<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 31, 1995.
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C> <C>
INTERNATIONAL PAPER COMPANY NEW YORK 13-0872805
INTERNATIONAL PAPER CAPITAL TRUST DELAWARE 62-6296765
(Exact name of registrant as specified in its charter) (State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
</TABLE>
------------------------------
TWO MANHATTANVILLE ROAD, PURCHASE, NEW YORK 10577, (914) 397-1500
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
JAMES W. GUEDRY, ESQ.
INTERNATIONAL PAPER COMPANY
TWO MANHATTANVILLE ROAD, PURCHASE, NEW YORK 10577, (914) 397-1500
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPY TO:
VINCENT J. PISANO, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
919 THIRD AVENUE, NEW YORK, NEW YORK 10022, (212) 735-3000
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, (the "Securities Act") 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. /X/
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED (1) PER SHARE (4) OFFERING PRICE (4) FEE (1)
<S> <C> <C> <C> <C>
Convertible Preferred Securities of
International Paper Capital Trust........... 9,000,000 $47.375(1) $426,375,000(1) $147,025.86
Convertible Junior Subordinated Deferrable
Interest Debentures of International Paper
Company..................................... (2) -- -- --
Common Stock of International Paper
Company(4)(5)............................... (3) -- -- --
Preferred Securities Guarantee(6)............
Total.................................... 9,000,000 100% $426,375,000 $147,025.86
<FN>
(1) Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457(c) of the Securities Act.
(2) $450,000,000 in aggregate principal amount of 5 1/4% Convertible Junior
Subordinated Deferrable Interest Debentures (the "Convertible Junior
Subordinated Debentures") of International Paper Company (the "Company")
were issued and sold to International Paper Capital Trust (the "Trust") in
connection with the issuance by the Trust of 9,000,000 of its 5 1/4%
Convertible Preferred Securities (the "Convertible Preferred Securities").
The Convertible Junior Subordinated Debentures may be distributed, under
certain circumstances, to the holders of Convertible Preferred Securities
for no additional consideration.
(3) Such indeterminate number of shares of International Paper Common Stock as
may be issuable upon conversion of the Convertible Preferred Securities
registered hereunder, including such shares as may be issuable pursuant to
anti-dilution adjustments.
(4) Exclusive of accrued interest and distributions, if any.
(5) Includes International Paper Common Stock purchase rights. Prior to the
occurrence of certain events, the purchase rights will not be exercisable or
evidenced separately from the International Paper Common Stock. No separate
consideration will be received for the International Paper Common Stock
purchase rights.
(6) No separate consideration will be received for the Preferred Securities
Guarantee.
</TABLE>
------------------------------
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 THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY 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.
<PAGE>
PROSPECTUS
9,000,000 Convertible Preferred Securities
INTERNATIONAL PAPER CAPITAL TRUST
5 1/4% Convertible Preferred Securities
(liquidation preference $50 per Convertible Preferred Security)
guaranteed to the extent set forth herein by, and convertible into Common Stock
of,
INTERNATIONAL PAPER COMPANY
------------
This Prospectus relates to the 5 1/4% Convertible Preferred Securities (the
"Convertible Preferred Securities"), liquidation preference $50 per Convertible
Preferred Security, which represent undivided beneficial ownership interests in
the assets of the International Paper Capital Trust, a statutory business trust
formed under the laws of the State of Delaware (the "Trust" or the "Issuer"),
and the shares of the common stock, par value $1.00 per share, and the
accompanying common stock purchase rights as described herein ("International
Paper Common Stock") of International Paper Company, a New York corporation
("International Paper" or the "Company"), issuable upon conversion of the
Convertible Preferred Securities. The Convertible Preferred Securities were
issued and sold (the "Original Offering") on July 20, 1995 (the "Original
Offering Date") in transactions exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), in the United States
to persons reasonably believed by the Initial Purchasers (as defined) of the
Convertible Preferred Securities to be qualified institutional buyers as defined
in Rule 144A under the Securities Act, to certain qualified institutional buyers
acting on behalf of institutional "accredited investors" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) and outside the United
States to non-U.S. persons in offshore transactions in reliance on Regulation S
under the Securities Act. International Paper, directly or indirectly owns all
the common securities issued by the Trust (the "Common Securities" and, together
with the Convertible Preferred Securities, the "Trust Securities"). The Issuer
exists for the sole purpose of issuing the Trust Securities and using the
proceeds thereof to purchase from International Paper its 5 1/4% Convertible
Junior Subordinated Deferrable Interest Debentures Due 2025 (the "Convertible
Junior Subordinated Debentures") having the terms described herein. The holders
of the Convertible Preferred Securities will have a preference with respect to
cash distributions and amounts payable upon liquidation, redemption or otherwise
over the holders of the Common Securities of the Issuer.
The Convertible Preferred Securities and the International Paper Common
Stock issuable upon conversion of the Convertible Preferred Securities (the
"Offered Securities") may be offered and sold from time to time by the holders
named herein or by their transferees, pledgees, donees or their successors
(collectively, the "Selling Holders") pursuant to this Prospectus. The Offered
Securities may be sold by the Selling Holders from time to time directly to
purchasers or through agents, underwriters or dealers. See "Plan of
Distribution." If required, the names of any such agents or underwriters
involved in the sale of the Offered Securities and the applicable agent's
commission, dealer's purchase price or underwriter's discount, if any, will be
set forth in an accompanying supplement to this Prospectus (the "Prospectus
Supplement"). The Selling Holders will receive all of the net proceeds from the
sale of the Offered Securities and will pay all underwriting discounts and
selling commissions, if any, applicable to any such sale. The Company is
responsible for payment of all other expenses incident to the offer and sale of
the Offered Securities. The Selling Holders and any broker-dealers, agents or
underwriters which participate in the distribution of the Offered Securities may
be deemed to be "underwriters" within the meaning of the Securities Act, and any
commission received by them and any profit on the resale of the Offered
Securities purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. See "Plan of Distribution" for a description
of indemnification arrangements.
(CONTINUED ON FOLLOWING PAGE)
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER MATTERS DISCUSSED UNDER THE
CAPTION "RISK FACTORS" STARTING ON PAGE 5.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1995.
<PAGE>
(CONTINUED FROM FRONT COVER)
Holders of the Convertible Preferred Securities are entitled to receive
cumulative cash distributions at an annual rate of 5 1/4% of the liquidation
preference of $50 per Convertible Preferred Security, accruing from the date of
original issuance and payable quarterly in arrears on each March 15, June 15,
September 15 and December 15, commencing September 15, 1995. See "Description of
the Convertible Preferred Securities -- Distributions". The payment of
distributions and payments on liquidation of the Issuer or the redemption of
Convertible Preferred Securities, as described below (but only to the extent of
funds of the Trust available therefor), are guaranteed by International Paper to
the extent described herein (the "Guarantee"). International Paper's obligations
under the Guarantee are subordinate and junior to all other liabilities of
International Paper, except any liabilities that may be made PARI PASSU
expressly by their terms and certain other guarantees, but are PARI PASSU with
the most senior preferred stock issued, from time to time, if any, by
International Paper. See "Description of the Guarantee". If International Paper
fails to make interest payments on the Convertible Junior Subordinated
Debentures, the Issuer will have insufficient funds to pay distributions on the
Convertible Preferred Securities. The Guarantee does not cover payment of
distributions when the Issuer does not have sufficient funds to pay such
distributions. In such event, the remedy of a holder of Convertible Preferred
Securities is to rely on the enforcement by the Trustee (as defined herein) of
its rights as registered holder of the Convertible Junior Subordinated
Debentures against International Paper. The obligations of International Paper
under the Convertible Junior Subordinated Debentures are subordinate and junior
in right of payment to Senior Indebtedness (as defined herein) of International
Paper. At June 30, 1995, Senior Indebtedness of International Paper aggregated
approximately $7.2 billion. See "Capitalization".
International Paper has the right under the Indenture (as defined herein)
for the Convertible Junior Subordinated Debentures to defer the interest
payments due from time to time on the Convertible Junior Subordinated Debentures
for successive periods not exceeding 20 consecutive quarters for each such
period, and, as a consequence, quarterly distributions on the Convertible
Preferred Securities would be deferred by the Issuer (but would continue to
accumulate quarterly and accrue interest) until the end of any such interest
deferral period. See "Risk Factors -- Option to Extend Interest Payment Period;
Tax Consequences", "Description of the Convertible Preferred Securities --
Distributions" and "Description of the Convertible Junior Subordinated
Debentures -- Option to Extend Interest Payment Period".
Each Convertible Preferred Security is convertible in the manner described
herein at the option of the holder into shares of International Paper Common
Stock, at the rate of 0.925926 shares of International Paper Common Stock (as
adjusted to reflect the two-for-one split of the International Paper Common
Stock effective as of August 18, 1995 (the "Stock Split") for each Convertible
Preferred Security (equivalent to a conversion price of $54.00 per share of
International Paper Common Stock, as adjusted to reflect the Stock Split),
subject to adjustment in certain circumstances. See "Description of the
Convertible Preferred Securities -- Conversion Rights". The last reported sale
price of International Paper Common Stock, which is listed under the symbol "IP"
on the New York Stock Exchange ("NYSE") Composite Tape, on August 28, 1995, was
$81 5/8 per share. See "Recent Developments". Whenever International Paper
issues shares of International Paper Common Stock upon conversion of the
Convertible Preferred Securities, International Paper will, subject to certain
conditions, issue, together with each share of International Paper Common Stock,
one Right (as defined herein) entitling the holder thereof, under certain
circumstances, to purchase one share of International Paper Common Stock. See
"Description of the Convertible Preferred Securities -- Conversion Rights".
The Convertible Preferred Securities are effectively redeemable at the
option of the Company, in whole or in part, from time to time, after June 30,
1999, at the prices set forth herein, plus accrued and unpaid distributions
thereon to the date fixed for redemption (the "Redemption Price"). See
"Description of the Convertible Preferred Securities -- Optional Redemption".
Upon the repayment of the Convertible Junior Subordinated Debentures at maturity
or upon any acceleration, earlier
2
<PAGE>
redemption or otherwise, the proceeds from such repayment will be applied to
redeem the Convertible Preferred Securities and Common Securities on a PRO RATA
basis. In addition, upon the occurrence of certain events arising from a change
in law or a change in legal interpretation, International Paper will liquidate
the Trust and cause to be distributed to the holders of the Convertible
Preferred Securities, on a PRO RATA basis, Convertible Junior Subordinated
Debentures or, in certain limited circumstances, will cause the redemption of
the Convertible Preferred Securities in whole at the liquidation preference of
$50 per share plus accrued and unpaid distributions. See "Description of the
Convertible Preferred Securities -- Tax Event or Investment Company Event
Redemption or Distribution". See "Description of the Convertible Junior
Subordinated Debentures".
In the event of the liquidation of the Trust, the holders of the Convertible
Preferred Securities will be entitled to receive for each Convertible Preferred
Security a liquidation preference of $50 plus accrued and unpaid distributions
thereon to the date of payment, unless, in connection with such liquidation,
Convertible Junior Subordinated Debentures are distributed to the holders of the
Convertible Preferred Securities. See "Description of the Convertible Preferred
Securities -- Liquidation Distribution Upon Dissolution".
3
<PAGE>
AVAILABLE INFORMATION
International Paper is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "SEC" or the "Commission"). Such reports, proxy
statements, and other information filed by International Paper can be inspected
and copied at the public reference facilities of the SEC at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, DC 20549, and at the following
Regional Offices of the Commission: 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511; and Seven World Trade Center, 13th Floor, New
York, New York 10048. Copies of such material may also be obtained from the
Public Reference Section of the SEC at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, DC 20549, at prescribed rates. Certain securities of International
Paper are listed on, and reports, proxy statements and other information
concerning International Paper can be inspected at the offices of, the New York
Stock Exchange, 20 Broad Street, New York, New York 10005.
International Paper has filed with the Commission a Registration Statement
on Form S-3 (herein together with all amendments and exhibits thereto, called
the "Registration Statement") under the Securities Act with respect to the
securities offered by this Prospectus. This Prospectus does not contain all of
the information set forth or incorporated by reference in the Registration
Statement and the exhibits and schedules relating thereto, certain portions of
which have been omitted as permitted by the rules and regulations of the
Commission. For further information with respect to International Paper and the
securities offered by this Prospectus, reference is made to the Registration
Statement and the exhibits filed or incorporated as a part thereof, which are on
file at the offices of the Commission and may be obtained upon payment of the
fee prescribed by the Commission, or may be examined without charge at the
offices of the Commission. Statements contained in this Prospectus as to the
contents of any documents referred to are not necessarily complete, and, in each
such instance, are qualified in all respects by reference to the applicable
documents filed with the Commission.
No separate financial statements of the Issuer have been included herein.
International Paper does not consider that such financial statements would be
material to holders of the Convertible Preferred Securities because (i) all of
the voting securities of the Issuer will be owned, directly or indirectly, by
International Paper, a reporting company under the Exchange Act, (ii) the Issuer
has no independent operations but exists for the sole purpose of issuing
securities representing undivided beneficial interests in the assets of the
Issuer and investing the proceeds thereof in Convertible Junior Subordinated
Debentures issued by International Paper and (iii) the obligations of the Issuer
under the Trust Securities (as defined herein) are fully and unconditionally
guaranteed by International Paper to the extent that the Issuer has funds
available to meet such obligations. See "Description of the Convertible Junior
Subordinated Debentures" and "Description of the Guarantee".
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by International Paper with the SEC pursuant
to the Exchange Act (File No. 1-3157) are incorporated in this Prospectus by
reference: (a) Annual Report on Form 10-K for the year ended December 31, 1994;
(b) Quarterly Report on Form 10-Q for the quarter ended March 31, 1995; (c)
Quarterly Report on Form 10-Q for the quarter ended June 30, 1995; (d) the
description of International Paper's capital stock which is contained in
International Paper's registration statement on Form 8-A, dated July 20, 1976,
as amended, and International Paper's registration statements on Form S-3, filed
January 8, 1992 (No. 33-44855), December 23, 1993 (No. 33-51447) and April 1,
1994 (No. 33-52945); (e) International Paper's registration statement on Form
8-A, dated April 17, 1987, as amended December 14, 1989 (relating to the
Rights), and the related Current Report on Form 8-K, dated April 17, 1987, and
(f) Current Reports on Form 8-K, dated January 10, 1995, March 6, 1995, April
11, 1995, April 21, 1995, July 11, 1995 and August 30, 1995.
All documents filed by International Paper with the SEC pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the filing of a post-
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<PAGE>
effective amendment which indicates the termination of this offering shall be
deemed to be incorporated by reference in this Prospectus and to be a part of
this Prospectus from the date of filing of such documents.
Any statement contained in a document, all or a portion of which is
incorporated or deemed to be incorporated by reference herein, or contained in
this Prospectus, shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
International Paper hereby undertakes to provide without charge to each
person to whom a copy of this Prospectus is delivered, on the written or oral
request of such person, a copy of any or all of the documents referred to above
which have been or may be incorporated by reference in this Prospectus (other
than certain exhibits). Such written or oral request should be directed to
International Paper Company, Two Manhattanville Road, Purchase, New York 10577,
Attention: Investor Relations Department ((914) 397-1632).
RISK FACTORS
PROSPECTIVE PURCHASERS OF THE OFFERED SECURITIES SHOULD CAREFULLY REVIEW THE
INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS AND SHOULD PARTICULARLY
CONSIDER THE FOLLOWING MATTERS:
SUBORDINATION OF GUARANTEE AND CONVERTIBLE JUNIOR SUBORDINATED
DEBENTURES. International Paper's obligations under the Guarantee are
subordinate and junior in right of payment to all other liabilities of
International Paper, with certain limited exceptions. The obligations of
International Paper under the Convertible Junior Subordinated Debentures are
subordinate and junior in right of payment to Senior Indebtedness (as defined
herein) of International Paper. As of June 30, 1995, International Paper had
approximately $7.2 billion principal amount of Senior Indebtedness. See
"Capitalization". There are no terms of the Convertible Preferred Securities,
the Convertible Junior Subordinated Debentures or the Guarantee that limit
International Paper's ability to incur additional indebtedness or liabilities,
including indebtedness or liabilities that would rank senior to the Convertible
Junior Subordinated Debentures and the Guarantee. See "Description of the
Guarantee -- Status of the Guarantee; Subordination" and "Description of the
Convertible Junior Subordinated Debentures -- Subordination".
The ability of the Issuer to pay amounts due on the Convertible Preferred
Securities is wholly dependent upon International Paper's making payments on the
Convertible Junior Subordinated Debentures.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES. International
Paper has the right under the Indenture to defer interest payments from time to
time on the Convertible Junior Subordinated Debentures for successive periods
not exceeding 20 consecutive quarters for each such period. Upon the termination
of any Deferral Period and the payment of all amounts then due, International
Paper may select a new Deferral Period, subject to the requirements described
herein. As a consequence, during any such Deferral Period, quarterly
distributions on the Convertible Preferred Securities would be deferred (but
would continue to accrue with interest thereon) by the Issuer. In the event that
International Paper exercises this right, during such period International Paper
(i) 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 stock dividends paid by International Paper
which consist of stock of the same class as that on which the dividend is being
paid), (ii) shall not make any payment of interest, principal or premium, if
any, on or repay, repurchase or redeem any debt securities issued by
International Paper that rank PARI PASSU with or junior to the Convertible
Junior Subordinated Debentures, and (iii) shall not make any guarantee payments
with respect to the foregoing (other than pursuant to the Guarantee). Prior to
the termination of any such Deferral Period, International Paper may further
extend the Deferral Period; PROVIDED that such
5
<PAGE>
Deferral Period, together with all previous and further extensions thereof, may
not exceed 20 consecutive quarters and that such Deferral Period may not extend
beyond the maturity date of the Convertible Junior Subordinated Debentures. If
International Paper should determine to exercise its deferral right in the
future, the market price of the Convertible Preferred Securities is likely to be
adversely affected. See "Description of the Convertible Preferred Securities --
Distributions" and "Description of the Convertible Junior Subordinated
Debentures -- Option to Extend Interest Payment Period".
Should a Deferral Period occur, a Preferred Securityholder (as defined
herein) will continue to accrue interest income for United States Federal income
tax purposes. As a result, such a holder will be required to include such
interest in gross income for United States Federal income tax purposes in
advance of the receipt of cash, and such holder will not receive the cash from
the Issuer related to such income if such holder disposes of or converts its
Convertible Preferred Securities prior to the record date for payment of
distributions. See "United States Taxation -- Potential Extension of Interest
Payment Period and Original Issue Discount".
RIGHTS UNDER THE GUARANTEE. The Guarantee Trustee (as defined herein) will
hold the Guarantee for the benefit of the holders of the Convertible Preferred
Securities. The Guarantee guarantees to the holders of the Convertible Preferred
Securities the payment (but not the collection) of (i) any accrued and unpaid
distributions on the Convertible Preferred Securities to the extent of funds of
the Trust available therefor, (ii) the amount payable upon redemption, including
all accrued and unpaid distributions, of the Convertible Preferred Securities
called for redemption by the Issuer, to the extent of funds of the Trust
available therefor and (iii) upon a voluntary or involuntary dissolution,
winding up or termination of the Issuer (other than in connection with a
redemption of all of the Convertible Preferred Securities), the lesser of (a)
the aggregate of the liquidation amount and all accrued and unpaid distributions
on the Convertible Preferred Securities to the date of payment to the extent of
funds of the Trust available therefor and (b) the amount of assets of the Issuer
remaining available for distribution to holders of the Convertible Preferred
Securities upon the liquidation of the Issuer. The holders of a majority in
liquidation amount of the Convertible Preferred Securities 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. If the Guarantee
Trustee fails to enforce the Guarantee, any holder of Convertible Preferred
Securities may, after such holder's written request to the Guarantee Trustee to
enforce the Guarantee, institute a legal proceeding directly against
International Paper to enforce the Guarantee Trustee's rights under the
Guarantee without first instituting a legal proceeding against the Trust, the
Guarantee Trustee, or any other person or entity. If International Paper were to
default on its obligations under the Convertible Junior Subordinated Debentures,
the Issuer would lack available funds for the payment of distributions or
amounts payable on redemption of the Convertible Preferred Securities or
otherwise, and in such event holders of the Convertible Preferred Securities
would not be able to rely upon the Guarantee for payment of such amounts.
Instead, holders of the Convertible Preferred Securities would be required to
rely on the enforcement by the Trustee of its rights, as registered holder of
the Convertible Junior Subordinated Debentures, against International Paper
pursuant to the terms of the Convertible Junior Subordinated Debentures and may
also vote to appoint a Special Trustee who shall have the same rights, powers
and privileges of the IP Trustees (as defined herein). See "Description of the
Guarantee -- Status of the Guarantee; Subordination" and "Description of the
Convertible Junior Subordinated Debentures -- Subordination" herein. The
Declaration will provide that each holder of Convertible Preferred Securities by
acceptance thereof agrees to the provisions of the Guarantee (including the
subordination provisions thereof) and the Indenture.
TAX EVENT OR INVESTMENT COMPANY EVENT REDEMPTION OR DISTRIBUTION. Upon the
occurrence of a Tax Event or Investment Company Event, International Paper will,
except in certain limited circumstances, cause the IP Trustees to liquidate the
Issuer and cause Convertible Junior Subordinated Debentures to be distributed
PRO RATA to the holders of the Convertible Preferred Securities. In certain
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<PAGE>
circumstances, International Paper will have the right to redeem the Convertible
Junior Subordinated Debentures, in whole (but not in part), at par plus accrued
and unpaid interest, in lieu of a distribution of the Convertible Junior
Subordinated Debentures, in which event the Convertible Preferred Securities
will be redeemed in whole at the liquidation preference of $50 per Convertible
Preferred Security plus accrued and unpaid distributions. In the case of a Tax
Event, International Paper may also elect to cause the Convertible Preferred
Securities to remain outstanding and pay Additional Interest (as defined herein)
on the Convertible Junior Subordinated Debentures. See "Description of the
Convertible Preferred Securities -- Tax Event or Investment Company Event
Redemption or Distribution" and "Description of the Convertible Junior
Subordinated Debentures -- General".
Under current United States Federal income tax law, a distribution of the
Convertible Junior Subordinated Debentures would not be a taxable event to
holders of the Convertible Preferred Securities. However, if the relevant
Special Event (as defined herein) is a Tax Event which results in the Issuer
being treated as an association taxable as a corporation, the distribution would
likely constitute a taxable event to holders of the Convertible Preferred
Securities. See "United States Taxation -- Receipt of Convertible Junior
Subordinated Debentures or Cash Upon Liquidation of the Issuer".
LIMITED VOTING RIGHTS. Holders of Convertible Preferred Securities will
have limited voting rights and, except upon the occurrence of certain events
described herein, will not be entitled to vote to appoint, remove or replace the
Issuer Trustees (as defined herein), the right to which is vested exclusively in
the holder of the Common Securities.
TRADING CHARACTERISTICS OF CONVERTIBLE PREFERRED SECURITIES. The
Convertible Preferred Securities may trade at a price that does not fully
reflect the value of accrued but unpaid distributions. A holder who disposes of
its Convertible Preferred Securities between record dates for payments of
distributions thereon will be required to include accrued but unpaid interest on
the Convertible Junior Subordinated Debentures through the date of disposition
in income as ordinary income (I.E., original issue discount), and to add such
amount to its adjusted tax basis in its PRO RATA share of the underlying
Convertible Junior Subordinated Debentures deemed disposed of. To the extent the
selling price is less than the holder's adjusted tax basis (which will include,
in the form of original issue discount, all accrued but unpaid interest), a
holder will recognize a capital loss. Subject to certain limited exceptions,
capital losses cannot be applied to offset ordinary income for United States
Federal income tax purposes. See "United States Taxation".
LACK OF PUBLIC MARKET FOR THE CONVERTIBLE PREFERRED SECURITIES. There is no
existing trading market for the Convertible Preferred Securities, and there can
be no assurance regarding the future development of a market for the Convertible
Preferred Securities, or the ability of holders of the Convertible Preferred
Securities to sell their Convertible Preferred Securities or the price at which
such holders may be able to sell their Convertible Preferred Securities. If such
a market were to develop, the Convertible Preferred Securities could trade at
prices that may be higher or lower than the initial offering price depending on
many factors, including prevailing interest rates, the price of the
International Paper Common Stock, the Company's operating results and the market
for similar securities. The Initial Purchasers currently make a market in the
Convertible Preferred Securities. The Initial Purchasers are not obligated to do
so, however, and any market making with respect to the Convertible Preferred
Securities may be discontinued at any time without notice. Therefore, there can
be no assurance as to the liquidity of any trading market for the Convertible
Preferred Securities or that an active public market for the Convertible
Preferred Securities will develop. The Company does not intend to apply for
listing or quotation of the Convertible Preferred Securities on any securities
exchange or stock market.
7
<PAGE>
INTERNATIONAL PAPER CAPITAL TRUST
International Paper Capital Trust is a statutory business trust formed under
Delaware law pursuant to (i) a declaration of trust (the "Declaration") executed
by International Paper, as sponsor of the Trust, and the trustees of the Issuer
(the "Issuer Trustees") and (ii) the filing of a certificate of trust with the
Secretary of State of the State of Delaware. International Paper has directly or
indirectly acquired Common Securities in an aggregate liquidation amount equal
to 3% of the total capital of the Issuer. The Common Securities rank PARI PASSU,
and payment will be made thereon PRO RATA, with the Convertible Preferred
Securities, except that, upon the occurrence and during the continuance of an
event of default under the Declaration, the rights of the holders of the Common
Securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Convertible Preferred Securities. The assets of the Trust consist
principally of the Convertible Junior Subordinated Debentures. The Issuer exists
for the exclusive purpose of (i) issuing the Trust Securities representing
undivided beneficial interests in the assets of the Trust, (ii) investing the
gross proceeds of the Trust Securities in the Convertible Junior Subordinated
Debentures and (iii) engaging in only those other activities necessary or
incidental thereto.
Pursuant to the Declaration, the number of Issuer Trustees will initially be
five. Three of the Issuer Trustees (the "IP Trustees") will be individuals who
are employees or officers of or who are affiliated with International Paper. The
fourth trustee will be a financial institution that is unaffiliated with
International Paper (the "Trustee"). The fifth trustee will be an entity which
maintains its principal place of business in the State of Delaware (the
"Delaware Trustee"). Initially, The Bank of New York, a New York banking
corporation, will act as Trustee and its affiliate, The Bank of New York
(Delaware), a Delaware banking corporation, will act as Delaware Trustee until,
in each case, removed or replaced by the holder of the Common Securities. The
Bank of New York will also act as indenture trustee under the Guarantee (the
"Guarantee Trustee") and under the Indenture (the "Indenture Trustee"). See
"Description of the Guarantee" and "Description of the Convertible Preferred
Securities". In certain circumstances, the holders of a majority of the
Convertible Preferred Securities will be entitled to appoint one additional
trustee (a "Special Trustee"), who need not be an officer or employee of or
otherwise affiliated with International Paper, who will have the same rights,
powers and privileges as the IP Trustees. See "Description of the Convertible
Preferred Securities -- Voting Rights".
The Trustee holds title to the Convertible Junior Subordinated Debentures
for the benefit of the holders of the Trust Securities and the Trustee will have
the power to exercise all rights, powers and privileges under the Indenture (as
defined herein) as the holder of the Convertible Junior Subordinated Debentures.
In addition, the 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 Convertible Junior Subordinated Debentures for the
benefit of the holders of the Trust Securities. The Guarantee Trustee holds the
Guarantee for the benefit of the holders of the Convertible Preferred
Securities. Subject to the right of the holders of the Convertible Preferred
Securities to appoint a Special Trustee, International Paper, as the direct or
indirect holder of all the Common Securities, has the right to appoint, remove
or replace any of the Issuer Trustees and to increase or decrease the number of
trustees, provided that the number of trustees shall be at least three, a
majority of which shall be IP Trustees. International Paper will pay all fees
and expenses related to the Trust and the offering of the Convertible Preferred
Securities. See "Description of the Convertible Junior Subordinated Debentures".
The rights of the holders of the Convertible Preferred Securities, including
economic rights, rights to information and voting rights, are as set forth in
the Declaration and the Delaware Business Trust Act, as amended (the "Trust
Act"). See "Description of the Convertible Preferred Securities". The
Declaration, the Indenture and the Guarantee also incorporate by reference the
terms of the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"). The Declaration, the Indenture and the Guarantee will be qualified under
the Trust Indenture Act.
The place of business and the telephone number of the Trust are the
principal executive offices and telephone number of International Paper. See
"The Company".
8
<PAGE>
THE COMPANY
The Company is a worldwide forest products company and is one of the world's
largest producers of bleached paperboard used primarily in consumer packaging
and uncoated free sheet used in printing and writing, two major and growing
segments in the paper industry. The Company is also a leading producer of
linerboard, which is used in industrial packaging. Additionally, the Company is
a producer of wood pulp, lumber, wood panels, laminated wood products and
specialty products, including photosensitive films and papers, nonwovens,
chemicals and minerals.
At December 31, 1994, the Company had manufacturing operations in 28
countries and sales in 130 countries. In 1994, international operations and
export sales generated revenues of $4.5 billion, 30% of the Company's total
sales. In the United States, the Company operates 24 pulp and paper mills, 53
converting and packaging plants, 43 wood products facilities, 15 specialty
panels and laminated products plants, six nonwoven products facilities and two
envelope plants. Internationally, in Europe, Asia, Latin America and Canada, the
Company operates 13 pulp and paper mills, 29 converting and packaging plants,
two wood products facilities, four specialty panels and laminated products
plants and five nonwoven products facilities. Through over 280 distribution
branches, the Company is one of the largest distributors in the United States of
printing papers and is a major distributor of industrial and office supply
products. The Company produces photosensitive films and papers and photographic
equipment at three U.S. and six international locations and specialty chemicals
at seven U.S. and two international locations, and engages in domestic oil and
gas and real estate activities. The Company, principally through its majority
ownership interest in the public limited partnership, IP Timberlands, Ltd.,
controls approximately 6.1 million acres of timberlands, making it one of the
largest private landowners in the United States. Substantially all of the
Company's businesses have experienced and are likely to continue to experience
cycles relating to available industrial capacity and general economic
conditions.
The Company's strategy for improved profitability and growth is based on
improving the cost position and efficiency of the Company's mill system,
emphasizing higher value products in its core paper businesses, expanding into
fast-growing markets worldwide and strengthening its specialty products and
distribution businesses. As a result of this strategy, which in part has been
implemented through acquisitions, the Company's total sales have more than
tripled since 1985 to approximately $15.0 billion in 1994. During this period,
annual sales of specialty products increased significantly to $2.6 billion and
sales in Europe increased from $213 million to over $2.9 billion.
From 1990 through 1994, the Company's capital expenditures approximated $5.9
billion. These expenditures reflect continuing efforts to improve product
quality and environmental performance, lower costs, expand production capacity,
and acquire and improve forestlands. Capital spending in 1994 was $1.1 billion
and is expected to exceed $1.5 billion in 1995.
Currently, the Company is embarked on a capital program which will
substantially upgrade its facilities around the world. This program included
building a modern 360,000 ton white paper machine (the largest in the world) at
Selma, Alabama and a world class pulp mill at Saillat, France, and will also
encompass a 408,000 ton linerboard machine at Mansfield, Louisiana, and the
start-up of a fourth paper machine at Kwidzyn, Poland to produce coated
paperboard. As new low-cost capacity is added, the Company has shut down older,
higher cost capacity, some of which has been converted to other uses.
The Company has grown substantially as a result of acquisitions. Since 1986,
the Company has completed over 37 acquisitions at an aggregate cost, including
the assumption of debt, of approximately $8.3 billion.
In November 1991, the Company entered into a joint venture agreement with
Brierley Investments Limited ("Brierley") to control 32% of Carter Holt Harvey
Limited ("CHH"), a major New Zealand paper and forest products company. CHH also
has substantial assets in Chile. In March 1994, the Company, through a
subsidiary, acquired approximately one-half of Brierley's holdings in CHH.
9
<PAGE>
The purchase increased the Company's ownership of CHH to 24% and left Brierley
with 8%. In April 1995, the Company acquired from Brierley their remaining 131.8
million shares of CHH stock for NZ $470 million (approximately $316 million).
Also in April 1995, an additional 325.8 million CHH shares were acquired by the
Company through a subsidiary in open-market purchases for NZ $3.80 per share
(approximately $834 million) bringing the Company's total ownership in CHH to
50.2% on a fully diluted basis. All of the share purchases in April 1995,
including the acquisition from Brierley, were financed with borrowings totaling
approximately $1.1 billion. Beginning May 1, 1995, CHH was consolidated in the
financial statements of the Company.
In December 1994, the Company acquired additional stock of Zanders
Feinpapiere AG, a major German paper producer in which the Company has owned a
stake since 1989. In December 1993, the Company acquired assets of Monsanto
Company's Kentucky-based Fome-Cor division, a manufacturer of polystyrene foam
products. In 1992, the Company acquired an equity interest in Scitex Corporation
Ltd., an Israel-based world leader in color electronic prepress systems for the
graphic design, printing, publishing and video industries; Zaklady
Celulozowa-Papierniecze S.A. w Kwidzynie ("Kwidzyn") from the Government of the
Republic of Poland, Poland's largest white papers manufacturer and Poland's only
integrated bleached pulp and paper company; and certain assets of the chemical
division of Norway-based M. Peterson & Son AS.
In January 1995, the Company acquired the assets of two Michigan-based paper
distributors, Carpenter Paper Company and Seaman-Patrick Holding Company. In
July 1994, the Company, through a subsidiary, acquired certain assets of
Papelera Kif and Ogi Papel, distributors of printing papers in Juarez and
Chihuahua, Mexico. In December 1994, the Company completed a merger with Kirk
Paper Corporation, a paper distributor located in Downey, California, using the
pooling-of-interests accounting method. In April 1993, the Company acquired
certain assets of the Los Angeles-based Ingram Paper Company, a distributor of
industrial and fine printing papers. In December 1993, J.B. Papers, Inc., a
paper distribution company located in Union, New Jersey, was purchased. In the
first quarter of 1992, the operating assets of Western Paper Company, a printing
and industrial paper distribution business based in Portland, Oregon, were
purchased.
As a result of its capital expenditure and acquisition programs, the Company
has reduced its exposure to price fluctuations in the market pulp segment,
typically the most volatile commodity grade in terms of pricing in the paper
industry. In 1994, the Company produced approximately 1.3 million short tons of
market pulp. Approximately 30% of this tonnage represents specialty grades of
dissolving pulp used to make rayon and acetate products. Dissolving pulp has
historically been less volatile in price than paper pulp. The Company also
purchases significant volumes of market pulp, which provides, on a Company-wide
basis, for a substantially balanced net pulp position.
The Company's future investment strategy is to continue to invest
selectively to reduce costs further in core commodity businesses such as
unbleached kraft, paper, pulp and wood products. More significant investment
will occur in higher growth value-added lines in which the Company has a
material market position such as uncoated white papers, bristols, specialty
linerboard, pulps and bleached board.
The Company was incorporated in 1941 under the laws of the State of New York
as the successor to the New York corporation of the same name organized in 1898.
The Company's corporate headquarters are located at Two Manhattanville Road,
Purchase, New York 10577, and its telephone number is (914) 397-1500.
10
<PAGE>
RECENT DEVELOPMENTS
On July 3, 1995, the Company announced that on August 2, 1995, it would
redeem the entire outstanding principal amount of its $200 million 5 3/4%
Convertible Subordinated Debentures Due 2002 at 100% of their principal amount
plus accrued interest. Substantially all of the 5 3/4% Convertible Subordinated
Debentures Due 2002 were converted to International Paper Common Stock on August
2, 1995.
On July 11, 1995, International Paper announced an increase in its quarterly
dividend from $0.42 per share to $0.50 per share. The Company also announced a
two for one split of the International Paper Common Stock to holders of record
on August 18, 1995, payable September 19, 1995 (the "Stock Split"). Following
the Stock Split, the dividend per share of International Paper Common Stock will
be $0.25.
RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
The following table sets forth International Paper's ratio of earnings to
fixed charges on a historical basis for each of the five years in the period
ended December 31, 1994, and for the six-month periods ended June 30, 1994 and
June 30, 1995.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE
YEAR ENDED DECEMBER 31, 30,
---------------------------- ----------
1990 1991 1992 1993 1994 1994 1995
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges.............................................. 3.56 2.47 1.44 2.26 2.43 2.21 3.86
</TABLE>
For purposes of computing the ratio of earnings to fixed charges, earnings
include pre-tax earnings before extraordinary charges and the cumulative effect
of accounting changes, interest expense and the estimated interest factor in
rent expense (which, in the opinion of International Paper, approximates
one-third of rent expense), and adjustments for undistributed equity earnings
and the amortization of capitalized interest. Fixed charges include interest
incurred (including amounts capitalized) and the estimated interest factor in
rent expense.
11
<PAGE>
CAPITALIZATION
(UNAUDITED)
The following table sets forth the capitalization of International Paper and
its consolidated subsidiaries as of June 30, 1995, and as adjusted to give
effect to the sale of the Convertible Preferred Securities, the application of
the estimated gross proceeds from such sale to repay short-term indebtedness of
the Company and the call and subsequent conversion of the Company's 5 3/4%
Convertible Subordinated Debentures Due 2002 discussed in "Recent Developments".
The table should be read in conjunction with International Paper's consolidated
financial statements and notes thereto and other financial data incorporated
herein by reference.
<TABLE>
<CAPTION>
JUNE 30, 1995
--------------------
ACTUAL AS ADJUSTED
------- -----------
(IN MILLIONS)
<S> <C> <C>
INDEBTEDNESS:
Short-Term Indebtedness...................................................................... $ 3,152 $ 2,702
Current Maturities of Long-Term Indebtedness................................................. 569 569
------- -----------
Total Short-Term Indebtedness.............................................................. 3,721 3,271
Long-Term Indebtedness, excluding Current Maturities (1)..................................... 5,641 5,441
------- -----------
Total Indebtedness....................................................................... 9,362 8,712
Minority interestInternational Paper-obligated mandatorily redeemable preferred securities of
Trust (2)..................................................................................... -- 450
COMMON SHAREHOLDERS' EQUITY: (3)
Common Stock, par value $1.00 per share; 400 million shares authorized; 128.7 million (131.6
million as adjusted) issued and outstanding (1)............................................. 129 132
Paid-in capital (1).......................................................................... 1,944 2,141
Retained earnings............................................................................ 5,167 5,167
Less: Common Stock held in treasury, at cost; 1.7 million shares........................... 81 81
------- -----------
Total Common Shareholders' Equity........................................................ 7,159 7,359
------- -----------
Total Capitalization................................................................... $16,521 $16,521
------- -----------
------- -----------
<FN>
- ------------------------
(1) The amounts in the "As Adjusted" column assume that all of the Company's
5 3/4% Convertible Subordinated Debentures Due 2002 were converted into
International Paper Common Stock at a conversion price of $68.50 per share.
(2) As described herein, substantially all the assets of the Trust will consist
of the Convertible Junior Subordinated Debentures of the Company.
(3) The data included in the table does not reflect the Stock Split announced
on July 11, 1995. See "Recent Developments".
</TABLE>
ACCOUNTING TREATMENT
The financial statements of the Trust will be consolidated with
International Paper's financial statements. It is expected that the Convertible
Preferred Securities will be reflected in International Paper's consolidated
financial statements as a minority interest consisting of International
Paper-obligated mandatorily redeemable preferred securities of a trust holding
convertible subordinated debentures of International Paper. All of the assets of
the Trust will be approximately $464 million of Convertible Junior Subordinated
Debentures of the Company which will bear interest at a rate of 5 1/4% per
annum.
USE OF PROCEEDS
Neither International Paper nor the Issuer will receive any proceeds from
the sale of the Offered Securities.
12
<PAGE>
DESCRIPTION OF THE CONVERTIBLE PREFERRED SECURITIES
THE FOLLOWING SUMMARY OF CERTAIN MATERIAL TERMS AND PROVISIONS OF THE
CONVERTIBLE PREFERRED SECURITIES DOES NOT PURPORT TO BE COMPLETE AND IS SUBJECT
TO, AND QUALIFIED IN ITS ENTIRETY BY REFERENCE TO, THE DECLARATION. THE
CONVERTIBLE PREFERRED SECURITIES WERE ISSUED PURSUANT TO THE TERMS OF THE
DECLARATION. THE DECLARATION INCORPORATES BY REFERENCE TERMS OF THE TRUST
INDENTURE ACT. THE DECLARATION WILL BE QUALIFIED UNDER THE TRUST INDENTURE ACT.
THE BANK OF NEW YORK, AS TRUSTEE, ACTS AS INDENTURE TRUSTEE FOR THE DECLARATION
FOR PURPOSES OF COMPLIANCE WITH THE TRUST INDENTURE ACT. CAPITALIZED TERMS NOT
OTHERWISE DEFINED HEREIN HAVE THE MEANINGS ASSIGNED TO THEM IN THE DECLARATION.
GENERAL
The Convertible Preferred Securities were issued in fully registered form
without interest coupons.
The Convertible Preferred Securities represent undivided beneficial
ownership interests in the assets of the Issuer and entitle the holders thereof
to a preference in certain circumstances with respect to distributions and
amounts payable on redemption or liquidation over the Common Securities, as well
as other benefits as described in the Declaration.
All of the Common Securities are owned, directly or indirectly, by
International Paper. The Common Securities rank PARI PASSU, and payments are
made thereon PRO RATA, with the Convertible Preferred Securities except as
described under "-- Subordination of Common Securities". The Convertible Junior
Subordinated Debentures are owned by the Trustee and held for the benefit of the
holders of the Trust Securities. The Guarantee is a full and unconditional
guarantee with respect to the Convertible Preferred Securities, but does not
guarantee payment of distributions or amounts payable on redemption or
liquidation of the Convertible Preferred Securities when the Issuer does not
have funds available to make such payments.
DISTRIBUTIONS
The distributions payable on each Convertible Preferred Security are fixed
at a rate per annum of 5 1/4% of the stated liquidation preference of $50 per
Convertible Preferred Security. Deferred distributions (and interest thereon)
will accrue interest (compounded quarterly) at the same rate. The term
"distributions" as used herein includes any such distributions payable 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 Convertible Preferred Securities will be cumulative,
accrue from the date of initial issuance and will be payable quarterly in
arrears on each March 15, June 15, September 15 and December 15, commencing
September 15, 1995, when, as and if available. International Paper has the right
under the Indenture to defer interest payments from time to time on the
Convertible Junior Subordinated Debentures for successive periods not exceeding
20 consecutive quarters for each such period, and, as a consequence, quarterly
distributions on the Convertible Preferred Securities would be deferred by the
Issuer (but would continue to accrue with interest) during any such Deferral
Period. In the event that International Paper exercises this right, during such
period International Paper (i) 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 stock
dividends paid by International Paper which consist of stock of the same class
as that on which the dividend is being paid), (ii) shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by International Paper that rank PARI PASSU with or
junior to the Convertible Junior Subordinated Debentures, and (iii) shall not
make any guarantee payments with respect to the foregoing (other than pursuant
to the Guarantee). Prior to the termination of any Deferral Period,
International Paper may further extend such Deferral Period; PROVIDED that such
Deferral Period together with all previous and further deferrals thereof may not
exceed 20 consecutive quarters. Upon the termination of any Deferral Period,
International Paper is required to pay all amounts then due and, upon such
payment, International Paper may select a new
13
<PAGE>
Deferral Period, subject to the above requirements. In no event shall any
Deferral Period extend beyond the maturity of the Convertible Junior
Subordinated Debentures. See "Description of the Convertible Junior Subordinated
Debentures -- Interest" and "-- Option to Extend Interest Payment Period".
Distributions on the Convertible Preferred Securities must be paid quarterly
on the dates payable to the extent of funds of the Trust available for the
payment of such distributions. Amounts available to the Trust for distribution
to the holders of the Convertible Preferred Securities will be limited to
payments under the Convertible Junior Subordinated Debentures. See "Description
of the Convertible Junior Subordinated Debentures". The payment of
distributions, to the extent of funds of the Trust available therefor, is
guaranteed by International Paper, as set forth under "Description of the
Guarantee".
Distributions on the Convertible Preferred Securities will be payable to the
holders thereof as they appear on the books and records of the Issuer on the
relevant record dates, which will be fifteen days prior to the relevant payment
dates. 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. In the event that any date
on which distributions are payable on the Convertible Preferred Securities is
not a Business Day, payment of the distribution payable on such date will be
made on the next succeeding day which is a Business Day (without any
distribution 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. A "Business Day" shall mean any day other than a
day on which banking institutions in The City of New York are authorized or
required by law to close.
CONVERSION RIGHTS
GENERAL. Convertible Preferred Securities will be convertible at any time,
at the option of the holder thereof and in the manner described below, into
shares of International Paper Common Stock at an initial conversion rate of
0.925926 shares of International Paper Common Stock (as adjusted to reflect the
Stock Split) for each Convertible Preferred Security (equivalent to a conversion
price of $54.00 per share of International Paper Common Stock, as adjusted to
reflect the Stock Split), subject to adjustment as described under "--
Conversion Price Adjustments" below. The Issuer has agreed in the Declaration
not to convert Convertible Junior Subordinated Debentures held by it except
pursuant to a notice of conversion delivered to the Conversion Agent by a holder
of Convertible Preferred Securities. A holder of a Convertible Preferred
Security wishing to exercise its conversion right shall deliver an irrevocable
conversion notice, together, if the Convertible Preferred Security is a
Certificated Security (as defined herein), with such Certificated Security, to
the Conversion Agent which shall, on behalf of such holder, exchange such
Convertible Preferred Security for a portion of the Convertible Junior
Subordinated Debentures and immediately convert such Convertible Junior
Subordinated Debentures into International Paper Common Stock. Holders may
obtain copies of the required form of the conversion notice from the Conversion
Agent.
Whenever International Paper issues shares of International Paper Common
Stock upon conversion of Convertible Preferred Securities, International Paper
will issue, together with each such share of International Paper Common Stock,
one right entitling the holder thereof, under certain circumstances, to purchase
one share of International Paper Common Stock pursuant to, and upon the terms
indicated in, the Rights Agreement (the "Rights Agreement") dated as of April
14, 1987, as amended, between International Paper and Chemical Bank (successor
to Manufacturers Hanover Trust Company), as Rights Agent, or any similar rights
issued to holders of International Paper Common Stock in addition thereto or in
replacement thereof (such rights, together with any additional or replacement
rights, being collectively referred to as the "Rights"), whether or not such
Rights shall be exercisable at such time, but only if such Rights are issued and
outstanding and held by other holders
14
<PAGE>
of International Paper Common Stock (or are evidenced by outstanding share
certificates representing International Paper Common Stock) at such time and
have not expired or been redeemed. As distributed, the Rights trade together
with the International Paper Common Stock. The Rights may be exercised or traded
separately only after the earlier to occur of: (i) the tenth business day after
the commencement of, or first public disclosure of an intention to commence, a
tender or exchange offer by a person or group other than International Paper or
any subsidiary or employee benefit plan of International Paper or any subsidiary
if, upon consummation of the offer, such person or group would acquire
beneficial ownership of 20% or more of the outstanding International Paper
Common Stock or (ii) the tenth day after the first public announcement that an
Acquiring Person (as such term is defined in the Rights Agreement) has acquired
the beneficial ownership of 20% or more of the shares of International Paper
Common Stock outstanding. The Rights will expire on April 28, 1997, unless
earlier redeemed by International Paper as provided in the Rights Agreement.
Until a Right is exercised, the holder thereof will have no additional rights as
a shareholder of International Paper, including, without limitation, the right
to vote or to receive dividends on shares of International Paper Common Stock
subject to the Rights. The foregoing description of the Rights is qualified in
its entirety by reference to the Rights Agreement, which is an exhibit to
International Paper's registration statement on Form 8-A, dated April 17, 1987,
as amended, incorporated by reference herein.
Holders of Convertible Preferred Securities at the close of business on a
distribution record date will be entitled to receive the distribution payable on
such Convertible Preferred Securities on the corresponding distribution payment
date notwithstanding the conversion of such Convertible Preferred Securities
following such distribution record date but prior to such distribution payment
date. Except as provided in the immediately preceding sentence, neither the
Issuer nor International Paper will make, or be required to make, any payment,
allowance or adjustment for accumulated and unpaid distributions, whether or not
in arrears, on converted Convertible Preferred Securities. International Paper
will make no payment or allowance for distributions on the shares of
International Paper Common Stock issued upon such conversion, except to the
extent that such shares of International Paper Common Stock are held of record
on the record date for any such distributions. Each conversion will be deemed to
have been effected immediately prior to the close of business on the day on
which the related conversion notice was received by the Issuer.
No fractional shares of International Paper Common Stock will be issued as a
result of conversion, but in lieu thereof such fractional interest will be paid
by International Paper in cash.
CONVERSION PRICE ADJUSTMENTS -- GENERAL. The conversion price will be
subject to adjustment in certain events including, without duplication: (i) the
payment of dividends (and other distributions) payable in International Paper
Common Stock on any class of capital stock of International Paper; (ii) the
issuance to all holders of International Paper Common Stock of rights or
warrants, or the occurrence of an event under the Company's Rights Agreement,
entitling holders of such rights or warrants to subscribe for or purchase
International Paper Common Stock at less than the then current market price;
(iii) subdivisions and combinations of International Paper Common Stock; (iv)
the payment of dividends (and other distributions) to all holders of
International Paper Common Stock consisting of evidences of indebtedness of
International Paper, securities or capital stock, cash or assets (including
securities, but excluding those rights, warrants, dividends and distributions
referred to in clauses (i) and (ii) and dividends and distributions paid
exclusively in cash); (v) the payment of dividends (and other distributions) on
International Paper Common Stock paid exclusively in cash, excluding (A) cash
dividends that do not exceed the per share amount of the immediately preceding
regular cash dividend (as adjusted to reflect any of the events referred to in
clauses (i) through (vi) of this sentence) and (B) cash dividends if the
annualized per share amount thereof does not exceed 15% of the current market
price of International Paper Common Stock as of the trading day immediately
preceding the date of declaration of such dividend; and (vi) payment to holders
of International Paper Common Stock in respect of a tender or exchange offer
(other than an odd-lot offer) by International Paper or any subsidiary of
International Paper for International Paper
15
<PAGE>
Common Stock at a price in excess of 110% of the current market price of
International Paper Common Stock as of the trading day next succeeding the last
date tenders or exchanges may be made pursuant to such tender or exchange offer.
International Paper from time to time may reduce the conversion price of the
Convertible Junior Subordinated Debentures (and thus the conversion price of the
Convertible Preferred Securities) by any amount selected by International Paper
for any period of at least 20 days, in which case International Paper shall give
at least 15 days' notice of such reduction. International Paper may, at its
option, make such reductions in the conversion price, in addition to those set
forth above, as the International Paper Board of Directors deems advisable to
avoid or diminish any income tax to holders of International Paper Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes. See "United
States Taxation -- Adjustment of Conversion Price".
No adjustment of the conversion price will be made upon the issuance of any
shares of International Paper Common Stock pursuant to any present or future
plan providing for the reinvestment of dividends or interest payable on
securities of International Paper and the investment of additional optional
amounts in shares of International Paper Common Stock under any such plan or the
issuance of any shares of International Paper Common Stock or options or rights
to purchase such shares pursuant to any present or future employee, director or
consultant benefit plan or program of International Paper or pursuant to any
option, warrant, right, or exercisable, exchangeable or convertible security
outstanding as of the date the Convertible Preferred Securities were first
issued. There shall also be no adjustment of the conversion price in case of the
issuance of any International Paper Common Stock (or securities convertible into
or exchangeable for International Paper Common Stock), except as specifically
described above. If any action would require adjustment of the conversion price
pursuant to more than one of the anti-dilution provisions, only one adjustment
shall be made and such adjustment shall be the amount of adjustment that has the
highest absolute value to holders of the Convertible Preferred Securities. No
adjustment in the conversion price will be required unless such adjustment would
require an increase or decrease of at least 1% of the conversion price, but any
adjustment that would otherwise be required to be made shall be carried forward
and taken into account in any subsequent adjustment.
CONVERSION PRICE ADJUSTMENTS -- MERGER, CONSOLIDATION OR SALE OF ASSETS OF
INTERNATIONAL PAPER. In the event that International Paper is a party to any
transaction (including, without limitation, a merger, consolidation, sale of all
or substantially all of the assets of International Paper, recapitalization or
reclassification of International Paper Common Stock or any compulsory share
exchange (each of the foregoing being referred to as a "Transaction")), in each
case, as a result of which shares of International Paper Common Stock shall be
converted into the right (i) in the case of any Transaction other than a
Transaction involving a Common Stock Fundamental Change (as defined herein), to
receive securities, cash or other property, each Convertible Preferred Security
shall thereafter be convertible into the kind and amount of securities, cash and
other property receivable upon the consummation of such Transaction by a holder
of that number of shares of International Paper Common Stock into which a
Convertible Preferred Security was convertible immediately prior to such
Transaction, with such adjustments as provided below, or (ii) in the case of a
Transaction involving a Common Stock Fundamental Change, to receive common stock
of the kind received by holders of International Paper Common Stock (but in each
case after giving effect to any adjustment discussed below relating to a
Fundamental Change if such Transaction constitutes a Fundamental Change). The
holders of Convertible Preferred Securities will have no voting rights with
respect to any Transaction described in this section.
If any Fundamental Change (as defined herein) occurs, the conversion price
in effect will be adjusted immediately after such Fundamental Change as
described below. In addition, in the event of a Common Stock Fundamental Change,
each Convertible Preferred Security shall be convertible solely into common
stock of the kind received by holders of International Paper Common Stock as a
result of such Common Stock Fundamental Change.
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The conversion price in the case of any Transaction involving a Fundamental
Change will be adjusted immediately after such Fundamental Change:
(i) in the case of a Non-Stock Fundamental Change (as defined herein),
the conversion price of the Convertible Preferred Securities will thereupon
become the lower of (A) the conversion price in effect immediately prior to
such Non-Stock Fundamental Change, but after giving effect to any other
prior adjustments, and (B) the result obtained by multiplying the greater of
the Applicable Price (as defined herein) or the then applicable Reference
Market Price (as defined herein) by a fraction of which the numerator will
be $50 and the denominator will be the then current Redemption Price (as
defined herein) or, prior to June 30, 1999, an amount per Convertible
Preferred Security determined by International Paper in its sole discretion,
after consultation with an investment banking firm, to be the equivalent of
the hypothetical redemption price that would have been applicable if the
Convertible Preferred Securities had been redeemable during such period; and
(ii) in the case of a Common Stock Fundamental Change, the conversion
price of the Convertible Preferred Securities in effect immediately prior to
such Common Stock Fundamental Change, but after giving effect to any other
prior adjustments, will thereupon be adjusted by multiplying such conversion
price by a fraction of which the numerator will be the Purchaser Stock Price
(as defined herein) and the denominator will be the Applicable Price;
PROVIDED, HOWEVER, that in the event of a Common Stock Fundamental Change in
which (A) 100% of the value of the consideration received by a holder of
International Paper Common Stock is common stock of the successor, acquiror
or other third party (and cash, if any, is paid only with respect to any
fractional interests in such common stock resulting from such Common Stock
Fundamental Change) and (B) all of the International Paper Common Stock will
have been exchanged for, converted into, or acquired for common stock (and
cash with respect to fractional interests) of the successor, acquiror or
other third party, the conversion price of the Convertible Preferred
Securities in effect immediately prior to such Common Stock Fundamental
Change will thereupon be adjusted by multiplying such conversion price by a
fraction of which the numerator will be one and the denominator will be the
number of shares of common stock of the successor, acquiror, or other third
party received by a holder of one share of International Paper Common Stock
as a result of such Common Stock Fundamental Change.
In the absence of the Fundamental Change provisions, in the case of a
Transaction each Convertible Preferred Security would become convertible into
the securities, cash, or property receivable by a holder of the number of shares
of International Paper Common Stock into which such Convertible Preferred
Security was convertible immediately prior to such Transaction. Thus, in the
absence of the Fundamental Change provisions, a Transaction could substantially
lessen or eliminate the value of the conversion privilege associated with the
Convertible Preferred Securities. For example, if International Paper were
acquired in a cash merger, each Convertible Preferred Security would become
convertible solely into cash and would no longer be convertible into securities
whose value would vary depending on the future prospects of International Paper
and other factors.
The foregoing conversion price adjustments are designed, in "Fundamental
Change" transactions where all or substantially all the International Paper
Common Stock is converted into securities, cash, or property and not more than
50% of the value received by the holders of International Paper Common Stock
consists of stock listed or admitted for listing subject to notice of issuance
on a national securities exchange or quoted on the National Market System of the
National Association of Securities Dealers, Inc. (a "Non-Stock Fundamental
Change", as defined herein), to increase the securities, cash, or property into
which each Convertible Preferred Security is convertible.
In a Non-Stock Fundamental Change transaction in which the initial value
received per share of International Paper Common Stock (measured as described in
the definition of Applicable Price below) is lower than the then applicable
conversion price of a Convertible Preferred Security but greater than or equal
to the "Reference Market Price" (initially $29.625, as adjusted to reflect the
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Stock Split, but subject to adjustment in certain events as described below),
the conversion price will be adjusted as described above with the effect that
each Convertible Preferred Security will be convertible into securities, cash or
property of the same type received by the holders of International Paper Common
Stock in such transaction with the conversion price adjusted as though such
initial value had been the Applicable Price.
In a Non-Stock Fundamental Change transaction in which the initial value
received per share of International Paper Common Stock (measured as described in
the definition of Applicable Price below) is lower than both the Applicable
Conversion Price of a Convertible Preferred Security and the Reference Market
Price, the conversion price will be adjusted as described above but calculated
as though such initial value had been the Reference Market Price.
In a Fundamental Change transaction in which all or substantially all of the
International Paper Common Stock is converted into securities, cash, or property
and more than 50% of the value received by the holders of International Paper
Common Stock consists of listed or National Market System-traded common stock (a
"Common Stock Fundamental Change", as defined herein), the foregoing adjustments
are designed to provide in effect that (a) where International Paper Common
Stock is converted partly into such common stock and partly into other
securities, cash or property, each Convertible Preferred Security will be
convertible solely into a number of shares of such common stock determined so
that the initial value of such shares (measured as described in the definition
of "Purchaser Stock Price" below) equals the value of the shares of
International Paper Common Stock into which such Convertible Preferred Security
was convertible immediately before the transaction (measured as aforesaid) and
(b) where International Paper Common Stock is converted solely into such common
stock, each Convertible Preferred Security will be convertible into the same
number of shares of such common stock receivable by a holder of the number of
shares of International Paper Common Stock into which such Convertible Preferred
Security was convertible immediately before such transaction.
The term "Applicable Price" means (i) in the case of a Non-Stock Fundamental
Change in which the holder of the International Paper Common Stock receives only
cash, the amount of cash received by the holder of one share of International
Paper Common Stock and (ii) in the event of any other Non-Stock Fundamental
Change or any Common Stock Fundamental Change, the average of the Closing Prices
(as defined herein) for the International Paper Common Stock during the ten
trading days prior to and including the record date for the determination of the
holders of International Paper Common Stock entitled to receive such securities,
cash, or other property in connection with such Non-Stock Fundamental Change or
Common Stock Fundamental Change or, if there is no such record date, the date
upon which the holders of the International Paper Common Stock shall have the
right to receive such securities, cash, or other property (such record date or
distribution date being hereinafter referred as the Entitlement Date), in each
case as adjusted in good faith by International Paper to appropriately reflect
any of the events referred to in clauses (i) through (vi) of the first paragraph
under "-- Conversion Price Adjustments -- General".
The term "Closing Price" means on any day the last reported sale price on
such day or in case no sale takes place on such day, the average of the reported
closing bid and asked prices in each case on the NYSE Composite Tape or, if the
stock is not listed or admitted to trading on such exchange, on the principal
national securities exchange on which such stock is listed or admitted to
trading or if not listed or admitted to trading on any national securities
exchange, the average of the closing bid and asked prices as furnished by any
NYSE member firm, selected by International Paper for that purpose.
The term "Common Stock Fundamental Change" means any Fundamental Change in
which more than 50% of the value (as determined in good faith by the Board of
Directors of International Paper) of the consideration received by holders of
International Paper Common Stock consists of common stock that for each of the
ten consecutive trading days prior to the Entitlement Date has been admitted for
listing or admitted for listing subject to notice of issuance on a national
securities
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exchange or quoted on the National Market System of the National Association of
Securities Dealers, Inc.; PROVIDED, HOWEVER, that a Fundamental Change shall not
be a Common Stock Fundamental Change unless International Paper continues to
exist after the occurrence of such Fundamental Change and the outstanding
Convertible Preferred Securities continue to exist as outstanding Convertible
Preferred Securities.
The term "Fundamental Change" means the occurrence of any transaction or
event in connection with a plan pursuant to which all or substantially all of
the International Paper Common Stock shall be exchanged for, converted into,
acquired for or constitute solely the right to receive securities, cash or other
property (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise); PROVIDED that, in the case of a plan involving more than one such
transaction or event, for purposes of adjustment of the conversion price, such
Fundamental Change shall be deemed to have occurred when substantially all of
the International Paper Common Stock shall be exchanged for, converted into, or
acquired for or constitute solely the right to receive securities, cash, or
other property, but the adjustment shall be based upon the highest weighted
average per share consideration that a holder of International Paper Common
Stock could have received in such transaction or event as a result of which more
than 50% of the International Paper Common Stock shall have been exchanged for,
converted into, or acquired for or constitute solely the right to receive
securities, cash or other property.
The term "Non-Stock Fundamental Change" means any Fundamental Change other
than a Common Stock Fundamental Change.
The term "Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the Closing Prices for the common stock
received in such Common Stock Fundamental Change for the ten consecutive trading
days prior to and including the Entitlement Date, as adjusted in good faith by
International Paper to appropriately reflect any of the events referred to in
clauses (i) through (vi) of the first paragraph under "-- Conversion Price
Adjustments -- General".
The term "Reference Market Price" shall initially mean $29.625 (as adjusted
to reflect the Stock Split) (which is an amount equal to 66 2/3% of the last
reported sale price for the International Paper Common Stock on the NYSE
Composite Tape on July 13, 1995) and, in the event of any adjustment to the
conversion price other than as a result of a Non-Stock Fundamental Change, the
Reference Market Price shall also be adjusted so that the ratio of the Reference
Market Price to the conversion price after giving effect to any such adjustment
shall always be the same as the ratio of $29.625 (as adjusted to reflect the
Stock Split) to the initial conversion price of the Convertible Preferred
Securities.
OPTIONAL REDEMPTION
International Paper is permitted to redeem the Convertible Junior
Subordinated Debentures as described herein under "Description of the
Convertible Junior Subordinated Debentures -- Optional Redemption", in whole or
in part, from time to time, after June 30, 1999, upon not less than 30 nor more
than 60 days' notice. See "Description of the Convertible Junior Subordinated
Debentures -- Optional Redemption". Upon any redemption in whole or in part of
the Convertible Junior Subordinated Debentures at the option of International
Paper, the Issuer will, to the extent of the proceeds of such redemption, redeem
Convertible Preferred Securities and Common Securities at the Redemption Price.
In the event that fewer than all the outstanding Convertible Preferred
Securities are to be so redeemed, the Convertible Preferred Securities to be
redeemed will be selected as described under "-- Book-Entry-Only Issuance -- The
Depository Trust Company" below.
In the event of any redemption in part, the Trust shall not be required to
(i) issue, register the transfer of or exchange any Convertible Preferred
Security during a period beginning at the opening of business 15 days before any
selection for redemption of Convertible Preferred Securities and ending at the
close of business on the earliest date in which the relevant notice of
redemption is deemed to
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have been given to all holders of Convertible Preferred Securities to be so
redeemed and (ii) register the transfer of or exchange any Convertible Preferred
Securities so selected for redemption, in whole or in part, except for the
unredeemed portion of any Convertible Preferred Securities being redeemed in
part.
TAX EVENT OR INVESTMENT COMPANY EVENT REDEMPTION OR DISTRIBUTION
If a Tax Event (as defined herein) shall occur and be continuing,
International Paper shall cause the IP Trustees to liquidate the Issuer and
cause Convertible Junior Subordinated Debentures to be distributed to the
holders of the Convertible Preferred Securities in liquidation of the Issuer
within 90 days following the occurrence of such Tax Event; PROVIDED, HOWEVER,
that such liquidation and distribution shall be conditioned on (i) the IP
Trustees' receipt of an opinion of nationally recognized independent tax counsel
(reasonably acceptable to the IP Trustees) experienced in such matters (a "No
Recognition Opinion"), which opinion may rely on published revenue rulings of
the Internal Revenue Service, to the effect that the holders of the Convertible
Preferred Securities will not recognize any income, gain or loss for United
States Federal income tax purposes as a result of such liquidation and
distribution of Convertible Junior Subordinated Debentures, and (ii)
International Paper being unable to avoid such Tax Event within such 90-day
period by taking some ministerial action or pursuing some other reasonable
measure that, in the sole judgment of International Paper, will have no adverse
effect on the Issuer, International Paper or the holders of the Convertible
Preferred Securities and will involve no material cost. Furthermore, if (i)
International Paper has received an opinion (a "Redemption Tax Opinion") of
nationally recognized independent tax counsel (reasonably acceptable to the IP
Trustees) experienced in such matters that, as a result of a Tax Event, there is
more than an insubstantial risk that International Paper would be precluded from
deducting the interest on the Convertible Junior Subordinated Debentures for
United States Federal income tax purposes, even after the Convertible Junior
Subordinated Debentures were distributed to the holders of the Convertible
Preferred Securities upon liquidation of the Issuer as described above, or (ii)
the IP Trustees shall have been informed by such tax counsel that it cannot
deliver a No Recognition Opinion, International Paper shall have the right, upon
not less than 30 nor more than 60 days' notice and within 90 days following the
occurrence of the Tax Event, to redeem the Convertible Junior Subordinated
Debentures, in whole (but not in part) for cash, at par plus accrued and unpaid
interest and, following such redemption, all the Convertible Preferred
Securities will be redeemed by the Issuer at the liquidation preference of $50
per Convertible Preferred Security plus accrued and unpaid distributions;
PROVIDED, HOWEVER, that, if at the time there is available to International
Paper or the Issuer the opportunity to eliminate, within such 90-day period, the
Tax Event by taking some ministerial action or pursuing some other reasonable
measure that, in the sole judgment of International Paper, will have no adverse
effect on the Issuer, International Paper or the holders of the Convertible
Preferred Securities and will involve no material cost, the Issuer or
International Paper will pursue such measure in lieu of redemption. See "--
Mandatory Redemption". In lieu of the foregoing options, International Paper
will also have the option of causing the Convertible Preferred Securities to
remain outstanding and pay Additional Interest (as defined herein) on the
Convertible Junior Subordinated Debentures. See "Description of the Convertible
Junior Subordinated Debentures -- Additional Interest".
"Tax Event" means that International Paper shall have obtained an opinion of
nationally recognized independent tax counsel (reasonably acceptable to the IP
Trustees) 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 taxing authority thereof or therein or (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 (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after the Original Offering Date), which
amendment or change is effective or which interpretation or pronouncement is
announced on or after the Original Offering Date, there is more than an
insubstantial risk that (i) the Issuer is or will be subject to United States
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Federal income tax with respect to interest received on the Convertible Junior
Subordinated Debentures, (ii) interest payable to the Issuer on the Convertible
Junior Subordinated Debentures is not or will not be deductible for United
States Federal income tax purposes or (iii) the Issuer is or will be subject to
more than a DE MINIMIS amount of other taxes, duties, assessments or other
governmental charges.
If an Investment Company Event (as hereinafter defined) shall occur and be
continuing, International Paper shall cause the IP Trustees to liquidate the
Issuer and cause the Convertible Junior Subordinated Debentures to be
distributed to the holders of the Convertible Preferred Securities in
liquidation of the Issuer within 90 days following the occurrence of such
Investment Company Event.
The distribution by International Paper of the Convertible Junior
Subordinated Debentures will effectively result in the cancellation of the
Convertible Preferred Securities.
"Investment Company Event" means 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") to the effect that the Issuer 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"), which Change in
1940 Act Law becomes effective on or after the Original Offering Date.
A "Special Event" means either an Investment Company Event or a Tax Event.
After the date fixed for any distribution of Convertible Junior Subordinated
Debentures (i) the Convertible Preferred Securities will no longer be deemed to
be outstanding, (ii) The Depository Trust Company (the "Depository" or "DTC") or
its nominee, as the record holder of the Global Certificates, will receive a
registered global certificate or certificates representing the Convertible
Junior Subordinated Debentures to be delivered upon such distribution and (iii)
any certificates representing Convertible Preferred Securities not held by DTC
or its nominee will be deemed to represent Convertible Junior Subordinated
Debentures having a principal amount equal to the aggregate of the stated
liquidation preference of such Convertible Preferred Securities, with accrued
and unpaid interest equal to the amount of accrued and unpaid distributions on
such Convertible Preferred Securities, until such certificates are presented to
International Paper or its agent for transfer or reissuance.
MANDATORY REDEMPTION
The Convertible Junior Subordinated Debentures will mature on July 20, 2025,
and may be redeemed, in whole or in part, at any time after June 30, 1999 or at
any time in certain circumstances upon the occurrence of a Special Event. Upon
the repayment or payment of the Convertible Junior Subordinated Debentures,
whether at maturity or upon redemption or otherwise, the proceeds from such
repayment or redemption shall simultaneously be applied to redeem Trust
Securities having an aggregate liquidation amount equal to the Convertible
Junior Subordinated Debentures so repaid or redeemed at the applicable
redemption price together with accrued and unpaid distributions through the date
of redemption; PROVIDED that holders of the Trust Securities shall be given not
less than 30 nor more than 60 days' notice of such redemption. See "-- Tax Event
or Investment Company Event Redemption or Distribution" and "Description of the
Convertible Junior Subordinated Debentures -- General" and "Optional
Redemption". Upon the repayment of the Convertible Junior Subordinated
Debentures at maturity or upon any acceleration, earlier redemption or
otherwise, the proceeds from such repayment will be applied to redeem the
Convertible Preferred Securities and Common Securities, in whole, upon not less
than 30 nor more than 60 days' notice.
REDEMPTION PROCEDURES
The Convertible Preferred Securities will not be redeemed unless all accrued
and unpaid distributions have been paid on all Convertible Preferred Securities
for all quarterly distribution periods terminating on or prior to the date of
redemption.
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If the Issuer gives a notice of redemption in respect of Convertible
Preferred Securities (which notice will be irrevocable), then, by 12:00 noon,
New York time, on the redemption date, the Issuer will irrevocably deposit with
DTC funds sufficient to pay the amount payable on redemption and will give DTC
irrevocable instructions and authority to pay such amount in respect of
Convertible Preferred Securities represented by the Global Certificates and will
irrevocably deposit with the paying agent for the Convertible Preferred
Securities funds sufficient to pay such amount in respect of any Certificated
Securities and will give such paying agent irrevocable instructions and
authority to pay such amount to the holders of Certificated Securities upon
surrender of their certificates. Notwithstanding the foregoing, distributions
payable on or prior to the redemption date for any Convertible Preferred
Securities called for redemption shall be payable to the holders of such
Convertible Preferred Securities on the relevant record dates for the related
distribution dates. If notice of redemption shall have been given and funds are
deposited as required, then upon the date of such deposit, all rights of holders
of such Convertible Preferred Securities so called for redemption will cease,
except the right of the holders of such Convertible Preferred Securities to
receive the redemption price, but without interest on such redemption price. In
the event that any date fixed for redemption of Convertible Preferred Securities
is not a Business Day, then payment of the amount payable on such date will be
made on the next succeeding day which 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 the event that payment of the redemption price in
respect of Convertible Preferred Securities is improperly withheld or refused
and not paid either by the Issuer or by International Paper pursuant to the
Guarantee described under "Description of the Guarantee", distributions on such
Convertible Preferred Securities will continue to accrue at the then applicable
rate, from the original redemption date to the date of payment, in which case
the actual payment date will be considered the date fixed for redemption for
purposes of calculating the amount payable upon redemption (other than for
purposes of calculating any premium).
Subject to the foregoing and applicable law (including, without limitation,
United States Federal securities laws), International Paper or its subsidiaries
may at any time and from time to time purchase outstanding Convertible Preferred
Securities by tender, in the open market or by private agreement.
SUBORDINATION OF COMMON SECURITIES
Payment of distributions on, and the amount payable upon redemption of, the
Trust Securities, as applicable, shall be made PRO RATA based on the liquidation
preference of the Trust Securities; PROVIDED, HOWEVER, that, if on any
distribution date or redemption date a Declaration Event of Default (as defined
below under "-- Declaration Events of Default") under the Declaration shall have
occurred and be continuing, no payment of any distribution on, or amount payable
upon redemption of, any Common Security, and no other payment on account of the
redemption, liquidation or other acquisition of Common Securities, shall be made
unless payment in full in cash of all accumulated and unpaid distributions on
all outstanding Convertible Preferred Securities for all distribution periods
terminating on or prior thereto, or in the case of payment of the amount payable
upon redemption of the Convertible Preferred Securities, the full amount of such
amount in respect of all outstanding Convertible Preferred Securities shall have
been made or provided for, and all funds available to the Trustee shall first be
applied to the payment in full in cash of all distributions on, or the amount
payable upon redemption of, Convertible Preferred Securities then due and
payable.
In the case of any Declaration Event of Default, the holder of Common
Securities will be deemed to have waived any such Declaration Event of Default
until all such Declaration Events of Default with respect to the Convertible
Preferred Securities have been cured, waived or otherwise eliminated. Until any
such Declaration Events of Default with respect to the Convertible Preferred
Securities have been so cured, waived or otherwise eliminated, the Trustee shall
act solely on behalf of the holders of the Convertible Preferred Securities and
not the holder of the Common Securities, and only the holders of the Convertible
Preferred Securities will have the right to direct the Trustee to act on their
behalf.
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LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary liquidation, dissolution,
winding up or termination of the Issuer, the holders of the Convertible
Preferred Securities at the time will be entitled to receive out of the assets
of the Issuer available for distribution to holders of Trust Securities after
satisfaction of liabilities of creditors of the Trust, before any distribution
of assets is made to the holders of the Common Securities, an amount equal to
the aggregate of the stated liquidation preference of $50 per Convertible
Preferred Security and accrued and unpaid distributions thereon to the date of
payment (the "Liquidation Distribution"), unless, in connection with such
liquidation, dissolution, winding up or termination, Convertible Junior
Subordinated Debentures in an aggregate principal amount equal to the
Liquidation Distribution have been distributed on a PRO RATA basis to the
holders of the Trust Securities.
Pursuant to the Declaration, the Issuer shall be dissolved and its affairs
shall be wound up upon the earliest to occur of the following: (i) October 28,
2058, the expiration of the term of the Issuer, (ii) the bankruptcy of
International Paper or the holder of the Common Securities, (iii) the filing of
a certificate of dissolution or its equivalent with respect to International
Paper or such holder, or the revocation of International Paper's or such
holder's charter and the expiration of 90 days after the date of notice to
International Paper or such holder of revocation without a reinstatement of its
charter, (iv) the distribution of all the assets of the Trust, (v) the entry of
a decree of a judicial dissolution of International Paper, the Trust or such
holder, or (vi) the redemption of all the Trust Securities.
MERGER, CONSOLIDATION OR AMALGAMATION OF THE ISSUER
The Issuer 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 entity or person,
except as described below. The Issuer may, without the consent of the holders of
the Convertible Preferred Securities, consolidate, amalgamate, merge with or
into, or be replaced by, a trust organized as such under the laws of any state
of the United States of America or of the District of Columbia; PROVIDED that
(i) if the Issuer is not the survivor, such successor entity either (x)
expressly assumes all of the obligations of the Issuer under the Convertible
Preferred Securities or (y) substitutes for the Convertible Preferred Securities
other securities having substantially the same terms as the Convertible
Preferred Securities (the "Successor Securities") as long as the Successor
Securities rank, with respect to participation in the profits and distributions
or in the assets of the successor entity, at least as high as the Convertible
Preferred Securities rank with respect to participation in the profits and
dividends or in the assets of the Issuer, (ii) International Paper expressly
acknowledges such successor entity as the holder of the Convertible Junior
Subordinated Debentures, (iii) the Convertible Preferred Securities or any
Successor Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or other
organization on which the Convertible Preferred Securities are then listed, (iv)
such merger, consolidation, amalgamation or replacement does not cause the
Convertible 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 powers, preferences and other special rights of the holders of the
Convertible Preferred Securities (including any Successor Securities) in any
material respect, (vi) such successor entity has a purpose substantially
identical to that of the Issuer, (vii) International Paper has provided a
guarantee to the holders of the Successor Securities with respect to such
successor entity having substantially the same terms as the Guarantee and (viii)
prior to such merger, consolidation, amalgamation or replacement, International
Paper has received an opinion of nationally recognized independent counsel
(reasonably acceptable to the Trustee) to the Issuer experienced in such matters
to the effect that (x) such successor entity will be treated as a grantor trust
for United States Federal income tax purposes, (y) following such merger,
consolidation, amalgamation or replacement, neither International Paper nor such
successor entity will be required to register as an investment company under the
1940 Act and (z) such merger, consolidation, amalgamation or replacement will
not adversely affect the limited liability of the holders of the
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Convertible Preferred Securities. Notwithstanding the foregoing, the Issuer
shall not, except with the consent of holders of 100% in liquidation amount of
the Common 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 Issuer or the Successor
Entity to be classified as other than a grantor trust for United States Federal
income tax purposes.
DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture (an "Event of Default") or a default
by International Paper under the Guarantee 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 Convertible Preferred Securities have been cured, waived or
otherwise eliminated. Until such Declaration Events of Default with respect to
the Convertible Preferred Securities have been so cured, waived or otherwise
eliminated, the Trustee will be deemed to be acting solely on behalf of the
holders of the Convertible Preferred Securities and only the holders of the
Convertible Preferred Securities will have the right to direct the Trustee with
respect to certain matters under the Declaration and, therefore, the Indenture.
As long as the Convertible Preferred Securities are outstanding, upon the
occurrence of a Declaration Event of Default, the Trustee as the sole holder of
the Convertible Junior Subordinated Debentures will have the right under the
Indenture to declare the principal of and interest on the Convertible Junior
Subordinated Debentures to be immediately due and payable. International Paper
and the Issuer are each required to file annually with the Trustee an officer's
certificate as to its compliance with all conditions and covenants under the
Declaration.
VOTING RIGHTS
Except as described herein, under the Trust Act and under "Description of
the Guarantee -- Amendments and Assignment", and as otherwise required by law
and the Declaration, the holders of the Convertible Preferred Securities will
have no voting rights.
If (i) the Issuer fails to pay distributions in full on the Convertible
Preferred Securities for six consecutive quarterly distribution periods (whether
or not a Deferral Period is in effect) or (ii) a Declaration Event of Default
occurs and is continuing (each an "Appointment Event"), then the holders of the
Convertible Preferred Securities, acting as a single class, will be entitled by
the majority vote of such holders to appoint a Special Trustee. For purposes of
determining whether the Issuer has failed to pay distributions in full for six
consecutive quarterly distribution periods, distributions shall be deemed to
remain in arrears, notwithstanding any payments in respect thereof, until full
cumulative distributions have been or contemporaneously are paid with respect to
all quarterly distribution periods terminating on or prior to the date of
payment of such cumulative distributions. Any holder of Convertible Preferred
Securities (other than International Paper or any of its affiliates) shall be
entitled to nominate any person to be appointed as Special Trustee. Not later
than 30 days after such right to appoint a Special Trustee arises, the IP
Trustees shall convene a meeting of the holders of Convertible Preferred
Securities for the purpose of appointing a Special Trustee. If the IP Trustees
fail to convene such meeting within such 30-day period, the holders of not less
than 10% of the aggregate stated liquidation amount of the outstanding
Convertible Preferred Securities will be entitled to convene such meeting. The
provisions of the Declaration relating to the convening and conduct of the
meetings of the holders will apply with respect to any such meeting. Any Special
Trustee so appointed shall cease to be a Special Trustee if the Appointment
Event pursuant to which the Special Trustee was appointed and all other
Appointment Events cease to be continuing. Notwithstanding the appointment of
any such Special Trustee, International Paper shall retain all rights under the
Indenture, including the right to defer payments of interest by extending the
interest
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payment period as provided under "Description of the Convertible Junior
Subordinated Debentures -- Option to Extend Interest Payment Period". If such an
extension occurs, there will be no Event of Default under the Indenture and,
consequently, no Declaration Event of Default for failure to make any scheduled
interest payment during the Deferral Period on the date originally scheduled.
Subject to the requirement of the 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 Convertible Preferred Securities
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or direct the exercise of any trust or
power conferred upon the Trustee under the Declaration including the right to
direct the Trustee, as holder of the Convertible Junior Subordinated Debentures,
to (i) exercise the remedies available under the Indenture with respect to the
Convertible Junior Subordinated Debentures, (ii) waive any past Event of Default
that is waiveable under the Indenture or (iii) exercise any right to rescind or
annul a declaration that the principal of all the Convertible Junior
Subordinated Debentures shall be due and payable; PROVIDED, HOWEVER, that, where
a consent or action under the Indenture would require the consent or act of the
holders of more than a majority of the aggregate principal amount of Convertible
Junior Subordinated Debentures affected thereby, only the holders of the
percentage of the aggregate stated liquidation preference of the Convertible
Preferred Securities which is at least equal to the percentage required under
the Indenture may direct the Trustee to give such consent or take such action.
If the Trustee fails to enforce its rights under the Convertible Junior
Subordinated Debentures, a holder of record of Convertible Preferred Securities
may, after such holder's having made a written request to the Trustee to enforce
such rights, institute a legal proceeding directly against International Paper
to enforce the Trustee's rights under the Convertible Junior Subordinated
Debentures without first instituting any legal proceeding against the Trustee or
any other person or entity. The Trustee shall notify all holders of the
Convertible Preferred Securities of any notice of default received from the
Indenture Trustee with respect to the Convertible Junior Subordinated
Debentures. Such notice shall state that such 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 Trustee shall not
take any of the actions described in clause (i), (ii) or (iii) above unless the
Trustee has obtained an opinion of tax counsel to the effect that, as a result
of such action, the Issuer will not fail to be classified as a grantor trust or
a partnership for United States Federal income tax purposes.
In the event the consent of the Trustee, as the holder of the Convertible
Junior Subordinated Debentures, is required under the Indenture with respect to
any amendment, modification or termination of the Indenture, the 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
the holders of more than a majority of the aggregate principal amount of the
Convertible Junior Subordinated Debentures, the Trustee may only give such
consent at the direction of the holders of at least the same proportion in
aggregate stated liquidation preference of the Trust Securities. The Trustee
shall not take any such action in accordance with the directions of the holders
of the Trust Securities unless the Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States Federal income tax
the Issuer will not be classified as other than a grantor trust or a
partnership.
A waiver of an Event of Default under the Indenture will constitute a waiver
of the corresponding Declaration Event of Default.
Any required approval or direction of holders of Convertible Preferred
Securities may be given at a separate meeting of holders of Convertible
Preferred Securities convened for such purpose, at a meeting of all of the
holders of Trust Securities or pursuant to written consent. The IP Trustees will
cause a notice of any meeting at which holders of Convertible 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
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each holder of record of Convertible Preferred 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 Convertible Preferred Securities will be required for the
Issuer to redeem and cancel Convertible Preferred Securities or distribute
Convertible Junior Subordinated Debentures in accordance with the Declaration.
Notwithstanding that holders of Convertible Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Convertible Preferred Securities that are owned at such time by
International Paper or any entity directly or indirectly controlling or
controlled by, or under direct or indirect common control with, International
Paper, shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if such Convertible Preferred Securities were not
outstanding.
The procedures by which holders of Convertible Preferred Securities may
exercise their voting rights are described below. See "-- Book-Entry-Only
Issuance -- The Depository Trust Company" below.
Except in the limited circumstances described above, in connection with the
appointment of a Special Trustee, holders of the Convertible Preferred
Securities will have no rights to appoint or remove the Issuer Trustees, who may
be appointed, removed or replaced solely by International Paper as the indirect
or direct holder of all of the Common Securities.
REGISTRATION RIGHTS
In connection with the Original Offering the Company entered into a
registration rights agreement dated July 20, 1995 (the "Registration Rights
Agreement") with the Initial Purchasers, for the benefit of the holders of the
Convertible Preferred Securities, pursuant to which the Company would, at its
cost, (a) file a Registration Statement on Form S-3 (a "Shelf Registration
Statement") covering resales of the Convertible Preferred Securities (together
with the Convertible Junior Subordinated Debentures, the Guarantee, the
International Paper Common Stock and the related Rights) pursuant to Rule 415
under the Securities Act, (b) use its best efforts to cause the Shelf
Registration Statement to be declared effective under the Securities Act and (c)
keep the Shelf Registration Statement effective until three years after its
effective date. The Company would, in the event a Shelf Registration Statement
is filed, among other things, provide to each holder for whom such Shelf
Registration Statement was filed copies of this Prospectus which is a part of
the Shelf Registration Statement, notify each such holder when the Shelf
Registration Statement had become effective and take certain other actions as
are required to permit unrestricted resales of such Securities. A holder selling
such Securities pursuant to the Shelf Registration Statement generally would be
required to be named as a selling security holder in the related Prospectus and
to deliver the Prospectus to purchasers, would be subject to certain of the
civil liability provisions under the Securities Act in connection with such
sales and would be bound by the provisions of the Registration Rights Agreement
which are applicable to such holder (including certain indemnification
obligations).
If (i) by September 4, 1995, the Shelf Registration Statement had not been
filed with the SEC; (ii) by November 17, 1995, the Shelf Registration Statement
had not been declared effective by the SEC; or (iii) after the Shelf
Registration Statement had been declared effective, such Registration Statement
ceases to be effective or usable (subject to certain exceptions) in connection
with resales of Convertible Preferred Securities in accordance with and during
the periods specified in the Registration Rights Agreement (each such event
referred to in clauses (i) through (iii) a "Registration Default"), the
Convertible Junior Subordinated Debentures would bear interest at the rate per
annum of 5 3/4% and, therefore, distributions would accrue on the Convertible
Preferred Securities at the rate of 5 3/4% per annum, from and including the
date on which any such Registration Default shall have occurred to but excluding
the date on which all Registration Defaults have been cured. At all
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other times, interest will accrue on the Convertible Junior Subordinated
Debentures and distributions will accrue on the Convertible Preferred Securities
at a rate of 5 1/4% per annum. This Prospectus is a part of the Shelf
Registration Statement filed in accordance with the foregoing requirements.
The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, all the provisions of the Registration Rights
Agreement, a copy of which is available upon request to the Company or the
Initial Purchasers.
BOOK-ENTRY-ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
The description of book-entry procedures in this Prospectus includes
summaries of certain rules and operating procedures of DTC that affect transfers
of interest in the global certificate or certificates issued in connection with
sales of Convertible Preferred Securities made pursuant to this Prospectus.
Except as described in the next paragraph, the Convertible Preferred Securities
were issued only as fully registered securities registered in the name of Cede &
Co. (as nominee for DTC). One or more fully registered global Convertible
Preferred Security certificates (without restrictive legends) (the "Global
Certificates") will be issued, representing, in the aggregate, Convertible
Preferred Securities sold pursuant to this Prospectus, and will be deposited
with DTC. In the event of a transfer of securities which were issued in fully
registered, certificated form, the holder of such certificates will be required
to exchange them for interests in the Global Certificates representing the
number of Convertible Preferred Securities being transferred.
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 ("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. Participants in DTC
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a number of its
Participants and by the NYSE, 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 a custodial relationship with a
Participant, either directly or indirectly ("Indirect Participants"). The rules
applicable to DTC and its Participants are on file with the Commission.
Purchases of Convertible Preferred Securities within the DTC system must be
made by or through Participants, which will receive a credit for the Convertible
Preferred Securities on DTC's records. The ownership interest of each actual
purchaser of Convertible Preferred Securities ("Beneficial Owner") is in turn to
be recorded on the Participants' 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 Participants or Indirect Participants through which the Beneficial
Owners purchased Convertible Preferred Securities. Transfers of ownership
interests in the Convertible Preferred Securities are to be accomplished by
entries made on the books of Participants and Indirect Participants acting on
behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Convertible Preferred Securities,
except in the event that use of the book-entry system for the Convertible
Preferred Securities is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Convertible
Preferred Securities; DTC's records reflect only the identity of the
Participants to whose accounts such Convertible
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Preferred Securities are credited, which may or may not be the Beneficial
Owners. The Participants and Indirect Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants, and by Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
Redemption notices in respect of the Convertible Preferred Securities held
in book-entry form shall be sent to Cede & Co. If less than all of the
Convertible Preferred Securities are being redeemed, DTC will determine the
amount of the interest of each Participant to be redeemed in accordance with its
procedures.
Although voting with respect to the Convertible Preferred Securities is
limited, in those cases where a vote is required, neither DTC nor Cede & Co.
will itself consent or vote with respect to Convertible Preferred Securities.
Under its usual procedures, DTC would mail an Omnibus Proxy to the Issuer as
soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Participants to whose accounts the
Convertible Preferred Securities are credited on the record date (identified in
a listing attached to the Omnibus Proxy).
Distributions on the Convertible Preferred Securities held in book-entry
form will be made to DTC in immediately available funds. 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 and Indirect Participants to Beneficial Owners will be governed by
standing instructions and customary practices and will be the responsibility of
such Participants and Indirect Participants and not of DTC, the Issuer or
International Paper, subject to any statutory or regulatory require-ments as may
be in effect from time to time. Payment of distributions to DTC is the
responsibility of the Issuer, disbursement of such payments to Participants is
the responsibility of DTC, and disbursement of such payments to the Beneficial
Owners is the responsibility of Participants and Indirect Participants.
Except as provided herein, a Beneficial Owner of an interest in a global
Convertible Preferred Security will not be entitled to receive physical delivery
of Convertible Preferred Securities. Accordingly, each Beneficial Owner must
rely on the procedures of DTC to exercise any rights under the Convertible
Preferred Securities.
DTC may discontinue providing its services as securities depository with
respect to the Convertible Preferred Securities at any time by giving notice to
the Issuer. Under such circumstances, in the event that a successor securities
depository is not obtained, Convertible Preferred Security certificates are
required to be printed and delivered. Additionally, the Issuer (with the consent
of International Paper) may decide to discontinue use of the system of
book-entry transfers through DTC (or a successor depository). In that event,
certificates for the Convertible Preferred Securities will be printed and
delivered. In each of the above circumstances, International Paper will appoint
a paying agent with respect to the Convertible Preferred Securities.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that International Paper and the Issuer believe
to be reliable, but neither International Paper nor the Issuer takes
responsibility for the accuracy thereof.
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 Convertible Preferred
Securities as represented by a Global Certificate.
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PAYMENT AND PAYING AGENCY
Payments in respect of the Convertible Preferred Securities shall be made to
DTC, which shall credit the relevant accounts at DTC 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 initially be
The Bank of New York. The Paying Agent shall be permitted to resign as Paying
Agent upon 30 days' written notice to the Issuer Trustees. In the event that The
Bank of New York shall no longer be the Paying Agent, the Trustee shall appoint
a successor to act as Paying Agent (which shall be a bank or trust company).
REGISTRAR, TRANSFER AGENT, PAYING AGENT AND CONVERSION AGENT
The Bank of New York will act as registrar, transfer agent, paying agent and
Conversion Agent for the Convertible Preferred Securities.
Registration of transfers of Convertible Preferred Securities will be
effected without charge by or on behalf of the Issuer, but upon payment (with
the giving of such indemnity as the Issuer or International Paper may require)
in respect of any tax or other government charges which may be imposed in
relation to it.
The Issuer will not be required to register or cause to be registered the
transfer of Convertible Preferred Securities after such Convertible Preferred
Securities have been called for redemption.
INFORMATION CONCERNING THE TRUSTEE
The Trustee, prior to the occurrence of a default with respect to the Trust
Securities, 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 Trustee is under no obligation to exercise any
of the powers vested in it by the Declaration at the request of any holder of
Convertible Preferred Securities, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be incurred
thereby. The holders of Convertible Preferred Securities will not be required to
offer such indemnity in the event such holders, by exercising their voting
rights, direct the Trustee to take any action following a Declaration Event of
Default.
International Paper and certain of its subsidiaries maintain deposit
accounts and conduct other banking transactions with the Trustee in the ordinary
course of their businesses.
GOVERNING LAW
The Declaration and the Convertible Preferred Securities will be governed
by, and construed in accordance with, the internal laws of the State of
Delaware.
MISCELLANEOUS
The Issuer Trustees are authorized and directed to conduct the affairs of
and to operate the Issuer in such a way that the Issuer will not be deemed to be
an "investment company" required to be registered under the 1940 Act or
characterized as other than a grantor trust for Federal income tax purposes and
so that the Convertible Junior Subordinated Debentures will be treated as
indebtedness of International Paper for United States Federal income tax
purposes. In this connection, the Issuer Trustees are authorized to take any
action, not inconsistent with applicable law, the certificate of trust or the
Declaration that the Issuer Trustees determine in their discretion to be
necessary or desirable for such purposes as long as such action does not
adversely affect the interests of the holders of the Convertible Preferred
Securities.
Holders of the Convertible Preferred Securities have no preemptive rights.
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DESCRIPTION OF THE GUARANTEE
SET FORTH BELOW IS A SUMMARY OF INFORMATION CONCERNING THE GUARANTEE WHICH
WAS EXECUTED AND DELIVERED BY INTERNATIONAL PAPER FOR THE BENEFIT OF THE HOLDERS
FROM TIME TO TIME OF CONVERTIBLE PREFERRED SECURITIES. THE SUMMARY DOES NOT
PURPORT TO BE COMPLETE AND IS SUBJECT IN ALL RESPECTS TO THE PROVISIONS OF, AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO, THE GUARANTEE. THE GUARANTEE
INCORPORATES BY REFERENCE THE TERMS OF THE TRUST INDENTURE ACT. THE GUARANTEE
WILL BE QUALIFIED UNDER THE TRUST INDENTURE ACT. THE BANK OF NEW YORK WILL ACT
AS TRUSTEE UNDER THE GUARANTEE. THE BANK OF NEW YORK, AS THE GUARANTEE TRUSTEE,
HOLDS THE GUARANTEE FOR THE BENEFIT OF THE HOLDERS OF THE CONVERTIBLE PREFERRED
SECURITIES.
GENERAL
Pursuant to the Guarantee, International Paper irrevocably and
unconditionally agreed, to the extent set forth herein, to pay in full, to the
holders of the Convertible Preferred Securities, the Guarantee Payments (as
defined below), as and when due, regardless of any defense, right of set off or
counterclaim which the Issuer may have or assert. The following payments with
respect to the Convertible Preferred Securities, to the extent not paid by the
Issuer (the "Guarantee Payments"), will be subject to the Guarantee (without
duplication): (i) any accrued and unpaid distributions which are required to be
paid on the Convertible Preferred Securities to the extent of funds of the Trust
available therefor, (ii) the amount payable upon redemption of the Convertible
Preferred Securities, payable out of funds of the Trust available therefor with
respect to any Convertible Preferred Securities called for redemption by the
Issuer and (iii) upon a liquidation of the Issuer, the lesser of (a) the
aggregate of the liquidation preference and all accrued and unpaid dividends on
the Convertible Preferred Securities to the date of payment and (b) the amount
of assets of the Issuer remaining available for distribution to holders of
Convertible Preferred Securities upon the liquidation of the Issuer.
International Paper's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by International Paper to the holders of
Convertible Preferred Securities or by causing the Issuer to pay such amounts to
such holders.
If International Paper fails to make interest payments on the Convertible
Junior Subordinated Debentures or pay amounts payable upon the redemption,
acceleration or maturity of the Convertible Junior Subordinated Debentures, the
Issuer will have insufficient funds to pay distributions on or to pay amounts
payable upon the redemption or repayment of the Convertible Preferred
Securities. The Guarantee does not cover payment of distributions or the amount
payable upon redemption or repayment in respect of the Convertible Preferred
Securities when the Issuer does not have sufficient funds to pay such
distributions or such amount.
Because the Guarantee is a guarantee of payment and not of collection,
holders of the Convertible Preferred Securities may proceed directly against
International Paper as guarantor, rather than having to proceed against the
Issuer before attempting to collect from International Paper, and International
Paper waives any right or remedy to require that any action be brought against
the Issuer or any other person or entity before proceeding against International
Paper. Such obligations will not be discharged except by payment of the
Guarantee Payments in full.
CERTAIN COVENANTS OF INTERNATIONAL PAPER
In the Guarantee, International Paper has covenanted that, so long as any
Convertible Preferred Securities remain outstanding, if at such time (i)
International Paper has exercised its option to defer interest payments on the
Convertible Junior Subordinated Debentures and such deferral is continuing, (ii)
International Paper shall be in default with respect to its payment or other
obligations under the Guarantee or (iii) there shall have occurred any event
that, with the giving of notice or the lapse of time or both, would constitute
an Event of Default under the Indenture, then International Paper (a) 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 stock dividends paid by International Paper which
consist of the stock of the same class as that on which the dividend is being
paid), (b) shall not make any payment of interest, principal or premium, if any,
on or
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repay, repurchase or redeem any debt securities issued by International Paper
that rank PARI PASSU with or junior to the Convertible Junior Subordinated
Debentures, and (c) shall not make any guarantee payments with respect to the
foregoing (other than pursuant to the Guarantee).
As part of the Guarantee, International Paper has agreed that it will honor
all obligations described therein relating to the conversion of the Convertible
Preferred Securities into International Paper Common Stock as described in
"Description of the Convertible Preferred Securities -- Conversion Rights".
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of Convertible Preferred Securities (in which case no vote
will be required), the Guarantee may be changed only with the prior approval of
the holders of not less than 66 2/3% in aggregate stated liquidation preference
of the outstanding Convertible Preferred Securities. The manner of obtaining any
such approval of holders of the Convertible Preferred Securities will be as set
forth under "Description of the Convertible Preferred Securities -- Voting
Rights". All guarantees and agreements contained in the Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of International
Paper and shall inure to the benefit of the holders of the Convertible Preferred
Securities then outstanding. Except in connection with any permitted merger or
consolidation of International Paper with or into another entity or any
permitted sale, transfer or lease of International Paper's assets to another
entity as described below under "Description of the Convertible Junior
Subordinated Debentures -- Restrictions", International Paper may not assign its
rights or delegate its obligations under the Guarantee without the prior
approval of the holders of at least 66 2/3% of the aggregate stated liquidation
preference of the Convertible Preferred Securities then outstanding.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate as to each holder of Convertible Preferred
Securities and be of no further force and effect upon (a) full payment of the
applicable redemption price of such holder's Convertible Preferred Securities or
(b) the distribution of International Paper Common Stock to such holder in
respect of the conversion of such holder's Convertible Preferred Securities into
International Paper Common Stock and will terminate completely upon full payment
of the amounts payable upon liquidation of the Issuer. The Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any holder of Convertible Preferred Securities must restore payment of any
sums paid under such Convertible Preferred Securities or the Guarantee.
STATUS OF THE GUARANTEE; SUBORDINATION
The Guarantee constitutes an unsecured obligation of International Paper and
ranks (i) subordinate and junior in right of payment to all liabilities of
International Paper, except any liabilities that may be made PARI PASSU
expressly by their terms, (ii) PARI PASSU with the most senior preferred or
preference stock now or hereafter issued by International Paper and with any
guarantee now or hereafter entered into by International Paper in respect of any
preferred or preference stock or preferred securities of any affiliate of
International Paper and (iii) senior to International Paper Common Stock. The
Declaration provides that each holder of Convertible Preferred Securities by
acceptance thereof agrees to the subordination provisions and other terms of the
Guarantee. Upon the bankruptcy, liquidation or winding up of International
Paper, its obligations under the Guarantee will rank junior to all its other
liabilities (except as aforesaid) and, therefore, funds may not be available for
payment under the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default, has undertaken
to perform only such duties as are specifically set forth in the Guarantee and,
after default with respect to the Guarantee, 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 provision, the Guarantee Trustee is under no obligation
to exercise
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any of the powers vested in it by the Guarantee at the request of any holder of
Convertible Preferred Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby.
GOVERNING LAW
The Guarantee is governed by and construed in accordance with the laws of
the State of New York.
DESCRIPTION OF THE CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES
SET FORTH BELOW IS A DESCRIPTION OF THE SPECIFIC TERMS OF THE CONVERTIBLE
JUNIOR SUBORDINATED DEBENTURES IN WHICH THE ISSUER INVESTED WITH THE PROCEEDS OF
THE ISSUANCE AND SALE OF (I) THE CONVERTIBLE PREFERRED SECURITIES AND (II) THE
COMMON SECURITIES. THE FOLLOWING DESCRIPTION DOES NOT PURPORT TO BE COMPLETE AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE INDENTURE DATED AS OF JULY 1,
1995 (THE "INDENTURE"), BETWEEN INTERNATIONAL PAPER AND THE BANK OF NEW YORK, AS
TRUSTEE (THE "INDENTURE TRUSTEE"). THE INDENTURE WILL BE QUALIFIED UNDER THE
TRUST INDENTURE ACT. WHENEVER PARTICULAR PROVISIONS OR DEFINED TERMS IN THE
INDENTURE ARE REFERRED TO HEREIN, SUCH PROVISIONS OR DEFINED TERMS ARE
INCORPORATED BY REFERENCE HEREIN.
Under certain circumstances involving the dissolution of the Issuer
following the occurrence of a Tax Event or Investment Company Event, Convertible
Junior Subordinated Debentures may be distributed to the holders of the
Convertible Preferred Securities in liquidation of the Issuer. See "Description
of the Convertible Preferred Securities -- Tax Event or Investment Company Event
Redemption or Distribution".
GENERAL
The Convertible Junior Subordinated Debentures were issued as a series of
Junior Subordinated Debentures under the Indenture. The Convertible Junior
Subordinated Debentures were limited in aggregate principal amount to
approximately 103.092784% of the aggregate stated liquidation preference of the
Convertible Preferred Securities, such amount being the sum of the aggregate
stated liquidation preference of the Convertible Preferred Securities and the
Common Securities. The Indenture does not limit the aggregate principal amount
of Junior Subordinated Debentures which may be issued thereunder.
The entire principal amount of the Convertible Junior Subordinated
Debentures will become due and payable, together with any accrued and unpaid
interest thereon, including Additional Interest, if any, on July 20, 2025.
The Convertible Junior Subordinated Debentures, if distributed to holders of
Convertible Preferred Securities in a dissolution of the Issuer, will initially
be issued as a global security to the extent of any Global Certificates at the
time representing any Convertible Preferred Securities and otherwise in fully
registered, certificated form. In the event that Convertible Junior Subordinated
Debentures are issued in certificated form, such Convertible Junior Subordinated
Debentures will be in denominations of $50 and integral multiples thereof and
may be transferred or exchanged at the offices described below.
Payments on Convertible Junior Subordinated Debentures issued as a global
security will be made to DTC, as the depository for the Convertible Junior
Subordinated Debentures. In the event Convertible Junior Subordinated Debentures
are issued in certificated form, principal and interest will be payable, the
transfer of the Convertible Junior Subordinated Debentures will be registrable
and Convertible Junior Subordinated Debentures will be exchangeable for
Convertible Junior Subordinated Debentures of other denominations of a like
aggregate principal amount at the corporate trust office of the Indenture
Trustee in The City of New York; PROVIDED that, unless the Convertible Junior
Subordinated Debentures are held by the Issuer or any successor permissible
under "Description of the Convertible Preferred Securities -- Merger,
Consolidation or Amalgamation of the Issuer", payment of interest may be made at
the option of International Paper by check mailed to the address of the persons
entitled thereto.
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The Indenture does not contain any provisions that afford holders of
Convertible Junior Subordinated Debentures protection in the event of a highly
leveraged transaction involving International Paper. The Convertible Junior
Subordinated Debentures are not entitled to the benefit of any sinking fund.
INTEREST
Each Convertible Junior Subordinated Debenture bears interest at the rate of
5 1/4% per annum from the original date of issuance, payable quarterly in
arrears on March 15, June 15, September 15 and December 15 (each, an "Interest
Payment Date"), commencing September 15, 1995, to the person in whose name such
Convertible Junior Subordinated Debenture is registered at the close of business
on the fifteenth day immediately preceding such Interest Payment Date. Interest
will compound quarterly and will accrue at the annual rate of 5 1/4% on any
interest installment not paid when due.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Convertible Junior Subordinated Debentures is not a
Business Day, then payment of the interest payable on such date will be made on
the next succeeding day which is a Business Day (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.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
International Paper shall have the right at any time during the term of the
Convertible Junior Subordinated Debentures to defer interest payments from time
to time for successive periods not exceeding 20 consecutive quarters for each
such period. At the end of each Deferral Period, International Paper shall pay
all interest then accrued and unpaid (together with interest thereon at the rate
specified for the Convertible Junior Subordinated Debentures to the extent
permitted by applicable law). In no event shall any Deferral Period extend
beyond the maturity of the Convertible Junior Subordinated Debentures. During
any Deferral Period, International Paper (i) 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
stock dividends paid by International Paper which consist of stock of the same
class as that on which the dividend is being paid), (ii) shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by International Paper that rank PARI PASSU
with or junior to the Convertible Junior Subordinated Debentures, and (iii)
shall not make any guarantee payments with respect to the foregoing (other than
pursuant to the Guarantee). Prior to the termination of any such Deferral
Period, International Paper may further extend such Deferral Period; PROVIDED
that such Deferral Period together with all previous and further extensions
thereof may not exceed 20 consecutive quarters. Upon the termination of any
Deferral Period and the payment of all amounts then due, International Paper may
select a new Deferral Period, subject to the above requirements. No interest
during a Deferral Period, except at the end thereof, shall be due and payable.
If the Issuer shall be the sole holder of the Convertible Junior Subordinated
Debentures, International Paper shall give the Issuer notice of its selection of
such Deferral Period at least one Business Day prior to the earlier of (i) the
date the distributions on the Convertible Preferred Securities are payable or
(ii) the date the Issuer is required to give notice to any applicable
self-regulatory organization or to holders of the Convertible Preferred
Securities of the record date or the date such distribution is payable, but in
any event not less than ten Business Days prior to such record date.
International Paper shall cause the Issuer to give notice of International
Paper's selection of such Deferral Period to the holders of the Convertible
Preferred Securities. If the Issuer shall not be the sole holder of the
Convertible Junior Subordinated Debentures, International Paper shall give the
holders of the Convertible Junior Subordinated Debentures notice of its
selection of such Deferral Period at least ten Business Days prior to the
earlier of (i) the Interest Payment Date or (ii) the date International Paper is
required to give
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notice to any applicable self-regulatory organization or to holders of the
Convertible Junior Subordinated Debentures of the record or payment date of such
related interest payment, but in any event not less than two Business Days prior
to such record date.
ADDITIONAL INTEREST
If the Issuer would be required to pay any taxes, duties, assessments or
governmental charges of whatever nature (other than withholding taxes) imposed
by the United States, or any other taxing authority, then, in any such case,
International Paper will pay as additional interest ("Additional Interest") such
amounts as shall be required so that the net amounts received and retained by
the Issuer after paying any such taxes, duties, assessments or governmental
charges will be not less than the amounts the Issuer would have received had no
such taxes, duties, assessments or governmental charges been imposed.
CONVERSION OF THE CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES
The Convertible Junior Subordinated Debentures are convertible into
International Paper Common Stock at the option of the holders of the Convertible
Junior Subordinated Debentures at any time at the initial conversion price set
forth on the cover page of this Prospectus subject to the conversion price
adjustments described under "Description of the Convertible Preferred Securities
- -- Conversion Rights". The Issuer has agreed not to convert Convertible Junior
Subordinated Debentures held by it except pursuant to a notice of conversion
delivered to the Conversion Agent by a holder of Convertible Preferred
Securities. Upon surrender of a Convertible Preferred Security to the Conversion
Agent for conversion, the Issuer will distribute $50 principal amount of the
Convertible Junior Subordinated Debentures to the Conversion Agent on behalf of
the holder of the Convertible Preferred Securities so converted, whereupon the
Conversion Agent will convert such Convertible Junior Subordinated Debentures to
International Paper Common Stock on behalf of such holder. International Paper's
delivery to the holders of the Convertible Junior Subordinated Debentures
(through the Conversion Agent) of the fixed number of shares of International
Paper Common Stock into which the Convertible Junior Subordinated Debentures are
convertible (together with the cash payment, if any, in lieu of fractional
shares) will be deemed to satisfy International Paper's obligation to pay the
principal amount of the Convertible Junior Subordinated Debentures so converted,
and the accrued and unpaid interest thereon attributable to the period from the
last date to which interest has been paid or duly provided for; PROVIDED,
HOWEVER, that if any Convertible Junior Subordinated Debenture is converted
after a record date for payment of interest, the interest payable on the related
interest payment date with respect to such Convertible Junior Subordinated
Debenture shall be paid to the Issuer (which will distribute such interest to
the converting holder) or other holder of Convertible Junior Subordinated
Debentures, as the case may be, despite such conversion.
OPTIONAL REDEMPTION
International Paper shall have the right to redeem the Convertible Junior
Subordinated Debentures, in whole or in part, at any time or from time to time
after June 30, 1999, upon not less than 30 nor more than 60 days' notice, at a
redemption price equal to $51.58 per $50 principal amount of the Convertible
Junior Subordinated Debentures to be redeemed plus any accrued and unpaid
interest, including Additional Interest, if any, to the redemption date, if
redeemed on or before June 30, 2000, and at the following redemption prices per
$50 principal amount of Convertible Junior Subordinated Debentures, if redeemed
during the 12-month period ending June 30:
<TABLE>
<CAPTION>
PRICE PER $50
PRINCIPAL
YEAR AMOUNT
- -------------------------------------------------------------- -------------
<S> <C>
2001.......................................................... $51.31
2002.......................................................... 51.05
2003.......................................................... 50.79
2004.......................................................... 50.53
2005.......................................................... 50.26
</TABLE>
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<PAGE>
and thereafter at $50 per $50 principal amount of Convertible Junior
Subordinated Debentures plus, in each case, accrued and unpaid interest,
including Additional Interest, if any, to the redemption date.
In the event of any redemption in part, International Paper shall not be
required to (i) issue, register the transfer of or exchange any Convertible
Junior Subordinated Debenture during a period beginning at the opening of
business 15 days before any selection for redemption of Convertible Junior
Subordinated Debentures and ending at the close of business on the earliest date
on which the relevant notice of redemption is deemed to have been given to all
holders of Convertible Junior Subordinated Debentures to be so redeemed and (ii)
register the transfer of or exchange any Convertible Junior Subordinated
Debentures so selected for redemption, in whole or in part, except the
unredeemed portion of any Convertible Junior Subordinated Debenture being
redeemed in part.
SUBORDINATION
The Indenture provides that the Convertible Junior Subordinated Debentures
are subordinate and junior in right of payment to all Senior Indebtedness of
International Paper as provided in the Indenture. No payment of principal of
(including redemption payments), or interest on, the Convertible Junior
Subordinated Debentures may be made (i) if any Senior Indebtedness is not paid
when due, any applicable grace period with respect to such default has ended and
such default has not been cured or waived, or (ii) if the maturity of any Senior
Indebtedness has been accelerated because of a default. Upon any distribution of
assets of International Paper to creditors upon any dissolution, winding up,
liquidation or reorganization, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, all principal of, and
premium, if any, and interest due or to become due on, all Senior Indebtedness
must be paid in full before the holders of the Convertible Junior Subordinated
Debentures are entitled to receive or retain any payment. In the event that,
notwithstanding the foregoing, any payment or distribution of cash, property or
securities shall be received or collected by a holder of the Convertible Junior
Subordinated Debentures in contravention of the foregoing provisions, such
payment or distribution shall be held for the benefit of and shall be paid over
to the holders of Senior Indebtedness or their representative or representatives
or to the trustee or trustees under any indenture under which any instrument
evidencing Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay in full all Senior
Indebtedness then due, after giving effect to any concurrent payment to the
holders of Senior Indebtedness. Subject to the payment in full of all Senior
Indebtedness, the rights of the holders of the Convertible Junior Subordinated
Debentures will be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions applicable to Senior
Indebtedness until all amounts owing on the Convertible Junior Subordinated
Debentures are paid in full.
The term "Senior Indebtedness" shall mean in respect of International Paper
(i) the principal, premium, if any, and interest in respect of (A) indebtedness
of such obligor for money borrowed and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments issued by such obligor, (ii) all
capital lease obligations of such obligor, (iii) all obligations of such obligor
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of such obligor and all obligations of such obligor under any
title retention agreement (but excluding trade accounts payable arising in the
ordinary course of business), (iv) all obligations of such obligor for the
reimbursement of any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction, (v) all obligations of the type referred
to in clauses (i) through (iv) above of other persons for the payment of which
such obligor is responsible or liable as obligor, guarantor or otherwise, and
(vi) all obligations of the type referred to in clauses (i) through (v) above of
other persons secured by any lien on any property or asset of such obligor
(whether or not such obligation is assumed by such obligor), except for (1) any
such indebtedness that is by its terms subordinated to or PARI PASSU with the
Convertible Junior Subordinated Debentures and (2) any indebtedness (including
all other debt securities and guarantees in respect of those debt securities)
initially issued to any other trust, or a trustee of such trust, partnership or
other entity affiliated with International Paper that is, directly or
indirectly, a financing vehicle of International Paper (a "Financing Entity") in
connection with the issuance by such Financing Entity of preferred securities or
other similar securities. Such Senior
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Indebtedness shall continue to be Senior Indebtedness and entitled to the
benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any term of such Senior Indebtedness.
The Indenture does not limit the aggregate amount of Senior Indebtedness
International Paper may issue. At June 30, 1995, Senior Indebtedness of
International Paper aggregated approximately $7.2 billion. See "Capitalization".
CERTAIN COVENANTS
If (i) there shall have occurred any event that would constitute an Event of
Default, (ii) International Paper shall be in default with respect to its
payment of any obligations under the Guarantee, or (iii) International Paper
shall have given notice of its election to defer payments of interest on the
Convertible Junior Subordinated Debentures by extending the interest payment
period as provided in the Indenture and such period, or any extension thereof,
shall be continuing, then International Paper (a) 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 stock dividends paid by International Paper which consist of stock
of the same class as that on which the dividend is being paid), (b) shall not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by International Paper that rank
PARI PASSU with or junior to the Convertible Junior Subordinated Debentures, and
(c) shall not make any guarantee payments with respect to the foregoing (other
than pursuant to the Guarantee).
International Paper has agreed (i) to directly or indirectly maintain 100%
ownership of the Common Securities of the Trust; PROVIDED, HOWEVER, that any
permitted successor of International Paper under the Indenture may succeed to
International Paper's ownership of such Common Securities and (ii) to use its
reasonable efforts to cause the Trust (x) to remain a statutory business trust,
except in connection with the distribution of Convertible Junior Subordinated
Debentures to the holders of Trust Securities in liquidation of the Trust, the
redemption of all of the Trust Securities of the Trust, or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration, and (y)
to otherwise continue to be classified as a grantor trust for United States
Federal income tax purposes.
RESTRICTIONS
The Indenture provides that International Paper shall not consolidate with
or merge with or into any other corporation, or, directly or indirectly, convey,
transfer or lease all or substantially all of the properties and assets of
International Paper on a consolidated basis to any Person, unless either
International Paper is the continuing corporation or such corporation or Person
assumes by supplemental indenture all the obligations of International Paper
under the Indenture and the Convertible Junior Subordinated Debentures, no
default or Event of Default shall exist immediately after the transaction, and
the surviving corporation or such Person is a corporation, partnership or trust
organized and validly existing under the laws of the United States of America,
any state thereof or the District of Columbia.
EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events, which has occurred and is continuing, constitutes an "Event of Default"
with respect to the Convertible Junior Subordinated Debentures: (i) failure for
30 days to pay interest on the Convertible Junior Subordinated Debentures,
including any Additional Interest in respect thereof, when due; or (ii) failure
to pay principal of or premium, if any, on the Convertible Junior Subordinated
Debentures when due whether at maturity, upon redemption, by declaration or
otherwise; or (iii) failure by International Paper to deliver shares of
International Paper Common Stock upon an election by a holder of Convertible
Preferred Securities to convert such Convertible Preferred Securities; or (iv)
failure to observe or perform any other covenant contained in the Indenture for
90 days after notice; or (v) the dissolution, winding up or termination of the
Issuer, except in connection with the distribution of Convertible Junior
Subordinated Debentures to the holders of Convertible Preferred Securities in
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<PAGE>
liquidation of the Issuer and in connection with certain mergers, consolidations
or amalgamations permitted by the Declaration; or (vi) certain events in
bankruptcy, insolvency or reorganization of International Paper.
The Indenture Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of the Convertible Junior Subordinated Debentures
may declare the principal of and interest (including any Additional Interest) on
the Convertible Junior Subordinated Debentures due and payable immediately on
the occurrence of an Event of Default; PROVIDED, HOWEVER, that, after such
acceleration, but before a judgment or decree based on acceleration, the holders
of a majority in aggregate principal amount of outstanding Convertible Junior
Subordinated Debentures may, under certain circumstances, rescind and annul such
acceleration if all Events of Default, other than the nonpayment of accelerated
principal, have been cured or waived as provided in the Indenture. For
information as to waiver of defaults, see "-- Modification of the Indenture".
The Trustee is the initial holder of the Convertible Junior Subordinated
Debentures. However, while the Convertible Preferred Securities are outstanding,
the Trustee has agreed not to waive an Event of Default with respect to the
Convertible Junior Subordinated Debentures without the consent of holders of
66 2/3% in aggregate liquidation preference of the Convertible Preferred
Securities then outstanding.
A default under any other indebtedness of International Paper or the Issuer
would not constitute an Event of Default under the Convertible Junior
Subordinated Debentures.
Subject to the provisions of the Indenture relating to the duties of the
Indenture Trustee in case an Event of Default shall occur and be continuing, the
Indenture Trustee will be under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any holders of
Convertible Junior Subordinated Debentures, unless such holders shall have
offered to the Indenture Trustee reasonable indemnity. Subject to such
provisions for the indemnification of the Indenture Trustee, the holders of a
majority in aggregate principal amount of the Convertible Junior Subordinated
Debentures then outstanding will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Indenture
Trustee, or exercising any trust or power conferred on the Indenture Trustee
with respect to such series.
No holder of any Convertible Junior Subordinated Debenture will have any
right to institute any proceeding with respect to the Indenture or for any
remedy thereunder, unless such holder shall have previously given to the
Indenture Trustee written notice of a continuing Event of Default and, if the
Issuer is not the sole holder of Convertible Junior Subordinated Debentures,
unless the holders of at least 25% in aggregate principal amount of the
Convertible Junior Subordinated Debentures then outstanding shall also have made
written request, and offered reasonable indemnity, to the Indenture Trustee to
institute such proceeding as Indenture Trustee, and the Indenture Trustee shall
not have received from the holders of a majority in aggregate principal amount
of the outstanding Convertible Junior Subordinated Debentures a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days. However, such limitations do not apply to a suit
instituted by a holder of a Convertible Junior Subordinated Debenture for
enforcement of payment of the principal of or interest on such Convertible
Junior Subordinated Debenture on or after the respective due dates expressed in
such Convertible Junior Subordinated Debenture.
The holders of a majority in aggregate outstanding principal amount of all
series of the Junior Subordinated Debentures affected thereby may, on behalf of
the holders of all the Junior Subordinated Debentures of such series, waive any
past default, except a default in the payment of principal, premium, if any, or
interest. International Paper is required to file annually with the Indenture
Trustee and the Trustee a certificate as to whether or not International Paper
is in compliance with all the conditions and covenants under the Indenture.
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<PAGE>
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting International Paper and the
Indenture Trustee, with the consent of the holders of not less than a majority
in principal amount of the Junior Subordinated Debentures of each series which
are affected by the modification, to modify the Indenture or any supplemental
indenture affecting that series or the rights of the holders of that series of
Junior Subordinated Debentures; PROVIDED that no such modification may, without
the consent of the holder of each outstanding Junior Subordinated Debenture
affected thereby, (i) extend the fixed maturity of any Junior Subordinated
Debentures of any series, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or reduce any premium
payable upon the redemption thereof, or adversely affect the right to convert
convertible Junior Subordinated Debentures, without the consent of the holder of
each Junior Subordinated Debenture so affected, or (ii) reduce the percentage of
Junior Subordinated Debentures, the holders of which are required to consent to
any such supplemental indenture, without the consent of the holders of each
Junior Subordinated Debenture then outstanding and affected thereby.
In addition, International Paper and the Indenture Trustee may execute,
without the consent of any holder of Convertible Junior Subordinated Debentures,
any supplemental indenture for certain other usual purposes including the
creation of any new series of Junior Subordinated Debentures.
SETOFF
Notwithstanding anything contained to the contrary in the Indenture,
International Paper shall have the right to set off any payment with respect to
the Convertible Junior Subordinated Debentures it is otherwise required to make
thereunder with and to the extent International Paper has theretofore made, or
is concurrently on the date of such payment making, a payment under the
Guarantee.
GOVERNING LAW
The Indenture and the Convertible Junior Subordinated Debentures is governed
by, and construed in accordance with, the laws of the State of New York.
INFORMATION CONCERNING THE INDENTURE TRUSTEE
The Indenture Trustee, prior to default, undertakes to perform only such
duties as are specifically set forth in the Indenture 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 provision, the Indenture
Trustee is under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Convertible Junior Subordinated
Debentures, unless offered reasonable indemnity by such holder against the
costs, expenses and liabilities which might be incurred thereby. The Indenture
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 Indenture
Trustee reasonably believes that repayment or adequate indemnity is not
reasonably assured to it.
EFFECT OF OBLIGATIONS UNDER THE
CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of the Issuer is to issue
the Trust Securities and use the proceeds thereof to purchase from International
Paper the Convertible Junior Subordinated Debentures.
As long as payments of interest and other payments are made when due on the
Convertible Junior Subordinated Debentures, such payments will be sufficient to
cover distributions and payments due on the Convertible Preferred Securities
primarily because (i) the aggregate principal amount of Convertible Junior
Subordinated Debentures will be equal to the sum of the aggregate stated
liquidation preference of the Convertible Preferred Securities and the Common
Securities; (ii) the interest rate and interest and other payment dates on the
Convertible Junior Subordinated Debentures will match the distribution rate and
distribution and other payment dates for the Convertible Preferred Securities;
(iii) the Declaration provides that International Paper, as originator, shall
pay for all, and
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the Issuer shall not be obligated to pay, directly or indirectly, for any, costs
and expenses of the Issuer; and (iv) the Declaration further provides that the
holders of Common Securities and the Issuer Trustees shall not cause or permit
the Issuer to, among other things, engage in any activity that is not consistent
with the purposes of the Issuer.
If International Paper fails to make interest or other payments on the
Convertible Junior Subordinated Debentures when due, the Declaration provides a
mechanism whereby the holders of the Convertible Preferred Securities may (i)
appoint a Special Trustee and (ii) direct the Trustee to enforce its rights
under the Convertible Junior Subordinated Debentures. If the Trustee fails to
enforce its rights under the Convertible Junior Subordinated Debentures, a
holder of Convertible Junior Subordinated Debentures may, after a holder makes
written request to the Trustee to enforce such rights, institute a legal
proceeding directly against International Paper to enforce the Trustee's right
under the Convertible Junior Subordinated Debentures without first instituting
any legal proceeding against the Trustee or any other person or entity.
Payments of distributions and other payments due on the Convertible
Preferred Securities out of moneys held by the Issuer are guaranteed by
International Paper to the extent set forth under "Description of the
Guarantee". If International Paper fails to make payments under the Guarantee,
the Guarantee provides a mechanism whereby the holders of the Convertible
Preferred Securities may direct the Guarantee Trustee to enforce its rights
thereunder. If the Guarantee Trustee fails to enforce the Guarantee, a holder of
a Convertible Preferred Security may, after such holder makes written request to
the Guarantee Trustee to enforce the Guarantee, institute a legal proceeding
directly against International Paper to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Issuer or any other
person or entity.
International Paper and the Issuer believe that the Guarantee, when taken
together with the provisions of the Declaration and International Paper's
obligations to make payments of principal and interest on the Convertible Junior
Subordinated Debentures, constitutes a full and unconditional guarantee by
International Paper of the Convertible Preferred Securities.
DESCRIPTION OF INTERNATIONAL PAPER CAPITAL STOCK
The authorized capital stock of International Paper consists of (i)
400,000,000 shares of International Paper Common Stock, (ii) 400,000 shares of
cumulative $4 preferred stock, without par value (the International Paper $4
Preferred Stock) and (iii) 8,750,000 shares of serial preferred stock, $1.00 par
value per share (the "International Paper Serial Preferred Stock" and, together
with the International Paper $4 Preferred Stock, the "International Paper
Preferred Stock").
At July 31, 1995, after adjusting for the Stock Split, there were
outstanding (a) 254,578,206 shares of International Paper Common Stock (as well
as the same number of International Paper Common Share Purchase Rights (the
"Rights") to purchase International Paper Common Stock pursuant to the Rights
Agreement), (b) employee stock options to purchase an aggregate of approximately
8,679,116 shares of International Paper Common Stock and (c) 15,780 shares of
International Paper $4 Preferred Stock. In addition, approximately 5,824,800
shares of International Paper Common Stock were issued upon conversion of
International Paper's convertible subordinated debentures. See "Recent
Developments".
DESCRIPTION OF INTERNATIONAL PAPER COMMON STOCK
GENERAL. Subject to the rights of the holders of any shares of
International Paper Preferred Stock which may at the time be outstanding,
holders of International Paper Common Stock are entitled to receive such
dividends as may be declared from time to time by the Board of Directors out of
funds legally available therefor.
The holders of International Paper Common Stock are entitled to one vote per
share on all matters submitted to a vote of shareholders and do not have
cumulative voting rights. Holders of International Paper Common Stock are
entitled to receive, upon any liquidation of International
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<PAGE>
Paper, all remaining assets available for distribution to shareholders after
satisfaction of International Paper's liabilities and the preferential rights of
any preferred stock that may then be issued and outstanding. The outstanding
shares of International Paper Common Stock are, and the shares which may be
acquired upon conversion of the Convertible Preferred Securities will be, fully
paid and nonassessable. The holders of International Paper Common Stock have no
preemptive, conversion or redemption rights. The International Paper Common
Stock is listed on the New York Stock Exchange. The registrar and transfer agent
for the International Paper Common Stock is Chemical Bank.
CERTAIN PROVISIONS. International Paper's Restated Certificate of
Incorporation (the "International Paper Restated Certificate of Incorporation")
contains provisions which: (1) divide the Board of Directors into three classes
of as nearly equal size as possible, with Directors in each class being elected
for terms of three years; (2) require the affirmative vote of 80% of the
outstanding shares of voting stock to remove any Director except for cause; (3)
require the affirmative vote of (a) 80% of the outstanding shares of voting
stock and (b) a majority of the voting stock not owned by an Interested
Stockholder (an owner of 10% or more of voting power) to approve any Business
Combination (as such term is defined in the International Paper Restated
Certificate of Incorporation) with an Interested Stockholder unless (x) the
Business Combination shall have been approved by the Board of Directors at a
time when Disinterested Directors (those directors unaffiliated with an
Interested Stockholder who were either on the Board of Directors prior to the
time the Interested Stockholder became an Interested Stockholder or succeeded a
Disinterested Director and were recommended for a nomination or election by a
majority of the Disinterested Directors) constitute a majority of the entire
Board of Directors or (y) in the case of a Business Combination involving the
payment of consideration to holders of capital stock, certain conditions
concerning the adequacy of the consideration are met; (4) require the
affirmative vote of 80% of the outstanding shares of voting stock to amend or
repeal those provisions of the International Paper Restated Certificate of
Incorporation described in clauses (1) and (2) above; and (5) require the
affirmative vote of (x) 80% of the outstanding shares of voting stock and (y) a
majority of the voting stock not owned by an Interested Stockholder, to approve
any proposal made by such Interested Stockholder to amend or repeal those
provisions of International Paper's Restated Certificate of Incorporation
described in clause (3) above, unless such proposal is recommended by the Board
of Directors at a time when Disinterested Directors constitute a majority of the
entire Board of Directors.
The overall effect of these provisions may be to deter or discourage hostile
takeover attempts by making it more difficult for a person who has gained a
substantial equity interest in International Paper effectively to exercise
control.
DESCRIPTION OF INTERNATIONAL PAPER PREFERRED STOCK
The following summary contains a description of certain general terms of the
International Paper Preferred Stock. The description of certain provisions of
the International Paper Preferred Stock does not purport to be complete and is
subject to and qualified in its entirety by reference to the provisions of the
International Paper Restated Certificate of Incorporation, and the Certificate
of Designation (the "Certificate of Designation") relating to each particular
series of International Paper Preferred Stock.
GENERAL. Under the International Paper Restated Certificate of
Incorporation, the Board of Directors of International Paper is authorized,
without further stockholder action, to provide for the issuance of up to
8,750,000 shares of International Paper Serial Preferred Stock. The
International Paper Serial Preferred Stock may be issued in one or more series,
with such designations of titles; dividend rates; any redemption provisions;
special or relative rights in the event of liquidation, dissolution,
distribution or winding up of International Paper; any sinking fund provisions;
any conversion provisions; any voting rights thereof; and any other preferences,
privileges, powers, rights, qualifications, limitations and restrictions, as
shall be set forth as and when established by the Board
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<PAGE>
of Directors of International Paper. The shares of any series of International
Paper Serial Preferred Stock will be, when issued, fully paid and nonassessable
and holders thereof will have no preemptive rights in connection therewith.
RANK. Any series of International Paper Preferred Stock will, with respect
to rights on liquidation, winding up and dissolution, rank (i) senior to all
classes of International Paper Common Stock and to all equity securities issued
by International Paper, the terms of which specifically provide that such equity
securities will rank junior to such series of International Paper Preferred
Stock (the "International Paper Junior Liquidation Securities"); (ii) on a
parity with all equity securities issued by International Paper, the terms of
which specifically provide that such equity securities will rank on a parity
with such series of International Paper Preferred Stock ("International Paper
Parity Liquidation Securities"), and (iii) junior to all equity securities
issued by International Paper, the terms of which specifically provide that such
equity securities will rank senior to such series of International Paper
Preferred Stock (the Senior Liquidation Securities). In addition, any series of
International Paper Preferred Stock will, with respect to dividend rights, rank
(i) senior to all equity securities issued by International Paper, the terms of
which specifically provide that such equity securities will rank junior to such
series of International Paper Preferred Stock and, to the extent provided in the
applicable Certificate of Designation, to International Paper Common Stock, (ii)
on a parity with all equity securities issued by International Paper, the terms
of which specifically provide that such equity securities will rank on a parity
with such series of International Paper Preferred Stock and, to the extent
provided in the applicable Certificate of Designation, to International Paper
Common Stock ("International Paper Parity Dividend Securities") and (iii) junior
to all equity securities issued by International Paper, the terms of which
specifically provide that such equity securities will rank senior to such series
of International Paper Preferred Stock. As used in any Certificate of
Designation for these purposes, the term "equity securities" will not include
debt securities convertible into or exchangeable for equity securities.
UNITED STATES TAXATION
GENERAL
The following is a summary of certain of the material United States Federal
income tax consequences of the purchase, ownership, disposition and conversion
of Convertible Preferred Securities. Unless otherwise stated, this summary deals
only with Convertible Preferred Securities held as capital assets by holders who
purchase the Convertible Preferred Securities upon original issuance. It does
not deal with special classes of holders such as banks, thrifts, real estate
investment trusts, regulated investment companies, insurance companies, dealers
in securities or currencies, tax-exempt investors, or persons that will hold the
Convertible Preferred Securities as other than a capital asset. This summary
also does not address the tax consequences to persons that have a functional
currency other than the U.S. Dollar or the tax consequences to shareholders,
partners or beneficiaries of a holder of Convertible Preferred Securities.
Further, it does not include any description of any alternative minimum tax
consequences or the tax laws of any state or local government or of any foreign
government that may be applicable to the Convertible Preferred Securities. This
summary is based on the Internal Revenue Code of 1986, as amended (the "Code"),
Treasury regulations thereunder and administrative and judicial interpretations
thereof, as of the date hereof, all of which are subject to change, possibly on
a retroactive basis.
CLASSIFICATION OF THE CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES
In connection with the issuance of the Convertible Junior Subordinated
Debentures, Skadden, Arps, Slate, Meagher & Flom, special counsel to
International Paper and the Trust, rendered its opinion generally to the effect
that, under then current law and assuming full compliance with the terms of the
Convertible Junior Subordinated Debenture Indenture (and certain other
documents), and based on certain facts and assumptions contained in such
opinion, the Convertible Junior Subordinated Debentures held by the Trust will
be classified for United States Federal income tax purposes as indebtedness of
International Paper.
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CLASSIFICATION OF THE TRUST
In connection with the issuance of the Convertible Preferred Securities,
Skadden, Arps, Slate, Meagher & Flom, special counsel to International Paper and
the Trust, rendered its opinion generally to the effect that, under then current
law and assuming full compliance with the terms of the Declaration and the
Convertible Junior Subordinated Debenture Indenture (and certain other
documents), and based on certain facts and assumptions contained in such
opinion, the Trust will be classified for United States Federal income tax
purposes as a grantor trust and not as an association taxable as a corporation.
Accordingly, for United States Federal income tax purposes, each holder of
Convertible Preferred Securities generally will be considered the owner of an
undivided interest in the Convertible Junior Subordinated Debentures, and each
holder will be required to include in its gross income any original issue
discount ("OID") accrued with respect to its allocable share of those
Convertible Junior Subordinated Debentures.
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL ISSUE DISCOUNT
Because International Paper has the option, under the terms of the
Convertible Junior Subordinated Debentures, to defer payments of interest by
extending interest payment periods for up to 20 quarters, all of the stated
interest payments on the Convertible Junior Subordinated Debentures will be
treated as "original issue discount". Holders of debt instruments issued with
OID must include that discount in income on an economic accrual basis before the
receipt of cash attributable to the interest, regardless of their method of tax
accounting. Generally, all of a holder's taxable interest income with respect to
the Convertible Junior Subordinated Debentures will be accounted for as OID.
Actual payments and distributions of stated interest will not, however, be
separately reported as taxable income. The amount of OID that accrues in any
quarter will approximately equal the amount of the interest that accrues on the
Convertible Junior Subordinated Debentures in that quarter at the stated
interest rate. In the event that the interest payment period is extended,
holders will continue to accrue OID approximately equal to the amount of the
interest payment due at the end of the extended interest payment period on an
economic accrual basis over the length of the extended interest payment period.
Because income on the Convertible Preferred Securities will constitute OID,
corporate holders of Convertible Preferred Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the Convertible Preferred Securities.
MARKET DISCOUNT AND BOND PREMIUM
Holders of Convertible Preferred Securities other than a holder who
purchased the Convertible Preferred Securities upon original issuance may be
considered to have acquired their undivided interests in the Convertible Junior
Subordinated Debentures with market discount or acquisition premium as such
phrases are defined for United States Federal income tax purposes. Such holders
are advised to consult their tax advisors as to the income tax consequences of
the acquisition, ownership and disposition of the Convertible Preferred
Securities.
RECEIPT OF CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION
OF THE ISSUER
Under certain circumstances, as described under the caption "Description of
the Preferred Securities -- Tax Event or Investment Company Event Redemption or
Distribution", Convertible Junior Subordinated Debentures may be distributed to
holders in exchange for the Convertible Preferred Securities and in liquidation
of the Trust. Under current law, such a distribution to holders, for United
States Federal income tax purposes, would be treated as a nontaxable event to
each holder, and each holder would receive an aggregate tax basis in the
Convertible Junior Subordinated Debentures equal to such holder's aggregate tax
basis in its Convertible Preferred Securities. A holder's holding period in the
Convertible Junior Subordinated Debentures so received in liquidation of the
Trust would include the period during which the Convertible Preferred Securities
were held by such holder. If, however, the related Special Event is a Tax Event
which results in the Trust being treated as an association taxable as a
corporation, the distribution would likely constitute a taxable event to holders
of the Convertible Preferred Securities.
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Under certain circumstances described herein (see "Description of the
Convertible Preferred Securities"), the Convertible Junior Subordinated
Debentures may be redeemed for cash and the proceeds of such redemption
distributed to holders in redemption of their Convertible Preferred Securities.
Under current law, such a redemption would, for United States Federal income tax
purposes, constitute a taxable disposition of the redeemed Convertible Preferred
Securities, and a holder would recognize gain or loss as if it sold such
redeemed Convertible Preferred Securities for cash. See "-- Disposition of
Convertible Preferred Securities."
DISPOSITION OF CONVERTIBLE PREFERRED SECURITIES
A holder that sells Convertible Preferred Securities will recognize gain or
loss equal to the difference between the amount realized on the sale of the
Convertible Preferred Securities and the holder's adjusted tax basis in such
Convertible Preferred Securities. A holder's adjusted tax basis in the
Convertible Preferred Securities generally will be its initial purchase price
increased by OID previously includible in such holder's gross income to the date
of disposition and decreased by payments received on the Convertible Preferred
Securities to the date of disposition. Such gain or loss will be a capital gain
or loss and will be a long-term capital gain or loss if the Convertible
Preferred Securities have been held for more than one year at the time of sale.
The Convertible Preferred Securities may trade at a price that does not
accurately reflect the value of accrued but unpaid interest with respect to the
underlying Convertible Junior Subordinated Debentures. A holder who disposes of
or converts his Convertible Preferred Securities between record dates for
payments of distributions thereon will be required to include accrued but unpaid
interest on the Convertible Junior Subordinated Debentures through the date of
disposition in income as ordinary income, and to add such amount to his adjusted
tax basis in his PRO RATA share of the underlying Convertible Junior
Subordinated Debentures deemed disposed of. To the extent the selling price is
less than the holder's adjusted tax basis (which basis will include, in the form
of OID, all accrued but unpaid interest), a holder will recognize a capital
loss. Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States Federal income tax purposes.
EXCHANGE OF CONVERTIBLE PREFERRED SECURITIES FOR INTERNATIONAL PAPER COMMON
STOCK
A Preferred Securityholder will not recognize gain or loss upon the
exchange, through the Conversion Agent, of Convertible Preferred Securities for
a proportionate share of the Convertible Junior Subordinated Debentures held by
the Issuer.
A Preferred Securityholder will not recognize income, gain or loss upon the
conversion, through the Conversion Agent, of Convertible Junior Subordinated
Debentures into International Paper Common Stock. A Preferred Securityholder
will, however, recognize gain upon the receipt of cash in lieu of a fractional
share of International Paper Common Stock equal to the amount of cash received
less the Preferred Securityholder's tax basis in such fractional share. A
Preferred Securityholder's tax basis in the International Paper Common Stock
received upon exchange and conversion should generally be equal to the Preferred
Securityholder's tax basis in the Convertible Preferred Securities delivered to
the Conversion Agent for exchange less the basis allocated to any fractional
share for which cash is received and a Preferred Securityholder's holding period
in the International Paper Common Stock received upon exchange and conversion
should generally begin on the date the Preferred Securityholder acquired the
Convertible Preferred Securities delivered to the Conversion Agent for exchange.
ADJUSTMENT OF CONVERSION PRICE
Treasury Regulations promulgated under Section 305 of the Code would treat
holders of Convertible Preferred Securities as having received a constructive
distribution from International Paper in the event the conversion ratio of the
Convertible Junior Subordinated Debentures were adjusted if (i) as a result of
such adjustment, the proportionate interest (measured by the quantum of
International Paper Common Stock into or for which the Convertible Junior
Subordinated Debentures are convertible or exchangeable) of the holders of the
Preferred Securities in the assets or earnings and profits of International
Paper were increased, and (ii) the adjustment was not made pursuant to a
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bona fide, reasonable antidilution formula. An adjustment in the conversion
ratio would not be considered made pursuant to such a formula if the adjustment
was made to compensate for certain taxable distributions with respect to the
International Paper Common Stock. Thus, under certain circumstances, a reduction
in the conversion price for the holders may result in deemed dividend income to
holders to the extent of the current or accumulated earnings and profits of
International Paper. Holders of the Convertible Preferred Securities would be
required to include their allocable share of such deemed dividend income in
gross income but will not receive any cash related thereto.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is, as to the United
States, a foreign corporation, a non-resident alien individual, a foreign
partnership, or a nonresident fiduciary of a foreign estate or trust.
Under present United States Federal income tax law, (i) payments by the
Trust or any of its paying agents to any holder of a Convertible Preferred
Security who or which is a United States Alien Holder will not be subject to
withholding of United States Federal income tax; provided that, (a) the
beneficial owner of the Convertible Preferred Security does not actually or
constructively (including by virtue of its interest in the underlying
Convertible Junior Subordinated Debentures) own 10% or more of the total
combined voting power of all classes of stock of International Paper entitled to
vote, (b) the beneficial owner of the Convertible Preferred Security is not a
controlled foreign corporation that is related to International Paper through
stock ownership, and (c) either (A) the beneficial owner of the Convertible
Preferred Security certifies to the Trust or its agent, under penalties of
perjury, that it is not a United States holder and provides its name and address
or (B) a securities clearing organization, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or business
(a "Financial Institution"), and holds the Convertible Preferred Security in
such capacity, that certifies to the Trust or its agent, under penalties of
perjury, that such statement has been received from the beneficial owner by it
or by a Financial Institution between it and the beneficial owner and furnishes
the Trust or its agent with a copy thereof; and (ii) a United States Alien
Holder of a Convertible Preferred Security will not be subject to withholding of
United States Federal income tax on any gain realized upon the sale or other
disposition of a Convertible Preferred Security.
If a United States Alien Holder is treated as receiving a deemed dividend as
a result of an adjustment of the conversion price of the Convertible Junior
Subordinated Debentures, as described above under "Adjustment of Conversion
Price", such deemed dividend will be subject to United States Federal
withholding tax at a 30% (or lower treaty) rate.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Subject to the qualifications discussed below, income on the Convertible
Preferred Securities will be reported to holders on Forms 1099, which forms
should be mailed to holders of Preferred Securities by January 31 following each
calendar year.
The Trust will be obligated to report annually to Cede & Co., as holder of
record of the Convertible Preferred Securities, the OID related to the
Convertible Junior Subordinated Debentures that accrued during the year. The
Trust currently intends to report such information on Form 1099 prior to January
31 following each calendar year even though the Trust is not legally required to
report to record holders until April 15 following each calendar year. The
Placing Agents have indicated to the Trust that, to the extent that they hold
Convertible Preferred Securities as nominees for beneficial holders, they
currently expect to report to such beneficial holders on Forms 1099 by January
31 following each calendar year. Under current law, holders of Convertible
Preferred Securities who hold as nominees for beneficial holders will not have
any obligation to report information regarding the beneficial holders to the
Trust. The Trust, moreover, will not have any obligation to report to beneficial
holders who are not also record holders. Thus, beneficial holders of Convertible
Preferred
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Securities who hold their Convertible Preferred Securities through the Placing
Agents will receive Forms 1099 reflecting the income on their Convertible
Preferred Securities from such nominee holders rather than the Trust.
Payments made on, and proceeds from the sale of, the Convertible Preferred
Securities may be subject to a "backup" withholding tax of 31% unless the holder
complies with certain identification requirements. Any withheld amounts will be
allowed as a credit against the holder's United States Federal income tax,
provided the required information is provided to the Internal Revenue Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
CONVERTIBLE PREFERRED SECURITIES, 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.
ERISA CONSIDERATIONS
Generally, employee benefit plans that are subject to the Employee
Retirement Income Security Act of 1974 ("ERISA"), or Section 4975 of the Code
("Plans"), may purchase Convertible Preferred Securities, subject to the
investing fiduciary's determination that the investment in Convertible Preferred
Securities satisfies ERISA's fiduciary standards and other requirements
applicable to investments by the Plan.
In any case, International Paper and/or any of its affiliates may be
considered a "party in interest" (within the meaning of ERISA) or a disqualified
person (within the meaning of Section 4975 of the Code) with respect to certain
plans (generally, Plans maintained or sponsored by, or contributed to by, any
such persons). The acquisition and ownership of Convertible Preferred Securities
by a Plan (or by an individual retirement arrangement or other Plans described
in Section 4975(e)(i) of the Code) with respect to which International Paper or
any of its affiliates is considered a party in interest or a disqualified
person, may constitute or result in a prohibited transaction under ERISA or
Section 4975 of the Code, unless such Convertible Preferred Securities are
acquired pursuant to and in accordance with an applicable exemption.
As a result, Plans with respect to which International Paper or any of its
affiliates is a party in interest or a disqualified person should not acquire
Convertible Preferred Securities. Any other Plans or other entities whose assets
include Plan assets subject to ERISA proposing to acquire Convertible Preferred
Securities should consult with their own ERISA counsel.
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SELLING HOLDERS
The Convertible Preferred Securities were originally issued by the Trust and
sold by CS First Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, J.P. Morgan Securities Inc. and PaineWebber Incorporated (the
"Initial Purchasers"), in a transaction exempt from the registration
requirements of the Securities Act, to persons reasonably believed by such
Initial Purchasers to be "qualified institutional buyers" (as defined in Rule
144A under the Securities Act), to certain qualified institutional buyers acting
on behalf of institutional "accredited investors" (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act or outside the United States to
non-U.S. persons in offshore transactions in reliance on Regulation S under the
Securities Act. The Selling Holders may from time to time offer and sell
pursuant to this Prospectus any or all of the Convertible Preferred Securities,
any Convertible Junior Subordinated Debentures and International Paper Common
Stock issued upon conversion of the Convertible Preferred Securities.
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The following table sets forth information with respect to the record
holders of the Convertible Preferred Securities as of August 18, 1995. The term
Selling Holder includes the record holders listed below and the beneficial
owners of the Convertible Preferred Securities and their transferees, pledgees,
donees or other successors. CS First Boston Corporation, an affiliate of Credit
Suisse London Nominees Ltd., maintains ongoing business relationships with
International Paper and in connection therewith provides investment banking and
investment advisory services for which it receives customary fees.
<TABLE>
<CAPTION>
NUMBER OF
CONVERTIBLE
PREFERRED
SELLING HOLDER SECURITIES
- --------------------------------------------------------------- -----------
<C><S> <C>
1. CEDE & CO................................................... 8,208,100
2. BAII ASSET MANAGEMENT....................................... 75,000
3. SWISS BANK CORPORATION (LONDON OFFICE
NOMINEES) LIMITED.......................................... 60,000
4. MSS NOMINEES LTD............................................ 55,000
5. ISELIN CORPORATION.......................................... 50,000
6. NCB TRUST LIMITED BEAR...................................... 47,500
7. NYKREDIT BANK A/S........................................... 40,000
8. BIKUBEN..................................................... 40,000
9. HANOVER NOMINEES LTD........................................ 35,000
10. CREDIT SUISSE LONDON NOMINEES LTD.
FOR THE ACCOUNT OF CUSTOMERS............................... 32,500
11. BT GLOBENET NOMINEES LTD.................................... 30,000
12. CS FIRST BOSTON CORPORATION................................. 25,000
13. NATWEST DIMSDALES NOMINEE LTD............................... 25,000
14. TRUST COMPANY OF THE WEST................................... 22,900
15. GENERALE BANK............................................... 20,000
16. UNIBANK..................................................... 20,000
17. MINERVA NOMINEES LTD........................................ 20,000
18. NCB TRUST LIMITED........................................... 20,000
19. NATWEST CROMPTON NOMINEE LTD................................ 20,000
20. BBL FRANCE.................................................. 15,500
21. CHAMPION WORLDWIDE HOLDINGS LTD............................. 15,000
22. TENDENCIA OVERSEAS FUND LTD................................. 15,000
23. STATE STREET NOMINEES LTD................................... 12,000
24. TWC ASSET MANAGEMENT COMPANY................................ 11,300
25. VIDACOS NOMINEES LTD........................................ 10,000
26. SCHRODER NOMINEES LTD....................................... 10,000
27. ASSICURAZIONI GENERALI SPA.................................. 10,000
28. BARCLAYS NOMINEES (GRACECHURCH) LTD......................... 8,400
29. TCW ASSET MANAGEMENT COMPANY................................ 8,200
30. NATWEST PARRS NOMINEE LTD................................... 7,500
31. MEES PIERSON NOMINEES (GUERNSEY) LTD........................ 6,500
32. JASON & ARGO PARTNERS LTD................................... 5,000
33. MIRGLIP NOMINEES LTD........................................ 4,000
34. SE BANKEN FONDER AB......................................... 3,600
35. GALLUS NOMINEES LIMITED..................................... 2,500
36. CAZENOVE & CO............................................... 2,500
37. A/S BJORNSKYOV OG CO........................................ 2,000
38. JAMES CAPEL NOMINEES LTD.................................... 1,700
39. MISS VICTORIA MARGARET COATES............................... 1,650
40. CAMERON ASSET MANAGEMENT LIMITED............................ 1,650
-----------
Total................................................... 9,000,000
-----------
-----------
</TABLE>
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None of the other Selling Holders has, or within the past three years has
had, any position, office or other material relationship with the Trust or the
Company or any of their predecessors or affiliates, except as noted above.
Because the Selling Holders may, pursuant to this Prospectus, offer all or some
portion of the Convertible Preferred Securities, the Convertible Junior
Subordinated Debentures or the International Paper Common Stock issuable upon
conversion of the Convertible Preferred Securities, no estimate can be given as
to the amount of the Convertible Preferred Securities, the Convertible Junior
Subordinated Debentures or the International Paper Common Stock issuable upon
conversion of the Convertible Preferred Securities that will be held by the
Selling Holders upon termination of any such sales. In addition, the Selling
Holders identified above may have sold, transferred or otherwise disposed of all
or a portion of their Convertible Preferred Securities, since the date on which
they provided the information regarding their Convertible Preferred Securities,
in transactions exempt from the registration requirements of the Securities Act.
PLAN OF DISTRIBUTION
The Offered Securities may be sold from time to time to purchasers directly
by the Selling Holders. Alternatively, the Selling Holders may from time to time
offer the Offered Securities to or through underwriters, broker/dealers or
agents, who may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Holders or the purchasers of such
securities for whom they may act as agents. The Selling Holders and any
underwriters, broker/dealers or agents that participate in the distribution of
Offered Securities may be deemed to be "underwriters" within the meaning of the
Securities Act and any profit on the sale of such securities and any discounts,
commissions, concessions or other compensation received by any such underwriter,
broker/ dealer or agent may be deemed to be underwriting discounts and
commissions under the Securities Act.
The Offered Securities may be sold from time to time in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at varying prices determined at the time of sale or at negotiated prices. The
sale of the Offered Securities may be effected in transactions (which may
involve crosses or block transactions) (i) on any national securities exchange
or quotation service on which the Offered Securities may be listed or quoted at
the time of sale, (ii) in the over-the-counter market, (iii) in transactions
otherwise than on such exchanges or in the over-the-counter market or (iv)
through the writing of options. At the time a particular offering of the Offered
Securities is made, a Prospectus Supplement, if required, will be distributed
which will set forth the aggregate amount and type of Offered Securities being
offered and the terms of the offering, including the name or names of any
underwriters, broker/dealers or agents, any discounts, commissions and other
terms constituting compensation from the Selling Holders and any discounts,
commissions or concessions allowed or reallowed or paid to broker/dealers.
To comply with the securities laws of certain jurisdictions, if applicable,
the Offered Securities will be offered or sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
jurisdictions the Offered Securities may not be offered or sold unless they have
been registered or qualified for sale in such jurisdictions or any exemption
from registration or qualification is available and is complied with.
The Selling Holders will be subject to applicable provisions of the Exchange
Act and the rules and regulations thereunder, which provisions may limit the
timing of purchases and sales of any of the Offered Securities by the Selling
Holders. The foregoing may affect the marketability of such securities.
Pursuant to the Registration Rights Agreement, all expenses of the
registration of the Offered Securities will be paid by the Company, including,
without limitation, Commission filing fees and expenses of compliance with state
securities or "blue sky" laws; provided, however, that the Selling Holders will
pay all underwriting discounts and selling commissions, if any. The Selling
Holders will be indemnified by the Company and the Trust, jointly and severally
against certain civil liabilities,
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<PAGE>
including certain liabilities under the Securities Act, or will be entitled to
contribution in connection therewith. The Company and the Trust will be
indemnified by the Selling Holders severally against certain civil liabilities,
including certain liabilities under the Securities Act, or will be entitled to
contribution in connection therewith.
LEGAL MATTERS
The validity of the Convertible Preferred Securities, the Convertible Junior
Subordinated Debentures and the Guarantee, and certain United States federal
income taxation matters, will be passed upon for International Paper and the
Issuer by Skadden, Arps, Slate, Meagher & Flom, and the validity of any
International Paper Common Stock issuable upon conversion of such Convertible
Preferred Securities will be passed upon for International Paper and the Issuer
by James W. Guedry, Associate General Counsel of International Paper. Mr. Guedry
does not own a material or significant amount of the outstanding shares of
International Paper Common Stock. He participates in International Paper's Stock
Option Plan and in its Salaried Savings Plan, having an interest in a fund under
that plan which invests in the International Paper Common Stock.
EXPERTS
The audited financial statements and schedules incorporated by reference in
this Registration Statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving such reports.
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- ---------------------------------------------
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- ---------------------------------------------
---------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY INTERNATIONAL PAPER COMPANY OR INTERNATIONAL PAPER
CAPITAL TRUST OR ANY OF THEIR AGENTS. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
INTERNATIONAL PAPER COMPANY OR INTERNATIONAL PAPER CAPITAL TRUST SINCE SUCH
DATE.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information........... 4
Incorporation of Certain
Documents by Reference........ 4
Risk Factors.................... 5
International Paper Capital
Trust......................... 8
The Company..................... 9
Recent Developments............. 11
Ratio of Earnings to Fixed
Charges....................... 11
Capitalization.................. 12
Accounting Treatment............ 12
Use of Proceeds................. 12
Description of the Convertible
Preferred Securities.......... 13
Description of the Guarantee.... 30
Description of the Convertible
Junior Subordinated
Debentures.................... 32
Effect of Obligations Under the
Convertible Junior
Subordinated Debentures and
the Guarantee................. 38
Description of International
Paper Capital Stock........... 39
United States Taxation.......... 41
ERISA Considerations............ 45
Selling Holders................. 46
Plan of Distribution............ 48
Legal Matters................... 49
Experts......................... 49
</TABLE>
INTERNATIONAL PAPER
CAPITAL TRUST
9,000,000
5 1/4% Convertible Preferred Securities
guaranteed to the extent
set forth herein by,
and convertible into
Common Stock of,
INTERNATIONAL PAPER
COMPANY
-------
add
INTERNATIONAL PAPER
logo
-------
PROSPECTUS
DATED , 1995
- ---------------------------------------------
---------------------------------------------
- ---------------------------------------------
---------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following are the estimated expenses in connection with the distribution
of the securities being registered hereunder, other than underwriting discounts
and commissions.
<TABLE>
<S> <C>
S.E.C. registration fee.......................................... $147,026
Accounting fees and expenses..................................... 10,000
Legal fees and expenses.......................................... 40,000
Printing and engraving expenses.................................. 50,000
Transfer agent and trustee fees.................................. 10,000
Miscellaneous expenses........................................... 10,000
--------
Total........................................................ $267,026
--------
--------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS OF THE COMPANY
Section 721 of the New York Business Corporation Law ("B.C.L.") provides
that, in addition to indemnification provided in Article 7 of the B.C.L., a
corporation may indemnify a director or the officer by a provision contained in
this certificate of incorporation or by-laws or by a duly authorized resolution
of its shareholders or directors or by agreement provided that no
indemnification may be made to or on behalf of any director or officer if a
judgment or other final adjudication adverse to the director or officer
establishes that his acts were committed in bad faith or were the result of
active and deliberate dishonesty and material to the cause of action, or that
such director or officer personally gained in fact a financial profit or other
advantage to which he was not legally entitled.
Section 722(a) of the B.C.L. provides that a corporation may indemnify a
director or officer made, or threatened to be made, a party to any action other
than a derivative actio, whether civil or criminal, against judgments, fines,
amounts paid in settlement and reasonable expenses actually and necessarily
incurred as a result of such action, if such director or officer acted, in good
faith, for a purpose which he reasonably believed to be in, or not opposed to,
the best interests of the corporation and, in criminal actions or proceedings,
in addition, has no reasonable cause to believe that his conduct was unlawful.
Section 722(c) of the B.C.L. provides that a corporation may indemnify a
director or officer, made or threatened to be made a party in a derivative
action, against amounts paid in settlement and reasonable expenses actually and
necessarily incurred by him in connection with the defense or settlement of such
action or in connection with an appeal therein if such director or officer
acted, in good faith, for a purpose which he reasonably believed to be in, or
not opposed to, the best interests of the corporation, except that no
indemnification will be available under Section 722(c) of the B.C.L. in respect
of a threatened or pending action which is settled or otherwise disposed of or
any claims as to which such director or officer shall have been adjudged liable
to the corporation, unless and only to the extent that the court in which the
action was brought, or, if no action was brought, any court of competent
jurisdiction, determines, upon application, that, in view of all the
circumstances of the case, the director or officer is fairly and reasonably
entitled to indemnity for such portion of the settlement amount and expenses as
the court deems proper.
Section 723 of the B.C.L. specifies the manner in which payment of
indemnification under Section 722 of the B.C.L. or indemnification permitted
under Section 721 of the B.C.L. may be authorized by the corporation. It
provides that indemnification may be authorized by the corporation. It provides
that indemnification by a corporation is mandatory in any case in which the
director or officer has been successful, whether on the merits or otherwise, in
defending an action. In the event that the director or officer has not been
successful or the action is settled, indemnification must be authorized by the
appropriate corporate action as set forth in Section 723. Section 724 of the
B.C.L.
II-1
<PAGE>
provides that, upon application by a director or officer, indemnification may be
awarded by a court to the extent authorized under Sections 722 and 723 of the
B.C.L. contains certain other miscellaneous provisions affecting the
indemnification of directors and officers.
Section 726 of the B.C.L. authorizes the purchase and maintenance of
insurance to indemnify (1) a corporation for any obligation which it incurs as a
result of the indemnification of directors and officers under the above
sections, (2) directors and officers in instances in which they may be
indemnified by a corporation under such sections, and (3) directors and officers
in instances in which they may not otherwise be indemnified by a corporation
under such sections, provided the contract of insurance covering such directors
and officers provides, in a manner acceptable to the New York State
Superintendent of Insurance, for a retention amount and for co-insurance.
Article VII of the Restated Certificate of Incorporation of International
Paper Company provides in part as follows:
"Each Director of the Corporation shall be indemnified by the
Corporation against expenses actually and necessarily incurred by him in
connection with the defense of any action, suit or proceeding in which he is
made a party by reason of his being or having been a Director of the
Corporation, except in relation to matters as to which he shall be adjudged
in such action, suit or proceeding to be liable for negligence or misconduct
in the performance of his duties as such Director, provided that such right
of indemnification shall not be deemed exclusive of any other rights to
which a Director of the Corporation may be entitled, under any by-law,
agreement, vote of stockholders or otherwise."
Article IX of the By-laws, as amended, of the Company provides as follows;
"The Corporation shall indemnify each Officer or Director who is made,
or threatened to be made, a party to any action by reason of the fact that
he or she is or was an officer or Director of the Corporation, or is or was
serving at the request of the Corporation in any capacity for the
Corporation or any other enterprise, to the fullest extent permitted by
applicable law. The Corporation may, so far as permitted by law, enter into
an agreement to indemnify and advance expenses to any Officer or Director
who is made, or threatened to be made, a party to any such action."
The Company has purchased certain liability insurance for its officers and
directors as permitted by Section 727 of the B.C.L. has entered into indemnity
agreements with its directors and certain officers providing indemnification in
addition to that provided unde the B.C.L., as permitted by Section 721 of the
B.C.L.
INDEMNIFICATION OF DIRECTORS AND OFFICERS OF THE TRUST
The Declaration of the Trust provides that no Trustee, affiliate of any
Regular Trustee, or any officers, directors, shareholders, members, partners,
employees, representatives or agent of the Trust, or any employee or agent of
the trust or its affiliates (each an "Indemnified Person") shall be liable,
responsible or accountable in damages or otherwise to the Trust or any employee
or agent of the trust or its affiliates for 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 the 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, in the case of the Trustee,
negligence) or willful misconduct with respect to such acts or omissions. The
Declaration of the Trust also provides that to the fullest extent permitted by
applicable law, International Paper 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 on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by the Declaration, except that no
Indemnified Person shall be entitled to be indemnified
II-2
<PAGE>
in respect of any loss, damage or claim incurred by such Indemnified Person by
reason of gross negligence (or, in the case of the Trustee, negligence) or
willful misconduct with respect to such acts or omissions. The Declaration of
the Trust further provides that, to the fullest extent permitted by applicable
law, 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 International Paper prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by or 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 for the
underlying cause of action as authorized by the Declaration. The directors and
officers of International Paper and the Regular Trustees are covered by
insurance policies indemnifying them against certain liabilities, including
certain liabilities arising under the Securities Act of 1933, as amended (the
"Securities Act"), which might be incurred by them in such capacities and
against which they cannot be indemnified by International Paper or the Trust.
The Selling Holders will be indemnified by International Paper and the Trust,
jointly and severally, against certain civil liabilities, including certain
liabilities under the Securities Act, or will be entitled to contribution in
connection therewith. International Paper and the Trust will be indemnified by
the Selling Holders severally against certain civil liabilities, including
certain liabilities under the Securities Act, or will be entitled to
contribution in connection therewith.
ITEM 16. EXHIBITS
The following exhibits are filed as part of this Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ------------------------------------------------------------
<C> <S>
4.1 Certificate of Trust of International Paper Capital Trust
4.2 Amended and Restated Declaration of Trust of International
Paper Capital Trust, dated as of July 13, 1995 among
International Paper Company, as Sponsor, The Bank of New
York, as Property Trustee, The Bank of New York (Delaware),
as Delaware Trustee and Charles Greenberg, John R. Jepsen
and Syvert E. Nerheim, as Trustees
4.3 Indenture for the 5 1/4% Convertible Junior Subordinated
Debentures, dated as of July 1, 1995 among International
Paper Company and The Bank of New York, as Trustee
4.4 Form of 5 1/4% Convertible Preferred Securities (included in
Exhibit 4.2 above)
4.5 Form of 5 1/4% Convertible Junior Subordinated Debentures
(included in Exhibit 4.3 above)
4.6 International Paper Company Preferred Securities Guarantee,
dated as of July 20, 1995, between International Paper
Company, as Guarantor, and The Bank of New York, as
Preferred Guarantee Trustee
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom as to the
legality of the Convertible Preferred Securities,
Convertible Junior Subordinated Debentures and Preferred
Guarantee being registered hereby*
5.2 Opinion of James W. Guedry, Associate General Counsel of
International Paper, as to the legality of the
International Paper Common Stock being registered hereby*
8.1 Opinion of Skadden, Arps, Slate, Meagher & Flom as to
certain tax matters*
10.1 Registration Rights Agreement, dated July 20, 1995, between
International Paper Capital Trust and CS First Boston
Corporation, as Representative of the Several Initial
Purchasers
23.1 Consent of independent public accountants
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom is contained
in the opinion of counsel filed as Exhibits 5.1 and 8.1*
23.3 Consent of James W. Guedry, Associate General Counsel of
International Paper, is contained in the opinion filed as
Exhibit 5.2*
24.1 Powers of Attorney
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ------------------------------------------------------------
<C> <S>
25.1 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as
Trustee under the 5 1/4% Convertible Junior Subordinated
Debentures Indenture
25.2 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as
Property Trustee under the Amended and Restated Declaration
of Trust
25.3 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as
Preferred Guarantee Trustee under the Preferred Securities
Guarantee
<FN>
- ------------------------
*To be filed by Amendment.
</TABLE>
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
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 (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, 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 which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for 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.
(c) 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 foregoing provisions, 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 the
Securities Act
II-4
<PAGE>
of 1933 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 Securities
Act of 1933 and will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes 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 Trust Indenture Act.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, International
Paper Company certifies that it has reasonable grounds to believe that it meets
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 the City of Purchase, State of New York on the 31st day of
August, 1995.
INTERNATIONAL PAPER COMPANY
By /s/ JAMES W. GUEDRY
-----------------------------------
James W. Guedry
SECRETARY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------------------ ------------------ ---------------
<C> <S> <C>
Director and
/s/ JOHN A. GEORGES Chairman of
- ------------------------------------------ the Board (Chief August 31, 1995
(John A. Georges) Executive
Officer)
* Executive Vice
- ------------------------------------------ President August 31, 1995
(John T. Dillon) and Director
- ------------------------------------------ Director August 31, 1995
(Willard C. Butcher)
*
- ------------------------------------------ Director August 31, 1995
(Robert J. Eaton)
*
- ------------------------------------------ Director August 31, 1995
(Stanley C. Gault)
*
- ------------------------------------------ Director August 31, 1995
(Thomas C. Graham)
*
- ------------------------------------------ Director August 31, 1995
(Arthur G. Hansen)
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------------------ ------------------ ---------------
*
- ------------------------------------------ Director August 31, 1995
(Donald F. McHenry)
<C> <S> <C>
*
- ------------------------------------------ Director August 31, 1995
(Patrick F. Noonan)
*
- ------------------------------------------ Director August 31, 1995
(Jane C. Pfeiffer)
*
- ------------------------------------------ Director August 31, 1995
(Edmund T. Pratt, Jr.)
*
- ------------------------------------------ Director August 31, 1995
(Charles R. Shoemate)
*
- ------------------------------------------ Director August 31, 1995
(Roger B. Smith)
Senior Vice
/s/ ROBERT C. BUTLER President and
- ------------------------------------------ Chief Financial August 31, 1995
(Robert C. Butler) Officer
Controller and
/s/ ANDREW R. LESSIN Chief
- ------------------------------------------ Accounting August 31, 1995
(Andrew R. Lessin) Officer
*By /s/ JAMES W. GUEDRY
-------------------------------------- August 31, 1995
(James W. Guedry, Attorney-in-Fact)
</TABLE>
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, International
Paper Capital Trust 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 the City of Purchase, State of New York, on the 31st day of
August 1995.
INTERNATIONAL PAPER CAPITAL TRUST
By /s/ CHARLES GREENBERG
-----------------------------------
Charles Greenberg
TRUSTEE
By /s/ JOHN R. JEPSEN
-----------------------------------
John R. Jepsen
TRUSTEE
By /s/ SYVERT E. NERHEIM
-----------------------------------
Syvert E. Nerheim
TRUSTEE
II-8
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER NUMBER
- -------- ------
<C> <S> <C>
4.1 Certificate of Trust of International
Paper Capital Trust....................
4.2 Amended and Restated Declaration of
Trust of International Paper Capital
Trust, dated as of July 13, 1995 among
International Paper Company, as
Sponsor, The Bank of New York, as
Property Trustee, The Bank of New York
(Delaware), as Delaware Trustee and
Charles Greenberg, John R. Jepsen and
Syvert E. Nerheim, as Trustees.........
4.3 Indenture for the 5 1/4% Convertible
Junior Subordinated Debentures, dated
as of July 1, 1995 among International
Paper Company and The Bank of New York,
as Trustee.............................
4.4 Form of 5 1/4% Convertible Preferred
Securities (included in Exhibit 4.2
above).................................
4.5 Form of 5 1/4% Convertible Junior
Subordinated Debentures (included in
Exhibit 4.3 above).....................
4.6 International Paper Company Preferred
Securities Guarantee, dated as of July
20, 1995, between International Paper
Company, as Guarantor, and The Bank of
New York, as Preferred Guarantee
Trustee................................
5.1 Opinion of Skadden, Arps, Slate, Meagher
& Flom as to the legality of the
Convertible Preferred Securities,
Convertible Junior Subordinated
Debentures and Preferred Guarantee
being registered hereby*...............
5.2 Opinion of James W. Guedry, Associate
General Counsel of International Paper,
as to the legality of the International
Paper Common Stock being registered
hereby*................................
8.1 Opinion of Skadden, Arps, Slate, Meagher
& Flom as to certain tax matters*......
10.1 Registration Rights Agreement, dated
July 20, 1995, between International
Paper Capital Trust and CS First Boston
Corporation, as Representative of the
Several Initial Purchasers.............
23.1 Consent of independent public
accountants............................
23.2 Consent of Skadden, Arps, Slate, Meagher
& Flom is contained in the opinions of
counsel filed as Exhibits 5.1 and
8.1*...................................
23.3 Consent of James W. Guedry, Associate
General Counsel of International Paper,
is contained in the opinion filed as
Exhibit 5.2*...........................
24.1 Powers of Attorney......................
25.1 Form T-1 Statement of Eligibility under
the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as
Trustee under the 5 1/4% Convertible
Junior Subordinated Debentures
Indenture..............................
25.2 Form T-1 Statement of Eligibility under
the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as
Trustee under the Amended and Restated
Declaration of Trust...................
25.3 Form T-1 Statement of Eligibility under
the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as
Preferred Guarantee Trustee under the
Preferred Securities Guarantee.........
<FN>
- ------------------------
* To be filed by Amendment.
</TABLE>
<PAGE>
CERTIFICATE OF TRUST
The undersigned, the trustees of International Paper Capital Trust
desiring to form a business trust pursuant to Delaware Business Trust Act, 12
DEL. C. Section 3810 hereby certify as follows:
1. The name of the business trust being formed hereby (the "Trust")
is International Paper Capital Trust.
2. The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is
as follows: The Bank of New York (Delaware), White Clay Center,
Route 273, Newark, Delaware 19711
Dated: July 12, 1995 Charles Greenberg,
as Trustee
/s/ Charles Greenberg
----------------------------
John R. Jepsen,
as Trustee
/s/ John R. Jepsen
----------------------------
Syvert E. Nerheim,
as Trustee
/s/ Syvert E. Nerheim
----------------------------
The Bank of New York (Delaware),
as Delaware Trustee
By: /s/ Donald J. Wrobel
----------------------
Name: Donald J. Wrobel
Title: Executive Vice President
<PAGE>
--------------------------------
AMENDED AND RESTATED DECLARATION
OF TRUST
INTERNATIONAL PAPER CAPITAL TRUST
Dated as of July 13, 1995
--------------------------------
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
INTERNATIONAL PAPER CAPITAL TRUST
JULY 13, 1995
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of July 13, 1995, by the undersigned trustees (together with all
other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"),
International Paper Company, a New York corporation, as trust sponsor (the
"Sponsor"), and by the holders, from time to time, of undivided beneficial
interests in the Trust issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established a trust (the
"Trust") under the Delaware Business Trust Act pursuant to a Declaration of
Trust dated as of July 12, 1995, (the "Original Declaration") and a Certificate
of Trust filed with the Secretary of State of Delaware on July 12, 1995, 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;
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 Original 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 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.
<PAGE>
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;
(d) all references in this Declaration to Articles and Sections and
Exhibits are to Articles and Sections of 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 Registrar, Paying Agent, Conversion Agent or co-
registrar.
"APPOINTMENT EVENT" means an event defined in the terms of the
Preferred Securities, as set forth in Annex I, which entitles the Holders of a
Majority in liquidation preference of the Preferred Securities to appoint a
Special Regular Trustee.
"AUTHORIZED OFFICER" of a Person means any Person that is authorized
to bind such Person.
2
<PAGE>
"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 Depositary as described in Section 9.4.
"BUSINESS DAY" means any day other than a day on which banking
institutions in New York, New York and in London, England are authorized or
required by 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.
"CERTIFICATE" means a certificate in global or definitive form
representing a Common Security or a Preferred Security.
"CLOSING DATE" means July 20, 1995.
"CODE" means the Internal Revenue Code of 1986 as amended.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON SECURITIES" has the meaning specified in Section 7.1(a).
"COMMON SECURITIES GUARANTEE" means the guarantee agreement to be
dated as of July 20, 1995, of the Sponsor in respect of the Common Securities.
"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 the Sponsor in its capacity as issuer of the
Debentures.
"DEBENTURE TRUSTEE" means The Bank of New York, a New York banking
corporation, 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 to be
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held by the Property Trustee, a specimen certificate for such series of
Debentures being Exhibit B.
"DELAWARE TRUSTEE" has the meaning set forth in Section 5.2.
"DEFINITIVE PREFERRED SECURITIES" means the Regulation S Definitive
Preferred Security, the Restricted Definitive Preferred Security and any other
Preferred Securities in definitive form issued by the Trust.
"DISTRIBUTION" means a distribution payable to Holders of Securities
in accordance with Section 6.1.
"DEPOSITARY" means The Depository Trust Company, the initial Clearing
Agency.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"EXCHANGED PREFERRED SECURITIES" means any Preferred Security issued
in connection with a sale pursuant to an effective Shelf Registration Statement
and not bearing any Restricted Securities Legend.
"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.
"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) any Trustee; (b) any Affiliate of any
Trustee; (c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or (d) any employee or
agent of the Trust or its Affiliates.
"INDENTURE" means the Indenture dated as of July 1, 1995, between the
Debenture Issuer and The Bank of New York, as trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued.
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"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.
"LEGAL ACTION" has the meaning set forth in Section 3.6(g).
"MINISTERIAL ACTION" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided in the terms of the Preferred Securities and 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.
"OFFERING CIRCULAR" means the confidential offering circular, dated as
of July 13, 1995, relating to the issuance by the Trust of Preferred 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 Declaration shall include:
(a) a statement that each officer signing the 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
Certificate;
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(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.
"PARTICIPANTS" has the meaning set forth in Section 7.3(b).
"PAYING AGENT" has the meaning specified in Section 3.8(h).
"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.
"PREFERRED SECURITIES GUARANTEE" means the guarantee agreement to be
dated as of July 20, 1995, of the Sponsor in respect of the Preferred
Securities.
"PREFERRED SECURITIES" has the meaning specified in Section 7.1(a).
"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 Depositary, or on the books of a
Person maintaining an account with such Depositary (directly as a Participant or
as an indirect participant, in each case in accordance with the rules of such
Depositary).
"PROPERTY TRUSTEE" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"PROPERTY TRUSTEE ACCOUNT" has the meaning set forth in Section
3.8(c).
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"PURCHASE AGREEMENT" shall have the meaning set forth in Section
7.3(a).
"QUORUM" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated July 20, 1995, the Sponsor, the Trust, and the Initial
Purchasers named in the Purchase Agreement.
"REGULAR TRUSTEE" means any Trustee other than the Property Trustee
and the Delaware Trustee.
"REGULATION S DEFINITIVE PREFERRED SECURITY" has the meaning set forth
in Section 7.3(c).
"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.
"RESPONSIBLE OFFICER" means, with respect to the Property Trustee, any
vice-president, any assistant vice-president, the treasurer, any assistant
treasurer, any trust officer or assistant trust officer or any other officer in
the Corporate Trust Department of the Property 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.
"RESTRICTED DEFINITIVE PREFERRED SECURITY" has the meaning set forth
in Section 7.3(c).
"RESTRICTED PERIOD" means the one-year period following the last issue
date for the Preferred Securities (including Preferred Securities issued to
cover Overallotments and Common Securities issued in connection with related
capital contributions). The Sponsor shall inform the Trustee as to the
termination of the restricted period and the Trustee may rely conclusively
thereon.
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"RESTRICTED PREFERRED SECURITIES" shall include the Regulation S
Definitive Preferred Securities, the Restricted Definitive Preferred Securities
and the Rule 144A Global Preferred Securities (as defined herein).
"SECURITIES" means the Common Securities and the Preferred Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES CUSTODIAN" means the custodian with respect to the Rule
144A Global Preferred Security and any other Preferred Security in global form.
"SHELF REGISTRATION STATEMENT" has the meaning specified in Section
14.1.
"66-2/3% IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided in the terms of the Preferred Securities and by the Trust Indenture
Act, Holders of outstanding Securities voting together as a single class or, as
the context may require, Holders of Preferred Securities or Holder(s) of
outstanding Common Securities voting separately as a class, representing at
least 66 2/3% 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.
"SPECIAL REGULAR TRUSTEE" means a Regular Trustee appointed by the
Holders of a Majority in liquidation preference of the Preferred Securities in
accordance with Section 5.6(a)(ii)(B).
"SPONSOR" means International Paper Company, a New York corporation,
or any successor entity in a merger, consolidation or amalgamation, in its
capacity as sponsor of the Trust.
"SUPER MAJORITY" has the meaning set forth in Section 2.6(a)(ii).
"TAX EVENT" means the Regular Trustees shall have received an opinion
of nationally recognized independent tax counsel experienced in such matters to
the effect that, as a
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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 taxing authority thereof or therein or (b) any
amendment to or change in an interpretation or application of such laws or
regulations, there is more than an insubstantial risk that (i) the Trust would
be subject to United States federal income tax with respect to income accrued or
received on the Subordinated Debt Securities, (ii) interest payable to the Trust
on the Subordinated Debt Securities would not be deductible by the Debenture
Issuer for United States federal income tax purposes or (iii) the Trust would be
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
"10% IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holders 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, representing 10% 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.
"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).
"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.
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"UNRESTRICTED DEFINITIVE PREFERRED SECURITY" has the meaning set forth
in Section 9.2(c).
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, which are
incorporated by reference in and made part of this Indenture and shall, to the
extent applicable, be governed by such provisions.
(b) The Property 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 Section Section 310 to
317, inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The 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 Property Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Property 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 Property 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 for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Property Trustee. The Property Trustee shall preserve, in as current
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a form as is reasonably practicable, all information contained in Lists of
Holders given to it or which it receives in the capacity as Paying Agent (if
acting in such capacity) PROVIDED THAT the Property Trustee may destroy any List
of Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
Section Section 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 REPORTS BY THE PROPERTY TRUSTEE.
Within 60 days after May 15 of each year, the Property 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 Property Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO PROPERTY TRUSTEE.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property 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 Property 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 preference of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any
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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 the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount the holders of the Debentures (a "Super Majority") to be
waived under the Indenture, the Event of Default under the Declaration may
only be waived by the vote of the Holders of at least the proportion in
liquidation preference of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding.
Upon such waiver, any such default shall cease to exist, and any Event
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 the Declaration as provided below in this Section 2.6(b), the
Event of Default under the Declaration shall also not be waivable; or
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(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 the Declaration as provided below
in this Section 2(b), the Event of Default under the Declaration may only
be waived by the vote of the Holders of at least the proportion in
liquidation preference of the Preferred 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
Property 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 Property Trustee in accordance with the terms of
the Securities. 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
Property Trustee at the direction of the Holders of the Preferred Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration.
SECTION 2.7 EVENT OF DEFAULT; NOTICE.
(a) The Property Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults with respect to the
Securities known to the Property Trustee, 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
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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 or in the payment of any sinking
fund installment established for the Debentures, the Property Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers of the Property Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 501(1) and 501(2) of the Indenture;
or
(ii) any default as to which the Property Trustee shall have
received written notice.
ARTICLE III
ORGANIZATION
SECTION 3.1 NAME.
The Trust is named "International Paper Capital Trust," as such name
may be modified from time to time by the Regular Trustees following written
notice to the Holders of 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 International
Paper Company, Two Manhattanville Road, Purchase, New York 10577, Attention:
John R. Jepsen. On ten Business Days written notice to the Holders of
Securities, the Regular Trustees may designate another principal office.
SECTION 3.3 PURPOSE.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the Debentures,
and (b) except as
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otherwise limited herein, to engage in only those other activities necessary, 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.
SECTION 3.4 AUTHORITY.
Subject to the limitations provided in this Declaration and to the
specific duties of the Property 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
Property Trustee 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 Property Trustee Account or as otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The Holders
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,
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that there shall be no interests in the Trust other than the Securities, and the
issuance of Securities shall be limited to a one-time, simultaneous issuance of
both Preferred Securities and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute, if necessary, an offering circular (the "Offering
Circular") in preliminary and final form prepared by the Sponsor, in
relation to the offering and sale of Preferred Securities to qualified
institutional buyers in reliance on Rule 144A under the Securities Act and
outside the United States to non-U.S. persons in offshore transactions in
reliance on Regulation S under the Securities Act and to execute and file
with the Commission, at such time as determined by the Sponsor, a
registration statement filed on Form S-3 prepared by the Sponsor, including
any amendments thereto in relation to the Preferred Securities;
(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 Preferred Securities in any State or
foreign jurisdiction in which the Sponsor has determined to qualify or
register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the Sponsor,
to the Private Offerings, Resale and Trading through Automated Linkages
("PORTAL") Market and, at such time as determined by the Sponsor to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing or quotation of the Preferred Securities;
(iv) to execute and deliver letters, documents, or instruments
with The Depository Trust Company relating the Preferred Securities;
(v) execute and file with the Commission, at such time as
determined by the Sponsor, 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
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the Exchange Act; and
(vi) execute and enter into the Purchase Agreement, Registration
Rights Agreement and other related agreements providing for the sale of the
Preferred Securities;
(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 Property Trustee for the benefit of the Holders of the
Preferred Securities and the Holders or Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Tax Event; PROVIDED THAT the Regular Trustees
shall consult with the Sponsor and the Property Trustee before taking or
refraining from taking any Ministerial Action in relation to a Tax 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, 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;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property 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;
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(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 Property Trustee, which certificate may be executed
by any Regular Trustee;
(k) to incur expenses that are necessary 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 (i) to defer
payments of interest on the Debentures by extending the interest payment period
under the Indenture or (ii) to extend the scheduled maturity date on the
Debentures;
(n) 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 or incidental to the foregoing;
(o) 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;
(p) 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 as set out
in this Section 3.6, 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;
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(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 does not adversely affect the interests of Holders;
and
(q) 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.
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 Property Trustee set forth in Section 3.8.
SECTION 3.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES.
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall not, engage in any activity other than as required or authorized
by this Declaration. In particular, the Trust shall not and the Trustees
(including the Property 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;
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(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness 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) (A) direct the time, method and place of exercising any
trust or power conferred upon the Debenture Trustee with respect to the
Debentures, (B) waive any past default that is waivable under Section 513
of 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 or partnership.
SECTION 3.8 POWERS AND DUTIES OF THE PROPERTY TRUSTEE.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Property
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Property Trustee in accordance with in 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 Property Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Property Trustee does not also act as Delaware Trustee).
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(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of the
Securities and, upon the receipt of payments of funds made in respect of
the Debentures held by the Property Trustee, deposit such funds into the
Property Trustee Account and make payments to the Holders of the Preferred
Securities and Holders of the Common Securities from the Property Trustee
Account in accordance with Section 6.1. Funds in the Property Trustee
Account shall be held uninvested until disbursed in accordance with this
Declaration.
(ii) engage in such ministerial activities as so directed and as
shall be necessary or appropriate to effect the redemption of the Preferred
Securities and the Common Securities to the extent the Debentures are
redeemed or mature; and
(iii) upon notice of distribution issued by the Regular Trustees
in accordance with the terms of the Securities, engage in such ministerial
activities as so directed as shall be necessary or appropriate to effect
the distribution of 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 Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of the Securities.
(e) The Property Trustee shall take any Legal Action which arises out
of or in connection with an Event of Default or the Property Trustee's duties
and obligations under this Declaration or the Trust Indenture Act.
(f) The Property Trustee shall not resign as a Trustee unless either:
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(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 Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Property 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 occurs and is continuing, the Property
Trustee shall, for the benefit of Holders of the Securities, enforce its rights
as holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities.
(h) The Property Trustee will act as Paying Agent and Registrar in
both London and New York (each, a "Paying Agent") to pay Distributions,
redemption payments or liquidation payments on behalf of the Trust with respect
to all securities and any such Paying Agent shall comply with Section 317(b) of
the Trust Indenture Act. Any Paying Agent may be removed by the Property
Trustee at any time and a successor Paying Agent or additional Paying Agents may
be appointed at any time by the Property Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Property 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 Property 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 PROPERTY TRUSTEE.
(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
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this Declaration and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.6), the Property 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 Property 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 Property Trustee
shall be determined solely by the express provisions of this
Declaration and the Property 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 Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property 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 Property 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 Property Trustee, the Property Trustee shall be
under a duty to examine the same to determine whether or not they
conform to the requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a
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Responsible Officer of the Property Trustee, unless it shall be proved that
the Property Trustee was negligent in ascertaining the pertinent facts;
(iii) the Property 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 preference of the Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred upon the Property
Trustee under this Declaration;
(iv) no provision of this Declaration shall require the Property
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 adequate
indemnity against such risk or liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Property Trustee Account shall be to deal with such property in a similar
manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability afforded
to the Property Trustee under this Declaration and the Trust Indenture Act;
(vi) the Property 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 Property 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 Property Trustee need not be segregated from
other funds held by it except in relation to the Property Trustee Account
maintained by
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the Property Trustee pursuant to Section 3.8(c)(i) and except to the extent
otherwise required by law; and
(viii) the Property 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 Property Trustee be
liable for the default or misconduct of the Regular Trustees or the
Sponsor.
SECTION 3.10 CERTAIN RIGHTS OF PROPERTY TRUSTEE.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may 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 an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and rely upon an
Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Regular Trustees;
(iv) the Property 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 Property Trustee may consult with counsel or other
experts and the advice or opinion of
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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 Property 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 Property 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 Property Trustee adequate security and indemnity, which
would satisfy a reasonable person in the position of the Property Trustee,
against the costs, expenses (including attorneys' fees and expenses) 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
Property Trustee provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Property Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the rights
and powers vested in it by this Declaration;
(vii) the Property 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, security, bond, debenture, note, other evidence
of indebtedness or other paper or document, but the Property Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Property 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 Property 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;
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(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Property 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 Property 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 Property
Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder the Property 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 Property 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 acting in
accordance with such instructions; and
(xi) except as otherwise expressly provided by this Declaration,
the Property 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 Property 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 Property 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 Property Trustee
shall be construed to be a duty.
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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 Regular Trustees or the Property Trustee 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, any 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 and the Securities 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 exist until October 28, 2058.
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
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entirety to any corporation or other entity or person, except as described in
Section 3.15(b) and (c).
(b) The Trust may, with the consent of a majority of the Regular
Trustees and without the consent of the Holders of the Securities, the Delaware
Trustee or the Property Trustee, consolidate, amalgamate, merge with or into, or
be replaced by a trust organized as such under the laws of any State or the
District of Columbia; PROVIDED THAT:
(i) if the Trust is not the surviving entity, the successor
entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Preferred Securities (the
"Successor Securities") as long as the Successor Securities rank,
with respect to participation in the profits and distributions or
in the assets of the Successor Entity at least as high as the
Preferred Securities rank with respect to participation in the
profits and dividends or in the assets of the Trust;
(ii) the Debenture Issuer expressly acknowledges such Successor
Entity as the Holder of the Debentures;
(iii) the Preferred 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 any other
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;
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(v) such merger, consolidation, amalgamation or replacement does
not adversely affect the powers, preferences and other special rights of
the Holders of the Preferred Securities (including any Successor
Securities) in any material respect;
(vi) such Successor Entity has a purpose substantially 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 (reasonably acceptable to the Property Trustee) to the
Trust experienced in such matters to the effect that:
(A) the Successor Entity will be treated as a grantor trust
for United States federal income tax purposes;
(B) following such merger, consolidation, amalgamation or
replacement, neither the Sponsor nor the Successor Entity will be
required to register as an Investment Company; and
(C) such merger, consolidation, amalgamation or replacement
will not adversely affect the limited liability of the Holders of the
Securities (including any Successor Securities); and
(viii) the Sponsor provides a guarantee to the Holders of the
Successor Securities with respect to the Successor Entity having
substantially the same terms as the Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Common 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.
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ARTICLE IV
SPONSOR
SECTION 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES.
On the Closing Date the Sponsor will purchase all the Common
Securities issued by the Trust, in an aggregate liquidation amount equal to 3%
of the total capital of the Trust, at the same time as the Preferred Securities
are sold.
SECTION 4.2 RESPONSIBILITIES OF THE SPONSOR.
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare the Offering Circular and to prepare for filing by the
Trust with the Commission the Registration Statement, including any amendments
thereto;
(b) to determine the States and foreign jurisdictions in which to
take appropriate action to qualify or register for sale all or part of the
Preferred Securities 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 and foreign jurisdictions;
(c) to prepare for filing by the Trust an application to PORTAL and
to the New York Stock Exchange or any other national stock exchange or the
Nasdaq National Market for listing or quotation of the Preferred Securities;
(d) to prepare for filing by the Trust with the Commission 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 Purchase Agreement, Registration
Rights Agreement and other related agreements providing for the sale of the
Preferred Securities.
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ARTICLE V
TRUSTEES
SECTION 5.1 NUMBER OF TRUSTEES.
The number of Trustees shall initially be five (5), 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:
(i) and except as provided in Sections 5.1(b)(ii) and
5.6(a)(ii)(B) with respect to the Special Regular Trustee, 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; and
(ii) the number of Trustees shall be increased automatically by
one (1) if an Appointment Event has occurred and is continuing and the
Holders of a Majority in liquidation preference of the Preferred Securities
appoint a Special Regular Trustee in accordance with Section 5.6(a)(ii),
PROVIDED THAT, if the Property Trustee does not also act as Delaware Trustee,
the number of Trustees shall be at least five (5).
SECTION 5.2 DELAWARE TRUSTEE.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be 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 Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
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SECTION 5.3 PROPERTY TRUSTEE; ELIGIBILITY.
(a) There shall at all times be one Trustee which shall act as
Property Trustee 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 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 50 million U.S. dollars
($50,000,000), 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 Property Trustee shall cease to be eligible to
so act under Section 5.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property 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 shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
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SECTION 5.4 QUALIFICATIONS OF REGULAR TRUSTEES AND DELAWARE TRUSTEE
GENERALLY.
Each Regular Trustee and the Delaware Trustee (unless the Property
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 INITIAL TRUSTEES.
The initial Regular Trustees shall be:
Charles Greenberg
c/o International Paper Company
Two Manhattanville Road
Purchase, New York 10577
John R. Jepsen
c/o International Paper Company
Two Manhattanville Road
Purchase, New York 10577
Syvert E. Nerheim
c/o International Paper Company
Two Manhattanville Road
Purchase, New York 10577
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
ATTENTION: Corporate Trust Trustee Administration
The initial Property Trustee shall be:
The Bank of New York
101 Barclay Street
New York, New York 10286
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:
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(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities:
(A) other than in respect to a Special Regular Trustee, 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; and
(B) if an Appointment Event has occurred and is continuing,
one (1) additional Regular Trustee (the "Special Regular
Trustee") may be appointed by vote of the Holders of a Majority
in liquidation preference of the Preferred Securities, voting as
a class at a meeting of the Holders of the Preferred Securities,
and such Special Regular Trustee may only be removed (otherwise
than by the operation of Section 5.6(c)), by vote of the Holders
of a Majority in liquidation preference of the Preferred
Securities voting as a class at a meeting of the Holders of the
Preferred Securities.
(b) The Trustee that acts as Property Trustee shall not be removed in
accordance with Section 5.6(a) until a Successor Property Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Property Trustee and delivered to the Regular Trustees and the
Sponsor; and
(c) The Trustee that acts as Delaware Trustee shall not be removed in
accordance with this 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.
(d) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation,
PROVIDED THAT a Special Regular Trustee shall only hold office while an
Appointment Event is continuing and shall cease to hold office
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immediately after the Appointment Event pursuant to which the Special Regular
Trustee was appointed and all other Appointment Events cease to be continuing.
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 Property
Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Property Trustee and delivered to the Trust, the
Sponsor and the resigning Property Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities;
(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; and
(iii) no such resignation of a Special Regular Trustee shall be
effective until the 60th day following delivery of the instrument of
resignation of the Special Regular Trustee to the Sponsor and the Trust or
such later date specified in such instrument during which period the
Holders of the Preferred Securities shall have the right to appoint a
successor Special Regular Trustee as provided in this Section 5.6; and
(e) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be, if the Property Trustee or the Delaware Trustee
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delivers an instrument of resignation in accordance with this Section 5.6.
(f) If no Successor Property 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 Property Trustee or Delaware Trustee, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property 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 Property 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 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 in the number of 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.
SECTION 5.9 MEETINGS.
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
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(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 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 without a meeting by the unanimous
written consent of the Regular Trustees.
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.
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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 principal on the Debentures held by the
Property Trustee (the amount of any such payment being a "Payment Amount"), the
Property 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 convertible preferred securities, representing undivided beneficial interests
in the assets of the Trust (the "Preferred Securities"), having such terms (the
"Terms") as are set forth in Annex I and one class of convertible common
securities, representing undivided beneficial interests in the assets of the
Trust (the "Common Securities"), having such terms as are set forth in Annex I.
The Trust shall have no securities or other interests in the assets of the Trust
other than the Preferred Securities and the Common Securities. The Trust shall
issue no Securities in bearer form.
(b) 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.
(c) 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,
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subject to Section 10.1 with respect to the Common Securities.
(d) 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 EXECUTION AND AUTHENTICATION.
(a) The Securities shall be signed on behalf of the Trust by one
Regular Trustee. In case any Regular Trustee of the Trust who shall have signed
any of the Securities shall cease to be such Regular Trustee before the
Securities so signed shall be delivered by the Trust, such Securities
nevertheless may be delivered as though the person who signed such Securities
had not ceased to be such Regular Trustee; and any Securities may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Security, 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.
(b) One Regular Trustee shall sign the Preferred Securities for the
Trust by manual or facsimile signature. Unless otherwise determined by the
Trust, such signature shall, in the case of Common Securities, be a manual
signature.
A Preferred Security shall not be valid until authenticated by the
manual signature of an authorized officer of the Property Trustee. The
signature shall be conclusive evidence that the Preferred Security has been
authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular Trustee, the
Property Trustee shall authenticate the Preferred Securities for original issue
in paragraph 5 of the Securities. The aggregate number of Preferred Securities
outstanding at any time shall not exceed the number set forth in the Terms in
Annex A hereto except as provided in Section 7.7.
The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Preferred
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Securities. An authenticating agent may authenticate Preferred Securities
whenever the Property Trustee may do so. Each reference in this Declaration to
authentication by the Property Trustee includes authentication by such agent.
An authenticating agent has the same rights as the Property Trustee to deal with
the Company or an Affiliate.
SECTION 7.3 FORM AND DATING.
The Preferred Securities and the Property Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 and A-2 and the
Common Securities shall be substantially in the form of Exhibit A-3, each of
which is hereby incorporated in and expressly made a part of this Declaration.
Certificates may 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. The Securities may have letters, numbers, notations
or other marks of identification or designation and such legends or endorsements
required by law, stock exchange rule, agreements to which the Trust is subject,
if any, or usage (provided that any such notation, legend or endorsement is in a
form acceptable to the Trust). The Trust at the direction of the Sponsor shall
furnish any such legend not contained in Exhibit A-1 or Exhibit A-2 to the
Property Trustee in writing. Each Preferred Security shall be dated the date of
its authentication. The terms and provisions of the Securities set forth in
Annex I and the forms of Securities set forth in Exhibits A-1, A-2 and A-3 are
part of the terms of this Declaration and to the extent applicable, the Property
Trustee and the Sponsor, by their execution and delivery of this Declaration,
expressly agree to such terms and provisions and to be bound thereby.
(a) GLOBAL SECURITIES. The Preferred Securities are being offered
and sold by the Trust pursuant to a Purchase Agreement relating to the Preferred
Securities, dated July 13, 1995, among the Trust, the Sponsor and the Initial
Purchasers named therein (the "Purchase Agreement").
Securities offered and sold to Qualified Institutional Buyers ("QIBs")
in reliance on Rule 144A under the Securities Act ("Rule 144A") as provided in
the Purchase Agreement, shall be issued in the form of one or more, permanent
global Securities in definitive, fully registered form without distribution
coupons with the appropriate
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global legends and Restricted Securities Legend set forth in Exhibit A-1 hereto
(each, a "Rule 144A Global Preferred Security"), which shall be deposited on
behalf of the purchasers of the Preferred Securities represented thereby with
the Property Trustee, at its New York office, as custodian for the Depositary,
and registered in the name of the Depositary of a nominee of the Depositary,
duly executed by the Trust and authenticated by the Property Trustee as
hereinafter provided. The number of Preferred Securities represented by the
Rule 144A Global Preferred Security may from time to time be increased or
decreased by adjustments made on the records of the Property Trustee and the
Depositary or its nominee as hereinafter provided.
(b) BOOK-ENTRY PROVISIONS. This Section 7.3(b) shall apply only to
the Rule 144A Global Preferred Securities and such other Preferred Securities in
global form as may be authorized by the Trust to be deposited with or on behalf
of the Depositary.
The Trust shall execute and the Property Trustee shall, in accordance
with this Section 7.3, authenticate and deliver initially one or more Rule 144A
Global Preferred Securities that (a) shall be registered in the name of Cede &
Co. or other nominee of such Depositary and (b) shall be delivered by the
Trustee to such Depositary or pursuant to such Depositary's instructions or held
by the Trustee as custodian for the Depositary.
Members of, or participants in, the Depositary ("Participants") shall
have no rights under this Declaration with respect to any Rule 144A Global
Preferred Security held on their behalf by the Depositary or by the Property
Trustee as the custodian of the Depositary or under such Rule 144A Global
Preferred Security, and the Depositary may be treated by the Trust, the Property
Trustee and any agent of the Trust or the Property Trustee as the absolute owner
of such Rule 144A Global Preferred Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Trust, the
Property Trustee or any agent of the Trust or the Property Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Participants, the
operation of customary practices of such Depositary governing the exercise of
the rights of a holder of a beneficial interest in any Rule 144A Global
Preferred Security.
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(c) CERTIFICATED SECURITIES. Except as provided in Section 7.10,
owners of beneficial interests in the Rule 144A Global Preferred Security will
not be entitled to receive physical delivery of certificated Preferred
Securities. Preferred Securities offered and sold in reliance on Regulation S
under the Securities Act ("Regulation S"), as provided in the Purchase
Agreement, shall be issued initially in the form of individual certificates in
definitive, fully registered form without distribution coupons and shall bear
the Restricted Securities Legend set forth in Exhibit A-1 hereto (the
"Regulation S Definitive Preferred Securities"). Purchasers of Securities who
are QIBs acting on behalf of institutional "accredited investors" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and did not purchase
Preferred Securities in reliance on Regulation S under the Securities Act will
receive Preferred Securities in the form of individual certificates in
definitive, fully registered form without distribution coupons and with the
Restricted Securities Legend set forth in Exhibit A-1 hereto ("Restricted
Definitive Preferred Securities"); provided, however, that upon transfer of such
Restricted Definitive Preferred Securities to a QIB, such Restricted Definitive
Preferred Securities will, unless the Rule 144A Global Preferred Security has
previously been exchanged, be exchanged for an interest in a Rule 144A Global
Security pursuant to the provisions at Section 9.2. Restricted Definitive
Preferred Securities will bear the Restricted Securities Legend set forth on
Exhibit A-1 unless removed in accordance with this Section 7.3 or Section 9.2.
SECTION 7.4 REGISTRAR, PAYING AGENT AND CONVERSION AGENT.
The Trust shall maintain in the Borough of Manhattan, City of New
York, State of New York or in the city of London, England, as the case may be,
(i) an office or agency where Preferred Securities may be presented for
registration of transfer or from exchange ("Registrar"), (ii) an office or
agency where Preferred Securities may be presented for payment ("Paying Agent")
and an office or agency where Securities may be presented for conversion
("Conversion Agent"). The Registrar shall keep a register of the Preferred
Securities and of their transfer and exchange. The Trust may appoint the
Registrar, the Paying Agent and the Conversion Agent and may appoint one or more
co-registrars, one or more additional paying agents and one or more additional
conversion agents in such other locations
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as it shall determine. The term "Paying Agent" includes any additional paying
agent and the term "Conversion Agent" includes any additional conversion agent.
The Trust may change any Paying Agent, Registrar, co-registrar or Conversion
Agent without prior notice to any Holder. The Trust shall notify the property
Trustee of the name and address of any Agent not a party to this Declaration.
If the Trust fails to appoint or maintain another entity as Registrar, Paying
Agent or Conversion Agent, the Property Trustee shall act as such. The Trust or
any of its Affiliates may act as Paying Agent, Registrar, or Conversion Agent.
The Trust shall act as Paying Agent, Registrar, co-registrar, and Conversion
Agent for the Common Securities.
The Trust initially appoints the Property Trustee as Registrar, Paying
Agent, and Conversion Agent for the Preferred Securities.
SECTION 7.5 PAYING AGENT TO HOLD MONEY IN TRUST.
The Trust shall require each Paying Agent other than the Property
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Property Trustee all money held by the Paying Agent
for the payment of principal or distribution on the Securities, and will notify
the Property Trustee if there are insufficient funds. While any such
insufficiency continues, the Property Trustee may require a Paying Agent to pay
all money held by it to the Property Trustee. The Trust at any time may require
a Paying Agent to pay all money held by it to the Property Trustee and to
account for any money disbursed by it. Upon payment over to the Property
Trustee, the Paying Agent (if other than the Trust or an Affiliate of the Trust)
shall have no further liability for the money. If the Trust or the Sponsor or
an Affiliate of the Trust or the Sponsor acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent.
SECTION 7.6 [reserved]
SECTION 7.7 REPLACEMENT SECURITIES.
If the holder of a Security claims that the Security has been lost,
destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or in the case of the Preferred Securities to the
Property
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Trustee, the Trust shall issue and the Property Trustee shall authenticate a
replacement Security if the Property Trustee's and the Trust's requirements, as
the case may be, are met. If required by the Property Trustee or the Trust, an
indemnity bond must be sufficient in the judgment of both to protect the
Trustees, the Property Trustee, the Sponsor or any authenticating agent from any
loss which any of them may suffer if a Security is replaced. The Company may
charge for its expenses in replacing a Security.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be purchased by the
Sponsor pursuant to Article III hereof, the Sponsor in its discretion may,
instead of issuing a new Security, pay or purchase such Security, as the case
may be.
Every replacement Security is an additional obligation of the Trust.
SECTION 7.8 OUTSTANDING PREFERRED SECURITIES.
The Preferred Securities outstanding at any time are all the Preferred
Securities authenticated by the Property Trustee except for those canceled by
it, those delivered to it for cancellation, and those described in this Section
as not outstanding.
If a Preferred Security is replaced, paid or purchased pursuant to
Section 7.7 hereof, it ceases to be outstanding unless the Property Trustee
receives proof satisfactory to it that the replaced, paid or purchased Preferred
Security is held by a bona fide purchaser.
If Preferred Securities are considered paid in accordance with the
terms of this Declaration, they cease to be outstanding and interest on them
ceases to accrue.
A Preferred Security does not cease to be outstanding because one of
the Trust, the Sponsor or an Affiliate of the Sponsor holds the Security.
SECTION 7.9 PREFERRED SECURITIES IN TREASURY.
In determining whether the Holders of the required amount of
Securities have concurred in any direction, waiver or consent, Preferred
Securities owned by the Trust, the
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Sponsor or an Affiliate of the Sponsor, as the case may be, shall be disregarded
and deemed not to be outstanding, except that for the purposes of determining
whether the Property Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Property Trustee knows
are so owned shall be so disregarded.
SECTION 7.10 TEMPORARY SECURITIES.
(a) Until definitive Securities are ready for delivery, the Trust may
prepare and, in the case of the Preferred Securities, the Property Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Trust
considers appropriate for temporary Securities. Without unreasonable delay, the
Trust shall prepare and, in the case of the Preferred Securities, the Property
Trustee shall authenticate definitive Securities in exchange for temporary
Securities.
(b) A Global Preferred Security deposited with the Depositary or with
the Property Trustee as custodian for the Depositary pursuant to Section 7.3
shall be transferred to the beneficial owners thereof in the form of
certificated Preferred Securities only if such transfer complies with Section
9.2 and (i) the Depositary notifies the Company that it is unwilling or unable
to continue as Depositary for such Global Preferred Security or if at any time
such Depositary ceases to be a "clearing agency" registered under the Exchange
Act and a successor depositary is not appointed by the Sponsor within 90 days of
such notice, or (ii) an Event of Default has occurred and is continuing.
(c) Any Global Preferred Security that is transferable to the
beneficial owners thereof in the form of certificated Preferred Securities
pursuant to this Section 7.10 shall be surrendered by the Depositary to the
Property Trustee located in the Borough of Manhattan, The City of New York, to
be so transferred, in whole or from time to time in part, without charge, and
the Property Trustee shall authenticate and deliver, upon such transfer of each
portion of such Global Preferred Security, an equal aggregate liquidation amount
of Securities of authorized denominations in the form of certificated
Securities. Any portion of a Global Preferred Security transferred pursuant to
this Section shall be any registered in such names as the Depositary shall
direct. Any Preferred Security in the form
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of certificated Preferred Securities delivered in exchange for an interest in
the Restricted Global Preferred Security shall, except as otherwise provided by
Sections 7.3 and 9.1 bear the Restricted Securities Legend set forth in Exhibit
A hereto.
(d) Subject to the provisions of Section 7.10(c), the registered
holder of a Global Preferred Security may grant proxies and otherwise authorize
any person, including Participants and persons that may hold interests through
Participants, to take any action which a holder is entitled to take under this
Declaration or the Securities.
(e) In the event of the occurrence of either of the events specified
in Section 7.10(b), the Trust will promptly make available to the Property
Trustee a reasonable supply of certificated Securities in definite, fully
registered form without interest coupons.
SECTION 7.11 CANCELLATION.
The Trust at any time may deliver Preferred Securities to the Property
Trustee for cancellation. The Registrar, Paying Agent and Conversion Agent
shall forward to the Property Trustee any Preferred Securities surrendered to
them for registration of transfer, redemption, conversion, exchange or payment.
The Property Trustee shall promptly cancel all Preferred Securities, surrendered
for registration of transfer, redemption, conversion, exchange, payment,
replacement or cancellation and shall dispose of cancelled Preferred Securities
as the Trust directs. The Trust may not issue new Preferred Securities to
replace Preferred Securities that it has paid or that have been delivered to the
Property Trustee for cancellation or that any holder has converted.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 TERMINATION OF TRUST.
(a) The Trust shall terminate upon the earliest to occur of the
following:
(i) the bankruptcy of the Holder of the Common Securities or the
Sponsor;
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(ii) the filing of a certificate of dissolution or its equivalent
with respect to the Holder of the Common Securities or the Sponsor; the
filing of a certificate of cancellation with respect to the Trust or the
revocation of the charter of the Holder of the Common Securities or the
Sponsor and the expiration of 90 days after the date of revocation without
a reinstatement thereof;
(iii) the entry of a decree of judicial dissolution of the Holder
of the Common Securities, the Sponsor or the Trust;
(iv) all of 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;
(v) the occurrence and continuation of a Tax 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; or
(vi) the expiration of the term of the Trust on October 28, 2058.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER AND EXCHANGE
SECTION 9.1 GENERAL.
(a) Where Preferred Securities are presented to the Registrar or a
co-registrar with a request to register a transfer or to exchange them for an
equal number of Preferred Securities represented by different certificates, the
Registrar shall register the transfer or make the
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exchange if its requirements for such transactions are met. To permit
registrations of transfers and exchanges, the Trust shall issue and the Property
Trustee shall authenticate Preferred Securities at the Registrar's request.
(b) 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.
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.
(c) The Regular Trustees shall provide for the registration of
Securities and of transfers of Securities, 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 governmental charges that may be imposed in
relation to it. Upon surrender for registration of transfer of any Securities,
the Regular Trustees shall cause one or more new Securities to be issued in the
name of the designated transferee or transferees. Every Security 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 Security
surrendered for registration of transfer shall be canceled by the Regular
Trustees. A transferee of a Security shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Security. By acceptance of a Security, each
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transferee shall be deemed to have agreed to be bound by this Declaration.
(d) The Trust shall not be required (i) to issue, register the
transfer of, or exchange, Preferred Securities during a period beginning at the
opening of business 15 days before the day of any selection of Preferred
Securities for redemption set forth in the terms and ending at the close of
business on the day of selection, or (ii) to register the transfer or exchange
of any Preferred Security so selected for redemption in whole or in part, except
the unredeemed portion of any Preferred Security being redeemed in part.
SECTION 9.2 TRANSFER PROCEDURES AND RESTRICTIONS.
(a) GENERAL. Except in connection with a Shelf Registration
Statement contemplated by and in accordance with the terms of the Registration
Rights Agreement, if Preferred Securities are issued upon the transfer, exchange
or replacement of Preferred Securities bearing the Restricted Securities Legend
set forth in Exhibit A-1 hereto, or if a request is made to remove such
Restricted Securities Legend on Preferred Securities, the Preferred Securities
so issued shall bear the Restricted Securities Legend, or the Restricted
Securities Legend shall not be removed, as the case may be, unless there is
delivered to the Trust such satisfactory evidence, which may include an opinion
of counsel licensed to practice law in the State of New York, as may be
reasonably required by the Company, that neither the legend nor the restrictions
on transfer set forth therein are required to ensure that transfers thereof
comply with the provisions of Rule 144A, Rule 144 or Regulation S under the
Securities Act or, with respect to Restricted Securities, that such Securities
are not "restricted" within the meaning of Rule 144 under the Securities Act.
Upon provision of such satisfactory evidence, the Property Trustee, at the
written direction of the Trust, shall authenticate and deliver Preferred
Securities that do not bear the legend.
(b) TRANSFERS AFTER EFFECTIVENESS OF SHELF REGISTRATION STATEMENT.
After the effectiveness of a Shelf Registration Statement for any Preferred
Securities, all requirements pertaining to legends on such Preferred Security
will cease to apply, and beneficial interests in a Preferred Security in global
form without legends will be available to transferees of such Preferred
Securities upon
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exchange of the transferring holder's Restricted Definitive Preferred Security
or directions to transfer such Holder's beneficial interest in the Rule 144A
Global Preferred Security, as the case may be. After the effectiveness of the
Shelf Registration Statement, the Trust shall issue and the Property Trustee
shall authenticate a Preferred Security in global form without the Restricted
Securities Legend (the "Exchanged Global Preferred Security") to deposit with
the Depositary to evidence transfers of (i) beneficial interests from the Rule
144A Global Preferred Security, (ii) Restricted Definitive Preferred Securities,
and (iii) Unrestricted Definitive Preferred Securities.
(c) REGULATION S DEFINITIVE PREFERRED SECURITY TO UNRESTRICTED
DEFINITIVE PREFERRED SECURITY; TERMINATION OF RESTRICTED PERIOD. Following the
termination of the "restricted period" with respect to the issuance of the
Preferred Securities, Regulation S Definitive Preferred Securities may be
exchanged for an interest in a Preferred Security in definitive, fully
registered form without distribution coupons, but without the Restricted
Securities Legend (an "Unrestricted Definitive Preferred Security"), that is
free from any restriction on transfer (other than such as are solely
attributable to any holder's status). Unrestricted Definitive Preferred
Securities will bear a CUSIP number different from that of the Exchanged Global
Preferred Securities and transfers or exchanges from an Unrestricted Definitive
Preferred Security or Regulation S Definitive Preferred Security to an Exchanged
Preferred Security must be effected pursuant Section 9.2 (b).
(d) TRANSFER AND EXCHANGE OF DEFINITIVE PREFERRED SECURITIES. When
Definitive Preferred Securities are presented to the Registrar or co-Registrar
(x) to register the transfer of such Definitive Preferred Securities;
or
(y) to exchange such Definitive Preferred Securities for an equal
number of Definitive Preferred Securities of another number,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Preferred Securities surrendered for
transfer or exchange:
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(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Trust and the
Registrar or co-registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing; and
(ii) in the case of Definitive Preferred Securities that are
Restricted Definitive Preferred Securities, are being transferred or
exchanged pursuant to an effective registration statement under the
Securities Act or pursuant to clause (A) or (B) below, and are accompanied
by the following additional information and documents, as applicable:
(A) if such Restricted Preferred Securities are being
delivered to the Registrar by a Holder for registration in the
name of such Holder, without transfer, a certification from such
Holder to that effect (in the form set forth on the reverse of
the Preferred Security); or
(B) if such Restricted Preferred Securities are being
transferred pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S under the Securities
Act: (i) a certification to that effect (in the form set forth
on the reverse of the Preferred Security) and (ii) if the Trust
or Registrar so requests, evidence reasonably satisfactory to
them as to the compliance with the restrictions set forth in the
Restricted Securities Legend.
Definitive Preferred Securities that are transferred to QIBs in
accordance with Rule 144A under the Securities Act must take delivery of their
interests as the Preferred Securities in the form of a beneficial interest in
the Rule 144A Global Preferred Security in accordance with Section 9.2(e).
(e) RESTRICTIONS ON TRANSFER OF A DEFINITIVE PREFERRED SECURITY FOR A
BENEFICIAL INTEREST IN A GLOBAL PREFERRED SECURITY. A Definitive Preferred
Security may not be exchanged for a beneficial interest in a Global Preferred
Security except upon satisfaction of the requirements set forth below. Upon
receipt by the Property Trustee of a
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Definitive Preferred Security, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Property Trustee, together
with:
(i) if such Definitive Preferred Security is a Restricted
Preferred Security, certification, in the form set forth on the reverse of
the Preferred Security, that such Definitive Preferred Security is being
transferred to a QIB in accordance with Rule 144A under the Securities Act;
and
(ii) whether or not such Definitive Preferred Security is a
Restricted Preferred Security, written instructions directing the Property
Trustee to make, or to direct the Depositary to make, an adjustment on its
books and records with respect to such Global Preferred Security to reflect
an increase in the number of the Preferred Securities represented by the
Global Preferred Security,
then the Property Trustee shall cancel such Definitive Preferred Security and
cause, or direct the Depositary to cause, the aggregate number of Preferred
Securities represented by the Global Preferred Security to be increased
accordingly. If no Global Preferred Securities are then outstanding, the Trust
shall issue and the Property Trustee shall authenticate, upon written order of
any Regular Trustee, an appropriate number of Preferred Securities in global
form.
(f) TRANSFER AND EXCHANGE OF GLOBAL PREFERRED SECURITIES. The
transfer and exchange of Global Preferred Securities or beneficial interests
therein shall be effected through the Depositary, in accordance with this
Declaration (including applicable restrictions on transfer set forth herein, if
any) and the procedures of the Depositary therefor.
(g) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL PREFERRED SECURITY
FOR A DEFINITIVE PREFERRED SECURITY.
(i) Any person having a beneficial interest in a Global
Preferred Security that is being transferred or exchanged pursuant to a
effective registration statement under the Securities Act or pursuant to
clause (A) or (B) below may upon request, and if accompanied by the
information specified below,
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exchange such beneficial interest for a Definitive Preferred Security
representing the same number of Preferred Securities. Upon receipt by the
Property Trustee from the Depositary or its nominee on behalf of any Person
having a beneficial interest in a Global Preferred Security of written
instructions or such other form of instructions as is customary for the
Depositary or the person designated by the Depositary as having such a
beneficial interest in a Restricted Preferred Security and the following
additional information and documents (all of which may submitted by
facsimile):
(A) if such beneficial interest is being transferred to the
person designated by the Depositary as being the owner of a
beneficial interest in a Global Preferred Security, a
certification from such Person to that effect (in the form set
forth on the reverse of the Preferred Security); or
(B) if such beneficial interest is being transferred
pursuant to an exemption from registration in accordance with
Rule 144 or Regulation S under the Securities Act: (i) a
certification to that effect from the transferee or transferor
(in the form set forth on the reverse of the Preferred Security)
and (ii) if the Property Trustee or Registrar so requests,
evidence reasonably satisfactory to them as to the compliance
with the restrictions set forth in the legend set forth in
Section 9.2(j),
then the Property Trustee or the Securities Custodian, at the direction of
the Property Trustee, will cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Securities Custodian, the aggregate principal amount of the Global
Preferred Security to be reduced on its books and records and, following
such reduction, the Trust will execute and the Property Trustee will
authenticate and deliver to the transferee a Definitive Preferred Security.
(ii) Definitive Preferred Securities issued in exchange for a
beneficial interest in a Global
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Preferred Security pursuant to this Section 9.2(g) shall be registered in
such names and in such authorized denominations as the Depositary, pursuant
to instructions from its Participants or indirect participants or
otherwise, shall instruct the Property Trustee. The Property Trustee shall
deliver such Preferred Securities to the persons in whose names such
Preferred Securities are so registered in accordance with the instructions
of the Depositary.
Beneficial interests in the Rule 144A Global Security may not
be exchanged for a Definitive Preferred Security except a Regulation S
Definitive Preferred Security and except as provided in Section 9.2(i).
(h) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL PREFERRED
SECURITIES. Notwithstanding any other provisions of this Declaration (other
than the provisions set forth in subsection (i) of this Section 9.2), a Global
Preferred Security may not be transferred as a whole except by the Depositary to
a nominee of the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
Definitive Preferred Securities that are transferred to QIBs in
accordance with Rule 144A under the Securities Act must take delivery of their
interests as the Preferred Securities in the form of a beneficial interest in
the Rule 144A Global Preferred Security in accordance with Section 9.2(e).
(i) AUTHENTICATION OF DEFINITIVE PREFERRED SECURITIES. If at any
time:
(i) the Depositary notifies the Trust that the Depositary is
unwilling or unable to continue as Depositary for the Global Preferred
Securities and a successor Depositary for the Global Preferred Securities
is not appointed by the Trust at the direction of the Sponsor within 90
days after delivery of such notice; or
(ii) the Trust, in its sole discretion, notifies the Property
Trustee in writing that it elects to
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cause the issuance of Definitive Preferred Securities under this
Declaration,
then the Trust will execute, and the Property Trustee, upon receipt of a written
order of the Trust signed by One Regular Trustee requesting the authentication
and delivery of Definitive Preferred Securities to the Persons designated by the
Trust, will authenticate and deliver Definitive Preferred Securities, in an
aggregate principal amount equal to the principal amount of Global Preferred
Securities, in exchange for such Global Preferred Securities.
(j) LEGEND.
(i) Except as permitted by the following paragraph (ii), each
Preferred Security certificate evidencing the Global Preferred Securities
and the Definitive Preferred Securities (and all Preferred Securities
issued in exchange therefor or substitution thereof) shall bear a legend
(the "Restricted Securities Legend") in substantially the following form:
THIS SECURITY, ANY CONVERTIBLE JUNIOR SUBORDINATED DEBENTURE
ISSUED IN EXCHANGE FOR THIS SECURITY AND ANY COMMON STOCK (AND RELATED
RIGHTS) ISSUED ON CONVERSION THEREOF HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS
OF THE STATES OF THE UNITED STATES.
(ii) Upon any sale or transfer of a Restricted Preferred Security
(including any Restricted
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Preferred Security represented by a Global Preferred Security) pursuant to
Rule 144 under the Securities Act or an effective registration statement
under the Securities Act:
(A) in the case of any Restricted Preferred Security that
is a Definitive Preferred Security, the Registrar shall permit the
Holder thereof to exchange such Restricted Preferred Security for a
Definitive Preferred Security that does not bear the Restricted
Securities Legend and rescind any restriction on the transfer of such
Restricted Preferred Security; and
(B) in the case of any Restricted Preferred Security that
is represented by a Global Preferred Security, the Registrar shall
permit the Holder thereof to exchange such Restricted Preferred
Security (in connection with the sale of a Preferred Security pursuant
to the Registration Rights Agreement) for another Global Preferred
Security that does not bear the Restricted Securities Legend.
(k) CANCELLATION OR ADJUSTMENT OF GLOBAL PREFERRED SECURITY. At such
time as all beneficial interests in a Global Preferred Security have either been
exchanged for Definitive Preferred Securities to the extent permitted by the
Declaration or redeemed, repurchased or canceled in accordance with the terms of
this Declaration, such Global Preferred Security shall be returned to the
Depositary for cancellation or retained and canceled by the Property Trustee.
At any time prior to such cancellation, if any beneficial interest in a Global
Preferred Security is exchanged for Definitive Preferred Securities, Preferred
Securities represented by such Global Preferred Security shall be reduced and an
adjustment shall be made on the books and records of the Property Trustee (if it
is then the Securities Custodian for such Global Preferred Security) with
respect to such Global Preferred Security, by the Property Trustee or the
Securities Custodian, to reflect such reduction.
(l) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF PREFERRED
SECURITIES.
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(i) To permit registrations of transfers and exchanges, the
Trust shall execute and the Property Trustee shall authenticate Definitive
Preferred Securities and Global Preferred Securities at the Registrar's or
co-Registrar's request.
(ii) Registrations of transfers or exchanges will be effected
without charge, but only upon payment (with such indemnity as the Trust or
the Sponsor may require) in respect of any tax or other governmental charge
that may be imposed in relation to it.
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of (a) any Definitive Preferred
Security selected for redemption in whole or in part pursuant to Article 3,
except the unredeemed portion of any Definitive Preferred Security being
redeemed in part, or (b) any Preferred Security for a period beginning 15
Business Days before the mailing of a notice of an offer to repurchase or
redeem Preferred Securities or 15 Business Days before a quarterly
distribution date.
(iv) Prior to the due presentation for registrations of transfer
of any Preferred Security, the Trust, the Property Trustee, the Paying
Agent, the Registrar or any co-registrar may deem and treat the person in
whose name a Preferred Security is registered as the absolute owner of such
Preferred Security for the purpose of receiving Distributions on such
Preferred Security and for all other purposes whatsoever, and none of the
Trust, the Property Trustee, the Paying Agent, the Registrar or any co-
registrar shall be affected by notice to the contrary.
(v) All Preferred Securities issued upon any transfer or
exchange pursuant to the terms of this Declaration shall evidence the same
security and shall be entitled to the same benefits under this Declaration
as the Preferred Securities surrendered upon such transfer or exchange.
(m) NO OBLIGATION OF THE PROPERTY TRUSTEE.
(i) The Property Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Preferred Security, a
Participant in the
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Depositary or other Person with respect to the accuracy of the records of
the Depositary or its nominee or of any Participant thereof, with respect
to any ownership interest in the Preferred Securities or with respect to
the delivery to any Participant, beneficial owner or other Person (other
than the Depositary) of any notice (including any notice of redemption) or
the payment of any amount, under or with respect to such Preferred
Securities. All notices and communications to be given to the Holders and
all payments to be made to Holders under the Preferred Securities shall be
given or made only to or upon the order of the registered Holders (which
shall be the Depositary or its nominee in the case of a Global Preferred
Security). The rights of beneficial owners in any Global Preferred
Security shall be exercised only through the Depositary subject to the
applicable rules and procedures of the Depositary. The Property Trustee
may rely and shall be fully protected in relying upon information furnished
by the Depositary with respect to its Participants and any beneficial
owners.
(ii) The Property Trustee and Registrar shall have no obligation
or duty to monitor, determine or inquire as to compliance with any
restrictions on transfer imposed under this Declaration or under applicable
law with respect to any transfer of any interest in any Preferred Security
(including any transfers between or among Depositary Participants or
beneficial owners in any Global Preferred Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the
terms of this Declaration, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
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
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Certificate on the part of any Person, whether or not the Trust, the Property
Trustee, the Registrar or an co-registrar shall have actual or other notice
thereof.
SECTION 9.4 BOOK ENTRY INTERESTS.
Global Preferred Securities shall initially be registered on the books
and records of the Trust in the name of Cede & Co., the nominee of the
Depositary, and no Preferred Security Beneficial Owner will receive a definitive
Preferred Security Certificate representing such Preferred Security Beneficial
Owner's interests in such Global Preferred Securities, except as provided in
Section 9.7. Unless and until definitive, fully registered Preferred Securities
Certificates have been issued to the Preferred Security Beneficial Owners
pursuant to Section 7.10:
(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
Depositary for all purposes of this Declaration (including the payment of
Distributions on the relevant Global Preferred Securities and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Preferred Securities 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 Depositary and shall be limited to those established
by law and agreements between such Preferred Security Beneficial Owners and the
Depositary and/or the Participants and receive and transmit payments of
Distributions on the Global Certificates to such Participants. The Depositary
will make book entry transfers among the Participants.
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SECTION 9.5 NOTICES TO CLEARING AGENCY.
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, the Regular Trustees shall, in the
case of any Global Preferred Security, give all such notices and communications
specified herein to be given to the Preferred Security Holders to the
Depositary, and shall have no notice obligations to the Preferred Security
Beneficial Owners.
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 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; and
(ii) be 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 any loss, damage
or claim
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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, in the
case of the Property Trustee, 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 Property 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 an
Indemnified Person and any Covered Person; or
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(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
(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) To the fullest extent permitted by applicable law, the Sponsor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage, liability, tax, penalty, expense or claim of any kind or nature
whatsoever incurred by such Indemnified Person by reason of the creation,
operation or termination of the Trust or any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and
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in a manner such Indemnified Person reasonably believed to be within the scope
of authority conferred on such Indemnified Person by this Declaration, 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 gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees and expenses) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Sponsor prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Sponsor 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 10.4(a). The indemnification shall survive the
termination of this Declaration.
SECTION 10.5 OUTSIDE BUSINESSES.
Any Covered Person, the Sponsor, the Delaware Trustee and the Property
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
Property 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 be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Property 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 Property 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,
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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 Regular
Trustees 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 by a firm of independent certified public accountants selected by the
Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss;
(c) The Regular Trustees 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 Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
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(d) The Regular Trustees 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 Regular Trustees 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 Property Trustee shall be made directly to
the Property Trustee Account and no other funds of the Trust shall be deposited
in the Property Trustee Account. The sole signatories for such accounts shall
be designated by the Regular Trustees; PROVIDED, HOWEVER, that the Property
Trustee shall designate the signatories for the Property Trustee Account.
SECTION 11.4 WITHHOLDING.
The Trust and the Regular Trustees 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 Regular Trustee 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.
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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:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property Trustee;
and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the Property
Trustee shall have first received an Officers' 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 Property
Trustee, the Property Trustee shall have first received:
(A) an Officers' 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
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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
Property 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 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 and;
(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;
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(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; and
(iv) 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 which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders.
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 requests 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 Certificates held by the Holders of Securities exercising the right to call
a meeting and only those Securities represented by the Certificates so 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
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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 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 aggregate liquidation amount of Securities 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 Holders 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 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
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Indenture Act or the listing rules of any stock exchange on which the
Preferred Securities are then listed or trading, provide otherwise, 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 PROPERTY TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1 REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE.
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration and at
the time of Closing, and each Successor Property Trustee represents and warrants
to the Trust and the Sponsor at the time of the Successor Property Trustee's
acceptance of its appointment as Property Trustee that:
(a) The Property Trustee is a banking corporation with trust powers,
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, with corporate 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 Property Trustee
of the Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and constitutes a legal, valid and binding
obligation of the Property 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
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of such remedies is considered in a proceeding in equity or at law).
(c) The execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of the
certificate of incorporation or By-laws of the Property Trustee.
(d) At the Closing Date, the Property Trustee will have valid
ownership interest in the Debentures for the benefit of the holders of the
Securities in each case free from liens, encumbrances and defects.
(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 Property 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 at
the time of Closing, and each Successor Delaware Trustee represents and warrants
to the Trust and the Sponsor at the time of the Successor Property Trustee's
acceptance of its appointment as Delaware Trustee that:
(a) The Delaware Trustee is a banking corporation with trust powers,
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, with corporate 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 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
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of such remedies is considered in a proceeding in equity or at law).
(c) The execution, delivery and performance of the Declaration by the
Delaware Trustee does not conflict with or constitute a breach of the
certificate of incorporation or By-laws of the Delaware Trustee.
(d) 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.
(e) The Delaware Trustee is an entity which has its principal place
of business in the State of Delaware.
(f) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The Declaration
under Delaware law 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).
ARTICLE XIV
REGISTRATION RIGHTS
SECTION 14.1 REGISTRATION RIGHTS.
The Holders of the Preferred Securities, the Debentures and the
Preferred Securities Guarantee are entitled to the benefits of a Registration
Rights Agreement. Pursuant to the Registration Rights Agreement the Sponsor has
agreed for the benefit of the Holders of the Preferred Securities, the
Debentures and the Preferred Securities Guarantee that (i) it will, at its cost,
prior to September 4, 1995 file a shelf registration statement (the "Shelf
Registration Statement") with the Commission with respect to resales of the
Preferred Securities, together with the Debentures, the Preferred Securities
Guarantee and the related Common Stock (and Rights) issuable upon conversion
thereof, (ii) prior to November 17, 1995, such Shelf
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Registration Statement shall be declared effective by the Commission and (iii)
the Sponsor will maintain such Shelf Registration Statement continuously
effective under the Securities Act until the third anniversary of the
effectiveness of the Shelf Registration Statement or such earlier date as is
provided in the Registration Rights Agreement. If the Company fails to comply
with any of clauses (i) through (iii) above (a "Registration Default") then, at
such time, the per annum interest rate on the Securities will increase by 50
basis points (.50%), PROVIDED, HOWEVER, that if the Registration Default
consists of the occurrence of any event contemplated by paragraph 3(c)(2)(iii)
of the Registration Rights Agreement, such Registration Default shall not be
deemed to have occurred until the expiration of 30 days after the date of the
occurrence of such event if such event is an action taken by the Guarantor in
good faith and for valid business reasons and the Trust and the Guarantor
thereafter promptly comply with the requirements of paragraph 3(i) of the
Registration Rights Agreement. Such increase will remain in effect from and
including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured on which
date the interest rate on the Securities will revert to the interest rate
originally borne by the Securities.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 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):
c/o International Paper Company
Two Manhattanville Road
Purchase, New York 10577
Attention: John R. Jepsen
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(b) if given to the Property Trustee, at the mailing address set
forth below (or such other address as the Property Trustee may give notice of to
the Holders of the Securities):
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
(c) 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):
International Paper Company
Two Manhattanville Road
Purchase, New York 10577
Attention: Office of the Treasurer
(d) if given to any other Holder, at the address set forth on the
books and records of the Trust or the Registrar, as applicable.
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 15.2 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 15.3 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 Decla-
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ration shall be interpreted to further this intention of the parties.
SECTION 15.4 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 15.5 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 15.6 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 15.7 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.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
Charles Greenberg
as Trustee
/s/ Charles Greenberg
----------------------------------
John R. Jepsen
as Trustee
/s/ John R. Jepsen
----------------------------------
Syvert E. Nerheim
as Trustee
/s/ Syvert E. Nerheim
----------------------------------
THE BANK OF NEW YORK
(DELAWARE), as Delaware Trustee
By: /s/ Joseph F. Leary
------------------------------
Name: Joseph F. Leary
Title: Vice President
THE BANK OF NEW YORK, as
Property Trustee
By: /s/ Vivian Georges
------------------------------
Name: Vivian Georges
Title: Assistant Vice President
INTERNATIONAL PAPER COMPANY
as Sponsor
By: /s/ James W. Guedry
------------------------------
Name: James W. Guedry
Title: Secretary & Staff Vice
President
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ANNEX I
TERMS OF
5 1/4% CONVERTIBLE PREFERRED SECURITIES
5 1/4% CONVERTIBLE COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of July 13, 1995 (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 such
Declaration, as defined in the Offering Circular referred to below):
1. DESIGNATION AND NUMBER.
(a) "Preferred Securities." 9,000,000 Preferred Securities of the Trust
with an aggregate liquidation preference with respect to the assets of
the Trust of Four Hundred Fifty Million Dollars ($450,000,000), plus
up to an additional 1,350,000 Preferred Securities of the Trust with
an aggregate liquidation preference with respect to the assets of the
Trust of Sixty-Seven Million Five Hundred Thousand Dollars
($67,500,000) solely to cover over-allotments, as provided for in the
Purchase Agreement (the "Additional Preferred Securities"), and a
liquidation preference with respect to the assets of the Trust of $50
per Preferred Security, are hereby designated for the purposes of
identification only as "5 1/4% Convertible Preferred Securities
(liquidation preference $50 per Convertible Preferred Security)" (the
"Preferred Securities"). The Preferred Security Certificates
evidencing the Preferred Securities shall be substantially in the form
attached hereto as Exhibit A-1 and Exhibit A-2, with such changes and
additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice or to conform to the rules of any
stock exchange or other organization on which the Preferred Securities
are listed.
(b) "Common Securities." 278,351 Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust
of Thirteen Million Nine Hundred Seventeen Thousand Five Hundred Fifty
Dollars ($13,917,550), plus up to an additional 41,753 Common
Securities of the Trust with an aggregate liquidation
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amount with respect to the assets of the Trust of Two Million Eighty-
Seven Thousand Six Hundred Fifty Dollars ($2,087,650) to meet the
capital requirements of the Trust in the event of an issuance of
Additional Preferred Securities, and a liquidation amount with respect
to the assets of the Trust of $50 per Common Security, are hereby
designated for the purposes of identification only as "5 1/4%
Convertible Common Securities (liquidation amount $50 per Convertible
Common Security)" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially
in the form attached hereto as Exhibit A-3, with such changes and
additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
2. DISTRIBUTIONS.
(a) Distributions payable on each Security will be fixed at a rate per
annum of 5 1/4% (the "Coupon Rate") of the stated liquidation amount
of $50 per Security, such rate being the rate of interest payable on
the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one quarter will bear interest thereon
compounded quarterly at the Coupon Rate (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 Property Trustee and
to the extent the Property 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.
(b) Distributions on the Securities will be cumulative, will accrue from
the date of original issuance and will be payable quarterly in
arrears, on the following dates, which dates correspond to the
interest payment dates on the Debentures: March 15, June 15,
September 15, and December 15 of each year, commencing on September
15, 1995, 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 exceeding 20 consecutive quarters (each an
"Extension Period") and, as a conse-
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quence 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
Coupon Rate compounded quarterly during any such Extension Period.
Prior to the termination of any such Extension Period, the Debenture
Issuer may further extend such Extension Period; PROVIDED THAT such
Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters. 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, subject to the above
requirements.
(c) Distributions on the Securities will be payable to the Holders thereof
as they appear on the books and records of the Trust on the relevant
record dates. The relevant record dates shall be 15 days prior to the
relevant payment dates, except as otherwise described in this Annex I
to the Declaration. Subject to any applicable laws and regulations
and the provisions of the Declaration, each such payment in respect of
Preferred Securities being held in book-entry form through The
Depository Trust Company (the "Depositary") will be made as described
under the heading "Description of the Convertible Preferred Securities
-- Book-Entry Only Issuance -- The Depository Trust Company" in the
Offering Circular. The relevant record dates for the Common
Securities shall be the same record dates as for the Preferred
Securities. 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
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Day, in each case with the same force and effect as if made on such
date.
(d) In the event of an election by the Holder to convert its Securities
through the Conversion Agent into International Paper Common Stock
pursuant to the terms of the Securities as forth in this Annex I to
the Declaration, no payment, allowance or adjustment shall be made
with respect to accumulated and unpaid Distributions on such
Securities, or be required to be made; PROVIDED THAT Holders of
Securities at the close of business on any record date for the payment
of Distributions will be entitled to receive the Distributions payable
on such Securities on the corresponding payment date notwithstanding
the conversion of such Securities into International Paper Common
Stock following such record date.
(e) 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, winding-up
or termination of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities after satisfaction of liabilities of creditors an amount equal to the
aggregate of the stated liquidation amount of $50 per Security plus accrued and
unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"), unless, in connection with such dissolution,
winding-up or termination, Debentures in an aggregate principal amount equal to
the aggregate stated liquidation amount of such Securities, with an interest
rate equal to the Coupon Rate of, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on, such Securities, shall
be distributed on a Pro Rata basis to the Holders of the Securities in exchange
for such Securities.
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 in accordance
with paragraph 9.
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4. REDEMPTION AND DISTRIBUTION.
(a) Upon the repayment or payment of the Debentures in whole or in part,
whether at maturity or upon redemption or otherwise, the proceeds from
such repayment or redemption shall be simultaneously applied to redeem
Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so repaid or redeemed at
a redemption price of $50 per Security together with accrued and
unpaid Distributions thereon through the date of the redemption,
payable in cash (the "Redemption Price"). Holders will be given not
less than 30 nor more than 60 days' notice of such redemption. Upon
the repayment of the Debentures at maturity or upon any acceleration,
earlier redemption or otherwise, the proceeds from such repayment will
be applied to redeem the Securities, in whole, upon not less than 30
nor more than 60 days' notice.
(b) If fewer than all the outstanding Securities are to be so redeemed,
the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the Preferred Securities to be redeemed will be as
described in Paragraph 4(f)(ii) below.
(c) If, at any time, a Tax Event shall occur and be continuing the Sponsor
shall cause the Regular Trustees to liquidate the Trust and, after
satisfaction of creditors of the Trust, cause Debentures to be
distributed to the Holders of the Securities in liquidation of the
Trust within 90 days following the occurrence of such Tax Event (the
"90 Day Period"); PROVIDED, HOWEVER, that such liquidation and
distribution shall be conditioned on (i) the Regular Trustees' receipt
of an opinion of a nationally recognized independent tax counsel
experienced in such matters (a "No Recognition Opinion"), which
opinion may rely on published revenue rulings of the Internal Revenue
Service, to the effect that the Holders of the Securities will not
recognize any income, gain or loss for United States federal income
tax purposes as a result of such liquidation and distribution of
Debentures, and (ii) the Sponsor being unable to avoid such Tax Event
within such 90-day period by taking some ministerial action or
pursuing some other reasonable measure that, in the sole judgment of
the Sponsor, will have no adverse effect on the Trust, the Sponsor or
the Holders of the Securities and will involve no material cost
("Ministerial Action").
If (i) the Debenture Issuer has received an opinion (a
"Redemption Tax Opinion") of a nationally recognized independent tax
counsel (reasonably accept-
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able to the Regular Trustees) experienced in such matters that, as a
result of a Tax Event, there is more than an insubstantial risk that
the Debenture Issuer would be precluded from deducting the interest on
the Debentures for United States federal income tax purposes, even
after the Debentures were distributed to the Holders of Securities
upon liquidation of the Trust as described in this paragraph 4(c), or
(ii) the Regular Trustees shall have been informed by such tax counsel
that it cannot deliver a No Recognition Opinion, the Debenture Issuer
shall have the right, upon not less than 30 nor more than 60 days'
notice, and within 90 days following the occurrence of such Tax Event,
to redeem the Debentures in whole (but not in part) for cash, at par
plus accrued and unpaid interest and, following such redemption, all
the Securities will be redeemed by the Trust at the liquidation
preference of $50 per Security plus accrued and unpaid distributions;
PROVIDED, HOWEVER, that, if at the time there is available to the
Debenture Issuer or the Trust the opportunity to eliminate, within
such 90 day period, the Tax Event by taking some Ministerial Action,
the Trust or the Debenture Issuer will pursue such Ministerial Action
in lieu of redemption.
"Tax Event" means that the Sponsor shall have received an
opinion of a nationally recognized independent tax counsel (reasonably
acceptable to the Regular Trustees) experienced in such matters (a
"Dissolution Tax Opinion") 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 taxing authority therefor or therein, or
(b) any amendment to, or change in, an interpretation or application
of any such laws or regulations by any legislative body, court,
governmental agency or regulatory authority (including the enactment
of any legislation and the publication of any judicial decision or
regulatory determination on or after the date of the Offering
Circular), which amendment or change is effective or which
interpretation or pronouncement is announced on or after the date of
the Offering Circular, there is more than an insubstantial risk that
(i) the Trust is or will be subject to United States federal income
tax with respect to interest received on the Debentures, (ii) the
Trust is, or will be within 90 days of the date thereof, subject to
more than a de minimis amount of taxes, duties or other governmental
charges, or (iii) interest payable by the Debenture Issuer to the
Trust on the Debentures is not or will
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not be deductible by the Debenture Issuer for United States federal
income tax purposes.
If an Investment Company Event (as hereinafter defined)
shall occur and be continuing, the Sponsor shall cause the Regular
Trustees to liquidate the Trust and cause the Debentures to be
distributed to the Holders of the Securities in liquidation of the
Trust within 90 days following the occurrence of such Investment
Company Event.
"Investment Company Event" means 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"), to the effect that the Trust is or will be considered an
Investment Company which is required to be registered under the
Investment Company Act, which Change in 1940 Act Law becomes effective
on or after the date of the Offering Circular.
After the date fixed for any distribution of Debentures:
(i) the Securities will no longer be deemed to be outstanding, (ii)
the Depositary or its nominee (or any successor Clearing Agency or its
nominee), as record Holder of Preferred Securities represented by
global certificates, will receive a registered global certificate or
certificates representing the Debentures to be delivered upon such
distribution and (iii) any certificates representing Securities,
except for certificates representing Preferred Securities held by the
Depositary or its nominee (or any successor Clearing Agency or its
nominee), will be deemed to represent Debentures having an aggregate
principal amount equal to the aggregate stated liquidation amount of
such Securities, with 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
reissuance.
(d) The Securities will not be redeemed unless all accrued and unpaid
Distributions have been paid on all Securities for all quarterly
Distribution periods terminating on or before the date of redemption.
(e) "Redemption or Distribution Procedures."
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for the Securities (a
"Redemption/Distribution Notice") will be
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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 date fixed for
redemption of the Debentures. For purposes of the calculation of
the date of redemption or exchange and the dates on which notices
are given pursuant to this paragraph 4(f)(i), 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.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed
Pro Rata from each Holder of Preferred Securities, it being
understood that, in respect of Preferred Securities registered in
the name of and held of record by the Depositary (or any
successor Clearing Agency) or any nominee, the distribution of
the proceeds of such redemption will be made to each Clearing
Agency Participant (or Person on whose behalf such nominee holds
such securities) in accordance with the procedures applied by
such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued
if the Debentures are redeemed as set out in this paragraph 4
(which notice will be irrevocable), then (A) with respect to
Preferred Securities held in book-entry form, by 12:00 noon, New
York City time, on the redemption date, provided that the
Debenture Issuer has paid the Property Trustee a sufficient
amount of cash in connection with the related redemption or
maturity of the Debentures, the Property Trustee will deposit
irrevocably with the Depositary (or successor Clearing Agency)
funds sufficient to pay the amount payable on redemption with
respect to such Preferred Securities and will give the Depositary
irrevocable instructions and authority to pay the amount payable
on redemption to the Hold-
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ers of such Preferred Securities, and (B) with respect to
Preferred Securities issued in certificated form and Common
Securities, provided that the Debenture Issuer has paid the
Property Trustee a sufficient amount of cash in connection with
the related redemption or maturity of the Debentures, the
Property Trustee will irrevocably deposit with the Paying Agent
funds sufficient to pay the amount payable on redemption to the
Holders of such Securities upon surrender of their certificates.
If a Redemption/Distribution Notice shall have been given and
funds deposited as required, then on the date of such deposit,
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 amount 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 redemption. If payment
of the redemption price in respect of any Securities is
improperly withheld or refused and not paid either by the Trust
or by the Sponsor as guarantor pursuant to the relevant
Securities Guarantee, Distributions on such Securities will
continue to accrue at the then applicable rate, from the original
redemption date to the date of payment, in which case the actual
payment date will be considered the date fixed for redemption for
purposes of calculating the amount payable upon redemption (other
than for purposes of calculating any premium).
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in the case of Preferred
Securities held in book-entry form, the Depositary and, in the
case of Securities held in certificated form, the Holders of such
certificates and (B) in respect of the Common Securities, the
Holder thereof.
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(v) 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
purchase outstanding Preferred Securities by tender, in the open
market or by private agreement.
5. CONVERSION RIGHTS.
The Holders of Securities shall have the right at any time, at their
option, to cause the Conversion Agent to convert Securities, on behalf of
the converting Holders, into shares of International Paper Common Stock in
the manner described herein on and subject to the following terms and
conditions:
(a) The Securities will be convertible at the office of the Conversion
Agent into fully paid and nonassessable shares of International Paper
Common Stock pursuant to the Holder's direction to the Conversion
Agent to exchange such Securities for a portion of the Debentures
theretofor held by the Trust on the basis of one Security per $50
principal amount of Debentures, and immediately convert such amount of
Debentures into fully paid and nonassessable shares of International
Paper Common Stock at an initial rate of 0.462963 shares of
International Paper Common Stock per $50 principal amount of
Debentures (which is equivalent to a conversion price of $108.00 per
share of International Paper Common Stock, subject to certain
adjustments set forth in the terms of the Debentures (as so adjusted,
"Conversion Price")).
(b) In order to convert Securities into International Paper Common Stock
the Holder shall submit to the Conversion Agent at the office referred
to above an irrevocable request to convert Securities on behalf of
such Holder (the "Conversion Request"), together, if the Securities
are in certificated form, with such certificates. The Conversion
Request shall (i) set forth the number of Securities to be converted
and the name or names, if other than the Holder, in which the shares
of International Paper Common Stock should be issued and (ii) direct
the Conversion Agent (a) to exchange such Securities for a portion of
the Debentures held by the Trust (at the rate of exchange specified in
the preceding paragraph) and (b) to immediately convert such
Debentures on behalf of such Holder, into International Paper Common
Stock (at the conversion rate specified in the preceding paragraph).
The Conversion Agent shall notify the Trust of the Holder's election
to exchange Securities for a portion of the Debentures held by the
Trust and the Trust shall, upon receipt of such notice,
I-10
<PAGE>
deliver to the Conversion Agent the appropriate principal amount of
Debentures for exchange in accordance with this Section. The
Conversion Agent shall thereupon notify International Paper of the
Holder's election to convert such Debentures into shares of
International Paper Common Stock. Holders of Securities at the close
of business on a Distribution record date will be entitled to receive
the Distribution payable on such securities on the corresponding
Distribution payment date notwithstanding the conversion of such
Securities following such record date but prior to such distribution
payment date. Except as provided above, neither the Trust nor the
Sponsor will make, or be required to make, any payment, allowance or
adjustment upon any conversion on account of any accumulated and
unpaid Distributions accrued on the Securities (including any
Additional Amounts accrued thereon) surrendered for conversion, or on
account of any accumulated and unpaid dividends on the shares of
International Paper Common Stock issued upon such conversion.
Securities shall be deemed to have been converted immediately prior to
the close of business on the day on which a Notice of Conversion
relating to such Securities is received the Trust in accordance with
the foregoing provision (the "Conversion Date"). The Person or
Persons entitled to receive the International Paper Common Stock
issuable upon conversion of the Debentures shall be treated for all
purposes as the record holder or holders of such International Paper
Common Stock at such time. As promptly as practicable on or after the
Conversion Date, International Paper shall issue and deliver at the
office of the Conversion Agent a certificate or certificates for the
number of full shares of International Paper Common Stock issuable
upon such conversion, together with the cash payment, if any, in lieu
of any fraction of any share to the Person or Persons entitled to
receive the same, unless otherwise directed by the Holder in the
notice of conversion and the Conversion Agent shall distribute such
certificate or certificates to such Person or Persons.
(c) Each Holder of a Security by his acceptance thereof appoints The Bank
of New York "Conversion Agent" for the purpose of effecting the
conversion of Securities in accordance with this Section. In
effecting the conversion and transactions described in this Section,
the Conversion Agent shall be acting as agent of the Holders of
Securities directing it to effect such conversion transactions. The
Conversion Agent is hereby authorized (i) to exchange Securities from
time to time for Debentures held by the Trust in connection with the
conversion of such Securities in accordance
I-11
<PAGE>
with this Section and (ii) to convert all or a portion of the
Debentures into International Paper Common Stock and thereupon to
deliver such shares of International Paper Common Stock in accordance
with the provisions of this Section and to deliver to the Trust a new
Debenture or Debentures for any resulting unconverted principal
amount.
(d) No fractional shares of International Paper Common Stock will be
issued as a result of conversion, but in lieu thereof, such fractional
interest will be in cash by International Paper to the Trust, which in
turn will make such payment to the Holder or Holders of Securities so
converted.
(e) International Paper shall at all times reserve and keep available out
of its authorized and unissued International Paper Common Stock,
solely for issuance upon the conversion of the Debentures, free from
any preemptive or other similar rights, such number of shares of
International Paper Common Stock as shall from time to time be
issuable upon the conversion of all the Debentures then outstanding.
Notwithstanding the foregoing, International Paper shall be entitled
to deliver upon conversion of Debentures, shares of International
Paper Common Stock reacquired and held in the treasury of
International Paper (in lieu of the issuance of authorized and
unissued shares of International Paper Common Stock), so long as any
such treasury shares are free and clear of all liens, charges,
security interests or encumbrances. Any shares of International Paper
Common Stock issued upon conversion of the Debentures shall be duly
authorized, validly issued and fully paid and nonassessable. The
Trust shall deliver the shares of International Paper Common Stock
received upon conversion of the Debentures to the converting Holder
free and clear of all liens, charges, security interests and
encumbrances, except for United States withholding taxes. Each of
International Paper and the Trust shall prepare and shall use its best
efforts to obtain and keep in force such governmental or regulatory
permits or other authorizations as may be required by law, and shall
comply with all applicable requirements as to registration or
qualification of the International Paper Common Stock (and all
requirements to list the International Paper Common Stock issuable
upon conversion of Debentures that are at the time applicable), in
order to enable International Paper to lawfully issue International
Paper Common Stock to the Trust upon conversion of the Debentures and
the Trust to lawfully deliver the International Paper Common Stock to
each Holder upon conversion of the Securities.
I-12
<PAGE>
(f) International Paper will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of International Paper
Common Stock on conversion of Debentures and the delivery of the
shares of International Paper Common Stock by the Trust upon
conversion of the Securities. International Paper shall not, however,
be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of shares of International
Paper Common Stock in a name other than that in which the Securities
so converted were registered, and no such issue or delivery shall be
made unless and until the person requesting such issue has paid to the
Trust the amount of any such tax, or has established to the
satisfaction of the Trust that such tax has been paid.
(g) Nothing in the preceding Paragraph (f) shall limit the requirement of
the Trust to withhold taxes pursuant to the terms of the Securities or
set forth in this Annex I to the Declaration or to the Declaration
itself or otherwise require the Property Trustee or the Trust to pay
any amounts on account of such withholdings.
6. VOTING RIGHTS - PREFERRED SECURITIES.
(a) Except as provided under paragraphs 5(b) and 7, in the Business Trust
Act and as otherwise required by law and the Declaration, the Holders
of the Preferred Securities will have no voting rights.
(b) If (i) the Trust fails to make Distributions in full on the Preferred
Securities for 6 consecutive quarterly Distribution periods (whether
or not an Extended Interest Payment Period is in effect), or (ii) an
Event of Default occurs and is continuing (each of (i) and (ii) being
an "Appointment Event"), then the Holders of the Preferred Securities,
acting as a single class, will be entitled by the vote of a Majority
in liquidation preference of the Preferred Securities to appoint a
Special Regular Trustee in accordance with Section 5.6(a)(ii)(B) of
the Declaration. Any Holder of Preferred Securities (other than the
Sponsor, or any entity directly or indirectly controlling or
controlled by or under direct or indirect common control with the
Sponsor) will be entitled to nominate any person to be appointed as
Special Regular Trustee. For purposes of determining whether the
Trust has failed to make Distributions in full for 6 consecutive
quarterly Distribution periods, Distributions shall be deemed to
remain in arrears, notwithstanding any payments in respect thereof,
until full cumulative Distributions have been or contemporaneously are
paid with respect to all quar-
I-13
<PAGE>
terly Distribution periods terminating on or prior to the date of
payment of such cumulative Distributions. Not later than 30 days
after such right to appoint a Special Regular Trustee arises, the
Regular Trustees will convene a meeting for the purpose of appointing
a Special Regular Trustee. If the Regular Trustees fail to convene
such meeting within such 30-day period, the Holders of not less than
10% in aggregate liquidation preference of the Preferred Securities
will be entitled to convene such meeting in accordance with Section
12.2 of the Declaration. The record date for such meeting will be the
close of business on the Business Day that is one Business Day before
the day on which notice of the meeting is sent to the Holders. The
provisions of the Declaration relating to the convening and conduct of
the meetings of the Holders will apply with respect to any such
meeting.
Any Special Regular Trustee so appointed shall cease to be a Special
Regular Trustee if the Appointment Event pursuant to which the Special
Regular Trustee was appointed and all other Appointment Events cease
to be continuing. A Special Regular Trustee may be removed without
cause at any time by vote of the Holders of a Majority in liquidation
preference of the Preferred Securities at a meeting of the Holders of
the Preferred Securities in accordance with Section 5.6(a)(ii)(B) of
the Declaration. The Holders of 10% in liquidation preference of the
Preferred Securities will be entitled to convene such a meeting in
accordance with Section 12.2 of the Declaration. The record date for
such meeting will be the close of business on the Business Day which
is one Business Day before the day on which the notice of meeting is
sent to Holders. Notwithstanding the appointment of a Special Regular
Trustee, the Debenture Issuer shall retain all rights under the
Indenture, including the right to extend the interest payment period
on the Debentures.
Subject to the requirements set forth in this paragraph, the Holders
of a majority in liquidation preference 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 Property
Trustee, or direct the exercise of any trust or power conferred upon
the Property Trustee under the Declaration, including the right to
direct the Property Trustee, as holder of the Debentures, to (i)
exercise the remedies available under the Indenture with respect to
the Debentures, (ii) waive any past default and its consequences that
is waivable under Section 513 of the Indenture, or (iii) exercise any
right to rescind or
I-14
<PAGE>
annul a declaration that the principal of all the Debentures shall be
due and payable, 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 Property Trustee may only
give such consent or take such action at the direction of the Holders
of at least the proportion in liquidation preference of the Preferred
Securities which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding. The
Property 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 Property Trustee or the
Debenture Trustee as set forth above, the Property Trustee shall not
take any action in accordance with the directions of the Holders of
the Preferred Securities under this paragraph unless the Property
Trustee has obtained an opinion of tax counsel to the effect that, as
a result of such action, the Trust will not fail to be classified as a
grantor trust or partnership for United States federal income tax
purposes. If the Property Trustee fails to enforce its rights, as
holder of the Debentures, under the Indenture, any Holder of Preferred
Securities may, after a period of 30 days has elapsed from such
Holder's written request to the Property Trustee to enforce such
rights, institute a legal proceeding directly against the Debenture
Issuer, to enforce the rights of the Property Trustee, as holder of
the Debentures, under the Indenture, without first instituting any
legal proceeding against the Property Trustee or any other Person.
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 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
I-15
<PAGE>
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 redeem 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.
7. VOTING RIGHTS - COMMON SECURITIES.
(a) Except as provided under paragraphs 7(b), (c) and 8, in the Business
Trust Act 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, subject to the exclusive right of the Holders of the
Preferred Securities to appoint, remove or replace a Special Regular
Trustee.
(c) Subject to Section 2.6 of the Declaration and only after the 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 remedy available to the Property Trustee, or
exercising any trust or power conferred upon the Property Trustee
under the Declaration, including (i) directing the time, method, place
of conducting any proceeding for any remedy waivable 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 Section 606 of 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
I-16
<PAGE>
act of the Holders of greater than a majority in principal amount of
Debentures affected thereby (a "Super Majority"), the Property Trustee
may only give such consent or take such action at the 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 paragraph 6(c), the Property 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 Property
Trustee or the Debenture Trustee as set forth above, the Property
Trustee shall not take any action in accordance with the directions of
the Holders of the Common Securities under this paragraph unless the
Property Trustee has obtained an opinion of tax counsel to the effect
that, as a result of such action the Trust will not fail to be
classified as a grantor trust or a partnership for United States
federal income tax purposes. If the Property Trustee fails to enforce
its rights, as holder of the Debentures, under the Indenture, any
Holder of Common Securities may, after a period of 30 days has elapsed
from such Holder's written request to the Property Trustee to enforce
such rights, institute a legal proceeding directly against the
Debenture Issuer, to enforce the Property Trustee's rights, as holder
of the Debentures, under the Indenture, without first instituting any
legal proceeding against the Property 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 can-
I-17
<PAGE>
cel Common Securities or to distribute the Debentures in accordance
with the Declaration and the terms of the Securities.
8. 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 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, winding-up or termination of the
Trust, other than as described in Section 8.1 of the Declaration, then
the Holders of outstanding Securities as 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 66 2/3% in liquidation
amount of the Securities, voting together as a single class PROVIDED,
HOWEVER, that, the rights of Holders of Preferred Securities under
Article V of the Declaration to appoint, remove or replace a Special
Regular Trustee shall not be amended without the consent of each
Holder of Preferred Securities; 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 66 2/3% in liquidation amount of such class of Securities.
(b) In the event the consent of the Property 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 Property Trustee shall request the 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 the
consent of the holders of greater than a majority in aggregate
principal amount of the Debentures (a "Super Majority"), the Property
Trustee may only give such consent at the direction of the Holders of
at least the same proportion in aggregate stated liquidation
preference of the Securities; PROVIDED,
I-18
<PAGE>
FURTHER, that the Property Trustee shall not take any action in
accordance with the directions of the Holders of the Securities under
this paragraph 8(b) unless the Property 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 or partnership on account of such action.
9. 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, on any distribution date or redemption date
an Event of Default under the Declaration has occurred and is continuing, in
which case no payment of any distribution on, or amount payable upon redemption
of, any Common Security, and no other payment on account of the redemption,
liquidation or other acquisition of Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid distributions on all
outstanding Preferred Securities for all distribution periods terminating on or
prior thereto, or in the case of payment of the amount payable upon redemption
of the Preferred Securities, the full amount of such amount in respect of all
outstanding Preferred Securities shall have been made or provided for, and all
funds available to the Property Trustee shall first be applied to the payment in
full in cash of all distributions on, or the amount payable upon redemption of
Preferred Securities then due and payable.
10. 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 Property Trustee, the rights of Holders of the 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.
11. 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, including the
subordination provisions therein and to the provisions of the Indenture.
I-19
<PAGE>
12. NO PREEMPTIVE RIGHTS.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. 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.
I-20
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY
A-1
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY
[FORM OF FACE OF SECURITY]
[Include the following Restricted Securities Legend on all Preferred
Securities, including Rule 144A Global Preferred Securities, Regulation S
Definitive Preferred Securities, and Restricted Definitive Preferred Securities,
unless otherwise determined by the Sponsor in accordance with applicable law --
THIS SECURITY, ANY CONVERTIBLE JUNIOR SUBORDINATED DEBENTURE ISSUED IN EXCHANGE
FOR THIS SECURITY AND ANY COMMON STOCK (AND RELATED RIGHTS) ISSUED ON CONVERSION
THEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
904 OF REGULATION S UNDER THE SECURITIES ACT, OR (3) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES.]
[Include if Preferred Security is a Regulation S Definitive Preferred
Security or any other Security issue in respect of a Preferred Security
initially issued in reliance on Regulation S under the Securities Act --
SUBSEQUENT TRANSFERS OF THIS SECURITY (OR ANY OTHER SECURITY REFERRED TO ABOVE)
AND REGISTRATION OF SUCH TRANSFERS ARE SUBJECT TO THE PRIOR SATISFACTION OF THE
CERTIFICATION REQUIREMENTS AS THE REGISTRAR OR TRANSFER AGENT MAY REASONABLY
REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.]
[Include if Preferred Security is Restricted Definitive Preferred Security
- -- IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.]
[Include if Preferred Security is in global form and the Depository
Trust Company is the U. S. Depository -- UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), 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 IS
<PAGE>
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[Include if Preferred Security is in global form -- TRANSFERS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO
BELOW.]
Certificate Number Number of Preferred Securities
[CUSIP NO. [ ]]
[ISIN NO. [ ]]
Preferred Securities
of
International Paper Capital Trust
5 1/4% Convertible Preferred Securities
(liquidation preference $50 per Convertible Preferred Security)
International Paper Capital Trust, 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 undivided beneficial interests in the assets of the Trust
designated the 5 1/4% Convertible Preferred Securities (liquidation preference
$50 per Convertible 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
A1-2
<PAGE>
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of July 13, 1995, 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 Indenture to a Holder
without charge upon written request to the Trust at its principal place of
business.
Reference is hereby made to select provisions of the Preferred
Securities set forth on the reverse hereof, which select provisions shall for
all purposes have the same effect as if set forth at this place.
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.
A1-3
<PAGE>
Unless the Property Trustee's Certificate of Authentication hereon has
been properly executed, these Preferred Securities shall not be entitled to any
benefit under the Declaration or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Trust has executed this certificate this day
of __________ , 199__.
International Paper Capital Trust
By:______________________________
Name:
Title:
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the within-
mentioned Declaration.
Dated: __________, ____
THE BANK OF NEW YORK,
as Property Trustee
By: _______________________
Authorized Signatory
A1-4
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a
rate per annum of 5 1/4% (the "Coupon Rate") of the stated liquidation
preference of $50 per Preferred Security, such rate being the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one quarter will bear interest thereon compounded
quarterly at the Coupon Rate (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
Property Trustee and to the extent the Property 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 Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on March 15, June 15, September 15 and
December 15 of each year, commencing on September 15, 1995, to Holders of record
fifteen (15) days 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 20 consecutive quarters (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 Coupon Rate
compounded quarterly during any such Extension Period. Prior to the termination
of any such Extension Period, the Debenture Issuer may further extend such
Extension Period; PROVIDED THAT such Extension Period together with all such
previous and further extensions thereof may not exceed 20 consecutive quarters.
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, subject to the above requirements.
The Preferred Securities shall be redeemable as provided in the
Declaration.
A1-5
<PAGE>
The Preferred Securities shall be convertible into shares of
International Paper Common Stock, through (i) the exchange of Preferred
Securities for a portion of the Debentures and (ii) the immediate conversion of
such Debentures into International Paper Common Stock, in the manner and
according to the terms set forth in the Declaration.
A1-6
<PAGE>
CONVERSION REQUEST
To: The Bank of New York,
as Property Trustee of
International Paper
Capital Trust
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock of INTERNATIONAL PAPER COMPANY (the "International
Paper Common Stock") in accordance with the terms of the Amended and Restated
Declaration of Trust (the "Declaration"), dated as of July 13, 1995, by Charles
Greenberg, John R. Jepsen and Syvert E. Nerheim, as Regular Trustees, The Bank
of New York (Delaware), as Delaware Trustee, The Bank of New York, as Property
Trustee, International Paper Company, as Sponsor, and by the Holders, from time
to time, of individual beneficial interests in the Trust to be issued pursuant
to the Declaration. Pursuant to the aforementioned exercise of the option to
convert these Preferred Securities, the undersigned hereby directs the
Conversion Agent (as that term is defined in the Declaration) to (i) exchange
such Preferred Securities for a portion of the Debentures (as that term is
defined in the Declaration) held by the Trust (at the rate of exchange specified
in the terms of the Preferred Securities set forth as Annex I to the
Declaration) and (ii) immediately convert such Debentures on behalf of the
undersigned, into International Paper Common Stock (at the conversion rate
specified in the terms of the Preferred Securities set forth as Annex I to the
Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
A1-7
<PAGE>
Any holder, upon the exercise of its conversion rights in accordance
with the terms of the Declaration and the Preferred Securities, agrees to be
bound by the terms of the Registration Rights Agreement relating to the
International Paper Common Stock issuable upon conversion of the Preferred
Securities.
Date: ____________, ____
in whole __ in part __
Number of Preferred Securities to be converted:
___________________
If a name or names other than the undersigned,
please indicate in the spaces below the name or
names in which the shares of International Paper
Common Stock are to be issued, along with the
address or addresses of such person or persons
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
Signature (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or Other
Identifying Number
_______________________________________________________
_______________________________________________________
_______________________________________________________
Signature Guarantee:* _________________________________
________________________
* (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
A1-8
<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security 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 on the books of the Trust. The agent
may substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee: **_________________________________________________________
________________________
** (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
A1-9
<PAGE>
_____________________
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF RESTRICTED
PREFERRED SECURITIES
This certificate relates to _____________ Preferred Securities held in (check
applicable space) ____ book-entry or ____ definitive form by the undersigned.
(A) The undersigned (check one box below):
/ / has requested the Property Trustee by written order
to deliver in exchange for its beneficial interest
in the Rule 144A Global Preferred Security held by the Depositary a
Preferred Security or Preferred Securities in definitive, registered form
in such number equal to its beneficial interest in such Rule 144A Global
Preferred Security (or the number thereof indicated above); or
/ / has requested the Property Trustee by written order to exchange its
Preferred Security in definitive registered form for an interest in the
Rule 144A Global Preferred Security held by the Depositary in such number
equal to number of Preferred Securities in definitive registered form so
held; or
/ / has requested the Property Trustee by written order
to exchange or register the transfer of a Preferred
Security or Preferred Securities.
(B) The undersigned confirms that such Securities
are being (check one box below):
(1) / / acquired for the undersigned's own account, without transfer (in
satisfaction of Section 9.2(d)(ii)(A); or
(2) / / pursuant to and in compliance with Rule 144A under the Securities
Act of 1933; or
(3) / / pursuant to and in compliance with Regulation S under the
Securities Act of 1933; or
(4) / / pursuant to Rule 144 of the Securities Act of 1933.
Unless one of the boxes in (B) above is checked, the Property Trustee will
refuse to register any of the Preferred Securities evidenced by this certificate
in the name of any person other than the registered Holder thereof; PROVIDED,
HOWEVER, that if box (3) or (4) is checked, the Property Trustee may require,
prior to registering any such transfer of the Preferred Securities such legal
opinions, certifications and other information as the Trust has reasonably
requested to confirm that such transfer
A1-10
<PAGE>
is being made pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act of 1933, such as the
exemption provided by Rule 144 under such Act.
__________________________
Signature
Signature Guarantee:***
_________________________ __________________________
Signature must be guaranteed Signature
________________________________________________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing these
Preferred Securities for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Trust as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated: _________________ ______________________________________
NOTICE: To be executed by
an executive officer
________________________
* (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
A1-11
<PAGE>
EXHIBIT A-2
FORM OF EXCHANGED PREFERRED SECURITY
[FORM OF FACE OF SECURITY]
[Include if Preferred Security is in global form and the Depository
Trust Company is the U. S. Depositary -- UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), 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 IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[Include if Preferred Security is in global form -- TRANSFERS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO
BELOW.]
Certificate Number Number of Preferred Securities
[CUSIP NO. [ ]]
[ISIN NO. [ ]]
Preferred Securities
of
International Paper Capital Trust
5 1/4% Convertible Preferred Securities
(liquidation preference $50 per Convertible Preferred Security)
International Paper Capital Trust, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
A2-1
<PAGE>
- --------------------------------------------------------------------------------
(the "Holder") is the registered owner of preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 5 1/4% Convertible Preferred Securities (liquidation preference
$50 per Convertible 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 July 13, 1995, 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 Indenture to a Holder
without charge upon written request to the Trust at its principal place of
business.
Reference is hereby made to select provisions of the Preferred
Securities set forth on the reverse hereof, which select provisions shall for
all purposes have the same effect as if set forth at this place.
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.
A2-2
<PAGE>
Unless the Property Trustee's Certificate of Authentication hereon has
been properly executed, these Preferred Securities shall not be entitled to any
benefit under the Declaration or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Trust has executed this certificate this day
of ______________, 199__.
International Paper Capital Trust
By:____________________________
Name:
Title:
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the within-
mentioned Declaration.
Dated: _________, ____
THE BANK OF NEW YORK,
as Property Trustee
By: _______________________
Authorized Signatory
A2-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a
rate per annum of 5 1/4% (the "Coupon Rate") of the stated liquidation
preference of $50 per Preferred Security, such rate being the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one quarter will bear interest thereon compounded
quarterly at the Coupon Rate (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
Property Trustee and to the extent the Property 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 Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on March 15, June 15, September 15 and
December 15 of each year, commencing on September 15, 1995, to Holders of record
fifteen (15) days 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 20 consecutive quarters (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 Coupon Rate
compounded quarterly during any such Extension Period. Prior to the termination
of any such Extension Period, the Debenture Issuer may further extend such
Extension Period; PROVIDED THAT such Extension Period together with all such
previous and further extensions thereof may not exceed 20 consecutive quarters.
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, subject to the above requirements.
The Preferred Securities shall be redeemable as provided in the
Declaration.
A2-4
<PAGE>
The Preferred Securities shall be convertible into shares of
International Paper Common Stock, through (i) the exchange of Preferred
Securities for a portion of the Debentures and (ii) the immediate conversion of
such Debentures into International Paper Common Stock, in the manner and
according to the terms set forth in the Declaration.
A2-5
<PAGE>
CONVERSION REQUEST
To: The Bank of New York,
as Property Trustee of
International Paper
Capital Trust
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock of INTERNATIONAL PAPER COMPANY (the "International
Paper Common Stock") in accordance with the terms of the Amended and Restated
Declaration of Trust (the "Declaration"), dated as of July 13, 1995, by Charles
Greenberg, John R. Jepsen and Syvert E. Nerheim, as Regular Trustees, The Bank
of New York (Delaware), as Delaware Trustee, The Bank of New York, as Property
Trustee, International Paper Company, as Sponsor, and by the Holders, from time
to time, of individual beneficial interests in the Trust to be issued pursuant
to the Declaration. Pursuant to the aforementioned exercise of the option to
convert these Preferred Securities, the undersigned hereby directs the
Conversion Agent (as that term is defined in the Declaration) to (i) exchange
such Preferred Securities for a portion of the Debentures (as that term is
defined in the Declaration) held by the Trust (at the rate of exchange specified
in the terms of the Preferred Securities set forth as Annex I to the
Declaration) and (ii) immediately convert such Debentures on behalf of the
undersigned, into International Paper Common Stock (at the conversion rate
specified in the terms of the Preferred Securities set forth as Annex I to the
Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
A2-6
<PAGE>
Any holder, upon the exercise of its conversion rights in accordance
with the terms of the Declaration and the Preferred Securities, agrees to be
bound by the terms of the Registration Rights Agreement relating to the
International Paper Common Stock issuable upon conversion of the Preferred
Securities.
Date: ____________, ____
in whole __ in part __
Number of Preferred Securities to
be converted: ___________________
If a name or names other than the undersigned,
please indicate in the spaces below the name or
names in which the shares of International Paper
Common Stock are to be issued, along with the
address or addresses of such person or persons
Signature (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or Other
Identifying Number
Signature Guarantee:*
_______________________
* (Signature must be guaranteed by an "eligible guarantor institution" that
is, as bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents
(continued)
A2-7
<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: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee:**
_______________________
* (...continued)
Medallion Program ("STAMP") or such other "signature guarantee program" as may
be determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
** (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
A2-8
<PAGE>
EXHIBIT A-3
FORM OF COMMON SECURITY
[FORM OF FACE OF SECURITY]
[THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN EFFECTIVE REGISTRATION
STATEMENT.]
[OTHER THAN AS PROVIDED IN THE DECLARATION (AS DEFINED HEREIN), THIS
SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO A
RELATED PARTY (AS DEFINED IN THE DECLARATION) OF INTERNATIONAL PAPER COMPANY.]
Certificate Number Number of Common Securities
Common Securities
of
International Paper Capital Trust
5 1/4% Convertible Common Securities
(liquidation amount $50 per Convertible Common Security)
International Paper Capital Trust, 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 common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 5 1/4% Convertible Common Securities (liquidation amount $50 per
Convertible 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
A3-1
<PAGE>
Amended and Restated Declaration of Trust of the Trust dated as of July 13,
1995, 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.
Reference is hereby made to select provisions of the Common Securities
set forth on the reverse hereof, which select provisions shall for all purposes
have the same effect as if set forth at this place.
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.
A3-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this day
of ____________, 199___.
International Paper Capital Trust
By: _________________________
Name:
Title:
A3-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate
per annum of 5 1/4% (the "Coupon Rate") of the stated liquidation amount of $50
per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (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 Property
Trustee and to the extent the Property 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 March 15, June 15, September 15 and
December 15 of each year, commencing on September 15, 1995, to Holders of record
fifteen (15) days 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 20 consecutive quarters (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 Coupon Rate
compounded quarterly during any such Extension Period. Prior to the termination
of any such Extension Period, the Debenture Issuer may further extend such
Extension Period; PROVIDED THAT such Extension Period together with all such
previous and further extensions thereof may not exceed 20 consecutive quarters.
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, subject to the above requirements.
A3-4
<PAGE>
The Common Securities shall be redeemable as provided in the
Declaration.
The Common Securities shall be convertible into shares of
International Paper Common Stock, through (i) the exchange of Common Securities
for a portion of the Debentures and (ii) the immediate conversion of such
Debentures into International Paper Common Stock, in the manner and according to
the terms set forth in the Declaration.
A3-5
<PAGE>
CONVERSION REQUEST
To: The Bank of New York,
as Property Trustee of
International Paper
Capital Trust
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock of INTERNATIONAL PAPER COMPANY (the "International
Paper Common Stock") in accordance with the terms of the Amended and Restated
Declaration of Trust (the "Declaration"), dated as of July 13, 1995, by Charles
Greenberg, John R. Jepsen and Syvert E. Nerheim, as Regular Trustees, The Bank
of New York (Delaware), as Delaware Trustee, The Bank of New York, as Property
Trustee, International Paper Company, as Sponsor, and by the Holders, from time
to time, of individual beneficial interests in the Trust to be issued pursuant
to the Declaration. Pursuant to the aforementioned exercise of the option to
convert these Common Securities, the undersigned hereby directs the Conversion
Agent (as that term is defined in the Declaration) to (i) exchange such Common
Securities for a portion of the Debentures (as that term is defined in the
Declaration) held by the Trust (at the rate of exchange specified in the terms
of the Common Securities set forth as Annex I to the Declaration) and (ii)
immediately convert such Debentures on behalf of the undersigned, into
International Paper Common Stock (at the conversion rate specified in the terms
of the Common Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
A3-6
<PAGE>
Any holder, upon the exercise of its conversion rights in accordance
with the terms of the Declaration and the Common Securities, agrees to be bound
by the terms of the Registration Rights Agreement relating to the International
Paper Common Stock issuable upon conversion of the Common Securities.
Date: ____________, ____
in whole __ in part __
Number of Common Securities to be
converted: _____________________
If a name or names other than the undersigned,
please indicate in the spaces below the name or
names in which the shares of International Paper
Common Stock are to be issued, along with the
address or addresses of such person or persons
Signature (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or Other
Identifying Number
Signature Guarantee:*
_______________________
* (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents
(continued...)
A3-7
<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: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature Guarantee**:
- --------------
*(...continued)
Medallion Program ("STAMP") or such other "signature guarantee program" as may
be determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
** (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
A3-8
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . . . . . . . . 10
SECTION 2.2 Lists of Holders of Securities . . . . . . . . . . . . . 10
SECTION 2.3 Reports by the Property Trustee. . . . . . . . . . . . . 11
SECTION 2.4 Periodic Reports to Property Trustee . . . . . . . . . . 11
SECTION 2.5 Evidence of Compliance with Conditions Precedent . . . . 11
SECTION 2.6 Events of Default; Waiver. . . . . . . . . . . . . . . . 11
SECTION 2.7 Event of Default; Notice . . . . . . . . . . . . . . . . 13
ARTICLE III
ORGANIZATION
SECTION 3.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.2 Office . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.3 Purpose. . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.4 Authority. . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.5 Title to Property of the Trust . . . . . . . . . . . . . 15
SECTION 3.6 Powers and Duties of the Regular Trustees. . . . . . . . 15
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.. . 19
SECTION 3.8 Powers and Duties of the Property Trustee. . . . . . . . 20
SECTION 3.9 Certain Duties and Responsibilities of the Property
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.10 Certain Rights of Property Trustee . . . . . . . . . . . 25
SECTION 3.11 Delaware Trustee . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.12 Execution of Documents . . . . . . . . . . . . . . . . . 28
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities . 28
SECTION 3.14 Duration of Trust. . . . . . . . . . . . . . . . . . . . 28
SECTION 3.15 Mergers. . . . . . . . . . . . . . . . . . . . . . . . . 28
i
<PAGE>
ARTICLE IV
SPONSOR
Page
----
SECTION 4.1 Sponsor's Purchase of Common Securities. . . . . . . . . 31
SECTION 4.2 Responsibilities of the Sponsor. . . . . . . . . . . . . 31
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees . . . . . . . . . . . . . . . . . . . 32
SECTION 5.2 Delaware Trustee . . . . . . . . . . . . . . . . . . . . 32
SECTION 5.3 Property Trustee; Eligibility. . . . . . . . . . . . . . 33
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.5 Initial Trustees . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.6 Appointment, Removal and Resignation of Trustees . . . . 34
SECTION 5.7 Vacancies among Trustees . . . . . . . . . . . . . . . . 37
SECTION 5.8 Effect of Vacancies. . . . . . . . . . . . . . . . . . . 37
SECTION 5.9 Meetings . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.10 Delegation of Power. . . . . . . . . . . . . . . . . . . 38
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions. . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities. . . . . . . . . 39
SECTION 7.2 Execution and Authentication . . . . . . . . . . . . . . 40
SECTION 7.3 Form and Dating. . . . . . . . . . . . . . . . . . . . . 41
SECTION 7.4 Registrar, Paying Agent and Conversion Agent . . . . . . 43
SECTION 7.5 Paying Agent to Hold Money in Trust. . . . . . . . . . . 44
SECTION 7.6 [reserved] . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 7.7 Replacement Securities . . . . . . . . . . . . . . . . . 44
SECTION 7.8 Outstanding Preferred Securities . . . . . . . . . . . . 45
SECTION 7.9 Preferred Securities in Treasury . . . . . . . . . . . . 45
SECTION 7.10 Temporary Securities . . . . . . . . . . . . . . . . . . 46
SECTION 7.11 Cancellation . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE VIII
TERMINATION OF TRUST
ii
<PAGE>
Page
----
SECTION 8.1 Termination of Trust . . . . . . . . . . . . . . . . . . 47
ARTICLE IX
TRANSFER AND EXCHANGE
SECTION 9.1 General. . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 9.2 Transfer Procedures and Restrictions . . . . . . . . . . 50
SECTION 9.3 Deemed Security Holders. . . . . . . . . . . . . . . . . 59
SECTION 9.4 Book Entry Interests . . . . . . . . . . . . . . . . . . 60
SECTION 9.5 Notices to Clearing Agency . . . . . . . . . . . . . . . 61
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability. . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.2 Exculpation. . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.3 Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . 62
SECTION 10.4 Indemnification. . . . . . . . . . . . . . . . . . . . . 63
SECTION 10.5 Outside Businesses . . . . . . . . . . . . . . . . . . . 64
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 11.2 Certain Accounting Matters . . . . . . . . . . . . . . . 65
SECTION 11.3 Banking. . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 11.4 Withholding. . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 12.2 Meetings of the Holders of Securities; Action by
Written Consent . . . . . . . . . . . . . . . . . . . . 69
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee . . . 71
SECTION 13.2 Representations and Warranties of Delaware Trustee . . . 72
iii
<PAGE>
ARTICLE XIV
REGISTRATION RIGHTS
Page
----
SECTION 14.1 Registration Rights. . . . . . . . . . . . . . . . . . . 73
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 15.2 Governing Law. . . . . . . . . . . . . . . . . . . . . . 75
SECTION 15.3 Intention of the Parties . . . . . . . . . . . . . . . . 75
SECTION 15.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 15.5 Successors and Assigns . . . . . . . . . . . . . . . . . 76
SECTION 15.6 Partial Enforceability . . . . . . . . . . . . . . . . . 76
SECTION 15.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . 76
iv
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- -------------------
310(a) . . . . . . . . . . . . . . . . . . 5.3(a)
310(c) . . . . . . . . . . . . . . . . . . Inapplicable
311(c) . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . . 2.2(b)
313. . . . . . . . . . . . . . . . . . . . 2.3
314(a) . . . . . . . . . . . . . . . . . . 2.4
314(b) . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . 2.5
314(d) . . . . . . . . . . . . . . . . . . Inapplicable
314(f) . . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . . 3.9(b)
315(c) . . . . . . . . . . . . . . . . . . 3.9(a)
315(d) . . . . . . . . . . . . . . . . . . 3.9(a)
316(a) . . . . . . . . . . . . . . . . . . Annex I
316(c) . . . . . . . . . . . . . . . . . . 3.6(e)
_______________
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
v
<PAGE>
- --------------------------------------------------------------------------------
INTERNATIONAL PAPER COMPANY
TO
THE BANK OF NEW YORK
TRUSTEE
----------------
INDENTURE
DATED AS OF JULY 1, 1995
----------------
$463,917,550.00
(SUBJECT TO INCREASE TO UP TO $553,505,200.00 IN
THE EVENT AN OVER-ALLOTMENT OPTION IS EXERCISED)
5 1/4% CONVERTIBLE JUNIOR SUBORDINATED
DEFERRABLE INTEREST DEBENTURES DUE 2025
- --------------------------------------------------------------------------------
<PAGE>
International Paper Company
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Indenture
Act Section 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)
(a)(4) . . . . . . . . . . . . . . . 101, 1004
(b) . . . . . . . . . . . . . . . 703(a)
(c) . . . . . . . . . . . . . . . 703(a)
(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
(b) . . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . . . 514
Section 316 (a) . . . . . . . . . . . . . . . 101
(a)(1)(A) . . . . . . . . . . . . . . . 502
512
(a)(1)(B) . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . . . 104(c)
Section 317 (a)(1) . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . 1003
Section 318 (a) . . . . . . . . . . . . . . . 107
- --------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
- ii -
<PAGE>
TABLE OF CONTENTS
Page
----
Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals of the Company. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Additional Interest . . . . . . . . . . . . . . . . . . . . . 3
Additional Payments . . . . . . . . . . . . . . . . . . . . . . 3
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Applicable Price. . . . . . . . . . . . . . . . . . . . . . . 3
Board of Directors. . . . . . . . . . . . . . . . . . . . . . 3
Board Resolution. . . . . . . . . . . . . . . . . . . . . . . 3
Business Day. . . . . . . . . . . . . . . . . . . . . . . . . 3
Closing Price . . . . . . . . . . . . . . . . . . . . . . . . 4
Commission. . . . . . . . . . . . . . . . . . . . . . . . . . 4
Common Securities . . . . . . . . . . . . . . . . . . . . . . 4
Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . 4
Common Stock Fundamental Change . . . . . . . . . . . . . . . 4
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Company Request . . . . . . . . . . . . . . . . . . . . . . . 4
Compounded Interest . . . . . . . . . . . . . . . . . . . . . 5
Conversion Agent. . . . . . . . . . . . . . . . . . . . . . . 5
Conversion Date . . . . . . . . . . . . . . . . . . . . . . . 5
Corporate Trust Office. . . . . . . . . . . . . . . . . . . . 5
Declaration . . . . . . . . . . . . . . . . . . . . . . . . . 5
Defaulted Interest. . . . . . . . . . . . . . . . . . . . . . 5
Delaware Trustee. . . . . . . . . . . . . . . . . . . . . . . 5
Entitlement Date. . . . . . . . . . . . . . . . . . . . . . . 5
Event of Default. . . . . . . . . . . . . . . . . . . . . . . 5
Exchanged Securities. . . . . . . . . . . . . . . . . . . . . 5
Expiration Time . . . . . . . . . . . . . . . . . . . . . . . 5
Extended Interest Payment Period. . . . . . . . . . . . . . . 5
Fundamental Change. . . . . . . . . . . . . . . . . . . . . . 5
Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Holder. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Initial Purchasers. . . . . . . . . . . . . . . . . . . . . . 6
Interest Payment Date . . . . . . . . . . . . . . . . . . . . 6
Investment Company Event. . . . . . . . . . . . . . . . . . . 6
Maturity. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
- iii -
<PAGE>
Page
----
90 Day Period . . . . . . . . . . . . . . . . . . . . . . . . 6
No Recognition Opinion. . . . . . . . . . . . . . . . . . . . 6
Non-Stock Fundamental Change. . . . . . . . . . . . . . . . . 6
Notice of Conversion. . . . . . . . . . . . . . . . . . . . . 6
Officers' Certificate . . . . . . . . . . . . . . . . . . . . 6
Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . 7
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . 7
Paying Agent. . . . . . . . . . . . . . . . . . . . . . . . . 7
Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Predecessor Security. . . . . . . . . . . . . . . . . . . . . 7
Preferred Securities. . . . . . . . . . . . . . . . . . . . . 7
Property Trustee. . . . . . . . . . . . . . . . . . . . . . . 8
Purchase Agreement. . . . . . . . . . . . . . . . . . . . . . 8
Purchased Shares. . . . . . . . . . . . . . . . . . . . . . . 8
Purchaser Stock Price . . . . . . . . . . . . . . . . . . . . 8
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . 8
Redemption Price. . . . . . . . . . . . . . . . . . . . . . . 8
Redemption Tax Opinion. . . . . . . . . . . . . . . . . . . . 8
Reference Date. . . . . . . . . . . . . . . . . . . . . . . . . 8
Reference Market Price. . . . . . . . . . . . . . . . . . . . 8
Registration Default. . . . . . . . . . . . . . . . . . . . . . 8
Registration Rights Agreement . . . . . . . . . . . . . . . . 8
Regular Record Date . . . . . . . . . . . . . . . . . . . . . 8
Responsible Officer . . . . . . . . . . . . . . . . . . . . . 8
Restricted Securities Legend. . . . . . . . . . . . . . . . . 9
Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Rights Agreement. . . . . . . . . . . . . . . . . . . . . . . 9
Securities. . . . . . . . . . . . . . . . . . . . . . . . . . 9
Security Register . . . . . . . . . . . . . . . . . . . . . . 9
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . 9
Shelf Registration Statement. . . . . . . . . . . . . . . . . 9
Special Event . . . . . . . . . . . . . . . . . . . . . . . . 9
Special Record Date . . . . . . . . . . . . . . . . . . . . . 10
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . 10
Subsidiary. . . . . . . . . . . . . . . . . . . . . . . . . . 10
Tax Event . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Trading Day . . . . . . . . . . . . . . . . . . . . . . . . . 10
Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . 10
Trust Securities. . . . . . . . . . . . . . . . . . . . . . . 10
Vice President. . . . . . . . . . . . . . . . . . . . . . . . 10
Voting Stock. . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 102. Compliance Certificates and Opinions. . . . . . . . . . . . . 11
- iv -
<PAGE>
Page
----
SECTION 103. Form of Documents Delivered to Trustee. . . . . . . . . . . . 11
SECTION 104. Acts of Holders; Record Dates . . . . . . . . . . . . . . . . 12
SECTION 105. Notices, Etc., to Trustee and the Company . . . . . . . . . . 13
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . 13
SECTION 107. Conflict with Trust Indenture Act . . . . . . . . . . . . . . 14
SECTION 108. Effect of Headings and Table of Contents. . . . . . . . . . . 14
SECTION 109. Successors and Assigns. . . . . . . . . . . . . . . . . . . . 14
SECTION 110. Separability Clause . . . . . . . . . . . . . . . . . . . . . 14
SECTION 111. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . 15
SECTION 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 113. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 202. Initial Issuance to Property Trustee. . . . . . . . . . . . . .15
ARTICLE THREE
The Securities
SECTION 301. Title and Terms . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 303. Execution, Authentication, Delivery and Dating. . . . . . . . 19
SECTION 304. Temporary Securities. . . . . . . . . . . . . . . . . . . . . 19
SECTION 305. Registration, Registration of Transfer and Exchange . . . . . 20
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. . . . . . . 21
SECTION 307. Payment of Interest; Interest Rights Preserved. . . . . . . . 22
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . 24
SECTION 309. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 310. Right of Set Off. . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 311. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 312. Extension of Interest Payment Period; Notice of Extension . . 26
SECTION 313. Paying Agent, Security Registrar and Conversion Agent . . . . 27
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture . . . . . . . . . . . 27
SECTION 402. Application of Trust Money. . . . . . . . . . . . . . . . . . 29
- v -
<PAGE>
Page
----
ARTICLE FIVE
Remedies
SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 502. Acceleration of Maturity; Rescission and Annulment. . . . . . 31
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 504. Trustee May File Proofs of Claim. . . . . . . . . . . . . . . 33
SECTION 505. Trustee May Enforce Claims Without Possession of Securities . 34
SECTION 506. Application of Money Collected. . . . . . . . . . . . . . . . 34
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . 34
SECTION 508. Unconditional Right of Holders to Receive Principal and
Interest and Convert . . . . . . . . . . . . . . . . . . . . 35
SECTION 509. Restoration of Rights and Remedies. . . . . . . . . . . . . . 35
SECTION 510. Rights and Remedies Cumulative. . . . . . . . . . . . . . . . 36
SECTION 511. Delay or Omission Not Waiver. . . . . . . . . . . . . . . . . 36
SECTION 512. Control by Holders. . . . . . . . . . . . . . . . . . . . . . 36
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . 37
SECTION 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . 37
SECTION 515. Waiver of Stay or Extension Laws. . . . . . . . . . . . . . . 37
SECTION 516. Enforcement by Holders of Preferred Securities. . . . . . . . 38
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities . . . . . . . . . . . . . 38
SECTION 602. Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . 38
SECTION 603. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . 39
SECTION 604. Not Responsible for Recitals or Issuance of Securities. . . . 40
SECTION 605. May Hold Securities . . . . . . . . . . . . . . . . . . . . . 40
SECTION 606. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . 40
SECTION 607. Compensation and Reimbursement. . . . . . . . . . . . . . . . 40
SECTION 608. Disqualification; Conflicting Interests . . . . . . . . . . . 41
SECTION 609. Corporate Trustee Required; Eligibility . . . . . . . . . . . 41
SECTION 610. Resignation and Removal; Appointment of Successor . . . . . . 42
SECTION 611. Acceptance of Appointment by Successor. . . . . . . . . . . . 43
SECTION 612. Merger, Conversion, Consolidation or Succession to Business . 44
SECTION 613. Preferential Collection of Claims Against Company . . . . . . 44
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ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders . . 44
SECTION 702. Preservation of Information; Communications to Holders. . . . 45
SECTION 703. Reports by Trustee. . . . . . . . . . . . . . . . . . . . . . 45
SECTION 704. Reports by Company. . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms. . . . . 46
SECTION 802. Successor Substituted . . . . . . . . . . . . . . . . . . . . 47
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders. . . . . . 48
SECTION 902. Supplemental Indentures with Consent of Holders . . . . . . . 49
SECTION 903. Execution of Supplemental Indentures. . . . . . . . . . . . . 50
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . . . . 50
SECTION 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . 51
SECTION 906. Reference in Securities to Supplemental Indentures. . . . . . 51
ARTICLE TEN
Covenants; Representations and Warranties
SECTION 1001. Payment of Principal and Interest . . . . . . . . . . . . . . 51
SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . 51
SECTION 1003. Money for Security Payments to Be Held in Trust . . . . . . . 52
SECTION 1004. Statement by Officers as to Default . . . . . . . . . . . . . 53
SECTION 1005. Limitation on Dividends; Transactions with Affiliates;
Covenants as to the Trust. . . . . . . . . . . . . . . . . . 53
SECTION 1006. Payment of Expenses of the Trust. . . . . . . . . . . . . . . 54
SECTION 1007. Registration Rights . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE ELEVEN
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Page
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Redemption of Securities
SECTION 1101. Right of Redemption . . . . . . . . . . . . . . . . . . . . . 56
SECTION 1102. Applicability of Article. . . . . . . . . . . . . . . . . . . 56
SECTION 1103. Election to Redeem; Notice to Trustee . . . . . . . . . . . . 56
SECTION 1104. Selection by Trustee of Securities to Be Redeemed . . . . . . 56
SECTION 1105. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . 57
SECTION 1106. Deposit of Redemption Price . . . . . . . . . . . . . . . . . 58
SECTION 1107. Securities Payable on Redemption Date . . . . . . . . . . . . 58
SECTION 1108. Securities Redeemed in Part . . . . . . . . . . . . . . . . . 58
SECTION 1109. Optional Redemption . . . . . . . . . . . . . . . . . . . . . 59
SECTION 1110. Tax Event Redemption. . . . . . . . . . . . . . . . . . . . . 60
ARTICLE TWELVE
Subordination of Securities
SECTION 1201. Agreement to Subordinate. . . . . . . . . . . . . . . . . . . 60
SECTION 1202. Default on Senior Indebtedness. . . . . . . . . . . . . . . . 61
SECTION 1203. Liquidation; Dissolution; Bankruptcy. . . . . . . . . . . . . 61
SECTION 1204. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 1205. Trustee to Effectuate Subordination . . . . . . . . . . . . . 64
SECTION 1206. Notice by the Company . . . . . . . . . . . . . . . . . . . . 64
SECTION 1207. Rights of the Trustee: Holders of Senior Indebtedness . . . . 66
SECTION 1208. Subordination May Not Be Impaired . . . . . . . . . . . . . . 66
ARTICLE THIRTEEN
Conversion of Securities
SECTION 1301. Conversion Rights . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 1302. Conversion Procedures . . . . . . . . . . . . . . . . . . . . 67
SECTION 1303. Conversion Price Adjustments. . . . . . . . . . . . . . . . . 70
SECTION 1304. Reclassification, Consolidation, Merger or Sale of Assets . . 76
SECTION 1305. Notice of Adjustments of Conversion Price . . . . . . . . . . 77
SECTION 1306. Prior Notice of Certain Events. . . . . . . . . . . . . . . . 78
SECTION 1307. Adjustments in Case of Fundamental Changes. . . . . . . . . . 79
SECTION 1308. Dividend or Interest Reinvestment Plans . . . . . . . . . . . 82
SECTION 1309. Certain Additional Rights . . . . . . . . . . . . . . . . . . 83
SECTION 1310. Restrictions on Common Stock Issuable Upon Conversion.. . . . 84
SECTION 1311. Trustee Not Responsible for Determining Conversion Price
or Adjustments . . . . . . . . . . . . . . . . . . . . . . . 84
EXHIBIT A-1 Form of the Security
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Page
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EXHIBIT A-2 Form of the Exchange Security
ANNEX A Form of Amended and Restated Declaration of Trust among the Company,
as Sponsor, The Bank of New York, The Bank of New York (Delaware), and
Charles Greenberg, John R. Jepsen and Syvert E. Nerheim, as trustees,
dated as of June 13, 1995.
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Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
- ix -
<PAGE>
INDENTURE, dated as of July 1, 1995, between International Paper
Company, a corporation duly organized and existing under the laws of the State
of New York (herein called the "Company"), having its principal office at Two
Manhattanville Road, Purchase, New York 10577, and The Bank of New York, a New
York banking corporation, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, International Paper Capital Trust, a Delaware business trust
(the "Trust"), formed under the Amended and Restated Declaration of Trust among
the Company, as Sponsor, The Bank of New York, as property trustee (the
"Property Trustee") and The Bank of New York (Delaware) (the "Delaware Trustee")
and Charles Greenberg, John R. Jepsen and Syvert E. Nerheim, as trustees, dated
as of July 13, 1995 (the "Declaration"), pursuant to the Purchase Agreement (the
"Purchase Agreement") dated July 13, 1995, among the Company, the Trust and the
Initial Purchasers named therein, will issue and sell up to 9,000,000 (or
10,350,000 if the over-allotment option is exercised) aggregate liquidation
preference of its 5.25% Convertible Preferred Securities (the "Preferred
Securities") with a liquidation preference of $50 per Preferred Security, having
an aggregate liquidation amount with respect to the assets of the Trust of
$450,000,000.00 (or $517,500,000.00 if the over-allotment option is exercised);
WHEREAS, the trustees of the Trust, on behalf of the Trust, will
execute and deliver to the Company Common Securities evidencing an ownership
interest in the Trust, registered in the name of the Company, in an aggregate
amount equal to three percent of the capitalization of the Trust, equivalent to
278,351 Common Securities (or 320,104 Common Securities if the over-allotment
option is exercised), with a liquidation preference of $50 per Common Security,
having an aggregate liquidation amount with respect to the assets of the Trust
of $13,917,550.00 (or $16,005,200.00 if the over-allotment option is exercised)
(the "Common Securities");
WHEREAS, the Trust will use the proceeds from the sale of the
Preferred Securities and the Common Securities to purchase from the Company
Securities (as defined below) in an aggregate principal amount of
$463,917,550.00 (or $533,505,200.00 if the over-allotment option is exercised)
WHEREAS, the Company is guaranteeing the payment of distributions on
the Preferred Securities, and payment of the Redemption Price and payments on
liquidation with respect to the Preferred Securities, to the extent provided in
<PAGE>
the Preferred Securities Guarantee Agreement (the "Guarantee") between the
Company and The Bank of New York, as guarantee trustee, for the benefit of the
holders of the Preferred Securities from time to time;
WHEREAS, the Company has duly authorized the creation of an issue of
its 5 1/4% Convertible Junior Subordinated Deferrable Interest Debentures Due
2025 (the "Securities"), of substantially the tenor and amount hereinafter set
forth and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture; and
WHEREAS, so long as the Trust is a Holder of Securities, and any
Preferred Securities are outstanding, the Declaration provides that the holders
of Preferred Securities may cause the Conversion Agent to (a) exchange such
Preferred Securities for Securities held by the Trust and (b) immediately
convert such Securities into Common Stock;
WHEREAS, all things necessary to make the Securities, when executed by
the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and 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 agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
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 direct-
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<PAGE>
ly 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 generally accepted
accounting principles; and
(4) 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.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Additional Interest" has the meaning specified in Section 301.
"Additional Payments" means Compounded Interest and Additional
Interest, if any.
"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.
"Agent" means any Registrar, Paying Agent, Conversion Agent or co-
registrar.
"Applicable Price" has the meaning specified in Section 1307(b).
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"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" means any day other than a Saturday or a Sunday or a
day on which banking institutions in The
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<PAGE>
City of New York are authorized or required by law or executive order to remain
closed.
"Closing Price" has the meaning specified in Section 1307(b).
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the execution 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 Securities" has the meaning specified in the recitals to this
Instrument.
"Common Stock" includes any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Company and which is not subject to redemption by the Company. However, subject
to the provisions of Article Thirteen, shares issuable on conversion of
Securities shall include only shares of the class designated as Common Stock of
the Company at the date of this instrument or shares of any class or classes
resulting from any reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which are not subject to redemption by the Company; PROVIDED, that if at any
time there shall be more than one such resulting class, the shares of each such
class then so issuable on conversion shall be substantially in the proportion
which the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
"Common Stock Fundamental Change" has the meaning specified in Section
1307(b).
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"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 Vice
Chairman of the Board, its President or a Vice President, and by its Trea-
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<PAGE>
surer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Compounded Interest" has the meaning specified in Section 312.
"Conversion Agent" means the Person appointed to act on behalf of the
holders of Preferred Securities in effecting the conversion of Preferred
Securities as and in the manner set forth in the Declaration and Section 1302
hereof.
"Conversion Date" has the meaning specified in Section 1302.
"Corporate Trust Office" means the principal office of the Trustee in
New York, New York, at which at any particular time its corporate trust business
shall be administered and which at the date of this Indenture is 101 Barclay
Street, Floor 21 West, New York, New York 10286.
"Declaration" has the meaning specified in the Recitals of this
instrument.
"Defaulted Interest" has the meaning specified in Section 307.
"Delaware Trustee" has the meaning given it in the Recitals of this
instrument.
"Entitlement Date" has the meaning specified in Section 1307.
"Event of Default" has the meaning specified in Section 501.
"Exchanged Securities" means the 5 1/4% Convertible Junior
Subordinated Deferrable Interest Debentures Due 2025 to be issued in connection
with sales of such Securities pursuant to an effective Shelf Registration
Statement.
"Expiration Time" has the meaning specified in Section 1303(vi).
"Extended Interest Payment Period" has the meaning specified in
Section 312.
"Fundamental Change" has the meaning specified in Section 1307(b).
"Guarantee" has the meaning specified in the Recitals to this
instrument.
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<PAGE>
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"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,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Initial Purchasers," with respect to the Preferred Securities, means
CS First Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
J.P. Morgan Securities Inc. and PaineWebber Incorporated.
"Interest Payment Date" has the meaning specified in Section 301.
"Investment Company Event" has the meaning specified in the
Declaration.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"90 Day Period" has the meaning specified in Section 1110.
"No Recognition Opinion" has the meaning specified in the Declaration.
"Non-Stock Fundamental Change" has the meaning specified in Section
1307(b).
"Notice of Conversion" means the notice to be given by a holder of
Preferred Securities to the Conversion Agent directing the Conversion Agent to
exchange such Preferred Securities for Securities and to convert such Securities
into Common Stock on behalf of such holder.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the Vice Chairman of the Board, the President or a Vice President,
and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee. One of the officers
signing an Officers' Certificate given
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<PAGE>
pursuant to Section 1004 shall be the principal executive, financial or
accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all 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 for whose
payment or 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; and (iii) Securities which have been paid pursuant to Section 306,
converted into Common Stock pursuant to Section 1301, 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.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company.
"Person" means any individual, corporation, company, partnership,
joint venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Preferred Securities" has the meaning specified in the Recitals to
this instrument.
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<PAGE>
"Property Trustee" has the meaning specified in the Recitals of this
instrument.
"Purchase Agreement" has the meaning specified in the Recitals to this
instrument.
"Purchased Shares" has the meaning specified in Section 1303(vi).
"Purchaser Stock Price" has the meaning specified in Section 1307(b).
"Redemption Date", when used with respect to any Security 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 to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Redemption Tax Opinion" has the meaning set forth in the Declaration.
"Reference Date" has the meaning specified in Section 1303(iv).
"Reference Market Price" has the meaning specified in Section 1307(b).
"Registration Default" has the meaning specified in Section 1007.
"Registration Rights Agreement" has the meaning specified in Section
1007.
"Regular Record Date" has the meaning specified in Section 301.
"Responsible Officer", when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, any assistant vice
president, the treasurer, any assistant treasurer, the cashier, any assistant
cashier, any trust officer or assistant trust officer, the controller or any
assistant controller or any other officer of the 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 his knowledge of and
familiarity with the particular subject.
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<PAGE>
"Restricted Securities Legend" has the meaning specified in Section
202.
"Rights" has the meaning specified in Section 1302.
"Rights Agreement" has the meaning specified in Section 1302.
"Securities" has the meaning specified in the Recitals to this
instrument.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" means in respect of the Company (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of such
obligor for money borrowed and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments issued by such obligor, (ii) all
capital lease obligations of such obligor, (iii) all obligations of such obligor
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of such obligor and all obligations of such obligor under any
title retention agreement (but excluding trade accounts payable arising in the
ordinary course of business), (iv) all obligations of such obligor for the
reimbursement of any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction, (v) all obligations of the type referred
to in clauses (i) through (iv) above of other persons for the payment of which
such obligor is responsible or liable as obligor, guarantor or otherwise, and
(vi) all obligations of the type referred to in clauses (i) through (v) above of
other persons secured by any lien on any property or asset of such obligor
(whether or not such obligation is assumed by such obligor), except for (1) any
such indebtedness that is by its terms subordinated to or PARI PASSU with the
Securities and (2) any indebtedness (including all other debt securities and
guarantees in respect of those debt securities) initially issued to any other
trust, or a trustee of such trust, partnership, or other entity affiliated with
the Company that is, directly or indirectly, a financing vehicle of the Company
(a "Financing Entity") in connection with the issuance by such Financing Entity
of preferred securities or other similar securities.
"Shelf Registration Statement" has the meaning specified in Section
1007.
"Special Event" has the meaning specified in the Declaration.
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<PAGE>
"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 interest thereon, means the date specified in such Security as
the fixed date on which the principal, together with any accrued and unpaid
interest (including Compounded Interest), of such Security or such installment
of interest is due and payable.
"Subsidiary" of any Person means (i) a corporation more than 50% of
the outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof or (ii) any other Person (other than a
corporation) in which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and power to direct the policies,
management and affairs thereof.
"Tax Event" has the meaning specified in the Declaration.
"Trading Day" has the meaning specified in Section 1307(b).
"Trust" has the meaning specified in the Recitals to this instrument.
"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 such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; PROVIDED, HOWEVER,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trust Securities" means Common Securities and Preferred Securities.
"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".
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<PAGE>
"Voting Stock" of any Person means capital stock of such Person which
ordinarily has voting power for the election of directors (or Persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
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, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act or reasonably requested by the Trustee in connection with such
application or request. Each such certificate or opinion shall be given in the
form of an Officers' Certificate, if to be given by an officer of the Company,
or an Opinion of Counsel, if to be given by counsel, and shall comply with the
applicable requirements of the Trust Indenture Act and any other applicable
requirement set forth in this Indenture.
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 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.
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<PAGE>
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; RECORD DATES.
(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 an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee 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 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 or the Company, as the case may be, deems
sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders entitled to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders. If not set by the Company prior to
the first solicitation of a Holder made by any Person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date
for any such action or vote shall
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be the 30th day (or, if later, the date of the most recent list of Holders
required to be provided pursuant to Section 701) prior to such first
solicitation or vote, as the case may be. With regard to any record date, only
the Holders on such date (or their duly designated proxies) shall be entitled to
give or take, or vote on, the relevant action.
(d) The ownership of Securities shall be proved by the Security
Register.
(e) 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.
SECTION 105. NOTICES, ETC., TO TRUSTEE AND THE 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,
(1) 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 at its Corporate Trust Office,
Attention: Corporate Trust Trustee Administration, or
(2) 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 instrument
or at any other address previously furnished in writing to the Trustee
by the Company.
SECTION 106. NOTICE TO HOLDERS; WAIVER.
Where this Indenture 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 such Holder's address as it
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appears in the Security Register, not later than the latest date (if any), and
not earlier than the earliest date (if any), 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 Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of 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.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter 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 to 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
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thereby.
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, the holders of Senior Indebtedness, the holders of Preferred
Securities (to the extent provided herein) and the Holders of Securities, 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 OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security or the last date on which a Holder has the right to
convert his Securities shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Securities) payment of interest or
principal or conversion of the Securities need not be made on such date, but may
be made on the next succeeding Business Day (except that, if such Business Day
is in the next succeeding calendar year, such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be, shall be the immediately preceding
Business Day) with the same force and effect as if made on the Interest Payment
Date or Redemption Date, or at the Stated Maturity or on such last day for
conversion, 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.
ARTICLE TWO
Security Forms
SECTION 201. FORMS GENERALLY.
The Securities and the Trustee's certificates of authentication shall
be substantially in the form of Exhibit A-1 which is hereby incorporated in and
expressly made a part of this Indenture. The Exchanged Securities and the
Trustee's Certificate of authentication shall be substantially in the form of
Exhibit A-2, which is hereby incorpo-
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rated by reference and expressly made in part of this Indenture. The Securities
may have notations, legends or endorsements required by law, stock exchange
rule, agreements to which the Company is subject, if any, or usage (provided
that any such notation, legend or endorsement is in a form acceptable to the
Company). The Company shall furnish any such legend not contained in Exhibit A-
1 to the Trustee in writing. Each Security shall be dated the date of its
authentication. The terms and provisions of the Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Indenture and to the extent
applicable, the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
The definitive Securities shall be typewritten or printed,
lithographed or engraved or produced by any combination of these methods on
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
SECTION 202. INITIAL ISSUANCE TO PROPERTY TRUSTEE.
The Securities initially issued to the Property Trustee of the Trust
shall be in the form of or more individual certificates in definitive, fully
registered form without distribution coupons and shall bear the following legend
(the "Restricted Securities Legend") unless the Company determines otherwise in
accordance with applicable law:
THIS SECURITY AND ANY COMMON STOCK (AND RELATED RIGHTS) ISSUED ON
CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING
WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS OF THE STATES OF THE UNITED STATES.
ARTICLE THREE
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The Securities
SECTION 301. TITLE AND TERMS.
The aggregate principal amount of Securities that may be authenticated
and delivered under this Indenture is limited to the sum of (a) $463,917,550.00
and (b) such aggregate principal amount (which may not exceed $533,505,200.00
aggregate principal amount) of Securities, if any, as shall be purchased by the
Trust pursuant to an over-allotment option in accordance with the terms and
provisions of the Purchase Agreement dated July 13, 1995, among the Company, the
Trust referred to therein, except for Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, other
Securities pursuant to Section 304, 305, 306, 906, 1108 or 1301.
The Securities shall be known and designated as the "5 1/4%
Convertible Junior Subordinated Deferrable Interest Debentures Due 2025" of the
Company. Their Stated Maturity shall be July 20, 2025, and they shall bear
interest at the rate of 5 1/4% per annum, from July 20, 1995 or from the most
recent Interest Payment Date (as defined below) to which interest has been paid
or duly provided for, as the case may be, payable quarterly (subject to deferral
as set forth herein), in arrears, on March 15, June 15, September 15 and
December 15 (each an "Interest Payment Date") of each year, commencing
September 15, 1995 until the principal thereof is paid or made available for
payment, and they shall be paid to the Person in whose name the Security is
registered at the close of business on the regular record date for such interest
installment, which shall be the close of business on the date which is 15 days
prior to each Interest Payment Date (the "Regular Record Date"). Interest will
compound quarterly and will accrue at the rate of 5 1/4% per annum on any
interest installment in arrears for more than one quarter or during an extension
of an interest payment period as set forth in Section 312 hereof.
The amount of interest payable for any period will be computed on the
basis of a 360-day year 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 in computed, will be computed on the
basis of the actual number of days elapsed in such a 30-day month. In the event
that any date on which interest is payable on the Securities 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
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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.
If at any time while the Property Trustee is the Holder of any
Securities, the Trust or the Property Trustee is required to pay any taxes,
duties assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing authority,
then, in any case, the Company will pay as additional interest ("Additional
Interest") on the Securities held by the Property Trustee, such additional
amounts as shall be required so that the net amounts received and retained by
the Trust and the Property Trustee after paying such taxes, duties assessments
or other governmental charges will be equal to the amounts the Trust and the
Property Trustee would have received had no such taxes, duties, assessments or
other government charges been imposed.
The principal of and interest on the Securities shall be payable at
the office or agency of the Company in the United States maintained for such
purpose and at any other office or agency maintained by the Company for such
purpose in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; 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.
The Securities shall be redeemable as provided in Article Eleven
hereof.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Twelve hereof.
The Securities shall be convertible as provided in Article Thirteen
hereof.
SECTION 302. DENOMINATIONS.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $50 and integral multiples thereof.
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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.
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 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 such Company Order shall authenticate and make available for delivery such
Securities as in this Indenture provided and not otherwise.
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.
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
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.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without
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unreasonable delay. After the preparation of definitive Securities, the
temporary Securities shall be exchangeable for definitive Securities upon
surrender of the temporary Securities at any office or agency of the Company
designated pursuant to Section 1002, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities 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
authorized denominations. Until so exchanged the temporary Securities shall in
all respects be entitled to the same benefits under this Indenture as definitive
Securities.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
(a) GENERAL.
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 designated pursuant to Section 1002 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 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 at an
office or agency of the Company designated pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount, 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.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations 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
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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.
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, 1108 or 1301 not involving any transfer.
The Company shall not be required (i) in the case of a partial
redemption of the Securities, to issue, register the transfer of or exchange any
Security during a period beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of Securities selected for
redemption under Section 1104 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.
(b) TRANSFER PROCEDURES AND RESTRICTIONS.
The Securities may not be transferred except in compliance with the
Restricted Securities Legend unless otherwise determined by the Company in
accordance with applicable law. Upon any distribution of the Securities to the
holders of the Preferred Securities in accordance with the Declaration, the
Company and the Trustee shall enter into a supplemental indenture pursuant to
Section 901(6) to provide for transfer procedures and restrictions with respect
to the Securities substantially similar to those contained in the Declaration to
the extent applicable in the circumstances existing at the time of such
distribution.
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 like tenor and principal amount and bearing a number
not contemporaneously outstanding.
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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 the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security 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.
Every new Security 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 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.
Any interest on any Security 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,
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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 (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 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 benefit of the Persons entitled to such
Defaulted Interest as in this Clause 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 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 (or their respective Predecessor
Securities) are regis-
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tered at the close of business on such Special Record Date
and shall no longer be payable pursuant to the following
Clause (2).
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the
Securities may be listed, and, if so listed, 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 Clause, 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 (including in each such case Compounded Interest),
which were carried by such other Security.
In the case of any Security which is converted after any Regular
Record Date and on or prior to the next succeeding Interest Payment Date (other
than any Security whose Maturity is prior to such Interest Payment Date),
interest whose Stated Maturity is on such Interest Payment Date shall be payable
on such Interest Payment Date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) 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 such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the case
of any Security that is converted, interest whose Stated Maturity is after the
date of conversion of such Security shall not be payable, and the Company shall
not make nor be required to make any other payment, adjustment or allowance with
respect to accrued but unpaid interest (including Compounded Interest) on the
Securities being converted, which shall be deemed to be paid in full.
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 Secu-
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rity for the purpose of receiving payment of principal of and (subject to
Section 307) interest (including Compounded 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.
SECTION 309. CANCELLATION.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or conversion 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 held by the Trustee shall be disposed of as directed by a Company
Order; PROVIDED, HOWEVER, that the Trustee shall not be required to destroy the
certificates representing such cancelled Securities.
SECTION 310. RIGHT OF SET OFF.
Notwithstanding anything to the contrary in this Indenture, the
Company shall have the right to set off any payment it is otherwise required to
make hereunder to the extent the Company has theretofore made, or is
concurrently on the date of such payment making, a payment under the Guarantee.
SECTION 311. CUSIP NUMBERS.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; PROVIDED, that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption 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.
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SECTION 312. EXTENSION OF INTEREST PAYMENT PERIOD; NOTICE OF EXTENSION.
(a) The Company shall have the right, at any time during the term of
this Security, from time to time to defer payments of interest by extending for
successive periods not exceeding 20 consecutive quarters for each such period
(an "Extended Interest Payment Period"). 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 312, will bear interest
thereon at 5 1/4% 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 then accrued and unpaid on
the Securities, including any Compounded Interest that shall be payable to the
Holders of the Securities in whose names the Securities are registered in the
Security Registrar on the first Regular Record Date after the end of the
Extended Interest Payment Period. Before the termination of any Extended
Interest Payment Period, the Company may further extend such period, provided
that such period together with all such further extensions thereof shall not
exceed 20 consecutive quarters. Upon the termination of any Extended Interest
Payment Period and upon the payment of all Additional Payments then due, the
Company may commence a new Extended 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.
(b) If the Property Trustee is the sole Holder of the Security, the
Company shall give the Holder of the Security and the Trustee notice of its
selection of an Extended Interest Payment Period at least one Business Day prior
to the earlier of (i) the Interest Payment Date or (ii) if the Preferred
Securities are listed on the New York Stock Exchange or other stock exchange or
quotation system, the date the Trust is required to give notice to the New York
Stock Exchange or other applicable self-regulatory organization or to holders of
the Preferred Securities of the record date or the date such distributions are
payable, but in any event not less than ten Business Days prior to such record
date.
(c) If the Property Trustee is not the sole holder of the Securities,
the Company shall give the Holders of the Securities and the Trustee notice of
its selection of an Extended Interest Payment Period at least ten Business Days
prior to the earlier of (i) the Interest Payment Date or (ii) if the Preferred
Securities are listed on the New York Stock Exchange or other stock exchange or
quotation system, the date the Trust is required to give notice to the New York
Stock Exchange or other applicable self-regulatory
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organization or to holders of the Securities of the record date or the date such
distributions are payable, but in any event not less than two Business Days
prior to such record date.
(d) The quarter in which any notice is given pursuant to paragraphs
(b) and (c) hereof shall be counted as one of the 20 quarters permitted in the
maximum Extended Interest Payment Period permitted under paragraph (a) hereof.
SECTION 313. PAYING AGENT, SECURITY REGISTRAR AND CONVERSION AGENT.
The Trustee will initially act as Paying Agent, Security Registrar and
Conversion Agent. The Company may change any Paying Agent, Security Registrar,
co-registrar or Conversion Agent without prior notice. The Company or any of
its Affiliates may act in any such capacity.
ARTICLE FOUR
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 conversion, registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, on demand of 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 1003) have been delivered to
the Trustee for cancellation; or
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(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 or caused to be 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 interest (including Compounded Interest)
to the date of such deposit (in the case of Securities which
have become due and payable) or to 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 Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 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 1003 shall survive.
SECTION 402. APPLICATION OF TRUST MONEY.
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Subject to the provisions of the last paragraph of Section 1003, 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 interest for
whose payment such money has been deposited with the Trustee. All moneys
deposited with the Trustee pursuant to Section 401 (and held by it or any Paying
Agent) for the payment of Securities subsequently converted shall be returned to
the Company upon Company Request.
ARTICLE FIVE
Remedies
SECTION 501. EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the
following events that has occurred and is continuing (whatever the reason for
such Event of Default and whether it shall be occasioned by the provisions of
Article Twelve or 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):
(1) default in the payment of the principal of (or
premium, if any, on) any Security when due whether at
Maturity, upon redemption, by declaration or otherwise; or
(2) default in the payment of any interest upon any
Security, including any Compounded Interest in respect
thereof, when it becomes due and payable, and continuance of
such default for a period of 30 days; PROVIDED, that a valid
extension of the interest payment period by the Company
pursuant to this Indenture shall not constitute a default in
the payment of interest for this purpose; or
(3) failure by the Company to issue and deliver Common
Stock upon an election to convert the Securities into Common
Stock; or
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(4) default in the performance, or breach, of any
covenant or warranty of the Company in this Indenture a
default in whose performance or whose breach is elsewhere in
this Section specifically dealt with]), and continuance of
such default or breach for a period of 90 days after there
has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in principal amount of the
Outstanding Securities a written notice specifying such
default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder;
or
(5) entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of
the Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order
adjudging the Company a bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of
the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the
Company or of substantially all of the property of the
Company, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in
effect for a period of 60 consecutive days; or
(6) the commencement by the Company of a voluntary
case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law
or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by the Company or to
the entry of a decree or order for relief in respect of
itself
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in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy
or insolvency case or proceeding against the Company, or
the filing by the Company of a petition or answer or
consent seeking reorganization or relief under any
applicable Federal or State law, or the consent by the
Company to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official
of the Company or of substantially all of the property of
the Company, or the making by the Company of an assignment
for the benefit of creditors, or the admission by the
Company in writing of its inability to pay its debts
generally as they become due, or the taking of corporate
action by the Company in furtherance of any such action;
or
(7) the voluntary or involuntary dissolution, winding
up or termination of the Trust, except in connection with
(i) the distribution of Securities to holders of Preferred
Securities in liquidation or redemption of their interests
in the Trust, (ii) the redemption of all of the outstanding
Preferred Securities of the Trust or (iii) certain mergers,
consolidations or amalgamations, each as permitted by the
Declaration.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default occurs and is continuing, then and in every
such case the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities may declare the principal of all the Securities and
any other amounts payable hereunder (including any Additional Payments) to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal and
all accrued interest shall become immediately due and payable.
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At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as provided in this Article hereinafter, the Holders of a majority
in aggregate principal amount of the Outstanding Securities, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest (including any Compounded
Interest) on all Securities,
(B) the principal of any Securities which have become
due otherwise than by such declaration of acceleration and
interest thereon at the rate borne by the Securities, and
(C) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel;
and
(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
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 (including
any Compounded Interest) on any Security 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 any
Security at the Maturity thereof,
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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 interest (including any Additional Payments) and,
to the extent that payment thereof shall be legally enforceable, interest on any
overdue principal and on any overdue interest (including any Additional
Interest), at the rate borne by the Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders 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 enforce any other proper remedy.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized 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.
No provision of this Indenture 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.
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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.
Subject to Article Twelve, any money collected by the Trustee pursuant
to this Article 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 interest (including any Additional Payments), upon presentation
of the Securities 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; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest (including any Additional Payments) on the
Securities 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 for
principal and interest (including any Compounded Interest),
respectively.
SECTION 507. LIMITATION ON SUITS.
No Holder of any Security 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;
(2) the Holders of not less than 25% in aggregate principal
amount of the Outstanding
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Securities 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;
it being understood and intended that no one or more Holders 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 Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND INTEREST
AND CONVERT.
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 (subject to Section 307) interest
(including any Additional Payments) on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to convert such Security in accordance with
Article Thirteen and to institute suit for the enforcement of any such payment
and right to convert, 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,
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subject to any determination in such proceeding, the Company, the Trustee and
the Holders 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 had 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 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 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Security
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 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; PROVIDED, that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture; and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
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SECTION 513. WAIVER OF PAST DEFAULTS.
Subject to Section 902 hereof, the Holders of not less than a majority
in principal amount of the Outstanding Securities may on behalf of the Holders
of all the Securities waive any past default hereunder and its consequences,
except a default
(1) in the payment of the principal of, premium, if any, or
interest (including any Additional Payments) on any Security (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 Trustee); or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. UNDERTAKING FOR COSTS.
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, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; PROVIDED, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company or the Trustee or in
any suit for the enforcement of the right to receive the principal of and
interest (including any Additional Payments) on any Security or to convert any
Security in accordance with Article Thirteen.
SECTION 515. 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
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covenants or the performance of this Indenture; 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 Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 516. ENFORCEMENT BY HOLDERS OF PREFERRED SECURITIES.
Notwithstanding anything to the contrary contained herein, if the
Property Trustee fails to enforce its rights under the Securities for a period
of 30 days after any holder of Preferred Securities shall have made a written
request to the Property Trustee to enforce such rights, such holder may
institute a legal proceeding directly against the Company to enforce the
Property Trustee's rights, as Holder of the Securities, without first
instituting any legal proceeding against the Property Trustee or any other
Person.
ARTICLE SIX
The Trustee
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee 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 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. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 602. NOTICE OF DEFAULTS.
The Trustee shall give the Holders notice of any default hereunder as
and to the extent provided by the Trust Indenture Act; PROVIDED, HOWEVER, that
in the case of any default of the character specified in Section 501(4), no such
notice to Holders shall be given until at least 30 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any event
which is, or
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after notice or lapse of time or both would become, an Event of Default.
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601:
(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 Officers' Certificate;
(d) the Trustee may consult with counsel of its choice and the
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 reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) 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,
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consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to reasonable examination of the books,
records and premises of the Company, personally or by agent or attorney;
and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys 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.
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Company of the Securities or the proceeds thereof.
SECTION 605. MAY HOLD SECURITIES.
The Trustee, 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, Paying Agent, Security Registrar, or such other agent.
SECTION 606. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder 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 with the Company.
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SECTION 607. COMPENSATION AND REIMBURSEMENT.
The Company agrees
(1) to pay to the Trustee from time to time such reasonable
compensation as the Company and the Trustee shall from time to time
agree in writing for all services rendered by it hereunder;
(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 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 and any predecessor Trustee for,
and to hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of this trust,
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 608. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000 and has its Corporate
Trust Office in New York, New York. If such Person 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 Person 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
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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 under Section 611.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
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.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company. If an instrument of acceptance by a successor
Trustee 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.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 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 therefor by the Company or
by any such Holder, 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 may remove the Trustee, or (ii) subject
to Section 514, any Holder who has
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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 and the appointment of a successor
Trustee.
(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, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, 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 appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder 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; PROVIDED, that on 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. Upon request of any such successor Trustee,
the Company shall execute any and all instruments required to more fully
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and certainly vest in and confirm to such successor Trustee all such rights,
powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
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.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
ARTICLE SEVEN
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) semiannually, not later than February 15 and August 15 in
each year, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Holders as of a date
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not more than 15 days prior to the delivery thereof, 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;
EXCLUDING from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
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) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(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 any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 703. REPORTS BY TRUSTEE.
(a) Within 60 days after May 15 of each year, commencing May 15,
1996, the Trustee shall transmit to Holders such reports concerning the Trustee
and its actions under this Indenture as may be required pursuant to the Trust
Indenture Act in the manner provided pursuant thereto.
(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 the Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when the Securities are listed on any stock
exchange.
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SECTION 704. REPORTS BY COMPANY.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; PROVIDED, that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 days after the same is so required to be filed
with the Commission.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge with or into any other
Person or, directly or indirectly, convey, transfer or lease all or
substantially all of its properties and assets on a consolidated basis to any
Person, unless:
(1) in case the Company shall consolidate with or merge with or
into another Person or convey, transfer or lease all or substantially
all of its properties and assets on a consolidated basis to any
Person, the Person formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance, transfer
or lease, all or substantially all of the properties and assets of the
Company on a consolidated basis shall be a corporation, partnership or
trust, shall be organized and validly existing under the laws of the
United States of America, 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 reasonably
satisfactory to the Trustee, the due and punctual payment of the
principal of and
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interest (including any Additional Payments) on all the Securities and the
performance or observance of every covenant of this Indenture on the part
of the Company to be performed or observed and shall have provided for
conversion rights in accordance with Article Thirteen;
(2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company
or a Subsidiary as a result of such transaction as having been
incurred by the Company or such Subsidiary at the time of such
transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have
happened and be continuing;
(3) such consolidation or merger or conveyance, transfer or
lease of assets of the Company is permitted under, and does not give
rise to any breach or violation of, the Declaration or the Guarantee;
and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with this Article and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 802. SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of all or
substantially all the properties and assets of the Company on a consolidated
basis in accordance with Section 801, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease 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 Person had been named as the Company herein,
and thereafter, except in the case of a lease, the predecessor Person shall be
relieved of all obligations and covenants under this Indenture and the
Securities.
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ARTICLE NINE
Supplemental Indentures
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without 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 Person to the Company
and the assumption by any such successor of the covenants of the
Company herein and in the Securities; 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 make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article Thirteen; or
(4) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent
with the provisions of this Indenture; PROVIDED, that such action
pursuant to this clause (4) shall not adversely affect the interests
of the Holders of the Securities or, so long as any of the Preferred
Securities shall remain outstanding, the holders of the Preferred
Securities;
(5) to comply with the requirements of the Commission in order
to effect or maintain the qualification of this Indenture under the
Trust Indenture Act; or
(6) to make provision for transfer procedures, certification, book-
entry provisions, the form of restricted securities legends, if any, to be
placed on Securities, and all other matters required pursuant to Section
305(b) or otherwise necessary, desirable or appropriate in connection with
the issuance of Securities to holders of Preferred Securities in the event
of
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a distribution of Securities by the Trust if a Special Event occurs and is
continuing.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may 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 under this Indenture;
PROVIDED, HOWEVER, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby,
(1) extend the Stated Maturity of the principal of, or any
installment of interest (including any Additional Payments) on, any
Security, or reduce the principal amount thereof, or reduce the rate
or extend the time for payment of interest thereon, or reduce any
premium payable upon the redemption thereof, or change the place of
payment where, or the coin or currency in which, any Security or
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), or adversely affect the right to convert any Security as
provided in Article Thirteen (except as permitted by Section 901(3)),
or modify the provisions of this Indenture with respect to the
subordination of the Securities in a manner adverse to the Holders,
(2) reduce the percentage in principal amount of the Outstanding
Securities, 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 certain defaults hereunder and their consequences)
provided for in this Indenture, or
(3) 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
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waived without the consent of the Holder of each Outstanding Security
affected thereby;
PROVIDED, that so long as any of the Preferred Securities remains outstanding,
no waiver of any Event of Default shall be effective, without the prior consent
of the holders of at least 66-2/3% of the aggregate liquidation preference of
the outstanding Preferred Securities.
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.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record
date, or their duly designated proxies, and only such Persons, shall be entitled
to consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided, that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
cancelled and of no further effect.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
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
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 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. No such supplemental indenture shall directly or
indirectly modify the provisions of Article Twelve in any manner which might
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terminate or impair the rights of the Senior Indebtedness pursuant to such
subordination provisions.
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.
SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities 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 so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE TEN
Covenants; Representations and Warranties
SECTION 1001. PAYMENT OF PRINCIPAL AND INTEREST.
The Company will duly and punctually pay the principal of and interest
on the Securities in accordance with the terms of the Securities and this
Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the United States an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer or exchange and 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 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 Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
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The Company may also from time to time designate one or more other
offices or agencies (in the United States) where the Securities may be presented
or surrendered 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 United States for such purposes. 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.
SECTION 1003. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of or interest on any of the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal 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, it will,
prior to each due date of the principal of or interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be
held as provided by the Trust Indenture Act, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent 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 (i) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent and (ii) during the continuance of any
default by the Company (or any other obligor upon the Securities) in the making
of any payment in respect of the Securities, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.
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,
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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 or interest on any
Security and remaining unclaimed for two years after such principal 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 any 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.
SECTION 1004. STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the
material terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
SECTION 1005. LIMITATION ON DIVIDENDS; TRANSACTIONS WITH AFFILIATES; COVENANTS
AS TO THE TRUST.
(a) The Company covenants that the Company (i) 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 stock dividends paid by the Company which consist of stock of the
same class as that on which the dividend is being paid), (ii) 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 PARI PASSU with or
junior to the Securities, and (iii) shall not make any guarantee payments with
respect to the foregoing (other than pursuant to the Guarantee), in each case if
at such time (i) there shall have occurred any event that with the giving of
notice or the lapse of time or both, would constitute an Event of Default
hereunder, (ii) the Company shall be in default with respect to its payment of
any obligations under the Guarantee or (iii) the Company shall have given notice
of its selection of an Extended Interest Payment Period as provided herein
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and such period, or any extension thereof, shall be continuing.
(b) The Company also covenants and agrees (i) that it shall directly
or indirectly maintain 100% ownership of the Common Securities of the
Trust; PROVIDED, HOWEVER, that any permitted successor of the Company hereunder
may succeed to the Company's ownership of such Common Securities and (ii) that
it shall use its reasonable efforts, consistent with the terms and provisions of
the Declaration, to cause the Trust (x) to remain a statutory business trust,
except in connection with the distribution of the Securities to the holders of
Trust Securities in liquidation of the Trust, the redemption of all of the Trust
Securities of the Trust, or certain mergers, consolidations or amalgamations,
each as permitted by the Declaration, and (y) to otherwise continue to be
classified as a grantor trust for United States Federal income tax purposes.
SECTION 1006. PAYMENT OF EXPENSES OF THE TRUST.
In connection with the offering, sale and issuance of the Securities
to the Property Trustee in connection with the sale of the Trust Securities by
the Trust, the Company shall:
(a) pay for all costs and expenses relating to the offering, sale and
issuance of the Securities, including commissions to the Initial Purchasers
payable pursuant to the Purchase Agreement and compensation of the Trustee under
the Indenture in accordance with the provisions of Section 607 of the Indenture;
(b) be responsible for and pay for all debts and obligations (other
than with respect to the Trust Securities) of the Trust, pay for 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 Property 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); and
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(c) 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 1007. REGISTRATION RIGHTS.
The holders of the Preferred Securities, the Securities and the
Guarantee are entitled to the benefits of a Registration Rights Agreement, dated
as of July 20, 1995, among the Company and the Initial Purchasers (the
"Registration Rights Agreement"). Pursuant to the Registration Rights Agreement
the Company has agreed for the benefit of the holders of the Preferred
Securities, the Securities and the Guarantee that (i) it will, at its cost,
prior to September 4, 1995 file a shelf registration statement (the "Shelf
Registration Statement") with the Commission with respect to resales of the
Preferred Securities, together with the Securities, the Guarantee and the
related Common Stock (and Rights) issuable upon conversion thereof, (b) prior to
November 17, 1995, such Shelf Registration Statement shall be declared effective
by the Commission and (iii) the Company will maintain such Shelf Registration
Statement continuously effective under the Securities Act of 1933, as amended,
until the third anniversary of the date of the effectiveness of the Shelf
Registration Statement or such earlier date as is provided in the Registration
Rights Agreement. If the Company fails to comply with any of clauses (i)
through (iii) above (a "Registration Default") then, at such time, the per annum
interest rate on the Securities will increase by 50 basis points (.50%);
PROVIDED, HOWEVER, that if the Registration Default consists of the occurrence
of any event contemplated by paragraph 3(c)(2)(iii) of the Registration Rights
Agreement, such Registration Default shall not be deemed to have occurred until
the expiration of 30 days after the date of the occurrence of such event if such
event is an action taken by the Company in good faith and for valid business
reasons and the Trust and the Company thereafter promptly comply with the
requirements of paragraph 3(i) of the Registration Rights Agreement. Such
increase will remain in effect from and including the date on which any such
Registration Default shall occur to but excluding the date on which all
Registration Defaults have been cured, on which date the interest rate on the
Securities will revert to the interest rate originally borne by the Securities.
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ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. RIGHT OF REDEMPTION.
(a) The Securities may be redeemed at the election of the Company, as
a whole or in part, at any time or from time to time after June 30, 1999, at the
Redemption Prices set forth in Section 1109 below.
(b) The Securities may be redeemed as a whole but not in part at the
election of the Company at any time within 90 days following the occurrence of a
Tax Event; PROVIDED, HOWEVER, that if, at the time there is available to the
Company or the Trust the opportunity to eliminate, within such 90-day period,
the Tax Event by taking some ministerial action, including but not limited to
filing a form or making an election, or pursuing some other similar reasonable
measure, which, in the sole judgment of the Company, has or will cause no
adverse effect on the Trust or the Company or involves or will involve no
material cost, then the Company or the Trust shall pursue such measure in lieu
of redemption.
SECTION 1102. APPLICABILITY OF ARTICLE.
Redemption of Securities at the election of the Company, as permitted
by Section 1101, shall be made in accordance with such provision and this
Article.
SECTION 1103. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem Securities pursuant to Section
1101 shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, at least 60 days and no more than 90
days prior to the Redemption Date fixed by the Company, notify the Trustee of
such Redemption Date and of the principal amount of Securities to be redeemed
and provide a copy of the notice of redemption given to Holders of Securities to
be redeemed pursuant to Section 1104.
SECTION 1104. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
If less than all the Securities are to be redeemed (unless such
redemption affects only a single Security), the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Securities not previously called for
redemption, by such method (including pro rata or by
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lot) as the Trustee shall deem fair and appropriate and which may provide for
the selection for redemption of portions (equal to $25 or any integral multiple
thereof) of the principal amount of the Securities.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any Securities
selected for partial redemption as aforesaid, the principal amount thereof to be
redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of 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.
SECTION 1105. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at such Holder's address
appearing in the Security Register.
All notices of redemption shall identify the Securities to be redeemed
(including, if relevant, CUSIP or ISIN number) and shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and that interest
thereon will cease to accrue on and after said date, and
(4) the place or places where such Securities are to be surrendered
for payment of the Redemption Price.
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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 1106. 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 1003) 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.
SECTION 1107. 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
(including Additional Payments, if any) 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 Record Dates according to the 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 shall, until paid, bear interest
from the Redemption Date at the rate borne by the Security.
SECTION 1108. SECURITIES REDEEMED IN PART.
In the event of any redemption in part, the Company shall not be
required to (i) issue, register the transfer of or exchange any Security during
a period beginning at the opening of business 15 days before any selection for
redemption of Securities and ending at the close of business on the earliest
date in which the relevant notice of redemption is deemed to have been given to
all holders of Securities to be so redeemed and (ii) register the transfer of or
exchange any Securities so selected for redemption, in whole or in
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part, except for the unredeemed portion of any Securities being redeemed in
part.
Any Security which is to be redeemed only in part shall be surrendered
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 make available for delivery to the Holder of such
Security without service charge, a new Security or Securities, 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.
SECTION 1109. OPTIONAL REDEMPTION.
(a) The Company shall have the right to redeem the Securities, in
whole or in part, at any time or from time to time on or after June 30, 1999,
upon not less than 30 nor more than 60 days' notice, at a Redemption Price equal
to $51.58 per $50 principal amount of the Securities to be redeemed plus any
accrued and unpaid interest, including Additional Payments, if any, to the
Redemption Date, if redeemed on or before June 30, 2000, and at the following
Redemption Prices per $50 principal amount of Securities, if redeemed during the
12-month period ending June 30:
Price Per $50
Principal
Year Amount
---- -------------
2001 . . . . . . . . . . $51.31
2002 . . . . . . . . . . 51.05
2003 . . . . . . . . . . 50.79
2004 . . . . . . . . . . 50.53
2005 . . . . . . . . . . 50.26
and thereafter at $50 per $50 principal amount of the Securities plus, in each
case, accrued and unpaid interest, including Additional Payments, if any, to the
Redemption Date. Any redemption pursuant to this Section 1109 shall be made
pursuant to the provisions of Sections 1101 through 1108 hereof.
(b) If a partial redemption of the Securities would result in the
delisting of the Preferred Securities issued by the Trust from any national
securities exchange or other organization on which the Preferred Securities are
listed, the Company shall not be permitted to effect such
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partial redemption and may only redeem the Securities in whole.
SECTION 1110. TAX EVENT REDEMPTION.
If a Tax Event has occurred and is continuing and:
(a) the Company has received a Redemption Tax Opinion; or
(b) the Trustee shall have been informed by tax counsel that a No
Recognition Opinion cannot be delivered to the Trust, then, notwithstanding
Section 1109(a) but subject to Section 1109(b), the Company shall have the right
upon not less than 30 days nor more than 60 days notice to the Holders of the
Securities to redeem the Securities in whole or in part for cash at $50 per $50
principal amount of the Securities plus accrued and unpaid interest, including
Additional Payments, if any, within 90 days following the occurrence of such Tax
Event (the "90 Day Period"); PROVIDED, HOWEVER, that if, at the time there is
available to the Company or the Trust the opportunity to eliminate within the 90
Day Period, the Tax Event by taking some ministerial action, including, but not
limited to, filing a form or making an election, or pursuing some other similar
reasonable measure which, in the sole judgment of the Company, will have no
adverse effect on the Company, the Trust or the Holders of the Trust Securities
issued by the Trust and will involve no material cost, then the Company or the
Trust shall pursue such ministerial action or other measure in lieu of
redemption, and PROVIDED, FURTHER, that the Company shall have no right to
redeem the Securities while the Trust is pursuing any ministerial action or
other similar measure pursuant to its obligations under the Declaration. The
redemption payment of $50 per $50 principal amount of the Securities plus
accrued and unpaid interest, including Additional Payments, if any, shall be
made prior to 12:00 noon, New York time, on the date of such redemption or such
earlier time as the Company determines provided that the Company shall deposit
with the Trustee an amount sufficient to make such redemption payment by 10:00
a.m. on the date such redemption payment is to be made.
ARTICLE TWELVE
Subordination of Securities
SECTION 1201. AGREEMENT TO SUBORDINATE.
The Company covenants and agrees, and each Holder of Securities by
such Holder's acceptance thereof likewise
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covenants and agrees, that all Securities shall be issued subject to the
provisions of this Article Twelve; and each Holder of a Security, whether upon
original issue or upon transfer or assignment thereof, accepts and agrees to be
bound by such provisions. The payment by the Company of the principal of,
premium, if any, and interest (including Additional Payments) on all Securities
issued hereunder shall, to the extent and in the manner hereinafter set forth,
be subordinated and junior in right of payment to the prior payment in full of
all Senior Indebtedness, whether outstanding at the date of this Indenture or
thereafter incurred; PROVIDED HOWEVER, that no provision of this Article Twelve
shall prevent the occurrence of any default or Event of Default hereunder.
SECTION 1202. DEFAULT ON SENIOR INDEBTEDNESS.
In the event and during the continuation of any default by the Company
in the payment of principal, premium, interest or any other payment due on any
Senior Indebtedness continuing beyond the period of grace, if any, specified in
the instrument evidencing such Senior Indebtedness, unless and until such
default shall have been cured or waived or shall have ceased to exist, and in
the event that the maturity of any Senior Indebtedness has been accelerated
because of a default, then no payment shall be made by the Company with respect
to the principal of (including redemption payments), premium, if any, or
interest on the Securities.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 1202, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent
that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee within 90 days of such payment
of the amounts then due and owing on the Senior Indebtedness and only the
amounts specified in such notice to the Trustee shall be paid to the holders of
Senior Indebtedness.
SECTION 1203. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding up or liquidation or reorganization of
the Company, whether voluntary or involuntary, or in bankruptcy,
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insolvency, receivership or other proceedings, all amounts (including principal,
premium, if any, and interest) due or to become due upon all Senior Indebtedness
shall first be paid in full, or payment thereof provided for in money in
accordance with its terms, before any payment is made on account of the
principal (and premium, if any) or interest on the Securities; and upon any such
dissolution or winding up or liquidation or reorganization, any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the Holders of the Securities
or the Trustee would be entitled, except for the provisions of this Article
Twelve, shall be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the Holders of the Securities or by the Trustee under this Indenture if
received by them or it, directly to the holders of Senior Indebtedness (pro rata
to such holders on the basis of the respective amounts of Senior Indebtedness
held by such holders, as calculated by the Company) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, to the extent necessary to pay such
Senior Indebtedness in full, in money or money's worth, after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Indebtedness, before any payment or distribution is made to the Holders of
Securities or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee or the Holders of the Securities before all Senior Indebtedness is paid
in full, or provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of Senior Indebtedness or
their representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, and their respective interests may appear, as calculated
by the Company, for application to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay such Senior Indebtedness in full
in money in accordance with its terms, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Indebtedness.
For purposes of this Article Twelve, the words, "cash, property or
securities" shall not be deemed to in-
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clude shares of stock of the Company as reorganized or readjusted, or securities
of the Company or any other corporation provided for by a plan of reorganization
or readjustment, the payment of which is subordinated at least to the extent
provided in this Article Twelve with respect to the Securities to the payment of
all Senior Indebtedness which may at the time be outstanding; PROVIDED, that
(i) such Senior Indebtedness is assumed by the new corporation, if any,
resulting from any such reorganization or readjustment, and (ii) the rights of
the holders of such Senior Indebtedness are not, without the consent of such
holders, altered by such reorganization or readjustment. The consolidation of
the Company with, or the merger of the Company with or into, another Person or
the liquidation or dissolution of the Company following the conveyance, transfer
or lease of all or substantially all its properties and assets on a consolidated
basis to another Person upon the terms and conditions provided for in Article
Eight hereof shall not be deemed a dissolution, winding up, liquidation or
reorganization for the purposes of this Section 1203 if such other Person shall,
as a part of such consolidation, merger, conveyance, transfer or lease, comply
with the conditions stated in Article Eight hereof. Nothing in Section 1202 or
in this Section 1203 shall apply to claims of, or payments to, the Trustee under
or pursuant to Section 607 hereof.
SECTION 1204. SUBROGATION.
Subject to the payment in full of all Senior Indebtedness, the rights
of the Holders of the Securities shall be subrogated to the rights of the
holders of such Senior Indebtedness to receive payments or distributions of
cash, property or securities of the Company, as the case may be, applicable to
such Senior Indebtedness until the principal of (and premium, if any,) and
interest on the Securities shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of such Senior
Indebtedness of any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the provisions of this
Article Twelve, and no payment over pursuant to the provisions of this Article
Twelve, to or for the benefit of the holders of such Senior Indebtedness by
Holders of the Securities or the Trustee, shall, as between the Company, its
creditors other than holders of Senior Indebtedness, and the Holders of the
Securities, be deemed to be a payment by the Company to or on account of such
Senior Indebtedness. It is understood that the provisions of this Article
Twelve are and are intended solely for the purposes of defining the relative
rights of the Holders of the Securities, on the one hand, and the holders of
such Senior Indebtedness on the other hand.
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Nothing contained in this Article Twelve or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Indebtedness, and the
Holders of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of (and
premium, if any) and interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Securities and creditors
of the Company, as the case may be, other than the holders of Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or the
Holder of any Security from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article Twelve of the holders of such Senior Indebtedness in respect
of cash, property or securities of the Company, as the case may be, received
upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article Twelve, the Trustee, subject to the provisions of Section 603,
and the Holders of the Securities, shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent
or other Person making such payment or distribution, delivered to the Trustee or
to the Holders of the Securities, for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, as the case may be, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article Twelve.
SECTION 1205. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of Securities by such Holder's acceptance thereof
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article Twelve and appoints the Trustee as such Holder's attorney-in-fact
for any and all such purposes.
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SECTION 1206. 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 which would prohibit the making
of any payment of monies to or by the Trustee in respect of the Securities
pursuant to the provisions of this Article Twelve. Notwithstanding the
provisions of this Article Twelve or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts which
would prohibit the making of any payment of monies to or by the Trustee in
respect of the Securities pursuant to the provision of this Article Twelve,
unless and until a Responsible Officer of the Trustee shall have received
written notice thereof at the Corporate Trust Office of the Trustee 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 Section 603 hereof, 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 Section 1206 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 (and premium, if any) or interest on any Security),
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 which may be received by it within two Business Days
prior to such date.
The Trustee, subject to the provisions of Section 603, shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such notice has been given by a holder
of such Senior Indebtedness or a trustee on behalf of any such holder or
holders. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article Twelve, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
right of such Person under this Article Twelve, and, if such evidence is not
furnished, the Trustee may defer any payment to such
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Person pending judicial determination as to the right of such Person to receive
such payment.
SECTION 1207. RIGHTS OF THE TRUSTEE: HOLDERS OF SENIOR INDEBTEDNESS.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article Twelve in respect of any Senior Indebtedness at
any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are set forth in this Article Twelve, and no implied covenants or
obligations with respect to the holders of such Senior Indebtedness shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed
to owe any fiduciary duty to the holders of such Senior Indebtedness and,
subject to the provisions of Section 603, the Trustee shall not be liable to any
holder of such Senior Indebtedness if it shall pay over or deliver to Holders of
Securities, the Company or any other Person money or assets to which any holder
of such Senior Indebtedness shall be entitled by virtue of this Article Twelve
or otherwise. With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants or obligations as
are specifically set forth in this Article Twelve and no implied covenants or
obligations with respect to holders of Senior Indebtedness shall be read into
this Indenture against the Trustee.
SECTION 1208. SUBORDINATION MAY NOT BE IMPAIRED.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or
otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the holders of the Securities
and without impairing or releasing the subordina-
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tion provided in this Article Twelve or the obligations hereunder of the Holders
of the Securities to the holders of Senior Indebtedness, do any one or more of
the following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, such Senior Indebtedness, or otherwise
amend or supplement in any manner such Senior Indebtedness or any instrument
evidencing the same or any agreement under which such Senior Indebtedness is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior Indebtedness; (iii) release
any Person liable in any manner for the collection of such Senior Indebtedness;
and (iv) exercise or refrain from exercising any rights against the Company and
any other Person.
ARTICLE THIRTEEN
Conversion of Securities
SECTION 1301. CONVERSION RIGHTS.
Subject to and upon compliance with the provisions of this Article,
the Securities are convertible, at the option of the Holder, at any time on or
before redemption as provided below or the close of business at their Stated
Maturity, into fully paid and nonassessable shares of Common Stock of the
Company at an initial conversion rate of 0.462963 shares of Common Stock for
each $50 in aggregate principal amount of Securities (equal to a conversion
price of $108.00 per share of Common Stock), subject to adjustment as described
in this Article Thirteen. A Holder of Securities may convert any portion of the
principal amount of the Securities into that number of fully paid and
nonassessable shares of Common Stock (calculated as to each conversion to the
nearest 1/100th of a share) obtained by dividing the principal amount of the
Securities to be converted by such conversion price. In case a Security or
portion thereof is called for redemption, such conversion right in respect of
the Security or portion so called shall expire at the close of business on the
corresponding Redemption Date, unless the Company defaults in making the payment
due upon redemption.
SECTION 1302. CONVERSION PROCEDURES.
(a) In order to convert all or a portion of the Securities, the
Holder thereof shall deliver to the Conversion Agent an irrevocable Notice of
Conversion setting forth the principal amount of Securities to be converted,
together with the name or names, if other than the Holder, in which the shares
of Common Stock should be issued upon conversion and, if such Securities are
definitive Securities, surrender
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to the Conversion Agent the Securities to be converted, duly endorsed or
assigned to the Company or in blank. In addition, a holder of Preferred
Securities may exercise its right under the Declaration to convert such
Preferred Securities into Common Stock by delivering to the Conversion Agent an
irrevocable Notice of Conversion setting forth the information called for by the
preceding sentence and directing the Conversion Agent (i) to exchange such
Preferred Security for a portion of the Securities held by the Trust (at an
exchange rate of $50 principal amount of Securities for each Preferred Security)
and (ii) to immediately convert such Securities, on behalf of such holder, into
Common Stock of the Company pursuant to this Article Thirteen and, if such
Preferred Securities are in definitive form, surrendering such Preferred
Securities, duly endorsed or assigned to the Company or in blank. So long as
any Preferred Securities are outstanding, the Trust shall not convert any
Securities except pursuant to a Notice of Conversion delivered to the Conversion
Agent by a holder of Preferred Securities.
If a Notice of Conversion is delivered on or after the Regular Record
Date and prior to the subsequent Interest Payment Date, the Holder will be
entitled to receive the interest payable on the subsequent Interest Payment Date
on the portion of Securities to be converted notwithstanding the conversion
thereof prior to such Interest Payment Date. Except as otherwise provided in
the immediately preceding sentence, in the case of any Security which is
converted, interest whose Stated Maturity is after the date of conversion of
such Security shall not be payable, and the Company shall not make nor be
required to make any other payment, adjustment or allowance with respect to
accrued but unpaid interest on the Securities being converted, which shall be
deemed to be paid in full. Each conversion shall be deemed to have been
effected immediately prior to the close of business on the day on which the
Notice of Conversion was received (the "Conversion Date") by the Conversion
Agent from the Holder or from a holder of the Preferred Securities effecting a
conversion thereof pursuant to its conversion rights under the Declaration, as
the case may be. The Person or Persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes as the record
holder or holders of such Common Stock as of the Conversion Date. As promptly
as practicable on or after the Conversion Date, the Company shall issue and
deliver at the office of the Conversion Agent, unless otherwise directed by the
Holder in the Notice of Conversion, a certificate or certificates for the number
of full shares of Common Stock issuable upon such conversion, together with the
cash payment, if any, in lieu of any fraction of any share to the Person or
Persons entitled to receive the same.
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The Conversion Agent shall deliver such certificate or certificates to such
Person or Persons.
(b) So long as any share purchase rights created pursuant to the
Rights Agreement between the Company and Chemical Bank (as successor by merger
to Manufacturers Hanover Trust Company), as rights agent, dated as of April 14,
1987, as amended (the "Rights Agreement") or any similar rights issued to
holders of Common Stock in addition thereto or replacement thereof (such rights,
together with any additional or replacement rights, being collectively referred
to as the "Rights") have not expired, been redeemed or otherwise terminated, the
Holder of any Security surrendered for conversion on or prior to the
Distribution Date (as defined in the Rights Agreement) will be entitled to
receive upon such conversion, in addition to the shares of Common Stock issuable
upon such conversion, the same number of Rights to which a holder of a number of
shares of Common Stock equal to the number of shares of Common Stock issuable
upon such conversion is entitled at the time of such conversion in accordance
with the terms and provisions of the Rights Agreement, but if such conversion
occurs after such Distribution Date, the Holder of the Securities surrendered
for conversion will not be entitled to receive any Rights.
(c) The Company's delivery upon conversion of the fixed number of
shares of Common Stock into which the Securities are convertible (together with
the cash payment, if any, in lieu of fractional shares) shall be deemed to
satisfy the Company's obligation to pay the principal amount at Maturity of the
portion of Securities so converted and any unpaid interest (including Compounded
Interest and Additional Interest) accrued on such Securities at the time of such
conversion.
(d) No fractional shares of Common Stock will be issued as a result
of conversion, but in lieu thereof, the Company shall pay to the Conversion
Agent a cash adjustment in an amount equal to the same fraction of the current
market price of such fractional interest on the date on which the Securities or
Preferred Securities, as the case may be, were duly surrendered to the
Conversion Agent for conversion, or, if such day is not a Trading Day, on the
next Trading Day, and the Conversion Agent in turn will make such payment, if
any, to the Holder of the Securities or the holder of the Preferred Securities
so converted.
(e) In the event of the conversion of any Security in part only, a
new Security or Securities for the unconverted portion thereof will be issued in
the name of the Holder thereof upon the cancellation thereof in accordance with
Section 305.
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(f) In effecting the conversion transactions described in this
Section, the Conversion Agent is acting as agent of the holders of Preferred
Securities (in the exchange of Preferred Securities for Securities) and as agent
of the Holders of Securities (in the conversion of Securities into Common
Stock), as the case may be, directing it to effect such conversion transactions.
The Conversion Agent is hereby authorized (i) to exchange Securities held by the
Trust from time to time for Preferred Securities in connection with the
conversion of such Preferred Securities in accordance with this Article Thirteen
and (ii) to convert all or a portion of the Securities into Common Stock and
thereupon to deliver such shares of Common Stock in accordance with the
provisions of this Article Thirteen and to deliver to the Trust a new Security
or Securities for any resulting unconverted principal amount.
(g) All shares of Common Stock delivered upon any conversion of
Restricted Securities shall bear a restrictive legend substantially in the form
of the legend required to be set forth on such Securities and shall be subject
to the restrictions on transfer provided in such legend and in Section 305 (b)
hereof. Neither the Trustee nor the Conversion Agent shall have any
responsibility for the inclusion or content of any such restrictive legend on
such Common Stock; PROVIDED, HOWEVER, that the Trustee or the Conversion Agent
shall have provided to the Company or to the Company's transfer agent for such
Common Stock, prior to or concurrently with a request to the Company to deliver
to such Conversion Agent certificates for such Common Stock, written notice that
the Securities delivered for conversion are Restricted Securities.
SECTION 1303. CONVERSION PRICE ADJUSTMENTS.
The conversion price shall be subject to adjustment (without
duplication) from time to time as follows:
(i) In case the Company shall pay or make a dividend or other
distribution on any class or series of capital stock of the Company
exclusively in Common Stock, the conversion price 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 reduced by multiplying such conversion price 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 reduction
to become effective
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immediately after the opening of business on the day following the date
fixed for such determination. For the purposes of this subparagraph (i),
the number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company. The Company shall not
pay any dividend or make any distribution exclusively in Common Stock on
shares of any class or series of capital stock of the Company held in the
treasury of the Company.
(ii) In case the Company shall pay or make a dividend or other
distribution on its Common Stock consisting exclusively of, or shall
otherwise issue to all holders of its Common Stock, rights or warrants, or
the occurrence of an event under the Rights Agreement, entitling the
holders thereof to subscribe for or purchase shares of Common Stock at a
price per share less than the current market price per share (determined as
provided in subparagraph (vii)) of the Common Stock on the date fixed for
the determination of stockholders entitled to receive such rights or
warrants, the conversion price in effect at the opening of business on the
day following the date fixed for such determination shall be reduced by
multiplying such conversion price 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 reduction to
become effective immediately after the opening of business on the day
following the date fixed for such determination. To the extent that shares
of Common Stock are not so delivered after the expiration of such rights or
warrants, the conversion price shall be readjusted to the conversion price
which would then be in effect if such date fixed for the determination of
stockholders entitled to receive such rights or warrants had not been
fixed. For the purposes of this subparagraph (ii), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company. The Company shall not issue any rights or
warrants in respect of shares of Common Stock held in the treasury of the
Company. In case any rights or warrants referred to in this subparagraph
(ii) in respect of which an adjustment shall have been
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made shall expire unexercised within 45 days after the same shall have been
distributed or issued by the Company, the conversion price shall be
readjusted at the time of such expiration to the conversion price that
would have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.
(iii) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the conversion
price in effect at the opening of business on the day following the day
upon which such subdivision becomes effective shall be proportionately
reduced and, conversely, in case outstanding shares of Common Stock shall
each be combined into a smaller number of shares of Common Stock, the
conversion price in effect at the opening of business on the day following
the day upon which such combination becomes effective shall be
proportionately increased, such reduction or increase, as the case may be,
to become effective immediately after the opening of business on the day
following the day upon which such subdivision or combination becomes
effective.
(iv) Subject to the last sentence of this subparagraph (iv), in
case the Company shall, by dividend or otherwise, distribute to all holders
of its Common Stock evidences of its indebtedness, shares of any class or
series of capital stock, cash or assets (including securities, but
excluding any rights or warrants referred to in subparagraph (ii), any
dividend or distribution paid exclusively in cash and any dividend or
distribution referred to in subparagraph (i) of this Section 1303), the
conversion price shall be reduced so that the same shall equal the price
determined by multiplying the conversion price in effect immediately prior
to the effectiveness of the conversion price reduction contemplated by this
subparagraph (iv) by a fraction of which the numerator shall be the current
market price per share (determined as provided in subparagraph (vii)) of
the Common Stock on the date fixed for the payment of such distribution
(the "Reference Date") less the fair market value (as determined in good
faith by the Board of Directors, whose determination shall be conclusive
and described in a resolution of the Board of Directors), on the Reference
Date, of the portion of the evidences of indebtedness, shares of capital
stock, cash and assets 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 reduction to become effective immediately prior to
the opening of business on the day
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following the Reference Date. In the event that such dividend or
distribution is not so paid or made, the conversion price shall again be
adjusted to be the conversion price which would then be in effect if such
dividend or distribution had not occurred. If the Board of Directors
determines the fair market value of any distribution for purposes of this
subparagraph (iv) by reference to the actual or when issued trading market
for any securities comprising such distribution, it must in doing so
consider the prices in such market over the same period used in computing
the current market price per share of Common Stock (determined as provided
in subparagraph (vii)). For purposes of this subparagraph (iv), any
dividend or distribution that includes shares of Common Stock or rights or
warrants to subscribe for or purchase shares of Common Stock shall be
deemed instead to be (1) a dividend or distribution of the evidences of
indebtedness, shares of capital stock, cash or assets other than such
shares of Common Stock or such rights or warrants (making any conversion
price reduction required by this subparagraph (iv)) immediately followed by
(2) a dividend or distribution of such shares of Common Stock or such
rights or warrants (making any further conversion price reduction required
by subparagraph (i) or (ii)), except (A) the Reference Date of such
dividend or distribution as defined in this subparagraph (iv) shall be
substituted as (a) "the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution," (b) "the date
fixed for the determination of stockholders entitled to receive such rights
or warrants" and (c) "the date fixed for such determination" within the
meaning of subparagraphs (i) and (ii) and (B) any shares of Common Stock
included in such dividend or distribution shall not be deemed "outstanding
at the close of business on the date fixed for such determination" within
the meaning of subparagraph (i).
(v) In case the Company shall pay or make a dividend or other
distribution on its Common Stock exclusively in cash (excluding, in the
case of any regular cash dividend on the Common Stock, the portion thereof
that does not exceed the per share amount of the next preceding regular
cash dividend on the Common Stock (as adjusted to appropriately reflect any
of the events referred to in subparagraphs (i), (ii), (iii), (iv), (v) and
(vi)), or all of such regular cash dividend if the annualized amount
thereof per share of Common Stock does not exceed 15% of the current market
price per share (determined as provided in subparagraph (vii)) of the
Common Stock on the Trading Day next preceding the date of declaration of
such dividend, the
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conversion price shall be reduced so that the same shall equal the price
determined by multiplying the conversion price in effect immediately prior
to the effectiveness of the conversion price reduction contemplated by this
subparagraph (v) by a fraction of which the numerator shall be the current
market price per share (determined as provided in subparagraph (vii)) of
the Common Stock on the date fixed for the payment of such distribution
less the amount of cash so distributed and not excluded as provided
applicable to one share of Common Stock and the denominator shall be such
current market price per share of the Common Stock, such reduction to
become effective immediately prior to the opening of business on the day
following the date fixed for the payment of such distribution; PROVIDED,
HOWEVER, that in the event the portion of the cash so distributed
applicable to one share of Common Stock is equal to or greater than the
current market price per share (as defined in subparagraph (vii)) of the
Common Stock on the record date mentioned above, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder of shares
of Securities shall have the right to receive upon conversion the amount of
cash such Holder would have received had such Holder converted each share
of the Securities immediately prior to the record date for the distribution
of the cash. In the event that such dividend or distribution is not so
paid or made, the conversion price shall again be adjusted to be the
conversion price which would then be in effect if such record date had not
been fixed.
(vi) In case a tender or exchange offer (other than an odd-lot
offer) made by the Company or any Subsidiary of the Company for all or any
portion of the Company's Common Stock shall expire and such tender or
exchange offer shall involve the payment by the Company or such Subsidiary
of consideration per share of Common Stock having a fair market value (as
determined in good faith by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of
Directors) at the last time (the "Expiration Time") tenders or exchanges
may be made pursuant to such tender or exchange offer (as it shall have
been amended) that exceeds 110% of the current market price per share
(determined as provided in subparagraph (vii)) of the Common Stock on the
Trading Day next succeeding the Expiration Time, the conversion price shall
be reduced so that the same shall equal the price determined by multiplying
the conversion price in effect immediately prior to the effectiveness of
the conversion price reduction contem-
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plated by this subparagraph (vi) by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding (including any tendered
or exchanged shares) at the Expiration Time multiplied by the current
market price per share (determined as provided in subparagraph (vii)) of
the Common Stock on the Trading Day next succeeding the Expiration Time and
the denominator shall be the sum of (x) the fair market value (determined
as aforesaid) of the aggregate consideration payable to stockholders based
on the acceptance (up to any maximum specified in the terms of the tender
or exchange offer) of all shares validly tendered or exchanged 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") and (y) the
product of the number of shares of Common Stock outstanding (less any
Purchased Shares) at the Expiration Time and the current market price per
share (determined as provided in subparagraph (vii)) of the Common Stock on
the Trading Day next succeeding the Expiration Time, such reduction to
become effective immediately prior to the opening of business on the day
following the Expiration Time.
(vii) For the purpose of any computation under subparagraphs
(ii), (iv), (v) and (vi), the current market price per share of Common
Stock on any date in question shall be deemed to be the average of the
daily Closing Prices for the five consecutive Trading Days selected by the
Company commencing not more than 20 Trading Days before, and ending not
later than, the earlier of the day in question and, if applicable, the day
before the "ex" date with respect to the issuance or distribution requiring
such computation; PROVIDED, HOWEVER, that if another event occurs that
would require an adjustment pursuant to subparagraph (i) through (vi),
inclusive, the Board of Directors may make such adjustments to the Closing
Prices during such five Trading Day period as it deems appropriate to
effectuate the intent of the adjustments in this Section 1303, in which
case any such determination by the Board of Directors shall be set forth in
a Board Resolution and shall be conclusive. For purposes of this
paragraph, the term "ex" date, (1) when used with respect to any issuance
or distribution, means the first date on which the Common Stock trades
regular way on the New York Stock Exchange or on such successor securities
exchange as the Common Stock may be listed or in the relevant market from
which the Closing Prices were obtained without the right to receive such
issuance or distribution, and (2) when used with respect to any tender or
exchange offer means the first date on
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which the Common Stock trades regular way on such securities exchange or
in such market after the Expiration Time of such offer.
(viii) The Company may make such reductions in the conversion
price, in addition to those required by subparagraphs (i), (ii), (iii),
(iv), (v) and (vi), as it considers to be advisable to avoid or diminish
any income tax to holders of Common Stock or rights to purchase Common
Stock resulting from any dividend or distribution of stock (or rights to
acquire stock) or from any event treated as such for income tax purposes.
The Company from time to time may reduce the conversion price by any amount
for any period of time if the period is at least twenty (20) days, the
reduction is irrevocable during the period, and the Board of Directors of
the Company shall have made a determination that such reduction would be in
the best interest of the Company, which determination shall be conclusive.
Whenever the conversion price is reduced pursuant to the preceding
sentence, the Company shall mail to holders of record of the Securities a
notice of the reduction at least fifteen (15) days prior to the date the
reduced conversion price takes effect, and such notice shall state the
reduced conversion price and the period it will be in effect.
(ix) No adjustment in the conversion price shall be required
unless such adjustment would require an increase or decrease of at least 1%
in the conversion price; PROVIDED, HOWEVER, that any adjustments which by
reason of this subparagraph (ix) are not required to be made shall be
carried forward and taken into account in determining whether any
subsequent adjustment shall be required.
(x) If any action would require adjustment of the conversion
price pursuant to more than one of the provisions described above, only one
adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value to the Holder of the
Securities.
SECTION 1304. RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE OF ASSETS.
In the event that the Company shall be a party to any transaction
(including without limitation (a) any recapitalization or reclassification of
the Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result
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of a subdivision or combination of the Common Stock), (b) any consolidation of
the Company with, or merger of the Company into, any other Person, any merger of
another Person into the Company (other than a merger which does not result in a
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company), (c) any sale or transfer of all or substantially
all of the assets of the Company or (d) any compulsory share exchange) pursuant
to which the Common Stock is converted into the right to receive other
securities, cash or other property, then lawful provision shall be made as part
of the terms of such transaction whereby the Holder of each Security then
outstanding shall have the right thereafter to convert such Security only into
(i) in the case of any such transaction other than a Common Stock Fundamental
Change, the kind and amount of securities, cash and other property receivable
upon consummation of such transaction by a holder of the number of shares of
Common Stock of the Company into which such Security could have been converted
immediately prior to such transaction, after giving effect, in the case of any
Non-Stock Fundamental Change, to any adjustment in the conversion price required
by the provision of Section 1307(a)(i), and (ii) in the case of a Common Stock
Fundamental Change, common stock of the kind received by holders of Common Stock
as a result of such Common Stock Fundamental Change in an amount determined
pursuant to the provisions of Section 1307(a)(ii).
The Company or the Person formed by such consolidation or resulting
from such merger or which acquired such assets or which acquires the Company's
shares, as the case may be, shall make provision in its certificate or articles
of incorporation or other constituent document to establish such right. Such
certificate or articles of incorporation or other constituent document shall
provide for adjustments which, for events subsequent to the effective date of
such certificate or articles of incorporation or other constituent document,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article Thirteen. The above provisions shall similarly apply to
successive transactions of the foregoing type.
SECTION 1305. NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.
Whenever the conversion price is adjusted as herein provided:
(a) the Company shall compute the adjusted conversion price and shall
prepare a certificate signed by the Chief Financial Officer or the Treasurer of
the Company setting forth the adjusted conversion price and showing in
reasonable detail the facts upon which such adjustment is
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based, and such certificate shall forthwith be filed with the Trustee and the
transfer agent for the Preferred Securities and the Securities; and
(b) a notice stating the conversion price has been adjusted and
setting forth the adjusted conversion price shall as soon as practicable be
mailed by the Company to all record holders of Preferred Securities and the
Securities at their last addresses as they appear upon the stock transfer books
of the Company and the Trust.
SECTION 1306. PRIOR NOTICE OF CERTAIN EVENTS.
In case:
(i) the Company shall (1) declare any dividend (or any other
distribution) on its Common Stock, other than (A) a dividend payable in
shares of Common Stock or (B) a dividend payable in cash that would not
require an adjustment pursuant to Section 1303(iv) or (v) or (2) authorize
a tender or exchange offer that would require an adjustment pursuant to
Section 1303(vi);
(ii) the Company shall authorize the granting to all holders of
Common Stock of rights or warrants to subscribe for or purchase any shares
of stock of any class or series or of any other rights or warrants;
(iii) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a change in
par value, or from par value to no par value, or from no par value to par
value), or of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company shall be
required, or of the sale or transfer of all or substantially all of the
assets of the Company or of any compulsory share exchange whereby the
Common Stock is converted into other securities, cash or other property; or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall (a) if any Preferred Securities are outstanding, cause to
be filed with the transfer agent for the Preferred Securities, and shall cause
to be mailed to the holders of record of the Preferred Securities, at their last
addresses as they shall appear upon the stock transfer books the Trust or
(b) shall cause to be mailed to all Holders at their last addresses as they
shall appear in the
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Security Register, at least fifteen days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on which a
record (if any) is to be taken for the purpose of such dividend, distribution,
rights or warrants or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution,
rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, share exchange, dissolution, liquidation or winding up (but no failure
to mail such notice or any defect therein or in the mailing thereof shall affect
the validity of the corporate action required to be specified in such notice).
SECTION 1307. ADJUSTMENTS IN CASE OF FUNDAMENTAL CHANGES.
(a) Notwithstanding any other provision in this Article Thirteen to
the contrary, if any Fundamental Change occurs, then the conversion price in
effect will be adjusted immediately after such Fundamental Change as described
below. In addition, in the event of a Common Stock Fundamental Change, each
Security shall be convertible solely into common stock of the kind and amount
received by holders of Common Stock as the result of such Common Stock
Fundamental Change as more specifically provided in the following clauses (i)
and (ii).
For purposes of calculating any adjustment to be made pursuant to this
Section 1307 in the event of a Fundamental Change, immediately after such
Fundamental Change:
(i) in the case of a Non-Stock Fundamental Change, the
conversion price of the Securities shall thereupon become the lower of (A)
the conversion price in effect immediately prior to such Non-Stock
Fundamental Change, but after giving effect to any other prior adjustments
effected pursuant to this Article Thirteen, and (B) the result obtained by
multiplying the greater of the Applicable Price or the then applicable
Reference Market Price by a fraction of which the numerator shall be $50
and the denominator shall be the current Redemption Price as set forth in
Section 1109 or, prior to June 30 1999, an amount per Security determined
by the Company in its sole discretion, after consultation with an
investment banking firm, to be the equivalent of the hypothetical
Redemption Price that would have
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been applicable if the if the Securities had been redeemable during such
period; and
(ii) in the case of a Common Stock Fundamental Change, the
conversion price of the Securities in effect immediately prior to such
Common Stock Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to this Article Thirteen, shall thereupon be
adjusted by multiplying such conversion price by a fraction of which the
numerator shall be the Purchaser Stock Price and the denominator shall be
the Applicable Price; PROVIDED, HOWEVER, that in the event of a Common
Stock Fundamental Change in which (A) 100% of the value of the
consideration received by a holder of Common Stock is common stock of the
successor, acquiror or other third party (and cash, if any, is paid only
with respect to any fractional interests in such common stock resulting
from such Common Stock Fundamental Change) and (B) all of the Common Stock
shall have been exchanged for, converted into or acquired for common stock
(and cash with respect to fractional interests) of the successor, acquiror
or other third party, the conversion price of the Securities in effect
immediately prior to such Common Stock Fundamental Change shall thereupon
be adjusted by multiplying such conversion price by a fraction of which the
numerator shall be one and the denominator shall be the number of shares of
common stock of the successor, acquiror, or other third party received by a
stockholder for one share of Common Stock as a result of such Common Stock
Fundamental Change.
(b) DEFINITIONS. The following definitions shall apply to terms used
in this Article Thirteen:
(1) "APPLICABLE PRICE" shall mean (i) in the event of a
Non-Stock Fundamental Change in which the holders of the Common Stock
receive only cash, the amount of cash received by a stockholder for one
share of Common Stock and (ii) in the event of any other Non-Stock
Fundamental Change or any Common Stock Fundamental Change, the average of
the daily Closing Prices of the Common Stock for the ten (10) consecutive
Trading Days prior to and including the record date for the determination
of the holders of Common Stock entitled to receive securities, cash or
other property in connection with such Non-Stock Fundamental Change or
Common Stock Fundamental Change, or, if there is no such record date, the
date upon which the holders of the Common Stock shall have the right to
receive such securities, cash or other property (such record date or
distribution date being hereinafter referred to as the
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"ENTITLEMENT DATE"), in each case, as adjusted in good faith by the Company
to appropriately reflect any of the events referred to in
subparagraphs (i), (ii), (iii), (iv), (v) and (vi) of Section 1303.
(2) "CLOSING PRICE" of any common stock on any day shall mean
the last reported sale price regular way on such day or, in case no such
sale takes place on such day, the average of the reported closing bid and
asked prices regular way of such common stock, in each case on the NYSE
Composite Tape or, if the common stock is not listed or admitted to trading
on such exchange, on the principal national securities exchange on which
such common stock is listed or admitted to trading, or, if not listed or
admitted to trading on any national securities exchange, the average of the
closing bid and asked prices as furnished by any New York Stock Exchange
member firm selected from time to time by the Board of Directors of the
Company for that purpose or, if not so available in such manner, as
otherwise determined in good faith by the Board of Directors.
(3) "COMMON STOCK FUNDAMENTAL CHANGE" shall mean any Fundamental
Change in which more than 50% of the value (as determined in good faith by
the Board of Directors) of the consideration received by holders of Common
Stock consists of common stock that for each of the ten consecutive Trading
Days prior to the Entitlement Date has been admitted for listing or
admitted for listing subject to notice of issuance on a national securities
exchange or quoted on the National Market System of the National
Association of Securities Dealers, Inc.; PROVIDED, HOWEVER, that a
Fundamental Change shall not be a Common Stock Fundamental Change unless
the Company continues to exist after the occurrence of such Fundamental
Change and the outstanding Preferred Securities continue to exist as
outstanding Preferred Securities.
(4) "FUNDAMENTAL CHANGE" shall mean the occurrence of any
transaction or event in connection with a plan pursuant to which all or
substantially all of the Common Stock shall be exchanged for, converted
into, acquired for or constitute solely the right to receive securities,
cash or other property (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise); PROVIDED, HOWEVER, in the case of a plan
involving more than one such transaction or event, for purposes of
adjustment of the conversion price, such Fundamental Change shall be deemed
to have occurred when substantially all of the
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Common Stock of the Company shall be exchanged for, converted into, or
acquired for or constitute solely the right to receive securities, cash or
other property, but the adjustment shall be based upon the highest weighted
average of consideration per share that a holder of Common Stock could have
received in such transactions or events as a result of which more than 50%
of the Common Stock of the Company shall have been exchanged for, converted
into, or acquired for or constitute solely the right to receive securities,
cash or other property.
(5) "NON-STOCK FUNDAMENTAL CHANGE" shall mean any Fundamental
Change other than a Common Stock Fundamental Change.
(6) "PURCHASER STOCK PRICE" shall mean, with respect to any
Common Stock Fundamental Change, the average of the daily Closing Prices of
the common stock received in such Common Stock Fundamental Change for the
ten consecutive Trading Days prior to and including the Entitlement Date,
as adjusted in good faith by the Board of Directors to appropriately
reflect any of the events referred to in subparagraphs (i), (ii), (iii),
(iv), (v) and (vi) of Section 1303.
(7) "REFERENCE MARKET PRICE" shall initially mean $59.25 (which
is an amount equal to 66 2/3% of the reported last sales price for the
Common Stock on the New York Stock Exchange Composite Tape on July 13, 1995
and in the event of any adjustment to the conversion price other than as a
result of a Non-Stock Fundamental Change, the Reference Market Price shall
also be adjusted so that the ratio of the Reference Market Price to the
conversion price after giving effect to any such adjustment shall always be
the same as the ratio of $59.25 to the initial conversion price of the
Preferred Securities.
(8) "TRADING DAY" shall mean a day on which securities are
traded on the national securities exchange or quotation system used to
determine the Closing Price.
SECTION 1308. DIVIDEND OR INTEREST REINVESTMENT PLANS.
Notwithstanding the foregoing provisions, the issuance of any shares
of Common Stock pursuant to any plan providing for the reinvestment of dividends
or interest payable on securities of the Company and the investment of
additional optional amounts in shares of Common Stock under any such plan, and
the issuance of any shares of Common
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Stock or options or rights to purchase such shares pursuant to any employee
benefit plan or program of the Company or pursuant to any option, warrant, right
or exercisable, exchangeable or convertible security outstanding as of the date
the Securities were first issued, shall not be deemed to constitute an issuance
of Common Stock or exercisable, exchangeable or convertible securities by the
Company to which any of the adjustment provisions described above applies.
There shall also be no adjustment of the conversion price in case of the
issuance of any stock (or securities convertible into or exchangeable for stock)
of the Company except as specifically described in this Article Thirteen.
SECTION 1309. CERTAIN ADDITIONAL RIGHTS.
In case the Company shall, by dividend or otherwise, declare or make a
distribution on its Common Stock referred to in Section 1303 (iv) or 1303(v)
(including, without limitation, dividends or distributions referred to in the
last sentence of Section 1303(iv)), the Holder of the Securities, upon the
conversion thereof subsequent to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution and prior to
the effectiveness of the conversion price adjustment in respect of such
distribution, shall also be entitled to receive for each share of Common Stock
into which the Securities are converted, the portion of the shares of Common
Stock, rights, warrants, evidences of indebtedness, shares of capital stock,
cash and assets so distributed applicable to one share of Common Stock;
PROVIDED, HOWEVER, that, at the election of the Company (whose election shall be
evidenced by a resolution of the Board of Directors) with respect to all Holders
so converting, the Company may, in lieu of distributing to such Holder any
portion of such distribution not consisting of cash or securities of the
Company, pay such Holder an amount in cash equal to the fair market value
thereof (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors). If any conversion of Securities described in the immediately
preceding sentence occurs prior to the payment date for a distribution to
holders of Common Stock which the Holder of Securities so converted is entitled
to receive in accordance with the immediately preceding sentence, the Company
may elect (such election to be evidenced by a resolution of the Board of
Directors) to distribute to such Holder a due bill for the shares of Common
Stock, rights, warrants, evidences of indebtedness, shares of capital stock,
cash or assets to which such Holder is so entitled, PROVIDED, that such due bill
(i) meets any applicable requirements of the principal national securities
exchange or other market on which the
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Common Stock is then traded and (ii) requires payment or delivery of such shares
of Common Stock, rights, warrants, evidences of indebtedness, shares of capital
stock, cash or assets no later than the date of payment or delivery thereof to
holders of shares of Common Stock receiving such distribution.
SECTION 1310. RESTRICTIONS ON COMMON STOCK ISSUABLE UPON CONVERSION.
(a) Shares of Common Stock to be issued upon conversion of a Security
in respect of Restricted Preferred Securities (as defined in the Declaration)
shall bear such restrictive legends as the Company may provide in accordance
with applicable law.
(b) If shares of Common Stock to be issued upon conversion of a
Security in respect of Restricted Preferred Securities are to be registered in a
name other than that of the Holder of such Preferred Security, then the Person
in whose name such shares of Common Stock are to be registered must deliver to
the Conversion Agent a certificate satisfactory to the Company and signed by
such Person, as to compliance with the restrictions on transfer applicable to
such Preferred Security. Neither the Trustee nor any Conversion Agent or
Registrar shall be required to register in a name other than that of the Holder
shares of Common Stock or such Preferred Securities issued upon conversion of
any such Security in respect of such Preferred Securities not so accompanied by
a properly completed certificate.
SECTION 1311. TRUSTEE NOT RESPONSIBLE FOR DETERMINING CONVERSION PRICE OR
ADJUSTMENTS.
Neither the Trustee nor any Conversion Agent shall at any time be
under any duty or responsibility to any Holder of any Security to determine
whether any facts exist which may require any adjustment of the conversion
price, or with respect to the nature or extent of any such adjustment when made,
or with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same. Neither the Trustee nor
any Conversion Agent shall be accountable with respect to the validity or value
(or the kind of account) of any shares of Common Stock or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Security; and neither the Trustee nor any Conversion Agent makes any
representation with respect thereto. Neither the Trustee nor any Conversion
Agent shall be responsible for any failure of the Company to make any cash
payment or to issue,
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transfer or deliver any shares of Common Stock or stock certificates or other
securities or property upon the surrender of any Security for the purpose of
conversion, or, except as expressly herein provided, to comply with any of the
covenants of the Company contained in Article Ten or this Article Thirteen.
--------------------
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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.
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.
INTERNATIONAL PAPER COMPANY
By: /s/ James W. Guedry
---------------------------------------
Name: James W. Guedry
Title: Secretary & Staff Vice President
Attest:
/s/ Syvert E. Nerheim
- ---------------------
Syvert E. Nerheim
Assistant Secretary
THE BANK OF NEW YORK
By: /s/ Vivian Georges
-------------------------------
Name: Vivian Georges
Title: Assistant Vice President
Attest:
/s/ Helen M. Cotiaux
- -----------------
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<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 20th day of July, 1995 before me personally came James W.
Guedry, to me known, who, being by me duly sworn, did depose and say that he/she
is the Secretary and Staff Vice President of International Paper Company, one of
the corporations described in and which executed the foregoing instrument; and
that he/she signed his/her name thereto by authority of the Board of Directors
of such corporation.
/s/ Zena M. Ruddock
--------------------------
Zena M. Ruddock
Notary Public
State of New York
No. 41-4803773
Qualified in Queens County
Certificate filed in
New York County
Commission Expires
September 30, 1996
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STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 20th day of July, 1995 before me personally came Vivian
Georges, to me known, who, being by me duly sworn, did depose and say that
he/she is a Assistant Vice President of The Bank of New York, a corporation
described in and which executed the foregoing instrument; and that he/she signed
his/her name thereto by authority of the Board of Directors of such corporation.
/s/ Zena M. Ruddock
--------------------------
Zena M. Ruddock
Notary Public
State of New York
No. 41-4803773
Qualified in Queens County
Certificate filed in
New York County
Commission Expires
September 30, 1996
- 88 -
<PAGE>
EXHIBIT A-1
FORM OF SECURITY
[FORM OF FACE OF SECURITY]
[Include Restricted Securities Legend: THIS SECURITY AND ANY COMMON STOCK (AND
RELATED RIGHTS) ISSUED ON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAW AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) AND (B) IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES.]
INTERNATIONAL PAPER COMPANY
5 1/4% Convertible Junior Subordinated
Deferrable Interest Security Due 2025
No._________ $___________
[CUSIP No. _________]
INTERNATIONAL PAPER COMPANY, a corporation duly organized and existing
under the laws of the State of New York (herein called "the Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to ____________________, or
registered assigns, the principal sum [indicated on Schedule A hereof]* [of
______ Dollars]** ($ ) on July 20, 2025.
Interest Payment Dates: March 15, June 15, September 15 and December 15,
commencing September 15, 1995
- ---------------
*
Applicable to Global Securities only.
**
Applicable to certificated Securities only.
<PAGE>
Regular Record Dates: the close of business on the 15th day immediately
preceding each Interest Payment Date, commencing August
31, 1995
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
signed manually or by facsimile by its duly authorized officers and a facsimile
of its corporate seal to be affixed hereto or imprinted hereon.
Dated: _________, ____
INTERNATIONAL PAPER COMPANY
By:________________________
Name:
Title:
[Seal]
Attest:
_______________
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<PAGE>
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: , THE BANK OF NEW YORK,
--------- ---- as Trustee
By: _______________________
Authorized Signatory
[FORM OF REVERSE OF SECURITY]
INTERNATIONAL PAPER COMPANY
5 1/4% Convertible Junior Subordinated
Deferrable Interest Debenture Due 2025*
(1) INTEREST. International Paper Company, a New York corporation
(the "Company"), is the issuer of this 5 1/4% Convertible Junior Subordinated
Deferrable Interest Debenture Due 2025 (the "Security") limited in aggregate
principal amount to $463,917,550.00 (or $533,505,200.00 if the over-allotment
option is exercised), issued under the Indenture hereinafter referred to. The
Company promises to pay interest on the Securities in cash from July 20, 1995 or
from the most recent interest payment date to which interest has been paid or
duly provided for, quarterly (subject to deferral for up to 20 consecutive
quarters as described in Section 3 hereof) in arrears on March 15, June 15,
September 15 and December 15 of each year (each such date, an "Interest Payment
Date"), commencing September 15, 1995, at the rate of 5 1/4% per annum (subject
to increase as provided in Section 13 hereto) PLUS Additional Interest, if any,
until the principal hereof shall have become due and payable.
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*
All terms used in this Security which are defined in the Indenture or in the
Declaration attached as Annex A thereto shall have the meanings assigned to them
in the Indenture or the Declaration, as the case may be.
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<PAGE>
The amount of interest payable for any period will be computed on the
basis of twelve 30-day months and a 360-day year. To the extent lawful, the
Company shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue installments of interest (without regard to
any applicable grace period) at the rate borne by the Securities, compounded
quarterly. Any interest paid on this Security shall be increased to the extent
necessary to pay Additional Interest as set forth in this Security.
(2) ADDITIONAL INTEREST. The Company shall pay to International
Paper Capital Trust (and its permitted successors or assigns under the
Declaration) (the "Trust") such additional amounts as may be necessary in order
that the amount of dividends or other distributions then due and payable by the
Trust on the Preferred Securities that at any time remain outstanding in
accordance with the terms thereof shall not be reduced as a result of any
additional taxes, duties and other governmental charges of whatever nature
(other than withholding taxes) imposed by the United States or any other taxing
authority.
(3) EXTENSION OF INTEREST PAYMENT PERIOD. The Company shall have the
right, at any time during the term of this Security, from time to time to defer
payments of interest by extending the interest payment period of such Security
for up to 20 consecutive quarters (an "Extended Interest Payment Period"). 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 313, will bear interest thereon at 5 1/4% 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 then accrued and unpaid on the Securities, including any Compounded
Interest that shall be payable to the Holders of the Securities in whose names
the Securities are registered in the Security Registrar on the first Regular
Record Date after the end of the Extended Interest Payment Period. Before the
termination of any Extended Interest Payment Period, the Company may further
extend such period, provided that such period together with all such further
extensions thereof shall not exceed 20 consecutive quarters. Upon the
termination of any Extended Interest Payment Period and upon the payment of all
Compounded Interest and Additional Interest, if any, 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.
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<PAGE>
If the Property Trustee is the sole holder of the Security, the
Company shall give the Holder of the Security and the Trustee notice of its
selection of an Extended Interest Payment Period at least one Business Day prior
to the earlier of (i) the Interest Payment Date or (ii) if the Preferred
Securities are listed on the New York Stock Exchange or other stock exchange or
quotation system, the date the Trust is required to give notice to the New York
Stock Exchange or other applicable self-regulatory organization or to holders of
the Preferred Securities on the record date or the date such distributions are
payable, but in any event not less than ten Business Days prior to such record
date.
If the Property Trustee is not the sole holder of the Securities, the
Company shall give the Holders of these Securities and the Trustee notice of its
selection of an Extended Interest Payment Period at least ten Business Days
prior to the earlier of (i) the Interest Payment Date or (ii) if the Preferred
Securities are listed on the New York Stock Exchange or other stock exchange or
quotation system, the date the Trust is required to give notice to the New York
Stock Exchange or other applicable self-regulatory organization or to holders of
the Securities on the record date or the date such distributions are payable,
but in any event not less than two Business Days prior to such record date.
The quarter in which any notice is given pursuant to the second and
third paragraphs of this Section 3 shall be counted as one of the 20 quarters
permitted in the maximum Extended Interest Payment Period permitted under the
first paragraph of this Section 3.
(4) METHOD OF PAYMENT. The interest 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 Security (or one or more
Predecessor Securities) is registered at the close of business on the regular
record date for such interest installment, which shall be the close of business
on the 15th day immediately preceding each Interest Payment Date (the "Regular
Record Date"), commencing August 31, 1995. Any such interest not so punctually
paid or duly provided for shall 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
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 securi-
- 5 -
<PAGE>
ties exchange on which the Securities may be listed, and upon such notice as may
be required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of and interest on this Security will be made
at the office or agency of the Company maintained for that purpose in New York,
New York, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
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.
(5) PAYING AGENT AND SECURITY REGISTRAR. The Trustee will act as
Paying Agent, Security Registrar and Conversion Agent. The Company may change
any Paying Agent, Security Registrar, co-registrar or Conversion Agent without
prior notice. The Company or any of its Affiliates may act in any such
capacity.
(6) INDENTURE. The Company issued the Securities under an indenture,
dated as of July 1, 1995 (the "Indenture"), between the Company and The Bank of
New York, 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 Trustee,
the Company and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-
77bbbb) ("TIA") as in effect on the date of the Indenture. The Securities are
subject to, and qualified by, all such terms, certain of which are summarized
hereon, and holders are referred to the Indenture and the TIA for a statement of
such terms. The Securities are unsecured general obligations of the Company
limited to $463,917,528.00 in aggregate principal amount (or $533,505,157.20 if
the over-allotment option is exercised) and subordinated in right of payment to
all existing and future Senior Indebtedness of the Company. 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 interest on this Security at the
times, place and rate, and in the coin or currency, herein prescribed or to
convert this Security as provided in the Indenture.
- 6 -
<PAGE>
(7) OPTIONAL REDEMPTION. The Securities are redeemable at the
Company's option at any time and from time to time after June 30, 1999, upon not
less than 30 or more than 60 days' notice, at a Redemption Price equal to $51.58
per $50 principal amount of the Securities plus any accrued and unpaid interest,
including Additional Interest, if any, to the Redemption Date, if redeemed on or
before June 30, 2000, and at the following Redemption Prices per $50 principal
amount of the Securities, if redeemed during the 12-month period ending June 30:
Price Per $50
Principal
Year Amount
---- -------------
2001. . . . . . . . . . . . . . . . . . $51.31
2002. . . . . . . . . . . . . . . . . . 51.05
2003. . . . . . . . . . . . . . . . . . 50.79
2004. . . . . . . . . . . . . . . . . . 50.53
2005. . . . . . . . . . . . . . . . . . 50.26
and thereafter at $50 per $50 principal amount of the Securities plus, in each
case, accrued and unpaid interest, including Additional Interest, if any, to the
Redemption Date (subject to the right of holders of record on the relevant
record date to receive interest due on the Interest Payment Date). On or after
the Redemption Date, interest will cease to accrue on the Securities, or portion
thereof, called for redemption.
(8) OPTIONAL REDEMPTION UPON TAX EVENT. The Securities are
subject to redemption in whole, but not in part, at any time within 90 days, if
a Tax Event (as defined in the Declaration) shall occur and be continuing, at a
redemption price equal to $50 per $50 principal amount thereof plus accrued but
unpaid interest, including Additional Interest, if any, to the Redemption Date.
Any redemption pursuant to this Section 8 will be made upon not less than 30 nor
more than 60 days' notice.
(9) NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the Redemption Date to each Holder of the
Securities to be redeemed at his address of record. The Securities in
denominations larger than $50 may be redeemed in part but only in integral
multiples of $50. In the event of a redemption of less than all of the
Securities, the Securities will be chosen for redemption by the Trustee in
accordance with the Indenture. On and after the Redemption Date, interest
ceases to accrue on the Securities or portions of them called for redemption.
- 7 -
<PAGE>
If this Security is redeemed subsequent to a Regular Record Date with
respect to any Interest Payment Date specified above and on or prior to such
Interest Payment Date, then any accrued interest will be paid to the person in
whose name this Security is registered at the close of business on such record
date.
(10) MANDATORY REDEMPTION. The Securities will mature on July 20,
2025, and may be redeemed, in whole or in part, at any time after June 30, 1999
or at any time in certain circumstances upon the occurrence of a Tax Event.
Upon the repayment of the Securities, whether at maturity or upon redemption,
the proceeds from such repayment or payment shall simultaneously be applied to
redeem Trust Securities having an aggregate liquidation amount of the Securities
so repaid or redeemed at the applicable redemption price together with accrued
and unpaid distributions through the date of redemption; PROVIDED, that holders
of the Trust Securities shall be given not less than 30 nor more than 60 days
notice of such redemption. Upon the repayment of the Securities at maturity or
upon any acceleration, earlier redemption or otherwise, the proceeds from such
repayment will be applied to redeem the Preferred Securities, in whole, upon not
less than 30 nor more than 60 days' notice. There are no sinking fund payments
with respect to the Securities.
(11) SUBORDINATION. The payment of the principal of, interest on or
any other amounts due on the Securities is subordinated in right of payment to
all existing and future Senior Indebtedness (as defined below) of the Company,
as described in the Indenture. Each holder, by accepting a Security, agrees to
such subordination and authorizes and directs the Trustee on its behalf to take
such action as may be necessary or appropriate to effectuate the subordination
so provided and appoints the Trustee as its attorney-in-fact for such purpose.
Senior Indebtedness shall mean in respect of the Company (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of such
obligor for money borrowed and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments issued by such obligor, (ii) all
capital lease obligations of such obligor, (iii) all obligations of such obligor
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of such obligor and all obligations of such obligor under any
title retention agreement (but excluding trade accounts payable arising in the
ordinary course of business), (iv) all obligations of such obligor for the
reimbursement of any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction,
- 8 -
<PAGE>
(v) all obligations of the type referred to in clauses (i) through (iv) above of
other persons for the payment of which such obligor is responsible or liable as
obligor, guarantor or otherwise, and (vi) all obligations of the type referred
to in clauses (i) through (v) above of other persons secured by any lien on any
property or asset of such obligor (whether or not such obligation is assumed by
such obligor), except for (1) any such indebtedness that is by its terms
subordinated to or PARI PASSU with the Securities and (2) any indebtedness
(including all other debt securities and guarantees in respect of those debt
securities) initially issued to any other trust, or a trustee of such trust,
partnership, or other entity affiliated with the Company that is, directly or
indirectly, a financing vehicle of the Company (a "Financing Entity") in
connection with the issuance by such Financing Entity of preferred securities or
other similar securities.
(12) CONVERSION. The Holder of any Security has the right,
exercisable at any time prior to the close of business (New York time) on the
date of the Security's maturity, to convert the principal amount thereof (or any
portion thereof that is an integral multiple of $50) into shares of Common Stock
at the initial conversion price 0.462963 shares of Common Stock for each
Security (equivalent to a conversion price of $108.00 per share of Common Stock
of the Company), subject to adjustment under certain circumstances, except that
if a Security is called for redemption, the conversion right will terminate at
the close of business on the Redemption Date.
To convert a Security, a Holder must (1) complete and sign a
conversion notice substantially in the form attached hereto, (2) surrender the
Security to a Conversion Agent, (3) furnish appropriate endorsements or transfer
documents if required by the Security Registrar or Conversion Agent and (4) pay
any transfer or similar tax, if required. Upon conversion, no adjustment or
payment will be made for interest or dividends, but if any Holder surrenders a
Security for conversion after the close of business on the Regular Record Date
for the payment of an installment of interest and prior to the opening of
business on the next Interest Payment Date, then, notwithstanding such
conversion, the interest payable on such Interest Payment Date will be paid to
the registered Holder of such Security on such Regular Record Date. In such
event, such Security, when surrendered for conversion, need not be accompanied
by payment of an amount equal to the interest payable on such Interest Payment
Date on the portion so converted. The number of shares issuable upon conversion
of a Security is determined by dividing the principal amount of the Security
converted by the conversion price in effect on the Conver-
- 9 -
<PAGE>
sion Date. No fractional shares will be issued upon conversion but a cash
adjustment will be made for any fractional interest. The outstanding principal
amount of any Security shall be reduced by the portion of the principal amount
thereof converted into shares of Common Stock.
(13) REGISTRATION RIGHTS. The holders of the Preferred Securities,
the Securities and the Guarantee are entitled to the benefits of a Registration
Rights Agreement, dated as of July 20, 1995, among the Company and the Initial
Purchasers (the "Registration Rights Agreement"). Pursuant to the Registration
Rights Agreement the Company has agreed for the benefit of the holders of the
Preferred Securities, the Securities and the Guarantee that (i) it will, at its
cost, prior to September 4, 1995 file a shelf registration statement (the "Shelf
Registration Statement") with the Commission with respect to resales of the
Preferred Securities, together with the Securities, the Guarantee and the
related Common Stock (and Rights) issuable upon conversion thereof, (b) prior to
November 17, 1995, such Shelf Registration Statement shall be declared effective
by the Commission and (iii) the Company will maintain such Shelf Registration
Statement continuously effective under the Securities Act of 1933, as amended,
until the third anniversary of the date of the effectiveness of the Shelf
Registration Statement or such earlier date as is provided in the Registration
Rights Agreement. If the Company fails to comply with any of clauses (i)
through (iii) above (a "Registration Default") then, at such time, the per annum
interest rate on the Securities will increase by 50 basis points (.50%);
PROVIDED, HOWEVER, that if the Registration Default consists of the occurrence
of any event contemplated by paragraph 3(c)(2)(iii) of the Registration Rights
Agreement, such Registration Default shall not be deemed to have occurred until
the expiration of 30 days after the date of the occurrence of such event if such
event is an action taken by the Company in good faith and for valid business
reasons and the Trust and the Company thereafter promptly comply with the
requirements of paragraph 3(i) of the Registration Rights Agreement. Such
increase will remain in effect from and including the date on which any such
Registration Default shall occur to but excluding the date on which all
Registration Defaults have been cured, on which date the interest rate on the
Securities will revert to the interest rate originally borne by the Securities.
- 10 -
<PAGE>
(14) REGISTRATION, TRANSFER, EXCHANGE AND DENOMINATIONS. 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 New York, New York, 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 authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $50 and integral multiples thereof. 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. In the event of redemption or conversion of
this Security in part only, a new Security or Securities for the unredeemed or
unconverted portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
(15) PERSONS DEEMED OWNERS. Except as provided in Section 3 hereof,
the registered Holder of a Security may be treated as its owner for all
purposes.
(16) UNCLAIMED MONEY. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent shall
pay the money back to the Company at its written request. After that, holders
of Securities entitled to the money must look to the Company for payment unless
an abandoned property law designates another Person and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
(17) DEFAULTS AND REMEDIES. The Securities shall have the Events of
Default as set forth in Section 501 of the Indenture. Subject to certain
limitations in the Indenture, if an Event of Default occurs and is continuing,
the Trustee by notice to the Company or the holders of at least 25% in aggregate
principal amount of the then outstanding Securities by notice to the Company and
the Trustee may
- 11 -
<PAGE>
declare all the Securities to be due and payable immediately, except that in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, all unpaid principal and interest accrued on the Securities shall
become due and payable immediately without further action or notice.
The holders of a majority in principal amount of the Securities then
outstanding by written notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration. Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. Subject to certain limitations, holders of a
majority in principal amount of the then outstanding Securities issued under the
Indenture may direct the Trustee in its exercise of any trust or power. The
Company must furnish annually compliance certificates to the Trustee. The above
description of Events of Default and remedies is qualified by reference to, and
subject in its entirety by, the more complete description thereof contained in
the Indenture.
(18) AMENDMENTS, SUPPLEMENTS AND WAIVERS. 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 under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of a majority in aggregate principal
amount of the Securities at the time Outstanding. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities at the time Outstanding, on behalf of the
Holders of all the Securities, 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 be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
(19) TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in its
individual or any other capacity may become the owner or pledgee of the
Securities and may otherwise deal with the Company or an Affiliate with the same
rights it would have, as if it were not Trustee, subject to certain
- 12 -
<PAGE>
limitations provided for in the Indenture and in the TIA. Any Agent may do the
same with like rights.
(20) 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 the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder of the Securities by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
(21) GOVERNING LAW. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THE INDENTURE AND THE SECURITIES WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS THEREOF.
(22) AUTHENTICATION. The Securities shall not be valid until
authenticated by the manual signature of an authorized officer of the Trustee or
an authenticating agent.
(23) ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
The Company will furnish to any Holder of the Securities upon written
request and without charge a copy of the Indenture. Request may be made to:
International Paper Company
Two Manhattanville Road
Purchase, New York 10577
Attention of: James W. Guedry, Esq.
General Counsel
- 13 -
<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. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(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.
Your Signature:
-------------------------------------------------------
(Sign exactly as your name appears on the other side of
this Security)
Date:
-------------------------
Signature Guarantee:*
--------------------------------------------------
[Include the following if the Security bears a Restricted Securities Legend --
In connection with any transfer of any of the Securities evidenced by this
certificate, the undersigned confirms that such Securities are being:
CHECK ONE BOX BELOW
(1) / / exchanged for the undersigned's own account without transfer; or
- ---------------
* Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange.
- 14 -
<PAGE>
(2) / / transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933; or
(3) / / transferred pursuant to and in compliance with Regulation S under
the Securities Act of 1933; or
(4) / / transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered Holder thereof; PROVIDED, HOWEVER, that if box (3) or (4) is
checked, the Trustee may require, prior to registering any such transfer of the
Securities such legal opinions, certifications and other information as the
Company has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, such as the exemption
provided by Rule 144 under such Act.
-------------------------
Signature
Signature Guarantee:*
- ---------------------------- -------------------------]
Signature must be guaranteed Signature
- --------------------------------------------------------------------------------
[TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it
- ---------------
* Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange.
- 15 -
<PAGE>
has received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
----------------- --------------------------------------------------
NOTICE: To be executed by an executive officer]
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<PAGE>
(TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE A
The initial principal amount of this Global Security shall be
$__________. The following increases or decreases in the principal amount of
this Global Security have been made:
Amount of
increase in
Principal
Amount of this Principal
Global Amount Signature
Security Amount of this of
including of decrease Global authorized
upon exercise in Principal Security officer of
of Amount of following Trustee or
over-allotment this Global such decrease Securities
Date Made option Security or increase Custodian
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<PAGE>
ELECTION TO CONVERT
To: International Paper Company
The undersigned owner of this Security hereby irrevocably exercises
the option to convert this Security, or the portion below designated, into
Common Stock of INTERNATIONAL PAPER COMPANY in accordance with the terms of the
Indenture referred to in this Security, and directs that the shares issuable and
deliverable upon conversion, together with any check in payment for fractional
shares, be issued in the name of and delivered to the undersigned, unless a
different name has been indicated in the assignment below. If shares are to be
issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto.
Any holder, upon the exercise of its conversion rights in accordance
with the terms of the Indenture and the Security, agrees to be bound by the
terms of the Registration Agreement relating to the Common Stock issuable upon
conversion of the Securities.
Date: ____________, ____
in whole __
Portions of Security to be converted ($50 or
integral multiples-thereof): $_________________
-------------------------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or Other
Identifying Number
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
Signature Guarantee:*
---------------------------------
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* Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange.
- 18 -
<PAGE>
EXHIBIT A-2
FORM OF EXCHANGE SECURITY
[FORM OF FACE OF SECURITY]
INTERNATIONAL PAPER COMPANY
5 1/4% Convertible Junior Subordinated
Deferrable Interest Security Due 2025
No._________ $___________
[CUSIP No. _________]
INTERNATIONAL PAPER COMPANY, a corporation duly organized and existing
under the laws of the State of New York (herein called "the Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to ____________________, or
registered assigns, the principal sum [indicated on Schedule A hereof]* [of
______ Dollars]** ($ ) on July 20, 2025.
Interest Payment Dates: March 15, June 15, September 15 and December 15,
commencing September 15, 1995
Regular Record Dates: the close of business on the 15th day immediately
preceding each Interest Payment Date, commencing August
31, 1995
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
- ---------------
* Applicable to Global Securities only.
** Applicable to certificated Securities only.
<PAGE>
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed manually or by facsimile by its duly authorized officers and a facsimile
of its corporate seal to be affixed hereto or imprinted hereon.
Dated: _________, ____
INTERNATIONAL PAPER COMPANY
By:________________________
Name:
Title:
[Seal]
Attest:
_______________
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<PAGE>
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: , THE BANK OF NEW YORK,
--------- ---- as Trustee
By: _______________________
Authorized Signatory
[FORM OF REVERSE OF SECURITY]
INTERNATIONAL PAPER COMPANY
5 1/4% Convertible Junior Subordinated
Deferrable Interest Debenture Due 2025*
(1) INTEREST. International Paper Company, a New York corporation
(the "Company"), is the issuer of this 5 1/4% Convertible Junior Subordinated
Deferrable Interest Debenture Due 2025 (the "Security") limited in aggregate
principal amount to $463,917,550.00 (or $533,505,200.00 if the over-allotment
option is exercised), issued under the Indenture hereinafter referred to. The
Company promises to pay interest on the Securities in cash from July 20, 1995 or
from the most recent interest payment date to which interest has been paid or
duly provided for, quarterly (subject to deferral for up to 20 consecutive
quarters as described in Section 3 hereof) in arrears on March 15, June 15,
September 15 and December 15 of each year (each such date, an "Interest Payment
Date"), commencing September 15, 1995, at the rate of 5 1/4% per annum (subject
to increase as provided in Section 13 hereto) PLUS Additional Interest, if any,
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* All terms used in this Security which are defined in the Indenture or in
the Declaration attached as Annex A thereto shall have the meanings
assigned to them in the Indenture or the Declaration, as the case may be.
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<PAGE>
until the principal hereof shall have become due and payable.
The amount of interest payable for any period will be computed on the
basis of twelve 30-day months and a 360-day year. To the extent lawful, the
Company shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue installments of interest (without regard to
any applicable grace period) at the rate borne by the Securities, compounded
quarterly. Any interest paid on this Security shall be increased to the extent
necessary to pay Additional Interest as set forth in this Security.
(2) ADDITIONAL INTEREST. The Company shall pay to International
Paper Capital Trust (and its permitted successors or assigns under the
Declaration) (the "Trust") such additional amounts as may be necessary in order
that the amount of dividends or other distributions then due and payable by the
Trust on the Preferred Securities that at any time remain outstanding in
accordance with the terms thereof shall not be reduced as a result of any
additional taxes, duties and other governmental charges of whatever nature
(other than withholding taxes) imposed by the United States or any other taxing
authority.
(3) EXTENSION OF INTEREST PAYMENT PERIOD. The Company shall have the
right, at any time during the term of this Security, from time to time to defer
payments of interest by extending the interest payment period of such Security
for up to 20 consecutive quarters (an "Extended Interest Payment Period"). 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 313, will bear interest thereon at 5 1/4% 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 then accrued and unpaid on the Securities, including any Compounded
Interest that shall be payable to the Holders of the Securities in whose names
the Securities are registered in the Security Registrar on the first Regular
Record Date after the end of the Extended Interest Payment Period. Before the
termination of any Extended Interest Payment Period, the Company may further
extend such period, provided that such period together with all such further
extensions thereof shall not exceed 20 consecutive quarters. Upon the
termination of any Extended Interest Payment Period and upon the payment of all
Compounded Interest and Additional Interest, if any, then due, the Company
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<PAGE>
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.
If the Property Trustee is the sole holder of the Security, the
Company shall give the Holder of the Security and the Trustee notice of its
selection of an Extended Interest Payment Period at least one Business Day prior
to the earlier of (i) the Interest Payment Date or (ii) if the Preferred
Securities are listed on the New York Stock Exchange or other stock exchange or
quotation system, the date the Trust is required to give notice to the New York
Stock Exchange or other applicable self-regulatory organization or to holders of
the Preferred Securities on the record date or the date such distributions are
payable, but in any event not less than ten Business Days prior to such record
date.
If the Property Trustee is not the sole holder of the Securities, the
Company shall give the Holders of these Securities and the Trustee notice of its
selection of an Extended Interest Payment Period at least ten Business Days
prior to the earlier of (i) the Interest Payment Date or (ii) if the Preferred
Securities are listed on the New York Stock Exchange or other stock exchange or
quotation system, the date the Trust is required to give notice to the New York
Stock Exchange or other applicable self-regulatory organization or to holders of
the Securities on the record date or the date such distributions are payable,
but in any event not less than two Business Days prior to such record date.
The quarter in which any notice is given pursuant to the second and
third paragraphs of this Section 3 shall be counted as one of the 20 quarters
permitted in the maximum Extended Interest Payment Period permitted under the
first paragraph of this Section 3.
(4) METHOD OF PAYMENT. The interest 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 Security (or one or more
Predecessor Securities) is registered at the close of business on the regular
record date for such interest installment, which shall be the close of business
on the 15th day immediately preceding each Interest Payment Date (the "Regular
Record Date"), commencing August 31, 1995. Any such interest not so punctually
paid or duly provided for shall forthwith cease to be payable to the Holder on
such Regular
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<PAGE>
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 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 may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of and interest on this Security will be made
at the office or agency of the Company maintained for that purpose in New York,
New York, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
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.
(5) PAYING AGENT AND SECURITY REGISTRAR. The Trustee will act as
Paying Agent, Security Registrar and Conversion Agent. The Company may change
any Paying Agent, Security Registrar, co-registrar or Conversion Agent without
prior notice. The Company or any of its Affiliates may act in any such
capacity.
(6) INDENTURE. The Company issued the Securities under an indenture,
dated as of July 1, 1995 (the "Indenture"), between the Company and The Bank of
New York, 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 Trustee,
the Company and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-
77bbbb) ("TIA") as in effect on the date of the Indenture. The Securities are
subject to, and qualified by, all such terms, certain of which are summarized
hereon, and holders are referred to the Indenture and the TIA for a statement of
such terms. The Securities are unsecured general obligations of the Company
limited to $463,917,528.00 in aggregate principal amount (or
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<PAGE>
$533,505,157.20 if the over-allotment option is exercised) and subordinated in
right of payment to all existing and future Senior Indebtedness of the Company.
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 interest on this Security at the
times, place and rate, and in the coin or currency, herein prescribed or to
convert this Security as provided in the Indenture.
(7) OPTIONAL REDEMPTION. The Securities are redeemable at the
Company's option at any time and from time to time after June 30, 1999, upon not
less than 30 or more than 60 days' notice, at a Redemption Price equal to $51.58
per $50 principal amount of the Securities plus any accrued and unpaid interest,
including Additional Interest, if any, to the Redemption Date, if redeemed on or
before June 30, 2000, and at the following Redemption Prices per $50 principal
amount of the Securities, if redeemed during the 12-month period ending June 30:
Price Per $50
Principal
Year Amount
---- -------------
2001. . . . . . . . . . . . . . . . . . $51.31
2002. . . . . . . . . . . . . . . . . . 51.05
2003. . . . . . . . . . . . . . . . . . 50.79
2004. . . . . . . . . . . . . . . . . . 50.53
2005. . . . . . . . . . . . . . . . . . 50.26
and thereafter at $50 per $50 principal amount of the Securities plus, in each
case, accrued and unpaid interest, including Additional Interest, if any, to the
Redemption Date (subject to the right of holders of record on the relevant
record date to receive interest due on the Interest Payment Date). On or after
the Redemption Date, interest will cease to accrue on the Securities, or portion
thereof, called for redemption.
(8) OPTIONAL REDEMPTION UPON TAX EVENT. The Securities are
subject to redemption in whole, but not in part, at any time within 90 days, if
a Tax Event (as defined in the Declaration) shall occur and be continuing, at a
redemption price equal to $50 per $50 principal amount thereof plus accrued but
unpaid interest, including Additional Interest, if any, to the Redemption Date.
Any redemption pursuant to this Section 8 will be made upon not less than 30 nor
more than 60 days' notice.
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<PAGE>
(9) NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the Redemption Date to each Holder of the
Securities to be redeemed at his address of record. The Securities in
denominations larger than $50 may be redeemed in part but only in integral
multiples of $50. In the event of a redemption of less than all of the
Securities, the Securities will be chosen for redemption by the Trustee in
accordance with the Indenture. On and after the Redemption Date, interest
ceases to accrue on the Securities or portions of them called for redemption.
If this Security is redeemed subsequent to a Regular Record Date with
respect to any Interest Payment Date specified above and on or prior to such
Interest Payment Date, then any accrued interest will be paid to the person in
whose name this Security is registered at the close of business on such record
date.
(10) MANDATORY REDEMPTION. The Securities will mature on July 20,
2025, and may be redeemed, in whole or in part, at any time after June 30, 1999
or at any time in certain circumstances upon the occurrence of a Tax Event.
Upon the repayment of the Securities, whether at maturity or upon redemption,
the proceeds from such repayment or payment shall simultaneously be applied to
redeem Trust Securities having an aggregate liquidation amount of the Securities
so repaid or redeemed at the applicable redemption price together with accrued
and unpaid distributions through the date of redemption; PROVIDED, that holders
of the Trust Securities shall be given not less than 30 nor more than 60 days
notice of such redemption. Upon the repayment of the Securities at maturity or
upon any acceleration, earlier redemption or otherwise, the proceeds from such
repayment will be applied to redeem the Preferred Securities, in whole, upon not
less than 30 nor more than 60 days' notice. There are no sinking fund payments
with respect to the Securities.
(11) SUBORDINATION. The payment of the principal of, interest on or
any other amounts due on the Securities is subordinated in right of payment to
all existing and future Senior Indebtedness (as defined below) of the Company,
as described in the Indenture. Each holder, by accepting a Security, agrees to
such subordination and authorizes and directs the Trustee on its behalf to take
such action as may be necessary or appropriate to effectuate the subordination
so provided and appoints the Trustee as its attorney-in-fact for such purpose.
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<PAGE>
Senior Indebtedness shall mean in respect of the Company (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of such
obligor for money borrowed and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments issued by such obligor, (ii) all
capital lease obligations of such obligor, (iii) all obligations of such obligor
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of such obligor and all obligations of such obligor under any
title retention agreement (but excluding trade accounts payable arising in the
ordinary course of business), (iv) all obligations of such obligor for the
reimbursement of any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction, (v) all obligations of the type referred
to in clauses (i) through (iv) above of other persons for the payment of which
such obligor is responsible or liable as obligor, guarantor or otherwise, and
(vi) all obligations of the type referred to in clauses (i) through (v) above of
other persons secured by any lien on any property or asset of such obligor
(whether or not such obligation is assumed by such obligor), except for (1) any
such indebtedness that is by its terms subordinated to or PARI PASSU with the
Securities and (2) any indebtedness (including all other debt securities and
guarantees in respect of those debt securities) initially issued to any other
trust, or a trustee of such trust, partnership, or other entity affiliated with
the Company that is, directly or indirectly, a financing vehicle of the Company
(a "Financing Entity") in connection with the issuance by such Financing Entity
of preferred securities or other similar securities.
(12) CONVERSION. The Holder of any Security has the right,
exercisable at any time prior to the close of business (New York time) on the
date of the Security's maturity, to convert the principal amount thereof (or any
portion thereof that is an integral multiple of $50) into shares of Common Stock
at the initial conversion price 0.462963 shares of Common Stock for each
Security (equivalent to a conversion price of $108.00 per share of Common Stock
of the Company), subject to adjustment under certain circumstances, except that
if a Security is called for redemption, the conversion right will terminate at
the close of business on the Redemption Date.
To convert a Security, a Holder must (1) complete and sign a
conversion notice substantially in the form attached hereto, (2) surrender the
Security to a Conversion Agent, (3) furnish appropriate endorsements or transfer
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<PAGE>
documents if required by the Security Registrar or Conversion Agent and (4) pay
any transfer or similar tax, if required. Upon conversion, no adjustment or
payment will be made for interest or dividends, but if any Holder surrenders a
Security for conversion after the close of business on the Regular Record Date
for the payment of an installment of interest and prior to the opening of
business on the next Interest Payment Date, then, notwithstanding such
conversion, the interest payable on such Interest Payment Date will be paid to
the registered Holder of such Security on such Regular Record Date. In such
event, such Security, when surrendered for conversion, need not be accompanied
by payment of an amount equal to the interest payable on such Interest Payment
Date on the portion so converted. The number of shares issuable upon conversion
of a Security is determined by dividing the principal amount of the Security
converted by the conversion price in effect on the Conversion Date. No
fractional shares will be issued upon conversion but a cash adjustment will be
made for any fractional interest. The outstanding principal amount of any
Security shall be reduced by the portion of the principal amount thereof
converted into shares of Common Stock.
(13) REGISTRATION RIGHTS. The holders of the Preferred Securities,
the Securities and the Guarantee are entitled to the benefits of a Registration
Rights Agreement, dated as of July 20, 1995, among the Company and the Initial
Purchasers (the "Registration Rights Agreement"). Pursuant to the Registration
Rights Agreement the Company has agreed for the benefit of the holders of the
Preferred Securities, the Securities and the Guarantee that (i) it will, at its
cost, prior to September 4, 1995 file a shelf registration statement (the "Shelf
Registration Statement") with the Commission with respect to resales of the
Preferred Securities, together with the Securities, the Guarantee and the
related Common Stock (and Rights) issuable upon conversion thereof, (b) prior to
November 17, 1995, such Shelf Registration Statement shall be declared effective
by the Commission and (iii) the Company will maintain such Shelf Registration
Statement continuously effective under the Securities Act of 1933, as amended,
until the third anniversary of the date of the effectiveness of the Shelf
Registration Statement or such earlier date as is provided in the Registration
Rights Agreement. If the Company fails to comply with any of clauses (i)
through (iii) above (a "Registration Default") then, at such time, the per annum
interest rate on the Securities will increase by 50 basis points (.50%);
PROVIDED, HOWEVER, that if the Registration Default consists of the occurrence
of any event contemplated by paragraph
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<PAGE>
3(c)(2)(iii) of the Registration Rights Agreement, such Registration Default
shall not be deemed to have occurred until the expiration of 30 days after the
date of the occurrence of such event if such event is an action taken by the
Company in good faith and for valid business reasons and the Trust and the
Company thereafter promptly comply with the requirements of paragraph 3(i) of
the Registration Rights Agreement. Such increase will remain in effect from and
including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured, on which
date the interest rate on the Securities will revert to the interest rate
originally borne by the Securities.
(14) REGISTRATION, TRANSFER, EXCHANGE AND DENOMINATIONS. 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 New York, New York, 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 authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $50 and integral multiples thereof. 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. In the event of redemption or conversion of
this Security in part only, a new Security or Securities for the unredeemed or
unconverted portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
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<PAGE>
(15) PERSONS DEEMED OWNERS. Except as provided in Section 3 hereof,
the registered Holder of a Security may be treated as its owner for all
purposes.
(16) UNCLAIMED MONEY. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent shall
pay the money back to the Company at its written request. After that, holders
of Securities entitled to the money must look to the Company for payment unless
an abandoned property law designates another Person and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
(17) DEFAULTS AND REMEDIES. The Securities shall have the Events of
Default as set forth in Section 501 of the Indenture. Subject to certain
limitations in the Indenture, if an Event of Default occurs and is continuing,
the Trustee by notice to the Company or the holders of at least 25% in aggregate
principal amount of the then outstanding Securities by notice to the Company and
the Trustee may declare all the Securities to be due and payable immediately,
except that in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, all unpaid principal and interest accrued on the
Securities shall become due and payable immediately without further action or
notice.
The holders of a majority in principal amount of the Securities then
outstanding by written notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration. Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. Subject to certain limitations, holders of a
majority in principal amount of the then outstanding Securities issued under the
Indenture may direct the Trustee in its exercise of any trust or power. The
Company must furnish annually compliance certificates to the Trustee. The above
description of Events of Default and remedies is qualified by reference to, and
subject in its entirety by, the more complete description thereof contained in
the Indenture.
(18) AMENDMENTS, SUPPLEMENTS AND WAIVERS. 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
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<PAGE>
Holders of the Securities under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of a majority in aggregate principal
amount of the Securities at the time Outstanding. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities at the time Outstanding, on behalf of the
Holders of all the Securities, 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 be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
(19) TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in its
individual or any other capacity may become the owner or pledgee of the
Securities and may otherwise deal with the Company or an Affiliate with the same
rights it would have, as if it were not Trustee, subject to certain limitations
provided for in the Indenture and in the TIA. Any Agent may do the same with
like rights.
(20) 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 the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder of the Securities by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
(21) GOVERNING LAW. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THE INDENTURE AND THE SECURITIES WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS THEREOF.
(22) AUTHENTICATION. The Securities shall not be valid until
authenticated by the manual signature of an authorized officer of the Trustee or
an authenticating agent.
(23) ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
- 13 -
<PAGE>
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
The Company will furnish to any Holder of the Securities upon written
request and without charge a copy of the Indenture. Request may be made to:
International Paper Company
Two Manhattanville Road
Purchase, New York 10577
Attention of: James W. Guedry, Esq.
General Counsel
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<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below:
(I) or (we) assign and transfer this Security to
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(Insert assignee's social security or tax I.D. no.)
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(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.
Your Signature:
-------------------------------------------------------
(Sign exactly as your name appears on the other side of
this Security)
Date:
-------------------------
Signature Guarantee:*
--------------------------------------------------
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* Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange.
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<PAGE>
(TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE A
The initial principal amount of this Global Security shall be
$__________. The following increases or decreases in the principal amount of
this Global Security have been made:
Amount of
increase in
Principal
Amount of this Principal
Global Amount Signature
Security Amount of this of
including of decrease Global authorized
upon exercise in Principal Security officer of
of Amount of following Trustee or
over-allotment this Global such decrease Securities
Date Made option Security or increase Custodian
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ELECTION TO CONVERT
To: International Paper Company
The undersigned owner of this Security hereby irrevocably exercises
the option to convert this Security, or the portion below designated, into
Common Stock of INTERNATIONAL PAPER COMPANY in accordance with the terms of the
Indenture referred to in this Security, and directs that the shares issuable and
deliverable upon conversion, together with any check in payment for fractional
shares, be issued in the name of and delivered to the undersigned, unless a
different name has been indicated in the assignment below. If shares are to be
issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto.
Any holder, upon the exercise of its conversion rights in accordance
with the terms of the Indenture and the Security, agrees to be bound by the
terms of the Registration Agreement relating to the Common Stock issuable upon
conversion of the Securities.
Date: ____________, ____
in whole __
Portions of Security to be converted ($50 or
integral multiples-thereof): $_________________
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Signature (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or Other
Identifying Number
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Signature Guarantee:*
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* Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange.
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PREFERRED SECURITIES GUARANTEE AGREEMENT
INTERNATIONAL PAPER COMPANY
Dated as of July 20, 1995
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This PREFERRED SECURITIES GUARANTEE AGREEMENT ("Preferred Securities
Guarantee"), dated as of July 20, 1995, is executed and delivered by
International Paper Company, a New York corporation (the "Guarantor"), and The
Bank of New York, a New York banking corporation, as trustee (the "Preferred
Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Preferred Securities (as defined herein) of International
Paper Capital Trust, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of July 13, 1995, 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 9,000,000 Preferred Securities, having an aggregate
stated liquidation preference of $450,000,000, designated the 5-1/4% Convertible
Preferred Securities (plus up to an additional 1,350,000 Preferred Securities,
having an aggregate liquidation preference of $67,500,000, to cover over-
allotments) (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein;
and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein) except that if an Event of Default (as
defined in the Indenture (as defined herein)), has occurred and is continuing,
the rights of holders of the Common Securities to receive Guarantee Payments
under the Common Securities Guarantee are subordinated to the rights of
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Holders of Preferred Securities to receive Guarantee Payments under this
Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS AND INTERPRETATION
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities 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 Preferred Securities Guarantee
has the same meaning throughout;
(c) all references to "the Preferred Securities Guarantee" or "this
Guarantee" are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred
Securities Guarantee unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee unless otherwise
defined in this Preferred Securities Guarantee or unless the
context otherwise requires; and
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(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.
"COMMON SECURITIES" means the convertible common securities
representing common undivided beneficial interests in the assets of the Issuer.
"COVERED PERSON" means any Holder or beneficial owner of Preferred
Securities.
"DEBENTURES" means the series of convertible junior subordinated debt
securities of the Guarantor designated the 5-1/4% Convertible Junior
Subordinated Deferrable Interest Debentures Due 2025 held by the Property
Trustee of the Issuer.
"EVENT OF DEFAULT" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"GUARANTEE PAYMENTS" means the following payments or distributions,
without duplication, with respect to the Preferred 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 Preferred
Securities to the extent the Issuer shall have funds available therefore, (ii)
the amount payable upon redemption to the extent the Issuer has funds available
therefor, with respect to any Preferred Securities called for redemption by the
Issuer, 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 Preferred Securities as provided in
the Declaration), the lesser of (a) the aggregate of the liquidation preference
and all accrued and unpaid Distributions on the Preferred 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 upon liquidation of the Issuer (in either case, the "Liquidation
Distribution"). If an event of default under the Indenture has occurred and is
continuing, the rights of
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holders of the Common Securities to receive payments under the Common Securities
Guarantee are subordinated to the rights of Holders of Preferred Securities to
receive Guarantee Payments.
"HOLDER" shall mean any holder, as registered on the books and records
of the Issuer of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
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 Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives or agents of the
Preferred Guarantee Trustee.
"INDENTURE" means the Indenture dated as of July 1, 1995, among the
Guarantor (the "Debenture Issuer") and The Bank of New York, as trustee, and any
indenture supplemental thereto pursuant to which the Debentures are to be issued
to the Property Trustee of the Issuer.
"MAJORITY IN LIQUIDATION PREFERENCE OF THE SECURITIES" means, except
as provided by the Trust Indenture Act, Holder(s) of Preferred Securities,
voting separately as a class, representing more than 50% of the stated
liquidation preference (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 Preferred
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 Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Certificate has read
the covenant or condition and the definition relating thereto;
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(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the 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.
"PREFERRED GUARANTEE TRUSTEE" means The Bank of New York until a
Successor Preferred Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Preferred Securities Guarantee and
thereafter means each such Successor Preferred Guarantee Trustee.
"RESPONSIBLE OFFICER" means, with respect to the Preferred Guarantee
Trustee, the chairman of the board of directors, the president, any
vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the Preferred 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 PREFERRED GUARANTEE TRUSTEE" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
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"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 Preferred Securities Guarantee is subject to the provisions
of the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee, which are incorporated by reference hereto, and shall, to
the extent applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control;
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES.
(a) The Guarantor shall provide the Preferred Guarantee Trustee (i)
within 14 days after January 1 and June 30 of each year, a list, in such form as
the Preferred Guarantee Trustee may reasonably require, of the names and
addresses of the Holders of the Preferred Securities ("List of Holders") as of
such date, 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 Preferred Guarantee Trustee by the
Guarantor, 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 Preferred Guarantee Trustee.
The Preferred Guarantee Trustee may destroy any List of Holders previously given
to it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 REPORTS BY THE PREFERRED
GUARANTEE TRUSTEE.
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Within 60 days after May 15 of each year, the Preferred Guarantee
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 Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO PREFERRED
GUARANTEE TRUSTEE.
The Guarantor shall provide to the Preferred 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 Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee which 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 preference of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, 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
Preferred Securities 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.
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(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default known to the Preferred Guarantee Trustee, unless such defaults have been
cured before the giving of such notice, provided, that, the Preferred Guarantee
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
and/or Responsible Officers of the Preferred Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default except any Event of Default as to which the
Preferred Guarantee Trustee shall have received written notice or a Responsible
Officer charged with the administration of the Declaration shall have obtained
written notice.
SECTION 2.8 CONFLICTING INTERESTS.
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 POWERS AND DUTIES OF THE
PREFERRED GUARANTEE TRUSTEE.
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders of the Preferred
Securities, and the Preferred Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder of Preferred Securities
exercising his or her rights pursuant to Section 5.4(b) or to a Successor
Preferred Guarantee Trustee on acceptance by such Successor Preferred Guarantee
Trustee of its appointment to act as Successor Preferred Guarantee Trustee. The
right, title and inter-
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est of the Preferred Guarantee Trustee shall automatically vest in any Successor
Preferred 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 Preferred Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Preferred Securities Guarantee
for the benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6), the Preferred Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Preferred Securities
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 Preferred Securities Guarantee shall be
construed to relieve the Preferred 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 all such Events of Default that may
have occurred:
(A) the duties and obligations of the Preferred
Guarantee Trustee shall be determined solely by the express provisions
of this Preferred Securities Guarantee, and the Preferred Guarantee
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Preferred
Securities Guarantee, and no
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implied covenants or obligations shall be read into this Preferred
Securities Guarantee against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of
the Preferred Guarantee Trustee, the Preferred 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 Preferred Guarantee Trustee and
conforming to the requirements of this Preferred Securities Guarantee;
but in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall be
under a duty to examine the same to determine whether or not they
conform to the requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be
liable for any error of judgment made in good faith by a Responsible
Officer of the Preferred Guarantee Trustee, unless it shall be proved
that the Preferred Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Preferred 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 preference of the Preferred
Securities at the time outstanding, relating to the time, method and
place of conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee, or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred
Securities Guarantee; and
(iv) no provision of this Preferred Securities
Guarantee shall require the Preferred Guarantee Trustee to expend or
risk its own funds or otherwise incur personal financial
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liability in the performance of any of its duties or in the exercise of any
of its rights or powers, if the Preferred 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 Preferred
Securities Guarantee or adequate indemnity against such risk or liability
is not reasonably assured to it.
SECTION 3.2 CERTAIN RIGHTS OF PREFERRED
GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may 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 Preferred Securities
Guarantor contemplated by this Preferred Securities Guarantee shall be
sufficiently evidenced by an Officers' Certificate;
(iii) whenever, in the administration of this
Preferred Securities Guarantee, the Preferred Guarantee Trustee shall
deem it desirable that a matter be proved or established before
taking, suffering or omitting any action hereunder, the Preferred
Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Guarantor;
(iv) the Preferred Guarantee Trustee shall have no duty
to see to any recording,
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filing or registration of any instrument (or any rerecording, refiling or
registration thereof);
(v) the Preferred Guarantee Trustee may consult with
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 may be counsel to the Guarantor or any of its Affiliates
and may include any of the Guarantor's employees. The Preferred
Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement
from any court of competent jurisdiction.
(vi) the Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by
this Preferred Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Preferred
Guarantee Trustee such adequate security and indemnity as would
satisfy a reasonable person in the position of the Preferred Guarantee
Trustee, against the costs, expenses (including attorneys' fees and
expenses) 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 Preferred Guarantee Trustee; provided that
nothing contained in this Section 3.2(a)(vi) shall be taken to relieve
the Preferred Guarantee Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers vested in
it by this Preferred Securities Guarantee;
(vii) the Preferred 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 evi-
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dence of indebtedness or other paper or document, but the Preferred
Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(viii) the Preferred Guarantee 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
Preferred 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 Preferred Guarantee
Trustee or its agents hereunder shall bind the Holders of the
Preferred Securities, and the signature of the Preferred 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 Preferred Guarantee Trustee to so act or as
to its compliance with any of the terms and provisions of this
Preferred Securities Guarantee, both of which shall be conclusively
evidenced by the Preferred Guarantee Trustee's or its agent's taking
such action; and
(x) whenever in the administration of this Preferred
Securities Guarantee the Preferred Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy
or right or taking any other action hereunder, the Preferred Guarantee
Trustee (i) may request instructions from the Holders of the Preferred
Securities or the Guarantor, (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 acting in accordance
with such instructions.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any
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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
Preferred 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, duty or obligation. No permissive power or authority available to
the Preferred 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 Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representations as to the validity or sufficiency of
this Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Preferred 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 50 million U.S. dollars ($50,000,000),
and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition
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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 Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred 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 PREFERRED GUARANTEE TRUSTEE.
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee
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Trustee and delivered to the Guarantor and the resigning Preferred Guarantee
Trustee.
(d) If no Successor Preferred 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 Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
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 SUBORDINATION
If an Event of Default (as defined in the Indenture), has occurred and
is continuing, the rights of Holders of the Common Securities to receive
Guarantee Payments under the Common Securities Guarantee are subordinated to the
rights of Holders of Preferred Securities to receive Guarantee Payments under
this Preferred Securities Guarantee.
SECTION 5.3 WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of this Preferred
Securities 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
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proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
SECTION 5.4 OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities 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 agreement,
covenant, term or condition relating to the Preferred Securities 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, the amount payable upon redemption, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred Securities (other
than an extension of time for payment of Distributions, the amount payable upon
redemption, 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 Preferred 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;
18
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(e) any invalidity of, or defect or deficiency in the Preferred
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 5.4 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 or any other Person to
give notice to, or obtain consent of, the Guarantor with respect to the
happening of any of the foregoing.
SECTION 5.5 RIGHTS OF HOLDERS.
(a) The Holders of a Majority in liquidation preference of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Preferred Guarantee
Trustee in respect of this Preferred Securities Guarantee or exercising any
trust or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce this
Preferred Securities Guarantee, any Holder of Preferred Securities may, after
such Holder makes a written request to the Preferred Guarantee Trustee to
enforce this Preferred Securities Guarantee, institute a legal proceeding
directly against the Guarantor to enforce its rights under this Preferred
Securities Guarantee, without first instituting a legal proceeding against the
Issuer, the Preferred Guarantee Trustee or any other Person.
SECTION 5.6 GUARANTEE OF PAYMENT.
This Preferred Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 5.7 SUBROGATION.
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The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities 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 Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities 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 5.8 INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.4 hereof.
SECTION 5.9 CONVERSION
The Guarantor acknowledges its obligation to issue and deliver common
stock upon the conversion of the Preferred Securities.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 LIMITATION OF TRANSACTIONS.
So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default, an event that, with the giving of notice or
the lapse of time or both, would constitute an Event of Default under the
Indenture or a selection by the Guarantor of an Extended Interest Payment Period
as provided in the
20
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Indenture and such period, or any extension thereof, shall be continuing, then
(a) the Guarantor shall not declare or pay any dividend on, or make any
distribution with respect to, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock (other than stock dividends
paid by the Guarantor which stock dividends consist of the stock of the same
class as that on which the dividend is being paid), (b) the Guarantor shall not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Guarantor which rank pari
passu with or junior to the Debentures and (c) shall not make any guarantee
payments with respect to the foregoing (other than pursuant to the Preferred
Securities Guarantee).
SECTION 6.2 RANKING.
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, except any liabilities that
may be made PARI PASSU expressly by their terms, (ii) PARI PASSU with the most
senior preferred or preference stock now or hereafter issued by the Guarantor
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock or Preferred Security of any Affiliate of
the Guarantor, and (iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 TERMINATION.
This Preferred Securities Guarantee shall terminate upon (i) full
payment of the amount payable upon redemption of all Preferred Securities, (ii)
the distribution of the Guarantor's common stock to the Holders in respect of
the conversion of the Preferred Securities into the Guarantor's common stock or
the distribution of the Debentures to the Holders of all of the Preferred
Securities or (iii) full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this
Preferred Securities Guarantee will continue to be effec-
21
<PAGE>
tive or will be reinstated, as the case may be, if at any time any Holder of
Preferred Securities must restore payment of any sums paid under the Preferred
Securities or under this Preferred Securities 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 Preferred
Securities 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 Preferred Securities 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.
(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 of Preferred Securities 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
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<PAGE>
such Indemnified Person in good faith in accordance with this Preferred
Securities Guarantee and in a manner such Indemnified Person reasonably believed
to be within the scope of authority conferred on such Indemnified Person in
accordance with this Preferred Securities 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, expenses
(including legal fees and expenses) 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).
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding. Except in connection with any
permitted merger or consolidation of the Guarantor with or into another entity
or any permitted sale, transfer or lease of the Guarantor's assets to another
entity, the Guarantor may not assign its rights or delegate its obligations
under the Preferred Securities Guarantee without the prior approval of the
Holders of at least 66-2/3% of the aggregate stated liquidation preference of
the Preferred 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
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consent of Holders will be required), this Preferred Securities Guarantee may
only be amended with the prior approval of the Holders of at least 66-2/3% in
liquidation preference of all the outstanding Preferred Securities. The
provisions of Section 12.2 of the Declaration with respect to meetings of
Holders of the Securities apply to the giving of such approval.
SECTION 9.3 NOTICES.
All notices provided for in this Preferred Securities 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 Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
The Bank of New York
101 Barclay Street
21 West
Attn: Corporate Trust
Trustee Administration
New York, New York 10286
(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 of the Preferred Securities):
International Paper Company
Two Manhattanville Road
Purchase, New York 10577
(c) If given to any Holder of Preferred Securities, 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
24
<PAGE>
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 Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 GOVERNING LAW.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
25
<PAGE>
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
INTERNATIONAL PAPER
COMPANY, as Guarantor
By: /s/ James W. Guedry
--------------------
Name: James W. Guedry
Title: Secretary & Staff
Vice President
THE BANK OF NEW YORK, as
Preferred Guarantee Trustee
By: /s/ Vivian Georges
-------------------
Name: Vivian Georges
Title: Assistant Vice
President
26
<PAGE>
EXECUTION COPY
INTERNATIONAL PAPER CAPITAL TRUST
5 1/4% Convertible Preferred Securities
(Liquidation Preference $50 per
Convertible Preferred Security)
Guaranteed by, and Convertible into
Common Stock of, International Paper Company
REGISTRATION RIGHTS AGREEMENT
July 20, 1995
CS First Boston Corporation
As Representative of the Several Purchasers
Park Avenue Plaza
New York, New York 10055
Dear Sirs:
International Paper Capital Trust, a statutory business trust formed
under the laws of the State of Delaware (the "Trust") by International Paper
Company, a New York corporation (the "Guarantor"), proposes to issue and sell to
CS First Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
J.P. Morgan Securities Inc. and PaineWebber Incorporated (the "Purchasers"),
upon the terms set forth in a purchase agreement dated July 13, 1995 (the
"Purchase Agreement"), among the Purchasers, the Guarantor and the Trust 5 1/4%
Convertible Preferred Securities (liquidation preference $50 per Convertible
Preferred Security) (the "Preferred Securities") (the "Initial Placement"). As
an inducement to you to enter into the Purchase Agreement and in satisfaction of
a condition to your obligations thereunder, the Trust and the Guarantor agree
with you, (i) for the benefit of the Purchasers and (ii) for the benefit of the
holders from time to time of the Preferred Securities, the 5 1/4% Convertible
Junior Subordinated Deferrable Interest Debentures Due 2025 (the "Debentures")
and the Common Stock, par value $1.00 per share (the "Common Stock"), of the
Guarantor (together with the related Rights) issuable upon conversion of the
Preferred Securities or the Debentures (collectively, together with the
Guarantee of International Paper of the
<PAGE>
2
Preferred Securities, the "Securities")), including the Purchasers (each of the
foregoing a "Holder" and together the "Holders"), as follows:
1. DEFINITIONS. Capitalized terms used herein without definition
shall have their respective meanings set forth in or pursuant to the Purchase
Agreement or the Confidential Offering Circular dated July 13, 1995, in respect
of the Preferred Securities. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"Act" or "Securities Act" means the Securities Act of 1933, as
amended.
"Affiliate" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such specified person. For purposes of this definition, control
of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
"Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering,
if any, as set forth in Section 6 hereof.
"Prospectus" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Securities.
"Shelf Registration" means a registration effected pursuant to
Section 2 hereof.
<PAGE>
3
"Shelf Registration Period" has the meaning set forth in Section 2(b)
hereof.
"Shelf Registration Statement" means a "shelf" registration statement
of the Trust and the Guarantor pursuant to the provisions of Section 2 hereof
filed with the Commission which covers some or all of the Securities, as
applicable, on an appropriate form under Rule 415 under the Act, or any similar
rule that may be adopted by the Commission, amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"underwriter" means any underwriter of Securities in connection with
an offering thereof under a Shelf Registration Statement.
2. SHELF REGISTRATION. (a) The Trust and the Guarantor shall as
promptly as practicable prepare and, not later than September 4, 1995, shall
file with the Commission and thereafter shall each use its best efforts to cause
to be declared effective under the Act as soon as practicable, but in no event
later than November 17, 1995, a Shelf Registration Statement relating to the
offer and sale of the Securities by the Holders from time to time in accordance
with the methods of distribution elected by such Holders and set forth in such
Shelf Registration Statement; PROVIDED, HOWEVER, that no Holder shall be
entitled to have the Securities held by it covered by such Shelf Registration
unless such Holder is in compliance with Section 3(m) hereof.
(b) The Trust and the Guarantor shall each use its best efforts
(i) to keep the Shelf Registration Statement continuously effective in order to
permit the Prospectus forming part thereof to be usable by Holders for a period
of three years from the date the Shelf Registration Statement is declared
effective or such shorter period that will terminate upon the earlier of the
following: (A) when all the Preferred Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement, (B) when all Debentures issued to Holders in respect of Preferred
Securities that had not been sold pursuant to the Shelf Registration Statement
have been sold pursuant to the Shelf Registration Statement, (C) when all shares
of Common Stock (together with the related Rights) issued upon conversion of any
such Preferred
<PAGE>
4
Securities or any such Debentures that had not been sold pursuant to the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement and (D) when, in the written opinion of counsel to the Trust and the
Guarantor, all outstanding Securities may be sold without registration under the
Act (in any such case, such period being called the "Shelf Registration Period")
and (ii) after the effectiveness of the Shelf Registration Statement, promptly
upon the request of any Holder to take any action reasonably necessary to
register the sale of any Securities of such Holder and to identify such Holder
as a selling securityholder. The Trust and the Guarantor shall be deemed not to
have used their best efforts to keep the Shelf Registration Statement effective
during the requisite period if either the Trust or the Guarantor voluntarily
takes any action that would result in Holders of Securities covered thereby not
being able to offer and sell any such Securities during that period, unless
(i) such action is required by applicable law or (ii) upon the occurrence of any
event contemplated by paragraph 3(c)(2)(iii) below, such action is taken by the
Trust or the Guarantor in good faith and for valid business reasons and the
Trust and the Guarantor thereafter promptly comply with the requirements of
paragraph 3(i) below.
3. REGISTRATION PROCEDURES. In connection with any Shelf
Registration Statement, the following provisions shall apply:
(a) The Trust and the Guarantor shall furnish to the Purchasers,
prior to the filing thereof with the Commission, a copy of any Shelf
Registration Statement, and each amendment thereof and each amendment or
supplement, if any, to the Prospectus included therein and shall each use
its best efforts to reflect in each such document, when so filed with the
Commission, such comments as the Purchasers reasonably may propose.
(b) The Trust and the Guarantor shall take such action as may be
necessary so that (i) any Shelf Registration Statement and any amendment
thereto and any Prospectus forming part thereof and any amendment or
supplement thereto (and each report or other document incorporated therein
by reference in each case) complies in all material respects with the
Securities Act and the Exchange Act and the respective rules and
regulations thereunder, (ii) any Shelf Registration Statement and any
amendment thereto does
<PAGE>
5
not, when it becomes effective, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any
Prospectus forming part of any Shelf Registration Statement, and any
amendment or supplement to such Prospectus, does not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements, in the light of the circumstances under which
they were made, not misleading.
(c) (1) The Guarantor shall advise the Purchasers and, in the case
of clause (i), the Holders and, if requested by the Purchasers or any such
Holder, confirm such advice in writing:
(i) when a Shelf Registration Statement and any amendment thereto
has been filed with the Commission and when the Shelf Registration
Statement or any post-effective amendment thereto has become
effective; and
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the Prospectus
included therein or for additional information.
(2) The Guarantor shall advise the Purchasers and the Holders and, if
requested by the Purchasers or any such Holder, confirm such advice in
writing:
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement or
the initiation of any proceedings for that purpose;
(ii) of the receipt by the Trust or the Guarantor of any
notification with respect to the suspension of the qualification of
the securities included therein for sale in any jurisdiction or the
initiation of any proceeding for such purpose; and
(iii) of the happening of any event that requires the making of
any changes in the Shelf Registration Statement or the Prospectus so
that, as of such date, the Registration Statement and
<PAGE>
6
the Prospectus do not contain an untrue statement of a material fact
and no not omit to state a material fact required to be stated therein
or necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made)
not misleading (which advice shall be accompanied by an instruction to
suspend the use of the Prospectus until the requisite changes have
been made).
(d) The Guarantor shall use its best efforts to prevent the issuance,
and if issued to obtain the withdrawal, of any order suspending the
effectiveness of any Shelf Registration Statement at the earliest possible
time.
(e) The Trust and the Guarantor shall furnish to each Holder of
Securities included within the coverage of any Shelf Registration
Statement, without charge, at least one copy of such Shelf Registration
Statement and any post-effective amendment thereto (including any reports
or other documents incorporated therein by reference), including financial
statements and schedules, and, if the Holder so requests in writing, all
exhibits (including those incorporated by reference).
(f) The Trust and the Guarantor shall, during the Shelf Registration
Period, deliver to each Holder of Securities included within the coverage
of any Shelf Registration Statement, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such
Holder may reasonably request; and each of the Trust and the Guarantor
consents to the use of the Prospectus or any amendment or supplement
thereto by each of the selling Holders of Securities in connection with the
offering and sale of the Securities covered by the Prospectus or any
amendment or supplement thereto during the Shelf Registration Period.
(g) Prior to any offering of Securities pursuant to any Shelf
Registration Statement, the Trust and the Guarantor shall register or
qualify or cooperate with the Holders of Securities included therein and
their respective counsel in connection with the registration
<PAGE>
7
or qualification of such Securities for offer and sale under the securities
or blue sky laws of such jurisdictions as any such Holders reasonably
request in writing and do any and all other acts or things necessary or
advisable to enable the offer and sale in such jurisdictions of the
Securities covered by such Shelf Registration Statement; PROVIDED, HOWEVER,
that neither the Trust nor the Guarantor will be required to qualify
generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service
of process or to taxation in any such jurisdiction where it is not then so
subject.
(h) Unless any Securities shall be in book-entry only form, the Trust
and the Guarantor shall cooperate with the Holders of Securities to
facilitate the timely preparation and delivery of certificates representing
Securities to be sold pursuant to any Shelf Registration Statement free of
any restrictive legends and in such permitted denominations and registered
in such names as Holders may request in connection with the sale of
Securities pursuant to such Shelf Registration Statement.
(i) Upon the occurrence of any event contemplated by
paragraph 3(c)(2)(iii) above, the Trust and the Guarantor shall promptly
prepare a post-effective amendment to any Shelf Registration Statement or
an amendment or supplement to the related Prospectus or file any other
required document so that, as thereafter delivered to purchasers of the
Securities included therein, the Prospectus will not include an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading. If the Trust or the Guarantor
notifies the Holders of the occurrence of any event contemplated by
paragraph 3(c)(2)(iii) above, the Holders shall suspend the use of the
Prospectus until the requisite changes to the Prospectus have been made.
(j) Not later than the effective date of any Shelf Registration
Statement hereunder, the Trust and the Guarantor shall provide a CUSIP
number for the Preferred Securities and the Debentures in the event of and
at the time of any distribution thereof to Holders, registered under such
Shelf Registration Statement, and
<PAGE>
8
provide the applicable trustee with certificates for such Securities, in a
form eligible for deposit with The Depository Trust Company.
(k) The Trust and the Guarantor shall use their best efforts to
comply with all applicable rules and regulations of the Commission and
shall make generally available to their security holders or otherwise
provide in accordance with Section 11(a) of the Securities Act as soon as
practicable after the effective date of the applicable Shelf Registration
Statement an earnings statement satisfying the provisions of Section 11(a)
of the Securities Act.
(l) The Trust and the Guarantor shall cause the Indenture, the
Declaration and the Guarantee to be qualified under the Trust Indenture Act
in a timely manner.
(m) The Trust and the Guarantor may require each Holder of Securities
to be sold pursuant to any Shelf Registration Statement to furnish to the
Trust and the Guarantor such information regarding the Holder and the
distribution of such Securities as the Trust and the Guarantor may from
time to time reasonably require for inclusion in such Shelf Registration
Statement and the Guarantor and the Trust may exclude from such
registration the Securities of any Holder that fails to furnish such
information within a reasonable time after receiving such request.
(n) The Trust and the Guarantor shall, if requested, promptly
incorporate in a Prospectus supplement or post-effective amendment to a
Shelf Registration Statement, such information as the Managing Underwriters
reasonably agree should be included therein and to which the Trust and the
Guarantor do not reasonably object and shall make all required filings of
such Prospectus supplement or post-effective amendment as soon as
practicable after they are notified of the matters to be incorporated in
such Prospectus supplement or post-effective amendment.
(o) The Trust and the Guarantor shall enter into such customary
agreements (including underwriting agreements in customary form) to take
all other appropriate actions in order to expedite or facilitate the
registration or the disposition of the Securities,
<PAGE>
9
and in connection therewith, if an underwriting agreement is entered into,
cause the same to contain indemnification provisions and procedures
substantially identical to those set forth in Section 5 (or such other
provisions and procedures acceptable to the Managing Underwriters, if any)
with respect to all parties to be indemnified pursuant to Section 5.
(p) The Trust and the Guarantor shall (i) make reasonably available
for inspection by the Holders of Securities to be registered thereunder,
any underwriter participating in any disposition pursuant to such Shelf
Registration Statement, and any attorney, accountant or other agent
retained by such Holders or any such underwriter all relevant financial and
other records, pertinent corporate documents and properties of the Trust
and the Guarantor and its subsidiaries; (ii) cause the Guarantor's
officers, directors and employees and the Issuer Trustees to supply all
relevant information reasonably requested by such Holders or any such
underwriter, attorney, accountant or agent in connection with any such
Shelf Registration Statement as is customary for similar due diligence
examinations; PROVIDED, HOWEVER, that any information that is designated in
writing by the Trust and the Guarantor, in good faith, as confidential at
the time of delivery of such information shall be kept confidential by such
Holders or any such underwriter, attorney, accountant or agent, unless such
disclosure is made in connection with a court proceeding or required by
law, or such information becomes available to the public generally or
through a third party without an accompanying obligation of
confidentiality; and PROVIDED FURTHER that the foregoing inspection and
information gathering shall, to the greatest extent possible, be
coordinated on behalf of the Holders and the other parties entitled thereto
by one counsel designated by and on behalf of such Holders and other
parties; (iii) make such representations and warranties to the Holders of
Securities registered thereunder and the underwriters, if any, in form,
substance and scope as are customarily made by the Guarantor to
underwriters in primary underwritten offerings and covering matters
including, but not limited to, those set forth in the Purchase Agreement;
(iv) obtain opinions of counsel to the Trust and the Guarantor (who may be
the General Counsel of the Guarantor) and updates thereof (which counsel
and opinions (in form,
<PAGE>
10
scope and substance) shall be reasonably satisfactory to the Managing
Underwriters, if any) addressed to each selling Holder and the
underwriters, if any, covering such matters as are customarily covered in
opinions requested in underwritten offerings and such other matters as may
be reasonably requested by such Holders and underwriters (it being agreed
that the matters to be covered by such opinion shall include, without
limitation, as of the date of the opinion and as of the effective date of
the Shelf Registration Statement or most recent post-effective amendment
thereto, as the case may be, the absence from such Shelf Registration
Statement and the prospectus included therein, as then amended or
supplemented, including the documents incorporated by reference therein, of
an untrue statement of a material fact or the omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading; (v) obtain "cold comfort" letters and
updates thereof from the independent certified public accountants of the
Guarantor (and, if necessary, any other independent certified public
accountants of any subsidiary of the Guarantor or of any business acquired
by the Company for which financial statements and financial data are, or
are required to be, included in the Shelf Registration Statement),
addressed to each such Holder of Securities registered thereunder and the
underwriters, if any, in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with primary
underwritten offerings; and (vi) deliver such documents and certificates as
may be reasonably requested by any such Holders and the Managing
Underwriters, if any, including those to evidence compliance with
Section 3(i) and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Trust and the
Guarantor. The foregoing actions set forth in clauses (iii), (iv), (v)
and (vi) of this Section 3(p) shall be performed at each closing under any
underwritten offering to the extent required thereunder.
(q) The Trust and the Guarantor will use its best efforts to cause
the Common Stock relating to such Shelf Registration Statement to be listed
on each securities exchange, if any, on which any shares of Common Stock
are then listed.
<PAGE>
11
(r) In the event that any broker-dealer registered under the Exchange
Act shall underwrite any Securities or participate as a member of an
underwriting syndicate or selling group or "assist in the distribution"
(within the meaning of the Rules of Fair Practice and the By-Laws of the
National Association of Securities Dealers, Inc. ("NASD")) thereof, whether
as a Holder of such Securities or as an underwriter, a placement or sales
agent or a broker or dealer in respect thereof, or otherwise, assist such
broker-dealer in complying with the requirements of such Rules and By-Laws,
including, without limitation, by (A) if such Rules or By-Laws, including
Schedule E thereto, shall so require, engaging a "qualified independent
underwriter" (as defined in such Schedule) to participate in the
preparation of the Shelf Registration Statement relating to such
Securities, to exercise usual standards of due diligence in respect
thereto, (B) indemnifying any such qualified independent underwriter to the
extent of the indemnification of underwriters provided in Section 5 hereof
and (C) providing such information to such broker-dealer as may be required
in order for such broker-dealer to comply with the requirements of the
Rules of Fair Practice of the NASD.
(s) The Trust and the Guarantor shall use their best efforts to take
all other steps necessary to effect the registration, offering and sale of
the Securities covered by the Shelf Registration Statement contemplated
hereby.
4. REGISTRATION EXPENSES. Except as otherwise provided in Section 6,
the Guarantor shall bear all fees and expenses incurred in connection with the
performance of its obligations under Sections 2 and 3 hereof and shall bear or
reimburse the Holders for the reasonable fees and disbursements of one firm of
counsel designated by the Guarantor and reasonably acceptable to the Holders of
a majority of the Securities covered by the Shelf Registration Statement to act
as counsel therefor in connection therewith.
5. INDEMNIFICATION AND CONTRIBUTION. (a) In connection with any
Shelf Registration Statement, the Trust and the Guarantor, jointly and
severally, agree to indemnify and hold harmless the Purchasers, each Holder of
Preferred Securities covered thereby (including the Purchasers) and
<PAGE>
12
each person who controls the Purchasers or any such Holder within the meaning of
either the Securities Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Securities Act, the Exchange Act or other Federal
or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Shelf Registration Statement as originally
filed or in any amendment thereof, or in any preliminary Prospectus or
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that (i) the Guarantor and the Trust
will not be liable in any case to the extent that any such loss, claim, damage
or liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Guarantor by or on
behalf of the Purchasers or any such Holder specifically for inclusion therein
and (ii) the foregoing indemnity with respect to any untrue statement or alleged
untrue statement or omission or alleged omission made in any preliminary
prospectus relating to a Shelf Registration Statement shall not inure to the
benefit of any Holder (or any person controlling such Holder) from whom the
person asserting any such loss, claim, damage or liability purchases any of the
Securities that are the subject thereof if such person did not receive a copy of
the final prospectus (or the final prospectus as supplemented) at or prior to
the written confirmation of the sale of such Securities to such person and the
untrue statement or alleged untrue statement or omission or alleged omission
contained in the preliminary prospectus was corrected in the final prospectus
(or the final prospectus as supplemented). This indemnity agreement will be in
addition to any liability which the Guarantor or the Trust may otherwise have.
The Trust and the Guarantor, jointly and severally, also agree to
indemnify or contribute to Losses
<PAGE>
13
(as defined below) of, as provided in Section 5(d), any underwriters of
Securities registered under the Shelf Registration Statement, their officers,
directors, employees and agents and each person who controls such underwriters
on substantially the same basis as that of the indemnification of the Purchasers
and the selling Holders provided in this Section 5(a) and shall, if requested by
any Holder, enter into an underwriting agreement reflecting such agreement, as
provided in Section 3(o) and Section 6 hereof.
(b) Each Holder of Securities covered by a Shelf Registration
Statement (including the Purchasers) severally agrees to indemnify and hold
harmless (i) the Trust and the Guarantor, (ii) each of the directors of the
Guarantor, (iii) each of its officers who signs such Shelf Registration
Statement and (iv) each person who controls the Trust or the Guarantor within
the meaning of either the Securities Act or the Exchange Act to the same extent
as the foregoing indemnity from the Trust and the Guarantor, but only with
reference to written information relating to such Holder furnished to the
Guarantor by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 5 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 5, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve the
indemnifying party from any liability it may have to any indemnified party
otherwise than under paragraph (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent
of such indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 5 for any legal or other expenses
subsequently
<PAGE>
14
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on any claims that are the subject
matter of such action.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 5 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall have a joint and several
obligation to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which such
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by such indemnifying party, on the one hand, and
such indemnified party, on the other hand, from the Initial Placement and the
Shelf Registration Statement which resulted in such Losses; PROVIDED, HOWEVER,
that in no case shall the Purchasers or any subsequent Holder of any Security be
responsible, in the aggregate, for any amount in excess of the amount by which
the net proceeds received by such Holders from the sale of the Securities
pursuant to the Registration Statement exceeds the amount of damages which such
Holders have otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. If the allocation provided by
the immediately preceding sentence is unavailable for any reason, the
indemnifying party and the indemnified party shall contribute in such proportion
as is appropriate to reflect not only such relative benefits but also the
relative fault of such indemnifying party, on the one hand, and such indemnified
party, on the other hand, in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Relative fault shall be determined by reference to whether any alleged untrue
statement or omission relates to information provided by the indemnifying party,
on the one hand, or by the indemnified party, on the other hand. The parties
agree that it would not be just and
<PAGE>
15
equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (d), no
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 5, each person who controls a Holder within the meaning of either
the Securities Act or the Exchange Act shall have the same rights to
contribution as such Holder, and each person who controls the Guarantor or the
Trust within the meaning of either the Securities Act or the Exchange Act, each
officer of the Guarantor who shall have signed the Shelf Registration Statement
and each director of the Guarantor shall have the same rights to contribution as
the Guarantor, subject in each case to the applicable terms and conditions of
this paragraph (d).
(e) The provisions of this Section 5 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder or
the Guarantor or the Trust or any of the officers, directors, employees, agents
or controlling persons referred to in Section 5 hereof, and will survive the
sale by a Holder of Securities covered by the Shelf Registration Statement.
6. UNDERWRITTEN OFFERING. The Holders of Securities covered by the
Shelf Registration Statement who desire to do so may sell such Securities in an
underwritten offering. In any such underwritten offering, the investment banker
or bankers and manager or managers that will administer the offering will be
selected by, and the underwriting arrangements with respect thereto will be
approved by, the Holders of a majority of the Securities to be included in such
offering; PROVIDED, HOWEVER, that (i) such investment bankers and managers and
underwriting arrangements must be reasonably satisfactory to the Guarantor and
the Trust and (ii) the Guarantor shall not be obligated to arrange for more than
one underwritten offering during the Shelf Registration Period. No Holder may
participate in any underwritten offering contemplated hereby unless such Holder
(a) agrees to sell such Holder's Securities in accordance with any approved
underwriting arrangements, (b) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements, lock-
up letters and other documents
<PAGE>
16
required under the terms of such approved underwriting arrangements and (c) at
least 20% of the outstanding Securities are included in such underwritten
offering. The Holders participating in any underwritten offering shall be
responsible for any expenses customarily borne by selling securityholders,
including underwriting discounts and commissions and fees and expenses of
counsel to the selling securityholders and shall reimburse the Trust and the
Guarantor for the fees and disbursements of their counsel, their independent
public accountants and any printing expenses incurred in connection with such
underwritten offering. Notwithstanding the foregoing or the provisions of
Section 3(n) hereof, upon receipt of a request from the Managing Underwriter or
a representative of holders of a majority of the Securities outstanding to
prepare and file an amendment or supplement to the Shelf Registration Statement
and Prospectus in connection with an underwritten offering, the Guarantor may
delay the filing of any such amendment or supplement for up to 90 days if the
Guarantor in good faith has a valid business reason for such delay.
7. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Trust and the Guarantor have
not, as of the date hereof, entered into, nor shall they on or after the
date hereof, enter into, any agreement with respect to their securities or
otherwise that is inconsistent with the rights granted to the Holders
herein or otherwise conflicts with the provisions hereof.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Trust and the Guarantor have
obtained the written consent of the Purchasers.
(c) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such
Holder to the Guarantor in
<PAGE>
17
accordance with the provisions of this Section 6(c);
(2) if to the Purchasers, initially at the address set forth in
the Purchase Agreement; and
(3) if to the Trust or the Guarantor, initially at its address
set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly given
when received.
The Purchaser or the Trust and the Guarantor by notice to the other
may designate additional or different addresses for subsequent notices or
communications.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties and the Holders, including, without the need for an express
assignment or any consent by the Trust or the Guarantor thereto, subsequent
Holders of Securities. The Trust and the Guarantor hereby agree to extend
the benefits of this Agreement to any Holder of Securities and any such
Holder may specifically enforce the provisions of this Agreement as if an
original party hereto.
(e) COUNTERPARTS. This agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(f) HEADINGS. The headings in this agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. This agreement shall be governed by and construed
in accordance with the internal laws of the State of New York applicable to
agreements made and to be performed in said State.
(h) SEVERABILITY. In the event that any one of more of the
provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect for
<PAGE>
18
any reason, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions hereof shall not be
in any way impaired or affected thereby, it being intended that all of the
rights and privileges of the parties shall be enforceable to the fullest
extent permitted by law.
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
INTERNATIONAL PAPER CAPITAL TRUST, by Syvert E.
Nerheim solely in his capacity as trustee and not
in his individual capacity,
by /s/ Syvert E. Nerheim
------------------------
Name: Syvert E. Nerheim
Title: Regular Trustee
INTERNATIONAL PAPER COMPANY,
by /s/ James W. Guedry
------------------------
Name: James W. Guedry
Title: Secretary & Staff
Vice President
The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.
CS FIRST BOSTON CORPORATION, Acting on
behalf of itself and as the
Representative of the
several Purchasers
by /s/ Adam Inselbuch
------------------------
Name: Adam Inselbuch
Title: Vice President
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our reports dated February 9, 1995
included or incorporated by reference in International Paper Company's Form 10-K
for the year ended December 31, 1994, and to all references to our Firm included
in this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
New York, New York
August 25, 1995
<PAGE>
Exhibit 24.1
POWER OF ATTORNEY
Know All Men By These Presents, that the undersigned hereby
constitutes and appoints ROBERT C. BUTLER, JAMES W. GUEDRY and JAMES P. MELICAN,
and each of them (with full power to each of them to act alone) their true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for them on their behalf and in their name, place and stead, in
any and all capacities, to sign, execute and affix their seal thereto and file,
on behalf of International Paper Company, relating to the registration of any
and all types of securities to be issued by International Paper Company, in
accordance with resolutions adopted on June 13, 1995, by the Board of Directors
of International Paper Company, any and all Form S-3 Registration Statements,
under the Securities Act of 1933, as amended, together with any and all
amendments (including post-effective amendments) to such Form S-3 Registration
Statements or on such other form or forms as prescribed by the Securities and
Exchange Commission relating to the securities and any and all amendments
thereto, and to file the same, with all exhibits and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises in order to effectuate the same, for all intents and
purposes, and that the undersigned hereby ratify and confirm all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
<PAGE>
Executed on the 13th day of June, 1995 by the following persons in the
capacities indicated.
Name Title
- ---- -----
/s/ John T. Dillon Executive Vice
- ------------------------- President and Director
(John T. Dillon)
Director
- -------------------------
(Willard C. Butcher)
/s/ Robert J. Eaton Director
- -------------------------
(Robert J. Eaton)
/s/ Stanley C. Gault) Director
- -------------------------
(Stanley C. Gault)
/s/Thomas C. Graham Director
- -------------------------
(Thomas C. Graham)
/s/ Arthur G. Hansen Director
- -------------------------
(Arthur G. Hansen)
/s/ Donald F. McHenry Director
- -------------------------
(Donald F. McHenry)
/s/ Patrick F. Noonan Director
- -------------------------
(Patrick F. Noonan)
/s/ Jane C. Pfeiffer Director
- -------------------------
(Jane C. Pfeiffer)
/s/ Edmund T. Pratt, Jr. Director
- -------------------------
(Edmund T. Pratt, Jr.)
/s/ Charles R. Shoemate Director
- -------------------------
(Charles R. Shoemate)
/s/ Roger B. Smith Director
- -------------------------
(Roger B. Smith)
2
<PAGE>
Exhibit 25.1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
INTERNATIONAL PAPER COMPANY
(Exact name of obligor as specified in its charter)
New York 13-0872805
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Two Manhattanville Road
Purchase, New York 10577
(Address of principal executive offices) (Zip code)
______________________
Convertible Junior Subordinated Deferrable Interest 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,
State of New York N.Y. 10006, and 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 New York, New York
Association
(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. (See Note on page 3.)
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 RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
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.)
2
<PAGE>
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.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
3
<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 30th day of August, 1995.
THE BANK OF NEW YORK
By: /S/MARY JANE MORRISSEY
--------------------------------
Name: MARY JANE MORRISSEY
Title: ASSISTANT VICE PRESIDENT
4
<PAGE>
Exhibit 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 1995,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin. . . . . . . . . . . . . . . . . . . . . $ 3,025,419
Interest-bearing balances. . . . . . . . . . . . . . . . . 881,413
Securities:
Held-to-maturity securities. . . . . . . . . . . . . . . . 1,242,368
Available-for-sale securities. . . . . . . . . . . . . . . 1,774,079
Federal funds sold in domestic
offices of the bank. . . . . . . . . . . . . . . . . . . . 5,503,445
Securities purchased under agreements to resell. . . . . . . 200,634
Loans and lease financing receivables:
Loans and leases, net of unearned income . . . . . . . . . 26,599,533
LESS: Allowance for loan and lease losses. . . . . . . . . 516,283
Loans and leases, net of unearned
income and allowance . . . . . . . . . . . . . . . . . . 26,083,250
Assets held in trading accounts. . . . . . . . . . . . . . . 1,455,639
Premises and fixed assets (including
capitalized leases). . . . . . . . . . . . . . . . . . . . 612,547
Other real estate owned. . . . . . . . . . . . . . . . . . . 79,667
Investments in unconsolidated subsidiaries and
associated companies . . . . . . . . . . . . . . . . . . . 198,737
Customers' liability to this bank on
acceptances outstanding. . . . . . . . . . . . . . . . . . 1,111,464
Intangible assets. . . . . . . . . . . . . . . . . . . . . . 105,263
Other assets . . . . . . . . . . . . . . . . . . . . . . . . 1,237,264
-----------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . $43,511,189
-----------
-----------
LIABILITIES
Deposits:
In domestic offices. . . . . . . . . . . . . . . . . . . . $19,233,885
Noninterest-bearing. . . . . . . . . . . . . . . . . . . . 7,677,954
Interest-bearing . . . . . . . . . . . . . . . . . . . . . 11,555,931
In foreign offices, Edge and
Agreement subsidiaries, and IBFs . . . . . . . . . . . . . 12,641,676
Noninterest-bearing. . . . . . . . . . . . . . . . . . . . 72,479
Interest-bearing . . . . . . . . . . . . . . . . . . . . . 12,569,197
E-1
<PAGE>
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds purchased. . . . . . . . . . . . . . . . . . 1,747,659
Securities sold under agreements to repurchase . . . . . . 73,553
Demand notes issued to the U.S. Treasury . . . . . . . . . . 300,000
Trading liabilities. . . . . . . . . . . . . . . . . . . . . 738,317
Other borrowed money:
With original maturity of one year or less . . . . . . . . 1,586,443
With original maturity of more than one year . . . . . . . 220,877
Bank's liability on acceptances executed and outstanding . . 1,113,102
Subordinated notes and debentures. . . . . . . . . . . . . . 1,053,860
Other liabilities. . . . . . . . . . . . . . . . . . . . . . 1,489,252
-----------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . 40,198,624
-----------
-----------
EQUITY CAPITAL
Common stock . . . . . . . . . . . . . . . . . . . . . . . . 942,284
Surplus. . . . . . . . . . . . . . . . . . . . . . . . . . . 525,686
Undivided profits and capital
reserves . . . . . . . . . . . . . . . . . . . . . . . . . 1,849,221
Net unrealized holding gains (losses) on
available-for-sale securities. . . . . . . . . . . . . . . (662)
Cumulative foreign currency translation adjustments. . . . . (3,944)
-----------
Total equity capital . . . . . . . . . . . . . . . . . . . . 3,312,585
-----------
Total liabilities and equity capital . . . . . . . . . . . . $43,511,189
-----------
-----------
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
--
J. Carter Bacot |
Thomas A. Renyi | Directors
Samuel F. Chovalier |
--
- --------------------------------------------------------------------------------
E-2
<PAGE>
Exhibit 25.2
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
INTERNATIONAL PAPER CAPITAL TRUST
(Exact name of obligor as specified in its charter)
Delaware 62-6296765
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Two Manhattanville Road
Purchase, New York 10577
(Address of principal executive offices) (Zip code)
___________
Convertible Preferred Securities
(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,
State of New York N.Y. 10006, and 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 New York, New York
Association
(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. (See Note on page 3.)
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 RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
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.)
2
<PAGE>
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.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
3
<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 30th day of August, 1995.
THE BANK OF NEW YORK
By: /S/MARY JANE MORRISSEY
--------------------------------
Name: MARY JANE MORRISSEY
Title: ASSISTANT VICE PRESIDENT
4
<PAGE>
Exhibit 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 1995,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin . . . . $ 3,025,419
Interest-bearing balances. . . . . . . . . . . . . . . . . 881,413
Securities:
Held-to-maturity securities. . . . . . . . . . . . . . . . 1,242,368
Available-for-sale securities. . . . . . . . . . . . . . . 1,774,079
Federal funds sold in domestic offices of the bank . . . . . 5,503,445
Securities purchased under agreements to resell. . . . . . . 200,634
Loans and lease financing receivables:
Loans and leases, net of unearned income . . . . . . . . . 26,599,533
LESS: Allowance for loan and lease losses. . . . . . . . . 516,283
Loans and leases, net of unearned
income and allowance . . . . . . . . . . . . . . . . . . 26,083,250
Assets held in trading accounts. . . . . . . . . . . . . . . 1,455,639
Premises and fixed assets (including capitalized leases) . . 612,547
Other real estate owned. . . . . . . . . . . . . . . . . . . 79,667
Investments in unconsolidated subsidiaries and associated
companies. . . . . . . . . . . . . . . . . . . . . . . . . 198,737
Customers' liability to this bank on acceptances
outstanding. . . . . . . . . . . . . . . . . . . . . . . . 1,111,464
Intangible assets. . . . . . . . . . . . . . . . . . . . . . 105,263
E-1
<PAGE>
Other assets . . . . . . . . . . . . . . . . . . . . . . . . 1,237,264
-----------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . $43,511,189
-----------
-----------
LIABILITIES
Deposits:
In domestic offices. . . . . . . . . . . . . . . . . . . . $19,233,885
Noninterest-bearing. . . . . . . . . . . . . . . . . . . . 7,677,954
Interest-bearing . . . . . . . . . . . . . . . . . . . . . 11,555,931
In foreign offices, Edge and Agreement subsidiaries,
and IBFs . . . . . . . . . . . . . . . . . . . . . . . . . 12,641,676
Noninterest-bearing. . . . . . . . . . . . . . . . . . . . 72,479
Interest-bearing . . . . . . . . . . . . . . . . . . . . . 12,569,197
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds purchased. . . . . . . . . . . . . . . . . . 1,747,659
Securities sold under agreements to repurchase . . . . . . 73,553
Demand notes issued to the U.S. Treasury . . . . . . . . . . 300,000
Trading liabilities. . . . . . . . . . . . . . . . . . . . . 738,317
Other borrowed money:
With original maturity of one year or less . . . . . . . . 1,586,443
With original maturity of more than one year . . . . . . . 220,877
Bank's liability on acceptances executed and outstanding . . 1,113,102
Subordinated notes and debentures. . . . . . . . . . . . . . 1,053,860
Other liabilities. . . . . . . . . . . . . . . . . . . . . . 1,489,252
-----------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . 40,198,624
-----------
-----------
EQUITY CAPITAL
Common stock . . . . . . . . . . . . . . . . . . . . . . . . 942,284
Surplus. . . . . . . . . . . . . . . . . . . . . . . . . . . 525,686
Undivided profits and capital reserves . . . . . . . . . . . 1,849,221
Net unrealized holding gains
(losses) on available-for-sale securities. . . . . . . . . (662)
Cumulative foreign currency translation adjustments. . . . . (3,944)
-----------
Total equity capital . . . . . . . . . . . . . . . . . . . . 3,312,585
-----------
Total liabilities and equity capital . . . . . . . . . . . . $43,511,189
-----------
-----------
</TABLE>
E-2
<PAGE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
--
J. Carter Bacot |
Thomas A. Renyi | Directors
Samuel F. Chovalier |
--
- --------------------------------------------------------------------------------
E-3
<PAGE>
Exhibit 25.3
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
-----------------------------------
INTERNATIONAL PAPER COMPANY
(Exact name of obligor as specified in its charter)
New York 13-0872805
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Two Manhattanville Road
Purchase, New York 10577
(Address of principal executive offices) (Zip code)
----------------------
Preferred Securities Guarantee
(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,
State of New York N.Y. 10006, and 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 New York, New York
Association
(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. (See Note on page 3.)
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 RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
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.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
2
<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 30th day of August, 1995.
THE BANK OF NEW YORK
By: /S/MARY JANE MORRISSEY
--------------------------------
Name: MARY JANE MORRISSEY
Title: ASSISTANT VICE PRESIDENT
3
<PAGE>
Exhibit 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 1995,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin . . . . $ 3,025,419
Interest-bearing balances. . . . . . . . . . . . . . . . . 881,413
Securities:
Held-to-maturity securities. . . . . . . . . . . . . . . . 1,242,368
Available-for-sale securities. . . . . . . . . . . . . . . 1,774,079
Federal funds sold in domestic offices of the bank . . . . . 5,503,445
Securities purchased under agreements to resell. . . . . . . 200,634
Loans and lease financing receivables:
Loans and leases, net of unearned income . . . . . . . . . 26,599,533
LESS: Allowance for loan and lease losses. . . . . . . . . 516,283
Loans and leases, net of unearned income and
allowance. . . . . . . . . . . . . . . . . . . . . . . . 26,083,250
Assets held in trading accounts. . . . . . . . . . . . . . . 1,455,639
Premises and fixed assets (including capitalized leases) . . 612,547
Other real estate owned. . . . . . . . . . . . . . . . . . . 79,667
Investments in unconsolidated subsidiaries and associated
companies. . . . . . . . . . . . . . . . . . . . . . . . . 198,737
Customers' liability to this bank on acceptances
outstanding. . . . . . . . . . . . . . . . . . . . . . . . 1,111,464
Intangible assets. . . . . . . . . . . . . . . . . . . . . . 105,263
Other assets . . . . . . . . . . . . . . . . . . . . . . . . 1,237,264
-----------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . $43,511,189
-----------
-----------
LIABILITIES
Deposits:
In domestic offices. . . . . . . . . . . . . . . . . . . . $19,233,885
Noninterest-bearing. . . . . . . . . . . . . . . . . . . . 7,677,954
Interest-bearing . . . . . . . . . . . . . . . . . . . . . 11,555,931
In foreign offices, Edge and Agreement subsidiaries,
and IBFs . . . . . . . . . . . . . . . . . . . . . . . . . 12,641,676
Noninterest-bearing. . . . . . . . . . . . . . . . . . . . 72,479
Interest-bearing . . . . . . . . . . . . . . . . . . . . . 12,569,197
E-1
<PAGE>
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds purchased. . . . . . . . . . . . . . . . . . 1,747,659
Securities sold under agreements to repurchase . . . . . . 73,553
Demand notes issued to the U.S. Treasury . . . . . . . . . . 300,000
Trading liabilities. . . . . . . . . . . . . . . . . . . . . 738,317
Other borrowed money:
With original maturity of one year or less . . . . . . . . 1,586,443
With original maturity of more than one year . . . . . . . 220,877
Bank's liability on acceptances executed and outstanding . . 1,113,102
Subordinated notes and debentures. . . . . . . . . . . . . . 1,053,860
Other liabilities. . . . . . . . . . . . . . . . . . . . . . 1,489,252
-----------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . 40,198,624
-----------
-----------
EQUITY CAPITAL
Common stock . . . . . . . . . . . . . . . . . . . . . . . . 942,284
Surplus. . . . . . . . . . . . . . . . . . . . . . . . . . . 525,686
Undivided profits and capital reserves . . . . . . . . . . . 1,849,221
Net unrealized holding gains (losses) on
available-for-sale securities. . . . . . . . . . . . . . . (662)
Cumulative foreign currency translation adjustments. . . . . (3,944)
-----------
Total equity capital . . . . . . . . . . . . . . . . . . . . 3,312,585
-----------
Total liabilities and equity capital . . . . . . . . . . . . $43,511,189
-----------
-----------
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
--
J. Carter Bacot |
Thomas A. Renyi | Directors
Samuel F. Chovalier |
--
- --------------------------------------------------------------------------------
E-2
