaid Distributions on such Securities and which shall be
distributed on a Pro Rata basis to the Holders of the Securities in exchange
for such Securities (such amount being "Liquidation Distribution").
If, upon any such dissolution, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available
to pay in full the aggregate Liquidation Distribution, then the amounts
payable directly by the Trust on the Securities shall be paid on a Pro Rata
basis.
4. Redemption and Distribution.
(a) Upon the redemption of the Debentures in whole (but
not in part), at maturity, the proceeds from such redemption shall, after
satisfaction of liabilities to creditors, be simultaneously applied to redeem
<PAGE>
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so redeemed at a redemption price of $10
per Security plus an amount equal to accrued and unpaid Distributions thereon
at the date of the repayment, payable in cash.
(b) If an Investment Company Event (as defined herein)
shall occur and be continuing the Regular Trustees shall dissolve the Trust
and, after satisfaction of liabilities to creditors, cause Debentures held by
the Institutional Trustee, having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate the rate of
____%, if on or prior to 15, 2001, and the Reset Rate thereafter,
and accrued and unpaid interest equal to accrued and unpaid Distributions on,
and having the same record date for payment as the Securities, to be
distributed to the Holders of the Securities in liquidation of such Holders'
interests in the Trust on a Pro Rata basis, within 90 days following the
occurrence of such Investment Company Event (the "90 Day Period"); provided,
however, that, if at the time there is available to the Trust the opportunity
to eliminate, within the 90 Day Period, the Investment Company Event by
taking some ministerial action, such as filing a form or making an election,
or pursuing some other similar reasonable measure that will have no adverse
effect on the Trust, the Debenture Issuer, the Sponsor or the Holders of the
Securities and will involve no material cost ("Ministerial Action"), the
Regular Trustees will pursue such Ministerial Action in lieu of dissolution.
"Investment Company Event" means that the Regular Trustees
shall have received an opinion of independent counsel experienced in practice
under the Investment Company Act (an "Investment Company Event Opinion") to
the effect that, as a result of the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), which Change in 1940 Act Law becomes
effective on or after the date of the Prospectus, there is a more than an
insubstantial risk that the Trust is or will be considered an Investment
Company which is required to be registered under the Investment Company Act.
(c) If a Tax Event shall occur and be continuing, the
Debentures are redeemable at the option of the Debenture Issuer, in whole but
not in part, on not less than 30 days nor more than 60 days notice ("Tax
Event Redemption"). If the Debenture Issuer redeems the Debentures upon the
occurrence and continuance of a Tax Event, the proceeds from such redemption
shall simultaneously be applied by the Institutional Trustee to redeem the
Securities having an aggregate stated liquidation amount equal to the
aggregate principal amount of the Debentures so redeemed at a redemption
price (the "Redemption Price"), per Security, equal to the Redemption Amount
plus any accumulated and unpaid distributions thereon to the date of such
redemption. If, following the occurrence of a Tax Event, the Debenture
Issuer exercises its option to redeem the Debentures, the Debenture Issuer
shall appoint the Quotation Agent to assemble the Treasury Portfolio in
consultation with the Company. The Institutional Trustee will distribute, to
the record Holder of the Securities the Redemption Price payable in
liquidation of such Holder's interests in the Trust.
"Tax Event" means the receipt by the Regular Trustees of an
opinion of a nationally recognized independent tax counsel experienced in
such matters to the effect that, as a result of (a) any amendment to, or
change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
<PAGE>
taxing authority thereof or therein affecting taxation, (b) any amendment to
or change in an interpretation or application of such laws or regulations by
any legislative body, court, governmental agency or regulatory authority or
(c) any interpretation or pronouncement that provides for a position with
respect to such laws or regulations that differs from the generally accepted
position on the date the Securities are issued, which amendment or change is
effective or which interpretation or pronouncement is announced on or after
the date of issuance of the Securities under the Declaration, there is more
than an insubstantial risk that (i) interest payable by the Debenture Issuer
on the Debentures would not be deductible, in whole or in part, by the
Debenture Issuer for federal income tax purposes or (ii) the Trust would be
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
"Treasury Portfolio" means, with respect to the Applicable
Principal Amount of Debentures (a) if the Tax Event Redemption Date occurs
prior to 16, 2001, a portfolio of zero-coupon U.S. Treasury
Securities consisting of (i) principal or interest strips of U.S. Treasury
Securities which mature on or prior to 15, 2001 in an
aggregate amount equal to the Applicable Principal Amount and (ii) with
respect to each scheduled interest payment date on the Debentures that occurs
after the Tax Event Redemption Date, principal or interest strips of U.S.
Treasury Securities which mature on or prior to such date in an aggregate
amount equal to the aggregate interest payment that would be due on the
Applicable Principal Amount of the Debentures on such date, and (b) if the
Tax Event Redemption Date occurs after February 16, 2001, a portfolio of
zero-coupon U.S. Treasury Securities consisting of (i) principal or interest
strips of U.S. Treasury Securities which mature on or prior to
15, 2003 in an aggregate amount equal to the Applicable
Principal Amount and (ii) with respect to each scheduled interest payment
date on the Debentures that occurs after the Tax Event Redemption Date,
principal or interest strips of such U.S. Treasury Securities which mature on
or prior to such date in an aggregate amount equal to the aggregate interest
payment that would be due on the Applicable Principal Amount of the Deben-
tures on such date.
"Applicable Ownership Interest" means, with respect to an
Income PRIDES and the U.S. Treasury Securities in the Treasury Portfolio, (A)
a 1/100, or 1%, undivided beneficial ownership interest in a $1,000 principal
or interest amount of a principal or interest strip in a U.S. Treasury
Security included in such Treasury Portfolio which matures on or prior to
15, 2001 and (B) for each scheduled interest payment date on
the Debentures that occurs after the Tax Event Redemption Date, a _________%
undivided beneficial ownership interest in a $1,000 face amount of such U.S.
Treasury Security which is a principal or interest strip maturing on such
date.
"Applicable Principal Amount" means either (i) if the Tax
Event Redemption Date occurs prior to 16, 2001, the aggregate
principal amount of the Debentures corresponding to the aggregate stated
liquidation amount of the Preferred Securities which are components of Income
PRIDES on the Tax Event Redemption Date or (ii) if the Tax Event Redemption
occurs on or after 16, 2001, the aggregate principal amount of
the Debentures corresponding to the aggregate stated liquidation amount of
the Preferred Securities outstanding on such Tax Event Redemption Date.
<PAGE>
"Redemption Amount" means for each Debenture, the product of
(i) the principal amount of such Debenture and (ii) a fraction whose
numerator is the Treasury Portfolio Purchase Price and whose denominator is
the Applicable Principal Amount.
"Treasury Portfolio Purchase Price" means the lowest
aggregate price quoted by a primary U.S. government securities dealer in New
York City (a "Primary Treasury Dealer") to the Quotation Agent on the third
Business Day immediately preceding the Tax Event Redemption Date for the
purchase of the Treasury Portfolio for settlement on the Tax Event Redemption
Date.
"Quotation Agent" means (i) Merrill Lynch Government
Securities, Inc. and its respective successors, provided, however, that if
the foregoing shall cease to be a Primary Treasury Dealer, the Sponsor shall
substitute therefor another Primary Treasury Dealer and (ii) any other
Primary Treasury Dealer selected by the Sponsor.
On and from the date fixed by the Regular Trustees for a Tax
Event Redemption or any distribution of Debentures and dissolution of the
Trust: (i) the Securities will no longer be deemed to be outstanding, (ii)
The Depository Trust Company ("DTC") or its nominee (or any successor
Clearing Agency or its nominee) or the record Holder of the Preferred
Securities, will receive a registered global certificate or certificates
representing the Debentures to be delivered upon such distribution and any
certificates representing Securities, except for certificates representing
Preferred Securities held by DTC or its nominee (or any successor Clearing
Agency or its nominee), will be deemed to represent beneficial interests in
the Debentures having an aggregate principal amount equal to the aggregate
stated liquidation amount of $10, with an interest rate of ____% if on or
prior to 15, 2001, and at the Reset Rate thereafter, and
accrued and unpaid interest equal to accrued and unpaid Distributions on such
Securities until such certificates are presented to the Debenture Issuer or
its agent for transfer or reissue.
5. Redemption or Distribution Procedures.
(a) Notice of any redemption (other then in connection
with the maturity of the Debentures) of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities to
be redeemed or exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the Tax Event Redemption Date. For purposes of the
calculation of the date of redemption or exchange and the dates on which
notices are given pursuant to this Section 5(a), a Redemption/Distribution
Notice shall be deemed to be given on the day such notice is first mailed by
first-class mail, postage prepaid, to Holders of Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of
Securities at the address of each such Holder appearing in the books and
records of the Trust. No defect in the Redemption/Distribution Notice or in
the mailing of either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with respect to any other
Holder.
(b) If Securities are to be redeemed and the Trust gives
a Redemption/Distribution Notice, which notice may only be issued if the
<PAGE>
Debentures are redeemed as set out in this Section 5 (such notice will be
irrevocable), then (A) while the Preferred Securities are in book-entry only
form, with respect to the Preferred Securities, by 12:00 noon, New York City
time, on the redemption date, provided that the Debenture Issuer has paid the
Institutional Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Debentures, the Institutional Trustee
will deposit irrevocably with DTC or its nominee (or any successor Clearing
Agency or its nominee) funds sufficient to pay the applicable Redemption
Price with respect to the Preferred Securities and will give DTC irrevocable
instructions and authority to pay the Redemption Price to the Holders of the
Preferred Securities so called for redemption, and (B) with respect to
Preferred Securities issued in definitive form and Common Securities,
provided that the Debenture Issuer has paid the Institutional Trustee a
sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, the Institutional Trustee will pay the relevant
Redemption Price to the Holders of such Securities by check mailed to the
address of the relevant Holder appearing on the books and records of the
Trust. Notwithstanding the foregoing, so long as the Holder of any Preferred
Securities is the Collateral Agent or the Purchase Contract Agent, the
payment of the Redemption Price in respect of such Preferred Securities held
by the Collateral Agent or the Purchase Contract Agent shall be made no later
than 12:00 noon, New York City time, on the Tax Event Redemption Date by
check or wire transfer in immediately available funds at such place and to
such account as may be designated by the Collateral Agent or the Purchase
Contract Agent. If a Redemption/Distribution Notice shall have been given
and funds deposited as required, if applicable, then immediately prior to the
close of business on the date of such deposit, or on the redemption date, as
applicable, distributions will cease to accrue on the Securities so redeemed
and all rights of Holders of such Securities so called for redemption will
cease, except the right of the Holders of such Securities to receive the
Redemption Price, but without interest on such Redemption Price. Neither the
Regular Trustees nor the Trust shall be required to register or cause to be
registered the transfer of any Securities that have been so called for
redemption. If any date fixed for redemption of Securities is not a Business
Day, then payment of the Redemption Price payable on such date will be made
on the next succeeding day that is a Business Day (without any interest or
other payment in respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case with the same force and effect as if
made on such date fixed for repayment. If payment of the Redemption Price in
respect of any Securities is improperly withheld or refused and not paid
either by the Institutional Trustee or by the Sponsor as guarantor pursuant
to the relevant Securities Guarantee, Distributions on such Securities will
continue to accrue from the original redemption date to the actual date of
payment, in which case the actual payment date will be considered the date
fixed for repayment for purposes of calculating the Redemption Price.
(c) Redemption/Distribution Notices shall be sent by the
Trust to (A) in respect of the Preferred Securities, the DTC or its nominee
(or any successor Clearing Agency or its nominee) if the Global Certificates
have been issued or, if Definitive Preferred Security Certificates have been
issued, to the Holder thereof, and (B) in respect of the Common Securities,
to the Holder thereof.
(d) Subject to the foregoing and applicable law
(including, without limitation, United States federal securities laws) the
Sponsor or any of its subsidiaries may at any time and from time to time
<PAGE>
purchase outstanding Preferred Securities by tender, in the open market or by
private agreement.
6. Repayment at Option of Holders.
(a) If a Failed Remarketing (as described in Section
5.4(b) of the Purchase Contract Agreement and incorporated herein by
reference) has occurred, each holder of Securities who holds such Securities
on the day immediately following the Purchase Contract Settlement Date, shall
have the right on or after the Business Day immediately following
16, 2001 to require the Trust to repay all or a portion of
such Securities owned by such holder (the "Put Option") on ,
2001 (the "Put Option Exercise Date"), upon at least three Business Days'
prior notice, at a repayment price of $10 per Security plus an amount equal
to the accrued and unpaid Distributions (including deferred distributions if
any) thereon to the date of payment (the "Put Option Repayment Price").
(b) The Trust shall obtain funds to pay the Put Option
Repayment Price of Securities being repaid under the Put Option through
presentation by the Institutional Trustee, on behalf of the Trust, to the
Debenture Issuer, pursuant to the right of the holder of the Debentures to
require the Debenture Issuer to repay all or a portion of the Debentures on
the Put Option Exercise Date, Debentures in an aggregate principal amount
equal to the aggregate stated liquidation amount of such Securities for
repayment on the Put Option Exercise Date at the Debenture Repayment Price.
(c) In order for the Securities to be repaid on the Put
Option Exercise Date, the Trust must receive on or prior to 4:00 p.m. on the
third Business Day immediately preceding the Put Option Exercise Date, at the
Corporate Trust Office of the Institutional Trustee, the Securities to be
repaid with the form entitled "Option to Elect Repayment" on the reverse
thereof or otherwise accompanying such Security duly completed. Any such
notice received by the Trust shall be irrevocable. All questions as to the
validity, eligibility (including time of receipt) and acceptance of the
Securities for repayment shall be determined by the Trust, whose
determination shall be final and binding.
(d) Payment of the Put Option Repayment Price to Holders
of Securities shall be made at the Corporate Trust Office of the
Institutional Trustee, provided that the Debenture Issuer has paid the
Institutional Trustee a sufficient amount of cash in connection with the
related repayment of the Debenture no later than 1:00 p.m., New York City
time, on the Put Option Exercise Date by check or wire transfer in
immediately available funds at such place and to such account as may be
designated by such Holders. If the Institutional Trustee holds immediately
available funds sufficient to pay the Put Option Repayment Price of such
Securities, then, immediately prior to the close of business on the Put
Option Exercise Date, such Securities will cease to be outstanding and
distributions thereon will cease to accrue, whether or not Securities are
delivered to the Institutional Trustee, and all other rights of the Holder in
respect of the Securities, including the Holder's right to require the Trust
to repay such Securities, shall terminate and lapse (other than the right to
receive the Put Option Repayment Price but without interest on such Put
Option Repayment Price). Neither the Regular Trustees nor the Trust shall be
required to register or cause to be registered the transfer of any Securities
for which repayment has been elected. If payment of the Put Option Repayment
Price in respect of Securities is (i) improperly withheld or refused and not
<PAGE>
paid either by the Institutional Trustee or by the Sponsor as guarantor
pursuant to the Securities Guarantee, or (ii) not paid by the Institutional
Trustee as the result of an Event of Default with respect to the Debentures
presented for repayment as described in paragraph 6(b), Distributions on such
Securities will continue to accrue, from the original Put Option Exercise
Date to the actual date of payment, in which case the actual payment date
will be considered the Put Option Exercise Date for purposes of calculating
the Put Option Repayment Price.
(e) The Debenture Issuer will request, not later than
seven nor more than 15 calendar days prior to 13, 2001 (the
date on which some or all of the Preferred Securities could be remarketed in
the manner described in Section 5.4(b) of the Purchase Contract Agreement and
incorporated herein by reference) that DTC notify the Preferred Securities
Holders as well as the Income PRIDES and Growth PRIDES holders of such
remarketing and of the procedures that must be followed if a Holder of
Preferred Securities wishes to exercise such Holder's rights with respect to
the Put Option.
7. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 7(b) and 9 and as
otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) Subject to the requirements set forth in this
paragraph, the Holders of a Majority in liquidation amount of the Preferred
Securities, voting separately as a class may direct the time, method, and
place of conducting any proceeding for any remedy available to the
Institutional Trustee, or the exercise of any trust or power conferred upon
the Institutional Trustee under the Declaration, including (i) directing the
time, method and place of conducting any proceeding for any remedy available
to the Debenture Trustee, or exercising any trust or power conferred on the
Debenture Trustee with respect to the Debentures, (ii) waiving any past
default and its consequences that is waivable under the Indenture, (iii)
exercising any right to rescind or annul a declaration that the principal of
all the Debentures shall be due and payable, or (iv) consenting to any
amendment, modification or termination of the Indenture or the Debentures
where such consent shall be required, provided, however, that, where a
consent under the Indenture would require the consent or act of the Holders
of greater than a majority of the Holders in principal amount of Debentures
affected thereby (a "Super Majority"), the Institutional Trustee may only
give such consent or take such action at the written direction of the Holders
of at least the proportion in liquidation amount of the Preferred Securities
which the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding. The Institutional Trustee shall not
revoke any action previously authorized or approved by a vote of the Holders
of the Preferred Securities. Other than with respect to directing the time,
method and place of conducting any remedy available to the Institutional
Trustee or the Debenture Trustee as set forth above, the Institutional
Trustee shall not take any action in accordance with the directions of the
Holders of the Preferred Securities under this paragraph unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect
that for the purposes of United States federal income tax the Trust will not
be classified as other than a grantor trust on account of such action. If the
Institutional Trustee fails to enforce its rights under the Debentures after
a Holder of Preferred Securities has made a written request, such Holder of
<PAGE>
Preferred Securities may, to the fullest extent permitted by applicable law,
institute a legal proceeding directly against the Debenture Issuer to enforce
the Institutional Trustee's rights under the Debentures without first
instituting a legal proceeding against the Institutional Trustee or any other
Person. Notwithstanding the foregoing, if an Event of Default has occurred
and is continuing and such event is attributable to the failure of the
Debenture Issuer to pay interest or principal on the Debentures on the date
such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a Holder of Preferred Securities
may directly institute a proceeding for enforcement of payment to such Holder
of the principal of or interest on the Debentures having a principal amount
equal to the aggregate liquidation amount of the Preferred Securities of such
Holder on or after the respective due date specified in the Debentures.
Except as provided in the preceding sentence, the Holders of Preferred
Securities shall not exercise directly any other remedy available to the
holders of the Debentures.
Any approval or direction of Holders of Preferred Securities
may be given at a separate meeting of Holders of Preferred Securities
convened for such purpose, at a meeting of all of the Holders of Securities
in the Trust or pursuant to written consent. The Regular Trustees will cause
a notice of any meeting at which Holders of Preferred Securities are entitled
to vote, or of any matter upon which action by written consent of such
Holders is to be taken, to be mailed to each Holder of record of Preferred
Securities. Each such notice will include a statement setting forth (i) the
date of such meeting or the date by which such action is to be taken, (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matter upon which written
consent is sought and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the Holders of the Preferred
Securities will be required for the Trust to repay and cancel Preferred
Securities or to distribute the Debentures in accordance with the Declaration
and the terms of the Securities. Notwithstanding that Holders of Preferred
Securities are entitled to vote or consent under any of the circumstances
described above, any of the Preferred Securities that are owned by the
Sponsor or any Affiliate of the Sponsor shall not be entitled to vote or
consent and shall, for purposes of such vote or consent, be treated as if
they were not outstanding.
8. Voting Rights - Common Securities.
(a) Except as provided under Sections 7(b) and (c) and
Section 9 and as otherwise required by law and the Declaration, the Holders
of the Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled,
in accordance with Article V of the Declaration, to vote to appoint, remove
or replace any Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only
after any Event of Default with respect to the Preferred Securities has been
cured, waived, or otherwise eliminated and subject to the requirements of the
second to last sentence of this paragraph, the Holders of a Majority in
liquidation amount of the Common Securities, voting separately as a class,
may direct the time, method, and place of conducting any proceeding for any
<PAGE>
remedy available to the Institutional Trustee, or exercising any trust or
power conferred upon the Institutional Trustee under the Declaration,
including (i) directing the time, method, and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or exercising
any trust or power conferred on the Debenture Trustee with respect to the
Debentures, (ii) waive any past default and its consequences that is waivable
under the Indenture, or (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and
payable, provided that, where a consent or action under the Indenture would
require the consent or act of the Holders of a Super Majority, the
Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in liquidation
amount of the Common Securities which the relevant Super Majority represents
of the aggregate principal amount of the Debentures outstanding. Pursuant to
this Section 7(c), the Institutional Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the Preferred
Securities. Other than with respect to directing the time, method and place
of conducting any remedy available to the Institutional Trustee or the
Debenture Trustee as set forth above, the Institutional Trustee shall not
take any action in accordance with the directions of the Holders of the
Common Securities under this paragraph unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be classified as other
than a grantor trust on account of such action. If the Institutional Trustee
fails to enforce its rights under the Declaration, any Holder of Common
Securities may institute a legal proceeding directly against any Person to
enforce the Institutional Trustee's rights under the Declaration, without
first instituting a legal proceeding against the Institutional Trustee or any
other Person.
Any approval or direction of Holders of Common Securities
may be given at a separate meeting of Holders of Common Securities convened
for such purpose, at a meeting of all of the Holders of Securities in the
Trust or pursuant to written consent. The Regular Trustees will cause a
notice of any meeting at which Holders of Common Securities are entitled to
vote, or of any matter upon which action by written consent of such Holders
is to be taken, to be mailed to each Holder of record of Common Securities.
Each such notice will include a statement setting forth (i) the date of such
meeting or the date by which such action is to be taken, (ii) a description
of any resolution proposed for adoption at such meeting on which such Holders
are entitled to vote or of such matter upon which written consent is sought
and (iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
9. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1
of the Declaration, if any proposed amendment to the Declaration provides
for, or the Regular Trustees otherwise propose to effect, (i) any action that
would materially adversely affect the powers, preferences or special rights
of the Securities, whether by way of amendment to the Declaration or
otherwise, or (ii) the dissolution of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities as
<PAGE>
a class will be entitled to vote on such amendment or proposal (but not on
any other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, if any amendment or proposal referred to in clause (i)
above would adversely affect only the Preferred Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.
(b) In the event the consent of the Institutional
Trustee as the holder of the Debentures is required under the Indenture with
respect to any amendment, modification or termination on the Indenture or the
Debentures, the Institutional Trustee shall request the written direction of
the Holders of the Securities with respect to such amendment, modification or
termination and shall vote with respect to such amendment, modification or
termination as directed by a Majority in liquidation amount of the Securities
voting together as a single class; provided, however, that where a consent
under the Indenture would require a Super Majority, the Institutional Trustee
may only give such consent at the direction of the Holders of at least the
proportion in liquidation amount of the Securities which the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding; provided, further, that the Institutional Trustee shall not take
any action in accordance with the directions of the Holders of the Securities
under this Section 8(b) unless (i) the Institutional Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action or (ii) such action would not reduce or
otherwise adversely affect powers of the Institutional Trustee or cause the
Trust to be deemed an "investment company" which is required to be registered
under the Investment Company Act of 1940.
10. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each
Holder of Securities according to the aggregate liquidation amount of the
Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities outstanding unless, in relation to a
payment, an Event of Default under the Declaration has occurred and is
continuing, in which case any funds available to make such payment shall be
paid first to each Holder of the Preferred Securities pro rata according to
the aggregate liquidation amount of Preferred Securities held by the relevant
Holder relative to the aggregate liquidation amount of all Preferred
Securities outstanding, and only after satisfaction of all amounts owed to
the Holders of the Preferred Securities, to each Holder of Common Securities
pro rata according to the aggregate liquidation amount of Common Securities
held by the relevant Holder relative to the aggregate liquidation amount of
all Common Securities outstanding.
11. Ranking.
The Preferred Securities rank pari passu and payment thereon
shall be made Pro Rata with the Common Securities except that, where an Event
of Default occurs and is continuing under the Indenture in respect of the
Debentures held by the Institutional Trustee, the rights of Holders of the
<PAGE>
Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to
payment of the Holders of the Preferred Securities.
12. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities by
the acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively.
13. No Preemptive Rights.
The Holders of the Securities shall have no preemptive
rights to subscribe for any additional securities.
14. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture to a Holder without charge on written request
to the Sponsor at its principal place of business.
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE
INSERT - This Preferred Security is a Global Certificate within the meaning
of the Declaration hereinafter referred to and is registered in the name of
The Depository Trust Company (the "Depositary") or a nominee of the
Depositary. This Preferred Security is exchangeable for Preferred Securities
registered in the name of a person other than the Depositary or its nominee
only in the limited circumstances described in the Declaration and no
transfer of this Preferred Security (other than a transfer of this Preferred
Security 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) may be registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York,
New York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede
& Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest
herein.]
Certificate Number _______________ Number of Preferred Securities ____________
CUSIP NO. ___________
Certificate Evidencing Preferred Securities
of
Ingersoll-Rand Financing I
____% Trust Originated Preferred Securities
(liquidation amount $10 per Preferred Security)
Ingersoll-Rand Financing I, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), hereby
certifies that __________ (the "Holder") is the registered owner of
____________ preferred securities of the Trust representing preferred
undivided beneficial interests in the assets of the Trust designated as the
____% Trust Originated Preferred Securities (liquidation amount $10 per
preferred security) (the "Preferred Securities"). The Preferred Securities
are transferable on the books and records of the Trust, in person or by a
duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities represented hereby are issued and shall in all respects be subject
to the provisions of the Amended and Restated Declaration of Trust of the
Trust dated as of March __, 1998, as the same may be amended from time to
time (the "Declaration"), including the designation of the terms of the
Preferred Securities as set forth in Annex I to the Declaration. Capitalized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Preferred
Securities Guarantee to the extent provided therein. The Sponsor will provide
a copy of the Declaration, the Preferred Securities Guarantee and the
<PAGE>
Indenture to a Holder without charge upon written request to the Trust at its
principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate
this ______ day of March, 1998.
INGERSOLL-RAND FINANCING I
By:__________________________________
Name:________________________________
Title: Regular Trustee
By:__________________________________
Name:________________________________
Title: Regular Trustee
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be
fixed at a rate per annum of ____% (the "Coupon Rate") of the stated
liquidation amount of $10 per Preferred Security, such rate being the rate of
interest payable on the Debentures to be held by the Institutional Trustee.
Distributions in arrears for more than one quarter will bear interest thereon
compounded quarterly at the rate of ____% until 15, 2001, and
at the Reset Rate thereafter (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash distributions and any
such interest payable unless otherwise stated. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will
be computed for any full quarterly Distribution period on the basis of a
360-day year consisting of twelve 30-day months, and for any period shorter
than a full quarterly Distribution period for which Distributions are
computed, Distributions will be computed on the basis of the actual number of
days elapsed per 30-day month.
Except as otherwise described below, Distributions on the
Preferred Securities will be cumulative, will accrue from the date of
original issuance and will be payable quarterly in arrears, on February 16,
May 16, August 16 and November 16 of each year, commencing on
16, 1998, to holders of record, if in book-entry only form,
one Business Day prior to such payment date, which payment dates shall
correspond to the interest payment dates on the Debentures. In the event that
the Preferred Securities are not in book-entry form, the Regular Trustees
will have the right to select relevant record dates, which will be more than
one Business Day but less than 60 Business Days prior to the relevant payment
dates. The Debenture Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period from time to
time on the Debentures for a period not exceeding beyond the date of maturity
of the Debentures (each an "Extension Period") and, as a consequence of such
deferral, Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accrue with interest thereon at the
rate of ____% until 15, 2001, and at the Reset Rate
thereafter, compounded quarterly during any such Extension Period (to the
extent permitted by applicable law). Payments of accrued Distributions will
be payable to Holders as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period. Upon the
termination of any Extension Period and the payment of all amounts then due,
the Debenture Issuer may commence a new Extension Period; provided that such
Extension Period together with all such previous and further extensions
thereof may not exceed beyond the maturity date of the Debenture.
The Preferred Securities shall be redeemable as provided in
the Declaration.
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs
the Trust to repay $_____ stated liquidation amount of the within Preferred
Security, pursuant to its terms, on the "Put Option Exercise Date," together
with distributions thereon accrued but unpaid to the date of repayment, to
the undersigned at:
_____________________________________________________________
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Declaration, a
new Preferred Security or Preferred Securities representing the remaining
stated liquidation amount of this Preferred Security.
For this Option to Elect Repayment to be effective, the within Preferred
Security with this Option to Elect Repayment duly completed must be received
by the Trust at the Corporate Trust Office of the Institutional Trustee at "
", __________________
_________________________________________, Attention: Corporate Trust
Administration.
Dated: Signature: _______________________________
Signature Guarantee: _____________________
Note: The signature to this Option to Elect Repayment must correspond with
the name as written upon the face of the within Preferred Security in every
particular without alternation or enlargement or any change whatsoever.
<PAGE>
___________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(Insert assignee's social security or tax identification number)
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date: ____________________________________
Signature: _______________________________
Signature Guarantee: _____________________
(Sign exactly as your name appears on the other side of this Preferred
Security Certificate)
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
The Common Securities may only be transferred by the
Debenture Issuer and any Related Party to the Debenture Issuer or a Related
Party of the Debenture Issuer; provided that, any such transfer is subject to
the condition precedent that the transferor obtain the written opinion of
nationally recognized independent counsel experienced in such matters that
such transfer would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United
States federal income tax purposes as a grantor Trust; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
Certificate Number ______________ Number of Common Securities ______________
Certificate Evidencing Common Securities
of
Ingersoll-Rand Financing I
____% Trust Originated Common Securities
(liquidation amount $10 per Common Security)
Ingersoll-Rand Financing I, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), hereby
certifies that Ingersoll-Rand Company (the "Holder") is the registered owner
of __________ common securities of the Trust representing common undivided
beneficial interests in the assets of the Trust designated as the ____% Trust
Originated Common Securities (liquidation amount $10 per common security)
(the "Common Securities"). The Common Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for
transfer. The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Common Securities represented hereby are
issued and shall in all respects be subject to the provisions of the Amended
and Restated Declaration of Trust of the Trust dated as of March __, 1998, as
the same may be amended from time to time (the "Declaration"), including the
designation of the terms of the Common Securities as set forth in Annex I to
the Declaration. Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. The Holder is entitled to the benefits
of the Common Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Common Securities
Guarantee and the Indenture to a Holder without charge upon written request
to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by
the Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Debentures.
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate
this _______ day of March, 1998.
INGERSOLL-RAND FINANCING I
By:__________________________________
Name:________________________________
Title: Regular Trustee
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed
at a rate per annum of ____% (the "Coupon Rate") of the stated liquidation
amount of $10 per Common Security, such rate being the rate of interest
payable on the Debentures to be held by the Institutional Trustee.
Distributions in arrears for more than one quarter will bear interest thereon
compounded quarterly at the rate of ____% until 15, 2001, and
at the Reset Rate thereafter (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash distributions and any
such interest payable unless otherwise stated. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will
be computed for any full quarterly Distribution period on the basis of a
360-day year of twelve 30-day months, and for any period shorter than a full
quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days
elapsed per 30-day month.
Except as otherwise described below, distributions on the
Common Securities will be cumulative, will accrue from the date of original
issuance and will be payable quarterly in arrears, on February 16, May 16,
August 16 and November 16 of each year, commencing on 16,
1998, to Holders of record one Business Day prior to such payment dates,
which payment dates shall correspond to the interest payment dates on the
Debentures. The Debenture Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period from time to
time on the Debentures for a period not exceeding beyond the date of maturity
of the Debentures (each an "Extension Period") and, as a consequence of such
deferral, Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accrue with interest thereon (to the
extent permitted by applicable law) at the rate of ____% until
15, 2001, and at the Reset Rate thereafter, compounded
quarterly during any such Extension Period. Payments of accrued Distributions
will be payable to Holders as they appear on the books and records of the
Trust on the first record date after the end of the Extension Period. Upon
the termination of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period; provided, that
such Extension Period together with all such previous and further extensions
thereof may not exceed beyond the maturity date of the Debentures.
The Common Securities shall be redeemable as provided in the
Declaration.
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Trust
to repay $_____ stated liquidation amount of the within Common Security,
pursuant to its terms, on the "Put Option Exercise Date," together with
distributions thereon accrued and unpaid to the date of repayment, to the
undersigned at:
_________________________________________________
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Declaration, a
new Common Security or Common Securities representing the remaining stated
liquidation amount of this Common Security.
For this Option to Elect Repayment to be effective, the within Common
Security with this Option to Elect Repayment duly completed must be received
by the Trust at the Corporate Trust Office of the Institutional Trustee at "
", _______________
__________________________________________, Attention: Corporate Trust
Administration.
Dated: Signature: _______________________________
Signature Guarantee: _____________________
Note: The signature to this Option to Elect Repayment must correspond with
the name as written upon the face of the within Common Security in every
particular without alternation or enlargement or any change whatsoever.
<PAGE>
___________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers
this Common Security Certificate to:
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(Insert assignee's social security or tax identification number)
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: ____________________________________
Signature: _______________________________
Signature Guarantee: _____________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
<PAGE>
EXHIBIT C
Underwriting Agreement
___________________________________________________________________
-------------------------------------------------------------------
GUARANTEE AGREEMENT
INGERSOLL-RAND FINANCING I
Dated as of March , 1998
___________________________________________________________________
-------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
SECTION 1.1 Definitions and Interpretation . . . . . . . . . . . 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application . . . . . . . . . . 4
SECTION 2.2 List of Holders of Securities . . . . . . . . . . . 4
SECTION 2.3 Reports by the Guarantee Trustee . . . . . . . . . . 4
SECTION 2.4 Periodic Reports to Guarantee Trustee . . . . . . . 4
SECTION 2.5 Evidence of Compliance with Conditions Precedent . . 5
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . . 5
SECTION 2.7 Event of Default; Notice . . . . . . . . . . . . . . 5
SECTION 2.8 Conflicting Interests . . . . . . . . . . . . . . . 5
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee . . . . . 5
SECTION 3.2 Certain Rights of the Guarantee Trustee . . . . . . 7
SECTION 3.3 Not Responsible for Recitals or Issuance of
Guarantee . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility . . . . . . . . . . . 8
SECTION 4.2 Appointment, Removal and Resignation of Guarantee
Trustees . . . . . . . . . . . . . . . . . . . 9
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee . . . . . . . . . . . . . . . . . . . . . 9
SECTION 5.2 Waiver of Notice and Demand . . . . . . . . . . . . 10
SECTION 5.3 Obligations Not Affected . . . . . . . . . . . . . . 10
SECTION 5.4 Rights of Holders . . . . . . . . . . . . . . . . . 11
SECTION 5.5 Guarantee of Payment . . . . . . . . . . . . . . . . 11
SECTION 5.6 Subrogation . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.7 Independent Obligations . . . . . . . . . . . . . . 11
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions . . . . . . . . . . . . . 11
SECTION 6.2 Ranking . . . . . . . . . . . . . . . . . . . . . . 12
<PAGE>
ARTICLE VII
TERMINATION
SECTION 7.1 Termination . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation . . . . . . . . . . . . . . . . . . . . 13
SECTION 8.2 Indemnification . . . . . . . . . . . . . . . . . . 13
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns . . . . . . . . . . . . . . . 14
SECTION 9.2 Amendments . . . . . . . . . . . . . . . . . . . . . 14
SECTION 9.3 Notices . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 9.4 Benefit . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 9.5 Governing Law. . . . . . . . . . . . . . . . . . . . 15
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Guarantee"), dated as of March ,
1998, is executed and delivered by Ingersoll-Rand Company, a New Jersey
corporation (the "Guarantor"), and "The First National Bank of Chicago", as
trustee (the " Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Securities (as defined herein) of
Ingersoll-Rand Financing I, a New Jersey statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of March , 1998, among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof preferred securities, liquidation amount
$10 per preferred security, having an aggregate liquidation amount of
$ designated the % Trust Originated Preferred Securities (the
"Preferred Securities") and common securities liquidation amount $10 per
Common Security having an aggregate liquidation amount of $36,082,500, desig-
nated the ___% Trust Originated Common Securities (the "Common Securities"
and, together with the Preferred Securities, the "Securities");
WHEREAS, as incentive for the Holders to purchase the Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Guarantee, to pay to the Holders the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and
conditions set forth herein; and
WHEREAS, if an Event of Default (as defined in the Declaration),
has occurred and is continuing, the rights of holders of the Common
Securities to receive Guarantee Payments under this Guarantee are
subordinated to the rights of the holders of the Securities to receive
Guarantee Payments under this Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder,
which purchase the Guarantor hereby agrees shall benefit the Guarantor, the
Guarantor executes and delivers this Guarantee for the benefit of the
Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
SECTION 1.1 Definitions and Interpretation
------------------------------
In this Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee but not defined in the
preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Guarantee has the same meaning
throughout;
(c) all reference to "the Guarantee" or "this Guarantee" are to this
Guarantee as modified, supplemented or amended from time to time;
<PAGE>
(d) all references in this Guarantee to Articles and Sections are to
Articles and Sections of this Guarantee, unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee, unless otherwise defined in this Guarantee
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act of 1933, as amended, or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Business Day" means any day other than Saturday, Sunday or any day
on which banking institutions in the City of New York, New York are
authorized or required by any applicable law to close.
"Corporate Trust Office" means the office of the Guarantee Trustee
at which the corporate trust business of the Guarantee Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at " ",
______________________________________________, Attention: Corporate Trust
Administration.
"Covered Person" means any Holder or beneficial owner of
Securities.
"Debentures" means the series of debt securities of the Guarantor
designated the % Debentures due , 2003 held by the
Institutional Trustee (as defined in the Declaration) of the Issuer.
"Direction" by a person means a written direction signed: (a) if
the Person is a natural person, by that Person; or (b) in any other case in
the name of such Person by one or more Authorized Officers of that Person.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Securities, to the extent not paid
or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such Securities to the
extent the Issuer shall have funds available therefor, (ii) the redemption
price, including all accrued and unpaid distributions to the date of
redemption (the "Repayment Price") with respect to Securities in respect of
which the related Debentures have been redeemed by the Company upon the
occurrence of a Tax Event Redemption, to the extent the Issuer has funds
available therefor, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for the Securities as
provided in the Declaration), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid Distributions on the Securities
to the date of payment, to the extent the Issuer shall have funds available
therefor, and (b) the amount of assets of the Issuer remaining available for
distribution to Holders in liquidation of the Issuer (in either case, the
<PAGE>
"Liquidation Distribution"). If an event of default under the Indenture has
occurred and is continuing, the rights of holders of the Common Securities to
receive payments under this Guarantee Agreement are subordinated to the
rights of holders of Securities to receive Guarantee Payments under this
Guarantee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Securities
have given any request, notice, consent or waiver hereunder, "Holder" shall
not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Guarantee Trustee, any Affiliate of
the Guarantee Trustee, or any officers, directors, shareholders, members,
partners, employees, representatives, nominees, custodians or agents of the
Guarantee Trustee.
"Indenture" means the Indenture dated as of March , 1998, among
the Guarantor (the "Debenture Issuer") and The Bank of New York, as trustee,
and any indenture supplemental thereto pursuant to which certain debt
securities of the Debenture Issuer are to be issued to the Institutional
Trustee of the Issuer.
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of Securities,
voting separately as a class, of more than 50% of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definition
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association or
government or any agency or political subdivision thereof, or any other
entity of whatever nature.
<PAGE>
"Guarantee Trustee" means _______________________________, until a
Successor Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee and thereafter means each
such Successor Guarantee Trustee.
"Responsible Officer" means, with respect to the Guarantee Trustee,
any officer within the Corporate Trust office of the Guarantee Trustee,
including any vice-president, any assistant vice-president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Guarantee Trustee customarily performing
functions similar to those performed by any of the above designated officers
and also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Tax Event Redemption" has the same meaning as defined in Annex I
to the Declaration.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application
--------------------------------
(a) This Guarantee is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee and shall, to
the extent applicable, be governed by such provisions; and
(b) If and to the extent that any provision of this Guarantee
limits, qualifies or conflicts with the duties imposed by Section 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.2 List of Holders of Securities
-----------------------------
(a) The Guarantor shall provide the Guarantee Trustee with a list,
in such form as the Guarantee Trustee may reasonably require, of the names
and addresses of the Holders ("List of Holders") as of such date, (i) within
1 Business Day after January 1 and July 1 of each year, and (ii) at any other
time within 30 days of receipt by the Guarantor of a written request for a
List of Holders as of a date no more than 14 days before such List of Holders
is given to the Guarantee Trustee provided, that the Guarantor shall not be
obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Guarantee
Trustee by the Guarantor. The Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
<PAGE>
SECTION 2.3 Reports by the Guarantee Trustee
--------------------------------
Within 60 days after May 15 of each year, the Guarantee Trustee
shall provide to the Holders such reports as are required by Section 313 of
the Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Guarantee Trustee
-------------------------------------
The Guarantor shall provide to the Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and
the compliance certificate required by Section 314 of the Trust Indenture Act
in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
------------------------------------------------
The Guarantor shall provide to the Guarantee Trustee such evidence
of compliance with any conditions precedent, if any, provided for in this
Securities Guarantee that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of
an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
-------------------------
The Holders of a Majority in liquidation amount of Securities may,
by vote, on behalf of all Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have
been cured, for every purpose of this Guarantee, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 2.7 Event of Default; Notice
------------------------
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all such Events of Default actually known
to a Responsible Officer of the Guarantee Trustee, unless such defaults have
been cured before the giving of such notice, provided, that, the Guarantee
Trustee shall be protected in withholding such notice if and so long as a
Responsible Officer of the Guarantee Trustee in good faith determines that
the withholding of such notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have received written
notice thereof, or a Responsible Officer of the Guarantee Trustee charged
with the administration of the Declaration shall have obtained actual
knowledge thereof.
SECTION 2.8 Conflicting Interests
---------------------
The Declaration and the Indenture shall be deemed to be
specifically described in this Guarantee for the purposes of clause (i) of
the first proviso contained in Section 310(b) of the Trust Indenture Act.
<PAGE>
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee
------------------------------------------
(a) This Guarantee shall be held by the Guarantee Trustee for the
benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee to any Person except a Holder exercising his or her rights pursuant
to Section 5.4(b) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor Guarantee
Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, and such vesting and
cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered pursuant to the appointment of such
Successor Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the Guarantee Trustee has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing or waiver of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Guarantee, and no implied covenants shall be read into this
Guarantee against the Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6) and is
actually known to a Responsible Officer of the Guarantee Trustee, the
Guarantee Trustee shall exercise such of the rights and powers vested in it
by this Guarantee, and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(d) No provision of this Guarantee shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall
be determined solely by the express provisions of this Guarantee, and
the Guarantee Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Guarantee, and no implied covenants or obligations shall be read into
this Guarantee against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Guarantee Trustee and
conforming to the requirements of this Guarantee; but in the case of any
such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Guarantee Trustee, the
Guarantee Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Guarantee;
<PAGE>
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment
was made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation amount of the relating to the time, method and
place of conducting any proceeding for any remedy available to the
Guarantee Trustee, or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee; and
(iv) no provision of this Guarantee shall require the Guarantee
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds
or liability is not reasonably assured to it under the terms of this
Guarantee or indemnity, reasonably satisfactory to the Guarantee
Trustee, against such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of the Guarantee Trustee
---------------------------------------
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely, and shall be
fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed, sent or presented by the proper party
or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee shall be sufficiently evidenced by a Direction or an Officers'
Certificate.
(iii) Whenever, in the administration of this Guarantee, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder,
the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or reregistration thereof).
(v) The Guarantee Trustee may consult with competent legal
counsel, and the written advice or opinion of such counsel with respect
to legal matters shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with such advice or opinion. Such counsel
<PAGE>
may be counsel to the Guarantor or any of its Affiliates and may include
any of its employees. The Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this
Guarantee from any court of competent jurisdiction.
(vi) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee at the
request or direction of any Holder, unless such Holder shall have
provided to the Guarantee Trustee such security and indemnity,
reasonably satisfactory to the Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses and the expenses of the
Guarantee Trustees, agents, nominees or custodians) and liabilities that
might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Guarantee
Trustee; provided that, nothing contained in this Section 3.2 (a) (vi)
shall be taken to relieve the Guarantee Trustee, upon the occurrence of
an Event of Default, of its obligation to exercise the rights and powers
vested in it by this Guarantee.
(vii) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit.
(viii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Guarantee
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder.
(ix) Any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders, and the signature of the Guarantee
Trustee or its agents alone shall be sufficient and effective to perform
any such action. No third party shall be required to inquire as to the
authority of the Guarantee Trustee to so act or as to its compliance
with any of the terms and provisions of this Guarantee, both of which
shall be conclusively evidenced by the Guarantee Trustee's or its
agent's taking such action.
(x) Whenever in the administration of this Guarantee the Guarantee
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Guarantee Trustee (i) may request instructions from the Holders of a
Majority in liquidation amount of the Securities, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in conclusively
relying on or acting in accordance with such instructions.
(b) No provision of this Guarantee shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in
any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable
law, to perform any such act or acts or to exercise any such right, power,
<PAGE>
duty or obligation. No permissive power or authority available to the
Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
-----------------------------------------------------
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility
------------------------------
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or of
the District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least 750 million U.S. dollars ($750,000,000), and subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then, for the
purposes of this Section 4.1 (a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section
4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act,
the Guarantee Trustee and Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Guarantee
Trustees
-------------------------------------------------
(a) Subject to Section 4.2(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 4.2(a) until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.
<PAGE>
(c) The Guarantee Trustee appointed to office shall hold office
until a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing executed
by the Guarantee Trustee and delivered to the Guarantor, which resignation
shall not take effect until a Successor Guarantee Trustee has been appointed
and has accepted such appointment by instrument in writing executed by such
Successor Guarantee Trustee and delivered to the Guarantor and the resigning
Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition any court of competent jurisdiction for
appointment of a Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or omissions
to act of any Successor Guarantee Trustee.
(f) Upon termination of this Guarantee or removal or resignation
of the Guarantee Trustee pursuant to this Section 4.2, the Guarantor shall
pay to the Guarantee Trustee all amounts accrued to the date of such
termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
---------
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
---------------------------
The Guarantor hereby waives notice of acceptance of this Guarantee
and of any liability to which it applies or may apply, presentment, demand
for payment, any right to require a proceeding first against the Issuer or
any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices
and demands.
SECTION 5.3 Obligations Not Affected
------------------------
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
<PAGE>
agreement, covenant, term or condition relating to the to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions, Repayment Price, Liquidation
Distribution or any other sums payable under the terms of the Securities
or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Securities (other than
an extension of time for payment of Distributions, Repayment Price,
Liquidation Distribution or other sum payable that results from the
extension of any interest payment period on the Debentures or any
extension of the maturity date of the Debentures permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Holders pursuant to the terms of the
Securities, or any action on the part of the Issuer granting indulgence
or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the
Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 5.3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain the consent of, the Guarantor with respect to the happening of any of
the foregoing.
SECTION 5.4 Rights of Holders
-----------------
(a) The Holders of a Majority in liquidation amount of the
Securities have the right to direct the time, method and place of conducting
of any proceeding for any remedy available to the Guarantee Trustee in
respect of this Guarantee or exercising any trust or power conferred upon
the Guarantee Trustee under this Guarantee.
(b) If the Guarantee Trustee fails to enforce this Guarantee, any
Holder may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee, without first instituting a legal
proceeding against the Issuer, the Guarantee Trustee or any other Person.
Notwithstanding the foregoing, if the Guarantor has failed to make a
Guarantee Payment, a Holder may directly institute a proceeding against the
Guarantor for enforcement of the Guarantee for such payment. The Guarantor
waives any right or remedy to require that any action on this Guarantee be
<PAGE>
brought first against the Issuer or any other person or entity before
proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
--------------------
This Guarantee creates a guarantee of payment and not of
collection.
SECTION 5.6 Subrogation
-----------
The Guarantor shall be subrogated to all rights, if any, of the
Holders against the Issuer in respect of any amounts paid to such Holders by
the Guarantor under this Guarantee; provided, however, that the Guarantor
shall not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee, if, at the time of any such
payment, any amounts are due and unpaid under this Guarantee. If any amount
shall be paid to the Guarantor in violation of the preceding sentence, the
Guarantor agrees to hold such amount in trust for the Holders and to pay over
such amount to the Holders.
SECTION 5.7 Independent Obligations
-----------------------
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Securities,
and that the Guarantor shall be liable as principal and as debtor hereunder
to make Guarantee Payments pursuant to the terms of this Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
--------------------------
So long as any Securities remain outstanding, if there shall have
occurred an Event of Default or an Event of Default under the Declaration and
written notice of such Event of Default has been given to the Guarantor, then
(a) the Guarantor shall not declare or pay dividends or make any distribution
with respect to, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of its capital stock (other than (i) purchases or
acquisitions of capital stock of the Guarantor in connection with the
satisfaction by the Guarantor of its obligations under any employee or agent
benefit plans or the satisfaction by the Guarantor of its obligations
pursuant to any contract or security outstanding on the date of such event
requiring the Guarantor to purchase capital stock of the Guarantor, (ii) as a
result of a reclassification of the Guarantor's capital stock or the exchange
or conversion of one class or series of the Guarantor's capital stock for
another class or series of the Guarantor's capital stock, (iii) the purchase
of fractional interests in shares of the Guarantor's capital stock pursuant
to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (iv) dividends or distributions in
capital stock of the Guarantor (or rights to acquire capital stock) or
repurchases or redemptions of capital stock solely from the issuance or
exchange of capital stock or (v) redemptions or purchases of any rights
outstanding under a shareholder rights plan ), (b) the Guarantor shall not
<PAGE>
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Guarantor that rank
junior to the Debentures (to the extent appropriate notice has been given to
the holders thereof effectively blocking such payment or to the extent the
failure to make any such payment is otherwise authorized under the agreements
governing such debt), and (c) the Guarantor shall not make any guarantee
payments with respect to the foregoing (other than payments pursuant to the
Guarantee) to the extent appropriate notice has been given to the
beneficiaries thereof effectively blocking such payment or to the extent the
failure to make any such payment is otherwise authorized under the agreements
governing such guarantee payments.
SECTION 6.2 Ranking
-------
This Guarantee will constitute a senior unsecured obligation of the
Guarantor and, at all times when an Event of Default has occurred and is
continuing under the Declaration, will rank:
(i) pari passu with all of the Guarantor's senior unsecured
obligations except those made subordinate hereto by their terms; and
(ii) senior to the Guarantor's common stock.
The rights of the holders of the Common Securities will be
subordinated and junior in right of payment and shall not be paid until the
prior payment in full of, all amounts due and owning to the holders of the
Securities.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
-----------
This Guarantee shall terminate upon (i) full payment of the
Repayment Price of all Securities, (ii) upon the distribution of the
Debentures to all Holders or (iii) upon full payment of the amounts payable
in accordance with the Declaration upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee will continue to be effective
or will be reinstated, as the case may be, if at any time any Holder must
restore payment of any sums paid under the Securities or under this
Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
-----------
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person
for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in accordance
with this Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such
Indemnified Person by this Guarantee or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason
of such Indemnified Person's negligence or willful misconduct with respect to
such acts or omissions.
<PAGE>
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as
to matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence
and amount of assets from which Distributions to Holders might properly be
paid.
SECTION 8.2 Indemnification
---------------
(a) To the fullest extent permitted by applicable law, the
Guarantor shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage or claim incurred by such Indemnified Person by
reason of any act or omission performed or omitted by such Indemnified Person
in good faith in accordance with this Guarantee and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Guarantee, except that no
Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of
negligence or willful misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, reasonable
out-of-pocket expenses (including legal fees) incurred by an Indemnified
Person in defending any claim, demand, action, suit or proceeding shall, from
time to time, be advanced by the Guarantor prior to the final disposition of
such claim, demand, action, suit or proceeding upon receipt by the Guarantor
of an undertaking by or on behalf of the Indemnified Person to repay such
amount if it shall be determined that the Indemnified Person is not entitled
to be indemnified as authorized in Section 8.2(a).
(c) The provisions set forth in this Section 8.2 shall survive the
termination of the Guarantee or the resignation or removal of the Guarantee
Trustee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
----------------------
All guarantees and agreements contained in this Guarantee shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Securities
then outstanding.
SECTION 9.2 Amendments
----------
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required),
this Guarantee may only be amended with the prior approval of the Holders of
at least a Majority in liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of all the outstanding Securities. The provisions of Section 12.2
<PAGE>
of the Declaration with respect to meetings of Holders apply to the giving of
such approval.
SECTION 9.3 Notices
-------
All notices provided for in this Guarantee shall be in writing,
duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) If given to the Guarantee Trustee, at the Guarantee Trustee's
mailing address set forth below (or such other address as the Guarantee
Trustee may give notice of to the Holders of the Securities):
" "
Attention: Corporate Trust
Administration
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice
of to the Holders):
Ingersoll-Rand Company
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07675
(c) If given to any Holder, at the address set forth on the books
and records of the Issuer.
All such notices shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 9.4 Benefit
-------
This Guarantee is solely for the benefit of the Holders and,
subject to Section 3.1(a), is not separately transferable from the
Securities.
SECTION 9.5 Governing Law.
-------------
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
<PAGE>
THIS GUARANTEE is executed as of the day and year first above
written.
INGERSOLL-RAND COMPANY
as Guarantor
By:___________________________________________
Name:
Title:
By:___________________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
as Guarantee Trustee
By:___________________________________________
Name:
Title:
_____________________________________________________________________________
INGERSOLL-RAND COMPANY,
AS ISSUER
TO
[ ]
,
AS TRUSTEE
_____________________________________________________________________________
Indenture
DATED AS OF ________, 1997
_____________________________________________________________________________
<PAGE>
INGERSOLL-RAND COMPANY
RECONCILIATION AND TIE BETWEEN TRUST
INDENTURE ACT OF 1939, AS AMENDED
AND INDENTURE, DATED AS OF NOVEMBER , 1997
TRUST INDENTURE INDENTURE SECTION
ACT SECTION
Section 310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . 608, 610
Section 311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 613
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 613
Section 312 (a) . . . . . . . . . . . . . . . . . . . . . . 701, 702(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 702(c)
Section 313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(b) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . . . . . . . . 703(a), 703(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 703(b)
Section 314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 704
(b) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 601(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 601(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 601(c)
(d)(l) . . . . . . . . . . . . . . . . . . . . 601(a), 601(c)
(d)(2) . . . . . . . . . . . . . . . . . . . . . . . . 601(c)
(d)(3) . . . . . . . . . . . . . . . . . . . . . . . . 601(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 514
Section 316 (a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . 502, 513
(a)(2) . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 508
Section 317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 1009
Section 318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 107
_______________________
NOTE: THIS RECONCILIATION AND TIE SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE
A PART OF THIS INDENTURE.
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION . . . . . . . . . . . 8
SECTION 101. Definitions . . . . . . . . . . . . . . . . . 8
Act . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Affiliate . . . . . . . . . . . . . . . . . . . . . . . 9
Authenticating Agent . . . . . . . . . . . . . . . . . . 9
Bankruptcy Law . . . . . . . . . . . . . . . . . . . . . 9
Board of Directors . . . . . . . . . . . . . . . . . . . 9
Board Resolution . . . . . . . . . . . . . . . . . . . . 9
Business Day . . . . . . . . . . . . . . . . . . . . . . 9
Capitalized Lease Obligation . . . . . . . . . . . . . . 9
Capital Stock . . . . . . . . . . . . . . . . . . . . . 9
Commission . . . . . . . . . . . . . . . . . . . . . . . 9
Common Depositary . . . . . . . . . . . . . . . . . . . 9
Company . . . . . . . . . . . . . . . . . . . . . . . . 9
Company Request . . . . . . . . . . . . . . . . . . . . 10
Company Order . . . . . . . . . . . . . . . . . . . . . 10
Corporate Trust Office . . . . . . . . . . . . . . . . . 10
Covenant Defeasance . . . . . . . . . . . . . . . . . . 10
Custodian . . . . . . . . . . . . . . . . . . . . . . . 10
Default . . . . . . . . . . . . . . . . . . . . . . . . 10
Defaulted Interest . . . . . . . . . . . . . . . . . . . 10
Defeasance . . . . . . . . . . . . . . . . . . . . . . . 10
Dollars . . . . . . . . . . . . . . . . . . . . . . . . 10
Event of Default . . . . . . . . . . . . . . . . . . . . 10
Exchange Act . . . . . . . . . . . . . . . . . . . . . . 10
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Holder . . . . . . . . . . . . . . . . . . . . . . . . . 10
Security holder . . . . . . . . . . . . . . . . . . . . 10
Indebtedness . . . . . . . . . . . . . . . . . . . . . . 10
Indenture . . . . . . . . . . . . . . . . . . . . . . . 11
Interest . . . . . . . . . . . . . . . . . . . . . . . . 11
Interest Payment Date . . . . . . . . . . . . . . . . . 11
Lien . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Maturity . . . . . . . . . . . . . . . . . . . . . . . . 11
Officer . . . . . . . . . . . . . . . . . . . . . . . . 11
Officer's Certificate . . . . . . . . . . . . . . . . . 11
Opinion of Counsel . . . . . . . . . . . . . . . . . . . 11
Original Issue Discount Security . . . . . . . . . . . . 11
Outstanding . . . . . . . . . . . . . . . . . . . . . . 11
Paying Agent . . . . . . . . . . . . . . . . . . . . . . 12
Person . . . . . . . . . . . . . . . . . . . . . . . . . 12
Place of Payment . . . . . . . . . . . . . . . . . . . . 12
Redemption Date . . . . . . . . . . . . . . . . . . . . 12
Redemption Price . . . . . . . . . . . . . . . . . . . . 12
Registered Security . . . . . . . . . . . . . . . . . . 12
Regular Record Date . . . . . . . . . . . . . . . . . . 13
Responsible Officer . . . . . . . . . . . . . . . . . . 13
Securities . . . . . . . . . . . . . . . . . . . . . . . 13
Security Register . . . . . . . . . . . . . . . . . . . 13
Security Registrar . . . . . . . . . . . . . . . . . . . 13
<PAGE>
Significant Subsidiary . . . . . . . . . . . . . . . . . 13
Special Record Date . . . . . . . . . . . . . . . . . . 13
Stated Maturity . . . . . . . . . . . . . . . . . . . . 13
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . 13
Trust Indenture Act . . . . . . . . . . . . . . . . . . 13
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 13
U.S. Depositary . . . . . . . . . . . . . . . . . . . . 14
U.S. Government Obligations . . . . . . . . . . . . . . 14
Vice President . . . . . . . . . . . . . . . . . . . . . 14
SECTION 102. Compliance Certificates and Opinions . . . . 14
SECTION 103. Form of Documents Delivered to Trustee . . . 15
SECTION 104. Acts of Holders . . . . . . . . . . . . . . . 15
SECTION 105. Notices, Etc., to Trustee and Company . . . . 16
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . 17
SECTION 107. Conflict with Trust Indenture Act . . . . . . 17
SECTION 108. Effect of Headings and Table of Contents . . 17
SECTION 109. Successors and Assigns . . . . . . . . . . . 17
SECTION 110. Separability Clause . . . . . . . . . . . . . 17
SECTION 111. Benefits of Indenture . . . . . . . . . . . . 18
SECTION 112. Governing Law . . . . . . . . . . . . . . . . 18
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . 18
SECTION 114. No Recourse Against Others . . . . . . . . . 18
ARTICLE 2
SECURITY FORMS . . . . . . . . . . . . . 18
SECTION 201. Forms Generally . . . . . . . . . . . . . . . 18
SECTION 202. Form of Face of Security . . . . . . . . . . 19
SECTION 203. Form of Reverse of Security . . . . . . . . . 21
SECTION 204. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . 26
SECTION 205. Securities in Global Form . . . . . . . . . . 26
SECTION 206. CUSIP Number . . . . . . . . . . . . . . . . 27
SECTION 207. Form of Legend for the Securities in
Global Form . . . . . . . . . . . . . . . . 27
ARTICLE 3
THE SECURITIES . . . . . . . . . . . . . 28
SECTION 301. Amount Unlimited; Issuable in Series . . . . 28
SECTION 302. Denominations . . . . . . . . . . . . . . . . 30
SECTION 303. Execution, Authentication, Delivery and
Dating . . . . . . . . . . . . . . . . . . 30
SECTION 304. Temporary Securities . . . . . . . . . . . . 32
SECTION 305. Registration, Registration of Transfer
and Exchange . . . . . . . . . . . . . . . 32
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . . 34
SECTION 307. Payment of Interest; Interest Rights
Preserved . . . . . . . . . . . . . . . . . 35
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . 36
SECTION 309. Cancellation . . . . . . . . . . . . . . . . 36
SECTION 310. Computation of Interest . . . . . . . . . . . 37
<PAGE>
ARTICLE 4
SATISFACTION AND DISCHARGE . . . . . . . . . . 37
SECTION 401. Satisfaction and Discharge of Indenture . . . 37
SECTION 402. Application of Trust Money . . . . . . . . . 38
ARTICLE 5
REMEDIES . . . . . . . . . . . . . . 38
SECTION 501. Events of Default . . . . . . . . . . . . . . 38
SECTION 502. Acceleration of Maturity; Rescission and
Annulment . . . . . . . . . . . . . . . . . 40
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . 41
SECTION 504. Trustee May File Proofs of Claim . . . . . . 41
SECTION 505. Trustee May Enforce Claims Without
Possession of Securities . . . . . . . . . 42
SECTION 506. Application of Money Collected . . . . . . . 42
SECTION 507. Limitation on Suits . . . . . . . . . . . . . 43
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest. . . . . . 43
SECTION 509. Restoration of Rights and Remedies . . . . . 43
SECTION 510. Rights and Remedies Cumulative . . . . . . . 44
SECTION 511. Delay or Omission Not Waiver . . . . . . . . 44
SECTION 512. Control by Holders . . . . . . . . . . . . . 44
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . 44
SECTION 514. Undertaking for Costs . . . . . . . . . . . . 45
ARTICLE 6
THE TRUSTEE . . . . . . . . . . . . . . 45
SECTION 601. Certain Duties and Responsibilities of
the Trustee . . . . . . . . . . . . . . . . 45
SECTION 602. Notice of Defaults . . . . . . . . . . . . . 45
SECTION 603. Certain Rights of Trustee . . . . . . . . . . 46
SECTION 604. Not Responsible for Recitals or Issuance
of Securities . . . . . . . . . . . . . . . 47
SECTION 605. May Hold Securities . . . . . . . . . . . . . 47
SECTION 606. Money Held in Trust . . . . . . . . . . . . . 47
SECTION 607. Compensation and Reimbursement . . . . . . . 47
SECTION 608. Disqualification; Conflicting Interests . . . 48
SECTION 609. Corporate Trustee Required; Eligibility . . . 48
SECTION 610. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . . 48
SECTION 611. Acceptance of Appointment by Successor . . . 50
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . 51
SECTION 613. Preferential Collection of Claims Against
Company . . . . . . . . . . . . . . . . . . 51
SECTION 614. Appointment of Authenticating Agent . . . . . 51
ARTICLE 7
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY . . . . 53
SECTION 701. Company to Furnish Trustee Names and
Addresses of Holders . . . . . . . . . . . 53
<PAGE>
SECTION 702. Preservation of Information;
Communications to Holders . . . . . . . . . 53
SECTION 703. Reports by Trustee . . . . . . . . . . . . . 54
SECTION 704. Reports by Company . . . . . . . . . . . . . 55
ARTICLE 8
CONSOLIDATION, MERGER, LEASE, SALE OR TRANSFER . . . . . 55
SECTION 801. When Company May Merge, Etc. . . . . . . . . 55
SECTION 802. Opinion of Counsel . . . . . . . . . . . . . 56
SECTION 803. Successor Corporation Substituted . . . . . . 56
ARTICLE 9
SUPPLEMENTAL INDENTURES . . . . . . . . . . . 56
SECTION 901. Supplemental Indentures Without Consent
of Holders . . . . . . . . . . . . . . . . 56
SECTION 902. Supplemental Indentures with Consent of
Holders . . . . . . . . . . . . . . . . . . 57
SECTION 903. Execution of Supplemental Indentures . . . . 58
SECTION 904. Effect of Supplemental Indentures . . . . . . 59
SECTION 905. Conformity with Trust Indenture Act . . . . . 59
SECTION 906. Reference in Securities to Supplemental
Indentures . . . . . . . . . . . . . . . . 59
ARTICLE 10
COVENANTS . . . . . . . . . . . . . . 59
SECTION 1001. Payments of Securities . . . . . . . . . . . 59
SECTION 1002. Maintenance of Office or Agency . . . . . . . 59
SECTION 1003. Corporate Existence . . . . . . . . . . . . . 60
SECTION 1004. Payment of Taxes and Other Claims . . . . . . 60
SECTION 1005. Maintenance of Properties . . . . . . . . . . 60
SECTION 1006. Compliance Certificates . . . . . . . . . . . 61
SECTION 1007. Commission Reports . . . . . . . . . . . . . 61
SECTION 1008. Waiver of Stay, Extension or Usury Laws . . . 62
SECTION 1009. Money for Securities Payments to Be Held
in Trust . . . . . . . . . . . . . . . . . 62
SECTION 1010. Limitation on Liens . . . . . . . . . . . . . 63
SECTION 1011. Waiver of Certain Covenants . . . . . . . . . 64
ARTICLE 11
REDEMPTION OF SECURITIES . . . . . . . . . . 65
SECTION 1101. Applicability of Article . . . . . . . . . . 65
SECTION 1102. Election to Redeem; Notice to Trustee . . . . 65
SECTION 1103. Selection by Trustee of Securities to Be
Redeemed . . . . . . . . . . . . . . . . . 65
SECTION 1104. Notice of Redemption . . . . . . . . . . . . 66
SECTION 1105. Deposit of Redemption Price . . . . . . . . . 66
SECTION 1106. Securities Payable on Redemption Date . . . . 67
SECTION 1107. Securities Redeemed in Part . . . . . . . . . 67
<PAGE>
ARTICLE 12
SINKING FUNDS . . . . . . . . . . . . . 67
SECTION 1201. Applicability of Article . . . . . . . . . . 67
SECTION 1202. Satisfaction of Sinking Fund Payments
with Securities . . . . . . . . . . . . . . 68
SECTION 1203. Redemption of Securities for Sinking Fund . . 68
ARTICLE 13
DEFEASANCE AND COVENANT DEFEASANCE . . . . . . . . 68
SECTION 1301. Applicability of Article; Company's
Option to Effect Defeasance or Covenant
Defeasance . . . . . . . . . . . . . . . . 68
SECTION 1302. Defeasance and Discharge . . . . . . . . . . 68
SECTION 1303. Covenant Defeasance . . . . . . . . . . . . . 69
SECTION 1304. Conditions to Defeasance or Covenant
Defeasance . . . . . . . . . . . . . . . . 69
SECTION 1305. Deposited Money and Government
Obligations To Be Held In Trust . . . . . . 71
ARTICLE 14
MISCELLANEOUS . . . . . . . . . . . . . 71
SECTION 1401. Miscellaneous . . . . . . . . . . . . . . . . 71
<PAGE>
Indenture, dated as of _______, 1997, between INGERSOLL-RAND COMPANY,
a corporation duly organized and existing under the laws of the State of New
Jersey (herein called the "Company "), having its principal office at P.O.
Box 8738, Woodcliff Lake, New Jersey 07675 and _________________, a
, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture
provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities or of
series thereof, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(4) the word "Including" (and with the correlative meaning
"Include") means including, without limiting the generality of, any
description preceding such term; and
(5) the words "Herein," "Hereof" and "Hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
<PAGE>
"Act," when used with respect to any Holder, has the meaning
specified in Section 104.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee to
act on behalf of the Trustee to authenticate Securities.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the board of directors of the Company;
provided, however, that when the context refers to actions or resolutions of
the Board of Directors, then the term "Board of Directors" shall also mean
any duly authorized committee of the Board of Directors of the Company or
Officer authorized to act with respect to any particular matter to exercise
the power of the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
"Business Day," when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in that Place of Payment are authorized or
obligated by law or regulation to close.
"Capitalized Lease Obligation" means an obligation under a lease that
is required to be capitalized for financial reporting purposes in accordance
with GAAP, and the amount of Indebtedness represented by such obligation
shall be the capitalized amount of such obligations determined ln accordance
with such principles.
"Capital Stock" of any Person shall mean any and all shares,
interests, participations or other equivalents of or interests in (however
designated) equity of such Person, including any preferred stock, but
excluding any debt securities convertible into such equity.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Common Depositary" has the meaning specified in Section 304.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor corporation shall have become
<PAGE>
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President
or a Vice President, and by its Treasurer, an Assistant Treasurer, its
Controller, an Assistant Controller, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee in
at which at any particular time its corporate trust business
shall be principally administered, which office at the date hereof is located
at ______________, .
"Covenant Defeasance" has the meaning specified in Section 1303.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Dollars" and "$" means lawful money of the United States of America.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended from time to time, and the rules and regulations promulgated
thereunder.
"GAAP" means such accounting principles that are generally accepted
in the United States of America as of the date of any computation required
hereunder.
"Holder" or "Security holder" means a Person in whose name a Security
if registered in the Security Register.
"Indebtedness" of any Person means, without duplication, (i) the
principal of and premium (if any) in respect of (A) indebtedness of such
Person for money borrowed and (B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which such
Person is responsible or liable; (ii) all Capitalized Lease Obligations of
such Person; (iii) all obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations and all
obligations under any title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business); (iv) all obligations of
such Person for the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction (other than obligations
with respect to letters of credit securing obligations (other than
obligations described in (i) through (iii) above) entered into in the
ordinary course of business of such Person to the extent such letters of
credit are not drawn upon or, if and to the extent drawn upon, such drawing
is reimbursed no later than the third Business Day following receipt by such
<PAGE>
Person of a demand for reimbursement following payment on the letter of
credit); (v) all obligations of the type referred to in clauses (i) through
(iv) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable as obligor,
guarantor or otherwise; and (vi) all obligations of the type referred to in
clauses (i) through (v) of other Persons secured by any Lien on any property
or asset of such Person (whether or not such obligation is assumed by such
Person), the amount of such obligation being deemed to be the lesser of the
value of such property or assets or the amount of the obligation so secured.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 301.
"Interest," when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date," when used with respect to any Security,
means the Stated Maturity of an installment of interest on such Security.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind
or nature whatsoever (including, without limitation, the interest of a vendor
or lessor under any conditional sale, capitalized lease or other title
retention agreement).
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes
due and payable as therein or herein provided, whether at the Stated Maturity
or by declaration of acceleration, call for redemption or otherwise.
"Officer" means the Chairman of the Board, the Vice Chairman of the
Board, the President, the Executive Vice President, any Vice President, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary or any
Assistant Secretary of the Company.
"Officer's Certificate" means a certificate signed by an Officer and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
an employee of or counsel for the Company, and who shall be reasonably
acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.
"Outstanding," when used with respect to Securities or Securities of
any series, means, as of the date of determination, all such Securities
theretofore authenticated and delivered under this Indenture, except: (i)
Securities theretofore cancelled by the Trustee or delivered to the Trustee
for cancellation; (ii) Securities, or portions thereof, for whose payment or
<PAGE>
redemption money in the necessary amount has been theretofore deposited with
the Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Securities; provided that, if such
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee
has been made; (iii) Securities which have been paid pursuant to Section 306
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Securities are held by a bona fide
purchaser in whose hands such Securities are valid obligations of the
Company; and (iv) Securities which have been defeased pursuant to Section
1302; provided, however, that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, (a) the principal amount of an Original Issue Discount Security
that shall be deemed to be Outstanding for such purposes shall be that
portion of the principal amount thereof that could be declared to be due and
payable upon the occurrence of an Event of Default and the continuation
thereof pursuant to the terms of such Original Issue Discount Security as of
the date of such determination and (b) Securities owned by the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent or
waiver, only Securities which the Trustee knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and
that the pledgee is not the Company or any other obligor upon the Securities
or any Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company. The Company may act as Paying Agent with respect to any
Securities issued hereunder.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if
any) and interest on the Securities of that series are payable as specified
as contemplated by Section 301.
"Redemption Date," when used with respect to any Security of any
series to be redeemed, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price," when used with respect to any Security of any
series to be redeemed, means the price at which it is to be redeemed pursuant
to this Indenture.
"Registered Security" means any Security issued hereunder and
registered in the Security Register.
<PAGE>
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for
that purpose as contemplated by Section 301.
"Responsible Officer," when used with respect to the Trustee, means
any officer of the Trustee in its Corporate Trust Office and also means, with
respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of his knowledge of and familiarity with the
particular subject.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Significant Subsidiary" means a Subsidiary or Subsidiaries of the
Company possessing assets (including the assets of its own Subsidiaries but
without regard to the Company or any other Subsidiary) having a book value,
in the aggregate, equal to not less than 10% of the book value of the
aggregate assets of the Company and its Subsidiaries calculated on a
consolidated basis.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.
"Subsidiary" of a Person means (i) any corporation more than 50% of
the outstanding securities having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one
or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any partnership, association, joint venture or similar
business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Company.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this Indenture was executed;
provided, however, that in the event that such Act is amended after such
date, "Trust Indenture Act" means the Trust Indenture Act of 1939 as so
amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder,
and if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect
to Securities of that series.
<PAGE>
"U.S. Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more permanent
global Securities, the Person designated as U.S. Depositary by the Company
pursuant to Section 301, which must be a clearing agency registered under the
Exchange Act until a successor U.S. Depositary shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter "U.S.
Depositary" shall mean or include each Person who is then a U.S. Depositary
hereunder, and if at any time there is more than one such Person, "U.S.
Depositary" shall mean the U.S. Depositary with respect to the Securities of
that series.
"U.S. Government Obligations" means securities which are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the timely payment of which is unconditionally guaranteed by the
full faith and credit of the United States of America which, in either case,
are not callable or redeemable at the option of the issuer thereof or
otherwise subject to prepayment, and shall also include a depository receipt
issued by a New York Clearing House bank or trust company as custodian with
respect to any such U.S. Government Obligation or a specific payment or
interest on or principal of any such U.S. Government Obligation held by such
custodian for the account of the holder of a depository receipt, provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt or
from any amount held by the custodian in respect of the U.S. Government
Obligation or the specific payment of interest on or principal of the U.S.
Government Obligation evidenced by such depository receipt.
"Vice President," when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, other than an action
permitted by Sections 205 and 704 hereof, the Company shall furnish to the
Trustee an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of
this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained
in such certificate or opinion are based;
<PAGE>
(c) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Officer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such Officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an Officer or Officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or
taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by agents
duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "ACT" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
601) conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual
<PAGE>
signing such instrument or writing acknowledged to him the execution thereof.
Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems
sufficient.
(c) The ownership of Registered Securities shall be proved by
the Security Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.
(e) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other
Act, but the Company shall have no obligation to do so. If such a record date
is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record date, but only
the Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of Outstanding Securities have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Securities shall be
computed as of such record date; provided that no such authorization,
agreement or consent by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee and received by the Trustee at its Corporate
Trust Office, Attention: Corporate Trust Administration, or
(b) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the
Company addressed to it at the address of its principal office specified in
the first paragraph of this Indenture, attention: Secretary, or at any other
address previously furnished in writing to the Trustee by the Company.
<PAGE>
SECTION 106. Notice to Holders; Waiver.
Where this Indenture or any Security provides for notice to Holders
of any event, such notice shall be deemed sufficiently given (unless
otherwise herein or in such Security expressly provided) if in writing and
mailed, first-class postage prepaid, to each Holder affected by such event,
at his address as it appears in the Security Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders or the validity of the proceedings to which
such notice relates. Where this Indenture or any Security provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall
be the equivalent of such notice. Waivers of notice by Holders shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose
hereunder.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of
the country of publication.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or
shall be excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
<PAGE>
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed
in accordance with the laws (other than the choice of law provisions) of the
State of New York.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of
the Securities) payment of interest or principal (and premium, if any) need
not be made at such Place of Payment on such date, but may be made on the
next succeeding Business Day or on such other day as may be set out in the
Officer's Certificate pursuant to Section 301 at such Place of Payment with
the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity, provided that no interest shall
accrue for the period from and after such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be.
SECTION 114. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Security holder, by
accepting a Security, waives and releases all such liability. Such waivers
and releases are part of the consideration for the issuance of the
Securities.
ARTICLE 2
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental
hereto, ln each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the Officers executing such
Securities, as evidenced by their execution of the Securities. If the form of
Securities of any series is established by action taken pursuant to a Board
Resolution, a copy of an appropriate record of such action shall be certified
by the Secretary or an Assistant Secretary of the Company and delivered to
<PAGE>
the Trustee at or prior to the delivery of the Company Order contemplated by
Section 303 for the authentication and delivery of such Securities.
The Trustee's certificates of authentication shall be in
substantially the form set forth in this Article.
The definitive Securities shall be photocopied, printed, lithographed
or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the Officers executing such Securities, as evidenced by
their execution of such Securities.
SECTION 202. Form of Face of Security.
(If the Security is an Original Issue Discount Security, insert--FOR
PURPOSES OF SECTION 1272 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE"), THE AMOUNT OF ORIGINAL ISSUE DISCOUNT (AS DEFINED IN SECTION
1273(a)(1) OF THE CODE AND TREASURY REGULATION SECTION 1.1273-l(a) WITH
RESPECT TO THIS SECURITY IS , THE ISSUE PRICE (AS DEFINED IN
TREASURY REGULATION SECTION 1.1273-2) OF THIS SECURITY IS , THE
ISSUE DATE (AS DEFINED IN SECTION 1275(a)(2) OF THE CODE AND TREASURY
REGULATION SECTION 1.1273-2) OF THIS SECURITY IS AND THE YIELD TO
MATURITY OF THIS SECURITY IS ).
<PAGE>
INGERSOLL-RAND COMPANY
........................
No. ________ ($)________
INGERSOLL-RAND COMPANY, a corporation duly organized and existing
under the laws of New Jersey (herein called the "Company," which term
includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to , or registered
assigns, the principal sum of $ on . (If the Security
is to bear interest prior to Maturity, insert --, and to pay interest thereon
from _______________ or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, (semi-annually) (quarterly)
(monthly) on and in each year, commencing , at the rate
of % per annum, until the principal hereof is paid or made available for
payment (If applicable insert--, and (to the extent that the payment of such
interest shall be legally enforceable) at the rate of % per annum on any
overdue principal and premium and on any overdue installment of interest).
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the of (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities of this series not less than
10 days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in
said Indenture.)
(If the Security is not to bear interest prior to Maturity,
insert--The principal of this Security shall not bear interest except in the
case of a default in payment of principal upon acceleration, upon redemption
or at Stated Maturity and in such case the overdue principal of this Security
shall bear interest at the rate of % per annum (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue
from the date of such default in payment to the date payment of such
principal has been made or duly provided for. Interest on any overdue
principal shall be payable on demand. Any such interest on any overdue
principal that is not so paid on demand shall bear interest at the rate of
% per annum (to the extent that the payment of such interest shall be
legally enforceable), which shall accrue from the date of such demand for
payment to the date payment of such interest has been made or duly provided
for, and such interest shall also be payable on demand.)
Payment of the principal of (and premium, if any) and (if applicable,
insert--any such) interest on this Security will be made at the office or
agency of the Company maintained for that purpose in , in Dollars
<PAGE>
(if applicable, insert--; provided, however, that at the option of the
Company payment of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security
Register).
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
INGERSOLL-RAND COMPANY
By:______________________
Attest:
___________________________ (SEAL)
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or
more series under an Indenture, dated as of November , 1997 (herein called
the "Indenture"), between the Company and as Trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof (limited in aggregate principal amount to $ ).
(If applicable, insert--The Securities of this series are subject to
redemption upon not less than 30 nor more than 45 days' notice by first class
mail, (if applicable, insert--(1) on in any year commencing with
the year and ending with the year through operation of
the sinking fund for this series at a Redemption Price equal to 100% of the
principal amount, and (2)) at any time (on or after , ), as a
whole or in part, at the election of the Company, at the following Redemption
Prices (expressed as percentages of the principal amount):
If redeemed (on or before , %, and if redeemed) during
the 12-month period beginning of the years indicated,
<PAGE>
Year Redemption Price Year Redemption Price
and thereafter at a Redemption Price equal to _______ of the principal
amount, together in the case of any such redemption (if applicable, insert --
(whether through operation of the sinking fund or otherwise)) with accrued
and unpaid interest to the Redemption Date, but interest installments whose
Stated Maturity is on or prior to such Redemption Date will be payable to the
Holders of such Securities, or one or more Predecessor Securities, of record
at the close of business on the relevant Record Dates referred to on the face
hereof, all as provided in the Indenture.)
(If applicable, insert -- The Securities of this series are subject
to redemption upon not less than 30 nor more than 45 days' notice by first
class mail, (1) on in any year commencing with the year
and ending with the year through operation of the
sinking fund for this series at the Redemption Prices for redemption through
operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below, and (2) at any time (on or after
____________), as a whole or in part, at the election of the Company, at the
Redemption Prices for redemption otherwise than through operation of the
sinking fund (expressed as percentages of the principal amount) set forth in
the table below:
If redeemed during a 12-month period beginning of the
years indicated,
Redemption Price for Redemption Price for
Redemption Through Redemption Otherwise
Operation of the Than Through Operation
Year Sinking Fund of the Sinking Fund
and thereafter at a Redemption Price equal to % of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued and unpaid interest to the Redemption
Date, but interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.)
(Notwithstanding the foregoing, the Company may not, prior to
redeem any Securities of this series as contemplated by (clause (2)
of) the preceding paragraph as a part of, or in anticipation of, any
refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance
with generally accepted financial practice) of less than % per annum.)
<PAGE>
(The sinking fund for this series provides for the redemption on
in each year beginning with the year and ending with the
year of (not less than) $ (("mandatory sinking fund")
and not more than $ aggregate principal amount of Securities of
this series.) (Securities of this series acquired or redeemed by the Company
otherwise than through (mandatory) sinking fund payments may be credited
against subsequent (mandatory) sinking fund payments otherwise required to be
made--in the (inverse) order in which they become due.)
(In the event of redemption of this Security in part only a new
Security or Securities of this series for the unredeemed portion hereof will
be issued ln the name of the Holder hereof upon the cancellation hereof.)
(If the Security is not an Original Issue Discount Security, insert -
- - If any Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may
be declared due and payable in the manner and with the effect provided in the
Indenture.) (If the Security is an Original Issue Discount Security, insert -
- - If an Event of Default with respect to Securities of this series shall
occur and be continuing, an amount of principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture. Such amount shall be equal -- insert formula for
determining the amount.) Upon payment (i) of the amount of principal so
declared due and payable and (ii) of interest on any overdue principal and
overdue interest (in each case to the extent that the payment of such
interest shall be legally enforceable), all of the Company's obligations in
respect of the payment of the principal of and interest, if any, on the
Securities of this series shall terminate.
This Security is a senior unsecured obligation of the Company and
will rank pari passu in right of payment with all other senior unsecured
obligations of the Company.
This Security is subject to Defeasance as described in the Indenture.
The Indenture may be modified by the Company and the Trustee without
consent of any Holder with respect to certain matters as described in the
Indenture. In addition, the Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights
and obligations of the Company and the rights of the Holders of the
Securities of each series to be affected under the Indenture at any time by
the Company and the Trustee with the consent of the Holders of a majority in
principal amount of the Securities at the time Outstanding of each series to
be affected. The Indenture also contains provisions permitting the Holders
of a majority in principal amount of the Securities of each series at the
time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture
and certain past defaults under the Indenture and their consequences. Any
such consent or waiver by the Holder of this Security shall bind such Holder
and all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
<PAGE>
premium, if any) and interest on this Security at the times, place and rate,
and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the
Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the
principal of (and premium, if any) and interest on this Security are payable,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by the
Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Securities of this series, of authorized denominations and for
the same Stated Maturity and aggregate principal amount, will be issued to
the designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of ($1,000) and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered as the
owner hereof for all purposes, whether or not this Security be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
The Indenture imposes certain limitations on the ability of the
Company to, among other things, merge or consolidate with any other Person or
sell, assign, transfer or lease all or substantially all of its properties or
assets (If other covenants are applicable pursuant to the provisions of
Section 301, insert here). All such covenants and limitations are subject to
a number of important qualifications and exceptions. The Company must report
periodically to the Trustee on compliance with the covenants in the
Indenture.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under this
Security or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Holder, by accepting a
Security, waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of this Security.
(If applicable, insert -- Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures ("CUSIP"), the
Company has caused CUSIP numbers to be printed on the Securities of this
series as a convenience to the Holders of the Securities of this series. No
representation is made as to the correctness or accuracy of such numbers as
printed on the Securities of this series and reliance may be placed only on
the other identification numbers printed hereon.)
<PAGE>
All capitalized terms used in this Security without definition which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign
and transfer this Security to
_____________________________________________________________________________
(Insert assignee's social security or tax I.D. number)
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _____________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated:__________________ Your Signature:________________________________
(Sign exactly as your name
appears on the other side
of this Security)
Signature Guaranty: ________________________________________________________
(Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Transfer Agent, which
requirements will include membership or
participation in STAMP or such other
"signature guarantee program" as may be
determined by the Transfer Agent in addition
to, or in substitution for, STAMP all in
accordance with the Exchange Act.)
Social Security Number or Taxpayer Identification Number: __________________
SECTION 204. Form of Trustee's Certificate of Authentication.
Dated: __________________
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
___________________________________________
as Trustee
By:________________________________________
Authorized Signatory
SECTION 205. Securities in Global Form.
If Securities of a series are issuable in global form, as
contemplated by Section 301, then, notwithstanding the provisions of Section
<PAGE>
302, any such Security shall represent such of the Outstanding Securities of
such series as shall be specified therein and may provide that it shall
represent the aggregate amount of Outstanding Securities from time to time
endorsed thereon and that the aggregate amount of Outstanding Securities
represented thereby may from time to time be reduced to reflect exchanges.
Any endorsement of a Security in global form to reflect the amount, or any
increase or decrease in the amount, of Outstanding Securities represented
thereby shall be made in such manner and upon instructions given by such
Person or Persons as shall be specified therein or in the Company Order to be
delivered to the Trustee pursuant to Section 303 or Section 304. Subject to
the provisions of Section 303 and, if applicable, Section 304, the Trustee
shall deliver and redeliver any Security in permanent global form in the
manner and upon instructions given by the Person or Persons specified therein
or in the applicable Company Order. If a Company Order pursuant to Section
303 or 304 has been, or simultaneously is, delivered, any instructions by the
Company with respect to endorsement or delivery or redelivery of a Security
in global form shall be in writing but need not comply with Section 102 and
need not be accompanied by an Opinion of Counsel.
The provisions of Section 309 shall apply to any Security represented
by a Security in global form if such Security was never issued and sold by
the Company and the Company delivers to the Trustee the Security in global
form together with written instructions (which need not comply with Section
102 and need not be accompanied by an Opinion of Counsel) with regard to the
reduction in the principal amount of Securities represented thereby.
Notwithstanding the provisions of Sections 201 and 307, unless
otherwise specified as contemplated by Section 301, payment of principal of,
premium, if any, and interest on any Security in permanent global form shall
be made to the Person or Persons specified therein.
Notwithstanding the provisions of Section 308 and except as provided
in the preceding paragraph, the Company, the Trustee and any agent of the
Company and the Trustee shall treat a Person as the Holder of such principal
amount of Outstanding Securities represented by a permanent global Security
as shall be specified in a written statement of the Holder of such permanent
global Security.
SECTION 206. CUSIP Number.
The Company in issuing Securities of any series may use a "CUSIP"
number, and, if so, the Trustee may use the CUSIP number in notices of
redemption or exchange as a convenience to Holders of such series; provided,
that any such notice may state that no representation is made as to the
correctness or accuracy of the CUSIP number printed on the notice or on the
Securities of such series, and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption
shall not be affected by any defect in or omission of such numbers. The
Company will promptly notify the Trustee of any change in the CUSIP number of
any series of Securities.
SECTION 207. Form of Legend for the Securities in Global Form.
Any Security in global form authenticated and delivered hereunder
shall bear a legend in substantially the following form:
<PAGE>
"This Security is in global form within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Common Depositary
or a U.S. Depositary. Unless and until it is exchanged in whole or in part
for Securities in certificated form, this Security may not be transferred
except as a whole by the Common Depositary or a U.S. Depositary or by a
nominee of the Common Depositary or a nominee of the U.S. Depositary as the
case may be."
ARTICLE 3
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued from time to time in one or more series.
There shall be established in or pursuant to a Board Resolution, and set
forth in an Officer's Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Sections 304, 305, 306, 906 or 1107);
(3) whether any Securities of the series are to be issuable in
permanent global form with or without coupons and, if so, (i) whether
beneficial owners of interests in any such permanent global security may
exchange such interests for Securities of such series and of like tenor of
any authorized form and denomination and the circumstances under which any
such exchanges may occur, if other than in the manner provided in Section
305, and (ii) the name of the Common Depositary (as defined in Section 304)
or the U.S. Depositary, as the case may be, with respect to any global
security;
(4) the date or dates on which the principal of the Securities
of the series is payable;
(5) the rate or rates at which the Securities of the series
shall bear interest, if any, the date or dates from which such interest shall
accrue, the Interest Payment Dates on which such interest shall be payable
and the Regular Record Date for the interest payable on any Interest Payment
Date and, if applicable to such series of Securities, the basis points and
United States Treasury rate(s) and any other rates to be used in calculating
the reset rate;
(6) the place or places where the principal of (and premium, if
any) and interest on Securities of the series shall be payable;
<PAGE>
(7) the right of the Company, if any, to defer any payment of
principal of or interest on the Securities of the series, and the maximum
length of any such deferral period;
(8) the period or periods within which, the price or prices at
which and the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company, pursuant to any
sinking fund or otherwise;
(9) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous provisions
or at the option of a Holder thereof and the period or periods within which,
the price or prices at which and the terms and conditions upon which
Securities of the series shall be redeemed or purchased, in whole or in part,
pursuant to such obligation, and, where applicable, the obligation of the
Company to select the Securities to be redeemed;
(10) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series shall
be issuable;
(11) if other than the principal amount thereof, the portion of
the principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502;
(12) additional Events of Default with respect to Securities of
the series, if any, other than those set forth herein;
(13) if either or both of Section 1302 and Section 1303 shall be
inapplicable to the Securities of the series (provided that if no such
inapplicability shall be specified, then both Section 1302 and Section 1303
shall be applicable to the Securities of the series);
(14) if other than U.S. dollars, the currency or currencies or
units based on or related to currencies in which the Securities of such
series shall be denominated and in which payments or principal of, and any
premium and interest on, such Securities shall or may by payable;
(15) additional covenants with respect to Securities of the
series, if any, other than those set forth herein;
(16) if other than the Trustee, the identity of the Registrar and
any Paying Agent; and
(17) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or
pursuant to such Board Resolution and set forth in such Officer's Certificate
or in any such Indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
<PAGE>
Officer's Certificate setting forth, or providing the manner for determining,
the terms of the Securities of such series.
SECTION 302. Denominations.
The Securities of each series shall be issuable in registered form
without coupons in such denominations as shall be specified as contemplated
by Section 301. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one
of its Vice Presidents, under its corporate seal reproduced thereon attested
by its Secretary or one of its Assistant Secretaries. The signature of any
of these officers on the Securities may be manual or facsimile. The seal of
the Company may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Securities. Typographical
and other minor errors or defects in any such reproduction of the seal or any
such signature shall not affect the validity or enforceability of any
security that has been duly authenticated and delivered by the Trustee.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the
Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities
or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by
the Company to the Trustee for authentication, together with a Company Order
for the authentication and delivery of such Securities, and the Trustee in
accordance with the Company Order shall authenticate and make such Securities
available for delivery. If the form or terms of the Securities of the series
have been established in or pursuant to one or more Board Resolutions as
permitted by Sections 201 and 301, in authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and (subject to
Sections 315(a) through (d) of the Trust Indenture Act) shall be fully
protected in relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such form has
been established in conformity with the provisions of this Indenture;
(b) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture;
(c) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally
binding obligations of the Company, enforceable in accordance With their
terms, except to the extent enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
<PAGE>
affecting the enforcement of creditors' rights generally and by the effect of
general principles of equity (regardless of whether enforceability is
considered in a proceeding ln equity or at law); and
(d) that no consent, approval, authorization, order, registration
or qualification of or with any court or any governmental agency or body
having jurisdiction over the Company is required for the execution and
delivery of such Securities by the Company, except such as have been obtained
(except that no opinion need be expressed as to state securities or Blue Sky
laws).
If such form or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee, or in the written opinion
of counsel to the Trustee (which counsel may be an employee of the Trustee)
such authentication may not lawfully be made or would involve the Trustee in
personal liability.
Notwithstanding the provisions of Section 301 and of the immediately
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officer's
Certificate otherwise required pursuant to Section 301 or the Company Order
and Opinion of Counsel otherwise required pursuant to the immediately
preceding paragraph at or prior to the time of authentication of each
security of such series if such documents are delivered at or prior to the
authentication upon original issuance of the first security of such series to
be issued.
If the Company shall establish pursuant to Section 301 that the
Securities of a series are to be issued in the form of one or more global
Securities, then the Company shall execute and the Trustee shall, in
accordance with this Section and the Company Order with respect to the
authentication and delivery of such series, authenticate and deliver one or
more global Securities that (i) shall be in an aggregate amount equal to the
aggregate principal amount specified in such Company Order, (ii) shall be
registered in the name of the Common Depositary or U.S. Depositary, as the
case may be, therefor or its nominee, and (iii) shall be made available for
delivery by the Trustee to such depositary or pursuant to such depositary's
instruction.
Each depositary designated pursuant to Section 301 must, at the time
of its designation and at all times while it serves as depositary, be a
clearing agency registered under the Exchange Act and any other applicable
statute or regulation.
Unless otherwise provided for in the form of security, each security
shall be dated the date of its authentication.
No security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such security
a certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
security shall be conclusive evidence, and the only evidence, that such
security has been duly authenticated and delivered hereunder and is entitled
to the benefits of this Indenture.
<PAGE>
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate
and make available for delivery, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of
such Securities.
In the case of Securities of any series, such temporary Securities
may be in global form, representing all or a portion of the Outstanding
Securities of such series.
Except in the case of temporary Securities in global form (which
shall be exchanged in accordance with the provisions of Section 305), if
temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Securities of any series, the Company shall execute and
the Trustee shall authenticate and make available for delivery in exchange
therefor a like principal amount of definitive Securities of the same series
of authorized denominations and of like tenor. Until so exchanged, the
temporary Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of such series.
If temporary Securities of any series are issued in global form, any
such temporary global Security shall, unless otherwise provided therein, be
delivered to the office of a depositary or common depositary (the "COMMON
DEPOSITARY") for credit to the respective accounts of the beneficial owners
of such Securities (or to such other accounts as they may direct).
SECTION 305. Registration, Registration of Transfer and
Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any
other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Securities and of registration of transfers
of Securities. The Trustee is hereby appointed "Security Registrar" for the
purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any security of any
series at the office or agency of the Company in Place of Payment for that
series, the Company shall execute, and the Trustee shall authenticate and
make available for delivery, in the name of the designated transferee or
transferees, one or more new Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and Stated Maturity.
<PAGE>
At the option of the Holder, Securities of any series may be
exchanged for other Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and Stated Maturity,
upon surrender of the Securities to be exchanged at such office or agency.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and make available for delivery,
the Securities which the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global security shall be
exchangeable only as provided in this paragraph. If the beneficial owners of
interests in a permanent global security are entitled to exchange such
interests for Securities of such series and of like tenor and principal
amount of another authorized form and denomination, as specified and as
subject to the conditions contemplated by Section 301, then without
unnecessary delay but in any event not later than the earliest date on which
such interests may be so exchanged, the Company shall deliver to the Trustee
definitive Securities of that series in aggregate principal amount equal to
the principal amount of such permanent global security, executed by the
Company. On or after the earliest date on which such interests may be so
exchanged, such permanent global Securities shall be surrendered from time to
time by the Common Depositary or the U.S. Depositary, as the case may be, and
in accordance with instructions given to the Trustee and the Common
Depositary or the U.S. Depositary, as the case may be (which instructions
shall be in writing but need not comply with Section 102 or be accompanied by
an Opinion of Counsel), as shall be specified in the Company Order with
respect thereto to the Trustee, as the Company's agent for such purpose, to
be exchanged, in whole or in part, for definitive Securities of the same
series without charge. The Trustee shall authenticate and make available for
delivery, in exchange for each portion of such surrendered permanent global
security, a like aggregate principal amount of definitive Securities of the
same series of authorized denominations and of like tenor as the portion of
such permanent global security to be exchanged which shall be in the form of
the Securities of such series; provided, however, that no such exchanges may
occur during a period beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of Securities of that series
selected for redemption under Section 1103 and ending at the close of
business on the day of such mailing. Promptly following any such exchange in
part, such permanent global Security shall be returned by the Trustee to the
Common Depositary or the U.S. Depositary, as the case may be, or such other
Common Depositary or U.S. Depositary referred to above in accordance with the
written instructions of the Company referred to above. If a Security in the
form specified for such series is issued in exchange for any portion of a
permanent global Security after the close of business at the office or agency
where such exchange occurs on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at
such office or agency on the related proposed date for payment of interest or
Defaulted Interest, as the case may be, such interest or Defaulted Interest
will not be payable on such Interest Payment Date or proposed date for
payment, as the case may be, in respect of such security in the form
specified for such series, but will be payable on such Interest Payment Date
or proposed date for payment, as the case may be, only to the Person to whom
interest in respect of such portion of such permanent global Security is
payable in accordance with the provisions of this Indenture.
<PAGE>
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligation, of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
Unless otherwise provided in the Securities to be transferred or
exchanged, no service charge shall be made for any registration of transfer
or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Securities,
other than exchanges pursuant to Section 304, 906 or 1107 not involving any
transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange Securities of any series during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of that series selected for redemption under Section
1103 and ending at the close of business on the day of such mailing, or (ii)
to register the transfer of or exchange any security so selected for
redemption in whole or in part, except the unredeemed portion of any security
being redeemed in part.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such Security or indemnity as may be required by them to
save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security, a new Security of the same series and of
like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected
therewith.
<PAGE>
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of that series duly
issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person
in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.
Any interest on any Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to
the Holder on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid on
each Security of such series and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of money equal
to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when deposited
to be held in trust for the be fit of the Persons entitled to such Defaulted
Interest as in this Section 307 provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall be
not more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder of Securities of such series at his address
as it appears in the security Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the Securities
of such series (or their respective Predecessor Securities) are registered at
the close of business on such Special Record Date and shall no longer be
payable pursuant to the following Clause (2).
<PAGE>
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this Section 307, such manner of payment shall be deemed practicable by
the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of (and
premium, if any) and (subject to Section 307) interest on such Security and
for all other purposes whatsoever, whether or not such Security be overdue,
and neither the Company, the Trustee nor any agent of the Company or the
Trustee shall be affected by notice to the contrary.
None of the Company, the Trustee or any agent of the Company or the
Trustee shall have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interest of a Security in global form, or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interest.
Notwithstanding the foregoing, with respect to any Security in global form,
nothing herein shall prevent the Company or the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy
or other authorization furnished by any Common Depositary (or its nominee),
as a Holder, with respect to such Security in global form or impair, as
between such Common Depositary and owners of beneficial interests in such
Security in global form, the operation of customary practices governing the
exercise of the right of such Common Depositary (or its nominee) as holder of
such Security in global form.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange
for any Securities cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Securities shall be held by the
Trustee and may be destroyed (and, if so destroyed, certification of their
destruction shall be delivered to the Company, unless, by a Company Order,
the Company shall direct that cancelled Securities be returned to it).
<PAGE>
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.
ARTICLE 4
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for or in the form of security for such series), when the
Trustee, upon Company Request and at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306 and (ii)
Securities for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust, as provided in Section 1009) have been
delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited with
the Trustee as trust funds in trust for the purpose an amount sufficient to
pay and discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal (and premium, if
any) and interest to the date of such deposit (in the case of Securities
which have become due and payable) or the Stated Maturity or Redemption Date,
as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for herein relating to the satisfaction and discharge of
this Indenture have been complied with.
<PAGE>
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations
of the Company to any Authenticating Agent under Section 614 and, if money
shall have been deposited with the Trustee pursuant to subclause (B) of
clause (1) of this Section, the obligations of the Trustee under Section 402
and the last paragraph of Section 1009 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1009, all
money deposited with the Trustee pursuant to Section 401 shall be held in
trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as its own Paying Agent) as the Trustee
may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest for whose payment such money has been deposited
with or received by the Trustee.
ARTICLE 5
REMEDIES
SECTION 501. Events of Default.
"EVENT OF DEFAULT," wherever used herein with respect to Securities
of any series, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or to
be effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body):
(1) the Company defaults in the payment of interest on any
Security of that series when such interest becomes due and payable and the
default continues for a period of 30 days; provided, however, that if the
Company is permitted by the terms of the Securities of the applicable series
to defer the payment in question, the date on which such payment is due and
payable shall be the date on which the Company is required to make payment
following such deferral, if such deferral has been elected pursuant to the
terms of the Securities; or
(2) the Company defaults in the payment of the principal of (or
premium, if any, on) any Security of that series when the same becomes due
and payable at Maturity, upon redemption (including redemptions under
Article 11), or otherwise; provided, however, that if the Company is
permitted by the terms of the Securities of the applicable series to defer
the payment in question, the date on which such payment is due and payable
shall be the date on which the Company is required to make payment following
such deferral, if such deferral has been elected pursuant to the terms of the
Securities; or
(3) the Company fails to observe or perform any of its other
covenants, warranties or agreements in the Securities of that series or this
Indenture (other than a covenant, agreement or warranty a default in whose
performance or whose breach is elsewhere in this Section specifically dealt
with or which has expressly been included in this Indenture solely for the
benefit of series of Securities other than that series), and the failure to
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observe or perform continues for the period and after the notice specified in
the last paragraph of this Section; or
(4) any Event of Default under any series of Securities issued
pursuant to this Indenture or any event of default, as defined in any other
Indenture, mortgage, indenture, or instrument under which there may be
issued, or by which there may be secured or evidenced, any Indebtedness of
the Company or a Subsidiary (whether such Indebtedness now exists or shall
hereafter be created or incurred) shall occur and shall consist of default in
the payment of such Indebtedness at the maturity thereof (after giving effect
to any applicable grace period) or shall result in Indebtedness becoming or
being declared due and payable prior to the date on which it would otherwise
become due and payable, and such default in payment is not cured or such
acceleration shall not be rescinded or annulled within 10 days after written
notice to the Company from the Trustee or to the Company and to the Trustee
from the Holders of at least 10% in aggregate principal amount of the
Securities of that series at the time outstanding; provided that it shall not
be an Event of Default if the principal amount of Indebtedness (other than
Indebtedness represented by Securities issued pursuant to this Indenture)
which is not paid at maturity or the maturity of which is accelerated is less
than the amount equal to 1% of the Company's consolidated total assets
(determined as of its most recent fiscal year-end) provided further that if,
prior to a declaration of acceleration of the maturity of the Securities of
that series or the entry of judgment in favor of the Trustee in a suit
pursuant to Section 503, such default shall be remedied or cured by the
Company or waived by the holders of such Indebtedness, then the Event of
Default hereunder by reason thereof shall be deemed likewise to have been
thereupon remedied, cured or waived without further action upon the part of
either the Trustee or any of the Holders of the Securities of that series,
and provided further, that, subject to Sections 601 and 602, the Trustee
shall not be charged with knowledge of any such default unless written notice
of such default shall have been given to the Trustee by the Company, by a
holder or an agent of a holder of any such Indebtedness, by the trustee then
acting under any indenture or other instrument under which such default shall
have occurred, or by the Holders of at least five percent in aggregate
principal amount of the Securities of that series at the time outstanding; or
(5) the Company pursuant to or within the meaning of any
Bankruptcy Law (A) commences a voluntary case or proceeding under any
Bankruptcy Law with respect to itself, (B) consents to the entry of a
judgment, decree or order for relief against it in an involuntary case or
proceeding under any Bankruptcy Law, (C) consents to or acquiesces in the
institution of bankruptcy or insolvency proceedings against it, (D) applies
for, consents to or acquiesces in the appointment of or taking possession by
a Custodian of the Company or for any material part of its property,
(E) makes a general assignment for the benefit of its creditors or (F) takes
any corporate action in furtherance of or to facilitate, conditionally or
otherwise, any of the foregoing; or
(6) (i) a court of competent jurisdiction enters a judgment,
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any Bankruptcy Law which shall (A) approve as properly
filed a petition seeking reorganization, arrangement, adjustment or
composition in respect of the Company, (B) appoint a Custodian of the Company
or for any material part of its property, or (C) order the winding-up or
liquidation of its affairs, and such judgment, decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or (ii) any
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bankruptcy or insolvency petition or application is filed, or any bankruptcy
or insolvency proceeding is commenced against the Company and such petition,
application or proceeding is not dismissed within 60 days; or (iii) a warrant
of attachment is issued against any material portion of the property of the
Company which is not released within 60 days of service; or
(7) any other Event of Default provided with respect to Securities
of that series.
A Default under clause (3) above is not an Event of Default until the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series notify the Company of the Default and
the Company does not cure the Default within 60 days after receipt of the
notice. The notice must specify the Default, demand that it be remedied and
state that the notice is a "Notice of Default." When a Default under clause
(3) above is cured within such 60-day period, it ceases.
SECTION 502. Acceleration of Maturity; Rescission and
Annulment.
If an Event of Default with respect to Securities of any series
(other than an Event of Default specified in clause (5) or (6) of Section
501) occurs and is continuing, the Trustee by notice in writing to the
Company, or the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series by notice in writing to the Company and
the Trustee, may declare the unpaid principal of and accrued interest to the
date of acceleration (or, if the Securities of that series are Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the terms of that series) on all the Outstanding Securities of that series
to be due and payable immediately and, upon any such declaration, the
Outstanding Securities of that series (or specified principal amount) shall
become and be immediately due and payable.
If an Event of Default specified in clause (5) or (6) of Section 501
occurs, all unpaid principal of and accrued interest on the Outstanding
Securities of that series (or specified principal amount) shall ipso facto
become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Holder of any Security of that series.
Upon payment of all such principal and interest, all of the Company's
obligations under the Securities of that series and (upon payment of the
Securities of all series) this Indenture shall terminate, except obligations
under Section 607.
The Holders of a majority in principal amount of the Outstanding
Securities of that series by notice to the Trustee may rescind an
acceleration and its consequences if (i) all existing Events of Default,
other than the nonpayment of the principal and interest of the Securities of
that series that has become due solely by such declaration of acceleration,
have been cured or waived, (ii) to the extent the payment of such interest is
lawful, interest on overdue installments of interest and overdue principal
that has become due otherwise than by such declaration of acceleration have
been paid, (iii) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction and (iv) all payments due to the
Trustee and any predecessor Trustee under Section 607 have been made.
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SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Company covenants that if:
(1) default is made in the payment of any interest on any Security
of any series when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security of any series at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest and, to the
extent that payment of such interest shall be legally enforceable, interest
on any overdue principal (and premium, if any) and on any overdue interest,
at the rate or rates prescribed therefor in such Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the reasonable
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other
obligor upon such Securities, wherever situated.
If an Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to secure any other proper
remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal or
interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise,
(i) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest owing and unpaid in respect of the
Securities and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
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the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agent and counsel) and of the Holders allowed in such judicial
proceedings, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar
official in any such judicial proceeding is hereby authorized by each Holder
to make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims
Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article in
respect of the Securities of any series shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal (or premium, if any) or
interest, upon presentation of the Securities in respect of which moneys have
been collected and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section
607 applicable to such series;
Second: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities of such
series in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according to
the amounts due and payable on such Securities of such series for principal
(and premium, if any) and interest, respectively; and
Third: To the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 506. At least fifteen (15) days before such
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record date, the Trustee shall mail to each Holder and the Company a notice
that states the record date, the payment date and the amount to be paid.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of Holders of Securities
of any series shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice
the rights of any other of such Holders, or to obtain or to seek to obtain
priority or preference over any other of such Holders or to enforce any right
under this Indenture, except in the manner herein provided and for the equal
and ratable benefit of all Holders of Securities of the affected series.
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 307) interest on such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
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shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the
Holders shall continue as though no such proceeding has been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or ln equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such
Event of Default or an acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by
the Holders, as the case may be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any series 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 Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of law
or with this Indenture;
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction; and
(3) subject to Section 601, the Trustee need not take any action
which might involve the Trustee in personal liability or be unduly
prejudicial to the Holders not joining therein.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may by written notice to the Trustee on
behalf of the Holders of all the Securities of such series waive any Default
or Event of Default with respect to such series and its consequences, except
a Default or Event of Default
(1) in respect of the payment of the principal of (or premium, if
any) or interest on any Security of such series, or
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(2) in respect of a covenant or other provision hereof which under
Article Nine cannot be modified or amended without the consent of the Holder
of each Outstanding Security of such series affected.
Upon any such waiver, such Default or Event of Default shall cease to
exist and shall be deemed to have been cured, for every purpose of this
Indenture and the Securities of such series; but no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any right
consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to
any suit instituted by the Company, to any suit instituted by the Trustee,
to any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% in principal amount of the Outstanding Securities of
any series, or to any suit instituted by any Holder for the enforcement of
the payment of the principal of (or premium, if any) or interest on any
Security on or after the Stated Maturity or Maturities expressed in such
Security (or, in the case of redemption, on or after the Redemption Date).
ARTICLE 6
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities of the
Trustee.
(a) Except during the continuance of an Event of Default, the
Trustee's duties and responsibilities under this Indenture shall be governed
by Section 315(a) of the Trust Indenture Act.
(b) In case an Event of Default has occurred and is continuing,
and is known to the Trustee, the Trustee shall exercise the rights and powers
vested in it by this Indenture, and shall use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(c) None of the provisions of Section 315(d) of the Trust
Indenture Act shall be excluded from this Indenture.
SECTION 602. Notice of Defaults.
Within 30 days after the occurrence of any Default or Event of
Default with respect to the Securities of any series, the Trustee shall give
to all Holders of Securities of such series, as their names and addresses
appear in the Security Register, notice of such Default or Event of Default
known to the Trustee, unless such Default or Event of Default shall have been
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cured or waived; provided, however, that, except in the case of a Default or
Event of Default in the payment of the principal of (or premium, if any) or
interest on any Security of such series or in the payment of any sinking fund
installment with respect to Securities of such series, the Trustee shall be
protected in withholding such notice if and so long as the board of
directors, the executive committee or directors or Responsible Officers of
the Trustee in good faith determine that the withholding of such notice is in
the interest of the Holders of Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity to its
reasonable satisfaction against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction;
(f) prior to the occurrence of an Event of Default with respect to
the Securities of any series and after the curing or waiving of all such
Events of Default which may have occurred, the Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, approval or other paper or document, or the books
and records of the Company, unless requested in writing to do so by the
Holders of a majority in principal amount of the Outstanding Securities of
any series; provided, however, that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is not, in the opinion of the Trustee,
reasonably assured to the Trustee by the security afforded to it by the terms
of this Indenture, the Trustee may require reasonable indemnity against such
costs, expenses or liabilities as a condition to so proceeding; the
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reasonable expense of every such investigation shall be paid by the Company
or, if paid by the Trustee, shall be repaid by the Company upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) the Trustee shall not be required to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of its rights or powers, if it shall
have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it.
SECTION 604. Not Responsible for Recitals or Issuance of
Securities.
The recitals herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the
Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities.
Neither the Trustee nor any Authenticating Agent shall be accountable for the
use or application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder (including amounts held
by the Trustee as Paying Agent) need not be segregated from other funds
except to the extent required by law. The Trustee shall be under no liability
for interest on any money received by it hereunder except as otherwise agreed
upon in writing with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of
a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision of
this Indenture (including the reasonable compensation and the expenses and
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disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability, damage, claim or expense, including taxes (other than
taxes based upon or determined or measured by the income of the Trustee),
incurred without gross negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(5) or Section 501(6), the
expenses (including the reasonable charges and expenses of its counsel) and
the compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency
or other similar law.
The provisions of this Section 607 shall survive this Indenture.
SECTION 608. Disqualification; Conflicting Interests.
The Trustee shall be disqualified only where such disqualification is
required by Section 310(b) of the Trust Indenture Act. Nothing shall prevent
the Trustee from filing with the Commission the application referred to in
the second to last paragraph of Section 310(b) of the Trust Indenture Act.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under Section 310(a)(1) of the Trust Indenture Act
having a combined capital and surplus of at least $50,000,000 subject to
supervision or examination by federal or State authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. Neither the
Company nor any Person directly or indirectly controlling, controlled by, or
under common control with the Company may serve as Trustee. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of
Successor.
(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
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Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 310(b) of
the Trust Indenture Act after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a Security for at least six
months; or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request herefor by the Company or by
any such Holder of a Security who has been a bona fide Holder of a Security
for at least six months; or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 315(e) of
the Trust Indenture Act, any Holder who has been a bona fide Holder of a
security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee with respect to all Securities and the appointment of
a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the Securities of
one or more or all of such series and that at any time there shall be only
one Trustee with respect to the Securities of any particular series) and
shall comply with the applicable requirements of Section 611. If, within one
year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee with respect to the Securities of any
series shall be appointed by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series delivered to the Company
and the retiring Trustee, the successor Trustee so appointed shall, forthwith
upon its acceptance of such appointment in accordance with the applicable
requirements of Section 611, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the successor Trustee
appointed by the Company with respect to such Securities. If no successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of
<PAGE>
a security of such series for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any
series by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders of Securities of such series as their names and
addresses appear in the security Register. Each notice shall include the name
of the successor Trustee with respect to the Securities of such series and
the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee so appointed
shall execute, acknowledge and deliver to the Company and to the retiring
Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee; but, on the request of the Company or the successor Trustee, such
retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder.
(b) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor
Trustee all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall
add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein
or in such supplemental Indenture shall constitute such Trustees co-trustees
of the same trust and that each such Trustee shall be trustee of a trust or
trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery
of such supplemental indenture the resignation or removal of the retiring
Trustee shall become effective to the extent provided therein and each such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the
<PAGE>
appointment of such successor Trustee relates; but, on request of the Company
or any successor Trustee, such retiring Trustee shall duly assign, transfer
and deliver to such successor Trustee all property and money held by such
retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under the Trust Indenture Act.
SECTION 612. Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act
on the part of any of the parties hereto. In case any Securities shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against
Company.
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship listed in Section 311(b) of the
Trust Indenture Act. A Trustee who has resigned or been removed shall be
subject to Section 311(a) of the Trust Indenture Act to the extent indicated
therein.
SECTION 614. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more
series of Securities which shall be authorized to act on behalf of, and
subject to the direction of, the Trustee to authenticate Securities of such
series issued upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 306, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee hereunder. Wherever
reference is made in this Indenture to the authentication and delivery of
Securities by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on
behalf of the Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
<PAGE>
times be a corporation organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision
or examination by federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published. If at any
time an Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating
Agent shall be a party, or any corporation succeeding to the corporate agency
or corporate trust business of an Authenticating Agent, shall continue to be
an Authenticating Agent, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or
any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall mail
written notice of such appointment by first-class mail, postage prepaid, to
all Holders of Securities of the series with respect to which such
Authenticating Agent will serve, as their names and addresses appear in the
security Register. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named
as an Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
Form of Authenticating Agent's
Certificate of Authentication
Dated:______________________
<PAGE>
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
___________________________________
As Trustee
By: _______________________________
As Authenticating Agent
By: _______________________________
Authorized Signatory
ARTICLE 7
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than January 1 and July 1 in each
year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of the preceding December 15 or June
15, as the case may be; and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list
of similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
provided, however, that so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
SECTION 702. Preservation of Information; Communications to
Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it as
provided in Section 701 upon receipt of a new list so furnished.
(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Trustee, and furnish to the Trustee reasonable proof
that each such applicant has owned a Security for a period of at least six
months preceding the date of such application, and such application states
that the applicants desire to communicate with other Holders with respect to
their rights under this Indenture or under the Securities and is accompanied
by a copy of the form of proxy or other communication which such applicants
propose to transmit then the Trustee shall, within five Business Days after
the receipt of such application, at its election, either
(i) afford such applicants access to the information
preserved at the time by the Trustee in accordance with Section 702(a); or
<PAGE>
(ii) inform such applicants as to the approximate number of
Holders whose names and addresses appear in the information preserved at the
time by the Trustee in accordance with Section 702(a), and as to the
approximate cost of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder whose name and address appears in the
information preserved at the time by the Trustee in accordance with Section
702(a) a copy of the form of proxy or other communication which is specified
in such request, with reasonable promptness after a tender to the Trustee of
the material to be mailed and of payment, or provision for the payment, of
the reasonable expenses of mailing, unless within five days after such tender
the Trustee shall mail to such applicants and file with the Commission,
together with a copy of the material to be mailed, a written statement to the
effect that, in the opinion of the Trustee, such mailing would be contrary to
the best interest of the Holders or would be in violation of applicable law.
Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in
the written statement so filed, shall enter an order refusing to sustain any
of such objections or if, after the entry of an order sustaining one or more
of such objections, the Commission shall find, after notice and opportunity
for hearing, that all objections so sustained have been met and shall enter
an order so declaring, the Trustee shall mail copies of such material to all
such Holders with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason
of the disclosure of any such information as to the names and addresses of
the Holders in accordance with Section 702(b), regardless of the source from
which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made
under Section 702(b).
SECTION 703. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with the
year 1998, the Trustee shall transmit by mail to all Holders of Securities as
provided in Section 313(c) of the Trust Indenture Act, a brief report dated
as of May 15, if required by and in compliance with Section 313(a) of the
Trust Indenture Act.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange
upon which any Securities are listed, with the Commission and with the
Company. The Company will notify the Trustee when any Securities are listed
on any stock exchange.
<PAGE>
SECTION 704. Reports by Company.
The Company shall:
(1) file with the Trustee, within 30 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the Exchange
Act; or, if the Company is not required to file information, documents or
reports pursuant to either of said Sections, then it shall file with the
Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act in respect of a security listed and registered
on a national securities exchange as may be prescribed from time to time in
such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations;
(3) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, (a) concurrently with furnishing the same to
its shareholders, the Company's annual report to shareholders, containing
certified financial statements, and any other financial reports which the
Company generally furnishes to its shareholders, and (b) within 30 days after
the filing thereof with the Trustee, such summaries of any other information,
documents and reports required to be filed by the Company pursuant to
paragraphs (1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission; and
(4) furnish to the Trustee, on or before May 1 of each year, a
brief certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his or her knowledge of the
Company's compliance with all conditions and covenants under this Indenture.
For purposes of this paragraph, such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Indenture. Such certificate need not comply with Section 102.
ARTICLE 8
CONSOLIDATION, MERGER, LEASE, SALE OR TRANSFER
SECTION 801. When Company May Merge, Etc.
The Company shall not consolidate with, or merge with or into any
other corporation (whether or not the Company shall be the surviving
corporation), or sell, assign, transfer or lease all or substantially all of
its properties and assets as an entirety or substantially as an entirety to
any Person or group of affiliated Persons, in one transaction or a series of
related transactions, unless:
<PAGE>
(1) either the Company shall be the continuing Person or the
Person (if other than the Company) formed by such consolidation or with which
or into which the Company is merged or the Person (or group of affiliated
Persons) to which all or substantially all the properties and assets of the
Company as an entirety or substantially as an entirety are sold, assigned,
transferred or leased shall be a corporation (or constitute corporations)
organized and existing under the laws of the United States of America or any
State thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the
Securities and this Indenture; and
(2) immediately before and after giving effect to such transaction
or series of related transactions, no Event of Default, and no Default, shall
have occurred and be continuing.
SECTION 802. Opinion of Counsel.
The Company shall deliver to the Trustee prior to the proposed
transaction(s) covered by Section 801 an Officer's Certificate and an Opinion
of Counsel stating that the transaction(s) and such supplemental indenture
comply with this Indenture and that all conditions precedent to the
consummation of the transaction(s) under this Indenture have been met.
SECTION 803. Successor Corporation Substituted.
Upon any consolidation by the Company with or merger by the Company
into an other corporation or any lease, sale, assignment, or transfer of all
or substantially all of the property and assets of the Company in accordance
with Section 801, the successor corporation formed by such consolidation or
into which the Company is merged or the successor corporation or affiliated
group of corporations to which such lease, sale, assignment, or transfer is
made shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture with the same effect as if
such successor corporation or corporations had been named as the Company
herein, and thereafter, except in the case of a lease, the predecessor
corporation or corporations shall be relieved of all obligations and
covenants under this Indenture and the Securities and in the event of such
conveyance or transfer, except in the case of a lease, any such predecessor
corporation may be dissolved and liquidated.
ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of
Holders.
Without notice to or the consent of any Holders, the Company, when authorized
by a Board Resolution, and the Trustee, at any time and from time to time,
may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the
Company and the assumption by any such successor of the covenants of the
Company herein and in the Securities; or
<PAGE>
(2) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants are to
be for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of series) or
to surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default with respect to all
or any series of Securities; or
(4) to add or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Security Outstanding of any series created
prior to the execution of such supplemental Indenture which is entitled to
the benefit of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series
as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, pursuant to the requirements of
Section 611(b); or
(9) to cure any ambiguity, defect or inconsistency or to correct
or supplement any provision herein which may be inconsistent with any other
provision herein; or
(10) to make any change that does not materially adversely affect
the interests of the Holders of Securities of any series.
Upon request of the Company, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon
receipt by the Trustee of the documents described in (and subject to the last
sentence of) Section 903, the Trustee shall join with the Company in the
execution of any supplemental indenture authorized or permitted by the terms
of this Indenture.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the written consent of the Holders of a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and
the Trustee, the Company, when authorized by a Board Resolution, and the
Trustee shall, subject to Section 903, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of such
series under this Indenture; provided, however, that no such supplemental
<PAGE>
indenture shall, without the consent of the Holder of each Outstanding
security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any security, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof or extend the time for payment thereof,
or reduce the amount of the principal of an Original Issue Discount security
that would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502, or change any Place of Payment
where, or the coin or currency in which, any security or any premium or the
interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof (or,
in the case of redemption, on or after the Redemption Date);
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required for
any waiver of compliance with certain provisions of this Indenture or
Defaults or Events of Default hereunder and their consequences provided for
in this Indenture; or
(3) change the redemption provisions (including Article Eleven)
hereof in a manner adverse to such Holder; or
(4) modify any of the provisions of this Section or Section 513,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent
of the Holder of each Outstanding Security affected thereby; provided,
however, that this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to "the Trustee" and
concomitant changes in this Section, or the deletion of this proviso, in
accordance with the requirements of Sections 611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or
other provisions of this Indenture which as expressly been included solely
for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with respect
to such covenant or other provision, shall be deemed not to affect the rights
under this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
The Trustee shall sign any supplemental indenture authorized pursuant
to this Article, subject to the last sentence of this Section 903. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the
trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Officer's Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
<PAGE>
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such
supplemental Indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental
Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and
shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities of any series so modified as to
conform, ln the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the Company and
authenticate and delivered by the Trustee in exchange for Outstanding
Securities of such series.
ARTICLE 10
COVENANTS
SECTION 1001. Payments of Securities.
With respect to each series of Securities, the Company will duly and
punctually pay the principal of (and premium, if any) and interest on such
Securities in accordance with their terms and this Indenture, and will duly
comply with all the other terms, agreements and conditions contained in, or
made in the Indenture for the benefit of, the Securities of such series.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain an office or agency in each Place of
Payment where Securities may be surrendered for registration of transfer or
exchange or for presentation for payment,where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served.
The Company will give prompt written notice to the Trustee of the location,
and any change ln location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee as set forth in Section 105 hereof.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations.
<PAGE>
The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
Unless otherwise set forth in, or pursuant to, a Board Resolution or
indenture supplemental hereto with respect to a series of Securities, the
Company hereby initially designates the office of _________________________
as such office of the Company.
SECTION 1003. Corporate Existence.
Subject to Article 8 hereof, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its
corporate existence and that of each of its Subsidiaries and the rights
(charter and statutory) of the Company and its Subsidiaries; provided,
however, that (a) the Company shall not be required to preserve any such
right, license or franchise or the corporate existence of any of its
Subsidiaries if the Board of Directors, or the board of directors of the
Subsidiary concerned, as the case may be, shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company or any of its Subsidiaries and that the loss thereof is not
materially disadvantageous to the Holders, and (b) nothing herein contained
shall prevent any Subsidiary of the Company from liquidating or dissolving,
or merging into, or consolidating with the Company (provided that the Company
shall be the continuing or surviving corporation) or with any one or more
Subsidiaries if the Board of Directors or the board of directors of the
Subsidiary concerned, as the case may be, shall so determine.
SECTION 1004. Payment of Taxes and Other Claims.
The Company will pay or discharge, or cause to be paid or discharged,
before the same shall become delinquent, (1) all material taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary
or upon the income, profits or property of the Company or any Subsidiary, and
(2) all lawful claims for labor, materials and supplies which, if unpaid,
might by law become a material lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be required to pay
or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which adequate provision has
been made.
SECTION 1005. Maintenance of Properties.
The Company will cause all material properties used or useful in the
conduct of its business or the business of any of its Subsidiaries to be
maintained and kept in good condition, repair and working order (normal wear
and tear excepted) and supplied with all necessary equipment and will cause
to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary,
so that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in
this Section shall prevent the Company from discontinuing the operation or
maintenance of any of such properties, or disposing of any of them, if such
discontinuance or disposal is, in the judgment of the Board of Directors or
of the board of directors of the Subsidiary concerned, as the case may be,
<PAGE>
desirable in the conduct of the business of the Company or any Subsidiary of
the Company and not materially disadvantageous to the Holders.
SECTION 1006. Compliance Certificates.
(a) The Company shall deliver to the Trustee within 90 days
after the end of each fiscal year of the Company (which fiscal year currently
ends on December 31), an Officer's Certificate stating whether or not the
signer knows of any Default or Event of Default by the Company that occurred
prior to the end of the fiscal year and is then continuing. If the signer
does know of such a Default or Event of Default, the certificate shall
describe each such Default or Event of Default and its status and the
specific section or sections of this Indenture in connection with which such
Default or Event of Default has occurred. The Company shall also promptly
notify the Trustee in writing should the Company's fiscal year be changed so
that the end thereof is on any date other than the date on which the
Company's fiscal year currently ends. The certificate need not comply with
Section 102 hereof.
(b) The Company shall deliver to the Trustee, within 10 days
after the occurrence thereof, notice of any acceleration which with the
giving of notice and the lapse of time would be an Event of Default within
the meaning of Section 501(4) hereof.
(c) The Company shall deliver to the Trustee forthwith upon
becoming aware of a Default or Event of Default (but in no event later than
10 days after the occurrence of each Default or Event of Default that is
continuing), an Officer's Certificate setting forth the details of such
Default or Event of Default and the action that the Company proposes to take
with respect thereto and the specific section or sections of this Indenture
in connection with which such Default or Event of Default has occurred.
SECTION 1007. Commission Reports.
(a) The Company shall file with the Trustee, within 30 days
after it files them with the Commission, copies of the quarterly and annual
reports and of the information, documents, and other reports (or copies of
such portions of any of the foregoing as the Commission may by rules and
regulations prescribe) which the Company is required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act. If the
Company is not subject to the requirement of such Section 13 or 15(d) of the
Exchange Act, the Company shall file with the Trustee, within 30 days after
it would have been required to file such information with the Commission,
financial statements, including any notes thereto and, with respect to annual
reports, an auditors' report by an accounting firm of established national
reputation and a "Management's Discussion and Analysis of Financial Condition
and Results of Operations," both comparable to that which the Company would
have been required to include in such annual reports, information, documents
or other reports if the Company had been subject to the requirements of such
Sections 13 or 15(d) of the Exchange Act. The Company also shall comply with
the other provisions of Section 314(a) of the Trust Indenture Act.
(b) So long as the Securities remain outstanding, the Company
shall cause its annual report to shareholders and any other financial reports
furnished by it to shareholders generally, to be mailed to the Holders at
their addresses appearing in the register of Securities maintained by the
Security Registrar in each case at the time of such mailing or furnishing to
<PAGE>
shareholders. If the Company is not required to furnish annual or quarterly
reports to its shareholders pursuant to the Exchange Act, the Company shall
cause its financial statements, including any notes thereto and, with respect
to annual reports, an auditors' report by an accounting firm of established
national reputation and a "Management's Discussion and Analysis of Financial
Condition and Results of Operations," to be so filed with the Trustee and
mailed to the Holders within 90 days after the end of each of the Company's
fiscal years and within 45 days after the end of each of the first three
quarters of each fiscal year.
(c) The Company shall provide the Trustee with a sufficient
number of copies of all reports and other documents and information that the
Company may be required to deliver to the Holders under this Section 1007.
SECTION 1008. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim, and will actively resist any and all efforts to be compelled to take
the benefit or advantage of, any stay or extension law or any usury law or
other law, which would prohibit or forgive the Company from paying all or any
portion of the principal of and/or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company hereby expressly waives all benefit
or advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
SECTION 1009. Money for Securities Payments to Be Held in
Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of
the principal of (and premium, if any) or interest on any of the Securities
of that series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal (and premium, if any)
or interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, prior to each due date of the principal of
(and premium, if any) or interest on any Securities of that series, deposit
with a Paying Agent a sum sufficient to pay the principal (and premium, if
any) or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Company will promptly notify
the Trustee of its action or failure to so act.
The Company will cause each Paying Agent for any series of Securities
(other than the Trustee) to execute and deliver to the Trustee an instrument
in which such Paying Agent shall agree with the Trustee, subject to the
provisions of this Section, that such Paying Agent will:
<PAGE>
(i) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest on Securities of that series in trust for
the benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(ii) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities of that series) in the making of any
payment of principal (and premium, if any) or interest on the Securities of
that series; and
(iii) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay,
or by Company Order direct any Paying Agent to pay, to the Trustee all sums
held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by
the Company or such Paying Agent; and, upon such payment by any Paying Agent
to the Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on any security of any series and remaining
unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable shall be paid to the Company on Company
Request, or (if then held by the Company) shall be discharged from such
trust; and the Holder of such security shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee of such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause
to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in New
York, New York, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 1010. Limitation on Liens.
Neither the Company will, nor will it permit any Significant
Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the
property of the Company or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or
levies on its property if the same shall not at the time be delinquent or
thereafter can be paid without penalty or are being contested in good faith
and by appropriate proceedings and for which adequate reserves in accordance
with generally accepted principles of accounting shall have been set aside on
its books.
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary course of
<PAGE>
business which secure payment of obligations not more than 60 days past due
or which are being contested in good faith by appropriate proceedings and for
which adequate reserves shall have been set aside on its books.
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other social
security or retirement benefits, or similar legislation.
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which do not
in any material way affect the marketability of the same or interfere with
the use thereof in the business of the Company or its Subsidiaries.
(v) Liens on the capital stock, partnership interest, or other
evidence of ownership of any Subsidiary or such Subsidiary's assets that
secure financings for such Subsidiary.
(vi) Purchase money liens upon or in property now owned or
hereafter acquired in the ordinary course of business (consistent with the
Company's business practices) to secure (A) the purchase price of such
property or (B) Indebtedness incurred solely for the purpose of financing the
acquisition, construction, or improvement of any such property to be subject
to such liens, or Liens existing on any such property at the time of
acquisition, or extensions, renewals, or replacements of any of the foregoing
for the same or a lesser amount; provided that no such lien shall extend to
or cover any property other than the property being acquired, constructed, or
improved and replacements, modifications, and proceeds of such property, and
no such extension, renewal, or replacement shall extend to or cover any
property not theretofore subject to the Lien being extended, renewed, or
replaced.
(vii) Liens existing on the date Securities are first issued
hereunder.
(viii) Liens for no more than 90 days arising from a transaction
involving accounts receivable or third-party reimbursements of the Company
(including the sale of such accounts receivable or third-party
reimbursements), where such accounts receivable or third-party reimbursements
arose in the ordinary course of the Company's business.
SECTION 1011. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 1010 or 1011 hereof, if before or
after the time for such compliance the Holders of not less than a majority in
principal amount of the Securities at the time Outstanding of each series
which is affected thereby, shall, by consent in writing of such Holders,
either waive such compliance in such instance or generally waive compliance
with such covenant or condition, but no such waiver shall extend to or affect
such covenant or conditions except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and
the duties of the Trustee in respect of any such covenant or condition shall
remain in full force and effect.
<PAGE>
ARTICLE 11
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any
series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities of any series, the Company shall,
at least 45 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of
such Redemption Date and of the principal amount of Securities of such series
to be redeemed. In the case of any redemption of Securities prior to the
expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officer's Certificate evidencing compliance with such
restriction.
SECTION 1103. Selection by Trustee of Securities to Be
Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 90 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities
of such series not previously called for redemption, substantially pro rata,
by lot or by any other method as the Trustee considers fair and appropriate
and that complies with the requirements of the principal national securities
exchange, if any, on which such Securities are listed, and which may provide
for the selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof)
of the principal amount of Securities of such series of a denomination larger
than the minimum authorized denomination for Securities of that series;
provided that in case the Securities of such series have different terms and
maturities, the Securities to be redeemed shall be selected by the Company
and the Company shall give notice thereof to the Trustee.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of the Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has
been or is to be redeemed.
<PAGE>
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 45 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at this address
appearing in the security Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Securities of any series
are to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Securities to be
redeemed;
(4) that on the Redemption Date the Redemption Price will be
come due and payable upon each such security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after said
date;
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price;
(6) that the redemption is for a sinking fund, if such is the
case;
(7) the CUSIP number, if any, of the Securities to be redeemed;
and
(8) unless otherwise provided as to a particular series of
Securities, if at the time of publication or mailing of any notice of
redemption the Company shall not have deposited with the Trustee or Paying
Agent and/or irrevocably directed the Trustee or Paying Agent to apply, from
money held by it available to be used for the redemption of Securities, an
amount in cash sufficient to redeem all of the Securities called for
redemption, including accrued interest to the Redemption Date, such notice
shall state that it is subject to the receipt of the redemption moneys by the
Trustee or Paying Agent before the Redemption Date (unless such redemption is
mandatory) and such notice shall be of no effect unless such moneys are so
received before such date.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by
the Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1009) an
amount of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all
the Securities which are to be redeemed on that date.
<PAGE>
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Redemption Date, become due and payable at
the Redemption Price therein specified, and from and after such date (unless
the Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such security for redemption in accordance with said notice, such security
shall be paid by the Company at the Redemption Price, together with accrued
interest to the Redemption Date; provided, however, that installments of
interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant
Regular or Special Record Dates according to their terms and the provisions
of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
thereof or in the security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company at a Place of Payment
therefor (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company
and the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such security without service
charge, a new Security or Securities of the same series and Stated Maturity,
of any authorized denomination as requested by such Holder, in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the security so surrendered.
ARTICLE 12
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking
fund for the retirement of Securities of a series, except as otherwise
specified as contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "Mandatory
Sinking Fund Payment," and any payment in excess of such minimum amount
provided for by the terms of Securities of any series is herein referred to
as an "Optional Sinking Fund Payment." If provided for by the terms of
Securities of any series, the cash amount of any sinking fund payment may be
subject to redemption as provided in Section 1202. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided
for by the terms of Securities of such series.
<PAGE>
SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities.
The Company (1) may deliver Securities of a series (other than any
Securities previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application
of permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking
fund payment with respect to the Securities of such series required to be
made pursuant to the terms of such Securities as provided for by the terms of
such series; provided that such Securities have not been previously so
credited. Such Securities shall be received and credited for such purpose by
the Trustee at the Redemption Price specified in such Securities for
redemption through operation of the sinking fund and the amount of such
sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officer's
Certificate specifying the amount of the next ensuing sinking fund payment
for that series pursuant to the terms of that series, the portion thereof, if
any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities of that
series pursuant to Section 1202 and will also deliver to the Trustee any
Securities to be so delivered. Not less than 30 days before each such sinking
fund payment date the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 and
cause notice of the redemption thereof to be given in the name of and at the
expense of the Company in the manner provided in Section 1104. Such notice
having been duly given, the redemption of such Securities shall be made upon
the terms and in the manner stated in Sections 1106 and 1107.
ARTICLE 13
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Applicability of Article; Company's Option to
Effect Defeasance or Covenant Defeasance.
Unless pursuant to Section 301 provision is made for the
inapplicability of either or both of (a) Defeasance of the Securities of a
series under Section 1302 or (b) Covenant Defeasance of the Securities of a
series under Section 1303, then the provisions of such Section or Sections,
as the case may be, together with the other provisions of this Article, shall
be applicable to the Securities of such series, and the Company may at its
option by Board Resolution, at any time, with respect to the Securities of
such series, elect to have either Section 1302 (unless inapplicable) or
Section 1303 (unless inapplicable) be applied to the Outstanding Securities
of such series upon compliance with the applicable conditions set forth below
in this Article.
SECTION 1302. Defeasance and Discharge.
Upon the Company's exercise of the option provided in Section 1301 to
defease the Outstanding Securities of a particular series, the Company shall
<PAGE>
be discharged from its obligations with respect to the Outstanding Securities
of such series on the date the applicable conditions set forth in Section
1304 are satisfied (hereinafter, "Defeasance"). Defeasance shall mean that
the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Outstanding Securities of such series and to
have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same); provided, however, that the following rights, obligations, powers,
trusts, duties and immunities shall survive until otherwise terminated or
discharged hereunder: (A) the rights of Holders of Outstanding Securities of
such series to receive, solely from the trust fund provided for in Section
1304, payments in respect of the principal of (and premium, if any) and
interest on such Securities when such payments are due, (B) the Company's
obligations with respect to such Securities under Sections 304, 305, 306,
1002 and 1009, (C) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (D) this Article. Subject to compliance with this
Article, the Company may exercise its option with respect to Defeasance under
this Section 1302 notwithstanding the prior exercise of its option with
respect to Covenant Defeasance under Section 1303 in regard to the Securities
of such series.
SECTION 1303. Covenant Defeasance.
Upon the Company's exercise of the option provided in Section 1301 to
obtain a Covenant Defeasance with respect to the Outstanding Securities of a
particular series, the Company shall be released from its obligations under
this Indenture (except its obligations under Sections 304, 305, 306, 506,
509, 610, 1001, 1002, 1006, 1008 and 1009) with respect to the Outstanding
Securities of such series on and after the date the applicable conditions set
forth in Section 1304 are satisfied (hereinafter, "Covenant Defeasance").
Covenant Defeasance shall mean that, with respect to the Outstanding
Securities of such series, the Company may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in
this Indenture (except its obligations under Sections 304, 305, 306, 506,
509, 610, 1001, 1002, 1006, 1008 and 1009), whether directly or indirectly by
reason of any reference elsewhere herein or by reason of any reference to any
other provision herein or in any other document, and such omission to comply
shall not constitute an Event of Default under Section 501(4) with respect to
Outstanding Securities of such series, and the remainder of this Indenture
and of the Securities of such series shall be unaffected thereby.
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to Defeasance under Section
1302 and Covenant Defeasance under Section 1303 with respect to the
Outstanding Securities of a particular series:
(1) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 609 who shall agree to comply with the provisions of this Article
applicable to it), under the terms of an irrevocable trust agreement in form
and substance reasonably satisfactory to such Trustee, as trust funds in
trust for the purpose of making the following payments, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of such
Securities, (A) Dollars in an amount, or (B) U.S. Government Obligations
which through the scheduled payment of principal and interest in respect
<PAGE>
thereof in accordance with their terms will provide, not later than the due
date of any payment, money in an amount, or (C) a combination thereof, in
each case sufficient, after payment of all federal, state and local taxes or
other charges or assessments in respect thereof payable by the Trustee, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay
and discharge, and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge, (i) the principal of (and premium, if any, on)
and each installment of principal of (and premium, if any) and interest on
the Outstanding Securities of such series on the Stated Maturity of such
principal or installment of principal or interest and (ii) any mandatory
sinking fund payments or analogous payments applicable to the Outstanding
Securities of such series on the day on which such payments are due and
payable in accordance with the terms of this Indenture and of such
Securities.
(2) No Default or Event of Default with respect to the
Securities of such series shall have occurred and be continuing on the date
of such deposit or shall occur as a result of such deposit, and no Default or
Event of Default under clause (5) or (6) of Section 501 hereof shall occur
and be continuing, at any time during the period ending on the 31st day after
the date of such deposit (it being understood that this condition shall not
be deemed satisfied until the expiration of such period).
(3) Such deposit, Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, any other
agreement or instrument to which the Company is a party or by which it is
bound.
(4) Such Defeasance or Covenant Defeasance shall not cause any
Securities of such series then listed on any national securities exchange
registered under the Exchange Act to be delisted.
(5) In the case of an election with respect to Section 1302, the
Company shall have delivered to the Trustee either (A) a ruling directed to
the Trustee received from the Internal Revenue Service to the effect that the
Holders of the Outstanding Securities of such series will not recognize
income, gain or loss for federal income tax purposes as a result of such
Defeasance and will be subject to federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such
Defeasance had not occurred or (B) an Opinion of Counsel, based on such
ruling or on a change in the applicable federal income tax law since the date
of this Indenture, in either case to the effect that, and based thereon such
opinion shall confirm that, the Holders of the Outstanding Securities of such
series will not recognize income, gain or loss for federal income tax
purposes as a result of such Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such Defeasance had not occurred.
(6) In the case of an election with respect to Section 1303, the
Company shall have delivered to the Trustee an Opinion of Counsel or a ruling
directed to the Trustee received from the Internal Revenue Service to the
effect that the Holders of the Outstanding Securities of such series will not
recognize income, gain or loss for federal income tax purposes as a result of
such Covenant Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such Covenant Defeasance had not occurred.
<PAGE>
(7) Such Defeasance or Covenant Defeasance shall be effected in
compliance with any additional terms, conditions or limitations which may be
imposed on the Company in connection therewith pursuant to Section 301.
(8) The Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to either the Defeasance under
Section 1302 or the Covenant Defeasance under Section 1303 (as the case may
be) have been complied with.
SECTION 1305. Deposited Money and Government Obligations
To Be Held In Trust.
Subject to the provisions of the last paragraph of Section 1009, all
money and Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee--collectively for purposes of
this Section 1305, the "Trustee") pursuant to Section 1304 in respect of the
Outstanding Securities of a particular series shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Securities
and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as its own Paying Agent) as the Trustee
may determine, to the Holders of such Securities of all sums due and to
become due thereon in respect of principal (and premium, if any) and
interest, but such money need not be segregated from other funds except to
the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Government Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof, other than any such tax, fee or other charge which by law is
for the account of the Holders of the Outstanding Securities of such series.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver to pay to the Company from time to time upon Company Request
any money or Government Obligations held by it as provided ln Section 1304
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to
be deposited for the purpose for which such money or Government Obligations
were deposited.
ARTICLE 14
MISCELLANEOUS
SECTION 1401. Miscellaneous.
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
INGERSOLL-RAND COMPANY
By _____________________________
Name:
Title:
Attest:
___________________________________
Name:
Title:
_______________________, as Trustee
By _____________________________
Name:
Title:
Attest:
____________________________________
Name:
Title:
FIRST SUPPLEMENTAL INDENTURE, dated as of March ,
1998 (the "First Supplemental Indenture"), between INGERSOLL-RAND
COMPANY, a corporation duly organized and existing under the laws
of the State of New Jersey, (the "Company"), and
________________________________________________, as trustee (the
"Trustee").
WHEREAS, the Company executed and delivered the
indenture dated as of , 1998 (the "Base Indenture"),
to the Trustee to provide for the future issuance of the
Company's Senior unsecured debentures, notes or other evidence
of indebtedness (the "Securities"), to be issued from time to
time in one or more series as might be determined by the Company
under the Base Indenture;
WHEREAS, pursuant to the terms of the Base Indenture,
the Company desires to provide for the establishment of a new
series of its Securities to be known as its ___% Debentures due
, 2003 (the "Debentures"), the form and
substance of such Debentures and the terms, provisions and
conditions thereof to be set forth as provided in the Base
Indenture and this First Supplemental Indenture (together, the
"Indenture");
WHEREAS, Ingersoll-Rand Financing I, a Delaware statutory
business trust (the "Trust"), has offered to the public its ___%
Trust Originated Preferred Securities (the "Preferred
Securities"), representing preferred, undivided beneficial
interests in the assets of the Trust, and proposes to invest the
proceeds from such offering, together with the proceeds of the
issuance and sale by the Trust to the Company of its ___% Trust
Originated Common Securities (the "Common Securities" and
together with the Preferred Securities, the "Trust Securities"),
in the Debentures; and
WHEREAS, the Company has requested that the Trustee
execute and deliver this First Supplemental Indenture and all
requirements necessary to make this First Supplemental Indenture
a valid instrument in accordance with its terms, and to make the
Debentures, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company
and all acts and things necessary have been done and performed to
make this First Supplemental Indenture enforceable in accordance
with its terms, and the execution and delivery of this First
Supplemental Indenture has been duly authorized in all respects:
NOW THEREFORE, in consideration of the purchase and
acceptance of the Debentures by the Holders thereof, and for the
purpose of setting forth, as provided in the Indenture, the form
and substance of the Debentures and the terms, provisions and
conditions thereof, the Company covenants and agrees with the
Trustee as follows:
<PAGE>
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms.
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same
meaning when used in this First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental
Indenture has the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and
do not affect interpretation;
(e) the following terms have the meanings given to
them in the Declaration: (i) Authorized Newspaper; (ii)
Business Day; (iii) Clearing Agency; (iv) Delaware Trustee;
(v) DTC; (vi) FELINE PRIDES; (vii) Growth PRIDES; (viii)
Income PRIDES; (xix) Institutional Trustee; (x) Investment
Company Event; (xi) Preferred Security Certificate; (xii)
Pricing Agreement; (xiii) Purchase Agreement; (xiv) Regular
Trustees; (xv) Reset Agent; (xvi) Reset Announcement Date;
(xvii) Reset Spread; (xviii) Two-Year Benchmark Treasury;
and (xix) Treasury Securities.
(f) the following terms have the meanings given to
them in this Section 1.11(f):
"Applicable Principal Amount" means either (i) if the
Tax Event Redemption Date occurs prior to ________ 16, 2001, the
aggregate principal amount of the Debentures corresponding to the
aggregate stated liquidation amount of the Preferred Securities
which are components of Income PRIDES on the Tax Event Redemption
Date or (ii) if the Tax Event Redemption occurs on or after
_________ 16, 2001, the aggregate principal amount of the
Debentures corresponding to the aggregate stated liquidation
amount of the Preferred Securities outstanding on such Tax Event
Redemption Date.
"Compounded Interest" shall have the meaning set forth
in Section 4.1.
"Coupon Rate" shall have the meaning set forth in
Section 2.5.
"Debentures Redemption Price" shall have the meaning
set forth in Section 3.4.
<PAGE>
"Declaration" means the Amended and Restated
Declaration of Trust of Ingersoll-Rand Financing I, a Delaware
statutory business trust, dated as of , 1998.
"Deferred Interest" shall have the meaning set forth
in Section 4.1 hereof.
"Dissolution Event" means that, as a result of the
occurrence and continuation of a Tax Event, an Investment Company
Event or otherwise, the Trust is to be dissolved in accordance
with the Declaration, and, except in the case of a Tax Event
Redemption, the Debentures held by the Institutional Trustee are
to be distributed to the holders of the Trust Securities issued
by the Trust pro rata in accordance with the Declaration.
"Extended Interest Payment Period" shall have the
meaning set forth in Section 4.1.
"Failed Remarketing" shall have the meaning set forth
in Section 5.4(b) of the Purchase Contract Agreement.
"Global Debentures" shall have the meaning set forth in
Section 2.4.
"Non Book-Entry Preferred Securities" shall have the
meaning set forth in Section 2.4 .
"Purchase Contract" shall have the meaning set forth in
the Purchase Contract Agreement, dated as of ,
1998, between the Company and The First National Bank of Chicago,
as purchase contract agent.
"Purchase Contract Settlement Date" means
, 2001.
"Put Option" shall have the meaning set forth in
Section 3.4.
"Quotation Agent" means (i) Merrill Lynch Government
Securities, Inc. and its respective successors, provided,
however, that if the foregoing shall cease to be a Primary
Treasury Dealer, the Company shall substitute therefor another
Primary Treasury Dealer, and (ii) any other Primary Treasury
Dealer selected by the Company.
"Redemption Amount" means for each Debenture, the
product of (i) the principal amount of such Debenture and (ii) a
fraction whose numerator is the Treasury Portfolio Purchase Price
and whose denominator is the Applicable Principal Amount of the
Treasury Portfolio.
"Tax Event" means the receipt by the Trust of an
opinion of a nationally recognized independent tax counsel
experienced in such matters to the effect that, as a result of
<PAGE>
(a) any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder)
of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, (b) any
amendment to or change in an interpretation or application of
such laws or regulations by any legislative body, court,
governmental agency or regulatory authority or (c) any
interpretation or pronouncement that provides for a position with
respect to such laws or regulations that differs from the
generally accepted position on the date the Trust Securities are
issued, which amendment or change is effective or which
interpretation or pronouncement is announced on or after the date
of issuance of the Trust Securities under the Declaration, there
is more than an insubstantial risk that (i) interest payable by
the Company on the Debentures would not be deductible, in whole
or in part, by the Company for federal income tax purposes or
(ii) the Trust would be subject to more than a de minimis amount
of other taxes, duties or other governmental charges.
"Tax Event Redemption Date" shall have the meaning set
forth in Section 3.1 hereof.
"Treasury Portfolio" means with respect to the
Applicable Principal Amount of Debentures (a) if the Tax Event
Redemption Date occurs prior to _________ 16, 2001, a portfolio
of zero-coupon U.S. Treasury Securities consisting of (i)
principal or interest strips of U.S. Treasury Securities which
mature on or prior to __________ 15, 2001 in an aggregate amount
equal to the Applicable Principal Amount and (ii) with respect to
each scheduled interest payment date on the Debentures that
occurs after the Tax Event Redemption Date principal or interest
strips of U.S. Treasury Securities which mature on or prior to
such date in an aggregate amount equal to the aggregate interest
payment that would be due on the Applicable Principal Amount of
the Debentures on such date, and (b) if the Tax Event Redemption
Date occurs after __________ 16, 2001, a portfolio of zero-coupon
U.S. Treasury Securities consisting of (i) principal or interest
strips of U.S. Treasury Securities which mature on or prior to
__________ 15, 2003 in an aggregate amount equal to the
Applicable Principal Amount and (ii) with respect to each
scheduled interest payment date on the Debentures that occurs
after the Tax Event Redemption Date interest or principal strips
of such U.S. Treasury Securities which mature on or prior to such
date in an aggregate amount equal to the aggregate interest
payment that would be due on the Applicable Principal Amount of
the Debentures on such date.
"Treasury Portfolio Purchase Price" means the lowest
aggregate price quoted by a primary U.S. government securities
dealer in New York City (a "Primary Treasury Dealer") to the
Quotation Agent on the third Business Day immediately preceding
the Tax Event Redemption Date for the purchase of the Treasury
Portfolio for settlement on the Tax Event Redemption Date.
<PAGE>
(g) the following terms shall have the meanings given
to them in the Purchase Contract: Collateral Agent.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. Designation and Principal Amount.
There is hereby authorized a series of Securities
designated the ___% Debentures (the "Debentures") due
, 2003, limited in aggregate principal amount to $
, which amount shall be as set forth in any
written order of the Company for the authentication and delivery
of Debentures pursuant to Section of the Base Indenture.
SECTION 2.2. Maturity. The Maturity Date will be
.
SECTION 2.3. Form and Payment.
Except as provided in Section 2.4, the Debentures shall
be issued in fully registered certificated form without interest
coupons bearing identical terms. Principal and interest on the
Debentures issued in certificated form will be payable, the
transfer of such Debentures will be registrable and such
Debentures will be exchangeable for Debentures bearing identical
terms and provisions at the office or agency of the Institutional
Trustee; provided, however, that payment of interest may be made
at the option of the Company by check mailed to the Holder at
such address as shall appear in the Security Register.
Notwithstanding the foregoing, so long as the Holder of any
Debentures is the Institutional Trustee, the payment of the
principal of and interest (including Compounded Interest and
expenses and taxes of the Trust set forth in Section 4.1 hereof,
if any) on such Debentures held by the Institutional Trustee will
be made at such place and to such account as may be designated by
the Institutional Trustee.
SECTION 2.4. Global Debenture.
(a) In connection with a Dissolution Event,
(i) the Debentures in certificated form may be
presented to the Trustee by the Institutional Trustee in exchange
for a global Debenture in an aggregate principal amount equal to
the aggregate principal amount of all outstanding Debentures (a
"Global Debenture"), to be registered in the name of the Clearing
Agency, or its nominee, and delivered by the Institutional
Trustee to the Clearing Agency for crediting to the accounts of
its participants pursuant to the instructions of the Regular
Trustees. The Company upon any such presentation shall execute
a Global Debenture in such aggregate principal amount and deliver
the same to the Trustee for authentication and delivery in
<PAGE>
accordance with the Indenture. Payments on the Debentures issued
as a Global Debenture will be made to the Clearing Agency; and
(ii) if any Preferred Securities are held in non book-
entry certificated form, the Debentures in certificated form may
be presented to the Trustee by the Institutional Trustee and any
Preferred Security Certificate which represents Preferred
Securities other than Preferred Securities held by the Clearing
Agency or its nominee ("Non Book-Entry Preferred Securities")
will be deemed to represent beneficial interests in the
Debentures presented to the Trustee by the Institutional Trustee
having an aggregate principal amount equal to the aggregate
liquidation amount of the Non Book-Entry Preferred Securities
until such Preferred Security Certificates are presented to the
Security Registrar for transfer or reissuance at which time such
Preferred Security Certificates will be cancelled and a
Debenture, registered in the name of the holder of the Preferred
Security Certificate or the transferee of the holder of such
Preferred Security Certificate, as the case may be, with an
aggregate principal amount equal to the aggregate liquidation
amount of the Preferred Security Certificate cancelled, will be
executed by the Company and delivered to the Trustee for
authentication and delivery in accordance with the Indenture to
such holder. On issue of such Debentures, Debentures with an
equivalent aggregate principal amount that were presented by
the Institutional Trustee to the Trustee will be deemed to have
been cancelled.
(b) Unless and until it is exchanged for the
Debentures in registered form, a Global Debenture may be
transferred, in whole but not in part, only to another nominee of
the Clearing Agency, or to a successor Clearing Agency selected
or approved by the Company or to a nominee of such successor
Clearing Agency.
(c) If at any time the Clearing Agency notifies the
Company that it is unwilling or unable to continue as a Clearing
Agency or if at any time the Clearing Agency for such series
shall no longer be registered or in good standing under the
Securities Exchange Act of 1934, as amended, or other applicable
statute or regulation, and a successor Clearing Agency for such
series is not appointed by the Company within 90 days after the
Company receives such notice or becomes aware of such condition,
as the case may be, the Company will execute, and, subject to
Article III of the Indenture, the Trustee, upon written notice
from the Company, will authenticate and deliver the Debentures in
definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the
principal amount of the Global Debenture in exchange for such
Global Debenture. In addition, the Company may at any time
determine that the Debentures shall no longer be represented by
Global Debenture. In such event the Company will execute, and
subject to Section 3.3 of the Base Indenture, the Trustee, upon
receipt of an Officer's Certificate evidencing such determination
<PAGE>
by the Company, will authenticate and deliver the Debentures in
definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the
principal amount of the Global Debenture in exchange for such
Global Debenture. Upon the exchange of the Global Debenture for
such Debentures in definitive registered form without coupons, in
authorized denominations, the Global Debenture shall be cancelled
by the Trustee. Such Debentures in definitive registered form
issued in exchange for the Global Debenture shall be registered
in such names and in such authorized denominations as the
Clearing Agency, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall deliver such Securities to the Clearing Agency
for delivery to the Persons in whose names such Securities are so
registered.
SECTION 2.5. Interest.
(a) Each Debenture will bear interest initially at the
rate of ___% per annum (the "Coupon Rate") from the original date
of issuance until [ ] 15, 2001, and at the Reset
Rate thereafter until the principal thereof becomes due and
payable, and on any overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the rate of ___% until [
] 15, 2001 and at the Reset Rate thereafter,
compounded quarterly, payable (subject to the provisions of
Article IV herein) quarterly in arrears on February 16, May 16,
August 16 and November 16 of each year (each, an "Interest
Payment Date") commencing on [ ] 16, 1998, to the
Person in whose name such Debenture or any predecessor Debenture
is registered, at the close of business on the Regular Record
Date for such interest installment, which, in respect of (i)
Debentures of which the Institutional Trustee is the Holder and
the Preferred Securities are in book-entry only form or (ii) a
Global Debenture, shall be the close of business on the Business
Day next preceding that Interest Payment Date. Notwithstanding
the foregoing sentence, if (i) the Debentures are held by the
Institutional Trustee and the Preferred Securities are no longer
in book-entry only form or (ii) the Debentures are not
represented by a Global Debenture, the Company may select a
Regular Record Date for such interest installment which shall be
more than one Business Day but less than 60 Business Days prior
to an Interest Payment Date.
(b) The Coupon Rate on the Debentures will be reset on
the third Business Day immediately preceding the Purchase
Contract Settlement Date to the Reset Rate (which Reset Rate will
become effective on and after the Purchase Contract Settlement
Date). On the tenth (10) Business Day immediately preceding the
Purchase Contract Settlement Date, the Reset Announcement Date,
the Reset Spread and the relevant Two-Year Benchmark Treasury
will be announced by the Company. On the Business Day
immediately following such Reset Announcement Date, the Holders
<PAGE>
of Debentures will be notified of such Reset Spread and Two-Year
Benchmark Treasury by the Company. Such notice shall be
sufficiently given to such Holders of Debentures if published in
an Authorized Newspaper.
(c) Not later than seven calendar days nor more than
15 calendar days immediately preceding the Reset Announcement
Date, the Company will request that the Clearing Agency or its
nominee (or any successor Clearing Agency or its nominee) or the
Institutional Trustee, notify the Holders of Debentures of such
Reset Announcement Date and the procedures to be followed by such
holders of Debentures wishing to settle the related Purchase
Contract with separate cash on the Business Day immediately
preceding the Purchase Contract Settlement Date.
(d) The amount of interest payable for any period will
be computed on the basis of a 360-day year consisting of twelve
30-day months. Except as provided in the following sentence, the
amount of interest payable for any period shorter than a full
quarterly period for which interest is computed, will be computed
on the basis of the actual number of days elapsed in such a
90-day period. In the event that any date on which interest is
payable on the Debentures is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day,
in each case with the same force and effect as if made on such
date.
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1. Tax Event Redemption.
If a Tax Event shall occur and be continuing, the
Company may, at its option, redeem the Debentures in whole (but
not in part) at any time at a Redemption Price per Debenture
equal to the Redemption Amount plus accrued and unpaid interest
thereon, including Compounded Interest and the expenses and taxes
of the Trust set forth in Section 4.1 hereof, if any, to the date
of such redemption (the "Tax Event Redemption Date"). If,
following the occurrence of a Tax Event, the Company exercises
its option to redeem the Debentures, then the proceeds of such
redemption, if distributed to the Institutional Trustee as the
sole Holder of such Debentures, will be applied by the
Institutional Trustee to redeem Trust Securities having an
aggregate liquidation amount equal to the aggregate principal
amount of the Debentures so redeemed, at the Redemption Price.
If, following the occurrence of a Tax Event, the Company
exercises its option to redeem the Debentures, the Company shall
appoint the Quotation Agent to assemble the Treasury Portfolio in
consultation with the Company. Notice of any redemption will be
<PAGE>
mailed at least 30 days but not more than 60 days before the Tax
Event Redemption Date to each registered Holder of the Debentures
to be prepaid at its registered address. Unless the Company
defaults in payment of the Redemption Price, on and after the
redemption date interest shall cease to accrue on such
Debentures.
SECTION 3.2. Redemption Procedure for Debentures.
Payment of the Redemption Price to each Holder of
Debentures shall be made by the Paying Agent, no later than
12:00 noon, New York City time, on the Tax Event Redemption Date,
by check or wire transfer in immediately available funds at such
place and to such account as may be designated by each such
Holder of Debentures, including the Institutional Trustee or the
Collateral Agent, as the case may be. If the Trustee holds
immediately available funds sufficient to pay the Redemption
Price of the Debentures (or, if the Company is acting as Paying
Agent or the Institutional Trustee has received the Redemption
Price), then, on such Tax Event Redemption Date, such Debentures
will cease to be outstanding and interest thereon will cease to
accrue, whether or not such Debentures have been received by the
Company, and all other rights of the Holder in respect of the
Debentures shall terminate and lapse (other than the right to
receive the Redemption Price upon delivery of such Debentures but
without interest on such Redemption Price).
SECTION 3.3. No Sinking Fund.
The Debentures are not entitled to the benefit of any
sinking fund.
SECTION 3.4. Option to Put Debentures.
If a Failed Remarketing has occurred, each Holder of
Debentures who holds such Debentures on the day immediately
following the Purchase Contract Settlement Date shall have the
right (the "Put Option") on or after the Business Day immediately
following the Purchase Contract Settlement Date, upon at least
three Business Days' prior notice, to require the Company to
repurchase such Holder's Debentures on __________, 2001 (the "Put
Option Exercise Date"), either in whole or in part, at a
repayment price per Debenture equal to $10, plus accrued and
unpaid interest, if any, thereon to the date of payment including
deferred interest, if any (the "Debenture Repayment Price").
SECTION 3.5. Repurchase Procedure for Debentures.
(a) In order for the Debentures to be repurchased on
the Put Option Exercise Date, the Company must receive on or
prior to 5:00 p.m. New York City time on the third Business Day
immediately preceding the Put Option Exercise Date, at the
principal executive offices of Ingersoll-Rand Company in
Woodcliff Lake, New Jersey, the Debentures to be repurchased with
the form entitled "Option to Elect Repayment" on the reverse of
<PAGE>
or otherwise accompanying such Debentures duly completed. Any
such notice received by the Trustee shall be irrevocable. All
questions as to the validity, eligibility (including time of re-
ceipt) and acceptance of the Debentures for repayment shall be
determined by the Company, whose determination shall be final and
binding.
(b) Payment of the Debentures Repayment Price to
Holders of Debentures shall be made through the Trustee, subject
to the Trustee's receipt of payment from the Company in
accordance with the terms of the Indenture either through the
Trustee or the Company acting as Paying Agent, no later than
12:00 noon, New York City time, on the Put Option Exercise Date,
and to such account as may be designated by such Holders. If the
Trustee holds immediately available funds sufficient to pay the
Debentures Repayment Price of the Debentures presented for
repayment (or, if the Company is acting as Paying Agent and the
Institutional Trustee has received the Debentures Repayment
Price), then, immediately prior to the close of business on the
Business Day immediately preceding the Put Option Exercise Date,
such Debentures will cease to be outstanding and interest thereon
will cease to accrue, whether or not such Debentures have been
received by the Company, and all other rights of the Holder in
respect of the Debentures, including the Holder's right to
require the Company to repay such Debentures, shall terminate and
lapse (other than the right to receive the Debentures Repayment
Price upon delivery of such Debentures but without interest on
such Debentures Repayment Price). Neither the Trustee nor the
Company will be required to register or cease to be registered
the transfer of any Debentures for which repayment has been
elected.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period.
The Company shall have the right at any time, and from
time to time, during the term of the Debentures, to defer
payments of interest by extending the interest payment period of
such Debentures for a period not extending, in the aggregate,
beyond the Maturity Date of the Debentures (the "Extended
Interest Payment Period"), during which Extended Interest Payment
Period no interest shall be due and payable. To the extent
permitted by applicable law, interest, the payment of which has
been deferred because of the extension of the interest payment
period pursuant to this Section 4.1, will bear interest thereon
at the rate of ___% until __________ 15, 2001, and at the Reset
Rate thereafter compounded quarterly for each quarter of the
Extended Interest Payment Period ("Compounded Interest"). At the
end of the Extended Interest Payment Period, the Company shall
pay all interest accrued and unpaid on the Debentures, including
any expenses and taxes of the Trust set forth in Section 5.1
hereof and Compounded Interest (together, "Deferred Interest")
<PAGE>
that shall be payable to the Holders of the Debentures in whose
names the Debentures are registered in the Security Register on
the first record date after the end of the Extended Interest
Payment Period; provided, however, that during any such Extended
Interest Payment Period, (a) the Company shall not declare or pay
dividends 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 (other than (i) purchases or
acquisitions of capital stock of the Company in connection with
the satisfaction by the Company of its obligations under any
employee or agent benefit plans or the satisfaction by the
Company of its obligations pursuant to any contract or security
outstanding on the date of such event requiring the Company to
purchase capital stock of the Company, (ii) as a result of a
reclassification of the Company's capital stock or the exchange
or conversion of one class or series of the Company's capital
stock for another class or series of the Company capital stock,
(iii) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted
or exchanged, (iv) dividends or distributions in capital stock of
the Company (or rights to acquire capital stock) or repurchases
or redemptions of capital stock solely from the issuance or
exchange of capital stock or (v) redemptions or repurchases of
any rights outstanding under a shareholder rights plan and the
declaration thereunder of a dividend of rights in the future),
(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 that rank junior to the
Debentures, and (c) the Company shall not make any guarantee
payments with respect to the foregoing (other than payments
pursuant to the Guarantee or the Common Securities Guarantee).
Prior to the termination of any Extended Interest Payment Period,
the Company may further extend such period, provided that such
period together with all such previous and further extensions
thereof shall not extend beyond the Maturity Date of the
Debentures. Upon the termination of any Extended Interest
Payment Period and the payment of all Deferred Interest then due,
the Company may commence a new Extended Interest Payment Period,
subject to the foregoing requirements. No interest shall be due
and payable during an Extended Interest Payment Period, except at
the end thereof, but the Company, at its option, may prepay on
any Interest Payment Date all or any portion of the interest
accrued during the then elapsed portion of an Extended Interest
Payment Period.
SECTION 4.2. Notice of Extension.
(a) If the Institutional Trustee is the only
registered Holder of the Debentures at the time the Company
selects an Extended Interest Payment Period, the Company shall
give written notice to the Regular Trustees, the Institutional
Trustee and the Trustee of its selection of such Extended
Interest Payment Period one Business Day before the earlier of
<PAGE>
(i) the next succeeding date on which Distributions on the Trust
Securities issued by the Trust are payable, or (ii) the date the
Trust is required to give notice of the record date, or the date
such Distributions are payable, to the New York Stock Exchange or
other applicable self-regulatory organization or to holders of
the Preferred Securities issued by the Trust, but in any event at
least one Business Day before such record date.
(b) If the Institutional Trustee is not the only
Holder of the Debentures at the time the Company selects an
Extended Interest Payment Period, the Company shall give the
Holders of the Debentures and the Trustee written notice of its
selection of such Extended Interest Payment Period at least 10
Business Days before the earlier of (i) the next succeeding
Interest Payment Date, or (ii) the date the Company is required
to give notice of the record or payment date of such interest
payment to the New York Stock Exchange or other applicable
self-regulatory organization or to Holders of the Debentures.
SECTION 4.3. Limitation of Transactions.
If (i) the Company shall exercise its right to defer
payment of interest as provided in Section 4.1, or (ii) there
shall have occurred any Event of Default, as defined in the
Indenture, then (a) the Company shall not declare or pay
dividends or make any distribution with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to,
any of its capital stock (other than (i) purchases or
acquisitions of capital stock of the Company in connection with
the satisfaction by the Company of its obligations under any
employee or agent benefit plans or the satisfaction by the
Company of its obligations pursuant to any contract or security
outstanding on the date of such event requiring the Company to
purchase capital stock of the Company, (ii) as a result of a
reclassification of the Company's capital stock or the exchange
or conversion of one class or series of the Company's capital
stock for another class or series of the Company capital stock,
(iii) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted
or exchanged, (iv) dividends or distributions in capital stock of
the Company (or rights to acquire capital stock) or repurchases
or redemptions of capital stock solely from the issuance or
exchange of capital stock and (v) redemptions or repurchases of
any rights outstanding under a shareholder rights plan and the
declaration thereunder of a dividend of rights in the future),
(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 that rank junior to the
Debentures, and (c) the Company shall not make any guarantee
payments with respect to the foregoing (other than payments
pursuant to the Guarantee or the Common Securities Guarantee).
<PAGE>
ARTICLE V
EXPENSES
SECTION 5.1. Payment of Expenses.
In connection with the offering, sale and issuance of
the Debentures to the Institutional Trustee and in connection
with the sale of the Trust Securities by the Trust, the Company,
in its capacity as borrower with respect to the Debentures,
shall:
(a) pay all costs and expenses relating to the
offering, sale and issuance of the Debentures, including
commissions to the underwriters payable pursuant to the
Underwriting Agreement and the Pricing Agreement and compensation
of the Trustee under the Indenture in accordance with the
provisions of Section ___ of the Base Indenture;
(b) pay all costs and expenses of the Trust
(including, but not limited to, costs and expenses relating to
the organization of the Trust, the offering, sale and issuance of
the Trust Securities (including commissions to the underwriters
in connection therewith), the fees and expenses of the
Institutional Trustee and the Delaware Trustee, the costs and
expenses relating to the operation of the Trust, including
without limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel and
telephone and other telecommunications expenses and costs and
expenses incurred in connection with the acquisition, financing,
and disposition of Trust assets) to which the Trust might become
subject;
(c) be primarily liable for any indemnification
obligations arising with respect to the Declaration; and
(d) pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and
all liabilities, costs and expenses with respect to such taxes of
the Trust.
SECTION 5.2. Payment Upon Resignation or Removal.
Upon termination of this First Supplemental Indenture
or the Base Indenture or the removal or resignation of the
Trustee pursuant to this Section 5.2, the Company shall pay to
the Trustee all amounts accrued to the date of such termination,
removal or resignation. Upon termination of the Declaration or
the removal or resignation of the Delaware Trustee or the
Institutional Trustee, as the case may be, pursuant to Section
5.6 of the Declaration, the Company shall pay to the Delaware
Trustee or the Institutional Trustee, as the case may be, all
<PAGE>
amounts accrued to the date of such termination, removal or
resignation.
ARTICLE VI
NOTICE
SECTION 6.1. Notice by the Company.
The Company shall give prompt written notice to a
Responsible Officer of the Trustee of any fact known to the
Company that would prohibit the making of any payment of monies
to or by the Trustee in respect of the Debentures pursuant to the
provisions of this Article VI. Notwithstanding any of the
provisions of the Base Indenture and this First Supplemental
Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit the making of any
payment of monies to or by the Trustee in respect of the
Debentures pursuant to the provisions of the Base Indenture,
unless and until a Responsible Officer of the Trustee shall have
received written notice thereof from the Company or a holder or
holders of Senior Indebtedness or from any trustee therefor and
before the receipt of any such written notice, the Trustee,
subject to the provisions of the Base Indenture, shall be
entitled in all respects to assume that no such facts exist;
provided, however, that if the Trustee shall not have received
the notice provided for in this Article VI at least two Business
Days prior to the date upon which by the terms hereof any money
may become payable for any purpose (including, without
limitation, the payment of the principal of (or premium, if any)
or interest on any Debenture), then, anything herein contained to
the contrary notwithstanding, the Trustee shall have full power
and authority to receive such money and to apply the same to the
purposes for which they were received, and shall not be affected
by any notice to the contrary that may be received by it within
two Business Days prior to such date.
ARTICLE VII
FORM OF DEBENTURE
SECTION 7.1. Form of Debenture.
The Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in
the following forms:
(FORM OF FACE OF DEBENTURE)
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT -
This Debenture is a Global Debenture within the meaning of the
Indenture hereinafter referred to and is registered in the name
of the Clearing Agency or a nominee of the Clearing Agency. This
Debenture is exchangeable for Debentures registered in the name
of a person other than the Clearing Agency or its nominee only in
the limited circumstances described in the Indenture, and no
<PAGE>
transfer of this Debenture (other than a transfer of this
Debenture as a whole by the Clearing Agency to a nominee of the
Clearing Agency or by a nominee of the Clearing Agency to the
Clearing Agency or another nominee of the Clearing Agency) may be
registered except in limited circumstances.
Unless this Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street,
New York, New York) to the issuer or its agent for registration
of transfer, exchange or payment, and any Debenture issued is
registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co.,
has an interest herein.]
No. ____________________________
$_______________________________
CUSIP No.________________________
INGERSOLL-RAND COMPANY
___% DEBENTURE
DUE [ ] 16, 2003
INGERSOLL-RAND COMPANY, a New Jersey corporation (the
"Company", which term includes any successor corporation under
the Indenture hereinafter referred to), for value received,
hereby promises to pay to ______________________________, the
principal sum of
___________________________________________________
($______________) on __________ 16, 2003 (such date is
hereinafter referred to as the "Maturity Date"), and to pay
interest on said principal sum from , 1998, or from the
most recent interest payment date (each such date, an "Interest
Payment Date") to which interest has been paid or duly provided
for, quarterly (subject to deferral as set forth herein) in
arrears on February 16, May 16, August 16 and November 16 of each
year, commencing on [ ] 16, 1998, initially at the
rate of ___% per annum until [ ] 15, 2001, and at
the Reset Rate thereafter until the principal hereof shall have
become due and payable, and on any overdue principal and premium,
if any, and (without duplication and to the extent that payment
of such interest is enforceable under applicable law) on any
overdue installment of interest at the rate of ___% until [
] 15, 2001, and at the Reset Date thereafter, compounded
quarterly. The interest rate will be reset on the third business
day preceding [ ] 16, 2001 to the Reset Rate (as
determined by the Reset Agent). The amount of interest payable
on any Interest Payment Date shall be computed on the basis of a
360-day year consisting of twelve 30-day months. In the event
that any date on which interest is payable on this Debenture is
<PAGE>
not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day that is a Business Day
(and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same
force and effect as if made on such date. The interest
installment so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in the Indenture,
be paid to the person in whose name this Debenture (or one or
more Predecessor Securities, as defined in said Indenture) is
registered at the close of business on the regular record date
for such interest installment which in the case of a Global
Debenture shall be the close of business on the business day next
preceding such Interest Payment Date; provided, however, if
pursuant to the terms of the indenture the Debentures are no
longer represented by a Global Debenture, the Company may select
such regular record date for such interest installment which
shall be more than one Business Day but less than 60 Business
Days prior to an Interest Payment Date. Any such interest
installment not punctually paid or duly provided for shall
forthwith cease to be payable to the registered Holders on such
regular record date and may be paid to the Person in whose name
this Debenture (or one or more Predecessor Securities) is
registered at the close of business on a special record date to
be fixed by the Trustee for the payment of such defaulted
interest, notice whereof shall be given to the registered Holders
of this series of Debentures not less than 10 days prior to such
special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any
securities exchange on which the Debentures may be listed, and
upon such notice as may be required by such exchange all as more
fully provided in the Indenture. The principal of (and premium,
if any) and the interest on this Debenture shall be payable at
the office or agency of the Trustee maintained for that purpose
in any coin or currency of the United States of America that at
the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the
registered Holder at such address as shall appear in the Security
Register or by wire transfer to an account appropriately
designated by the Holder entitled thereto. Notwithstanding the
foregoing, so long as the Holder of this Debenture is the
Institutional Trustee or the Collateral Agent, the payment of the
principal of (and premium, if any) and interest on this Debenture
will be made at such place and to such account as may be
designated in writing by the Institutional Trustee or the
Collateral Agent.
The indebtedness evidenced by this Debenture is, to the
extent provided in the Indenture, senior and unsecured and will
rank in right of payment on parity with all other senior
unsecured obligations of the Company.
<PAGE>
This Debenture shall not be entitled to any benefit
under the Indenture hereinafter referred to, be valid or become
obligatory for any purpose until the Certificate of
Authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Debenture are continued on the
reverse side hereof and such continued provisions shall for all
purposes have the same effect as though fully set forth at this
place.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this
instrument to be executed.
Dated
INGERSOLL-RAND COMPANY
By:________________________________
Name:
Title:
Attest:
By:________________________________
Name:
Title:
<PAGE>
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures
described in the within-mentioned Indenture.
Dated__________________________________________
___________________________
as Trustee
By_____________________________________________
Authorized Signatory
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of
Securities of the Company (herein sometimes referred to as the
"Securities"), specified in the Indenture, all issued or to be
issued in one or more series under and pursuant to an Indenture
dated as of , 1998 (the "Base Indenture"), duly
executed and delivered between the Company and
_____________________________________, as Trustee (the "Trustee")
(as supplemented by a First Supplemental Indenture, dated
, 1998), (the Base Indenture as so supplemented, the
"Indenture"), to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the Holders of the
Securities. By the terms of the Indenture, the Securities are
issuable in series that may vary as to amount, date of maturity,
rate of interest and in other respects as provided in the
Indenture. This series of Securities is limited in aggregate
principal amount as specified in said First Supplemental
Indenture.
If a Tax Event shall occur and be continuing, the
Company may, at its option, redeem Debentures in whole (but not
in part) at any time at a Redemption Price per Debenture equal to
the Redemption Amount plus accrued and unpaid interest thereon,
including Compounded Interest and expenses and taxes of the Trust
(each as defined herein), if any, to the Tax Event Redemption
Date. The Redemption Price shall be paid to each Holder of the
Debenture by the Company, no later than 12:00 noon, New York City
time, on the Tax Event Redemption Date, by check or wire transfer
in immediately available funds, at such place and to such account
as may be designated by each such Holder.
<PAGE>
The Debentures are not entitled to the benefit of any
sinking fund.
If a Failed Remarketing has occurred, each Holder of
this Debenture who holds this Debenture on the day immediately
following the Purchase Contract Settlement Date shall have the
right (the "Put Option") on or after the Business Day
immediately following the Purchase Contract Settlement Date, upon
at least three Business Days' prior notice, to require the
Company to repurchase such Holder's Debentures on
____________________, 2001 (the "Put Option Exercise Date"),
either in whole or in part, at a repayment price per Debenture
equal to $10, plus accrued and unpaid interest, if any, thereon
to the date of payment including deferred interest, if any (the
"Debenture Repayment Price"). In order for the Debentures to be
so repurchased, the Company must receive, on or prior to 5:00
p.m. New York City Time on the third Business Day immediately
preceding the Put Option Exercise Date, at the principal
executive offices of Ingersoll-Rand Company in Woodcliff Lake,
New Jersey, the Debentures to be repurchased with the form
entitled "Option to Elect Repayment" on the reverse of or
otherwise accompanying such Debentures duly completed. Any such
notice received by the Trustee shall be irrevocable. All
questions as to the validity, eligibility (including time of
receipt) and acceptance of the Debentures for repayment shall be
determined by the Company, whose determination shall be final and
binding. The payment of the Debentures Repayment Price in
respect of such Debentures shall be made, either through the
Trustee or the Company acting as Paying Agent, no later than
12:00 noon, New York City time, on the Put Option Exercise Date.
In case an Event of Default, as defined in the
Indenture, shall have occurred and be continuing, the principal
of all of the Debentures may be declared, and upon such
declaration shall become, due and payable, in the manner, with
the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the
Company and the Trustee, with the consent of the Holders of not
less than a majority in aggregate principal amount of the
Debentures of each series affected at the time outstanding, as
defined in the Indenture, to execute supplemental indentures for
the purpose of, among other things, adding any provisions to or
changing or eliminating any of the provisions of the Indenture or
of any supplemental indenture or of modifying the rights of the
Holders of the Debentures; provided, however, that, among other
things, no such supplemental indenture shall (i) reduce the
principal amount thereof, or reduce the rate or extend the time
of payment of interest thereon (subject to the Company's right to
defer such payments in the manner set forth herein), or reduce
any premium payable upon the redemption thereof, without the
consent of the Holder of each Debenture so affected, or (ii)
reduce the aforesaid percentage of Debentures, the Holders of
<PAGE>
which are required to consent to any such supplemental indenture,
without the consent of the Holders of each Debenture then
outstanding and affected thereby. The Indenture also contains
provisions permitting the Holders of a majority in aggregate
principal amount of the Securities of any series at the time
outstanding affected thereby, on behalf of all of the Holders of
the Debentures of such series, to waive a Default or Event of
Default with respect to such series, and its consequences,
except a Default or Event of Default in the payment of the
principal of or premium, if any, or interest on any of the
Securities of such series. Any such consent or waiver by the
registered Holder of this Debenture (unless revoked as provided
in the Indenture) shall be conclusive and binding upon such
Holder and upon all future Holders and owners of this Debenture
and of any Debenture issued in exchange for or in place hereof
(whether by registration of transfer or otherwise), irrespective
of whether or not any notation of such consent or waiver is made
upon this Debenture.
No reference herein to the Indenture and no provision
of this Debenture or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and premium, if any, and interest on this
Debenture at the time and place and at the rate and in the money
herein prescribed.
So long as the Company is not in default in the payment
of interest on the Debenture, the Company shall have the right at
any time during the term of the Debentures from time to time to
extend the interest payment period of such Debentures for a
period not extending, in the aggregate, beyond the Maturity Date
of the Debentures (an "Extended Interest Payment Period"). At
the end of an Extended Interest Payment Period, the Company shall
pay all interest then accrued and unpaid (together with the
interest thereon at the rate of ___% until [ ] 15,
2001 and at the Reset Rate thereafter to the extent that payment
of such interest is enforceable under applicable law). In the
event that the Company exercises this right, then (a) the Company
shall not declare or pay dividends or make any distribution with
respect to, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of capital stock of the Company in
connection with the satisfaction by the Company of its
obligations under any employee or agent benefit plans or the
satisfaction by the Company of its obligations pursuant to any
contract or security outstanding on the date of such event
requiring the Company to purchase capital stock of the Company,
(ii) as a result of a reclassification of the Company's capital
stock or the exchange or conversion of one class or series of the
Company's capital stock for another class or series of the
Company capital stock, (iii) the purchase of fractional interests
in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (iv) dividends or
<PAGE>
distributions in capital stock of the Company (or rights to
acquire capital stock) or repurchases or redemptions of capital
stock solely from the issuance or exchange of capital stock or
(v) redemptions or purchases of any rights outstanding under a
shareholder rights plan and the declaration thereunder of a
dividend of rights in the future), (b) the Company shall not make
any payment of interest, principal or premium, if any, or repay,
repurchase or redeem any debt securities issued by the Company
that rank junior to the Debentures, and (c) the Company shall not
make any guarantee payments with respect to the foregoing (other
than payments pursuant to the Guarantee or the Common Securities
Guarantee). Prior to the termination of any such Extended
Interest Payment Period, the Company may further extend the
interest payment period; provided, that such Extended Interest
Payment Period, together with all such previous and further
extensions thereof, may not extend beyond the Maturity Date of
the Debenture. At the termination of any such Extended Interest
Payment Period and upon the payment of all accrued and unpaid
interest and any additional amount then due, the Company may
commence a new Extended Interest Payment Period, subject to the
above requirements.
As provided in the Indenture and subject to certain
limitations therein set forth, this Debenture is transferable by
the registered Holder hereof on the Security Register of the
Company, upon surrender of this Debenture for registration of
transfer at the office or agency of the Trustee in the City of
Chicago and State of Illinois accompanied by a written instrument
or instruments of transfer in form satisfactory to the Company
or the Trustee duly executed by the registered Holder hereof or
his attorney duly authorized in writing, and thereupon one or
more new Debentures of authorized denominations and for the same
aggregate principal amount and series will be issued to the
designated transferee or transferees. No service charge will be
made for any such transfer, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge
payable in relation thereto.
Prior to due presentment for registration of transfer
of this Debenture, the Company, the Trustee, any Paying Agent and
the Security Registrar may deem and treat the registered holder
hereof as the absolute owner hereof (whether or not this
Debenture shall be overdue and notwithstanding any notice of
ownership or writing hereon made by anyone other than the
Security Registrar) for the purpose of receiving payment of or on
account of the principal hereof and premium, if any, and interest
due hereon and for all other purposes, and neither the Company
nor the Trustee nor any Paying Agent nor any Security Registrar
shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the
principal of or the interest on this Debenture, or for any claim
based hereon, or otherwise in respect hereof, or based on or in
respect of the Indenture, against any incorporator, shareholder,
<PAGE>
officer or director, past, present or future, as such, of the
Company or of any predecessor or successor corporation, whether
by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the
consideration for the issuance hereof, expressly waived and
released.
The Indenture imposes certain limitations on the
ability of the Company to, among other things, merge or
consolidate with any other Person or sell, assign, transfer or
lease all or substantially all of its properties or assets. All
such covenants and limitations are subject to a number of
important qualifications and exceptions. The Company must report
periodically to the Trustee on compliance with the covenants in
the Indenture.
The Debentures of this series are issuable only in
registered form without coupons in denominations of $50 and any
integral multiple thereof. This Global Debenture is exchangeable
for Debentures in definitive form only under certain limited
circumstances set forth in the Indenture. As provided in the
Indenture and subject to certain limitations therein set forth,
Debentures of this series so issued are exchangeable for a like
aggregate principal amount of Debentures of this series of a
different authorized denomination, as requested by the Holder
surrendering the same.
All terms used in this Debenture that are defined in
the Indenture shall have the meanings assigned to them in the
Indenture.
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and
instructs the Company to repay $_____ principal amount of the
within Debenture, pursuant to its terms, on the "Put Option
Exercise Date," together with any interest thereon accrued but
unpaid to the date of repayment, to the undersigned at:
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the
Indenture, a new Debenture or Debentures representing the
remaining aggregate principal amount of this Debenture.
For this Option to Elect Repayment to be effective, this
Indenture with the Option to Elect Repayment duly completed must
be received by the Company at Ingersoll-Rand Company, Attn:
Corporate Secretary, 200 Chestnut Ridge Road, Woodcliff Lake, New
Jersey 07679, no later than 5:00 p.m. on [ ] 27,
2001.
Dated: Signature: ________________________
Signature Guarantee: ___________________
Note: The signature to this Option to Elect Repayment must
correspond with the name as written upon the face of the within
Debenture in every particular without alternation or enlargement
or any change whatsoever.
<PAGE>
----------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Debenture to:
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(Insert assignee's social security or tax identification number)
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
agent to transfer this Debenture on the books of the Trust. The
agent may substitute another to act for him or her.
Date: ____________________________________
Signature: ______________________________
Signature Guarantee: ____________________
(Sign exactly as your name appears on the other side of this
Debenture)
<PAGE>
ARTICLE VIII
ORIGINAL ISSUE OF DEBENTURES
SECTION 8.1. Original Issue of Debentures.
Debentures in the aggregate principal amount of $
may, upon execution of this First Supplemental
Indenture, be executed by the Company and delivered to the
Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Debentures to or upon the written
order of the Company, signed by its Chairman, its Vice Chairman,
its President, or any Vice President and its Treasurer or an
Assistant Treasurer, without any further action by the Company.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Ratification of Indenture.
The Indenture as supplemented by this First
Supplemental Indenture, is in all respects ratified and
confirmed, and this First Supplemental Indenture shall be deemed
part of the Indenture in the manner and to the extent herein and
therein provided.
SECTION 9.2. Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company
and not by the Trustee, and the Trustee assumes no responsibility
for the correctness thereof. The Trustee makes no representation
as to the validity or sufficiency of this First Supplemental
Indenture.
SECTION 9.3. Governing Law.
This First Supplemental Indenture and each Debenture
shall be deemed to be a contract made under the internal laws of
the State of New York, and for all purposes shall be construed
in accordance with the laws of said State.
SECTION 9.4. Separability.
In case any one or more of the provisions contained in
this First Supplemental Indenture or in the Debentures shall for
any reason be held to be invalid illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall
not affect any other provisions of this First Supplemental
Indenture or of the Debentures, but this First Supplemental
Indenture and the Debentures shall be construed as if such
invalid or illegal or unenforceable provision had never been
contained herein or therein.
<PAGE>
SECTION 9.5. Counterparts.
This First Supplemental Indenture may be executed in
any number of counterparts each of which shall be an original;
but such counterparts shall together constitute but one and the
same instrument.
SECTION 9.6. Preferred Securities Guarantee and
Declaration.
The Preferred Securities Guarantee and the Declaration
shall be deemed to be specifically described in this First
Supplemental Indenture for purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
First Supplemental Indenture to be duly executed by their
respective officers thereunto duly authorized, on the date or
dates indicated in the acknowledgments and as of the day and year
first above written.
INGERSOLL-RAND COMPANY,
as Issuer
By: ____________________________
Name:
Title:
_________________________________
as Trustee
By: _____________________________
Name:
Title:
<PAGE>
_________________________________________________________________
FIRST SUPPLEMENTAL INDENTURE
Dated as of March , 1998
between
INGERSOLL-RAND COMPANY
AS ISSUER
and
_________________________________
AS TRUSTEE
_________________________________________________________________
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS . . . . . . . . . . . 1
SECTION 1.1. Definition of Terms . . . . . . . . . . . 1
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES . . 4
SECTION 2.1. Designation and Principal Amount . . . . . 4
SECTION 2.2. Maturity . . . . . . . . . . . . . . . . . 4
SECTION 2.3. Form and Payment . . . . . . . . . . . . . 4
SECTION 2.4. Global Debenture . . . . . . . . . . . . . 4
SECTION 2.5. Interest . . . . . . . . . . . . . . . . . 6
ARTICLE III
REDEMPTION OF THE DEBENTURES . . . . . . . 7
SECTION 3.1. Tax Event Redemption . . . . . . . . . . . 7
SECTION 3.2. Redemption Procedure for Debentures . . . 7
SECTION 3.3. No Sinking Fund . . . . . . . . . . . . . 8
SECTION 3.4. Option to Put Debentures . . . . . . . . . 8
SECTION 3.5. Repurchase Procedure for Debentures . . . 8
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD . . . . . 9
SECTION 4.1. Extension of Interest Payment Period . . . 9
SECTION 4.2. Notice of Extension . . . . . . . . . . . 10
SECTION 4.3. Limitation of Transactions . . . . . . . . 10
ARTICLE V
EXPENSES . . . . . . . . . . . . 11
SECTION 5.1. Payment of Expenses . . . . . . . . . . . 11
SECTION 5.2. Payment Upon Resignation or Removal . . . 11
ARTICLE VI
NOTICE . . . . . . . . . . . . 11
SECTION 6.1. Notice by the Company . . . . . . . . . . 11
ARTICLE VII
FORM OF DEBENTURE . . . . . . . . . . 12
SECTION 7.1. Form of Debenture . . . . . . . . . . . . 12
ARTICLE VIII
ORIGINAL ISSUE OF DEBENTURES . . . . . . . 22
<PAGE>
SECTION 8.1. Original Issue of Debentures . . . . . . . 22
ARTICLE IX
MISCELLANEOUS . . . . . . . . . . . 22
SECTION 9.1. Ratification of Indenture . . . . . . . . 22
SECTION 9.2. Trustee Not Responsible for Recitals . . . 22
SECTION 9.3. Governing Law . . . . . . . . . . . . . . 22
SECTION 9.4. Separability . . . . . . . . . . . . . . . 22
SECTION 9.5. Counterparts. . . . . . . . . . . . . . . 22
SECTION 9.6. Preferred Securities Guarantee and
Declaration . . . . . . . . . . . . . . . 23
=========================================================================
INGERSOLL-RAND COMPANY
AND
__________________________________,
AS PURCHASE CONTRACT AGENT
--------------------------
PURCHASE CONTRACT AGREEMENT
--------------------------
DATED AS OF MARCH ___, 1998
=========================================================================
<PAGE>
TABLE OF CONTENTS
Page
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE I
Definitions and Other Provisions
of General Applications . . . . . . . . . . . 5
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . 5
Section 1.2. Compliance Certificates and Opinions . . . . . 13
Section 1.3. Form of Documents Delivered to Agent . . . . . 14
Section 1.4. Acts of Holders; Record Dates . . . . . . . . . 15
Section 1.5. Notices . . . . . . . . . . . . . . . . . . . . 16
Section 1.6. Notice to Holders; Waiver . . . . . . . . . . . 17
Section 1.7. Effect of Headings and Table of Contents . . . 17
Section 1.8. Successors and Assigns . . . . . . . . . . . . 17
Section 1.9. Separability Clause . . . . . . . . . . . . . . 17
Section 1.10. Benefits of Agreement . . . . . . . . . . . . . 17
Section 1.11. Governing Law . . . . . . . . . . . . . . . . . 18
Section 1.12. Legal Holidays . . . . . . . . . . . . . . . . 18
Section 1.13. Counterparts . . . . . . . . . . . . . . . . . 18
Section 1.14. Inspection of Agreement . . . . . . . . . . . . 18
ARTICLE II
Certificate Forms . . . . . . . . . . . . 18
Section 2.1. Forms of Certificates Generally . . . . . . . . 18
Section 2.2. Form of Agent's Certificate of
Authentication . . . . . . . . . . . . . . . . 19
ARTICLE III
The Securities . . . . . . . . . . . . . 20
Section 3.1. Title and Terms; Denominations . . . . . . . . 20
Section 3.2. Rights and Obligations Evidenced by the
Certificates . . . . . . . . . . . . . . . . 20
Section 3.3. Execution, Authentication, Delivery and
Dating . . . . . . . . . . . . . . . . . . . 21
Section 3.4. Temporary Certificates . . . . . . . . . . . . 21
Section 3.5. Registration; Registration of Transfer and
Exchange . . . . . . . . . . . . . . . . . . 22
Section 3.6. Book-Entry Interests . . . . . . . . . . . . . 23
Section 3.7. Notices to Holders . . . . . . . . . . . . . . 24
Section 3.8. Appointment of Successor Clearing Agency . . . 24
Section 3.9. Definitive Certificates . . . . . . . . . . . . 24
Section 3.10. Mutilated, Destroyed, Lost and Stolen
Certificates . . . . . . . . . . . . . . . . 24
Section 3.11. Persons Deemed Owners . . . . . . . . . . . . . 25
Section 3.12. Cancellation . . . . . . . . . . . . . . . . . 26
Section 3.13. Establishment or Reestablishment of Growth
PRIDES . . . . . . . . . . . . . . . . . . . 26
<PAGE>
Section 3.14. Establishment or Reestablishment of Income
PRIDES . . . . . . . . . . . . . . . . . . . 28
Section 3.15. Transfer of Collateral upon Occurrence of
Termination Event . . . . . . . . . . . . . . 29
Section 3.16. No Consent to Assumption . . . . . . . . . . . 30
ARTICLE IV
The Preferred Securities . . . . . . . . . . 30
Section 4.1. Payment of Distribution; Rights to
Distributions Preserved; Distribution
Rate Reset; Notice . . . . . . . . . . . . . 30
Section 4.2. Notice and Voting . . . . . . . . . . . . . . . 31
Section 4.3. Distribution of Debentures; Tax Event
Redemption . . . . . . . . . . . . . . . . . 32
ARTICLE V
The Purchase Contracts . . . . . . . . . . . 33
Section 5.1. Purchase of Shares of Common Stock . . . . . . 33
Section 5.2. Contract Adjustment Payments . . . . . . . . . 34
Section 5.3. Deferral of Payment Dates For Contract
Adjustment Payments . . . . . . . . . . . . . 35
Section 5.4. Payment of Purchase Price . . . . . . . . . . . 36
Section 5.5. Issuance of Shares of Common Stock . . . . . . 39
Section 5.6. Adjustment of Settlement Rate . . . . . . . . . 40
Section 5.7. Notice of Adjustments and Certain Other
Events . . . . . . . . . . . . . . . . . . . 45
Section 5.8. Termination Event; Notice . . . . . . . . . . . 46
Section 5.9. Early Settlement . . . . . . . . . . . . . . . 46
Section 5.10. No Fractional Shares . . . . . . . . . . . . . 47
Section 5.11. Charges and Taxes . . . . . . . . . . . . . . . 48
ARTICLE VI
Remedies . . . . . . . . . . . . . . 48
Section 6.1. Unconditional Right of Holders to Receive
Contract Adjustment Payments and to
Purchase Common Stock . . . . . . . . . . . . 48
Section 6.2. Restoration of Rights and Remedies . . . . . . 49
Section 6.3. Rights and Remedies Cumulative . . . . . . . . 49
Section 6.4. Delay or Omission Not Waiver . . . . . . . . . 49
Section 6.5. Undertaking for Costs . . . . . . . . . . . . . 49
Section 6.6. Waiver of Stay or Extension Laws . . . . . . . 50
ARTICLE VII
The Agent . . . . . . . . . . . . . . 50
Section 7.1. Certain Duties and Responsibilities . . . . . . 50
Section 7.2. Notice of Default . . . . . . . . . . . . . . . 51
Section 7.3. Certain Rights of Agent . . . . . . . . . . . . 51
Section 7.4. Not Responsible for Recitals or Issuance of
Securities . . . . . . . . . . . . . . . . . . 52
<PAGE>
Section 7.5. May Hold Securities . . . . . . . . . . . . . . 52
Section 7.6. Money Held in Custody . . . . . . . . . . . . . 52
Section 7.7. Compensation and Reimbursement . . . . . . . . 52
Section 7.8. Corporate Agent Required; Eligibility . . . . . 52
Section 7.9. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . . . 53
Section 7.10. Acceptance of Appointment by Successor . . . . 54
Section 7.11. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . 54
Section 7.12. Preservation of Information; Communications
to Holders . . . . . . . . . . . . . . . . . 55
Section 7.13. No Obligations of Agent . . . . . . . . . . . . 55
Section 7.14. Tax Compliance . . . . . . . . . . . . . . . . 55
ARTICLE VIII
Supplemental Agreements . . . . . . . . . . . 56
Section 8.1. Supplemental Agreements Without Consent of
Holders . . . . . . . . . . . . . . . . . . . 56
Section 8.2. Supplemental Agreements with Consent of
Holders . . . . . . . . . . . . . . . . . . . 56
Section 8.3. Execution of Supplemental Agreements . . . . . 57
Section 8.4. Effect of Supplemental Agreements . . . . . . . 57
Section 8.5. Reference to Supplemental Agreements . . . . . 58
ARTICLE IX
Consolidation, Merger, Sale or Conveyance . . . . . . 58
Section 9.1. Covenant Not to Merge, Consolidate, Sell or
Convey Property Except Under Certain
Conditions . . . . . . . . . . . . . . . . . 58
Section 9.2. Rights and Duties of Successor Corporation . . 58
Section 9.3. Opinion of Counsel Given to Agent . . . . . . . 59
ARTICLE X
Covenants . . . . . . . . . . . . . . 59
Section 10.1. Performance Under Purchase Contracts . . . . . 59
Section 10.2. Maintenance of Office or Agency . . . . . . . . 59
Section 10.3. Company to Reserve Common Stock . . . . . . . . 60
Section 10.4. Covenants as to Common Stock . . . . . . . . . 60
Section 10.5. Statements of Officer of the Company as to
Default . . . . . . . . . . . . . . . . . . . 60
EXHIBIT A Form of Income PRIDES Certificate
EXHIBIT B Form of Growth PRIDES Certificate
EXHIBIT C Instruction to Collateral Agent
EXHIBIT D Instruction to Purchase Contract Agent
EXHIBIT E Notice to Settle with Separate Cash
<PAGE>
PURCHASE CONTRACT AGREEMENT, dated as of March ___, 1998,
between Ingersoll-Rand Company, a New Jersey corporation (the "Company"), and
The First National Bank of Chicago, a national banking association, acting as
purchase contract agent for the Holders of Securities from time to time (the
"Agent").
RECITALS
The Company has duly authorized the execution and delivery
of this Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when
the Certificates are executed by the Company and authenticated, executed on
behalf of the Holders and delivered by the Agent, as provided in this
Agreement, the valid obligations of the Company, and to constitute these
presents a valid agreement of the Company, in accordance with its terms, have
been done.
W I T N E S S E T H :
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
Definitions and Other Provisions
of General Applications
Section 1.1. Definitions.
For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as
the singular; and nouns and pronouns of the masculine gender include
the feminine and neuter genders;
(b) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with generally
accepted accounting principles in the United States;
(c) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a whole and
not to any particular Article, Section or other subdivision;
(d) the following terms have the meanings given to them
in the Declaration: (i) Applicable Ownership Interest; (ii)
Applicable Principal Amount; (iii) Authorized Newspaper;
(iv) Indenture, (v) Investment Company Event; (vi) Liquidation
Distribution; (vii) Preferred Securities Guarantee; (viii) Primary
Treasury Dealer; (ix) Quotation Agent; (x) Redemption Amount; (xi)
Redemption Price; (xii) Reset Agent; (xiii) Reset Announcement Date;
<PAGE>
(xiv) Reset Rate; (xv) Reset Spread; (xvi) Tax Event; (xvii) Tax
Event Redemption; (xviii) Tax Event Redemption Date; (xix) Two-Year
Benchmark Treasury; (xx) Treasury Portfolio; and (xxi) Treasury
Portfolio Purchase Price; and
(e) the following terms have the meanings given to them
in this Section 1.1(e).
"Act" when used with respect to any Holder, has the meaning
specified in Section 1.4.
"Affiliate"has the same meaning as given to that term in
Rule 405 of the Securities Act or any successor rule thereunder.
"Agent" means the Person named as the "Agent" in the first
paragraph of this instrument until a successor Agent shall have
become such pursuant to the applicable provisions of this Agreement,
and thereafter "Agent" shall mean such Person.
"Agreement" means this instrument as originally executed or
as it may from time to time be supplemented or amended by one or more
agreements supplemental hereto entered into pursuant to the
applicable provisions hereof.
"Applicable Market Value" has the meaning specified in
Section 5.1.
"Bankruptcy Code" means title 11 of the United States Code,
or any other law of the United States that from time to time provides
a uniform system of bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry
Interest, a Person who is the beneficial owner of such Book-Entry
Interest as reflected on the books of the Clearing Agency or on the
books of a Person maintaining an account with such Clearing Agency
(directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such
Clearing Agency).
"Board of Directors" means the board of directors of the
Company or a duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the
Board of Directors, a copy of which has been certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect
on the date of such certification and delivered to the Agent.
"Book-Entry Interest" means a beneficial interest in a
Global Certificate, ownership and transfers of which shall be
maintained and made through book entries by a Clearing Agency as
described in Section 3.6.
"Business Day" means any day other than a Saturday, Sunday
or any other day on which banking institutions in New York City (in
the State of New York) are permitted or required by any applicable
law to close.
<PAGE>
"Cash Settlement" has the meaning set forth in Section
5.4(a)(i).
"Certificate" means an Income PRIDES Certificate or a Growth
PRIDES Certificate.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is
acting as a depositary for the Securities and in whose name, or in
the name of a nominee of that organization, shall be registered a
Global Certificate and which shall undertake to effect book entry
transfers and pledges of the Securities.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to
time the Clearing Agency effects book entry transfers and pledges of
securities deposited with the Clearing Agency.
"Closing Price" has the meaning specified in Section 5.1.
"Collateral" has the meaning specified in Section 2.1 of the
Pledge Agreement.
"Collateral Agent" means The Chase Manhattan Bank, as
Collateral Agent under the Pledge Agreement until a successor
Collateral Agent shall have become such pursuant to the applicable
provisions of the Pledge Agreement, and thereafter "Collateral Agent"
shall mean the Person who is then the Collateral Agent thereunder.
"Collateral Substitution" has the meaning specified in
Section 3.13.
"Common Stock" means the Common Stock, par value $2.00, of
the Company.
"Company" means the Person named as the "Company" in the
first paragraph of this instrument until a successor shall have
become such pursuant to the applicable provision of this Agreement,
and thereafter "Company" shall mean such successor.
"Contract Adjustment Payments" means the fee payable by the
Company in respect of each Purchase Contract, equal to % per
annum of the Stated Amount in the case of Income PRIDES and %
per annum of the Stated Amount in the case of Growth PRIDES, computed
on the basis of a 360 day year of twelve 30 day months, plus any
Deferred Contract Adjustment Payments accrued pursuant to Section
5.2.
"Corporate Trust Office" means the principal corporate trust
office of the Agent at which, at any particular time, its corporate
trust business shall be administered, which office at the date hereof
is located at One First National Plaza, Suite 0126, Chicago, IL
60670-0126, Attention: Corporate Trust Services Division, except that
for purposes of Section 10.2, such term shall mean the office or
agency of the Agent in the Borough of Manhattan, the City of New
York, which office at the date hereof is located at 14 Wall Street,
Eighth Floor, New York, NY 10005.
<PAGE>
"Coupon Rate" means the percentage rate per annum at which
each Debenture will bear interest initially.
"Current Market Price" has the meaning specified in Section
5.6(a)(8).
"Debentures" means the series of debentures of the Company
designated the ____% Debentures due ____________ 16, 2003, to be
issued under the Indenture as of the date hereof.
"Declaration" means the Amended and Restated Agreement of
Trust of Ingersoll-Rand Financing I, dated ___________, 1998, among
the Company, as the sponsor, the trustees named therein and the
holders from time to time of individual beneficial interests in the
assets of the Trust.
"Deferred Contract Adjustment Payments" has the meaning
specified in Section 5.3.
"Depositary" means, initially, DTC until another Clearing
Agency becomes its successor.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"Early Settlement" has the meaning specified in Section
5.9(a).
"Early Settlement Amount" has the meaning specified in
Section 5.9(a).
"Early Settlement Date" has the meaning specified in Section
5.9(a).
"Early Settlement Rate" has the meaning specified in Section
5.9(b).
"Exchange Act" means the Securities Exchange Act of 1934 and
any statute successor thereto, in each case as amended from time to
time, and the rules and regulations promulgated thereunder.
"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section
5.6(a)(6).
"Global Certificate" means a Certificate that evidences all
or part of the Securities and is registered in the name of a
Depositary or a nominee thereof.
"Global Preferred Security Certificate" means a certificate
evidencing the rights and obligations of a Holder in respect of the
number of Preferred Securities specified on such certificate and
which is registered in the name of a Clearing Agency or a nominee
thereof.
<PAGE>
"Growth PRIDES" means, following the substitution of one or
more Treasury Securities for Preferred Securities or for the
Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, as collateral to secure a holder's obligations under a
Purchase Contract, the collective rights and obligations of a holder
of a Growth PRIDES Certificate in respect of such Treasury
Securities, subject in each case to the Pledge thereof, and the
related Purchase Contract.
"Growth PRIDES Certificate" means a certificate evidencing
the rights and obligations of a Holder in respect of the number of
Growth PRIDES specified on such certificate.
"Growth PRIDES Register" and "Growth PRIDES Registrar" have
the respective meanings specified in Section 3.5.
"Holder," when used with respect to a Security, means the
Person in whose name the Security evidenced by an Income PRIDES
Certificate and/or a Growth PRIDES Certificate is registered in the
related Income PRIDES Register and/or the Growth PRIDES Register, as
the case may be.
"Income PRIDES" means the collective rights and obligations
of a Holder of an Income PRIDES Certificate in respect of a Preferred
Security or an appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, subject in each case to the
Pledge thereof, and the related Purchase Contract.
"Income PRIDES Certificate" means a certificate evidencing
the rights and obligations of a Holder in respect of the number of
Income PRIDES specified on such certificate.
"Income PRIDES Register" and "Income PRIDES Registrar" have
the respective meanings specified in Section 3.5.
"Indenture" has the meaning set forth in Section 1.1 of the
Declaration.
"Indenture Trustee" means _____________________, a national
banking association, as trustee under the Indenture, or any successor
thereto.
"Institutional Trustee" means __________________, as
institutional trustee under the Declaration, or any successor thereto
that is a financial institution unaffiliated with the Company.
"Issuer Order" or "Issuer Request" means a written order or
request signed in the name of the Company by its Chairman of the
Board, any Vice Chairman, its President or a Vice President and by
its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Agent.
"NYSE" has the meaning specified in Section 5.1.
"Officer's Certificate" means a certificate signed by the
Chairman of the Board, any Vice Chairman of the Board, the President,
any Vice President, the Treasurer, any Assistant Treasurer, the
<PAGE>
Secretary or any Assistant Secretary of the Company and delivered to
the Agent.
"Opinion of Counsel" means an opinion in writing signed by
legal counsel, who may be an employee of or counsel to the Company or
an Affiliate and who shall be reasonably acceptable to the Agent.
"Outstanding Securities," with respect to any Income PRIDES
or Growth PRIDES, means, as of the date of determination, all Income
PRIDES or Growth PRIDES evidenced by Certificates theretofore
authenticated, executed and delivered under this Agreement, except:
(i) If a Termination Event has occurred, (A)
Growth PRIDES and (B) Income PRIDES for which the Stated
Amount of the related Preferred Security or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, or
a Liquidation Distribution in respect of such Preferred
Security, as the case may be, has been theretofore deposited
with the Agent in trust for the Holders of such Income
PRIDES;
(ii) Income PRIDES and Growth PRIDES evidenced
by Certificates theretofore cancelled by the Agent or
delivered to the Agent for cancellation or deemed cancelled
pursuant to the provisions of this Agreement; and
(iii) Income PRIDES and Growth PRIDES evidenced
by Certificates in exchange for or in lieu of which other
Certificates have been authenticated, executed on behalf of
the Holder and delivered pursuant to this Agreement, other
than any such Certificate in respect of which there shall
have been presented to the Agent proof satisfactory to it
that such Certificate is held by a bona fide purchaser in
whose hands the Income PRIDES or Growth PRIDES evidenced by
such Certificate are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
number of the Income PRIDES or Growth PRIDES have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Income PRIDES
or Growth PRIDES owned by the Company or any Affiliate of the Company shall
be disregarded and deemed not to be outstanding, except that, in determining
whether the Agent shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Income
PRIDES or Growth PRIDES which a Responsible Officer of the Agent knows to be
so owned shall be so disregarded. Income PRIDES or Growth PRIDES so owned
which have been pledged in good faith may be regarded as Outstanding
Securities if the pledgee establishes to the satisfaction of the Agent the
pledgee's right so to act with respect to such Income PRIDES or Growth PRIDES
and that the pledgee is not the Company or any Affiliate of the Company.
"Payment Date" means each February 16, May 16, August 16 and
November 16, commencing , 1998.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or government
or any agency or political subdivision thereof.
<PAGE>
"Permitted Investments" has the meaning set forth in Section
1 of the Pledge Agreement.
"Pledge" means the pledge under the Pledge Agreement of the
Preferred Securities, the Treasury Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, in each case
constituting a part of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of
the date hereof, by and among the Company, the Collateral Agent and
the Agent, on its own behalf and as attorney-in-fact for the Holders
from time to time of the Securities.
"Predecessor Certificate" means a Predecessor Income PRIDES
Certificate or a Predecessor Growth PRIDES Certificate.
"Predecessor Growth PRIDES Certificate" of any particular
Growth PRIDES Certificate means every previous Growth PRIDES
Certificate evidencing all or a portion of the rights and obligations
of the Company and the Holder under the Growth PRIDES evidenced
thereby; and, for the purposes of this definition, any Growth PRIDES
Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen
Growth PRIDES Certificate shall be deemed to evidence the same rights
and obligations of the Company and the Holder as the mutilated,
destroyed, lost or stolen Growth PRIDES Certificate.
"Predecessor Income PRIDES Certificate" of any particular
Income PRIDES Certificate means every previous Income PRIDES
Certificate evidencing all or a portion of the rights and obligations
of the Company and the Holder under the Income PRIDES evidenced
thereby; and, for the purposes of this definition, any Income PRIDES
Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen
Income PRIDES Certificate shall be deemed to evidence the same rights
and obligations of the Company and the Holder as the mutilated,
destroyed, lost or stolen Income PRIDES Certificate.
"Preferred Securities" means the ____% Trust Originated
Preferred Securities of the Trust, each having a stated liquidation
amount of $10, representing preferred undivided beneficial interests
in the assets of the Trust.
"Proceeds" has the meaning set forth in Section 1 of the
Pledge Agreement.
"Purchase Contract," when used with respect to any Security,
means the contract forming a part of such Security and obligating the
Company to (i) sell and the Holder of such Security to purchase
Common Stock and (ii) pay the Holder Contract Adjustment Payments, if
any, on the terms and subject to the conditions set forth in Article
Five hereof.
"Purchase Contract Settlement Date" means __________ 16,
2001.
<PAGE>
"Purchase Contract Settlement Fund" has the meaning
specified in Section 5.5.
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section
5.6(a)(6).
"Record Date" for the distribution and Contract Adjustment
Payments payable on any Payment Date means, as to any Global
Certificate, the Business Day next preceding such Payment Date, and
as to any other Certificate, a day selected by the Company which
shall be more than one Business Day but less than 60 Business Days
prior to such Payment Date.
"Register" means the Income PRIDES Register and the Growth
PRIDES Register.
"Registrar" means the Income PRIDES Registrar and the Growth
PRIDES Registrar.
"Remarketing Agent" has the meaning specified in Section
5.4.
"Remarketing Agreement" means the Remarketing Agreement
dated _______ ___, 1998 by and between the Company, the Trust, the
Remarketing Agent and the Purchase Contract Agent.
"Remarketing Fee" has the meaning specified in Section 5.4.
"Remarketing Purchase Agreement" has the meaning specified
in the Remarketing Agreement.
"Reorganization Event" has the meaning specified in Section
5.6(b).
"Responsible Officer," when used with respect to the Agent,
means any officer of the Agent assigned by the Agent to administer
its corporate trust matters.
"Security" means an Income PRIDES or a Growth PRIDES.
"Senior Indebtedness" means indebtedness of any kind of the
Company unless the instrument under which such indebtedness is
incurred expressly provides that it is on parity with or subordinated
in right of payment to the Contract Adjustment Payments.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means $10.
"Termination Date" means the date, if any, on which a
Termination Event occurs.
"Termination Event" means the occurrence of any of the
following events: (i) at any time on or prior to the Purchase
Contract Settlement Date, a judgment, decree or court order shall
<PAGE>
have been entered granting relief under the Bankruptcy Code,
adjudicating the Company to be insolvent, or approving as properly
filed a petition seeking reorganization or liquidation of the Company
or any other similar applicable Federal or State law, and, unless
such judgment, decree or order shall have been entered within 60 days
prior to the Purchase Contract Settlement Date, such decree or order
shall have continued undischarged and unstayed for a period of 60
days; or (ii) a judgment, decree or court order for the appointment
of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company or of its property, or for the winding up
or liquidation of its affairs, shall have been entered, and, unless
such judgment, decree or order shall have been entered within 60 days
prior to the Purchase Contract Settlement Date, such judgment, decree
or order shall have continued undischarged and unstayed for a period
of 60 days, or (iii) at any time on or prior to the Purchase Contract
Settlement Date the Company shall file a petition for relief under
the Bankruptcy Code, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or consent
seeking reorganization or liquidation under the Bankruptcy Code or
any other similar applicable Federal or State law, or shall consent
to the filing of any such petition, or shall consent to the
appointment of a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of it or of its property, or shall make an
assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due.
"Threshold Appreciation Price" has the meaning specified in
Section 5.1.
"TIA" means the Trust Indenture Act of 1939, as amended, or
any successor statute.
"Trading Day" has the meaning specified in Section 5.1.
"Treasury Security" means zero-coupon U.S. Treasury
Securities (Cusip Number ) which are the principal strip of the
______% U.S. Treasury Securities which mature on , 2001.
"Trust" means Ingersoll-Rand Financing I, a statutory
business trust formed under the laws of the State of Delaware, or any
successor thereto by merger or consolidation.
"Underwriting Agreement" means the Underwriting Agreement
dated ________ ___, 1998 between the Company, the Trust, and Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
"Vice President" means any vice president, whether or not
designated by a number or a word or words added before or after the
title "vice president."
Section 1.2. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement,
upon any application or request by the Company to the Agent to take any
action under any provision of this Agreement, the Company shall furnish to
the Agent an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Agreement relating to the proposed action have been
<PAGE>
complied with and, if requested by the Agent, an Opinion of Counsel stating
that, in the opinion of such counsel, all such conditions precedent, if any,
have been complied with, except that in the case of any such application or
request as to which the furnishing of such documents is specifically required
by any provision of this Agreement relating to such particular application or
request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with
a condition or covenant provided for in this Agreement shall include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, he or she has made such examination or investigation as
is necessary to enable such individual to express an informed opinion
as to whether or not such covenant or condition has been complied
with; and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied with.
Section 1.3. Form of Documents Delivered to Agent.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion
of, only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or
several documents.
Any certificate or opinion of an officer of the Company may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Agreement, they may, but need not, be
consolidated and form one instrument.
<PAGE>
Section 1.4. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Agreement to be
given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person
or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument
or instruments are delivered to the Agent and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Agreement and (subject to Section
7.1) conclusive in favor of the Agent and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved in any manner which the Agent
deems sufficient.
(c) The ownership of Securities shall be proved by the
Income PRIDES Register or the Growth PRIDES Register, as the case may be.
(d) Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the Holder of any Certificate shall
bind every future Holder of the same Certificate and the Holder of every
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered
to be done by the Agent or the Company in reliance thereon, whether or not
notation of such action is made upon such Certificate.
(e) The Company may set any day as a record date for the
purpose of determining the Holders of Outstanding Securities entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Agreement to be
given, made or taken by Holders of Securities. If any record date is set
pursuant to this paragraph, the Holders of the Outstanding Income PRIDES and
the Outstanding Growth PRIDES, as the case may be, on such record date, and
no other Holders, shall be entitled to take the relevant action with respect
to the Income PRIDES or the Growth PRIDES, as the case may be, whether or not
such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite number of Outstanding
Securities on such record date. Nothing in this paragraph shall be construed
to prevent the Company from setting a new record date for any action for
which a record date has previously been set pursuant to this paragraph
(whereupon the record date previously set shall automatically and with no
action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by
Holders of the requisite number of Outstanding Securities on the date such
action is taken. Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Expiration Date to be
given to the Agent in writing and to each Holder of Securities in the manner
set forth in Section 1.6.
<PAGE>
With respect to any record date set pursuant to this
Section, the Company may designate any date as the "Expiration Date" and from
time to time may change the Expiration Date to any earlier or later day;
provided that no such change shall be effective unless notice of the proposed
new Expiration Date is given to the Agent in writing, and to each Holder of
Securities in the manner set forth in Section 1.6, on or prior to the
existing Expiration Date. If an Expiration Date is not designated with
respect to any record date set pursuant to this Section, the Company shall be
deemed to have initially designated the 180th day after such record date as
the Expiration Date with respect thereto, subject to its right to change the
Expiration Date as provided in this paragraph. Notwithstanding the
foregoing, no Expiration Date shall be later than the 180th day after the
applicable record date.
Section 1.5. Notices.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Agreement to be made upon, given or furnished to, or filed with,
(1) the Agent by any Holder or by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, to the
Agent at The First National Bank of Chicago, One First National
Plaza, Suite 0126, Chicago, IL 60670-0126, Attention: Corporate Trust
Services Division, or at any other address previously furnished in
writing by the Agent to the Holders and the Company; or
(2) the Company by the Agent or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, to the
Company at Ingersoll-Rand Company, 200 Chestnut Ridge Road, Woodcliff
Lake, New Jersey 07675, Attention: Corporate Secretary, or at any
other address previously furnished in writing to the Agent by the
Company; or
(3) the Collateral Agent by the Agent, the Company or
any Holder shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if made, given, furnished or
filed in writing and personally delivered or mailed, first-class
postage prepaid, addressed to the Collateral Agent at The Chase
Manhattan Bank, 450 West 33rd Street, 15th Floor, New York, NY 10001,
Attention: Corporate Trust Administration, or at any other address
previously furnished in writing by the Collateral Agent to the Agent,
the Company and the Holders; or
(4) the Institutional Trustee by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid,
addressed to the Institutional Trustee at [ ],
Attention: Corporate Trust Services Division, or at any other address
previously furnished in writing by the Institutional Trustee to the
Company; or
<PAGE>
(5) the Indenture Trustee by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid,
addressed to the Indenture Trustee at [ ] or at
any other address previously furnished in writing by the Indenture
Trustee to the Company.
Section 1.6. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at its address as it appears in the
applicable Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed to any particular Holder shall affect
the sufficiency of such notice with respect to other Holders. Where this
Agreement provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers
of notice by Holders shall be filed with the Agent, but such filing shall not
be a condition precedent to the validity of any action taken in reliance
upon such waiver.
In case by reason of the suspension of regular mail service
or by reason of any other cause it shall be impracticable to give such notice
by mail, then such notification as shall be made with the approval of the
Agent shall constitute a sufficient notification for every purpose hereunder.
Section 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction
hereof.
Section 1.8. Successors and Assigns.
All covenants and agreements in this Agreement by the
Company shall bind its successors and assigns, whether so expressed or not.
Section 1.9. Separability Clause.
In case any provision in this Agreement or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof and thereof shall not in
any way be affected or impaired thereby.
Section 1.10. Benefits of Agreement.
Nothing in this Agreement or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and, to the extent provided hereby, the Holders, any
benefits or any legal or equitable right, remedy or claim under this
Agreement. The Holders from time to time shall be beneficiaries of this
Agreement and shall be bound by all of the terms and conditions hereof and of
<PAGE>
the Securities evidenced by their Certificates by their acceptance of
delivery of such Certificates.
Section 1.11. Governing Law.
This Agreement and the Securities shall be governed by and
construed in accordance with the laws of the State of New York.
Section 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business
Day, then (notwithstanding any other provision of this Agreement or the
Income PRIDES Certificates or the Growth PRIDES Certificates) payment of the
Contract Adjustment Payments, if any, shall not be made on such date, but
such payments shall be made on the next succeeding Business Day with the same
force and effect as if made on such Payment Date, provided that no interest
shall accrue or be payable by the Company or any Holder for the period from
and after any such Payment Date, except that, if such next succeeding
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day with the same force and effect
as if made on such Payment Date.
In any case where any Purchase Contract Settlement Date
shall not be a Business Day, then (notwithstanding any other provision of
this Agreement, the Income PRIDES Certificates or the Growth PRIDES
Certificates), the Purchase Contracts shall not be performed on such date,
but the Purchase Contracts shall be performed on the immediately following
Business Day with the same force and effect as if performed on the Purchase
Contract Settlement Date.
Section 1.13. Counterparts.
This Agreement may be executed in any number of counterparts
by the parties hereto on separate counterparts, each of which, when so
executed and delivered, shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
Section 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all
reasonable times during normal business hours at the Corporate Trust Office
for inspection by any Holder.
ARTICLE II
Certificate Forms
Section 2.1. Forms of Certificates Generally.
The Income PRIDES Certificates (including the form of
Purchase Contract forming part of the Income PRIDES evidenced thereby) shall
be in substantially the form set forth in Exhibit A hereto, with such
letters, numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as may be
required by the rules of any securities exchange on which the Income PRIDES
are listed or any depositary therefor, or as may, consistently herewith, be
<PAGE>
determined by the officers of the Company executing such Income PRIDES
Certificates, as evidenced by their execution of the Income PRIDES
Certificates.
The definitive Income PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Income PRIDES evidenced by such Income PRIDES Certificates, consistent with
the provisions of this Agreement, as evidenced by their execution thereof.
The Growth PRIDES Certificates (including the form of
Purchase Contracts forming part of the Growth PRIDES evidenced thereby) shall
be in substantially the form set forth in Exhibit B hereto, with such
letters, numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as may be
required by the rules of any securities exchange on which the Growth PRIDES
may be listed or any depositary therefor, or as may, consistently herewith,
be determined by the officers of the Company executing such Growth PRIDES
Certificates, as evidenced by their execution of the Growth PRIDES
Certificates.
The definitive Growth PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Growth PRIDES evidenced by such Growth PRIDES Certificates, consistent with
the provisions of this Agreement, as evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf
of the Holders and delivered hereunder shall bear a legend in substantially
the following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS
REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF.
THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE
OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN
SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Section 2.2. Form of Agent's Certificate of
Authentication.
The form of the Agent's certificate of authentication of the
Income PRIDES shall be in substantially the form set forth on the form of the
Income PRIDES Certificates.
The form of the Agent's certificate of authentication of the
Growth PRIDES shall be in substantially the form set forth on the form of the
Growth PRIDES Certificates.
<PAGE>
ARTICLE III
The Securities
Section 3.1. Title and Terms; Denominations.
The aggregate number of Income PRIDES evidenced by
Certificates authenticated, executed on behalf of the Holders and delivered
hereunder is limited to ___________ except for Certificates authenticated,
executed and delivered upon registration of transfer of, in exchange for, or
in lieu of, other Certificates pursuant to Section 3.4, 3.5, 3.10, 3.13,
3.14, 5.9 or 8.5.
The Certificates shall be issuable only in registered form
and only in denominations of a single Income PRIDES or Growth PRIDES and any
integral multiple thereof.
Section 3.2. Rights and Obligations Evidenced by the
Certificates.
Each Income PRIDES Certificate shall evidence the number of
Income PRIDES specified therein, with each such Income PRIDES representing
the ownership by the Holder thereof of a beneficial interest in a Preferred
Security or the Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, subject to the Pledge of such Preferred Security or the
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
by such Holder pursuant to the Pledge Agreement, and the rights and
obligations of the Holder thereof and the Company under one Purchase
Contract. The Agent as attorney-in-fact for, and on behalf of, the Holder of
each Income PRIDES shall pledge, pursuant to the Pledge Agreement, the
Preferred Security or the Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, forming a part of such Income PRIDES, to the
Collateral Agent and grant to the Collateral Agent a security interest in the
right, title, and interest of such Holder in such Preferred Security or the
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
for the benefit of the Company, to secure the obligation of the Holder under
each Purchase Contract to purchase the Common Stock of the Company. Prior to
the purchase of shares of Common Stock under each Purchase Contract, such
Purchase Contracts shall not entitle the Holder of an Income PRIDES
Certificates to any of the rights of a holder of shares of Common Stock,
including, without limitation, the right to vote or receive any dividends or
other payments or to consent or to receive notice as stockholders in respect
of the meetings of stockholders or for the election of directors of the
Company or for any other matter, or any other rights whatsoever as
stockholders of the Company.
Each Growth PRIDES Certificate shall evidence the number of
Growth PRIDES specified therein, with each such Growth PRIDES representing
the ownership by the Holder thereof of a 1/100 undivided beneficial interest
in a Treasury Security with a principal amount equal to $1,000 subject to the
Pledge of such Treasury Security by such Holder pursuant to the Pledge
Agreement, and the rights and obligations of the Holder thereof and the
Company under one Purchase Contract. Prior to the purchase, if any, of
shares of Common Stock under the Purchase Contracts, such Growth PRIDES
Certificates shall not entitle the Holders of Growth PRIDES Certificates to
any of the rights of a holder of shares of Common Stock, including, without
limitation, the right to vote or receive any dividends or other payments or
<PAGE>
to consent or to receive notice as stockholders in respect of the meetings of
stockholders or for the election of directors of the Company or for any other
matter, or any other rights whatsoever as stockholders of the Company.
Section 3.3. Execution, Authentication, Delivery and
Dating.
Subject to the provisions of Sections 3.13 and 3.14 hereof,
upon the execution and delivery of this Agreement, and at any time and from
time to time thereafter, the Company may deliver Certificates executed by the
Company to the Agent for authentication, execution on behalf of the Holders
and delivery, together with its Issuer Order for authentication of such
Certificates, and the Agent in accordance with such Issuer Order shall
authenticate, execute on behalf of the Holders and deliver such Certificates.
The Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its Vice Chairman of the Board, its President
or one of its Vice Presidents or Treasurer. The signature of any of these
officers on the Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be
valid until such Certificate has been executed on behalf of the Holder by the
manual signature of an authorized signatory of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Agent
shall be conclusive evidence that the Holder of such Certificate has entered
into the Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its
authentication.
No Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on
such Certificate a certificate of authentication substantially in the form
provided for herein executed by an authorized signatory of the Agent by
manual signature, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been
duly authenticated and delivered hereunder.
Section 3.4. Temporary Certificates.
Pending the preparation of definitive Certificates, the
Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holders, and deliver, in lieu of such
definitive Certificates, temporary Certificates which are in substantially
the form set forth in Exhibit A or Exhibit B hereto, as the case may be, with
such letters, numbers or other marks of identification or designation and
such legends or endorsements printed, lithographed or engraved thereon as may
be required by the rules of any securities exchange on which the Income
PRIDES or Growth PRIDES are listed, or as may, consistently herewith, be
determined by the officers of the Company executing such Certificates, as
evidenced by their execution of the Certificates.
<PAGE>
If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the Corporate Trust Office, at the expense of the Company and
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Certificates, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver in exchange therefor, one or more definitive Certificates of like
tenor and denominations and evidencing a like number of Income PRIDES or
Growth PRIDES, as the case may be, as the temporary Certificate or
Certificates so surrendered. Until so exchanged, the temporary Certificates
shall in all respects evidence the same benefits and the same obligations
with respect to the Income PRIDES or Growth PRIDES, as the case may be,
evidenced thereby as definitive Certificates.
Section 3.5. Registration; Registration of Transfer and
Exchange.
The Agent shall keep at the Corporate Trust Office a
register (the "Income PRIDES Register") in which, subject to such reasonable
regulations as it may prescribe, the Agent shall provide for the registration
of Income PRIDES Certificates and of transfers of Income PRIDES Certificates
(the Agent, in such capacity, the "Income PRIDES Registrar") and a Register
(the "Growth PRIDES Register") in which, subject to such reasonable
regulations as it may prescribe, the Agent shall provide for the registration
of the Growth PRIDES Certificates and transfers of Growth PRIDES Certificates
(the Agent, in such capacity, the "Growth PRIDES Registrar").
Upon surrender for registration of transfer of any
Certificate at the Corporate Trust Office, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on behalf of
the designated transferee or transferees, and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of any
authorized denominations, like tenor, and evidencing a like number of Income
PRIDES or Growth PRIDES, as the case may be.
At the option of the Holder, Certificates may be exchanged
for other Certificates, of any authorized denominations and evidencing a like
number of Income PRIDES or Growth PRIDES, as the case may be, upon surrender
of the Certificates to be exchanged at the Corporate Trust Office. Whenever
any Certificates are so surrendered for exchange, the Company shall execute
and deliver to the Agent, and the Agent shall authenticate, execute on behalf
of the Holder, and deliver the Certificates which the Holder making the
exchange is entitled to receive.
All Certificates issued upon any registration of transfer or
exchange of a Certificate shall evidence the ownership of the same number of
Income PRIDES or Growth PRIDES, as the case may be, and be entitled to the
same benefits and subject to the same obligations, under this Agreement as
the Income PRIDES or Growth PRIDES, as the case may be, evidenced by the
Certificate surrendered upon such registration of transfer or exchange.
Every Certificate presented or surrendered for registration
of transfer or for exchange shall (if so required by the Agent) be duly
endorsed, or be accompanied by a written instrument of transfer in form
<PAGE>
satisfactory to the Company and the Agent duly executed, by the Holder
thereof or its attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of a Certificate, but the Company and the Agent may
require payment from the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration
of transfer or exchange of Certificates, other than any exchanges pursuant to
Sections 3.6 and 8.5 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent shall not be
obligated to authenticate, execute on behalf of the Holder and deliver any
Certificate presented or surrendered for registration of transfer or for
exchange on or after the Business Day immediately preceding the earlier of
the Purchase Contract Settlement Date or the Termination Date. In lieu of
delivery of a new Certificate, upon satisfaction of the applicable conditions
specified above in this Section and receipt of appropriate registration or
transfer instructions from such Holder, the Agent shall (i) if the Purchase
Contract Settlement Date has occurred, deliver the shares of Common Stock
issuable in respect of the Purchase Contracts forming a part of the
Securities evidenced by such Certificate, (ii) in the case of Income PRIDES,
if a Termination Event shall have occurred prior to the Purchase Contract
Settlement Date, transfer the aggregate Stated Amount of the Preferred
Securities or the Treasury Portfolio, as applicable, evidenced thereby, or
(iii) in the case of Growth PRIDES, if a Termination Event shall have
occurred prior to the Purchase Contract Settlement Date, transfer the
Treasury Securities evidenced thereby, in each case subject to the applicable
conditions and in accordance with the applicable provisions of Article Five
hereof.
Section 3.6. Book-Entry Interests.
The Certificates, on original issuance, will be issued in
the form of one or more, fully registered Global Certificates, to be
delivered to the Depositary by, or on behalf of, the Company. Such Global
Certificate shall initially be registered on the books and records of the
Company in the name of Cede & Co., the nominee of the Depositary, and no
Beneficial Owner will receive a definitive Certificate representing such
Beneficial Owner's interest in such Global Certificate, except as provided in
Section 3.9. The Agent shall enter into an agreement with the Depositary if
so requested by the Company. Unless and until definitive, fully registered
Certificates have been issued to Beneficial Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in full
force and effect;
(b) the Company shall be entitled to deal with the
Clearing Agency for all purposes of this Agreement (including the
payment of Contract Adjustment Payments, if any, and receiving
approvals, votes or consents hereunder) as the Holder of the
Securities and the sole holder of the Global Certificate(s) and shall
have no obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section
3.6 conflict with any other provisions of this Agreement, the
provisions of this Section 3.6 shall control; and
<PAGE>
(d) the rights of the Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Beneficial
Owners and the Clearing Agency and/or the Clearing Agency
Participants. The Clearing Agency will make book entry transfers
among Clearing Agency Participants and receive and transmit payments
of Contract Adjustment Payments to such Clearing Agency Participants.
Section 3.7. Notices to Holders.
Whenever a notice or other communication to the Holders is
required to be given under this Agreement, the Company or the Company's agent
shall give such notices and communications to the Holders and, with respect
to any Securities registered in the name of a Clearing Agency or the nominee
of a Clearing Agency, the Company or the Company's agent shall, except as set
forth herein, have no obligations to the Beneficial Owners.
Section 3.8. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities, the Company may, in its
sole discretion, appoint a successor Clearing Agency with respect to the
Securities.
Section 3.9. Definitive Certificates.
If (i) a Clearing Agency elects to discontinue its services
as securities depositary with respect to the Securities and a successor
Clearing Agency is not appointed within 90 days after such discontinuance
pursuant to Section 3.8, (ii) the Company elects to terminate the book-entry
system through the Clearing Agency with respect to the Securities, or (iii)
there shall have occurred and be continuing a default by the Company in
respect of its obligations under one or more Purchase Contracts, then upon
surrender of the Global Certificates representing the Book-Entry Interests
with respect to the Securities by the Clearing Agency, accompanied by
registration instructions, the Company shall cause definitive Certificates to
be delivered to Beneficial Owners in accordance with the instructions of the
Clearing Agency. The Company shall not be liable for any delay in delivery
of such instructions and may conclusively rely on and shall be protected in
relying on, such instructions.
Section 3.10. Mutilated, Destroyed, Lost and Stolen
Certificates.
If any mutilated Certificate is surrendered to the Agent,
the Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver in exchange
therefor, a new Certificate at the cost of the Holder, evidencing the same
number of Income PRIDES or Growth PRIDES, as the case may be, and bearing a
Certificate number not contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i)
evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) such security or indemnity at the cost of the Holder as
may be required by them to hold each of them and any agent of any of them
harmless, then, in the absence of notice to the Company or the Agent that
such Certificate has been acquired by a bona fide purchaser, the Company
<PAGE>
shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holder, and deliver to the Holder, in lieu of any
such destroyed, lost or stolen Certificate, a new Certificate, evidencing the
same number of Income PRIDES or Growth PRIDES, as the case may be, and
bearing a Certificate number not contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent shall not be
obligated to authenticate, execute on behalf of the Holder, and deliver to
the Holder, a Certificate on or after the Business Day immediately preceding
the earlier of the Purchase Contract Settlement Date or the Termination Date.
In lieu of delivery of a new Certificate, upon satisfaction of the applicable
conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Agent shall (i)
if the Purchase Contract Settlement Date has occurred, deliver the shares of
Common Stock issuable in respect of the Purchase Contracts forming a part of
the Securities evidenced by such Certificate, or (ii) if a Termination Event
shall have occurred prior to the Purchase Contract Settlement Date, transfer
the Preferred Securities, the appropriate Applicable Ownership Interest of
the Treasury Portfolio or the Treasury Securities, as the case may be,
evidenced thereby, in each case subject to the applicable conditions and in
accordance with the applicable provisions of Article Five hereof.
Upon the issuance of any new Certificate under this Section,
the Company and the Agent may require the payment by the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses
of the Agent) connected therewith.
Every new Certificate issued pursuant to this Section in
lieu of any destroyed, lost or stolen Certificate shall constitute an
original additional contractual obligation of the Company and of the Holder
in respect of the Security evidenced thereby, whether or not the destroyed,
lost or stolen Certificate (and the Securities evidenced thereby) shall be at
any time enforceable by anyone, and shall be entitled to all the benefits and
be subject to all the obligations of this Agreement equally and
proportionately with any and all other Certificates delivered hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen
Certificates.
Section 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration
of transfer, the Company and the Agent, and any agent of the Company or the
Agent, may treat the Person in whose name such Certificate is registered as
the owner of the Income PRIDES or Growth PRIDES evidenced thereby, for the
purpose of receiving distributions on the Preferred Securities or on the
maturing quarterly interest strips of the Treasury Portfolio, as applicable,
receiving payments of Contract Adjustment Payments, performance of the
Purchase Contracts and for all other purposes whatsoever, whether or not any
distributions on the Preferred Securities or the Contract Adjustment Payments
payable in respect of the Purchase Contracts constituting a part of the
Income PRIDES or Growth PRIDES evidenced thereby shall be overdue and
notwithstanding any notice to the contrary, and neither the Company nor the
<PAGE>
Agent, nor any agent of the Company or the Agent, shall be affected by notice
to the contrary.
Notwithstanding the foregoing, with respect to any Global
Certificate, nothing herein shall prevent the Company, the Agent or any agent
of the Company or the Agent, from giving effect to any written certification,
proxy or other authorization furnished by any Clearing Agency (or its
nominee), as a Holder, with respect to such Global Certificate or impair, as
between such Clearing Agency and owners of beneficial interests in such
Global Certificate, the operation of customary practices governing the
exercise of rights of such Clearing Agency (or its nominee) as Holder of such
Global Certificate.
Section 3.12. Cancellation.
All Certificates surrendered for delivery of shares of
Common Stock on or after the Purchase Contract Settlement Date, upon the
transfer of Preferred Securities, the appropriate Applicable Ownership
Interest of the Treasury Portfolio or Treasury Securities, as the case may
be, after the occurrence of a Termination Event or pursuant to an Early
Settlement, or upon the registration of a transfer or exchange of a Security,
or a Collateral Substitution or the re-establishment of an Income PRIDES
shall, if surrendered to any Person other than the Agent, be delivered to the
Agent and, if not already cancelled, shall be promptly cancelled by it. The
Company may at any time deliver to the Agent for cancellation any
Certificates previously authenticated, executed and delivered hereunder which
the Company may have acquired in any manner whatsoever, and all Certificates
so delivered shall, upon Issuer Order, be promptly cancelled by the Agent.
No Certificates shall be authenticated, executed on behalf of the Holder and
delivered in lieu of or in exchange for any Certificates cancelled as
provided in this Section, except as expressly permitted by this Agreement.
All cancelled Certificates held by the Agent shall be destroyed by the Agent
unless otherwise directed by Issuer Order.
If the Company or any Affiliate of the Company shall acquire
any Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Agent
cancelled or for cancellation.
Section 3.13. Establishment or Reestablishment of Growth
PRIDES.
A Holder may separate the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as
applicable, from the related Purchase Contracts in respect of an Income
PRIDES by substituting for such Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
Treasury Securities in an aggregate principal amount equal to the aggregate
Stated Amount of such Preferred Securities or for the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such
term) of the Treasury Portfolio, as applicable (a "Collateral
Substitution"), at any time from and after the date of this Agreement and on
or prior to the fifth Business Day immediately preceding the Purchase
Contract Settlement Date in the case of the Preferred Securities and on or
prior to the second Business Day immediately preceding the Purchase Contract
Settlement Date in the case of the appropriate Applicable Ownership Interest
of the Treasury Portfolio, in each case by (a) depositing with the Collateral
<PAGE>
Agent Treasury Securities having an aggregate principal amount equal to the
aggregate Stated Amount of the Preferred Securities comprising part of such
Income PRIDES or for the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio comprising part of such Income PRIDES, as the case may be, and (b)
(i) in the event that Contract Adjustment Payments are at a higher rate for
Income PRIDES than for Growth PRIDES, by delivering cash in an amount equal
to the excess of the Contract Adjustment Payments that would have accrued
since the last Payment Date through the date of substitution on the Growth
PRIDES being created by the holder, over the Contract Adjustment Payments
that have accrued over the same time period on the related Income PRIDES,
which amount the Agent shall promptly remit to the Company, and (ii)
transferring the related Income PRIDES to the Agent accompanied by a notice
to the Agent, substantially in the form of Exhibit D hereto, stating that the
Holder has transferred the relevant amount of Treasury Securities to the
Collateral Agent and requesting that the Agent instruct the Collateral Agent
to release the Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, underlying such
Income PRIDES, whereupon the Agent shall promptly give such instruction to
the Collateral Agent, substantially in the form of Exhibit C hereto. Upon
receipt of the Treasury Securities described in clause (a) above and the
instruction described in clause (b) above, in accordance with the terms of
the Pledge Agreement, the Collateral Agent will release to the Agent, on
behalf of the Holder, Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, having a
corresponding aggregate Stated Amount of such Preferred Securities or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, from
the Pledge, free and clear of the Company's security interest therein, and
upon receipt thereof the Agent shall promptly:
(i) cancel the related Income PRIDES;
(ii) transfer the Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver a Growth PRIDES Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Income PRIDES.
Holders who elect to separate the Preferred Securities or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, from the related Purchase Contract and to substitute
Treasury Securities for such Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
shall be responsible for any fees or expenses payable to the Collateral Agent
for its services as Collateral Agent in respect of the substitution, and the
Company shall not be responsible for any such fees or expenses.
Holders may make Collateral Substitutions (i) only in
integral multiples of 100 Income PRIDES if Preferred Securities are being
substituted by Treasury Securities, or (ii) only in integral multiples of
160,000 Income PRIDES if the appropriate Applicable Ownership Interests of
the Treasury Portfolio are being substituted by Treasury Securities.
<PAGE>
In the event a Holder making a Collateral Substitution
pursuant to this Section 3.13 fails to effect a book-entry transfer of the
Income PRIDES or fails to deliver an Income PRIDES Certificate(s) to the
Agent after depositing Treasury Securities with the Collateral Agent, the
Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, constituting a part of such Income
PRIDES, and any distributions on such Preferred Security or the Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, shall be
held in the name of the Agent or its nominee in trust for the benefit of such
Holder, until such Income PRIDES is so transferred or the Income PRIDES
Certificate is so delivered, as the case may be, or, with respect to an
Income PRIDES Certificate, such Holder provides evidence satisfactory to the
Company and the Agent that such Income PRIDES Certificate has been destroyed,
lost or stolen, together with any indemnity that may be required by the Agent
and the Company.
Except as described in this Section 3.13, for so long as the
Purchase Contract underlying an Income PRIDES remains in effect, such Income
PRIDES shall not be separable into its constituent parts, and the rights and
obligations of the Holder in respect of the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, and Purchase Contract comprising such Income PRIDES may be
acquired, and may be transferred and exchanged, only as an Income PRIDES.
Section 3.14. Establishment or Reestablishment of Income
PRIDES.
A Holder of a Growth PRIDES may create or recreate Income
PRIDES at any time (i) on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, if a Tax Event Redemption
has not occurred, and (ii) on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date, if a Tax Event Redemption
has occurred, in each case by (a) depositing with the Collateral Agent
Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, having an aggregate Stated Amount in
the case of the Preferred Securities, or an appropriate Applicable Ownership
Interest (as defined in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, equal to the aggregate principal
amount of the Treasury Securities comprising part of the Growth PRIDES and
(b) (i) in the event that Contract Adjustment Payments are at a higher rate
for Income PRIDES than for Growth PRIDES, by delivering to the Agent cash in
an amount equal to the excess of the Contract Adjustment Payments that would
have accrued since the last payment date through the date of substitution on
the Income PRIDES being created or recreated by such holders, over the
Contract Adjustment Payments that have accrued over the same time period on
the related Growth PRIDES transferring the related Growth PRIDES to the Agent
accompanied by a notice to the Agent, substantially in the form of Exhibit D
hereto, stating that the Holder has transferred the relevant amount of
Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, to the Collateral Agent and
requesting that the Agent instruct the Collateral Agent to release the
Treasury Securities underlying such Growth PRIDES, whereupon the Agent shall
promptly give such instruction to the Collateral Agent, substantially in the
form of Exhibit C hereto. Upon receipt of the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, described in clause (a) above and the instruction described in
clause (b) above, in accordance with the terms of the Pledge Agreement, the
<PAGE>
Collateral Agent will effect the release of the Treasury Securities having a
corresponding aggregate principal amount from the Pledge to the Agent free
and clear of the Company's security interest therein, and upon receipt
thereof the Agent shall promptly:
(i) cancel the related Growth PRIDES;
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver an Income PRIDES Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Growth PRIDES.
Holders of Growth PRIDES may establish or reestablish Income
PRIDES in integral multiples of 100 Growth PRIDES for 100 Income PRIDES if a
Tax Event Redemption has not occurred, and in integral multiples of 160,000
Growth PRIDES for 160,000 Income PRIDES if a Tax Event Redemption has
occurred.
Except as provided in this Section 3.14, for so long as the
Purchase Contract underlying a Growth PRIDES remains in effect, such Growth
PRIDES shall not be separable into its constituent parts and the rights and
obligations of the Holder of such Growth PRIDES in respect of the Treasury
Security and Purchase Contract comprising such Growth PRIDES may be acquired,
and may be transferred and exchanged only as a Growth PRIDES.
Section 3.15. Transfer of Collateral upon Occurrence of
Termination Event.
Upon the occurrence of a Termination Event and the transfer
to the Agent of the Preferred Securities, the appropriate Applicable
Ownership Interest of the Treasury Portfolio or the Treasury Securities, as
the case may be, underlying the Income PRIDES and the Growth PRIDES pursuant
to the terms of the Pledge Agreement, the Agent shall request transfer
instructions with respect to such Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio or Treasury
Securities, as the case may be, from each Holder by written request mailed to
such Holder at its address as it appears in the Income PRIDES Register or the
Growth PRIDES Register, as the case may be. Upon book-entry transfer of the
Income PRIDES or Growth PRIDES or delivery of an Income PRIDES Certificate or
Growth PRIDES Certificate to the Agent with such transfer instructions, the
Agent shall transfer the Preferred Securities, the Treasury Portfolio or
Treasury Securities, as the case may be, underlying such Income PRIDES or
Growth PRIDES, as the case may be, to such Holder by book-entry transfer, or
other appropriate procedures, in accordance with such instructions. In the
event a Holder of Income PRIDES or Growth PRIDES fails to effect such
transfer or delivery, the Preferred Securities, the appropriate Applicable
Ownership Interest of the Treasury Portfolio or Treasury Securities, as the
case may be, underlying such Income PRIDES or Growth PRIDES, as the case may
be, and any distributions thereon, shall be held in the name of the Agent or
its nominee in trust for the benefit of such Holder, until such Income PRIDES
or Growth PRIDES are transferred or the Income PRIDES Certificate or Growth
PRIDES Certificate is surrendered or such Holder provides satisfactory
evidence that such Income PRIDES Certificate or Growth PRIDES Certificate has
been destroyed, lost or stolen, together with any indemnity that may be
required by the Agent and the Company.
<PAGE>
Section 3.16. No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be
deemed expressly to have withheld any consent to the assumption under Section
365 of the Bankruptcy Code or otherwise, of the Purchase Contract by the
Company, receiver, liquidator or a person or entity performing similar
functions, its trustee in the event that the Company becomes the debtor under
the Bankruptcy Code or subject to other similar state or federal law
providing for reorganization or liquidation.
ARTICLE IV
The Preferred Securities
Section 4.1. Payment of Distribution; Rights to
Distributions Preserved; Distribution Rate
Reset; Notice.
A distribution on any Preferred Security or on the
appropriate Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, which is paid on any Payment Date shall, subject to receipt
thereof by the Agent from the Collateral Agent as provided by the terms of
the Pledge Agreement, be paid to the Person in whose name the Income PRIDES
Certificate (or one or more Predecessor Income PRIDES Certificates) of which
such Preferred Security or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, is a part is registered at the
close of business on the Record Date for such Payment Date.
Each Income PRIDES Certificate evidencing Preferred
Securities delivered under this Agreement upon registration of transfer of or
in exchange for or in lieu of any other Income PRIDES Certificate shall carry
the rights to distributions accrued and unpaid, and to accrue distributions,
which were carried by the Preferred Securities underlying such other Income
PRIDES Certificate.
In the case of any Income PRIDES with respect to which Cash
Settlement of the underlying Purchase Contract is effected on the Business
Day immediately preceding the Purchase Contract Settlement Date pursuant to
prior notice, or with respect to which Early Settlement of the underlying
Purchase Contract is effected on a Early Settlement Date, or with respect to
which a Collateral Substitution is effected, in each case on a date that is
after any Record Date and on or prior to the next succeeding Payment Date,
distributions on the Preferred Securities or on the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, underlying
such Income PRIDES otherwise payable on such Payment Date shall be payable on
such Payment Date notwithstanding such Cash Settlement or Early Settlement or
Collateral Substitution, and such distributions shall, subject to receipt
thereof by the Agent, be payable to the Person in whose name the Income
PRIDES Certificate (or one or more Predecessor Income PRIDES Certificates)
was registered at the close of business on the Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the
case of any Income PRIDES with respect to which Cash Settlement or Early
Settlement of the underlying Purchase Contract is effected on the Business
Day immediately preceding the Purchase Contract Settlement Date or an Early
Settlement Date, as the case may be, or with respect to which a Collateral
Substitution has been effected, distributions on the related Preferred
<PAGE>
Securities or on the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, that would otherwise be payable after
the Purchase Contract Settlement Date or Early Settlement Date shall not be
payable hereunder to the Holder of such Income PRIDES; provided, however,
that to the extent that such Holder continues to hold the separated Preferred
Securities that formerly comprised a part of such Holder's Income PRIDES,
such Holder shall be entitled to receive the distributions on such separated
Preferred Securities.
The applicable Coupon Rate on the Preferred Securities on
and after the Purchase Contract Settlement Date will be reset on the third
Business Day immediately preceding the Purchase Contract Settlement Date to
the Reset Rate (such Reset Rate to be in effect on and after the purchase
Contract Settlement Date). On the Reset Announcement Date the Reset Spread
and the Two-Year Benchmark Treasury to be used to determine the Reset Rate
will be announced by the Company. On the Business Day immediately following
the Reset Announcement Date, the Preferred Securities Holders will be
notified of such Reset Spread and Two-Year Benchmark Treasury by the Company.
Such notice shall be sufficiently given to Holders of Preferred Securities if
published in an Authorized Newspaper in The City of New York.
Not later than 7 calendar days nor more than 15 calendar
days prior to the Reset Announcement Date, the Company will notify the DTC or
its nominee (or any successor Clearing Agency or its nominee) by first-class
mail, postage prepaid, to notify the Beneficial Owners or Clearing Agency
Participants holding Income PRIDES or Growth PRIDES, of such Reset
Announcement Date and the procedures to be followed by such Holders of Income
PRIDES who intend to settle their obligation under the Purchase Contract with
separate cash on the Purchase Contract Settlement Date.
Section 4.2. Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will be
entitled to exercise the voting and any other consensual rights pertaining to
the Preferred Securities pledged with the Collateral Agent but only to the
extent instructed by the Holders as described below. Upon receipt of notice
of any meeting at which holders of Preferred Securities are entitled to vote
or upon any solicitation of consents, waivers or proxies of holders of
Preferred Securities, the Agent shall, as soon as practicable thereafter,
mail to the Holders of Income PRIDES a notice (a) containing such information
as is contained in the notice or solicitation, (b) stating that each Holder
on the record date set by the Agent therefor (which, to the extent possible,
shall be the same date as the record date for determining the holders of
Preferred Securities entitled to vote) shall be entitled to instruct the
Agent as to the exercise of the voting rights pertaining to the Preferred
Securities underlying their Income PRIDES and (c) stating the manner in which
such instructions may be given. Upon the written request of the Holders of
Income PRIDES on such record date, the Agent shall endeavor insofar as
practicable to vote or cause to be voted, in accordance with the instructions
set forth in such requests, the maximum number of Preferred Securities as to
which any particular voting instructions are received. In the absence of
specific instructions from the Holder of an Income PRIDES, the Agent shall
abstain from voting the Preferred Security underlying such Income PRIDES.
The Company hereby agrees, if applicable, to solicit Holders of Income PRIDES
to timely instruct the Agent in order to enable the Agent to vote such
Preferred Securities and the Trust shall covenant to such effect in the
Declaration.
<PAGE>
Section 4.3. Distribution of Debentures; Tax Event
Redemption.
Upon the occurrence of an Investment Company Event or a
liquidation of the Trust in accordance with the Declaration, a principal
amount of Debentures constituting the assets of the Trust and underlying the
Preferred Securities equal to the aggregate Stated Amount of the Pledged
Preferred Securities shall be delivered to the Collateral Agent in exchange
for the Pledged Preferred Securities. Thereafter, the Debentures will be
substituted for the Pledged Preferred Securities, and will be held by the
Collateral Agent in accordance with the terms of the Pledge Agreement to
secure the obligations of each Holder of an Income PRIDES to purchase the
Common Stock of the Company under the Purchase Contracts constituting a part
of such Income PRIDES. Following the occurrence of an Investment Company
Event or a liquidation of the Trust, the Holders and the Collateral Agent
shall have such security interests, rights and obligations with respect to
the Debentures as the Holders and the Collateral Agent had in respect of the
Preferred Securities subject to the Pledge thereof as provided in Articles
II, III, IV, V and VI of the Pledge Agreement, and any reference herein to
the Preferred Securities shall be deemed to be a reference to such
Debentures. The Company may cause to be made in any Income PRIDES
Certificates thereafter to be issued such change in phraseology and form (but
not in substance) as may be appropriate to reflect the liquidation of the
Trust and the substitution of Debentures for Preferred Securities as
Collateral.
Upon the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Redemption Price payable on the Tax
Event Redemption Date with respect to the Applicable Principle Amount of
Debentures shall be delivered to the Collateral Agent in exchange for the
Pledged Preferred Securities. Thereafter, pursuant to the terms of the
Pledge Agreement, the Collateral Agent will apply an amount equal to the
Redemption Amount of such Redemption Price to purchase on behalf of the
Holders of Income PRIDES the Treasury Portfolio and promptly remit the
remaining portion of such Redemption Price to the Agent for payment to the
Holders of such Income PRIDES. The Treasury Portfolio will be substituted
for the Pledged Preferred Securities, and will be held by the Collateral
Agent in accordance with the terms of the Pledge Agreement to secure the
obligation of each Holder of an Income PRIDES to purchase the Common Stock of
the Company under the Purchase Contract constituting a part of such Income
PRIDES. Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of Income PRIDES and the
Collateral Agent shall have such security interests, rights and obligations
with respect to the Treasury Portfolio as the Holder of Income PRIDES and the
Collateral Agent had in respect of the Preferred Security or Debentures, as
the case may be, subject to the Pledge thereof as provided in Articles II,
III, IV, V, and VI of the Pledge Agreement, and any reference herein to the
Preferred Security or the Debenture shall be deemed to be reference to such
Treasury Portfolio. The Company may cause to be made in any Income PRIDES
Certificates thereafter to be issued such change in phraseology and form (but
not in substance) as may be appropriate to reflect the liquidation of the
Trust and the substitution of the Treasury Portfolio for Preferred Securities
or Debentures as collateral.
<PAGE>
ARTICLE V
The Purchase Contracts
Section 5.1. Purchase of Shares of Common Stock.
Each Purchase Contract shall, unless an Early Settlement has
occurred in accordance with Section 5.9 hereof, obligate the Holder of the
related Security to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price"), a number of newly issued shares of Common Stock equal to the
Settlement Rate unless, on or prior to the Purchase Contract Settlement Date,
there shall have occurred a Termination Event with respect to the Security of
which such Purchase Contract is a part. The "Settlement Rate" is equal to
(a) if the Applicable Market Value (as defined below) is equal to or greater
than $_____ (the "Threshold Appreciation Price"), _____ shares of Common
Stock per Purchase Contract, (b) if the Applicable Market Value is less than
the Threshold Appreciation Price, but is greater than $_____, the number of
shares of Common Stock equal to the Stated Amount divided by the Applicable
Market Value and (c) if the Applicable Market Value is less than or equal to
$_____, _____ shares of Common Stock per Purchase Contract, in each case
subject to adjustment as provided in Section 5.6 (and in each case rounded
upward or downward to the nearest 1/10,000th of a share). As provided in
Section 5.10, no fractional shares of Common Stock will be issued upon
settlement of Purchase Contracts.
The "Applicable Market Value" means the average of the
Closing Price per share of Common Stock on each of the 20 consecutive Trading
Days ending on the third Trading Day immediately preceding the Purchase
Contract Settlement Date. The "Closing Price" of the Common Stock on any
date of determination means the closing sale price (or, if no closing price
is reported, the last reported sale price) of the Common Stock on the New
York Stock Exchange (the "NYSE") on such date or, if the Common Stock is not
listed for trading on the NYSE on any such date, as reported in the composite
transactions for the principal United States securities exchange on which the
Common Stock is so listed, or if the Common Stock is not so listed on a
United States national or regional securities exchange, as reported by The
Nasdaq Stock Market, or, if the Common Stock is not so reported, the last
quoted bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization, or, if
such bid price is not available, the market value of the Common Stock on such
date as determined by a nationally recognized independent investment banking
firm retained for this purpose by the Company. A "Trading Day" means a day
on which the Common Stock (A) is not suspended from trading on any national
or regional securities exchange or association or over-the-counter market at
the close of business and (B) has traded at least once on the national or
regional securities exchange or association or over-the-counter market that
is the primary market for the trading of the Common Stock.
Each Holder of an Income PRIDES or a Growth PRIDES, by its
acceptance thereof, irrevocably authorizes the Agent to enter into and
perform the related Purchase Contract on its behalf as its attorney-in-fact
(including the execution of Certificates on behalf of such Holder), agrees to
be bound by the terms and provisions thereof, covenants and agrees to perform
its obligations under such Purchase Contracts, and consents to the provisions
hereof, irrevocably authorizes the Agent as its attorney-in-fact to enter
into and perform the Pledge Agreement on its behalf as its attorney-in-fact,
<PAGE>
and consents to and agrees to be bound by the Pledge of the Preferred
Securities, the Treasury Portfolio or the Treasury Securities pursuant to the
Pledge Agreement; provided that upon a Termination Event, the rights of the
Holder of such Security under the Purchase Contract may be enforced without
regard to any other rights or obligations. Each Holder of an Income PRIDES
or a Growth PRIDES, by its acceptance thereof, further covenants and agrees,
that, to the extent and in the manner provided in Section 5.4 and the Pledge
Agreement, but subject to the terms thereof, payments in respect of the
Stated Amount of the Preferred Securities or the Proceeds of the Treasury
Securities or the Treasury Portfolio on the Purchase Contract Settlement Date
shall be paid by the Collateral Agent to the Company in satisfaction of such
Holder's obligations under such Purchase Contract and such Holder shall
acquire no right, title or interest in such payments.
Upon registration of transfer of a Certificate, the
transferee shall be bound (without the necessity of any other action on the
part of such transferee), under the terms of this Agreement, the Purchase
Contracts underlying such Certificate and the Pledge Agreement and the
transferor shall be released from the obligations under this Agreement, the
Purchase Contracts underlying the Certificates so transferred and the Pledge
Agreement. The Company covenants and agrees, and each Holder of a
Certificate, by its acceptance thereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
Section 5.2. Contract Adjustment Payments.
Subject to Section 5.3 herein, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments payable in respect of
each Purchase Contract to the Person in whose name a Certificate (or one or
more Predecessor Certificates) is registered at the close of business on the
Record Date next preceding such Payment Date. The Contract Adjustment
Payments will be payable at the office of the Agent in The City of New York
maintained for that purpose or, at the option of the Company, by check mailed
to the address of the Person entitled thereto at such Person's address as it
appears on the Income PRIDES Register or Growth PRIDES Register.
Upon the occurrence of a Termination Event, the Company's
obligation to pay Contract Adjustment Payments (including any accrued or
Deferred Contract Adjustment Payments) shall cease.
Each Certificate delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of (including as a
result of a Collateral Substitution or the re-establishment of an Income
PRIDES) any other Certificate shall carry the rights to Contract Adjustment
Payments accrued and unpaid, and to accrue Contract Adjustment Payments,
which were carried by the Purchase Contracts underlying such other
Certificates.
Subject to Section 5.9, in the case of any Security with
respect to which Early Settlement of the underlying Purchase Contract is
effected on an Early Settlement Date that is after any Record Date and on or
prior to the next succeeding Payment Date, Contract Adjustment Payments, if
any, otherwise payable on such Payment Date shall be payable on such Payment
Date notwithstanding such Early Settlement, and such Contract Adjustment
Payments shall be paid to the Person in whose name the Certificate evidencing
such Security (or one or more Predecessor Certificates) is registered at the
close of business on such Record Date. Except as otherwise expressly
<PAGE>
provided in the immediately preceding sentence, in the case of any Security
with respect to which Early Settlement of the underlying Purchase Contract is
effected on an Early Settlement Date, Contract Adjustment Payments that would
otherwise be payable after the Early Settlement Date with respect to such
Purchase Contract shall not be payable.
The Company's obligations with respect to Contract
Adjustment Payments, will be subordinated and junior in right of payment to
the Company's obligations under any Senior Indebtedness.
Section 5.3. Deferral of Payment Dates For Contract
Adjustment Payments.
The Company shall have the right, at any time prior to the
Purchase Contract Settlement Date, to defer the payment of any or all of the
Contract Adjustment Payments otherwise payable on any Payment Date, but only
if the Company shall give the Holders and the Agent written notice of its
election to defer such payment (specifying the amount to be deferred) at
least ten Business Days prior to the earlier of (i) the next succeeding
Payment Date or (ii) the date the Company is required to give notice of the
Record Date or Payment Date with respect to payment of such Contract
Adjustment Payments to the New York Stock Exchange or other applicable
self-regulatory organization or to Holders of the Securities, but in any
event not less than one Business Day prior to such Record Date. Any Contract
Adjustment Payments so deferred shall bear additional Contract Adjustment
Payments thereon at the rate of ____% per annum (computed on the basis of 360
day year of twelve 30 day months), compounding on each succeeding Payment
Date, until paid in full (such deferred installments of Contract Adjustment
Payments together with the additional Contract Adjustment Payments accrued
thereon, being referred to herein as the "Deferred Contract Adjustment
Payments"). Deferred Contract Adjustment Payments shall be due on the next
succeeding Payment Date except to the extent that payment is deferred
pursuant to this Section. No Contract Adjustment Payments may be deferred to
a date that is after the Purchase Contract Settlement Date. If the Purchase
Contracts are terminated upon the occurrence of a Termination Event, the
Holder's right to receive Contract Adjustment Payments and Deferred Contract
Adjustment Payments will terminate.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the Purchase
Contract Settlement Date, each Holder will receive on the Purchase Contract
Settlement Date in lieu of a cash payment a number of shares of Common Stock
(in addition to a number of shares of Common Stock equal to the Settlement
Rate) equal to (x) the aggregate amount of Deferred Contract Adjustment
Payments payable to such Holder divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the
payment of Contract Adjustment Payments, then, until the Deferred Contract
Adjustment Payments have been paid, the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital
stock or make guarantee payments with respect to the foregoing (other than
(i) purchases or acquisitions of shares of capital stock of the Company in
connection with the satisfaction by the Company of its obligations under any
employee or agent benefit plans or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date of
such event requiring the Company to purchase capital stock of the Company,
<PAGE>
(ii) as a result of a reclassification of the Company's capital stock or the
exchange or conversion of one class or series of the Company's capital stock
for another class or series of the Company's capital stock, (iii) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, (iv) dividends or distributions in
capital stock of the Company (or rights to acquire capital stock) or
repurchases or redemptions of capital stock solely from the issuance or
exchange of capital stock or (v) redemptions or repurchases of any rights
outstanding under a shareholder rights plan and the declaration thereunder of
a dividend of rights in the future).
No fractional shares of Common Stock will be issued by the
Company with respect to the payment of Deferred Contract Adjustment Payments
on the Purchase Contract Settlement Date. In lieu of fractional shares
otherwise issuable with respect to such payment of Deferred Contract
Adjustment Payments, the Holder will be entitled to receive an amount in cash
as provided in Section 5.10.
Section 5.4. Payment of Purchase Price.
(a)(1) Unless a Tax Event Redemption has occurred or a
Holder settles the underlying Purchase Contract through the early delivery of
cash to the Purchase Contract Agent in the manner described in Section 5.9,
each Holder of an Income PRIDES must notify the Agent by use of a notice in
substantially the form of Exhibit E hereto of its intention to pay in cash
("Cash Settlement") the Purchase Price for the shares of Common Stock to be
purchased pursuant to a Purchase Contract. Such notice shall be made on or
prior to 5:00 p.m., New York City time, on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date. The Agent shall promptly
notify the Collateral Agent of the receipt of such a notice from a Holder
intending to make a Cash Settlement.
(2) A Holder of an Income PRIDES who has so notified the
Agent of its intention to make a Cash Settlement is required to pay the
Purchase Price to the Collateral Agent prior to 11:00 a.m., New York City
time, on the Business Day immediately preceding the Purchase Contract
Settlement Date in lawful money of the United States by certified or
cashiers' check or wire transfer, in each case in immediately available funds
payable to or upon the order of the Company. Any cash received by the
Collateral Agent will be invested promptly by the Collateral Agent in
Permitted Investments and paid to the Company on the Purchase Contract
Settlement Date in settlement of the Purchase Contract in accordance with the
terms of this Agreement and the Pledge Agreement. Any funds received by the
Collateral Agent in respect of the investment earnings from the investment in
such Permitted Investments, will be distributed to the Agent when received
for payment to the Holder.
(3) If a Holder of an Income PRIDES fails to notify the
Agent of its intention to make a Cash Settlement in accordance with paragraph
(a)(i) above, such failure shall constitute an event of default and the
Holder shall be deemed to have consented to the disposition of the pledged
Preferred Securities pursuant to the Remarketing as described in paragraph
(b) below. If a Holder of an Income PRIDES does notify the Agent as provided
in paragraph (a)(i) above of its intention to pay the Purchase Price in cash,
but fails to make such payment as required by paragraph (a)(ii) above, such
failure shall also constitute a default; however, the Preferred Securities of
<PAGE>
such a Holder will not be remarketed but instead the Collateral Agent, for
the benefit of the Company, will exercise its rights as a secured party with
respect to such Preferred Securities, including those rights specified in
paragraph (c) below.
(b) In order to dispose of the Preferred Securities of
Income PRIDES Holders who have not notified the Agent of their intention to
effect a Cash Settlement as provided in paragraph (a)(i) above, the Company
shall engage a nationally recognized investment bank (the "Remarketing
Agent") pursuant to the Remarketing Agreement to sell such Preferred
Securities. In order to facilitate the remarketing, the Agent shall notify,
by 10:00 a.m., New York City time, on the fourth Business Day immediately
preceding the Purchase Contract Settlement Date, the Remarketing Agent of the
aggregate number of Preferred Securities to be remarketed. Concurrently, the
Collateral Agent, pursuant to the terms of the Pledge Agreement, will present
for remarketing such Preferred Securities to the Remarketing Agent. Upon
receipt of such notice from the Agent and such Preferred Securities from the
Collateral Agent, the Remarketing Agent will, on the third Business Day
immediately preceding the Purchase Contract Settlement Date, use its
reasonable efforts to remarket such Preferred Securities on such date at a
price of approximately 100.5% (but not less than 100%) of the aggregate
stated liquidation amount of such Preferred Securities, plus accrued and
unpaid distributions (including deferred distributions), if any, thereon.
After deducting as the remarketing fee ("Remarketing Fee") an amount not
exceeding 25 basis points (.25%) of the aggregate stated liquidation amount
of the remarketed Preferred Securities from any amount of such proceeds in
excess of the aggregate stated liquidation amount of the remarketed Preferred
Securities plus accrued and unpaid distributions (including any deferred
distributions), if any, then the Remarketing Agent will remit the entire
amount of the proceeds from such remarketing to the Collateral Agent. Such
portion of the proceeds, equal to the aggregate stated liquidation amount of
such Preferred Securities, will automatically be applied by the Collateral
Agent, in accordance with the Pledge Agreement to satisfy in full such Income
PRIDES holders' obligations to pay the Purchase Price for the Common Stock
under the related Purchase Contracts on the Purchase Contract Settlement
Date. Any proceeds in excess of those required to pay the Purchase Price and
the Remarketing Fee will be remitted to the Agent for payment to the Holders
of the related Income PRIDES. Income PRIDES Holders whose Preferred
Securities are so remarketed will not otherwise be responsible for the
payment of any Remarketing Fee in connection therewith. If, in spite of
using its reasonable efforts, the Remarketing Agent cannot remarket the
related Preferred Securities of such Holders of Income PRIDES at a price not
less then 100% of the aggregate stated liquidation amount of such Preferred
Securities plus accrued and unpaid distributions (including deferred
distributions), if any, the remarketing will be deemed to have failed (a
"Failed Remarketing") and in accordance with the terms of the Pledge
Agreement the Collateral Agent for the benefit of the Company will exercise
its rights as a secured party with respect to such Preferred Securities,
including those actions specified in paragraph (c) below; provided, that if
upon a Failed Remarketing the Collateral Agent exercises such rights for the
benefit of the Company with respect to such Preferred Securities, any accrued
and unpaid distributions (including any deferred distributions) on such
Preferred Securities will become payable by the Company to the Agent for
payment to the Beneficial Owner of the Income PRIDES to which such Preferred
Securities relates. Such payment will be made by the Company on or prior to
11 a.m. New York City time on the Purchase Contract Settlement Date in lawful
money of the United States by certified or cashiers' check or wire transfer
<PAGE>
in immediately available funds payable to or upon the order of the Agent.
The Company will cause a notice of such Failed Remarketing to be published on
the Second Business Day immediately preceding the Purchase Contract
Settlement Date in a daily newspaper in the English language of general
circulation in The City of New York, which is expected to be The Wall Street
Journal.
(c) With respect to any Preferred Securities
beneficially owned by Holders who have elected Cash Settlement but failed to
deliver cash as required in (a)(ii) above, or with respect to Preferred
Securities which are subject to a Failed Remarketing, the Collateral Agent
for the benefit of the Company reserves all of its rights as a secured party
with respect thereto and, subject to applicable law and paragraph (h) below,
may, among other things, (i) retain the Preferred Securities in full
satisfaction of the Holders obligations under the Purchase Contracts or (ii)
sell the Preferred Securities in one or more public or private sales.
(d)(1) Unless a Holder of Growth PRIDES or Income PRIDES
(if a Tax Event Redemption has occurred) settles the underlying Purchase
Contract through the early delivery of cash to the Purchase Contract Agent in
the manner described in Section 5.9, each Holder of a Growth PRIDES or Income
PRIDES (if a Tax Event Redemption has occurred) must notify the Agent by use
of a notice in substantially the form of Exhibit E hereto of its intention to
pay in cash the Purchase Price for the shares of Common Stock to be purchased
pursuant to a Purchase Contract on or prior to 5:00 p.m., New York City time,
on the second Business Day immediately preceding the Purchase Contract
Settlement Date.
(2) A Holder of a Growth PRIDES or Income PRIDES (if a
Tax Event Redemption has occurred) who has so notified the Agent of its
intention to make a Cash Settlement in accordance with paragraph (d)(i) above
is required to pay the Purchase Price to the Collateral Agent prior to 11:00
a.m., New York City time, on the Business Day immediately preceding the
Purchase Contract Settlement Date in lawful money of the United States by
certified or cashiers' check or wire transfer, in each case in immediately
available funds payable to or upon the order of the Company. Any cash
received by the Collateral Agent will be invested promptly by the Collateral
Agent in Permitted Investments and paid to the Company on the Purchase
Contract Settlement Date in settlement of the Purchase Contract in accordance
with the terms of this Agreement and the Pledge Agreement. Any funds
received by the Collateral Agent in respect of the investment earnings from
the investment in such Permitted Investments will be distributed to the Agent
when received for payment to the Holder.
(3) If a Holder of a Growth PRIDES fails to notify the
Agent of its intention to make a Cash Settlement in accordance with paragraph
(d)(i) above, or if a Holder of an Income PRIDES (if a Tax Event Redemption
has occurred) does notify the Agent as provided in paragraph (d)(i) above its
intention to pay the Purchase Price in cash, but fails to make such payment
as required by paragraph (d)(ii) above, then upon the maturity of the Pledged
Treasury Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, held by the Collateral Agent on the
Business Day immediately prior to the Purchase Contract Settlement Date, the
principal amount of the Treasury Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, received by
the Collateral Agent will be invested promptly in overnight Permitted
Investments. On the Purchase Contract Settlement Date an amount equal to the
<PAGE>
Purchase Price will be remitted to the Company as payment thereof without
receiving any instructions from the Holder. In the event the sum of the
proceeds from the related Pledged Treasury Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
and the investment earnings earned from such investments is in excess of the
aggregate Purchase Price of the Purchase Contracts being settled thereby, the
Collateral Agent will distribute such excess to the Agent for the benefit of
the Holder of the related Growth PRIDES or Income PRIDES when received.
(e) Any distribution to Holders of excess funds and
interest described above, shall be payable at the office of the Agent in The
City of New York maintained for that purpose or, at the option of the Holder,
by check mailed to the address of the Person entitled thereto at such address
as it appears on the Register.
(f) Unless a Holder settles the underlying Purchase
Contract through the early delivery of cash to the Collateral Agent in the
manner described herein, the Company shall not be obligated to issue any
shares of Common Stock in respect of a Purchase Contract or deliver any
certificate therefor to the Holder unless it shall have received payment in
full of the Purchase Price for the shares of Common Stock to be purchased
thereunder in the manner herein set forth.
(g) Upon Cash Settlement of any Purchase Contract, (i)
the Collateral Agent will in accordance with the terms of the Pledge
Agreement cause the Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
or the Pledged Treasury Securities underlying the relevant Security to be
released from the Pledge by the Collateral Agent free and clear of any
security interest of the Company and transferred to the Agent for delivery to
the Holder thereof or its designee as soon as practicable and (ii) subject to
the receipt thereof from the Collateral Agent, the Agent shall, by book-entry
transfer, or other appropriate procedures, in accordance with instructions
provided by the Holder thereof, transfer such Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, or such Treasury Securities (or, if no such instructions are
given to the Agent by the Holder, the Agent shall hold such Preferred
Securities or the Treasury Portfolio, as the case may be, or such Treasury
Securities, and any distribution thereon, in the name of the Agent or its
nominee in trust for the benefit of such Holder).
(h) The obligations of the Holders to pay the Purchase
Price are non-recourse obligations and are payable solely out of any Cash
Settlement or the proceeds of any Collateral Pledged to secure the
obligations of the Holders and in no event will Holders be liable for any
deficiency between the proceeds of Collateral disposition and the Purchase
Price.
Section 5.5. Issuance of Shares of Common Stock.
Unless a Termination Event shall have occurred on or prior
to the Purchase Contract Settlement Date or an Early Settlement shall have
occurred, on the Purchase Contract Settlement Date, upon its receipt of
payment in full of the Purchase Price for the shares of Common Stock
purchased by the Holders pursuant to the foregoing provisions of this Article
and subject to Section 5.6(b), the Company shall issue and deposit with the
Agent, for the benefit of the Holders of the Outstanding Securities, one or
<PAGE>
more certificates representing the newly issued shares of Common Stock
registered in the name of the Agent (or its nominee) as custodian for the
Holders (such certificates for shares of Common Stock, together with any
dividends or distributions for which a record date and payment date for such
dividend or distribution has occurred after the Purchase Contract Settlement
Date, being hereinafter referred to as the "Purchase Contract Settlement
Fund") to which the Holders are entitled hereunder. Subject to the
foregoing, upon surrender of a Certificate to the Agent on or after the
Purchase Contract Settlement Date, together with settlement instructions
thereon duly completed and executed, the Holder of such Certificate shall be
entitled to receive in exchange therefor a certificate representing that
number of whole shares of Common Stock which such Holder is entitled to
receive pursuant to the provisions of this Article Five (after taking into
account all Securities then held by such Holder) together with cash in lieu
of fractional shares as provided in Section 5.10 and any dividends or
distributions with respect to such shares constituting part of the Purchase
Contract Settlement Fund, but without any interest thereon, and the
Certificate so surrendered shall forthwith be cancelled. Such shares shall
be registered in the name of the Holder or the Holder's designee as specified
in the settlement instructions provided by the Holder to the Agent. If any
shares of Common Stock issued in respect of a Purchase Contract are to be
registered to a Person other than the Person in whose name the Certificate
evidencing such Purchase Contract is registered, no such registration shall
be made unless the Person requesting such registration has paid any transfer
and other taxes required by reason of such registration in a name other than
that of the registered Holder of the Certificate evidencing such Purchase
Contract or has established to the satisfaction of the Company that such tax
either has been paid or is not payable.
Section 5.6. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock
Splits, Etc.
(1) In case the Company shall pay or make a dividend or
other distribution on the Common Stock in Common Stock, the Settlement Rate,
as in effect at the opening of business on the day following the date fixed
for the determination of stockholders entitled to receive such dividend or
other distribution shall be increased by dividing such Settlement Rate by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
and the denominator shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution, such
increase to become effective immediately after the opening of business on the
day following the date fixed for such determination. For the purposes of
this paragraph (1), the number of shares of Common Stock at time outstanding
shall not include shares held in the treasury of the Company but shall
include any shares issuable in respect of any scrip certificates issued in
lieu of fractions of shares of Common Stock. The Company will not pay any
dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
(2) In case the Company shall issue rights, options or
warrants to all holders of its Common Stock (not being available on an
equivalent basis to Holders of the Securities upon settlement of the Purchase
Contracts underlying such Securities) entitling them, for a period expiring
within 45 days after the record date for the determination of stockholders
<PAGE>
entitled to receive such rights, options or warrants, to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price per share of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights, options or
warrants (other than pursuant to a dividend reinvestment plan), the
Settlement Rate, in effect at the opening of business on the day following
the date fixed for such determination shall be increased by dividing such
Settlement Rate, by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common Stock
so offered for subscription or purchase would purchase at such Current Market
Price and the denominator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
plus the number of shares of Common Stock so offered for subscription or
purchase, such increase to become effective immediately after the opening of
business on the day following the date fixed for such determination. For the
purposes of this paragraph (2), the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the Company
but shall include any shares issuable in respect of any scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company shall not
issue any such rights, options or warrants in respect of shares of Common
Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be
subdivided or split into a greater number of shares of Common Stock, the
Settlement Rate, in effect at the opening of business on the day following
the day upon which such subdivision or split becomes effective shall be
proportionately increased, and, conversely, in case outstanding shares of
Common Stock shall each be combined into a smaller number of shares of Common
Stock, the Settlement Rate, in effect at the opening of business on the day
following the day upon which such combination becomes effective shall be
proportionately reduced, such increase or reduction, as the case may be, to
become effective immediately after the opening of business on the day
following the day upon which such subdivision, split or combination becomes
effective.
(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its indebtedness
or assets (including securities, but excluding any rights or warrants
referred to in paragraph (2) of this Section, any dividend or distribution
paid exclusively in cash and any dividend or distribution referred to in
paragraph (1) of this Section), the Settlement Rate, shall be adjusted so
that the same shall equal the rate determined by dividing the Settlement Rate
in effect immediately prior to the close of business on the date fixed for
the determination of stockholders entitled to receive such distribution by a
fraction of which the numerator shall be the Current Market Price per share
of the Common Stock on the date fixed for such determination less the then
fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution filed
with the Agent) of the portion of the assets or evidences of indebtedness so
distributed applicable to one share of Common Stock and the denominator shall
be such Current Market Price per share of the Common Stock, such adjustment
to become effective immediately prior to the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such distribution. In any case in which this paragraph (4) is
applicable, paragraph (2) of this Section shall not be applicable.
<PAGE>
(5) In case the Company shall, (I) by dividend or
otherwise, distribute to all holders of its Common Stock cash (excluding any
cash that is distributed in a Reorganization Event to which Section 5.6(b)
applies or as part of a distribution referred to in paragraph (4) of this
Section) in an aggregate amount that, combined together with (II) the
aggregate amount of any other distributions to all holders of its Common
Stock made exclusively in cash within the 12 months preceding the date of
payment of such distribution and in respect of which no adjustment pursuant
to this paragraph (5) or paragraph (6) of this Section has been made and
(III) the aggregate of any cash plus the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and described
in a Board Resolution) of consideration payable in respect of any tender or
exchange offer by the Company or any of its subsidiaries for all or any
portion of the Common Stock concluded within the 12 months preceding the date
of payment of the distribution described in clause (I) above and in respect
of which no adjustment pursuant to this paragraph (5) or paragraph (6) of
this Section has been made, exceeds 15% of the product of the Current Market
Price per share of the Common Stock on the date for the determination of
holders of shares of Common Stock entitled to receive such distribution times
the number of shares of Common Stock outstanding on such date, then, and in
each such case, immediately after the close of business on such date for
determination, the Settlement Rate, shall be increased so that the same shall
equal the rate determined by dividing the Settlement Rate in effect
immediately prior to the close of business on the date fixed for
determination of the stockholders entitled to receive such distribution by a
fraction (i) the numerator of which shall be equal to the Current Market
Price per share of the Common Stock on the date fixed for such determination
less an amount equal to the quotient of (x) the combined amount distributed
or payable in the transactions described in clauses (I), (II) and (III) above
and (y) the number of shares of Common Stock outstanding on such date for
determination and (ii) the denominator of which shall be equal to the Current
Market Price per share of the Common Stock on such date for determination.
(6) In case (I) a tender or exchange offer made by the
Company or any subsidiary of the Company for all or any portion of the Common
Stock shall expire and such tender or exchange offer (as amended upon the
expiration thereof) shall require the payment to stockholders (based on the
acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of Purchased Shares) of an aggregate consideration having a
fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) that
combined together with (II) the aggregate of the cash plus the fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution), as of the expiration of such
tender or exchange offer, of consideration payable in respect of any other
tender or exchange offer, by the Company or any subsidiary of the Company for
all or any portion of the Common Stock expiring within the 12 months
preceding the expiration of such tender or exchange offer and in respect of
which no adjustment pursuant to paragraph (5) of this Section or this
paragraph (6) has been made and (III) the aggregate amount of any
distributions to all holders of the Company's Common Stock made exclusively
in cash within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to paragraph
(5) of this Section or this paragraph (6) has been made, exceeds 15% of the
product of the Current Market Price per share of the Common Stock as of the
last time (the "Expiration Time") tenders could have been made pursuant to
such tender or exchange offer (as it may be amended) times the number of
<PAGE>
shares of Common Stock outstanding (including any tendered shares) on the
Expiration Time, then, and in each such case, immediately prior to the
opening of business on the day after the date of the Expiration Time, the
Settlement Rate, shall be adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate immediately prior to the close of
business on the date of the Expiration Time by a fraction (i) the numerator
of which shall be equal to (A) the product of (I) the Current Market Price
per share of the Common Stock on the date of the Expiration Time and (II) the
number of shares of Common Stock outstanding (including any tendered shares)
on the Expiration Time less (B) the amount of cash plus the fair market value
(determined as aforesaid) of the aggregate consideration payable to
stockholders based on the transactions described in clauses (I), (II) and
(III) above (assuming in the case of clause (I) the acceptance, up to any
maximum specified in the terms of the tender or exchange offer, of Purchased
Shares), and (ii) the denominator of which shall be equal to the product of
(A) the Current Market Price per share of the Common Stock as of the
Expiration Time and (B) the number of shares of Common Stock outstanding
(including any tendered shares) as of the Expiration Time less the number of
all shares validly tendered and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred to as the
"Purchased Shares").
(7) The reclassification of Common Stock into securities
including securities other than Common Stock (other than any reclassification
upon a Reorganization Event to which Section 5.6(b) applies) shall be deemed
to involve (a) a distribution of such securities other than Common Stock to
all holders of Common Stock (and the effective date of such reclassification
shall be deemed to be "the date fixed for the determination of stockholders
entitled to receive such distribution" and the "date fixed for such
determination" within the meaning of paragraph (4) of this Section), and (b)
a subdivision, split or combination, as the case may be, of the number of
shares of Common Stock outstanding immediately prior to such reclassification
into the number of shares of Common Stock outstanding immediately thereafter
(and the effective date of such reclassification shall be deemed to be "the
day upon which such subdivision or split becomes effective" or "the day upon
which such combination becomes effective", as the case may be, and "the day
upon which such subdivision, split or combination becomes effective" within
the meaning of paragraph (3) of this Section).
(8) The "Current Market Price" per share of Common Stock
on any day means the average of the daily Closing Prices for the 5
consecutive Trading Days selected by the Company commencing not more than 30
Trading Days before, and ending not later than, the earlier of the day in
question and the day before the "ex date" with respect to the issuance or
distribution requiring such computation. For purposes of this paragraph, the
term "ex date", when used with respect to any issuance or distribution, shall
mean the first date on which the Common Stock trades regular way on such
exchange or in such market without the right to receive such issuance or
distribution.
(9) All adjustments to the Settlement Rate, shall be
calculated to the nearest 1/10,000th of a share of Common Stock (or if there
is not a nearest 1/10,000th of a share to the next lower 1/10,000th of a
share). No adjustment in the Settlement Rate shall be required unless such
adjustment would require an increase or decrease of at least one percent
therein; provided, however, that any adjustments which by reason of this
subparagraph are not required to be made shall be carried forward and taken
<PAGE>
into account in any subsequent adjustment. If an adjustment is made to the
Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or
(10) of this Section 5.6(a), an adjustment shall also be made to the
Applicable Market Value solely to determine which of clauses (a), (b) or (c)
of the definition of Settlement Rate in Section 5.1 will apply on the
Purchase Contract Settlement Date. Such adjustment shall be made by
multiplying the Applicable Market Value by a fraction of which the numerator
shall be the Settlement Rate immediately after such adjustment pursuant to
paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a)
and the denominator shall be the Settlement Rate immediately before such
adjustment; provided, however, that if such adjustment to the Settlement Rate
is required to be made pursuant to the occurrence of any of the events
contemplated by paragraph (1) (2) (3) (4) (5) (7) or (10) of this Section
5.6(a) during the period taken into consideration for determining the
Applicable Market Value, appropriate and customary adjustments shall be made
to the Settlement Rate.
(10) The Company may make such increases in the
Settlement Rate, in addition to those required by this Section, as it
considers to be advisable in order to avoid or diminish any income tax to any
holders of shares of Common Stock resulting from any dividend or distribution
of stock or issuance of rights or warrants to purchase or subscribe for stock
or from any event treated as such for income tax purposes or for any other
reasons.
(b) Adjustment for Consolidation, Merger or Other
Reorganization Event. In the event of (i) any consolidation or merger of the
Company with or into another Person (other than a merger or consolidation in
which the Company is the continuing corporation and in which the Common Stock
outstanding immediately prior to the merger or consolidation is not exchanged
for cash, securities or other property of the Company or another
corporation), (ii) any sale, transfer, lease or conveyance to another Person
of the property of the Company as an entirety or substantially as an
entirety, (iii) any statutory exchange of securities of the Company with
another Person (other than in connection with a merger or acquisition) or
(iv) any liquidation, dissolution or winding up of the Company other than as
a result of or after the occurrence of a Termination Event (any such event, a
"Reorganization Event"), the Settlement Rate will be adjusted to provide that
each Holder of Securities will receive on the Purchase Contract Settlement
Date with respect to each Purchase Contract forming a part thereof, the kind
and amount of securities, cash and other property receivable upon such
Reorganization Event (without any interest thereon, and without any right to
dividends or distribution thereon which have a record date that is prior to
the Purchase Contract Settlement Date) by a Holder of the number of shares of
Common Stock issuable on account of each Purchase Contract if the Purchase
Contract Settlement Date had occurred immediately prior to such
Reorganization Event assuming such Holder of Common Stock is not a Person
with which the Company consolidated or into which the Company merged or which
merged into the Company or to which such sale or transfer was made, as the
case may be (any such Person, a "Constituent Person"), or an Affiliate of a
Constituent Person to the extent such Reorganization Event provides for
different treatment of common Stock held by Affiliates of the Company and
non-affiliates and such Holder failed to exercise his rights of election, if
any, as to the kind or amount of securities, cash and other property
receivable upon such Reorganization Event (provided that if the kind or
amount of securities, cash and other property receivable upon such
Reorganization Event is not the same for each share of Common Stock held
<PAGE>
immediately prior to such Reorganization Event by other than a Constituent
Person or an Affiliate thereof and in respect of which such rights of
election shall not have been exercised ("non-electing share"), then for the
purpose of this Section the kind and amount of securities, cash and other
property receivable upon such Reorganization Event by each non-electing share
shall be deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). In the event of such a Reorganization
Event, the Person formed by such consolidation, merger or exchange or the
Person which acquires the assets of the Company or, in the event of a
liquidation or dissolution of the Company, the Company or a liquidating trust
created in connection therewith, shall execute and deliver to the Agent an
agreement supplemental hereto providing that the Holders of each Outstanding
Security shall have the rights provided by this Section 5.6. Such
supplemental agreement shall provide for adjustments which, for events
subsequent to the effective date of such supplemental agreement, shall be as
nearly equivalent as may be practicable to the adjustments provided for in
this Section. The above provisions of this Section shall similarly apply to
successive Reorganization Events.
Section 5.7. Notice of Adjustments and Certain Other
Events.
(a) Whenever the Settlement Rate is adjusted as herein
provided, the Company shall:
(1) forthwith compute the Settlement Rate in accordance
with Section 5.6 and prepare and transmit to the Agent an Officer's
Certificate setting forth the Settlement Rate, the method of
calculation thereof in reasonable detail, and the facts requiring
such adjustment and upon which such adjustment is based; and
(2) within 10 Business Days following the occurrence of
an event that requires an adjustment to the Settlement Rate pursuant
to Section 5.6 (or if the Company is not aware of such occurrence, as
soon as practicable after becoming so aware), provide a written
notice to the Holders of the Securities of the occurrence of such
event and a statement in reasonable detail setting forth the method
by which the adjustment to the Settlement Rate was determined and
setting forth the adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts
exist which may require any adjustment of the Settlement Rate, or with
respect to the nature or extent or calculation of any such adjustment when
made, or with respect to the method employed in making the same. The Agent
shall not be accountable with respect to the validity or value (or the kind
or amount) of any shares of Common Stock, or of any securities or property,
which may at the time be issued or delivered with respect to any Purchase
Contract; and the Agent makes no representation with respect thereto. The
Agent shall not be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock pursuant to a Purchase
Contract or to comply with any of the duties, responsibilities or covenants
of the Company contained in this Article.
<PAGE>
Section 5.8. Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without limitation, the rights
of the Holders to receive and the obligation of the Company to pay any
Contract Adjustment Payments or Deferred Contract Adjustment Payments, if the
Company shall have such obligation, and the rights and obligations of Holders
to purchase Common Stock, shall immediately and automatically terminate,
without the necessity of any notice or action by any Holder, the Agent or the
Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon and after the occurrence of a
Termination Event, the Securities shall thereafter represent the right to
receive the Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, forming a part of
such Securities in the case of Income PRIDES, or Treasury Securities in the
case of Growth PRIDES, in accordance with the provisions of Section 4.3 of
the Pledge Agreement. Upon the occurrence of a Termination Event, the
Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Agent, the Collateral Agent and to the
Holders, at their addresses as they appear in the Register.
Section 5.9. Early Settlement.
(a) Subject to and upon compliance with the provisions
of this Section 5.9, at the option of the Holder thereof, Purchase Contracts
underlying Securities, having an aggregate Stated Amount equal to $1,000 or
an integral multiple thereof, may be settled early ("Early Settlement") in
the case of Income PRIDES (unless a Tax Event Redemption has occurred) on or
prior to the fifth Business Day immediately preceding the Purchase Contract
Settlement Date and in the case of Growth PRIDES on or prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date, in
each case, as provided herein; provided however, that if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a component of
the Income PRIDES Purchase Contracts, underlying Income PRIDES may be settled
early, on or prior to the second Business Day immediately preceding the
Purchase Contract Settlement Date, but only in an aggregate amount of
$8,000,000 or in an integral multiple thereof. In order to exercise the
right to effect Early Settlement with respect to any Purchase Contracts, the
Holder of the Certificate evidencing Securities shall deliver such
Certificate to the Agent at the Corporate Trust Office duly endorsed for
transfer to the Company or in blank with the form of Election to Settle Early
on the reverse thereof duly completed and accompanied by payment (payable to
the Company in immediately available funds in an amount (the "Early
Settlement Amount") equal to (i) the product of (A) the Stated Amount times
(B) the number of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement plus (ii) if such delivery is made with
respect to any Purchase Contracts during the period from the close of
business on any Record Date next preceding any Payment Date to the opening of
business on such Payment Date, an amount equal to the sum of (x) the Contract
Adjustment Payments payable on such Payment Date with respect to such
Purchase Contracts plus (y) in the case of Income PRIDES Certificate, the
distributions on the related Preferred Securities payable on such Payment
Date. Except as provided in the immediately preceding sentence and subject
to the second to last paragraph of Section 5.2, no payment or adjustment
shall be made upon Early Settlement of any Purchase Contract on account of
any Contract Adjustment Payments accrued on such Purchase Contract or on
account of any dividends on the Common Stock issued upon such Early
<PAGE>
Settlement. If the foregoing requirements are first satisfied with respect
to Purchase Contracts underlying any Securities at or prior to 5:00 p.m., New
York City time, on a Business Day, such day shall be the "Early Settlement
Date" with respect to such Securities and if such requirements are first
satisfied after 5:00 p.m., New York City time, on a Business Day or on a day
that is not a Business Day, the "Early Settlement Date" with respect to such
Securities shall be the next succeeding Business Day.
(b) Upon Early Settlement of Purchase Contracts by a
Holder of the related Securities, the Company shall issue, and the Holder
shall be entitled to receive, _____ shares of Common Stock on account of
each Purchase Contract as to which Early Settlement is effected (the "Early
Settlement Rate"); provided, however, that upon the Early Settlement of the
Purchase Contracts, the Holder of such related Securities will forfeit the
right to receive any Deferred Contract Adjustment Payments. The Early
Settlement Rate shall be adjusted in the same manner and at the same time as
the Settlement Rate is adjusted. As promptly as practicable after Early
Settlement of Purchase Contracts in accordance with the provisions of this
Section 5.9, the Company shall issue and shall deliver to the Agent at the
Corporate Trust Office a certificate or certificates for the full number of
shares of Common Stock issuable upon such Early Settlement together with
payment in lieu of any fraction of a share, as provided in Section 5.10.
(c) No later than the third Business Day after the
applicable Early Settlement Date the Company shall cause (i) the shares of
Common Stock issuable upon Early Settlement of Purchase Contracts to be
issued and delivered, and (ii) the related Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, in the
case of Income PRIDES, or the related Treasury Securities, in the case of
Growth PRIDES, to be released from the Pledge by the Collateral Agent and
transferred, in each case to the Agent for delivery to the Holder thereof or
its designee.
(d) Upon Early Settlement of any Purchase Contracts, and
subject to receipt of shares of Common Stock from the Company and the
Preferred Securities, the appropriate Applicable Ownership Interest of the
Treasury Portfolio or Treasury Securities, as the case may be, from the
Collateral Agent, as applicable, the Agent shall, in accordance with the
instructions provided by the Holder thereof on the applicable form of
Election to Settle Early on the reverse of the Certificate evidencing the
related Securities, (i) transfer to the Holder the Preferred Securities,
Treasury Portfolio or Treasury Securities, as the case may be, forming a part
of such Securities, and (ii) deliver to the Holder a certificate or
certificates for the full number of shares of Common Stock issuable upon such
Early Settlement together with payment in lieu of any fraction of a share, as
provided in Section 5.10.
(e) In the event that Early Settlement is effected with
respect to Purchase Contracts underlying less than all the Securities
evidenced by a Certificate, upon such Early Settlement the Company shall
execute and the Agent shall authenticate, countersign and deliver to the
Holder thereof, at the expense of the Company, a Certificate evidencing the
Securities as to which Early Settlement was not effected.
<PAGE>
Section 5.10. No Fractional Shares.
No fractional shares or scrip representing fractional shares
of Common Stock shall be issued or delivered upon settlement on the Purchase
Contract Settlement Date or upon Early Settlement of any Purchase Contracts.
If Certificates evidencing more than one Purchase Contract shall be
surrendered for settlement at one time by the same Holder, the number of full
shares of Common Stock which shall be delivered upon settlement shall be
computed on the basis of the aggregate number of Purchase Contracts evidenced
by the Certificates so surrendered. Instead of any fractional share of
Common Stock which would otherwise be deliverable upon settlement of any
Purchase Contracts on the Purchase Contract Settlement Date or upon Early
Settlement, the Company, through the Agent, shall make a cash payment in
respect of such fractional interest in an amount equal to the value of such
fractional shares times the Applicable Market Value. The Company shall
provide the Agent from time to time with sufficient funds to permit the Agent
to make all cash payments required by this Section 5.10 in a timely manner.
Section 5.11. Charges and Taxes.
The Company will pay all stock transfer and similar taxes
attributable to the initial issuance and delivery of the shares of Common
Stock pursuant to the Purchase Contracts and in payment of any Deferred
Contract Adjustment Payments; provided, however, that the Company shall not
be required to pay any such tax or taxes which may be payable in respect of
any exchange of or substitution for a Certificate evidencing a Security or
any issuance of a share of Common Stock in a name other than that of the
registered Holder of a Certificate surrendered in respect of the Securities
evidenced thereby, other than in the name of the Agent, as custodian for such
Holder, and the Company shall not be required to issue or deliver such share
certificates or Certificates unless or until the Person or Persons requesting
the transfer or issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that
such tax has been paid.
ARTICLE VI
Remedies
Section 6.1. Unconditional Right of Holders to Receive
Contract Adjustment Payments and to
Purchase Common Stock.
In the event that Contract Adjustment Payments shall
constitute a component of Income PRIDES or Growth PRIDES, the Holder of any
Income PRIDES or Growth PRIDES shall have the right, which is absolute and
unconditional (subject to the right of the Company to defer payment thereof
pursuant to Section 5.3, the prepayment of Contract Adjustment Payments
pursuant to Section 5.9(a) and to the forfeiture of any Deferred Contract
Adjustment Payments upon Early Settlement pursuant to Section 5.9(b) or upon
the occurrence of a Termination Event), to receive payment of each
installment of the Contract Adjustment Payments with respect to the Purchase
Contract constituting a part of such Security on the respective Payment Date
for such Security and to purchase Common Stock pursuant to such Purchase
Contract and, in each such case, to institute suit for the enforcement of any
<PAGE>
such payment and right to purchase Common Stock, and such rights shall not be
impaired without the consent of such Holder.
Section 6.2. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any
right or remedy under this Agreement and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
such Holder, then and in every such case, subject to any determination in
such proceeding, the Company and such Holder shall be restored severally and
respectively to their former positions hereunder and thereafter all rights
and remedies of such Holder shall continue as though no such proceeding had
been instituted.
Section 6.3. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Certificates in the last
paragraph of Section 3.10, no right or remedy herein conferred upon or
reserved to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
Section 6.4. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or
remedy upon a default shall impair any such right or remedy or constitute a
waiver of any such right. Every right and remedy given by this Article or by
law to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by such Holders.
Section 6.5. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of
Income PRIDES or Growth PRIDES, by its acceptance of such Income PRIDES or
Growth PRIDES shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy
under this Agreement, or in any suit against the Agent for any action taken,
suffered or omitted by it as Agent, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
provided that the provisions of this Section shall not apply to any suit
instituted by the Company, to any suit instituted by the Agent, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% of the Outstanding Securities, or to any suit instituted by any
Holder for the enforcement of distributions on any Preferred Securities or
Contract Adjustment Payments, if any, on any Purchase Contract on or after
the respective Payment Date therefor in respect of any Security held by such
Holder, or for enforcement of the right to purchase shares of Common Stock
under the Purchase Contracts constituting part of any Security held by such
Holder.
<PAGE>
Section 6.6. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, which may affect
the covenants or the performance of this Agreement; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Agent or the Holders,
but will suffer and permit the execution of every such power as though no
such law had been enacted.
ARTICLE VII
The Agent
Section 7.1. Certain Duties and Responsibilities.
(a)(1) The Agent undertakes to perform, with respect to the
Securities, such duties and only such duties as are specifically set forth in
this Agreement and the Pledge Agreement, and no implied covenants or
obligations shall be read into this Agreement against the Agent; and
(2) in the absence of bad faith or negligence on its
part, the Agent may, with respect to the Securities, conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Agent and conforming
to the requirements of this Agreement, but in the case of any certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Agent, the Agent shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Agreement.
(b) No provision of this Agreement shall be construed to
relieve the Agent from liability for its own negligent action, its own
negligent failure to act, or its own wilful misconduct, except that
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall
be proved that the Agent was negligent in ascertaining the
pertinent facts; and
(3) no provision of this Agreement shall require the
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if
adequate indemnity is not provided to it.
(c) Whether or not therein expressly so provided, every
provision of this Agreement relating to the conduct or affecting the
liability of or affording protection to the Agent shall be subject to the
provisions of this Section.
<PAGE>
(d) The Agent is authorized to execute and deliver the
Pledge Agreement in its capacity as Agent.
Section 7.2. Notice of Default.
Within 30 days after the occurrence of any default by the
Company hereunder of which a Responsible Officer of the Agent has actual
knowledge, the Agent shall transmit by mail to the Company and the Holders of
Securities, as their names and addresses appear in the Register, notice of
such default hereunder, unless such default shall have been cured or waived.
Section 7.3. Certain Rights of Agent.
Subject to the provisions of Section 7.1:
(a) the Agent may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by an Officer's Certificate,
Issuer Order or Issuer Request, and any resolution of the Board of
Directors of the Company may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Agreement the
Agent shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Agent (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officer's
Certificate of the Company;
(d) the Agent may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Agent, in its
discretion, may make reasonable further inquiry or investigation into
such facts or matters related to the execution, delivery and
performance of the Purchase Contracts as it may see fit, and, if the
Agent shall determine to make such further inquiry or investigation,
it shall be given a reasonable opportunity to examine the books,
records and premises of the Company, personally or by agent or
attorney; and
(f) the Agent may execute any of the powers hereunder or
perform any duties hereunder either directly or by or through agents
or attorneys or an Affiliate and the Agent shall not be responsible
<PAGE>
for any misconduct or negligence on the part of any agent or attorney
or an Affiliate appointed with due care by it hereunder.
Section 7.4. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Certificates shall
be taken as the statements of the Company and the Agent assumes no
responsibility for their accuracy. The Agent makes no representations as to
the validity or sufficiency of either this Agreement or of the Securities, or
of the Pledge Agreement or the Pledge. The Agent shall not be accountable
for the use or application by the Company of the proceeds in respect of the
Purchase Contracts.
Section 7.5. May Hold Securities.
Any Registrar or any other agent of the Company, or the
Agent and its Affiliates, in their individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with the
Company, the Collateral Agent or any other Person with the same rights it
would have if it were not Registrar or such other agent, or the Agent.
Section 7.6. Money Held in Custody.
Money held by the Agent in custody hereunder need not be
segregated from the other funds except to the extent required by law or
provided herein. The Agent shall be under no obligation to invest or pay
interest on any money received by it hereunder except as otherwise agreed in
writing with the Company.
Section 7.7. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Agent from time to time reasonable
compensation for all services rendered by it hereunder;
(2) except as otherwise expressly provided herein, to
reimburse the Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Agent in
accordance with any provision of this Agreement (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Agent and any predecessor Agent
for, and to hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of its duties
hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
Section 7.8. Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall
be a corporation organized and doing business under the laws of the United
<PAGE>
States of America, any State thereof or the District of Columbia, authorized
under such laws to exercise corporate trust powers, having (or being a member
of a bank holding company having) a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by Federal or State
authority and having a Corporate Trust Office in the Borough of Manhattan,
The City of New York, if there be such a corporation in the Borough of
Manhattan, The City of New York, qualified and eligible under this Article
and willing to act on reasonable terms. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time
the Agent shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 7.9. Resignation and Removal; Appointment of
Successor.
(a) No resignation or removal of the Agent and no
appointment of a successor Agent pursuant to this Article shall become
effective until the acceptance of appointment by the successor Agent in
accordance with the applicable requirements of Section 7.10.
(b) The Agent may resign at any time by giving written
notice thereof to the Company 60 days prior to the effective date of such
resignation. If the instrument of acceptance by a successor Agent required
by Section 7.10 shall not have been delivered to the Agent within 30 days
after the giving of such notice of resignation, the resigning Agent may
petition any court of competent jurisdiction for the appointment of a
successor Agent.
(c) The Agent may be removed at any time by Act of the
Holders of a majority in number of the Outstanding Securities delivered to
the Agent and the Company.
(d) if at any time
(1) the Agent fails to comply with Section 310(b) of the
TIA, as if the Agent were an indenture trustee under an indenture
qualified under the TIA, after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, or
(2) the Agent shall cease to be eligible under Section
7.8 and shall fail to resign after written request therefor by the
Company or by any such Holder, or
(3) the Agent shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Agent or of
its property shall be appointed or any public officer shall take
charge or control of the Agent or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Agent, or (ii) any Holder who has been a bona fide Holder of a Security for
<PAGE>
at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Agent and the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Agent for
any cause, the Company, by a Board Resolution, shall promptly appoint a
successor Agent and shall comply with the applicable requirements of
Section 7.10. If no successor Agent shall have been so appointed by the
Company and accepted appointment in the manner required by Section 7.10,
any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated,
petition any court of competentjurisdiction for the appointment of a
successor Agent.
(f) The Company shall give, or shall cause such
successor Agent to give, notice of each resignation and each removal of the
Agent and each appointment of a successor Agent by mailing written notice of
such event by first-class mail, postage prepaid, to all Holders as their
names and addresses appear in the applicable Register. Each notice shall
include the name of the successor Agent and the address of its Corporate
Trust Office.
Section 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Agent, every such successor Agent so appointed shall execute, acknowledge and
deliver to the Company and to the retiring Agent an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Agent
shall become effective and such successor Agent, without any further act,
deed or conveyance, shall become vested with all the rights, powers, agencies
and duties of the retiring Agent; but, on the request of the Company or the
successor Agent, such retiring Agent shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Agent all
the rights, powers and trusts of the retiring Agent and shall duly assign,
transfer and deliver to such successor Agent all property and money held by
such retiring Agent hereunder.
(b) Upon request of any such successor Agent, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Agent all such rights, powers and
agencies referred to in paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment
unless at the time of such acceptance such successor Agent shall be qualified
and eligible under this Article.
Section 7.11. Merger, Conversion, Consolidation or
Succession to Business.
Any corporation into which the Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Agent shall be a
party, or any corporation succeeding to all or substantially all the
corporate trust business of the Agent, shall be the successor of the Agent
hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or
any further act on the part of any of the parties hereto. In case any
<PAGE>
Certificates shall have been authenticated and executed on behalf of the
Holders, but not delivered, by the Agent then in office, any successor by
merger, conversion or consolidation to such Agent may adopt such
authentication and execution and deliver the Certificates so authenticated
and executed with the same effect as if such successor Agent had itself
authenticated and executed such Securities.
Section 7.12. Preservation of Information; Communications
to Holders.
(a) The Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders received by the
Agent in its capacity as Registrar.
(b) If three or more Holders (herein referred to as
"applicants") apply in writing to the Agent, and furnish to the Agent
reasonable proof that each such applicant has owned a Security for a period
of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other
Holders with respect to their rights under this Agreement or under the
Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Agent
shall, mail to all the Holders copies of the form of proxy or other
communication which is specified in such request, with reasonable promptness
after a tender to the Agent of the materials to be mailed and of payment, or
provision for the payment, of the reasonable expenses of such mailing.
Section 7.13. No Obligations of Agent.
Except to the extent otherwise provided in this Agreement,
the Agent assumes no obligations and shall not be subject to any liability
under this Agreement, the Pledge Agreement or any Purchase Contract in
respect of the obligations of the Holder of any Security thereunder. The
Company agrees, and each Holder of a Certificate, by his acceptance thereof,
shall be deemed to have agreed, that the Agent's execution of the
Certificates on behalf of the Holders shall be solely as agent and
attorney-in-fact for the Holders, and that the Agent shall have no obligation
to perform such Purchase Contracts on behalf of the Holders, except to the
extent expressly provided in Article Five hereof.
Section 7.14. Tax Compliance.
(a) The Agent, on its own behalf and on behalf of the
Company, will comply with all applicable certification, information reporting
and withholding (including "backup" withholding) requirements imposed by
applicable tax laws, regulations or administrative practice with respect to
(i) any payments made with respect to the Securities or (ii) the issuance,
delivery, holding, transfer, redemption or exercise of rights under the
Securities. Such compliance shall include, without limitation, the
preparation and timely filing of required returns and the timely payment of
all amounts required to be withheld to the appropriate taxing authority or
its designated agent.
(b) The Agent shall comply with any written direction
received from the Company with respect to the application of such
requirements to particular payments or Holders or in other particular
<PAGE>
circumstances, and may for purposes of this Agreement rely on any such
direction in accordance with the provisions of Section 7.1(a)(2) hereof.
(c) The Agent shall maintain all appropriate records
documenting compliance with such requirements, and shall make such records
available, on written request, to the Company or its authorized
representative within a reasonable period of time after receipt of such
request.
ARTICLE VIII
Supplemental Agreements
Section 8.1. Supplemental Agreements Without Consent of
Holders.
Without the consent of any Holders, the Company and the
Agent, at any time and from time to time, may enter into one or more
agreements supplemental hereto, in form satisfactory to the Company and the
Agent, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Certificates; or
(2) to add to the covenants of the Company for the
benefit of the Holders, or to surrender any right or power herein
conferred upon the Company; or
(3) to evidence and provide for the acceptance of
appointment hereunder by a successor Agent; or
(4) to make provision with respect to the rights of
Holders pursuant to the requirements of Section 5.6(b); or
(5) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions
herein, or to make any other provisions with respect to such matters
or questions arising under this Agreement, provided such action shall
not adversely affect the interests of the Holders.
Section 8.2. Supplemental Agreements with Consent of
Holders.
With the consent of the Holders of not less than a majority
of the outstanding Purchase Contracts voting together as one Class, by Act of
said Holders delivered to the Company and the Agent, the Company, when
authorized by a Board Resolution, and the Agent may enter into an agreement
or agreements supplemental hereto for the purpose of modifying in any manner
the terms of the Purchase Contracts, or the provisions of this Agreement or
the rights of the Holders in respect of the Securities; provided, however,
that, except as contemplated herein, no such supplemental agreement shall,
without the consent of the Holder of each Outstanding Security affected
thereby,
(1) change any Payment Date;
<PAGE>
(2) change the amount or the type of Collateral required
to be Pledged to secure a Holder's Obligations under the Purchase
Contract, impair the right of the Holder of any Purchase Contract to
receive distributions on the related Collateral (except for the
rights of Holders of Income PRIDES to substitute the Treasury
Securities for the Pledge Preferred Securities or the rights of
holders of Growth PRIDES to substitute Preferred Securities for the
Pledged Treasury Securities) or otherwise adversely affect the
Holder's rights in or to such Collateral or adversely alter the
rights in or to such Collateral;
(3) reduce any Contract Adjustment Payments or any
Deferred Contract Adjustment Payment, or change any place where, or
the coin or currency in which, any Contract Adjustment Payments is
payable;
(4) impair the right to institute suit for the
enforcement of any Purchase Contract;
(5) reduce the number of shares of Common Stock to be
purchased pursuant to any Purchase Contract, increase the price to
purchase shares of Common Stock upon settlement of any Purchase
Contract, change the Purchase Contract Settlement Date or otherwise
adversely affect the Holder's rights under any Purchase Contract; or
(6) reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any such
supplemental agreement;
provided, that if any amendment or proposal referred to above would adversely
affect only the Income PRIDES or the Growth PRIDES, then only the affected
class of Holder as of the record date for the Holders entitled to vote
thereon will be entitled to vote on such amendment or proposal, and such
amendment or proposal shall not be effective except with the consent of
Holders of not less than a majority of such class.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental
agreement, but it shall be sufficient if such Act shall approve the substance
thereof.
Section 8.3. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created
by, any supplemental agreement permitted by this Article or the modifications
thereby of the agencies created by this Agreement, the Agent shall be
entitled to receive and (subject to Section 7.1) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental agreement is authorized or permitted by this Agreement. The
Agent may, but shall not be obligated to, enter into any such supplemental
agreement which affects the Agent's own rights, duties or immunities under
this Agreement or otherwise.
Section 8.4. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this
Article, this Agreement shall be modified in accordance therewith, and such
<PAGE>
supplemental agreement shall form a part of this Agreement for all purposes;
and every Holder of Certificates theretofore or thereafter authenticated,
executed on behalf of the Holders and delivered hereunder shall be bound
thereby.
Section 8.5. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the
Holders and delivered after the execution of any supplemental agreement
pursuant to this Article may, and shall if required by the Agent, bear a
notation in form approved by the Agent as to any matter provided for in such
supplemental agreement. If the Company shall so determine, new Certificates
so modified as to conform, in the opinion of the Agent and the Company, to
any such supplemental agreement may be prepared and executed by the Company
and authenticated, executed on behalf of the Holders and delivered by the
Agent in exchange for Outstanding Certificates.
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
Section 9.1. Covenant Not to Merge, Consolidate, Sell or
Convey Property Except Under Certain
Conditions.
The Company covenants that it will not merge or consolidate
with any other Person or sell, assign, transfer, lease or convey all or
substantially all of its properties and assets to any Person or group of
affiliated Persons in one transaction or a series of related transactions,
unless (i) either the Company shall be the continuing corporation, or the
successor (if other than the Company) shall be a corporation organized and
existing under the laws of the United States of America or a State thereof or
the District of Columbia and such corporation shall expressly assume all the
obligations of the Company under the Purchase Contracts, this Agreement and
the Pledge Agreement by one or more supplemental agreements in form
reasonably satisfactory to the Agent and the Collateral Agent, executed and
delivered to the Agent and the Collateral Agent by such corporation, and (ii)
the Company or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale, assignment,
transfer, lease or conveyance, be in default in the performance of any
covenant or condition hereunder, under any of the Securities or under the
Pledge Agreement.
Section 9.2. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance and upon any such assumption by a successor
corporation in accordance with Section 9.1, such successor corporation shall
succeed to and be substituted for the Company with the same effect as if it
had been named herein as the Company. Such successor corporation thereupon
may cause to be signed, and may issue either in its own name or in the name
of Ingersoll-Rand Company any or all of the Certificates evidencing
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Agent; and, upon the order of such successor
corporation, instead of the Company, and subject to all the terms, conditions
and limitations in this Agreement prescribed, the Agent shall authenticate
<PAGE>
and execute on behalf of the Holders and deliver any Certificates which
previously shall have been signed and delivered by the officers of the
Company to the Agent for authentication and execution, and any Certificate
evidencing Securities which such successor corporation thereafter shall cause
to be signed and delivered to the Agent for that purpose. All the
Certificates so issued shall in all respects have the same legal rank and
benefit under this Agreement as the Certificates theretofore or thereafter
issued in accordance with the terms of this Agreement as though all of such
Certificates had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance such change in phraseology and form (but not in
substance) may be made in the Certificates evidencing Securities thereafter
to be issued as may be appropriate.
Section 9.3. Opinion of Counsel Given to Agent.
The Agent, subject to Sections 7.1 and 7.3, shall receive an
Opinion of Counsel as conclusive evidence that any such consolidation,
merger, sale, assignment, transfer, lease or conveyance, and any such
assumption, complies with the provisions of this Article and that all
conditions precedent to the consummation of any such consolidation, merger,
sale, assignment, transfer, lease or conveyance have been met.
ARTICLE X
Covenants
Section 10.1. Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the
Holders from time to time of the Securities that it will duly and punctually
perform its obligations under the Purchase Contracts in accordance with the
terms of the Purchase Contracts and this Agreement.
Section 10.2. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The
City of New York an office or agency where Certificates may be presented or
surrendered for acquisition of shares of Common Stock upon settlement of the
Purchase Contracts on the Purchase Contract Settlement Date or Early
Settlement and for transfer of Collateral upon occurrence of a Termination
Event, where Certificates may be surrendered for registration of transfer or
exchange, for a Collateral Substitution or re-establishment of an Income
PRIDES and where notices and demands to or upon the Company in respect of the
Securities and this Agreement may be served. The Company will give prompt
written notice to the Agent of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Agent with
the address thereof, such presentations, surrenders, notices and demands may
be made or served at the Corporate Trust Office, and the Company hereby
appoints the Agent as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate one or more
other offices or agencies where Certificates may be presented or surrendered
<PAGE>
for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall
in any manner relieve the Company of its obligation to maintain an office or
agency in the Borough of Manhattan, The City of New York for such purposes.
The Company will give prompt written notice to the Agent of any such
designation or rescission and of any change in the location of any such other
office or agency. The Company hereby designates as the place of payment for
the Securities the Corporate Trust Office and appoints the Agent at its
Corporate Trust Office as paying agent in such city.
Section 10.3. Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase
Contract Settlement Date reserve and keep available, free from preemptive
rights, out of its authorized but unissued Common Stock the full number of
shares of Common Stock issuable against tender of payment in respect of all
Purchase Contracts constituting a part of the Securities evidenced by
Outstanding Certificates.
Section 10.4. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which
may be issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Securities will, upon issuance, be
duly authorized, validly issued, fully paid and nonassessable.
Section 10.5. Statements of Officer of the Company as to
Default.
The Company will deliver to the Agent, within 120 days after
the end of each fiscal year of the Company ending after the date hereof, an
Officer's Certificate, stating whether or not to the best knowledge of the
signer thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions hereof, and if the Company shall
be in default, specifying all such defaults and the nature and status thereof
of which such Officer may have knowledge.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
INGERSOLL-RAND COMPANY
By:____________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO, as
Purchase Contract Agent
By:____________________________
Name:
Title:
<PAGE>
EXHIBIT A
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED
IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE
MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO
TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE
NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
AGREEMENT.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York,
New York) to the Company or its agent for registration of transfer, exchange
or payment, and any Certificate issued is registered in the name of Cede &
Co., or such other name as requested by an authorized representative of The
Depository Trust Company, and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest
herein.
No. _____ Cusip No.
Number of Income PRIDES _______
Form of Face of Income PRIDES Certificate
____% Income PRIDES
This Income PRIDES Certificate certifies that ___________ is
the registered Holder of the number of Income PRIDES set forth above. Each
Income PRIDES represents (i) either (a) beneficial ownership by the Holder of
one ____% Trust Originated Preferred Security (the "Preferred Security") of
Ingersoll-Rand Financing I, a Delaware statutory business trust (the
"Trust"), having a stated liquidation amount of $10, subject to the Pledge of
such Preferred Security by such Holder pursuant to the Pledge Agreement or
(b) upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the appropriate Applicable Ownership Interest of
the Treasury Portfolio, subject to the Pledge of such Applicable Ownership
Interest of the Treasury Portfolio by such Holder pursuant to the Pledge
Agreement, and (ii) the rights and obligations of the Holder under one
Purchase Contract with Ingersoll-Rand Company, a New Jersey corporation (the
"Company"). All capitalized terms used herein which are defined in the
Purchase Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Preferred Securities
or the appropriate Applicable Ownership Interest of the Treasury Portfolio,
as the case may be, constituting part of each Income PRIDES evidenced hereby
have been pledged to the Collateral Agent, for the benefit of the Company, to
secure the obligations of the Holder under the Purchase Contract comprising a
portion of such Income PRIDES.
The Pledge Agreement provides that all payments of the
Stated Amount of or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) in the Treasury
Portfolio, as the case may be, or cash distributions on, any Pledged
Preferred Securities (as defined in the Pledge Agreement) or the appropriate
<PAGE>
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
constituting part of the Income PRIDES received by the Collateral Agent shall
be paid by the Collateral Agent by wire transfer in same day funds (i) in the
case of (A) cash distributions with respect to Pledged Preferred Securities
or the appropriate Applicable Ownership Interest (as specified in clause (B)
of the definition of such term) of the Treasury Portfolio, as the case may
be, and (B) any payments of the Stated Amount or the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such
terms) of the Treasury Portfolio, as the case may be, with respect to any
Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, that have been released from the
Pledge pursuant to the Pledge Agreement, to the Agent to the account
designated by the Agent, no later than 2:00 p.m., New York City time, on the
Business Day such payment is received by the Collateral Agent (provided that
in the event such payment is received by the Collateral Agent on a day that
is not a Business Day or after 12:30 p.m., New York City time, on a Business
Day, then such payment shall be made no later than 10:30 a.m., New York City
time, on the next succeeding Business Day) and (ii) in the case of payments
of the Stated Amount or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) in the Treasury
Portfolio, as the case may be, of any Pledged Preferred Securities or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in the Treasury Portfolio, as the case may be, to
the Company on the Purchase Contract Settlement Date (as defined herein) in
accordance with the terms of the Pledge Agreement, in full satisfaction of
the respective obligations of the Holders of the Income PRIDES of which such
Pledged Preferred Securities or the Treasury Portfolio, as the case may be,
are a part under the Purchase Contracts forming a part of such Income PRIDES.
Distributions on any Preferred Security or the appropriate Applicable
Ownership Interest (as specified in clause (B) of the definition of such
term) of the Treasury Portfolio, as the case may be, forming part of an
Income PRIDES evidenced hereby which are payable quarterly in arrears on
February 16, May 16, August 16 and November 16 each year, commencing
______________, 1998 (a "Payment Date"), shall, subject to receipt thereof by
the Agent from the Collateral Agent, be paid to the Person in whose name this
Income PRIDES Certificate (or a Predecessor Income PRIDES Certificate) is
registered at the close of business on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder
of this Income PRIDES Certificate to purchase, and the Company to sell, on
____________, 2001 (the "Purchase Contract Settlement Date"), at a price
equal to $10 (the "Stated Amount"), a number of shares of Common Stock, no
par value ("Common Stock"), of the Company, equal to the Settlement Rate,
unless on or prior to the Purchase Contract Settlement Date there shall have
occurred a Termination Event or an Early Settlement with respect to the
Income PRIDES of which such Purchase Contract is a part, all as provided in
the Purchase Contract Agreement and more fully described on the reverse
hereof. The purchase price (the "Purchase Price") for the shares of Common
Stock purchased pursuant to each Purchase Contract evidenced hereby, if not
paid earlier, shall be paid on the Purchase Contract Settlement Date by
application of payment received in respect of the Stated Amount or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, of
the Pledged Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, pledged to secure the
obligations under such Purchase Contract of the Holder of the Income PRIDES
of which such Purchase Contract is a part.
<PAGE>
The Company shall pay, on each Payment Date, in respect of
each Purchase Contract forming part of an Income PRIDES evidenced hereby an
amount (the "Contract Adjustment Payments") equal to % per annum of the
Stated Amount, computed on the basis of a 360 day year of twelve 30 day
months, subject to deferral at the option of the Company as provided in the
Purchase Contract Agreement and more fully described on the reverse hereof.
Such Contract Adjustment Payments shall be payable to the Person in whose
name this Income PRIDES Certificate (or a Predecessor Income PRIDES
Certificate) is registered at the close of business on the Record Date for
such Payment Date.
Distributions on the Preferred Securities or the appropriate
Applicable Ownership Interest (as specified in clause (B) of the definition
of such term) of the Treasury Portfolio, as the case may be, and Contract
Adjustment Payments will be payable at the office of the Agent in The City of
New York or, at the option of the Company, by check mailed to the address of
the Person entitled thereto as such address appears on the Income PRIDES
Register.
Reference is hereby made to the further provisions set forth
on the reverse hereof, which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Agent by manual signature, this Income PRIDES Certificate
shall not be entitled to any benefit under the Pledge Agreement or the
Purchase Contract Agreement or be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed.
INGERSOLL-RAND COMPANY
By:____________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: THE FIRST NATIONAL BANK OF
CHICAGO, not individually but
solely as Attorney-in-Fact of
such Holder
By:____________________________________
Name:
Title:
Dated:
<PAGE>
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Income PRIDES Certificates referred to in
the within mentioned Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF
CHICAGO, as Purchase Contract
Agent
By:_________________________________
Authorized Officer
<PAGE>
(Form of Reverse of Income PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a
Purchase Contract Agreement, dated as of _______ ___, 1998 (as may be
supplemented from time to time, the "Purchase Contract Agreement"), between
the Company and The First National Bank of Chicago, as Purchase Contract
Agent (herein called the "Agent"), to which Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Agent, the Company, and the Holders and of the
terms upon which the Income PRIDES Certificates are, and are to be, executed
and delivered.
Each Purchase Contract evidenced hereby obligates the Holder
of this Income PRIDES Certificate to purchase, and the Company to sell, on
the Purchase Contract Settlement Date at a price equal to the Stated Amount
(the "Purchase Price"), a number of shares of Common Stock of the Company
equal to the Settlement Rate, unless, on or prior to the Purchase Contract
Settlement Date, there shall have occurred a Termination Event with respect
to the Security of which such Purchase Contract is a part or an Early
Settlement shall have occurred. The "Settlement Rate" is equal to (a) if the
Applicable Market Value (as defined below) is equal to or greater than $
(the "Threshold Appreciation Price"), shares of Common Stock per
Purchase Contract, (b) if the Applicable Market Value is less than the
Threshold Appreciation Price but is greater than $ , the number of shares
of Common Stock per Purchase Contract equal to the Stated Amount divided by
the Applicable Market Value and (c) if the Applicable Market Amount is less
than or equal to $ , shares of Common Stock per Purchase
Contract, in each case subject to adjustment as provided in the Purchase
Contract Agreement. No fractional shares of Common Stock will be issued upon
settlement of Purchase Contracts, as provided in the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby, which is settled
either through Early Settlement or Cash Settlement, shall obligate the Holder
of the related Income PRIDES to purchase at the Purchase Price, and the
Company to sell, a number of newly issued shares of Common Stock equal to the
Early Settlement Rate or the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the
Closing Price per share of Common Stock on each of the 20 consecutive Trading
Days ending on the third Trading Day immediately preceding the Purchase
Contract Settlement Date. The "Closing Price" of the Common Stock on any
date of determination means the closing sale price (or, if no closing price
is reported, the last reported sale price) of the Common Stock on the New
York Stock Exchange (the "NYSE") on such date or, if the Common Stock is not
listed for trading on the NYSE on any such date, as reported in the composite
transactions for the principal United States securities exchange on which the
Common Stock is so listed, or if the Common Stock is not so listed on a
United States national or regional securities exchange, as reported by The
Nasdaq Stock Market, or, if the Common Stock is not so reported, the last
quoted bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization, or, if
such bid price is not available, the market value of the Common Stock on such
date as determined by a nationally recognized independent investment banking
firm retained for this purpose by the Company. A "Trading Day" means a day
<PAGE>
on which the Common Stock (A) is not suspended from trading on any national
or regional securities exchange or association or over-the-counter market at
the close of business and (B) has traded at least once on the national or
regional securities exchange or association or over-the-counter market that
is the primary market for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract
Agreement, the Holder of this Income PRIDES Certificate shall pay the
Purchase Price for the shares of Common Stock purchased pursuant to each
Purchase Contract evidenced hereby by effecting a Cash Settlement, or an
Early Settlement or from the proceeds of a remarketing of the related Pledged
Preferred Securities of such holders. A Holder of Income PRIDES who does not
elect, on or prior to 5:00 p.m. New York City time on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, to make an
effective Cash Settlement or an Early Settlement, shall pay the Purchase
Price for the shares of Common Stock to be issued under the related Purchase
Contract from the Proceeds of the sale of the related Pledged Preferred
Securities held by the Collateral Agent. Such sale will be made by the
Remarketing Agent pursuant to the terms of the Remarketing Agreement and the
Remarketing Underwriting Agreement on the third Business Day immediately
preceding the Purchase Contract Settlement Date. If, as provided in the
Purchase Contract Agreement, upon the occurrence of a Failed Remarketing the
Collateral Agent, for the benefit of the Company, exercises its rights as a
secured creditor with respect to the Pledged Preferred Securities related to
this Income PRIDES certificate, any accrued and unpaid distributions
(including deferred distributions) on such Pledged Preferred Securities will
become payable by the Company to the holder of this Income PRIDES Certificate
in the manner provided for in the Purchase Contract Agreement.
The Company shall not be obligated to issue any shares of
Common Stock in respect of a Purchase Contract or deliver any certificates
therefor to the Holder unless it shall have received payment in full of the
aggregate purchase price for the shares of Common Stock to be purchased
thereunder in the manner herein set forth.
Each Purchase Contract evidenced hereby and all obligations
and rights of the Company and the Holder thereunder shall terminate if a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall give written notice to the Agent and to the Holders,
at their addresses as they appear in the Income PRIDES Register. Upon and
after the occurrence of a Termination Event, the Collateral Agent shall
release the Pledged Preferred Security (as defined in the Pledge Agreement)
or the appropriate Applicable Ownership Interest of the Treasury Portfolio
forming a part of each Income PRIDES, or the Liquidation Distribution
received in respect of such Pledged Preferred Security, from the Pledge. An
Income PRIDES shall thereafter represent the right to receive the Preferred
Security or the appropriate Applicable Ownership Interest of the Treasury
Portfolio forming a part of such Income PRIDES, or the Liquidation
Distribution received in respect of such Preferred Security, in accordance
with the terms of the Purchase Contract Agreement and the Pledge Agreement.
Under the terms of the Pledge Agreement, the Agent will be
entitled to exercise the voting and any other consensual rights pertaining to
the Pledged Preferred Securities. Upon receipt of notice of any meeting at
which holders of Preferred Securities are entitled to vote or upon the
solicitation of consents, waivers or proxies of holders of Preferred
Securities, the Agent shall, as soon as practicable thereafter, mail to the
<PAGE>
Income PRIDES holders a notice (a) containing such information as is
contained in the notice or solicitation, (b) stating that each Income PRIDES
holder on the record date set by the Agent therefor (which, to the extent
possible, shall be the same date as the record date for determining the
holders of Preferred Securities entitled to vote) shall be entitled to
instruct the Agent as to the exercise of the voting rights pertaining to the
Preferred Securities constituting a part of such holder's Income PRIDES and
(c) stating the manner in which such instructions may be given. Upon the
written request of the Income PRIDES Holders on such record date, the Agent
shall endeavor insofar as practicable to vote or cause to be voted, in
accordance with the instructions set forth in such requests, the maximum
number of Preferred Securities as to which any particular voting instructions
are received. In the absence of specific instructions from the Holder of an
Income PRIDES, the Agent shall abstain from voting the Preferred Security
evidenced by such Income PRIDES.
Upon the occurrence of an Investment Company Event or
liquidation of the Trust, a principal amount of the Debentures constituting
the assets of the Trust and underlying the Preferred Securities equal to the
aggregate Stated Amount of the Pledged Preferred Securities shall be
delivered to the Collateral Agent in exchange for Pledged Preferred
Securities. Thereafter, the Debentures shall be held by the Collateral Agent
to secure the obligations of each Holder of Income PRIDES to purchase shares
of Common Stock under the Purchase Contracts constituting a part of such
Income PRIDES. Following the liquidation of the Trust, the Holders and the
Collateral Agent shall have such security interests, rights and obligations
with respect to the Debentures as the Holders and the Collateral Agent had
in respect of the Pledged Preferred Securities, and any reference in the
Purchase Contract Agreement or Pledge Agreement to the Preferred Securities
shall be deemed to be a reference to the Debentures.
Upon the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Redemption Price payable on the Tax
Event Redemption Date with respect to the Applicable Principal Amount of
Debentures shall be delivered to the Collateral Agent in exchange for the
Pledged Preferred Securities. Thereafter, pursuant to the terms of the
Pledge Agreement, the Collateral Agent for the benefit of the Company will
apply an amount equal to the Redemption Amount of such Redemption Price to
purchase, the Treasury Portfolio and promptly remit the remaining portion of
such Redemption Price to the Agent for payment to the Holders of such Income
PRIDES.
Following the occurrence of a Tax Event Redemption prior to
the Purchase Contract Settlement Date, the Holders of Income PRIDES and the
Collateral Agent shall have such security interests rights and obligations
with respect to the Treasury Portfolio as the Holder of Income PRIDES and the
Collateral Agent had in respect of the Preferred Security or Debentures, as
the case may be, subject to the Pledge thereof as provided in Articles II,
III, IV, V and VI, of the Pledge Agreement and any reference herein to the
Preferred Security or the Debenture shall be deemed to be reference to such
Treasury Portfolio.
The Income PRIDES Certificates are issuable only in
registered form and only in denominations of a single Income PRIDES and any
integral multiple thereof. The transfer of any Income PRIDES Certificate
will be registered and Income PRIDES Certificates may be exchanged as
provided in the Purchase Contract Agreement. The Income PRIDES Registrar may
<PAGE>
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents permitted by the Purchase Contract Agreement. No service
charge shall be required for any such registration of transfer or exchange,
but the Company and the Agent may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
A holder who elects to substitute a Treasury Security for Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, thereby creating Growth PRIDES, shall be responsible for any fees
or expenses payable in connection therewith. Except as provided in the
Purchase Contract Agreement, for so long as the Purchase Contract underlying
an Income PRIDES remains in effect, such Income PRIDES shall not be separable
into its constituent parts, and the rights and obligations of the Holder of
such Income PRIDES in respect of the Preferred Security or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
and Purchase Contract constituting such Income PRIDES may be transferred and
exchanged only as an Income PRIDES. The holder of an Income PRIDES may
substitute for the Pledged Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio securing its obligation under
the related Purchase Contract Treasury Securities in an aggregate principal
amount equal to the aggregate Stated Amount of the Pledged Preferred
Securities or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) in the Treasury Portfolio in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement. From and after such Collateral Substitution, the Security for
which such Pledged Treasury Securities secures the holder's obligation under
the Purchase Contract shall be referred to as a "Growth PRIDES." A Holder
may make such Collateral Substitution only in integral multiples of 100
Income PRIDES for 100 Growth PRIDES; provided, however, that if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a component of
the Income PRIDES, a Holder may make such Collateral Substitutions only in
integral multiples of 160,000 Income PRIDES for 160,000 Growth PRIDES. Such
Collateral Substitution may cause the equivalent aggregate principal amount
of this Certificate to be increased or decreased; provided, however, the
equivalent aggregate principal amount outstanding under this Income PRIDES
Certificate shall not exceed $200,000,000. All such adjustments to the
equivalent aggregate principal amount of this Income PRIDES Certificate shall
be duly recorded by placing an appropriate notation on the Schedule attached
hereto.
A Holder of Growth PRIDES may create or recreate Income
PRIDES by delivering to the Collateral Agent Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, with a
Stated Amount, in the case of such Preferred Securities, or with the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, in the case of such
appropriate Applicable Ownership Interest of the Treasury Portfolio, equal to
the aggregate principal amount of the Pledged Treasury Securities in exchange
for the release of such Pledged Treasury Securities in accordance with the
terms of the Purchase Contract Agreement and the Pledge Agreement.
Subject to the next succeeding paragraph, the Company shall
pay, on each Payment Date, the Contract Adjustment Payments payable in
respect of each Purchase Contract to the Person in whose name the Income
PRIDES Certificate evidencing such Purchase Contract is registered at the
close of business on the Record Date for such Payment Date. Contract
Adjustment Payments will be payable at the office of the Agent in The City of
New York or, at the option of the Company, by check mailed to the address of
<PAGE>
the Person entitled thereto at such address as it appears on the Income
PRIDES Register.
The Company shall have the right, at any time prior to the
Purchase Contract Settlement Date, to defer the payment of any or all of the
Contract Adjustment Payments otherwise payable on any Payment Date, but only
if the Company shall give the Holders and the Agent written notice of its
election to defer such payment (specifying the amount to be deferred) as
provided in the Purchase Contract Agreement. Any Contract Adjustment
Payments so deferred shall bear additional Contract Adjustment Payments
thereon at the rate of ____% per annum (computed on the basis of a 360 day
year of twelve 30 day months), compounding on each succeeding Payment Date,
until paid in full (such deferred installments of Contract Adjustment
Payments, if any, together with the additional Contract Adjustment Payments
accrued thereon, are referred to herein as the "Deferred Contract Adjustment
Payments"). Deferred Contract Adjustment Payments, if any, shall be due on
the next succeeding Payment Date except to the extent that payment is
deferred pursuant to the Purchase Contract Agreement. No Contract Adjustment
Payments may be deferred to a date that is after the Purchase Contract
Settlement Date.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the Purchase
Contract Settlement Date, the Holder of this Income PRIDES Certificate will
receive on the Purchase Contract Settlement Date, in lieu of a cash payment,
a number of shares of Common Stock equal to (x) the aggregate amount of
Deferred Contract Adjustment Payments payable to the Holder of this Income
PRIDES Certificate divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the
payment of Contract Adjustment Payments, then until the Deferred Contract
Adjustment Payments have been paid, the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital
stock or make guarantee payments with respect to the foregoing (other than
(i) purchases or acquisitions of capital stock of the Company in connection
with the satisfaction by the Company of its obligations under any employee or
agent benefit plans or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date of such event
requiring the Company to purchase capital stock of the Company, (ii) as a
result of a reclassification of the Company's capital stock or the exchange
or conversion of one class or series of the Company's capital stock for
another class or series of the Company's capital stock, (iii) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (iv) dividends or distributions in capital stock of
the Company (or rights to acquire capital stock) or repurchases or
redemptions of capital stock solely from the issuance or exchange of capital
stock or (v) redemptions or repurchases of any rights outstanding under a
shareholder rights plan and a declaration thereunder of a dividend of rights
in the future).
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without limitation, the rights
of the Holders to receive and the obligation of the Company to pay any
Contract Adjustment Payments or any Deferred Contract Adjustment Payments,
shall immediately and automatically terminate, without the necessity of any
<PAGE>
notice or action by any Holder, the Agent or the Company, if, on or prior to
the Purchase Contract Settlement Date, a Termination Event shall have
occurred. Upon the occurrence of a Termination Event, the Company shall
promptly but in no event later than two Business Days thereafter give written
notice to the Agent, the Collateral Agent and to the Holders, at their
addresses as they appear in the Income PRIDES Register. Upon and after the
occurrence of a Termination Event, the Collateral Agent shall release the
Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, from the Pledge in accordance with
the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the
Purchase Contract Agreement, at the option of the Holder thereof, Purchase
Contracts underlying Securities having an aggregate Stated Amount equal to
$1,000 or an integral multiple thereof may be settled early ("Early
Settlement") as provided in the Purchase Contract Agreement; provided,
however, that if a Tax Event Redemption has occurred and the Treasury
Portfolio has become a component of the Income PRIDES, Holders may early
settle Income PRIDES only in integral multiples of 160,000 Income PRIDES. In
order to exercise the right to effect Early Settlement with respect to any
Purchase Contracts evidenced by this Income PRIDES Certificate, the Holder of
this Income PRIDES Certificate shall deliver this Income PRIDES Certificate
to the Agent at the Corporate Trust Office duly endorsed for transfer to the
Company or in blank with the form of Election to Settle Early set forth below
duly completed and accompanied by payment in the form of immediately
available funds payable to the order of the Company in an amount (the "Early
Settlement Amount") equal to (i) the product of (A) the Stated Amount times
(B) the number of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement, plus (ii) if such delivery is made with
respect to any Purchase Contracts during the period from the close of
business on any Record Date for any Payment Date to the opening of business
on such Payment Date, an amount equal to the Contract Adjustment Payments
payable on such Payment Date with respect to such Purchase Contracts. Upon
Early Settlement of Purchase Contracts by a Holder of the related Securities,
the Pledged Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio underlying such Securities shall be
released from the Pledge as provided in the Pledge Agreement and the Holder
shall be entitled to receive a number of shares of Common Stock on account of
each Purchase Contract forming part of a Income PRIDES as to which Early
Settlement is effected equal to the Early Settlement Rate; provided however,
that upon the Early Settlement of the Purchase Contracts, the Holder thereof
will forfeit the right to receive any Deferred Contract Adjustment Payments,
if any, on such Purchase Contracts. The Early Settlement Rate shall
initially be equal to shares of Common Stock and shall be adjusted in
the same manner and at the same time as the Settlement Rate is adjusted as
provided in the Purchase Contract Agreement.
Upon registration of transfer of this Income PRIDES
Certificate, the transferee shall be bound (without the necessity of any
other action on the part of such transferee, except as may be required by the
Agent pursuant to the Purchase Contract Agreement), under the terms of the
Purchase Contract Agreement and the Purchase Contracts evidenced hereby and
the transferor shall be released from the obligations under the Purchase
Contracts evidenced by this Income PRIDES Certificate. The Company covenants
and agrees, and the Holder, by its acceptance hereof, likewise covenants and
agrees, to be bound by the provisions of this paragraph.
<PAGE>
The Holder of this Income PRIDES Certificate, by its
acceptance hereof, authorizes the Agent to enter into and perform the related
Purchase Contracts forming part of the Income PRIDES evidenced hereby on his
behalf as his attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform his obligations under such Purchase
Contracts, consents to the provisions of the Purchase Contract Agreement,
authorizes the Agent to enter into and perform the Pledge Agreement on his
behalf as its attorney-in-fact, and consents to the Pledge of the Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, underlying this Income PRIDES Certificate
pursuant to the Pledge Agreement. The Holder further covenants and agrees,
that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof,
payments in respect to the Stated Amount of the Pledged Preferred Securities,
or the appropriate Applicable Ownership Interest (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio, on the Purchase
Contract Settlement Date shall be paid by the Collateral Agent to the Company
in satisfaction of such Holder's obligations under such Purchase Contract and
such Holder shall acquire no right, title or interest in such payments.
Subject to certain exceptions, the provisions of the
Purchase Contract Agreement may be amended with the consent of the Holders of
a majority of the Purchase Contracts.
The Purchase Contracts shall for all purposes be governed
by, and construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of
the Company or the Agent may treat the Person in whose name this Income
PRIDES Certificate is registered as the owner of the Income PRIDES evidenced
hereby for the purpose of receiving payments of distributions payable
quarterly on the Preferred Securities, receiving payments of Contract
Adjustment Payments and any Deferred Contract Adjustment Payments,
performance of the Purchase Contracts and for all other purposes whatsoever,
whether or not any payments in respect thereof be overdue and notwithstanding
any notice to the contrary, and neither the Company, the Agent nor any such
agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement
thereof, entitle the Holder to any of the rights of a holder of shares of
Common Stock.
A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Agent.
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written
out in full according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
------------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
_____________________________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto________________________________________________________
____________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number
of Assignee)
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Income PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
____________________________________________________________________________
attorney to transfer said Income PRIDES Certificates on the books of
INGERSOLL-RAND Company with full power of substitution in the premises.
Dated: _________________
Signature
NOTICE: The signature to this
assignment must correspond with
the name as it appears upon the
face of the within Income PRIDES
Certificates in every particular,
without alteration or enlargement
or any change whatsoever.
Signature Guarantee: ___________________________________
<PAGE>
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares
of Common Stock deliverable upon settlement on or after the Purchase Contract
Settlement Date of the Purchase Contracts underlying the number of Income
PRIDES evidenced by this Income PRIDES Certificate be registered in the name
of, and delivered, together with a check in payment for any fractional share,
to the undersigned at the address indicated below unless a different name and
address have been indicated below. If shares are to be registered in the
name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
Dated: ________________________ ___________________________
Signature
Signature Guarantee: _____________
(if assigned to another person)
If shares are to be registered
in the name of and delivered to REGISTERED HOLDER
a Person other than the Holder,
please (i) print such Person's
name and address and (ii) provide
a guarantee of your signature:
Please print name and address of
Registered Holder:
________________________________ ______________________________
Name Name
________________________________ ______________________________
Address Address
________________________________ ______________________________
________________________________ ______________________________
________________________________ ______________________________
Social Security or other
Taxpayer Identification
Number, if any ______________________________
<PAGE>
ELECTION TO SETTLE EARLY
The undersigned Holder of this Income PRIDES Certificate
hereby irrevocably exercises the option to effect Early Settlement in
accordance with the terms of the Purchase Contract Agreement with respect to
the Purchase Contracts underlying the number of Income PRIDES evidenced by
this Income PRIDES Certificate specified below. The undersigned Holder
directs that a certificate for shares of Common Stock deliverable upon such
Early Settlement be registered in the name of, and delivered, together with a
check in payment for any fractional share and any Income PRIDES Certificate
representing any Income PRIDES evidenced hereby as to which Early Settlement
of the related Purchase Contracts is not effected, to the undersigned at the
address indicated below unless a different name and address have been
indicated below. Pledged Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, deliverable
upon such Early Settlement will be transferred in accordance with the
transfer instructions set forth below. If shares are to be registered in the
name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
Dated:___________________ ________________________________
Signature
Signature Guarantee: ________________________
<PAGE>
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock or Income REGISTERED HOLDER
PRIDES Certificates are to be regis-
tered in the name of and delivered to
and Pledged Preferred Securities, or
the Treasury Portfolio, as the case may
be, are to be transferred to a Person
other than the Holder, please print such
Person's name and address:
Please print name and address of
Registered Holder:
________________________________ ______________________________
Name Name
________________________________ ______________________________
Address Address
________________________________ ______________________________
________________________________ ______________________________
________________________________ ______________________________
Social Security or other
Taxpayer Identification
Number, if any _____________________________
Transfer Instructions for Pledged Preferred Securities, or the Treasury
Portfolio, as the case may be, Transferable Upon Early Settlement or a
Termination Event:
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
<PAGE>
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
Principal
Amount of
Amount of Amount of this Global Signature of
decrease in increase in Certificate authorized
Principal Principal following officer of
Amount of the Amount of such decrease Trustee or
Global the Global or Securities
Date Certificate Certificate increase Custodian
<PAGE>
EXHIBIT B
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF A CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER
OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
Company or its agent for registration of transfer, exchange or payment, and
any Certificate issued is registered in the name of Cede & Co., or such other
name as requested by an authorized representative of The Depository Trust
Company, and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
No. _________ Number of Growth PRIDES _________ Cusip No.
Form of Face of Growth PRIDES Certificate
This Growth PRIDES Certificate certifies that __________ is the
registered Holder of the number of Growth PRIDES set forth above. Each
Growth PRIDES represents (i) a 1/100 undivided beneficial ownership interest,
of a Treasury Security having a principal amount at maturity equal to $1,000,
subject to the Pledge of such Treasury Security by such Holder pursuant to
the Pledge Agreement, and (ii) the rights and obligations of the Holder under
one Purchase Contract with Ingersoll-Rand Company, a New Jersey corporation
(the "Company"). All capitalized terms used herein which are defined in the
Purchase Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities
constituting part of each Growth PRIDES evidenced hereby have been pledged to
the Collateral Agent, for the benefit of the Company, to secure the
obligations of the Holder under the Purchase Contract comprising a portion of
such Growth PRIDES.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company, to sell, on
___________ 16, 2001 (the "Purchase Contract Settlement Date"), at a price
equal to $10 (the "Stated Amount"), a number of shares of Common stock, no
par value per share ("Common Stock"), of the Company equal to the Settlement
Rate, unless on or prior to the Purchase Contract Settlement Date there shall
have occurred a Termination Event or an Early Settlement with respect to the
Growth PRIDES of which such Purchase Contract is a part, all as provided in
the Purchase Contract Agreement and more fully described on the reverse
hereof. The purchase price for the shares of Common Stock purchased pursuant
to each Purchase Contract evidenced hereby will be paid by application of the
Proceeds from the Treasury Securities pledged to secure the obligations under
such Purchase Contract in accordance with the terms of the Pledge Agreement.
The Company shall pay on each Payment Date in respect of each
Purchase Contract evidenced hereby an amount (the "Contract Adjustment
<PAGE>
Payments") equal to __% per annum of the Stated Amount, computed on the basis
of the actual number of days elapsed in a year of 360 day year of twelve 30
day months, as the case may be, subject to deferral at the option of the
Company as provided in the Purchase Contract Agreement and more fully
described on the reverse hereof. Such Contract Adjustment Payments shall be
payable to the Person in whose name this Growth PRIDES Certificate (or a
Predecessor Growth PRIDES Certificate) is registered at the close of business
on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the office of the
Agent in The City of New York or, at the option of the Company, by check
mailed to the address of the Person entitled thereto as such address appears
on the Growth PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Growth PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed.
INGERSOLL-RAND COMPANY
By:__________________________________
Name:
Title:
By:__________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: THE FIRST NATIONAL BANK OF
CHICAGO, not individually but
solely as Attorney-in-Fact of
such Holder
By:________________________________
Name:
Title:
Dated:
<PAGE>
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Growth PRIDES referred to in the within-
mentioned Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF
CHICAGO, as Purchase Contract
Agent
By: ________________________________
Authorized Officer
<PAGE>
(Reverse of
Growth PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a
Purchase Contract Agreement, dated as of _______ ___, 1998 (as may be
supplemented from time to time, the "Purchase Contract Agreement") between
the Company and The First National Bank of Chicago, as Purchase Contract
Agent (including its successors thereunder, herein called the "Agent"), to
which the Purchase Contract Agreement and supplemental agreements thereto
reference is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Agent, the Company and the Holders and of the terms upon which the Growth
PRIDES Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder
of this Growth PRIDES Certificate to purchase, and the Company to sell, on
the Purchase Contract Settlement Date at a price equal to the Stated Amount
(the "Purchase Price") a number of shares of Common Stock of the Company
equal to the Settlement Rate, unless on or prior to the Purchase Contract
Settlement Date, there shall have occurred a Termination Event or an Early
Settlement with respect to the Security of which such Purchase Contract is a
part. The "Settlement Rate" is equal to (a) if the Applicable Market Value
(as defined below) is equal to or greater than $ (the "Threshold
Appreciation Price"), shares of Common Stock per Purchase Contract,
(b) if the Applicable Market Value is less than the Threshold Appreciation
Price but is greater than $ , the number of shares of Common Stock per
Purchase Contract equal to the Stated Amount divided by the Applicable Market
Value and (c) if the Applicable Market Amount is less than or equal to $
, then shares of Common Stock per Purchase Contract, in each
case subject to adjustment as provided in the Purchase Contract Agreement.
No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in the Purchase Contract Agreement.
The "Applicable Market Value" means the average of the
Closing Prices per share of Common Stock on each of the twenty consecutive
Trading Days ending on the third Trading Day immediately preceding the
Purchase Contract Settlement Date. The "Closing Price" of the Common Stock
on any date of determination means the closing sale price (or, if no closing
price is reported, the last reported sale price) of the Common Stock on the
New York Stock Exchange (the "NYSE") on such date or, if the Common Stock is
not listed for trading on the NYSE on any such date, as reported in the
composite transactions for the principal United States securities exchange on
which the Common Stock is so listed, or if the Common Stock is not so listed
on a United States national or regional securities exchange, as reported by
The Nasdaq Stock Market, or, if the Common Stock is not so reported, the last
quoted bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization, or, if
such bid price is not available, the market value of the Common Stock on such
date as determined by a nationally recognized independent investment banking
firm retained for this purpose by the Company. A "Trading Day" means a day
on which the Common Stock (A) is not suspended from trading on any national
or regional securities exchange or association or over-the-counter market at
the close of business and (B) has traded at least once on the national or
regional securities exchange or association or over-the-counter market that
is the primary market for the trading of the Common Stock.
<PAGE>
In accordance with the terms of the Purchase Contract
Agreement, the Holder of this Growth PRIDES Certificate shall pay the
Purchase Price for the shares of Common Stock purchased pursuant to each
Purchase Contract evidenced hereby by effecting either an Early Settlement of
each such Purchase Contract or by applying a principal amount of the Pledged
Treasury Securities underlying such Holder's Growth PRIDES equal to the
Stated Amount of such Purchase Contract to the purchase of the Common Stock.
The Company shall not be obligated to issue any shares of
Common Stock in respect of a Purchase Contract or deliver any certificates
therefor to the Holder unless it shall have received payment in full of the
aggregate purchase price for the shares of Common Stock to be purchased
thereunder in the manner herein set forth.
Each Purchase Contract evidenced hereby and all obligations
and rights of the Company and the Holder thereunder shall terminate if a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall give written notice to the Agent and to the Holders,
at their addresses as they appear in the Growth PRIDES Register. Upon and
after the occurrence of a Termination Event, the Collateral Agent shall
release the Pledged Treasury Securities (as defined in the Pledge Agreement)
forming a part of each Growth PRIDES.
The Growth PRIDES Certificates are issuable only in
registered form and only in denominations of a single Growth PRIDES and any
integral multiple thereof. The transfer of any Growth PRIDES Certificate
will be registered and Growth PRIDES Certificates may be exchanged as
provided in the Purchase Contract Agreement. The Growth PRIDES Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents permitted by the Purchase Contract Agreement. No service
charge shall be required for any such registration of transfer or exchange,
but the Company and the Agent may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
A Holder who elects to substitute Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
for Treasury Securities, thereby recreating Income PRIDES, shall be
responsible for any fees or expenses associated therewith. Except as
provided in the Purchase Contract Agreement, for so long as the Purchase
Contract underlying a Growth PRIDES remains in effect, such Growth PRIDES
shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such Growth PRIDES in respect of the Treasury
Security and the Purchase Contract constituting such Growth PRIDES may be
transferred and exchanged only as a Growth PRIDES. A Holder of Growth PRIDES
may create or recreate Income PRIDES by delivering to the Collateral Agent
Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, with a Stated Amount, in the case of such Preferred
Securities, or with the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, in the case of such appropriate Applicable Ownership Interest of
the Treasury Portfolio, equal to the aggregate principal amount of the
Pledged Treasury Securities in exchange for the release of such Pledged
Treasury Securities in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. From and after such substitution, the
Holder's Security shall be referred to as an "Income PRIDES." Such
substitution may cause the equivalent aggregate principal amount of this
Certificate to be increased or decreased; provided, however, the equivalent
aggregate principal amount outstanding under this Growth PRIDES Certificate
<PAGE>
shall not exceed $200,000,000. All such adjustments to the equivalent
aggregate principal amount of this Growth PRIDES Certificate shall be duly
recorded by placing an appropriate notation on the Schedule attached hereto.
A Holder of an Income PRIDES may create or recreate a Growth
PRIDES by delivering to the Collateral Agent Treasury Securities in an
aggregate principal amount equal to the aggregate Stated Amount of the
Pledged Preferred Securities or the appropriate Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, in exchange for the release of such Pledged
Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement. Any such recreation of
a Growth PRIDES may be effected only in multiples of 100 Income PRIDES for
100 Growth PRIDES; provided, however, if a Tax Event Redemption has occurred
and the Treasury Portfolio has become a component of the Income PRIDES, a
Holder may make such Collateral Substitution in integral multiples of 160,000
Income PRIDES for 160,000 Growth PRIDES.
Subject to the next succeeding paragraph, the Company shall
pay, on each Payment Date, the Contract Adjustment Payments payable in
respect of each Purchase Contract to the Person in whose name the Growth
PRIDES Certificate evidencing such Purchase Contract is registered at the
close of business on the Record Date for such Payment Date. Contract
Adjustment Payments will be payable at the office of the Agent in The City of
New York or, at the option of the Company, by check mailed to the address of
the Person entitled thereto at such address as it appears on the Growth
PRIDES Register.
The Company shall have the right, at any time prior to the
Purchase Contract Settlement Date, to defer the payment of any or all of the
Contract Adjustment Payments otherwise payable on any Payment Date, but only
if the Company shall give the Holders and the Agent written notice of its
election to defer such payment (specifying the amount to be deferred) as
provided in the Purchase Contract Agreement. Any Contract Adjustment
Payments so deferred shall bear additional Contract Adjustment Payments
thereon at the rate of ____% per annum (computed on the basis of a 360 day
year of twelve 30 day months), compounding on each succeeding Payment Date,
until paid in full (such deferred installments of Contract Adjustment
Payments together with the additional Contract Adjustment Payments accrued
thereon, are referred to herein as the "Deferred Contract Adjustment
Payments"). Deferred Contract Adjustment Payments, if any, shall be due on
the next succeeding Payment Date except to the extent that payment is
deferred pursuant to the Purchase Contract Agreement. No Contract Adjustment
Payments may be deferred to a date that is after the Purchase Contract
Settlement Date.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the Purchase
Contract Settlement Date, the Holder of this Growth PRIDES Certificate will
receive on the Purchase Contract Settlement Date, in lieu of a cash payment,
a number of Shares of Common Stock equal to (x) the aggregate amount of
Deferred Contract Adjustment Payments payable to the Holder of the Growth
PRIDES Certificate divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the
payment of Contract Adjustment Payments, then, until the Deferred Contract
<PAGE>
Adjustment Payments have been paid, the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital
stock or make guarantee payments with respect to the foregoing (other than
(i) purchases or acquisitions of shares of capital stock of the Company in
connection with the satisfaction by the Company of its obligations under any
employee or agent benefit plans or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date of
such event requiring the Company to purchase capital stock of the Company,
(ii) as a result of a reclassification of the Company's capital stock or the
exchange or conversion of one class or series of the Company's capital stock
for another class or series of the Company's capital stock, (iii) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of the Company's capital
stock or the security being converted or exchanged, (iv) dividends or
distributions in capital stock of the Company (or rights to acquire capital
stock) or repurchases or redemptions of capital stock solely from the
issuance or exchange of capital stock or (v) redemptions or repurchases of
any rights outstanding under a shareholder rights plan and the declaration
thereunder of a dividend of right in the future).
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without limitation, the rights
of the Holders to receive and the obligation of the Company to pay Contract
Adjustment Payments or any Deferred Contract Adjustment Payments, shall
immediately and automatically terminate, without the necessity of any notice
or action by any Holder, the Agent or the Company, if, on or prior to the
Purchase Contract Settlement Date, a Termination Event shall have occurred.
Upon the occurrence of a Termination Event, the Company shall promptly but in
no event later than two business days thereafter give written notice to the
Agent, the Collateral Agent and to the Holders, at their addresses as they
appear in the Growth PRIDES Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Treasury Securities
from the Pledge in accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the
Purchase Contract Agreement, at the option of the Holder thereof, Purchase
Contracts underlying Securities having an aggregate Stated Amount equal to
$1,000 or an integral multiple thereof may be settled early ("Early
Settlement") as provided in the Purchase Contract Agreement. In order to
exercise the right to effect Early Settlement with respect to any Purchase
Contracts evidenced by this Growth PRIDES Certificate, the Holder of this
Growth PRIDES Certificate shall deliver this Growth PRIDES Certificate to the
Agent at the Corporate Trust Office duly endorsed for transfer to the Company
or in blank with the form of Election to Settle Early set forth below duly
completed and accompanied by payment in the form of immediately available
funds payable to the order of the Company in an amount (the "Early Settlement
Amount") equal to (i) the product of (A) the Stated Amount times (B) the
number of Purchase Contracts with respect to which the Holder has elected to
effect Early Settlement, plus (ii) if such delivery is made with respect to
any Purchase Contracts during the period from the close of business on any
Record Date for any Payment Date to the opening of business on such Payment
Date, an amount equal to the Contract Adjustment Payments payable, if any, on
such Payment Date with respect to such Purchase Contracts. Upon Early
Settlement of Purchase Contracts by a Holder of the related Securities, the
Pledged Treasury Securities underlying such Securities shall be released from
the Pledge as provided in the Pledge Agreement and the Holder shall be
<PAGE>
entitled to receive, a number of shares of Common Stock on account of each
Purchase Contract forming part of a Growth PRIDES as to which Early
Settlement is effected equal to shares of Common Stock per Purchase
Contract (the "Early Settlement Rate"); provided however, that upon the Early
Settlement of the Purchase Contracts, the Holder thereof will forfeit the
right to receive any Deferred Contract Adjustment Payments on such Purchase
Contracts. The Early Settlement Rate shall be adjusted in the same manner
and at the same time as the Settlement Rate is adjusted as provided in the
Purchase Contract Agreement.
Upon registration of transfer of this Growth PRIDES
Certificate, the transferee shall be bound (without the necessity of any
other action on the part of such transferee, except as may be required by the
Agent pursuant to the Purchase Contract Agreement), under the terms of the
Purchase Contract Agreement and the Purchase Contracts evidenced hereby and
the transferor shall be released from the obligations under the Purchase
Contracts evidenced by this Growth PRIDES Certificate. The Company covenants
and agrees, and the Holder, by his acceptance hereof, likewise covenants and
agrees, to be bound by the provisions of this paragraph.
The Holder of this Growth PRIDES Certificate, by his
acceptance hereof, authorizes the Agent to enter into and perform the related
Purchase Contracts forming part of the Growth PRIDES evidenced hereby on his
behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform its obligations under such Purchase
Contracts, consents to the provisions of the Purchase Contract Agreement,
authorizes the Agent to enter into and perform the Pledge Agreement on his
behalf as his attorney-in-fact, and consents to the Pledge of the Treasury
Securities underlying this Growth PRIDES Certificate pursuant to the Pledge
Agreement. The Holder further covenants and agrees, that, to the extent and
in the manner provided in the Purchase Contract Agreement and the Pledge
Agreement, but subject to the terms thereof, payments in respect to the
Stated Amount of the Pledged Treasury Securities on the Purchase Contract
Settlement Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Purchase Contract and
such Holder shall acquire no right, title or interest in such payments.
Subject to certain exceptions, the provisions of the
Purchase Contract Agreement may be amended with the consent of the Holders of
a majority of the Purchase Contracts.
The Purchase Contracts shall for all purposes be governed
by, and construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of
the Company or the Agent may treat the Person in whose name this Growth
PRIDES Certificate is registered as the owner of the Growth PRIDES evidenced
hereby for the purpose of receiving payments of interest on the Treasury
Securities, receiving payments of Contract Adjustment Payments and any
Deferred Contract Adjustment Payments, performance of the Purchase Contracts
and for all other purposes whatsoever, whether or not any payments in respect
thereof be overdue and notwithstanding any notice to the contrary, and
neither the Company, the Agent nor any such agent shall be affected by notice
to the contrary.
<PAGE>
The Purchase Contracts shall not, prior to the settlement
thereof, entitle the Holder to any of the rights of a holder of shares of
Common Stock.
A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Agent.
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
_____________________________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
___________________________________________________________________________
___________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number
of Assignee)________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Growth PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
___________________________________________________________________________
attorney to transfer said Growth PRIDES Certificates on the books of
INGERSOLL-RAND Company with full power of substitution in the premises.
Dated: _________________ ____________________________
Signature
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of the
within Growth PRIDES Certificates in
every particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee: __________________________________
<PAGE>
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares
of Common Stock deliverable upon settlement on or after the Purchase Contract
Settlement Date of the Purchase Contracts underlying the number of Growth
PRIDES evidenced by this Growth PRIDES Certificate be registered in the name
of, and delivered, together with a check in payment for any fractional share,
to the undersigned at the address indicated below unless a different name and
address have been indicated below. If shares are to be registered in the
name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
Dated: ___________________ _______________________________
Signature
Signature Guarantee:
If shares are to be registered
in the name of and delivered to REGISTERED HOLDER
a Person other than the Holder,
please print such Person's name
and address:
Please print name and address of
Registered Holder:
______________________________ _______________________________
Name Name
______________________________ _______________________________
Address Address
______________________________ _______________________________
______________________________ _______________________________
______________________________ _______________________________
Social Security or other
Taxpayer Identification
Number, if any _______________________________
ELECTION TO SETTLE EARLY
The undersigned Holder of this Growth PRIDES Certificate
hereby irrevocably exercises the option to effect Early Settlement in
accordance with the terms of the Purchase Contract Agreement with respect to
the Purchase Contracts underlying the number of Growth PRIDES evidenced by
this Growth PRIDES Certificate specified below. The option to effect Early
Settlement may be exercised only with respect to Purchase Contracts
underlying Growth PRIDES with an aggregate Stated Amount equal to $1,000 or
an integral multiple thereof. The undersigned Holder directs that a
certificate for shares of Common Stock deliverable upon such Early Settlement
be registered in the name of, and delivered, together with a check in payment
for any fractional share and any Growth PRIDES Certificate representing any
<PAGE>
Growth PRIDES evidenced hereby as to which Early Settlement of the related
Purchase Contracts is not effected, to the undersigned at the address
indicated below unless a different name and address have been indicated
below. Pledged Treasury Securities deliverable upon such Early Settlement
will be transferred in accordance with the transfer instructions set forth
below. If shares are to be registered in the name of a Person other than the
undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated: ___________________ _______________________________
Signature
Signature Guarantee: ____________________________________
<PAGE>
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock of Growth REGISTERED HOLDER
PRIDES Certificates are to be regis-
tered in the name of and delivered to
and Pledged Treasury Securities are to
be transferred to a Person other than
the Holder, please print such Person's
name and address:
Please print name and
address of Registered
Holder:
______________________________ _______________________________
Name Name
______________________________ _______________________________
Address Address
______________________________ _______________________________
______________________________ _______________________________
______________________________ _______________________________
Social Security or other
Taxpayer Identification
Number, if any _______________________________
Transfer Instructions for Pledged Treasury Securities Transferable Upon Early
Settlement or a Termination Event:
___________________________________
___________________________________
___________________________________
<PAGE>
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
Principal
Amount of
Amount of Amount of this Global Signature of
decrease in increase in Certificate authorized
Principal Principal following officer of
Amount of the Amount of the such decrease Trustee or
Global Global or Securities
Date Certificate Certificate increase Custodian
<PAGE>
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
COLLATERAL AGENT
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10010-2697
Attention: Corporate Trust Administration Department
Re: FELINE PRIDES of Ingersoll-Rand Company (the
"Company"), and Ingersoll-Rand Financing I
We hereby notify you in accordance with Section 4.1 of the
Pledge Agreement, dated as of _______ ___, 1998, among the Company,
yourselves, as Collateral Agent, and ourselves, as Purchase Contract Agent
and as attorney-in-fact for the holders of [Income PRIDES] [Growth PRIDES]
from time to time, that the holder of securities listed below (the "Holder")
has elected to substitute [$_____ aggregate [principal amount] of Treasury
Securities] [$_______ Stated Amount of Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be,] in exchange for the [Pledged Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be,] [Pledged Treasury Securities] held by you in accordance with
the Pledge Agreement and has delivered to us a notice stating that the Holder
has Transferred [Treasury Securities] [Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be,] to you, as Collateral Agent. We hereby instruct you, upon
receipt of such [Pledged Treasury Securities] [Pledged Preferred Securities
or the appropriate Applicable Ownership Interest of the Treasury Portfolio,
as the case may be], and upon the payment by such Holder of any applicable
fees, to release the [Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,] [Treasury
Securities] related to such [Income PRIDES] [Growth PRIDES] to us in
accordance with the Holder's instructions.
Date:______________________ ___________________________________
By:________________________________
Name:
Title:
Signature Guarantee: ______________
<PAGE>
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,] for the
[Pledged Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] [Pledged Treasury
Securities]:
_________________________________ __________________________________
Name Social Security or other Taxpayer
Identification Number, if any
________________________________
Address
________________________________
________________________________
<PAGE>
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Services Division
Re: FELINE PRIDES of Ingersoll-Rand Company (the
"Company"), and Ingersoll-Rand Financing I
The undersigned Holder hereby notifies you that it has
delivered to The Chase Manhattan Bank, as Collateral Agent, $_______
aggregate principal amount of [Treasury Securities] [Preferred Securities or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be,] in exchange for the [Pledged Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be,] [Pledged Treasury Securities] held by the Collateral Agent, in
accordance with Section 4.1 of the Pledge Agreement, dated _______ ___,
1998, between you, the Company and the Collateral Agent. The undersigned
Holder has paid the Collateral Agent all applicable fees relating to such
exchange. The undersigned Holder hereby instructs you to instruct the
Collateral Agent to release to you on behalf of the undersigned Holder the
[Pledged Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] [Pledged Treasury
Securities] related to such [Income PRIDES] [Growth PRIDES].
Dated:_________________________ _________________________________
Signature
Signature Guarantee: _______________
Please print name and address of Registered Holder:
______________________________ ______________________________
Name Social Security or other Taxpayer
Identification Number, if any
Address
______________________________
______________________________
______________________________
<PAGE>
EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Services Division
Re: FELINE PRIDES of Ingersoll-Rand Company (the
"Company"), and Ingersoll-Rand Financing I
The undersigned Holder hereby irrevocably notifies you in
accordance with Section 5.4 of the Purchase Contract Agreement, dated as of
______ ___, 1998 among the Company, yourselves, as Purchase Contract Agent
and as Attorney-in-Fact for the Holders of the Purchase Contracts, that such
Holder has elected to pay to the Collateral Agent, on or prior to 11:00 a.m.
New York City time, on the Business Day immediately preceding the Purchase
Contract Settlement Date, (in lawful money of the United States by [certified
or cashiers check or] wire transfer, in each case in immediately available
funds), $_________ as the Purchase Price for the shares of Common Stock
issuable to such Holder by the Company under the related Purchase Contract on
the Purchase Contract Settlement Date. The undersigned Holder hereby
instructs you to notify promptly the Collateral Agent of the undersigned
Holders election to make such cash settlement with respect to the Purchase
Contracts related to such Holder's [Income PRIDES] [Growth PRIDES].
Dated:_________________________ _________________________________
Signature
Signature Guarantee: _______________
Please print name and address of Registered Holder:
______________________________ ______________________________
Name Social Security or other Taxpayer
Identification Number, if any
Address
______________________________
______________________________
______________________________
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of March, 1998 (this "Agreement"), among
Ingersoll-Rand Company, a New Jersey corporation (the "Company"), The Chase
Manhattan Bank, a New York banking corporation, not individually but solely
as collateral agent (in such capacity, together with its successors in such
capacity, the "Collateral Agent") and in its capacity as a "securities
intermediary" as defined in Section 8-102(a)(14) of the Code (as defined
herein) (in such capacity, together with its successors in such capacity, the
"Securities Intermediary"), and The First National Bank of Chicago, not
individually but solely as purchase contract agent and as attorney-in-fact of
the Holders (as defined in the Purchase Contract Agreement) from time to time
of the Securities (as hereinafter defined) (in such capacity, together with
its successors in such capacity, the "Purchase Contract Agent") under the
Purchase Contract Agreement (as hereinafter defined).
RECITALS
The Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement, dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which there may be issued up to FELINE PRIDES
and % Trust Originated Preferred Securities (the "Preferred
Securities" and, together with the FELINE PRIDES, the "Securities").
The FELINE PRIDES will initially consist of (A) 35,000,000 units
(referred to as "Income PRIDES") with a Stated Amount, per Income PRIDES, of
$10 (the "Stated Amount") and (B) at least 3,500,000 units (referred to as
"Growth PRIDES") with a face amount, per Growth PRIDES, equal to the Stated
Amount. Each Income PRIDES will initially consist of a unit comprised of (a)
a stock purchase contract (a "Purchase Contract") under which (i) the holder
will purchase from the Company on , 2001 (the "Purchase Contract
Settlement Date"), for an amount of cash equal to the Stated Amount, a number
of newly issued shares of common stock, $2.00 par value per share (the
"Common Stock"), of the Company equal to the Settlement Rate and (ii) the
Company will pay the holder Contract Adjustment Payments at the rate of
% of the Stated Amount per annum and (b) either beneficial ownership of a
Trust Preferred Security or upon the occurrence of a Tax Event Redemption the
Applicable Ownership Interest of the Treasury Portfolio. Each Growth PRIDES
will initially consist of a unit comprised of (a) a Purchase Contract under
which (i) the holder will purchase from the Company on the Purchase Contract
Settlement Date, for an amount in cash equal to the Stated Amount, a number
of newly issued shares of Common Stock of the Company, equal to the
Settlement Rate, and (ii) the Company will pay the holder Contract Adjustment
Payments, at the rate of % of the Stated Amount per annum, and (b) a
1/100 undivided beneficial interest in a % zero-coupon U.S. Treasury
Security (CUSIP No. ) having a principal amount equal to $1,000 and
maturing on , 2001 (the "Treasury Securities").
Pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders, from time to time, of the Securities have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of
such Holders, among other things, to execute and deliver this Agreement on
behalf of such Holders and to grant the pledge provided hereby of the
Preferred Securities and any Treasury Securities delivered in exchange
therefor to secure each Holder's obligations under the related Purchase
<PAGE>
Contract, as provided herein and subject to the terms hereof. Upon such
pledge, the Preferred Securities will be beneficially owned by the Holders
but will be owned of record by the Purchase Contract Agent subject to the
Pledge hereunder.
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary and the Purchase Contract Agent, on its own behalf and as
attorney-in-fact of the Holders from time to time of the Securities, agree as
follows:
Section 1. Definitions. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision;
(c) the following terms have the meanings assigned to them in the
Purchase Contract Agreement: (i) Act, (ii) Agent, (iii) Board
Resolution, (iv) Cash Settlement, (v) Certificate, (vi) Common Stock,
(vii) Contract Adjustment Payments, (viii) Debentures, (ix) Early
Settlement, (x) Early Settlement Amount, (xi) Early Settlement Date,
(xii) Failed Remarketing, (xiii) Holder, (xiv) Opinion of Counsel, (xv)
Outstanding Securities, (xvi) Purchase Agreement, (xvii) Purchase
Contract, (xviii) Purchase Contract Settlement Date, (xix) Purchase
Price, (xx) Remarketing Agent, (xxi) Remarketing Agreement, (xxii)
Remarketing Underwriting Agreement, (xxiii) Settlement Rate, and (xxiv)
Termination Event; and
(d) the following terms have the meanings assigned to them in the
Declaration: (i) Applicable Ownership Interest (ii) Applicable
Principal Amount, (iii) Institutional Trustee, (iv) Investment Company
Event,(v) Primary Treasury Dealer, (vi) Quotation Agent, (vii)
Redemption Amount, (viii) Redemption Price, (ix) Tax Event, (x) Tax
Event Redemption, (xi) Tax Event Redemption Date, (xii) Treasury
Portfolio, (xiii) Treasury Portfolio Purchase Price.
"Agreement" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions
hereof.
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform
system of bankruptcy laws.
"Business Day" means any day other than a Saturday, a Sunday or any
other day on which banking institutions in The City of New York (in the State
of New York) are permitted or required by any applicable law to close.
"Cash" means any coin or currency of the United States as at the
time shall be legal tender for payment of public and private debts.
<PAGE>
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1 hereof.
"Collateral Account" means the trust account (number )
maintained at The Chase Manhattan Bank in the name "The First National Bank
of Chicago", as Purchase Contract Agent on behalf of the holders of certain
securities of Ingersoll-Rand Financing I, Collateral Account subject to the
security interest of The Chase Manhattan Bank, as Collateral Agent, for the
benefit of Ingersoll-Rand Company, as pledgee and any successor account.
"Collateral Agent" has the meaning specified in the first paragraph
of this instrument.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"Debenture Trustee" means
, as trustee under the Indenture until a successor
is appointed thereunder, and thereafter means such successor trustee.
"Declaration" means the Amended and Restated Declaration of Trust,
dated as of , 1998, among the Company as sponsor, the trustees
named therein and the holders from time to time of undivided beneficial
interests in the assets of the Trust.
"Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Permitted Investments" means any one of the following which shall
mature not later than the next succeeding Business Day (i) any evidence of
indebtedness with an original maturity of 365 days or less issued, or
directly and fully guaranteed or insured, by the United States of America or
any agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof or such
indebtedness constitutes a general obligation of it); (ii) deposits,
certificates of deposit or acceptances with an original maturity of 365 days
or less of any institution which is a member of the Federal Reserve System
having combined capital and surplus and undivided profits of not less than
US$ 200.0 million at the time of deposit; (iii) investments with an original
maturity of 365 days or less of any Person that is fully and unconditionally
guaranteed by a bank referred to in clause (ii); (iv) repurchase agreements
and reverse repurchase agreements relating to marketable direct obligations
issued or unconditionally guaranteed by the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States Government; (v) investments in commercial paper, other than
commercial paper issued by the Company or its affiliates, of any corporation
incorporated under the laws of the United States or any State thereof, which
commercial paper has a rating at the time of purchase at least equal to "A-1"
by Standard & Poor's Ratings Services or at least equal to "P-1" by Moody's
Investors Service, Inc.; and (vi) investments in money market funds
registered under the Investment Company Act of 1940, as amended, rated in the
highest applicable rating category by S&P or Moody's.
<PAGE>
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Preferred Securities" has the meaning specified in Section
2.1 hereof.
"Pledged Treasury Securities" has the meaning specified in Section
2.1 hereof.
"Preferred Securities" has the meaning specified in the Recitals.
"Proceeds" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in Section 8-102(a)(9) of the Code)
and other property from time to time received, receivable or otherwise
distributed upon the sale, exchange, collection or disposition of the
Collateral or any proceeds thereof.
"Purchase Contract" has the meaning specified in the Recitals.
"Purchase Contract Agent" has the meaning specified in the first
paragraph of this Agreement.
"Purchase Contract Agreement" has the meaning specified in the
Recitals.
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in the first
paragraph of this Agreement.
"Security Entitlement" has the meaning set forth in Section 8-
102(a)(17) of the Code.
"Stated Amount" has the meaning specified in the Recitals.
"TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.
"TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the
TRADES Regulations are used herein as therein defined.
"Transfer" means, with respect to the Collateral and in accordance
with the instructions of the Collateral Agent, the Purchase Contract Agent or
the Holder, as applicable:
(i) in the case of Collateral consisting of securities which
cannot be delivered by book-entry or which the parties agree are to be
delivered in physical form, delivery in appropriate physical form to the
recipient accompanied by any duly executed instruments of transfer,
<PAGE>
assignments in blank, transfer tax stamps and any other documents
necessary to constitute a legally valid transfer to the recipient;
(ii) in the case of Collateral consisting of securities maintained
in book-entry form by causing a "securities intermediary" (as defined in
Section 8-102(a)(14) of the Code) to (i) credit a "securities
entitlement" (as defined in Section 8-102(a)(17) of the Code) with
respect to such securities to a "securities account" (as defined in
Section 8-501(a) of the Code) maintained by or on behalf of the
recipient and (ii) to issue a confirmation to the recipient with respect
to such credit.
"Treasury Security" means a zero-coupon U.S. Treasury Security
(Cusip Number ) which are the principal strips of the
% U.S. Treasury Securities which mature on , 2001.
"Trust" has the meaning specified in the Recitals.
"Value" with respect to any item of Collateral on any date means,
as to (i) a Preferred Security, the Stated Amount, (ii) Cash, the face amount
thereof and (iii) Treasury Securities, the aggregate principal amount thereof
at maturity.
Section 2. Pledge; Control and Perfection.
Section 2.1. The Pledge. The Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, hereby pledge
and grant to the Collateral Agent, for the benefit of the Company, as
collateral security for the performance when due by such Holders of their
respective obligations under the related Purchase Contracts, a security
interest in (i) all of the right, title and interest of such Holders (a) in
the Preferred Securities constituting a part of the Securities and all
Proceeds thereof and any Treasury Securities delivered in exchange for such
Preferred Securities in accordance with Section 4 hereof, in each case that
have been Transferred to or received by the Collateral Agent and not released
by the Collateral Agent to such Holders under the provisions of this
Agreement (the "Collateral"); (b) in payments made by Holders pursuant to
Section 4.4; (c) in the Collateral Account and all securities, financial
assets and other property credited thereto and all Security Entitlements
related thereto; (d) in any Debentures delivered to the Collateral Agent upon
the occurrence of an Investment Company Event or a liquidation of the Trust
as provided in Section 6.2; (e) in the Treasury Portfolio purchased on behalf
of the Holders of Income PRIDES by the Collateral Agent upon the occurrence
of a Tax Event Redemption as provided in Section 6.2 and (f) all proceeds of
the foregoing. Prior to or concurrently with the execution and delivery of
this Agreement, the Purchase Contract Agent, on behalf of the initial Holders
of the Income PRIDES, shall cause the Preferred Securities comprising a part
of the Income PRIDES to be delivered to the Collateral Agent for the benefit
of the Company by physically delivering such securities to the Collateral
Agent endorsed in blank and the Collateral Agent delivering such securities
to the Securities Intermediary and causing the Securities Intermediary to
credit the Collateral Account with such securities and send the Collateral
Agent a confirmation of the deposit of such securities. In the event a
Holder of Income PRIDES so elects, such Holder may Transfer Treasury
Securities to the Collateral Agent for the benefit of the Company in exchange
for the release by the Collateral Agent on behalf of the Company of Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
<PAGE>
Portfolio, as the case may be, with an aggregate stated liquidation amount
equal to the aggregate principal amount of the Treasury Securities so
Transferred, in the case of Preferred Securities, or with an appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio equal to the aggregate principal
amount of the Treasury Securities so transferred, in the event that a Tax
Event Redemption has occurred, to the Purchase Contract Agent on behalf of
such Holder. Treasury Securities and the Treasury Portfolio, as applicable,
shall be Transferred to the Collateral Account maintained by the Collateral
Agent at the Securities Intermediary by book-entry transfer to the Collateral
Account in accordance with the TRADES Regulations and other applicable law
and by the notation by the Securities Intermediary on its books that a
Security Entitlement with respect to such Treasury Securities or Treasury
Portfolio, has been credited to the Collateral Account. For purposes of
perfecting the Pledge under applicable law, including, to the extent
applicable, the TRADES Regulations or the Uniform Commercial Code as adopted
and in effect in any applicable jurisdiction, the Collateral Agent shall be
the agent of the Company as provided herein. The pledge provided in this
Section 2.1 is herein referred to as the "Pledge" and the Preferred
Securities (or the Debentures that are delivered pursuant to Section 6.2
hereof) or Treasury Securities subject to the Pledge, excluding any Preferred
Securities (or the Debentures that are delivered pursuant to Section 6.2
hereof) or Treasury Securities released from the Pledge as provided in
Section 4 hereof, are hereinafter referred to as "Pledged Preferred
Securities" or the "Pledged Treasury Securities," respectively. Subject to
the Pledge and the provisions of Section 2.2 hereof, the Holders from time to
time shall have full beneficial ownership of the Collateral. Whenever
directed by the Collateral Agent acting on behalf of the Company, the
Securities Intermediary shall have the right to reregister the Preferred
Securities or any other securities held in physical form in its name.
Except as may be required in order to release Preferred Securities
in connection with a Holder's election to convert its investment from an
Income PRIDES to a Growth PRIDES, or except as otherwise required to release
securities as specified herein, neither the Collateral Agent nor the
Securities Intermediary shall relinquish physical possession of any
certificate evidencing a Preferred Security prior to the termination of this
Agreement. If it becomes necessary for the Securities Intermediary to
relinquish physical possession of a certificate in order to release a portion
of the Preferred Securities evidenced thereby from the Pledge, the Securities
Intermediary shall use its best efforts to obtain physical possession of a
replacement certificate evidencing any Preferred Securities remaining subject
to the Pledge hereunder registered to it or endorsed in blank within fifteen
days of the date it relinquished possession. The Securities Intermediary
shall promptly notify the Company and the Collateral Agent of the Securities
Intermediary's failure to obtain possession of any such replacement
certificate as required hereby.
Section 2.2. Control and Perfection. In connection with the
Pledge granted in Section 2.1, and subject to the other provisions of this
Agreement, the Holders from time to time acting through the Purchase Contract
Agent, as their attorney-in-fact, hereby authorize and direct the Securities
Intermediary (without the necessity of obtaining the further consent of the
Purchase Contract Agent or any of the Holders), and the Securities
Intermediary agrees, to comply with and follow any instructions and
entitlement orders (as defined in Section 8-102(a)(8) of the Code) that the
Collateral Agent on behalf of the Company may give in writing with respect to
<PAGE>
the Collateral Account, the Collateral credited thereto and any security
entitlements with respect to any thereof. Such instructions and entitlement
orders may, without limitation, direct the Securities Intermediary to
transfer, redeem, sell, liquidate, assign, deliver or otherwise dispose of
the Preferred Securities, the Treasury Securities, the Treasury Portfolio,
and any Security Entitlements with respect thereto and to pay and deliver any
income, proceeds or other funds derived therefrom to the Company. The
Holders from time to time acting through the Purchase Contract Agent hereby
further authorize and direct the Collateral Agent, as agent of the Company,
to itself issue instructions and entitlement orders, and to otherwise take
action, with respect to the Collateral Account, the Collateral credited
thereto and any security entitlements with respect thereto, pursuant to the
terms and provisions hereof, all without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the Holders. The
Collateral Agent shall be the Agent of the Company and shall act as directed
in writing by the Company. Without limiting the generality of the foregoing,
the Collateral Agent shall issue entitlement orders to the Securities
Intermediary when and as directed by the Company.
Section 3. Distributions on Pledged Collateral. So long as the
Purchase Contract Agent is the registered owner of the Pledged Preferred
Securities, it shall receive all payments thereon. If the Pledged Preferred
Securities are reregistered, such that the Collateral Agent becomes the
registered holder, all payments of the Stated Amount of or, if applicable,
the appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio, or cash distributions
on, the Pledged Preferred Securities or on the appropriate Applicable
Ownership Interest (as specified in clause (B) of the definition of such
term) of the Treasury Portfolio, as the case may be, and all payments of the
principal of, or cash distributions on, any Pledged Treasury Securities
received by the Collateral Agent that are properly payable hereunder shall be
paid by the Collateral Agent by wire transfer in same day funds:
(i) In the case of (A) cash distributions with respect to
the Pledged Preferred Securities or the appropriate Applicable
Ownership Interest (as specified in clause (B) of the definition of
such term) of the Treasury Portfolio, as the case may be, and (B) any
payments of the Stated Amount or, if applicable, the appropriate
Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio with respect to
any Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, that have
been released from the Pledge pursuant to Section 4.3 hereof, to the
Purchase Contract Agent, for the benefit of the relevant Holders of
Securities, to the account designated by the Purchase Contract Agent
for such purpose, no later than 2:00 p.m., New York City time, on the
Business Day such payment is received by the Collateral Agent
(provided that in the event such payment is received by the
Collateral Agent on a day that is not a Business Day or after 12:30
p.m., New York City time, on a Business Day, then such payment shall
be made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day);
(ii) In the case of any principal payments with respect to
any Treasury Securities that have been released from the Pledge
pursuant to Section 4.3 hereof, to the Holders of the Growth PRIDES
to the accounts designated by them in writing for such purpose no
<PAGE>
later than 2:00 p.m., New York City time, on the Business Day such
payment is received by the Collateral Agent (provided that in the
event such payment is received by the Collateral Agent on a day that
is not a Business Day or after 12:30 p.m., New York City time, on a
Business Day, then such payment shall be made no later than 10:30
a.m., New York City time, on the next succeeding Business Day); and
(iii) In the case of payments of the Stated Amount of any
Pledged Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, as the case may be, or the principal of
any Pledged Treasury Securities, to the Company on the Purchase
Contract Settlement Date in accordance with the procedure set forth
in Section 4.6(a) or 4.6(b) hereof, in full satisfaction of the
respective obligations of the Holders under the related Purchase
Contracts.
All payments received by the Purchase Contract Agent as provided herein shall
be applied by the Purchase Contract Agent pursuant to the provisions of the
Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of the Stated Amount or, if
applicable, the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) on account of any Preferred
Security or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as applicable that, at the time of such payment, is a Pledged
Preferred Security or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, or a Holder of a Growth PRIDES shall
receive any payments of principal on account of any Treasury Securities that,
at the time of such payment, are Pledged Treasury Securities, the Purchase
Contract Agent or such Holder shall hold the same as trustee of an express
trust for the benefit of the Company (and promptly deliver the same over to
the Company) for application to the obligations of the Holders under the
related Purchase Contracts, and the Holders shall acquire no right, title or
interest in any such payments of Stated Amount or principal so received.
Section 4. Substitution, Release, Repledge and Settlement
of Preferred Securities.
Section 4.1. Substitution of Preferred Securities and the
Creation of Growth PRIDES or Income PRIDES.
(A) At any time on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date (unless a Tax
Event Redemption has occurred), a Holder of Income PRIDES shall have the
right to substitute Treasury Securities for the Pledged Preferred Securities
securing such Holder's obligations under the Purchase Contract(s) comprising
a part of its Income PRIDES in integral multiples of 100 Income PRIDES by (a)
Transferring to the Collateral Agent Treasury Securities having a Value equal
to the Stated Amount of the Pledged Preferred Securities to be released and
(b)(i) in the event that Contract Adjustment Payments are at a higher rate
for Growth PRIDES than for Income PRIDES, delivering cash in an amount equal
to the excess of the Contract Adjustment Payments that would have accrued
since the last Payment Date through the date of substitution on the Growth
PRIDES being created by the holder, over the Contract Adjustment Payments
that have accrued over the same time period on the related Income PRIDES,
which amount the Purchase Contract Agent shall promptly remit to the Company,
and (ii) delivering the related Income PRIDES to the Purchase Contract Agent,
<PAGE>
accompanied by a notice, substantially in the form of Exhibit B hereto, to
the Purchase Contract Agent stating that such Holder has Transferred Treasury
Securities to the Collateral Agent pursuant to clause (a) above (stating the
Value of the Treasury Securities Transferred by such Holder) and requesting
that the Purchase Contract Agent instruct the Collateral Agent to release
from the Pledge the Pledged Preferred Securities related to such Income
PRIDES. The Purchase Contract Agent shall instruct the Collateral Agent in
the form provided in Exhibit A; provided, however, that if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a component of
the Income PRIDES, Holders of Income PRIDES may make such substitution only
in integral multiples of 160,000 Income PRIDES at any time on or prior to the
second Business Day immediately preceding the Purchase Contract Settlement
Date. Upon receipt of Treasury Securities from a Holder of Income PRIDES and
the related instruction from the Purchase Contract Agent, the Collateral
Agent shall release the Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
and shall promptly Transfer such Pledged Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, free and clear of any lien, pledge or security interest created
hereby, to the Purchase Contract Agent.
(B) At any time on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date (unless a Tax
Event Redemption has occurred), a Holder of Growth PRIDES shall have the
right to establish or reestablish Income PRIDES consisting of the Purchase
Contracts and Preferred Securities in integral multiples of 100 Income PRIDES
by (a) Transferring to the Collateral Agent Preferred Securities having a
Stated Amount equal to the Stated Amount of the Pledged Treasury Securities
to be released and (b)(i) in the event that Contract Adjustment Payments are
at a higher rate for Income PRIDES than for Growth PRIDES, holders of Growth
PRIDES wishing to recreate Income PRIDES will also be required to deliver
cash in an amount equal to the excess of the Contract Adjustment Payments
that would have accrued since the last payment date through the date of
substitution on the Income PRIDES being recreated by such holders, over the
Contract Adjustment Payments that have accrued over the same time period on
the related Growth PRIDES and (ii) delivering the related Growth PRIDES to
the Purchase Contract Agent, accompanied by a notice, substantially in the
form of Exhibit B hereto, to the Purchase Contract Agent stating that such
Holder has transferred Preferred Securities to the Collateral Agent pursuant
to clause (a) above and requesting that the Purchase Contract Agent instruct
the Collateral Agent to release from the Pledge the Pledged Treasury
Securities related to such Growth PRIDES. The Purchase Contract Agent shall
instruct the Collateral Agent in the form provided in Exhibit A; provided,
however, that if a Tax Event Redemption has occurred and the Treasury
Portfolio has become a component of the Income PRIDES, Holders of Growth
PRIDES may make such substitution only in integral multiples of 160,000
Growth PRIDES, at any time on or prior to the Business Day immediately
preceding the Purchase Contract Settlement Date. Upon receipt of the
Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, from such Holder and the instruction
from the Purchase Contract Agent, the Collateral Agent shall release the
Treasury Securities and shall promptly Transfer such Treasury Securities,
free and clear of any lien, pledge or security interest created hereby, to
the Purchase Contract Agent.
<PAGE>
Section 4.2. Pledge of Preferred Securities and Re-
establishment of Income PRIDES or Growth PRIDES.
(A) At any time on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date (unless a Tax
Event Redemption has occurred), a Holder of Income PRIDES shall have the
right to substitute Treasury Securities for the Pledged Preferred Securities
securing such Holder's obligations under the Purchase Contract(s) comprising
a part of its Income PRIDES in integral multiples of 100 Income PRIDES by (a)
Transferring to the Collateral Agent Treasury Securities having a Value equal
to the Stated Amount of the Pledged Preferred Securities to be released and
(b)(i) in the event that Contract Adjustment Payments are at a higher rate
for Growth PRIDES than for Income PRIDES, delivering cash in an amount equal
to the excess of the Contract Adjustment Payments that would have accrued
since the last Payment Date through the date of substitution on the Growth
PRIDES being created by the holder, over the Contract Adjustment Payments
that have accrued over the same time period on the related Income PRIDES,
which amount the Purchase Contract Agent shall promptly remit to the Company,
and (ii) delivering the related Income PRIDES to the Purchase Contract Agent,
accompanied by a notice, substantially in the form of Exhibit B hereto, to
the Purchase Contract Agent stating that such Holder has Transferred Treasury
Securities to the Collateral Agent pursuant to clause (a) above (stating the
Value of the Treasury Securities Transferred by such Holder) and requesting
that the Purchase Contract Agent instruct the Collateral Agent to release
from the Pledge the Pledged Preferred Securities related to such Income
PRIDES. The Purchase Contract Agent shall instruct the Collateral Agent in
the form provided in Exhibit A; provided, however, that if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a component of
the Income PRIDES, Holders of Income PRIDES may make such substitution only
in integral multiples of 160,000 Income PRIDES at any time on or prior to the
second Business Day immediately preceding the Purchase Contract Settlement
Date. Upon receipt of Treasury Securities from a Holder of Income PRIDES and
the related instruction from the Purchase Contract Agent, the Collateral
Agent shall release the Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
and shall promptly Transfer such Pledged Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, free and clear of any lien, pledge or security interest created
hereby, to the Purchase Contract Agent.
(B) At any time on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date (unless a Tax
Event Redemption has occurred), a Holder of Growth PRIDES shall have the
right to establish or reestablish Income PRIDES consisting of the Purchase
Contracts and Preferred Securities in integral multiples of 100 Income PRIDES
by (a) Transferring to the Collateral Agent Preferred Securities having a
Stated Amount equal to the Stated Amount of the Pledged Treasury Securities
to be released and (b) (i) in the event that Contract Adjustment Payments are
at a higher rate for Income PRIDES than for Growth PRIDES, holders of Growth
PRIDES wishing to recreate Income PRIDES will also be required to deliver
cash in an amount equal to the excess of the Contract Adjustment Payments
that would have accrued since the last payment date through the date of
substitution on the Income PRIDES being recreated by such holders, over the
Contract Adjustment Payments that have accrued over the same time period on
the related Growth PRIDES and (ii) delivering the related Growth PRIDES to
the Purchase Contract Agent, accompanied by a notice, substantially in the
form of Exhibit B hereto, to the Purchase Contract Agent stating that such
<PAGE>
Holder has transferred Preferred Securities to the Collateral Agent pursuant
to clause (a) above and requesting that the Purchase Contract Agent instruct
the Collateral Agent to release from the Pledge the Pledged Treasury
Securities related to such Growth PRIDES. The Purchase Contract Agent shall
instruct the Collateral Agent in the form provided in Exhibit A; provided,
however, that if a Tax Event Redemption has occurred and the Treasury
Portfolio has become a component of the Income PRIDES, Holders of Growth
PRIDES may make such substitution only in integral multiples of 160,000
Growth PRIDES, at any time on or prior to the Business Day immediately
preceding the Purchase Contract Settlement Date. Upon receipt of the
Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, from such Holder and the instruction
from the Purchase Contract Agent, the Collateral Agent shall release the
Treasury Securities and shall promptly Transfer such Treasury Securities,
free and clear of any lien, pledge or security interest created hereby, to
the Purchase Contract Agent.
Section 4.3. Termination Event. Upon receipt by the
Collateral Agent of written notice from the Company or the Purchase Contract
Agent that there has occurred a Termination Event, the Collateral Agent shall
release all Collateral from the Pledge and shall promptly Transfer any
Pledged Preferred Securities (or the Applicable Ownership Interest of the
Treasury Portfolio if a Tax Event Redemption has occurred) and Pledged
Treasury Securities to the Purchase Contract Agent for the benefit of the
Holders of the Income PRIDES and the Growth PRIDES, respectively, free and
clear of any lien, pledge or security interest or other interest created
hereby.
If such Termination Event shall result from the Company's
becoming a debtor under the Bankruptcy Code, and if the Collateral Agent
shall for any reason fail promptly to effectuate the release and Transfer of
all Pledged Preferred Securities, the Treasury Portfolio or of the Pledged
Treasury Securities, as the case may be, as provided by this Section 4.3, the
Purchase Contract Agent shall (i) use its best efforts to obtain an opinion
of a nationally recognized law firm reasonably acceptable to the Collateral
Agent to the effect that, as a result of the Company's being the debtor in
such a bankruptcy case, the Collateral Agent will not be prohibited from
releasing or Transferring the Collateral as provided in this Section 4.3, and
shall deliver such opinion to the Collateral Agent within ten days after the
occurrence of such Termination Event, and if (y) the Purchase Contract Agent
shall be unable to obtain such opinion within ten days after the occurrence
of such Termination Event or (z) the Collateral Agent shall continue, after
delivery of such opinion, to refuse to effectuate the release and Transfer of
all Pledged Preferred Securities, of the Treasury Portfolio or of the Pledged
Treasury Securities, as the case may be, as provided in this Section 4.3,
then the Purchase Contract Agent shall within fifteen days after the
occurrence of such Termination Event commence an action or proceeding in the
court with jurisdiction of the Company's case under the Bankruptcy Code
seeking an order requiring the Collateral Agent to effectuate the release and
transfer of all Pledged Preferred Securities, of the Treasury Portfolio or of
the Pledged Treasury Securities, as the case may be, as provided by this
Section 4.3 or (ii) commence an action or proceeding like that described in
subsection (i)(z) hereof within ten days after the occurrence of such
Termination Event.
Section 4.4. Cash Settlement. (a) Upon receipt by the
Collateral Agent of (i) a notice from the Purchase Contract Agent promptly
<PAGE>
after the receipt by the Purchase Contract Agent of such notice that a Holder
of an Income PRIDES or Growth PRIDES has elected, in accordance with the
procedures specified in Section 5.4(a)(i) or (d)(i) of the Purchase Contract
Agreement, respectively, to settle its Purchase Contract with cash and (ii)
payment by such Holder on or prior to 11:00 a.m., New York City time, on the
Business Day immediately preceding the Purchase Contract Settlement Date in
lawful money of the United States by certified or cashiers' check or wire
transfer in immediately available funds payable to or upon the order of the
Company, then the Collateral Agent shall, upon the written direction of the
Purchase Contract Agent, promptly invest any Cash received from a Holder in
connection with a Cash Settlement in Permitted Investments. Upon receipt of
the proceeds upon the maturity of the Permitted Investments on the Purchase
Contract Settlement Date, the Collateral Agent shall pay the portion of such
proceeds and deliver any certified or cashiers' checks received, in an
aggregate amount equal to the Purchase Price, to the Company on the Purchase
Contract Settlement Date, and shall distribute any funds in respect of the
interest earned from the Permitted Investments to the Purchase Contract Agent
for payment to the relevant Holders.
(b) If a Holder of an Income PRIDES fails to notify the
Agent of its intention to make a Cash Settlement in accordance with paragraph
5.4(a)(i) of the Purchase Contract Agreement, such failure shall constitute
an event of default under the Purchase Contract Agreement and hereunder, and
the Holder shall be deemed to have consented to the disposition of the
pledged Preferred Securities pursuant to the remarketing as described in
paragraph 5.4(b) of the Purchase Contract Agreement, which is incorporated
herein by reference. If a Holder of an Income PRIDES does notify the Agent
as provided in paragraph 5.4(a)(i) of the Purchase Contract Agreement of its
intention to pay the Purchase Price in cash, but fails to make such payment
as required by paragraph 5.4(a)(ii) of the Purchase Contract Agreement, the
Preferred Securities of such a Holder will not be remarketed but instead the
Collateral Agent, for the benefit of the Company, will exercise its rights as
a secured party with respect to such Preferred Securities at the direction of
the Company to retain or dispose of the Collateral in accordance with
applicable law. In addition, in the event of a Failed Remarketing as
described in paragraph 5.4(b) of the Purchase Contract Agreement, such Failed
Remarketing shall constitute an event of default hereunder by such Holder and
the Collateral Agent, for the benefit of the Company, will also exercise its
rights as a secured party with respect to such Preferred Securities at the
direction of the Company to retain or dispose of the Collateral in accordance
with applicable law.
(c) If a Holder of a Growth PRIDES fails to notify the
Purchase Contract Agent of such Holder's intention to make a Cash Settlement
in accordance with paragraph 5.4(d)(i) of the Purchase Contract Agreement, or
if a Holder of an Income PRIDES does notify the Agent as provided in
paragraph (d)(i) of the Purchase Contract Agreement of its intention to pay
the Purchase Price in cash, but fails to make such payment as required by
paragraph 5.4(d)(ii) of the Purchase Contract Agreement, such failure shall
constitute an event of default hereunder by such Holder and upon the maturity
of any Pledged Treasury Securities or the Treasury Portfolio, if any, held by
the Collateral Agent on the Business Day immediately preceding the Purchase
Contract Settlement Date, the principal amount of the Pledged Treasury
Securities or the Treasury Portfolio received by the Collateral Agent shall,
upon written direction of the Purchase Contract Agent, be invested promptly
in Permitted Investments. On the Purchase Contract Settlement Date, an
amount equal to the Purchase Price will be remitted to the Company as payment
<PAGE>
thereof. In the event the sum of the proceeds from the related Pledged
Treasury Securities or the Treasury Portfolio, as the case may be, and the
investment earnings earned from such investments is in excess of the
aggregate Purchase Price of the Purchase Contracts being settled thereby, the
Collateral Agent will distribute such excess to the Purchase Contract Agent
for the benefit of the Holder of the related Growth PRIDES or Income PRIDES
when received.
Section 4.5. Early Settlement. Upon written notice to the
Collateral Agent by the Purchase Contract Agent that one or more Holders of
Securities have elected to effect Early Settlement of their respective
obligations under the Purchase Contracts forming a part of such Securities in
accordance with the terms of the Purchase Contracts and the Purchase Contract
Agreement (setting forth the number of such Purchase Contracts as to which
such Holders have elected to effect Early Settlement), and that the Purchase
Contract Agent has received from such Holders, and paid to the Company as
confirmed in writing by the Company, the related Early Settlement Amounts
pursuant to the terms of the Purchase Contracts and the Purchase Contract
Agreement and that all conditions to such Early Settlement have been
satisfied, then the Collateral Agent shall release from the Pledge, (a)
Pledged Preferred Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio in the case of a Holder of Income PRIDES or (b)
Pledged Treasury Securities in the case of a Holder of Growth PRIDES, as the
case may be, with a principal amount equal to the product of (i) the Stated
Amount times (ii) the number of such Purchase Contracts as to which such
Holders have elected to effect Early Settlement and shall Transfer all such
Pledged Preferred Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio or Pledged Treasury Securities, as the case may be,
free and clear of the Pledge created hereby, to the Purchase Contract Agent
for the benefit of the Holders.
Section 4.6. Application of Proceeds Settlement. (a) In
the event a Holder of Income PRIDES (if a Tax Event Redemption has not
occurred) has not elected to make an effective Cash Settlement by notifying
the Purchase Contract Agent in the manner provided for in paragraph 5.4(a)(i)
in the Purchase Contract Agreement or has not made an Early Settlement of the
Purchase Contract(s) underlying its Income PRIDES, such Holder shall be
deemed to have elected to pay for the shares of Common Stock to be issued
under such Purchase Contract(s) from the Proceeds of the related Pledged
Preferred Securities. The Collateral Agent shall, by 10:00 a.m., New York
City time, on the fourth Business Day immediately preceding the Purchase
Contract Settlement Date, without any instruction from such Holder of Income
PRIDES, present the related Pledged Preferred Securities to the Remarketing
Agent for remarketing. Upon receiving such Pledged Preferred Securities, the
Remarketing Agent, pursuant to the terms of the Remarketing Agreement and the
Remarketing Underwriting Agreement, will use its reasonable efforts to
remarket such Pledged Preferred Securities on such date at a price not less
than approximately 100.5% of the aggregate Stated Amount of such Pledged
Preferred Securities, plus accrued and unpaid distributions (including
deferred distributions), if any, thereon. After deducting as the Remarketing
Fee an amount not exceeding 25 basis points (.25%) of the aggregate Stated
Amount of the Pledged Preferred Securities from any amount of such Proceeds
in excess of the aggregate Stated Amount, plus such accrued and unpaid
distributions (including deferred distributions) of the remarketed Pledged
Preferred Securities, the Remarketing Agent will remit the entire amount of
the Proceeds of such remarketing to the Collateral Agent. On the Purchase
Contract Settlement Date, the Collateral Agent shall apply that portion of
<PAGE>
the Proceeds from such remarketing equal to the aggregate Stated Amount, plus
such accrued and unpaid distributions (including deferred distributions) of
such Pledged Preferred Securities, to satisfy in full the obligations of such
Holders of Income PRIDES to pay the Purchase Price to purchase the Common
Stock under the related Purchase Contracts. The remaining portion of such
Proceeds, if any, shall be distributed by the Collateral Agent to the
Purchase Contract Agent for payment to the Holders. If the Remarketing Agent
advises the Collateral Agent in writing that it cannot remarket the related
Pledged Preferred Securities of such Holders of Income PRIDES at a price not
less than 100% of the aggregate Stated Amount of such Pledged Preferred
Securities plus any accrued and unpaid distributions (including deferred
distributions), thus resulting in a Failed Remarketing and an event of
default under the Purchase Contract Agreement and hereunder, the Collateral
Agent, for the benefit of the Company will, at the written direction of the
Company, retain or dispose of the Pledged Preferred Securities in accordance
with applicable law and satisfy in full, from any such disposition or
retention, such Holder's obligation to pay the Purchase Price for the Common
Stock.
(b) In the event a Holder of Growth PRIDES or Income PRIDES
(if a Tax Event Redemption has occurred) has not made an Early Settlement of
the Purchase Contract(s) underlying its Growth PRIDES or Income PRIDES, such
Holder shall be deemed to have elected to pay for the shares of Common Stock
to be issued under such Purchase Contract(s) from the Proceeds of the related
Pledged Treasury Securities or the Treasury Portfolio, as the case may be.
On the Business Day immediately prior to the Purchase Contract Settlement
Date, the Collateral Agent shall, at the written direction of the Purchase
Contract Agent, invest the Cash proceeds of the maturing Pledged Treasury
Securities or the Treasury Portfolio, as the case may be, in overnight
Permitted Investments. Without receiving any instruction from any such Holder
of Growth PRIDES or Income PRIDES, the Collateral Agent shall apply the
Proceeds of the related Pledged Treasury Securities or Treasury Portfolio to
the settlement of such Purchase Contracts on the Purchase Contract Settlement
Date.
In the event the sum of the Proceeds from the related
Pledged Treasury Securities or Treasury Portfolio and the investment earnings
from the investment in overnight Permitted Investments is in excess of the
aggregate Purchase Price of the Purchase Contracts being settled thereby, the
Collateral Agent shall distribute such excess, when received, to the Purchase
Contract Agent for the benefit of the Holders.
(c) Pursuant to the Remarketing Agreement and subject to the
terms of the Remarketing Underwriting Agreement, on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, but
no earlier than the Payment Date immediately preceding the Purchase Contract
Settlement Date, holders of separate Preferred Securities which are not
components of Income PRIDES may elect to have their Preferred Securities
remarketed by delivering their Preferred Securities along with a notice of
such election to the Collateral Agent. The Collateral Agent will hold such
Preferred Securities in an account separate from the collateral account in
which the Pledged Securities will be held. Holders of Preferred Securities
electing to have their Preferred Securities remarketed will also have the
right to withdraw such election by written notice to the Collateral Agent on
or prior to the fifth Business Day immediately preceding the Purchase
Contract Settlement Date, upon which notice the Collateral Agent will return
such Preferred Securities to such holders. On the fourth Business Day
<PAGE>
immediately preceding the Purchase Contract Settlement Date, the Collateral
Agent will deliver the Preferred Securities to the Remarketing Agent for
remarketing. The Remarketing Agent will use its reasonable efforts to
remarket such Preferred Securities on such date at a price of approximately
100.5% of the aggregate stated liquidation amount of such Preferred
Securities, plus accrued and unpaid distributions (including deferred
distributions), if any, thereon. The portion of the proceeds from such
remarketing equal to the aggregate stated liquidation amount of such
Preferred Securities will automatically be remitted by the Remarketing Agent
to the Collateral Agent for the benefit of such Preferred Securities holders.
In addition, after deducting as the Remarketing Fee an amount not exceeding
25 basis points (.25%) of the aggregate stated liquidation amount of the
remarketed securities, from any amount of such proceeds in excess of the
aggregate stated liquidation amount of the remarketed Trust Preferred
Securities plus any accrued and unpaid distributions (including deferred
distributions, if any), the Remarketing Agent will remit to the Collateral
Agent the remaining portion of the proceeds, if any, for the benefit of such
holder. If, despite using its reasonable efforts, the Remarketing Agent
advises the Collateral Agent in writing that it cannot remarket the related
Preferred Securities of such holders at a price not less than 100% of the
aggregate stated liquidation amount of such Preferred Securities plus accrued
and unpaid distributions (including deferred distributions) and thus
resulting in a Failed Remarketing, the Remarketing Agent will promptly return
such Trust Preferred Securities to the Collateral Agent to release to such
holders.
Section 5. Voting Rights -- Preferred Securities. The
Purchase Contract Agent may exercise, or refrain from exercising, any and all
voting and other consensual rights pertaining to the Pledged Preferred
Securities or any part thereof for any purpose not inconsistent with the
terms of this Agreement and in accordance with the terms of the Purchase
Contract Agreement; provided, that the Purchase Contract Agent shall not
exercise or, as the case may be, shall not refrain from exercising such right
if, in the judgment of the Company, such action would impair or otherwise
have a material adverse effect on the value of all or any of the Pledged
Preferred Securities; and provided, further, that the Purchase Contract Agent
shall give the Company and the Collateral Agent at least five days' prior
written notice of the manner in which it intends to exercise, or its reasons
for refraining from exercising, any such right. Upon receipt of any notices
and other communications in respect of any Pledged Preferred Securities,
including notice of any meeting at which holders of Preferred Securities are
entitled to vote or solicitation of consents, waivers or proxies of holders
of Preferred Securities, the Collateral Agent shall use reasonable efforts to
send promptly to the Purchase Contract Agent such notice or communication,
and as soon as reasonably practicable after receipt of a written request
therefor from the Purchase Contract Agent, execute and deliver to the
Purchase Contract Agent such proxies and other instruments in respect of such
Pledged Preferred Securities (in form and substance satisfactory to the
Collateral Agent) as are prepared by the Purchase Contract Agent with respect
to the Pledged Preferred Securities.
Section 6. Rights and Remedies; Distribution of the
Debentures; Tax Event Redemption.
Section 6.1. Rights and Remedies of the Collateral Agent.
(a) In addition to the rights and remedies specified in Section 4.4 hereof
or otherwise available at law or in equity, after an event of default
<PAGE>
hereunder, the Collateral Agent shall have all of the rights and remedies
with respect to the Collateral of a secured party under the Uniform
Commercial Code as in effect in the State of New York (the "Code") (whether
or not the Code is in effect in the jurisdiction where the rights and
remedies are asserted) and the TRADES Regulations and such additional rights
and remedies to which a secured party is entitled under the laws in effect in
any jurisdiction where any rights and remedies hereunder may be asserted.
Without limiting the generality of the foregoing, such remedies may include,
to the extent permitted by applicable law, (i) retention of the Pledged
Preferred Securities or other Collateral in full satisfaction of the Holders
obligations under the Purchase Contracts or (ii) sale of the Pledged
Preferred Securities or other Collateral in one or more public or private
sales.
(b) Without limiting any rights or powers otherwise granted
by this Agreement to the Collateral Agent, in the event the Collateral Agent
is unable to make payments to the Company on account of the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio or on account of principal payments
of any Pledged Treasury Securities as provided in Section 3 hereof in
satisfaction of the obligations of the Holder of the Securities of which such
Pledged Treasury Securities, or the appropriate Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable, is a part under the related Purchase Contracts, the
inability to make such payments shall constitute an event of default
hereunder and the Collateral Agent shall have and may exercise, with
reference to such Pledged Treasury Securities, or such appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such
term) of the Treasury Portfolio, as applicable, and such obligations of such
Holder, any and all of the rights and remedies available to a secured party
under the Code and the TRADES Regulations after default by a debtor, and as
otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted
by this Agreement to the Collateral Agent, the Collateral Agent is hereby
irrevocably authorized to receive and collect all payments of (i) the Stated
Amount of or, cash distributions on, the Pledged Preferred Securities, (ii)
the principal amount of the Pledged Treasury Securities, or (iii) the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, subject, in each case, to
the provisions of Section 3, and as otherwise granted herein.
(d) The Purchase Contract Agent and each Holder of
Securities, in the event such Holder becomes the Holder of a Growth PRIDES,
agrees that, from time to time, upon the written request of the Collateral
Agent, the Purchase Contract Agent or such Holder shall execute and deliver
such further documents and do such other acts and things as the Collateral
Agent may reasonably request in order to maintain the Pledge, and the
perfection and priority thereof, and to confirm the rights of the Collateral
Agent hereunder. The Purchase Contract Agent shall have no liability to any
Holder for executing any documents or taking any such acts requested by the
Collateral Agent hereunder, except for liability for its own negligent act,
its own negligent failure to act or its own willful misconduct.
Section 6.2. Distribution of the Debentures; Tax Event
Redemption. Upon the occurrence of an Investment Company Event or a
liquidation of the Trust, a principal amount of the Debentures constituting
<PAGE>
the assets of the Trust and underlying the Preferred Securities equal to the
aggregate Stated Amount of the Pledged Preferred Securities shall be
delivered to the Collateral Agent in exchange for the Pledged Preferred
Securities. In the event the Collateral Agent receives such Debentures in
respect of Pledged Preferred Securities upon the occurrence of an Investment
Company Event or liquidation of the Trust, the Collateral Agent shall
Transfer the Debentures to the Collateral Account in the manner specified
herein for Pledged Preferred Securities to secure the obligations of the
Holders of Income PRIDES to purchase the Company's Common Stock under the
related Purchase Contracts. Thereafter, the Collateral Agent shall have such
security interests, rights and obligations with respect to the Debentures as
it had in respect of the Pledged Preferred Securities as provided in Articles
II, III, IV, V and VI hereof, and any reference herein to the Pledged
Preferred Securities shall be deemed to be referring to such Debentures.
Upon the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Redemption Price payable on the Tax
Event Redemption Date with respect to the Applicable Principal Amount of
Debentures shall be delivered to the Collateral Agent by the Institutional
Trustee or upon a dissolution of the Trust and the distribution of the
related Debentures by the Debenture Trustee on or prior to 12:30 p.m., New
York City time, by check or wire transfer in immediately available funds at
such place and at such account as may be designated by the Collateral Agent
in exchange for the Pledged Preferred Securities or Debentures, as the case
may be. In the event the Collateral Agent receives such Redemption Price,
the Collateral Agent will, at the written direction of the Company, apply an
amount equal to the Redemption Amount of such Redemption Price to purchase
from the Quotation Agent, the Treasury Portfolio and promptly remit the
remaining portion of such Redemption Price to the Purchase Contract Agent for
payment to the Holders of Income PRIDES. The Collateral Agent shall Transfer
the Treasury Portfolio to the Collateral Account in the manner specified
herein for Pledged Preferred Securities to secure the obligation of all
Holders of Income PRIDES to purchase Common Stock of the Company under the
Purchase Contracts constituting a part of such Income PRIDES, in substitution
for the Pledged Preferred Securities. Thereafter the Collateral Agent shall
have such security interests, rights and obligations with respect to the
Treasury Portfolio as it had in respect of the Pledged Preferred Securities
or Debentures, as the case may be, as provided in Articles II, III, IV, V,
and VI, and any reference herein to the Pledged Preferred Securities or the
Debentures shall be deemed to be reference to such Treasury Portfolio.
Section 6.3. Substitutions. Whenever a Holder has the
right to substitute Treasury Securities, Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, for Collateral held by the Collateral Agent, such substitution
shall not constitute a novation of the security interest created hereby.
Section 7. Representations and Warranties; Covenants.
Section 7.1. Representations and Warranties. The Holders
from time to time, acting through the Purchase Contract Agent as their
attorney-in-fact (it being understood that the Purchase Contract Agent shall
not be liable for any representation or warranty made by or on behalf of a
Holder), hereby represent and warrant to the Collateral Agent, which
representations and warranties shall be deemed repeated on each day a Holder
Transfers Collateral that:
<PAGE>
(a) such Holder has the power to grant a security interest
in and lien on the Collateral;
(b) such Holder is the sole beneficial owner of the
Collateral and, in the case of Collateral delivered in physical form,
is the sole holder of such Collateral and is the sole beneficial
owner of, or has the right to Transfer, the Collateral it Transfers
to the Collateral Agent, free and clear of any security interest,
lien, encumbrance, call, liability to pay money or other restriction
other than the security interest and lien granted under Section 2
hereof;
(c) upon the Transfer of the Collateral to the Collateral
Account, the Collateral Agent, for the benefit of the Company, will
have a valid and perfected first priority security interest therein
(assuming that any central clearing operation or any Intermediary or
other entity not within the control of the Holder involved in the
Transfer of the Collateral, including the Collateral Agent, gives the
notices and takes the action required of it hereunder and under
applicable law for perfection of that interest and assuming the
establishment and exercise of control pursuant to Section 2.2
hereof); and
(d) the execution and performance by the Holder of its
obligations under this Agreement will not result in the creation of
any security interest, lien or other encumbrance on the Collateral
other than the security interest and lien granted under Section 2
hereof or violate any provision of any existing law or regulation
applicable to it or of any mortgage, charge, pledge, indenture,
contract or undertaking to which it is a party or which is binding on
it or any of its assets.
Section 7.2. Covenants. The Holders from time to time,
acting through the Purchase Contract Agent as their attorney-in-fact (it
being understood that the Purchase Contract Agent shall not be liable for any
covenant made by or on behalf of a Holder), hereby covenant to the Collateral
Agent that for so long as the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders
will create or purport to create or allow to subsist any mortgage,
charge, lien, pledge or any other security interest whatsoever over
the Collateral or any part of it other than pursuant to this
Agreement; and
(b) neither the Purchase Contract Agent nor such Holders
will sell or otherwise dispose (or attempt to dispose) of the
Collateral or any part of it except for the beneficial interest
therein, subject to the pledge hereunder, transferred in connection
with the Transfer of the Securities.
Section 8. The Collateral Agent. It is hereby agreed as
follows:
Section 8.1. Appointment, Powers and Immunities. The
Collateral Agent shall act as agent for the Company hereunder with such
powers as are specifically vested in the Collateral Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
<PAGE>
thereto. The Collateral Agent: (a) shall have no duties or responsibilities
except those expressly set forth in this Agreement and no implied covenants
or obligations shall be inferred from this Agreement against the Collateral
Agent, nor shall the Collateral Agent be bound by the provisions of any
agreement by any party hereto beyond the specific terms hereof; (b) shall not
be responsible for any recitals contained in this Agreement, or in any
certificate or other document referred to or provided for in, or received by
it under, this Agreement, the Securities or the Purchase Contract Agreement,
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement (other than as against the Collateral Agent),
the Securities or the Purchase Contract Agreement or any other document
referred to or provided for herein or therein or for any failure by the
Company or any other Person (except the Collateral Agent) to perform any of
its obligations hereunder or thereunder or for the perfection, priority or,
except as expressly required hereby, maintenance of any security interest
created hereunder; (c) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder (except pursuant to directions
furnished under Section 8.2 hereof, subject to Section 8.6 hereof); (d) shall
not be responsible for any action taken or omitted to be taken by it
hereunder or under any other document or instrument referred to or provided
for herein or in connection herewith or therewith, except for its own
negligence or willful misconduct; and (e) shall not be required to advise any
party as to selling or retaining, or taking or refraining from taking any
action with respect to, any securities or other property deposited hereunder.
Subject to the foregoing, during the term of this Agreement, the Collateral
Agent shall take all reasonable action in connection with the safekeeping and
preservation of the Collateral hereunder.
No provision of this Agreement shall require the Collateral
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder. In no event
shall the Collateral Agent be liable for any amount in excess of the Value of
the Collateral. Notwithstanding the foregoing, the Collateral Agent and
Securities Intermediary in its individual capacity hereby waive any right of
setoff, bankers lien, liens or perfection rights as securities intermediary
or any counterclaim with respect to any of the Collateral.
Section 8.2. Instructions of the Company. The Company
shall have the right, by one or more instruments in writing executed and
delivered to the Collateral Agent, to direct the time, method and place of
conducting any proceeding for the realization of any right or remedy
available to the Collateral Agent, or of exercising any power conferred on
the Collateral Agent, or to direct the taking or refraining from taking of
any action authorized by this Agreement; provided, however, that (i) such
direction shall not conflict with the provisions of any law or of this
Agreement and (ii) the Collateral Agent shall be adequately indemnified as
provided herein. Nothing in this Section 8.2 shall impair the right of the
Collateral Agent in its discretion to take any action or omit to take any
action which it deems proper and which is not inconsistent with such
direction.
Section 8.3. Reliance by Collateral Agent. Each of the
Securities Intermediary and the Collateral Agent shall be entitled to rely
upon any certification, order, judgment, opinion, notice or other
communication (including, without limitation, any thereof by telephone,
telecopy, telex or facsimile) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons
<PAGE>
(without being required to determine the correctness of any fact stated
therein), and upon advice and statements of legal counsel and other experts
selected by the Collateral Agent and the Securities Intermediary. As to any
matters not expressly provided for by this Agreement, the Collateral Agent
and the Securities Intermediary shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with
instructions given by the Company in accordance with this Agreement.
Section 8.4. Rights in Other Capacities. The Collateral
Agent and the Securities Intermediary and their affiliates may (without
having to account therefor to the Company) accept deposits from, lend money
to, make their investments in and generally engage in any kind of banking,
trust or other business with the Purchase Contract Agent and any Holder of
Securities (and any of their respective subsidiaries or affiliates) as if it
were not acting as the Collateral Agent, and the Collateral Agent and its
affiliates may accept fees and other consideration from the Purchase Contract
Agent and any Holder of Securities without having to account for the same to
the Company; provided that each of the Securities Intermediary and the
Collateral Agent covenants and agrees with the Company that it shall not
accept, receive or permit there to be created in favor of itself and shall
take no affirmative action to permit there to be created in favor of any
other Person, any security interest, lien or other encumbrance of any kind in
or upon the Collateral.
Section 8.5. Non-Reliance on Collateral Agent. Neither the
Securities Intermediary nor the Collateral Agent shall be required to keep
itself informed as to the performance or observance by the Purchase Contract
Agent or any Holder of Securities of this Agreement, the Purchase Contract
Agreement, the Securities or any other document referred to or provided for
herein or therein or to inspect the properties or books of the Purchase
Contract Agent or any Holder of Securities. The Collateral Agent shall not
have any duty or responsibility to provide the Company with any credit or
other information concerning the affairs, financial condition or business of
the Purchase Contract Agent or any Holder of Securities (or any of their
respective affiliates) that may come into the possession of the Collateral
Agent or the Securities Intermediary or any of their respective affiliates.
Section 8.6. Compensation and Indemnity. The Company
agrees: (i) to pay the Collateral Agent from time to time such compensation
as shall be agreed in writing between the Company and the Collateral Agent
for all services rendered by it hereunder and (ii) to indemnify the
Collateral Agent and the Securities Intermediary for, and to hold each of
them harmless from and against, any loss, liability or reasonable out-of-
pocket expense incurred without negligence, willful misconduct or bad faith
on its part, arising out of or in connection with the acceptance or
administration of its powers and duties under this Agreement, including the
reasonable out-of-pocket costs and expenses (including reasonable fees and
expenses of counsel) of defending itself against any claim or liability in
connection with the exercise or performance of such powers and duties.
Section 8.7. Failure to Act. In the event of any ambiguity
in the provisions of this Agreement or any dispute between or conflicting
claims by or among the parties hereto or any other Person with respect to any
funds or property deposited hereunder, the Collateral Agent shall be
entitled, after prompt notice to the Company and the Purchase Contract Agent,
at its sole option, to refuse to comply with any and all claims, demands or
instructions with respect to such property or funds so long as such dispute
<PAGE>
or conflict shall continue, and the Collateral Agent shall not be or become
liable in any way to any of the parties hereto for its failure or refusal to
comply with such conflicting claims, demands or instructions. The Collateral
Agent shall be entitled to refuse to act until either (i) such conflicting or
adverse claims or demands shall have been finally determined by a court of
competent jurisdiction or settled by agreement between the conflicting
parties as evidenced in a writing, satisfactory to the Collateral Agent or
(ii) the Collateral Agent shall have received security or an indemnity
satisfactory to the Collateral Agent sufficient to save the Collateral Agent
harmless from and against any and all loss, liability or reasonable out-of-
pocket expense which the Collateral Agent may incur by reason of its acting.
The Collateral Agent may in addition elect to commence an interpleader action
or seek other judicial relief or orders as the Collateral Agent may deem
necessary. Notwithstanding anything contained herein to the contrary, the
Collateral Agent shall not be required to take any action that is in its
opinion contrary to law or to the terms of this Agreement, or which would in
its opinion subject it or any of its officers, employees or directors to
liability.
Section 8.8. Resignation of Collateral Agent. Subject to
the appointment and acceptance of a successor Collateral Agent as provided
below, (a) the Collateral Agent may resign at any time by giving notice
thereof to the Company and the Purchase Contract Agent as attorney-in-fact
for the Holders of Securities, (b) the Collateral Agent may be removed at any
time by the Company and (c) if the Collateral Agent fails to perform any of
its material obligations hereunder in any material respect for a period of
not less than 20 days after receiving written notice of such failure by the
Purchase Contract Agent and such failure shall be continuing, the Collateral
Agent may be removed by the Purchase Contract Agent. The Purchase Contract
Agent shall promptly notify the Company of any removal of the Collateral
Agent pursuant to clause (c) of the immediately preceding sentence. Upon any
such resignation or removal, the Company shall have the right to appoint a
successor Collateral Agent. If no successor Collateral Agent shall have been
so appointed and shall have accepted such appointment within 30 days after
the retiring Collateral Agent's giving of notice of resignation or such
removal, then the retiring Collateral Agent may petition any court of
competent jurisdiction for the appointment of a successor Collateral Agent.
The Collateral Agent shall be a bank which has an office in New York, New
York with a combined capital and surplus of at least $750,000,000. Upon the
acceptance of any appointment as Collateral Agent hereunder by a successor
Collateral Agent, such successor Collateral Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Collateral Agent, and the retiring Collateral Agent shall take all
appropriate action to transfer any money and property held by it hereunder
(including the Collateral) to such successor Collateral Agent. The retiring
Collateral Agent shall, upon such succession, be discharged from its duties
and obligations as Collateral Agent hereunder. After any retiring Collateral
Agent's resignation hereunder as Collateral Agent, the provisions of this
Section 8 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the Collateral
Agent.
Section 8.9. Right to Appoint Agent or Advisor. The
Collateral Agent shall have the right to appoint agents or advisors in
connection with any of its duties hereunder, and the Collateral Agent shall
not be liable for any action taken or omitted by, or in reliance upon the
advice of, such agents or advisors selected in good faith. The appointment
<PAGE>
of agents pursuant to this Section 8.9 shall be subject to prior consent of
the Company, which consent shall not be unreasonably withheld.
Section 8.10. Survival. The provisions of this Section 8
shall survive termination of this Agreement and the resignation or removal of
the Collateral Agent.
Section 8.11. Exculpation. Anything in this Agreement to
the contrary notwithstanding, in no event shall the Collateral Agent or the
Securities Intermediary or their officers, employees or agents be liable
under this Agreement to any third party for indirect, special, punitive, or
consequential loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known to the
Collateral Agent or the Securities Intermediary, or any of them, incurred
without any act or deed that is found to be attributable to gross negligence
or willful misconduct on the part of the Collateral Agent or the Securities
Intermediary.
Section 9. Amendment.
Section 9.1. Amendment Without Consent of Holders. Without
the consent of any Holders, the Company, the Collateral Agent and the
Purchase Contract Agent, at any time and from time to time, may amend this
Agreement, in form satisfactory to the Company, the Collateral Agent and the
Purchase Contract Agent, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company; or
(2) to add to the covenants of the Company for the benefit
of the Holders, or to surrender any right or power herein conferred
upon the Company so long as such covenants or such surrender do not
adversely affect the validity, perfection or priority of the security
interests granted or created hereunder; or
(3) to evidence and provide for the acceptance of
appointment hereunder by a successor Collateral Agent, Securities
Intermediary or Purchase Contract Agent; or
(4) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other such
provisions herein, or to make any other provisions with respect to
such matters or questions arising under this Agreement, provided such
action shall not adversely affect the interests of the Holders.
Section 9.2. Amendment with Consent of Holders. With the
consent of the Holders of not less than a majority of the Purchase Contracts
at the time outstanding, by Act of said Holders delivered to the Company,
the Purchase Contract Agent or the Collateral Agent, as the case may be, the
Company, when duly authorized, the Purchase Contract Agent and the Collateral
Agent may amend this Agreement for the purpose of modifying in any manner the
provisions of this Agreement or the rights of the Holders in respect of the
Securities; provided, however, that no such supplemental agreement shall,
without the consent of the Holder of each Outstanding Security adversely
affected thereby,
<PAGE>
(1) change the amount or type of Collateral underlying a
Security (except for the rights of holders of Income PRIDES to
substitute the Treasury Securities for the Pledged Preferred
Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, or the rights of Holders of
Growth PRIDES to substitute Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as
applicable, for the Pledged Treasury Securities), impair the right of
the Holder of any Security to receive distributions on the underlying
Collateral or otherwise adversely affect the Holder's rights in or to
such Collateral; or
(2) otherwise effect any action that would require the
consent of the Holder of each Outstanding Security affected thereby
pursuant to the Purchase Contract Agreement if such action were
effected by an agreement supplemental thereto; or
(3) reduce the percentage of Purchase Contracts the consent
of whose Holders is required for any such amendment.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
Section 9.3. Execution of Amendments. In executing any
amendment permitted by this Section, the Collateral Agent and the Purchase
Contract Agent shall be entitled to receive and (subject to Section 6.1
hereof, with respect to the Collateral Agent, and Section 7.1 of the Purchase
Contract Agreement, with respect to the Purchase Contract Agent) shall be
fully protected in relying upon, an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Agreement and
that all conditions precedent, if any, to the execution and delivery of such
amendment have been satisfied.
Section 9.4. Effect of Amendments. Upon the execution of
any amendment under this Section, this Agreement shall be modified in
accordance therewith, and such amendment shall form a part of this Agreement
for all purposes; and every Holder of Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered under the
Purchase Contract Agreement shall be bound thereby.
Section 9.5. Reference to Amendments. Security
Certificates authenticated, executed on behalf of the Holders and delivered
after the execution of any amendment pursuant to this Section may, and shall
if required by the Collateral Agent or the Purchase Contract Agent, bear a
notation in form approved by the Purchase Contract Agent and the Collateral
Agent as to any matter provided for in such amendment. If the Company shall
so determine, new Security Certificates so modified as to conform, in the
opinion of the Collateral Agent, the Purchase Contract Agent and the Company,
to any such amendment may be prepared and executed by the Company and
authenticated, executed on behalf of the Holders and delivered by the
Purchase Contract Agent in accordance with the Purchase Contract Agreement in
exchange for Outstanding Security Certificates.
<PAGE>
Section 10. Miscellaneous.
Section 10.1. No Waiver. No failure on the part of the
Collateral Agent or any of its agents to exercise, and no course of dealing
with respect to, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise by the Collateral Agent or any of its agents of any right, power or
remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. The remedies herein are
cumulative and are not exclusive of any remedies provided by law.
Section 10.2. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK. Without limiting the foregoing, the above choice of law is expressly
agreed to by the Securities Intermediary, the Collateral Agent and the
Holders from time to time acting through the Purchase Contract Agent, as
their attorney-in-fact, in connection with the establishment and maintenance
of the Collateral Account. The Company, the Collateral Agent and the Holders
from time to time of the Securities, acting through the Purchase Contract
Agent as their attorney-in-fact, hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in New York City for the
purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Company, the
Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
Section 10.3. Notices. All notices, requests, consents and
other communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be
given or made in writing (including, without limitation, by telecopy)
delivered to the intended recipient at the "Address for Notices" specified
below its name on the signature pages hereof or, as to any party, at such
other address as shall be designated by such party in a notice to the other
parties. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
Section 10.4. Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the respective successors and
assigns of the Company, the Collateral Agent and the Purchase Contract Agent,
and the Holders from time to time of the Securities, by their acceptance of
the same, shall be deemed to have agreed to be bound by the provisions hereof
and to have ratified the agreements of, and the grant of the Pledge hereunder
by, the Purchase Contract Agent.
Section 10.5. Counterparts. This Agreement may be executed
in any number of counterparts, all of which taken together shall constitute
one and the same instrument, and any of the parties hereto may execute this
Agreement by signing any such counterpart.
<PAGE>
Section 10.6. Severability. If any provision hereof is
invalid and unenforceable in any jurisdiction, then, to the fullest extent
permitted by law, (i) the other provisions hereof shall remain in full force
and effect in such jurisdiction and shall be liberally construed in order to
carry out the intentions of the parties hereto as nearly as may be possible
and (ii) the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.
Section 10.7. Expenses, etc. The Company agrees to
reimburse the Collateral Agent for: (a) all reasonable out-of-pocket costs
and expenses of the Collateral Agent (including, without limitation, the
reasonable fees and expenses of counsel to the Collateral Agent), in
connection with (i) the negotiation, preparation, execution and delivery or
performance of this Agreement and (ii) any modification, supplement or waiver
of any of the terms of this Agreement; (b) all reasonable costs and expenses
of the Collateral Agent (including, without limitation, reasonable fees and
expenses of counsel) in connection with (i) any enforcement or proceedings
resulting or incurred in connection with causing any Holder of Securities to
satisfy its obligations under the Purchase Contracts forming a part of the
Securities and (ii) the enforcement of this Section 10.7; and (c) all
transfer, stamp, documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect of this Agreement
or any other document referred to herein and all costs, expenses, taxes,
assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated
hereby.
Section 10.8. Security Interest Absolute. All rights of
the Collateral Agent and security interests hereunder, and all obligations of
the Holders from time to time hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of any provision
of the Purchase Contracts or the Securities or any other agreement or
instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or any other term of, or any increase in the amount of, all or any of
the obligations of Holders of Securities under the related Purchase
Contracts, or any other amendment or waiver of any term of, or any
consent to any departure from any requirement of, the Purchase
Contract Agreement or any Purchase Contract or any other agreement or
instrument relating thereto; or
(c) any other circumstance which might otherwise constitute
a defense available to, or discharge of, a borrower, a guarantor or a
pledgor.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
INGERSOLL-RAND COMPANY
By:_______________________________
Name:
Title:
Address for Notices:
INGERSOLL-RAND COMPANY
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07679
Attention: Chief Financial Officer
Telecopy: (201) 573-3172
THE FIRST NATIONAL BANK OF CHICAGO,
as Purchase Contract Agent and as
attorney-in-fact of the Holders
from time to time of the Securities
By:_______________________________
Name:
Title:
Address for Notices:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Administration
Telecopy: (312) 407-1708
THE CHASE MANHATTAN BANK, as Collateral
Agent and as Securities Intermediary
By: _______________________________
Name:
Title:
<PAGE>
Address for Notices:
The Chase Manhattan Bank
450 West 33rd Street
New York, NY 10001-2697
Attention: Corporate Trust
Administration Department
Telecopy: (212) 946-8160
<PAGE>
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10010-2697
Attention: Corporate Trust Administration Department
Re: FELINE PRIDES of Ingersoll-Rand Company (the
"Company"), and Ingersoll-Rand Financing I
We hereby notify you in accordance with Section 4.1 of the
Pledge Agreement, dated as of __, 1998, (the "Pledge Agreement")
among the Company, yourselves, as Collateral Agent, and ourselves, as
Purchase Contract Agent and as attorney-in-fact for the holders of [Income
PRIDES] [Growth PRIDES] from time to time, that the holder of securities
listed below (the "Holder") has elected to substitute [$_____ aggregate
principal amount of Treasury Securities] [$_______Stated Amount of Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio] in exchange for an equal Value of [Pledged Preferred Securities or
the appropriate Applicable Ownership Interest of the Treasury Portfolio]
[Pledged Treasury Securities] held by you in accordance with the Pledge
Agreement and has delivered to us a notice stating that the Holder has
Transferred [Treasury Securities] [Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio] to you, as
Collateral Agent. We hereby instruct you, upon receipt of such [Pledged
Treasury Securities] [Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio], to release the
[Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio] [Treasury Securities] related to such [Income PRIDES]
[Growth PRIDES] to us in accordance with the Holder's instructions.
Capitalized terms used herein but not defined shall have the meaning set
forth in the Pledge Agreement.
Date:_______________ _______________________________________
By:____________________________________
Name:
Title:
Signature Guarantee:___________________
<PAGE>
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio] for the [Pledged Preferred
Securities or the Treasury Portfolio] [Pledged Treasury Securities]:
______________________ _______________________________________
Name Social Security or other Taxpayer
Identification Number, if any
______________________
Address
______________________
______________________
<PAGE>
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Services Division
Re: FELINE PRIDES of Ingersoll-Rand Company (the
"Company"), and Ingersoll-Rand Financing I
The undersigned Holder hereby notifies you that it has delivered to
The Chase Manhattan Bank, as Collateral Agent, [$_______ aggregate principal
amount of Treasury Securities] [$ aggregate Stated Amount of
Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio of the appropriate Applicable Ownership Interest of the
Treasury Portfolio] in exchange for an equal Value of [Pledged Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio] [Pledged Treasury Securities] held by the Collateral Agent (the
"Pledge Agreement"), in accordance with Section 4.1 of the Pledge Agreement,
dated , 1998, between you, the Company and the Collateral Agent.
The undersigned Holder hereby instructs you to instruct the Collateral Agent
to release to you on behalf of the undersigned Holder the [Pledged Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio] [Pledged Treasury Securities] related to such [Income PRIDES]
[Growth PRIDES]. Capitalized terms used herein but not defined shall have
the meaning set forth in the Pledge Agreement.
Dated:________________ _______________________________________
Signature
Signature Guarantee:__________________
<PAGE>
Please print name and address of Registered Holder:
______________________ _______________________________________
Name Social Security or other Taxpayer
Identification Number, if any
______________________
Address
______________________
______________________
______________________
<PAGE>
INGERSOLL-RAND COMPANY,
THE CHASE MANHATTAN BANK,
as Collateral Agent
AND
,
as Purchase Contract Agent
PLEDGE AGREEMENT
Dated as of March , 1998
<PAGE>
TABLE OF CONTENTS
Page
Section 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2. Pledge; Control and Perfection . . . . . . . . . . . . . . 5
Section 2.1. The Pledge . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.2. Control and Perfection . . . . . . . . . . . . . . . . . . 6
Section 3. Distributions on Pledged Collateral . . . . . . . . . . . . 7
Section 4. Substitution, Release, Repledge and Settlement of
Preferred Securities . . . . . . . . . . . . . . . . . . . . . 8
Section 4.1. Substitution of Preferred Securities and the Creation
of Growth PRIDES or Income PRIDES . . . . . . . . . . . . . . 8
Section 4.2. Pledge of Preferred Securities and Re-establishment of
Income PRIDES or Growth PRIDES . . . . . . . . . . . . . . . .10
Section 4.3. Termination Event . . . . . . . . . . . . . . . . . . . . . 11
Section 4.4. Cash Settlement . . . . . . . . . . . . . . . . . . . . . . 11
Section 4.5. Early Settlement . . . . . . . . . . . . . . . . . . . . . 13
Section 4.6. Application of Proceeds Settlement. . . . . . . . . . . . 13
Section 5. Voting Rights -- Preferred Securities . . . . . . . . . . . 15
Section 6. Rights and Remedies; Distribution of the Debentures;
Tax Event Redemption . . . . . . . . . . . . . . . . . . . . .15
Section 6.1. Rights and Remedies of the Collateral Agent . . . . . . . . 15
Section 6.2. Distribution of the Debentures; Tax Event Redemption . . . 16
Section 6.3. Substitutions. . . . . . . . . . . . . . . . . . . . . . . 17
Section 7. Representations and Warranties; Covenants . . . . . . . . . 17
Section 7.1. Representations and Warranties . . . . . . . . . . . . . . 17
Section 7.2. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 8. The Collateral Agent . . . . . . . . . . . . . . . . . . . 18
Section 8.1. Appointment, Powers and Immunities . . . . . . . . . . . . 18
Section 8.2. Instructions of the Company . . . . . . . . . . . . . . . . 19
Section 8.3. Reliance by Collateral Agent . . . . . . . . . . . . . . . 19
<PAGE>
Section 8.4. Rights in Other Capacities . . . . . . . . . . . . . . . . 20
Section 8.5. Non-Reliance on Collateral Agent . . . . . . . . . . . . . 20
Section 8.6. Compensation and Indemnity . . . . . . . . . . . . . . . . 20
Section 8.7. Failure to Act . . . . . . . . . . . . . . . . . . . . . . 20
Section 8.8. Resignation of Collateral Agent . . . . . . . . . . . . . . 21
Section 8.9. Right to Appoint Agent or Advisor . . . . . . . . . . . . . 21
Section 8.10. Survival . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 8.11. Exculpation . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 9. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 9.1. Amendment Without Consent of Holders . . . . . . . . . . . 22
Section 9.2. Amendment with Consent of Holders . . . . . . . . . . . . . 22
Section 9.3. Execution of Amendments . . . . . . . . . . . . . . . . . . 23
Section 9.4. Effect of Amendments . . . . . . . . . . . . . . . . . . . 23
Section 9.5. Reference to Amendments . . . . . . . . . . . . . . . . . . 23
Section 10. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 24
Section 10.1. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 10.2. Governing Law . . . . . . . . . . . . . . . . . . . . . . 24
Section 10.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 10.4. Successors and Assigns . . . . . . . . . . . . . . . . . . 24
Section 10.5. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 24
Section 10.6. Severability . . . . . . . . . . . . . . . . . . . . . . . 25
Section 10.7. Expenses, etc. . . . . . . . . . . . . . . . . . . . . . . 25
Section 10.8. Security Interest Absolute . . . . . . . . . . . . . . . . 25
EXHIBIT A INSTRUCTION TO COLLATERAL AGENT
EXHIBIT B INSTRUCTION TO PURCHASE CONTRACT AGENT
Exhibit 5.1
[Letterhead of Simpson Thacher & Bartlett]
March 9, 1998
Ingersoll-Rand Company
Ingersoll-Rand Financing I
c/o Ingersoll Rand Company
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07675
Ladies and Gentlemen:
We have acted as counsel to Ingersoll-Rand Company, a New
Jersey corporation (the "Company"), and Ingersoll-Rand Financing I, a
Delaware statutory business trust (the "Trust"), in connection with the
Registration Statement on Form S-3 (the "Registration Statement") filed by
the Company with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, relating to (i) common stock,
par value $2 per share (the "Common Stock"), of the Company, (ii) debentures
of the Company (the "Trust Debentures") to be purchased by the Trust with the
proceeds from the sale of capital securities representing undivided
beneficial ownership interests in the Trust (the "Capital Securities"), (iii)
stock purchase contracts of the Company to purchase Common Stock (the "Stock
Purchase Contracts"), (iv) stock purchase units of the Company, each
representing ownership of (x) a Stock Purchase Contract and (y) a beneficial
interest in the Capital Securities or debt obligations of third parties,
including U.S. Treasury Securities, securing the holder's obligation to
purchase Common Stock under the Stock Purchase Contracts (the "Stock Purchase
Units"), (v) guarantees of certain payment obligations with respect to the
Capital Securities by the Company to be executed by the Company and The First
National Bank of Chicago, as guarantee trustee (the "Guarantees") and (vi)
<PAGE>
the Capital Securities of the Trust, each (i) through (vi) to be issued and
sold by the Company or the Trust, as applicable, from time to time pursuant
to Rule 415 under the Act for an aggregate initial offering price not to
exceed $600 million.
We have examined (i) the Registration Statement, (ii) the form
of Indenture to be executed by the Company and The Bank of New York, as
trustee (the "Trust Debenture Indenture") and (iii) the form of Guarantee
Agreement to be executed by the Company and The First National Bank of
Chicago, as guarantee trustee (the "Guarantee Agreement"). In addition, we
have examined, and have relied as to matters of fact upon, the originals or
copies, certified or otherwise identified to our satisfaction, of such
corporate records, agreements, documents and other instruments and such
certificates or comparable documents of public officials and of officers and
representatives of the Company and the Trust, and have made such other and
further investigations, as we have deemed relevant and necessary as a basis
for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents
of all documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.
We have also assumed that (i) the Registration Statement, and
any amendments thereto (including post-effective amendments), including the
form of prospectus included therein (as supplemented, the "Prospectus"), will
have become effective under the Act, (ii) one or more prospectus supplements
will have been prepared and filed with the Commission describing the Trust
Debentures, the Stock Purchase Contracts and/or the Guarantees offered
thereby, (iii) all Trust Debentures, Stock Purchase Contracts and Guarantees
issued will be issued and sold in compliance with applicable federal and
<PAGE>
state securities laws and solely in the manner stated in the Registration
Statement and the appropriate prospectus supplement, and (iv) a definitive
purchase, underwriting or similar agreement or stock purchase contract with
respect to any Trust Debentures, Stock Purchase Contracts or Guarantees
offered will have been duly authorized and validly executed and delivered by
the Company and the other parties thereto.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that:
1. With respect to the Trust Debentures to be issued
under the Trust Debenture Indenture, when (i) the Trust Debenture
Indenture has been duly authorized, executed and delivered by the
Company to the trustee in accordance with applicable law, (ii) the
Trust Debenture Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), (iii)
the Board of Directors of the Company, a duly constituted and acting
committee of such Board or duly authorized officer of the Company
(such Board of Directors, committee or authorized officer being
hereinafter referred to as the "Board"), has taken all necessary
corporate action to approve the issuance and terms of such Trust
Debentures, the terms of the offering thereof and related matters in
accordance with applicable law and (iv) such Trust Debentures have
been duly executed, authenticated, issued and delivered in accordance
with the provisions of the Trust Debenture Indenture and applicable
law and upon payment of the consideration therefor provided for in the
applicable definitive purchase, underwriting or similar agreement
approved by the Board, such Trust Debentures will constitute valid and
legally binding obligations of the Company, enforceable against the
Company in accordance with their terms.
2. With respect to the Stock Purchase Contracts,
when (i) the Board has taken all necessary corporate action to approve
the issuance and terms of such Stock Purchase Contracts, the terms of
the offering thereof and related matters in accordance with applicable
law and (ii) such Stock Purchase Contracts have been duly executed,
issued and delivered in accordance with applicable law and upon
payment of the consideration therefor provided for in the applicable
definitive purchase, underwriting or similar agreement approved by the
Board, such Stock Purchase Contracts will constitute valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their terms.
3. With respect to the Guarantees, when (i) the
Guarantee Agreement has been duly authorized, executed and delivered
by the Company to the guarantee trustee in accordance with applicable
law, (ii) the Guarantee Agreement has been duly qualified under the
Trust Indenture Act in accordance with applicable law, (iii) the Board
has taken all necessary corporate action to approve the issuance and
terms of such Guarantees, the terms of the offering thereof and
related matters in accordance with applicable law and (iv) such
<PAGE>
Guarantees have been duly executed, issued and delivered in accordance
with applicable law and in accordance with the provisions of the
Guarantee Agreement and the applicable definitive purchase,
underwriting or similar agreement approved by the Board upon payment
of the consideration therefore provided for therein, such Guarantees
will constitute valid and legally binding obligations of the Company
enforceable against the Company in accordance with their terms.
Our opinions set forth above are subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing.
We are members of the Bar of the State of New York and we do
not express any opinion herein concerning any law other than the law of the
State of New York and the federal law of the United States.
We hereby consent to the filing of this opinion of counsel as
Exhibit 5.1 to the Registration Statement and to the use of our name under
the caption "Legal Matters" in the Prospectus forming a part of the
Registration Statement.
Very truly yours,
/s/ Simpson Thacher & Bartlett
SIMPSON THACHER & BARTLETT
[Letterhead of Richards, Layton & Finger, P.A.]
March 9, 1998
Ingersoll-Rand Financing I
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07675
Re: Ingersoll-Rand Financing I
Ladies and Gentlemen:
We have acted as special Delaware counsel for Ingersoll-Rand
Company, a New Jersey corporation (the "Company"), and Ingersoll-Rand
Financing I, a Delaware business trust (the "Trust"), in connection with the
matters set forth herein. At your request, this opinion is being furnished
to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated August 18, 1997
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on August 18, 1997;
(b) The Trust Agreement of the Trust, dated as of August 18, 1997,
among the Company, as Depositor, and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement") on
Form S-3, including a preliminary prospectus (the "Prospectus") and
prospectus supplement (the "Prospectus Supplement"), relating to the Capital
Securities of the Trust representing preferred undivided beneficial interests
in the assets of the Trust (each, a "Capital Security" and collectively, the
"Capital Securities"), as proposed to be filed by the Company and the Trust
with the Securities and Exchange Commission on or about March 9, 1998;
(d) A form of Amended and Restated Trust Agreement of the Trust,
to be entered into among the Company, as Depositor, the trustees of the Trust
named therein, and the holders, from time to time of undivided beneficial
interests in the assets of the Trust (without exhibits) (the "Trust
Agreement"), attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated March 9,
1998, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined
are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents
other than the documents listed in paragraphs (a) through (e) above. In
<PAGE>
particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (e) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that
is inconsistent with the opinions stated herein. We have conducted no
independent factual investigation of our own but rather have relied solely
upon the foregoing documents, the statements and information set forth
therein and the additional matters recited or assumed herein, all of which we
have assumed to be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i)
the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement and the Certificate are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
creation or due organization or due formation, as the case may be, and valid
existence in good standing of each party to the documents examined by us
under the laws of the jurisdiction governing its creation, organization or
formation, (iii) the legal capacity of natural persons who are parties to the
documents examined by us, (iv) that each of the parties to the documents
examined by us has the power and authority to execute and deliver, and to
perform its obligations under, such documents, (v) the due authorization,
execution and delivery by all parties thereto of all documents examined by
us, (vi) the receipt by each Person to whom a Capital Security is to be
issued by the Trust (collectively, the "Capital Security Holders") of a
Capital Securities Certificate for such Capital Security and the payment for
the Capital Security acquired by it, in accordance with the Trust Agreement
and the Registration Statement, and (vii) that the Capital Securities are
issued and sold to the Capital Security Holders in accordance with the Trust
Agreement and the Registration Statement. We have not participated in the
preparation of the Registration Statement and assume no responsibility for
its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our
opinions are rendered only with respect to Delaware laws and rules,
regulations and orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act.
2. The Capital Securities will represent valid and, subject to
the qualifications set forth in paragraph 3 below, fully paid and
nonassessable undivided beneficial interests in the assets of the Trust.
3. The Capital Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended
<PAGE>
to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware. We note that the Preferred
Security Holders may be obligated to make payments as set forth in the Trust
Agreement.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In
addition, we hereby consent to the use of our name under the heading "Legal
Opinions" in the Prospectus and the Prospectus Supplement. In giving the
foregoing consents, we do not thereby admit that we come within the category
of Persons whose consent is required under Section 7 of the Securities Act of
1933, as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder. Except as stated above, without our prior written
consent, this opinion may not be furnished or quoted to, or relied upon by,
any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger
-----------------------------
RICHARDS, LAYTON & FINGER, P.A.
March 9, 1998
Ingersoll-Rand Company
Ingersoll-Rand Financing I
c/o Ingersoll Rand Company
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07675
Ladies and Gentlemen:
This opinion is delivered in connection with the Amendment No.
1 to the Registration Statement on Form S-3 (the "Registration Statement")
filed under the Securities Act of 1933, as amended (the "Act"), by Ingersoll-
Rand Company, a New Jersey corporation (the "Company"), and Ingersoll-Rand
Financing I, a Delaware statutory business trust (the "Trust"), which
Registration Statement relates to (i) common stock, par value $2 per share
(the "Common Stock"), of the Company, (ii) debentures of the Company (the
"Trust Debentures") to be purchased by the Trust with the proceeds from the
sale of preferred securities representing undivided beneficial ownership
interests in the Trust (the "Preferred Securities"), (iii) stock purchase
contracts of the Company to purchase Common Stock (the "Stock Purchase
Contracts"), (iv) stock purchase units of the Company, each representing
ownership of (x) a Stock Purchase Contract and (y) a beneficial interest in
the Preferred Securities or debt obligations of third parties, including U.S.
Treasury Securities, securing the holder's obligation to purchase Common
Stock under the Stock Purchase Contracts (the "Stock Purchase Units"), (v)
guarantees of certain payment obligations with respect to the Preferred
Securities by the Company to be executed by the Company and The National Bank
of Chicago, as guarantee trustee (the "Guarantees") and (vi) the Preferred
Securities of the Trust, each of (i) through (vi) to be issued and sold by
the Company or the Trust, as applicable, from time to time pursuant to Rule
<PAGE>
415 under the Act for an aggregate initial offering price not to exceed $600
million.
In preparation for rendering my opinion hereafter expressed, I
have examined the Registration Statement and originals or copies certified to
my satisfaction of corporate records and other documents and certificates as
I have deemed necessary.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, I am of the opinion that:
1. With respect to shares of Common Stock, when certificates
representing the shares of Common Stock have been duly executed,
countersigned, registered and delivered either (a) in accordance with
the applicable definitive purchase underwriting or similar agreement
approved by the Board of Directors of the Company (the "Board") upon
payment of the consideration therefor (not less than the par value of
the Common Stock) provided for therein, or (b) upon conversion or
exercise of any other security, in accordance with the terms of such
security or the instrument governing such security providing for such
conversion or exercise as approved by the Board, for the consideration
approved by the Board (not less than the par value of the Common
Stock), the shares of Common Stock will be duly authorized, validly
issued, fully paid and nonassessable.
2. With respect to the Stock Purchase Units, when such Stock
Purchase Units have been duly issued and delivered in accordance with
the provisions of the Registration Statement, the Prospectus and any
prospectus supplement relating thereto approved by the Board upon
payment of the consideration therefor provided for therein, assuming
that the terms of such Stock Purchase Units are in compliance with
then applicable law, such Stock Purchase Units will be duly
authorized, validly issued, fully paid and nonassessable.
I am a member of the Bar of the State of New Jersey and I do
not express any opinion herein concerning any law other than the law of the
State of New Jersey and, to the extent set forth herein and the federal law
of the United States.
<PAGE>
I hereby consent to the filing of this opinion of counsel as
Exhibit 5.3 to the Registration Statement and to the use of my name under the
caption "Legal Opinions" in the prospectus forming a part of the Registration
Statement.
Very truly yours,
/s/ Patricia Nachtigal
Name: Patricia Nachtigal
Title: Vice President and
General Counsel
[Letterhead of Simpson Thacher & Bartlett]
March 6, 1998
Ingersoll-Rand Company
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07675
Re: Issuance and Sale of FELINE PRIDES (sm)
by Ingersoll-Rand Company
---------------------------------------
Ladies and Gentlemen:
We have acted as special tax counsel ("Tax Counsel") to
Ingersoll-Rand Company, a New Jersey corporation (the "Corporation"), in
connection with the preparation and filing by the Corporation with the
Securities and Exchange Commission (the "Commission") of a Registration
Statement on Form S-3 (as amended, the "Registration Statement") under the
Securities Act of 1933, as amended, and with respect to the issuance and sale
of FELINE PRIDES (sm) (the "FELINE PRIDES") by the Corporation. The offering
of FELINE PRIDES will consist of an offering of Income PRIDES (sm) ("Income
Prides") and Growth PRIDES (sm) ("Growth Prides"). In connection with this
offering, the Corporation will issue and sell debentures due March 2003 (the
"Debentures") to Ingersoll-Rand Financing I, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), which will
issue and sell trust originated preferred securities (the "Capital
Securities") to investors pursuant to the Registration Statement. A portion
of the Capital Securities will be sold, together with Purchase Contracts, as
a component of the Income Prides and a portion of such Capital Securities
will be sold to investors separately. The Capital Securities will represent
undivided beneficial ownership interests in the Debentures.
In rendering this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction of (i) the Registration
Statement; (ii) a form of the Amended and Restated Declaration of Trust (the
"Declaration"), between the Corporation and the trustees named therein (the
"Ingersoll-Rand Trustees"); (iii) a form of the Indenture (the "Indenture"),
between the Corporation and The Bank of New York, as indenture trustee (the
"Indenture Trustee"), as supplemented by the First Supplemental Indenture (the
"Supplemental Indenture"), between the Corporation and the Indenture Trustee;
(iv) a form of Purchase Contract Agreement (the "Purchase Contract"), between
the Corporation and The Bank of New York, as Purchase Contract Agent (the
"Purchase Contract Agent"); (v) a form of the Pledge Agreement (the "Pledge
Agreement"), between the Corporation and The Chase Manhattan Bank, as
collateral agent (the "Collateral Agent"); (vi) a form of the Guarantee
Agreement, between the Corporation and The First National Bank of Chicago, as
trustee (in such capacity, the "Guarantee Trustee") (the "Guarantee Agreement"
and, together with the Declaration, the Indenture, the Purchase Contract, and
the Pledge Agreement the "Basic Documents"), and (vii) such other documents
relating to the issuance and sale of the FELINE PRIDES as we have deemed
relevant under the circumstances.
<PAGE>
All capitalized terms used in this opinion letter and not otherwise
defined herein shall have the meaning ascribed to such terms in the
Registration Statement.
In delivering this opinion letter, we have reviewed and relied
upon: (i) the Registration Statement and (ii) forms of the Basic Documents,
as such forms were filed exhibits to the Registration Statement. We also
have examined and relied upon originals or copies, certified or otherwise
identified to our satisfaction, of such records of the Corporation and the
Trust and such other statements, documents, certificates and records as we
have deemed necessary or appropriate as a basis for the opinions set forth
herein.
In our examination of such material, we have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals and the conformity to original documents of all copies of documents
submitted to us. In addition, we also have assumed that the transactions
related to the issuance of the FELINE PRIDES, Debentures and the Capital
Securities will be consummated in accordance with the terms of the documents
and forms of documents described herein.
On the basis of the foregoing and assuming that the Trust was formed
and will be maintained in compliance with the terms of the Declaration, we
hereby confirm (i) our opinions set forth in the Registration Statement under
the caption "Certain Federal Income Tax Consequences" and (ii) that, subject
to the qualifications set forth therein, the discussion set forth in the
Registration Statement under such caption is an accurate summary of the United
States federal income tax matters described therein in all material respects.
We express no opinion with respect to the transactions referred to
herein or in the Registration Statement other than as expressly set forth
herein. Moreover, we note that there is no authority directly on point
dealing with securities such as the Capital Securities or transactions of the
type described herein and that our opinion is not binding on the Internal
Revenue Service ("IRS") or the courts, either of which could take a contrary
position. Nevertheless, we believe that if challenged, the opinions we
express herein would be sustained by a court with jurisdiction in a properly
presented case.
Our opinion is based upon the Code, the Treasury regulations
promulgated thereunder and other relevant authorities and law, all as in
effect on the date hereof. Consequently, future changes in the law may cause
the tax treatment of the transactions referred to herein to be materially
different from that described above.
We are admitted to practice law only in the State of New York and
the opinions we express herein are limited solely to matters governed by the
federal law of the United States.
<PAGE>
We hereby consent to the use of this opinion for filing as
Exhibit 8.1 to the Registration Statement and the use of our name in the
Registration Statement under the caption "Certain Federal Income Tax
Consequences."
Very truly yours,
/s/ Simpson Thacher & Bartlett
SIMPSON THACHER & BARTLETT
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated February 3, 1998, which is included as part of Exhibit 13 --
Ingersoll-Rand 1997 Annual Report to Shareholders, which is incorporated by
reference in Ingersoll-Rand Company's Annual Report on Form 10-K for the year
ended December 31, 1997. We also consent to the incorporation by reference of
our report on the Financial Statement Schedule, which also appears in such
Annual Report on Form 10-K. We also consent to the reference to us under the
heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
Morristown, New Jersey
March 9, 1998
Independent Auditors' Consent
The Board of Directors
CBS Corporation (formerly Westinghouse Electric Corporation):
We consent to the incorporation by reference in the registration
statement on Form S-3 (No. 333-38367) of Ingersoll-Rand Company of our report
dated January 29, 1997, with respect to the combined balance sheets of Thermo
King (a unit of CBS Corporation) as of December 31, 1996 and 1995 and the
related combined statements of income and cash flows for each of the years in
the three-year period ended December 31, 1996, which report appears in the
Form 8-K of Ingersoll-Rand Company dated October 31, 1997. We also consent to
the reference to our firm under the heading "Experts" in the Prospectus.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
March 9, 1998
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________
Form T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1933 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) / /
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State or other (I.R.S. Employer
jurisdiction of Identification Number)
incorporation or
organization)
48 Wall Street
New York, NY 10286
(Address of principal executive offices)
_________________________
INGERSOLL-RAND COMPANY
(Exact name of obligor as specified in its charter)
New Jersey 13-5156640
(State or other (I.R.S. Employer
jurisdiction of Identification Number)
incorporation or
organization)
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07675
(Address of principal executive offices)
_________________________
Debentures
(Title of the indenture securities)
<PAGE>
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Name Address
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006, and
State of New York Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Washington, D.C. 20429
Corporation
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a
and 1b to Form T-1 filed with Registration Statement No. 33-21672
and Exhibit 1 to Form T-1 filed with Registration Statement No.
33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in The City of New
York, and State of New York, on the 5th day of March, 1998.
THE BANK OF NEW YORK
By: /s/VAN K. BROWN
Name: VAN K. BROWN
Title: ASSISTANT VICE PRESIDENT
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) -------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
Ingersoll - Rand Financing I
(Exact name of obligor as specified in its trust agreement)
Delaware Applied For
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07675
(Address of principal executive offices) (Zip Code)
Capital Securities of Ingersoll - Rand Financing I
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
--------------------
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of the Currency, Washington, D.C., Federal
Deposit Insurance Corporation, Washington, D.C., The Board
of Governors of the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of
-----------------------------
the trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
-----------------
part of this Statement of Eligibility.
1. A copy of the articles of association of the trustee
now in effect.*
2. A copy of the certificates of authority of the trustee
to commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of
the Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
<PAGE>
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all
in the City of Chicago and State of Illinois, on the 4th day of
March, 1998.
The First National Bank of Chicago,
Trustee
/s/ Steven M. Wagner
By --------------------------------
Steven M. Wagner
Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 25.1 to the Registration Statement on
Form S-3 of SunAmerica Inc., filed with the Securities and Exchange
Commission on October 2, 1996 (Registration No. 333-14201).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
March 4, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of the Amended and Restated
Declaration of Trust of Ingersoll - Rand Financing I, Dated as of
March 9, 1998, the undersigned, in accordance with Section 321(b) of
the Trust Indenture Act of 1939, as amended, hereby consents that the
reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by
such authorities to the Securities and Exchange Commission upon its
request therefor.
Very truly yours,
The First National Bank of Chicago
/s/ Steven M. Wagner
By: -------------------------------
Steven M. Wagner
Vice President
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago
Call Date: 06/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for September 30, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in C400
------
Thousands RCFD BIL MIL THOU
------------- ---- ------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions
(from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin<F(1)> 0081 4,499,157 1.a.
b. Interest-bearing balances<F(2)> 0071 6,967,103 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) 1773 5,251,713 2.b.
3. Federal funds sold and securities purchased under agreements to resell 1350 5,561,976 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 24,171,565 4.a.
b. LESS: Allowance for loan and lease losses RCFD 3123 419,216 4.b.
c. LESS: Allocated transfer risk reserve RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c) 2125 23,752,349 4.d.
5. Trading assets (from Schedule RD-D) 3545 6,238,805 5.
6. Premises and fixed assets (including capitalized leases) 2145 717,303 6.
7. Other real estate owned (from Schedule RC-M) 2150 7,187 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) 2130 77,115 8.
9. Customers' liability to this bank on acceptances outstanding 2155 614,921 9.
10. Intangible assets (from Schedule RC-M) 2143 277,105 10.
11. Other assets (from Schedule RC-F) 2160 2,147,141 11.
12. Total assets (sum of items 1 through 11) 2170 56,108,875 12.
<FN>
<F(1)> Includes cash items in process of collection and unposted debits.
<F(2)> Includes time certificates of deposit not held for trading.
</TABLE>
<PAGE>
<TABLE>
LIABILITIES
<S> <C> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) RCON 2200 21,496,468 13.a
(1) Noninterest-bearing<F(1)> RCON 6631 8,918,843 13.a.1
(2) Interest-bearing RCON 6636 12,577,625 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II) RCFN 2200 14,164,129 13.b.
(1) Noninterest bearing RCFN 6631 352,399 13.b.1
(2) Interest-bearing RCFN 6636 13,811,730 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 3,894,469 14
15. a. Demand notes issued to the U.S. Treasury RCON 2840 68,268 15.a
b. Trading Liabilities(from Schedule RC-D) RCFD 3548 5,247,232 15.b
16. Other borrowed money:
a. With a remaining maturity of one year or less RCFD 2332 2,608,057 16.a
b. With a remaining maturity of than one year through three years A547 379,893 16.b
c. With a remaining maturity of more than three years A548 323,042 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding RCFD 2920 614,921 18
19. Subordinated notes and debentures<F(2)> RCFD 3200 1,700,000 19
20. Other liabilities (from Schedule RC-G) RCFD 2930 1,222,121 20
21. Total liabilities (sum of items 13 through 20) RCFD 2948 51,718,600 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus RCFD 3838 0 23
24. Common stock RCFD 3230 200,858 24
25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 2,989,408 25
26. a. Undivided profits and capital reserves RCFD 3632 1,175,518 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities RCFD 8434 26,750 26.b.
27. Cumulative foreign currency translation adjustments RCFD 3284 (2,259) 27
28. Total equity capital (sum of items 23 through 27) RCFD 3210 4,390,275 28
29. Total liabilities and equity capital (sum of items 21 and 28) RCFD 3300 56,108,875 29
<FN>
<F(1)> Includes total demand deposits and noninterest-bearing time and savings deposits.
<F(2)> Includes limited-life preferred stock and related surplus.
</TABLE>
<PAGE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed
for the bank by independent external auditors as of any date during 1996
Number
RCFD 6724 N/A M.1
1. Independent audit of the bank conducted in accordance
with generally accepted auditing standards by a certified
public accounting firm which submits a report on the bank
2. Independent audit of the bank's parent holding company
conducted in accordance with generally accepted auditing
standards by a certified public accounting firm which
submits a report on the consolidated holding company
(but not on the bank separately)
3. Directors' examination of the bank conducted in
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
4. Directors' examination of the bank performed by other
external auditors (may be required by state chartering
authority)
5. Review of the bank's financial statements by external
auditors
6. Compilation of the bank's financial statements by
external auditors
7. Other audit procedures (excluding tax preparation work)
8. No external audit work
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
------------------------------
Ingersoll - Rand Company
(Exact name of obligor as specified in its charter)
New Jersey 13-5156640
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07675
(Address of principal executive offices) (Zip Code)
Guarantee of Capital Securities of Ingersoll - Rand Financing I
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of the Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate
trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act
of 1939, as amended, the trustee, The First National
Bank of Chicago, a national banking association
organized and existing under the laws of the United
<PAGE>
States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City
of Chicago and State of Illinois, on the 4th day of
March, 1998.
The First National Bank of Chicago,
Trustee
By ___________________________________________
Steven M. Wagner
Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to
Exhibits bearing identical numbers in Item 16 of the Form T-1 of
The First National Bank of Chicago, filed as Exhibit 25.1 to the
Registration Statement on Form S-3 of SunAmerica Inc., filed with
the Securities and Exchange Commission on October 2, 1996
(Registration No. 333-14201).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
March 4, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of the Capital Securities
Guarantee Agreement of the Capital Securities of Ingersoll - Rand
Financing I the undersigned, in accordance with Section 321(b) of
the Trust Indenture Act of 1939, as amended, hereby consents that
the reports of examinations of the undersigned, made by Federal
or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.
Very truly yours,
The First National Bank of
Chicago
By: ______________________________________
Steven M. Wagner
Vice President
<PAGE>
EXHIBIT 7
Call Date: 06/30/97 ST-BK: 17-1630 FFIEC 031
Page RC-1
Legal Title of Bank: The First National Bank of Chicago
Address: One First National Plaza, Ste 0303
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for September 30, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION> Dollar Amounts in C400
------
Thousands RCFD BIL MIL THOU
------------- ---- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions
(from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin<F1> 0081 4,499,157 1.a.
b. Interest-bearing balances<F2> 0071 6,967,103 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) 1773 5,251,713 2.b.
3. Federal funds sold and securities purchased under agreements to resell 1350 5,561,976 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 24,171,565 4.a.
b. LESS: Allowance for loan and lease losses RCFD 3123 419,216 4.b.
c. LESS: Allocated transfer risk reserve RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c) 2125 23,752,349 4.d.
5. Trading assets (from Schedule RD-D) 3545 6,238,805 5.
6. Premises and fixed assets (including capitalized leases) 2145 717,303 6.
7. Other real estate owned (from Schedule RC-M) 2150 7,187 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) 2130 77,115 8.
9. Customers' liability to this bank on acceptances outstanding 2155 614,921 9.
10. Intangible assets (from Schedule RC-M) 2143 277,105 10.
11. Other assets (from Schedule RC-F) 2160 2,147,141 11.
12. Total assets (sum of items 1 through 11) 2170 56,108,875 12.
<FN>
<F1> Includes cash items in process of collection and unposted debits.
<F2> Includes time certificates of deposit not held for trading.
</TABLE>
<PAGE>
<TABLE>
LIABILITIES
<S> <C> <C> <C> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) RCON 2200 21,496,468 13.a
(1) Noninterest-bearing<F1> RCON 6631 8,918,843 13.a.1
(2) Interest-bearing RCON 6636 12,577,625 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II) RCFN 2200 14,164,129 13.b.
(1) Noninterest bearing RCFN 6631 352,399 13.b.1
(2) Interest-bearing RCFN 6636 13,811,730 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 3,894,469 14
15. a. Demand notes issued to the U.S. Treasury RCON 2840 68,268 15.a
b. Trading Liabilities(from Schedule RC-D) RCFD 3548 5,247,232 15.b
16. Other borrowed money:
a. With a remaining maturity of one year or less RCFD 2332 2,608,057 16.a
b. With a remaining maturity of than one year through three years A547 379,893 16.b
c. With a remaining maturity of more than three years A548 323,042 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding RCFD 2920 614,921 18
19. Subordinated notes and debentures<F2> RCFD 3200 1,700,000 19
20. Other liabilities (from Schedule RC-G) RCFD 2930 1,222,121 20
21. Total liabilities (sum of items 13 through 20) RCFD 2948 51,718,600 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus RCFD 3838 0 23
24. Common stock RCFD 3230 200,858 24
25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 2,989,408 25
26. a. Undivided profits and capital reserves RCFD 3632 1,175,518 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities RCFD 8434 26,750 26.b.
27. Cumulative foreign currency translation adjustments RCFD 3284 (2,259) 27
28. Total equity capital (sum of items 23 through 27) RCFD 3210 4,390,275 28
29. Total liabilities and equity capital (sum of items 21 and 28) RCFD 3300 56,108,875 29
<FN>
<F1> Includes total demand deposits and noninterest-bearing time and savings deposits.
<F2> Includes limited-life preferred stock and related surplus.
</TABLE>
<PAGE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed
for the bank by independent external auditors as of any date during 1996
Number
RCFD 6724 N/A M.1
1. Independent audit of the bank conducted in accordance
with generally accepted auditing standards by a certified
public accounting firm which submits a report on the bank
2. Independent audit of the bank's parent holding company
conducted in accordance with generally accepted auditing
standards by a certified public accounting firm which
submits a report on the consolidated holding company
(but not on the bank separately)
3. Directors' examination of the bank conducted in
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
4. Directors' examination of the bank performed by other
external auditors (may be required by state chartering
authority)
5. Review of the bank's financial statements by external
auditors
6. Compilation of the bank's financial statements by
external auditors
7. Other audit procedures (excluding tax preparation work)
8. No external audit work
