<PAGE> 1
PROSPECTUS SUPPLEMENT FILED PURSUANT TO RULE 424(b)(5)
(To Prospectus Dated January 17, 1996) REGISTRATION NO. 033-64459
$300,000,000
IBP, INC.
7.95% NOTES DUE 2010
------------------
The notes will bear interest at a rate of 7.95% per year. Interest on the
notes is payable on February 1 and August 1 of each year, beginning August 1,
2000. The notes will mature on February 1, 2010. IBP, inc. may redeem the notes
in whole or in part at any time at the redemption prices described in this
prospectus supplement. The notes will not have the benefit of any sinking fund.
The notes will be senior obligations of IBP and will rank equally with all
other unsecured senior indebtedness of IBP. The notes will be issued only in
registered form in denominations of $1,000 and integral multiples of $1,000.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS SUPPLEMENT OR THE RELATED PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PER NOTE TOTAL
-------- ------------
<S> <C> <C>
Public Offering Price 99.175% $297,525,000
Underwriting Discount .650% $ 1,950,000
Proceeds to IBP (before expenses) 98.525% $295,575,000
</TABLE>
Interest on the notes will accrue from January 31, 2000 to the date of
delivery.
------------------
The underwriters are offering the notes subject to various conditions. The
underwriters expect to deliver the notes to purchasers, in book-entry form only,
through the facilities of The Depository Trust Company on or about January 31,
2000.
------------------
JOINT BOOK RUNNING MANAGERS
DONALDSON, LUFKIN & JENRETTE SALOMON SMITH BARNEY
BANC OF AMERICA SECURITIES LLC
January 26, 2000
<PAGE> 2
You should rely only on the information contained in or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We have
not authorized anyone to provide you with different information. We are not
making an offer of these securities in any state where the offer is not
permitted. You should not assume the information provided by this prospectus
supplement or the accompanying prospectus is accurate as of any date other than
the date on the front of this prospectus supplement.
-------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Forward-Looking Statements........... S-1
Offering Summary..................... S-2
Recent Developments.................. S-2
Use of Proceeds...................... S-6
Unaudited Pro Forma Combined
Financial Information.............. S-6
Capitalization....................... S-7
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Consolidated Financial Information... S-8
IBP, inc............................. S-10
Description of Notes................. S-14
Underwriting......................... S-18
Legal Matters........................ S-19
Where You Can Find More Information.. S-19
</TABLE>
PROSPECTUS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................ 2
Incorporation of Certain Documents by
Reference.......................... 2
The Company.......................... 3
Ratio of Earnings to Fixed Charges... 3
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Use of Proceeds...................... 3
Description of the Debt Securities... 3
Plan of Distribution................. 15
Validity of the Debt Securities...... 15
Experts.............................. 15
</TABLE>
-------------------------
<PAGE> 3
FORWARD-LOOKING STATEMENTS
This prospectus supplement (including the information incorporated by
reference in this prospectus supplement) and the accompanying prospectus contain
forward-looking statements with respect to the financial condition, results of
operations, plans, objectives, future performance and business of IBP,
including, without limitation, statements preceded by, followed by or that
include the words "believes," "expects," "anticipates," "estimates," or similar
expressions. These forward-looking statements involve risks and uncertainties.
Actual results may differ materially from those contemplated by such
forward-looking statements due to, among others, matters described in the
documents incorporated by reference in this prospectus supplement and the
following factors:
- risks of changing market conditions with respect to livestock supplies
and demand for our products;
- the nature and extent of consolidation in the food processing industry
and our ability to grow through acquisitions and to assimilate the
acquired entities;
- domestic and international legal and regulatory risks, and the impact of
governmental regulations; and
- the costs of environmental compliance.
See "Where You Can Find More Information."
S-1
<PAGE> 4
OFFERING SUMMARY
The following summary is qualified in its entirety by the more detailed
information included elsewhere or incorporated by reference in this prospectus
supplement. As used in this prospectus supplement, all references to "IBP,"
"we," the "Company," and "us" and all similar references are to IBP, inc. and
its consolidated subsidiaries, unless otherwise expressly stated or the context
otherwise requires.
IBP, INC.
IBP, inc. is the largest producer of fresh beef and pork products in the
United States, with fiscal 1998 net sales of $12.8 billion. We are also a
diversified producer of hundreds of consumer-ready food products, including deli
meats, pizza toppings, pizza crusts, wraps, appetizers, hors d'oeuvres, soups,
sauces, and side dishes, as well as tanned leather products. We operate through
two business segments, Fresh Meats and Enterprises. Our customers include food
retailers, distributors, wholesalers, restaurant and hotel chains and other food
processors. We provide fresh, partially cooked and fully cooked meats and
related products to these retail and food service industries. Our beef and pork
allied products line includes more than 300 items, such as ingredients for
pharmaceuticals and raw materials for animal feeds, as well as tanned hides for
leading automobile, upholstery and apparel manufacturers.
Founded in 1960 as Iowa Beef Packers, Inc., we began operations in 1961
with one plant in western Iowa. Today, we have approximately 45,000 employees at
53 production facilities in North America, joint venture operations in Russia,
Ireland and China, and sales offices throughout the United States and in Canada,
Mexico, England, Japan, Taiwan, Korea, Russia and China.
The address of our world headquarters is 800 Stevens Port Drive, Dakota
Dunes, South Dakota 57049. Our telephone number is (605) 235-2061.
RECENT DEVELOPMENTS
H&M Food Systems Company, Inc. and Russer Foods. In April 1999, we
acquired H&M Food Systems Company, Inc. and Zemco Industries, Inc., owner of
Russer Foods. H&M produces pre-cooked meat products and prepared foods with two
manufacturing facilities in Texas. Russer Foods produces and markets a full line
of premium deli hams, bologna, loaves, and specialty sausage products, as well
as self-serve deli meats with production facilities in New York and
Massachusetts.
Wilton Foods, Inc. In July 1999, we also purchased Wilton Foods, Inc.
Wilton Foods produces hors d'oeuvre, appetizer, premium kosher meals and
prepared foods with a production facility in Goshen, New York. Wilton is
operated as part of DFG Foods. Wilton sells its products into the U. S.,
Canadian, Mexican and European markets.
Norfolk, Nebraska Facility. In July 1999, we announced plans to begin
processing operations at the former Beef America facility in Norfolk, Nebraska.
This facility will further process beef carcasses and will help maximize our
slaughter and processing
S-2
<PAGE> 5
capacities. We estimate that it will cost approximately $35 million to reopen
and renovate the 230,000 square foot facility. We intend to begin operations at
the facility in the spring of 2000.
Thorn Apple Valley, Inc. In July 1999, a bankruptcy judge approved our bid
to purchase substantially all of the operating assets of Thorn Apple Valley,
Inc., which filed for bankruptcy protection on March 5, 1999. The assets that we
purchased will continue to further process pork and poultry products including
producing bacon, hot dogs, lunch meats, hams and sausages under national brand
names such as Thorn Apple Valley(R), Corn King(R), Colonial(R), Wilson
Certified(R), and Cavanaugh Lake View Farms(R). We purchased the Thorn Apple
Valley facilities in Ponca City, Oklahoma; Forrest City, Arkansas; Holly Ridge,
North Carolina; Grand Rapids, Michigan; and Detroit, Michigan. The Thorn Apple
Valley assets are now part of our Enterprises division operating under the IBP
Foods, Inc. name.
Tama, Iowa Facility. In December 1999, we closed our Tama, Iowa cow
slaughter and processing plant.
Corporate Brand Foods America. In December 1999, we entered into a
definitive agreement to acquire all of the capital stock of Corporate Brand
Foods America. The acquisition is structured as a stock for stock merger and we
will account for this acquisition as a pooling of interests. Corporate Brand
Foods is one of the largest private meat processors in the United States with
approximately $720 million in annual revenues in fiscal year 1998, which
includes the 1998 revenues for Wright Brand Foods which it acquired in 1999. It
operates eleven manufacturing facilities and produces a wide range of processed
meats, including home cooked and fresh sausage, roast beef, bacon, lunch meats,
and deli meats.
Recent Litigation Developments. The United States Department of Justice, on
behalf of the Environmental Protection Agency, has recently filed a lawsuit
against the company relating to alleged violations of environmental laws. For
additional details, see "IBP, inc. - Recent Litigation Developments."
S-3
<PAGE> 6
SELECTED SUMMARY FINANCIAL INFORMATION
The following table presents selected summary historical financial
information for the fiscal year ended 1998 and for the nine months ending
September 25, 1999 as well as for the nine months ending September 26, 1998. Our
historical financial information for the fiscal year ended 1998 was derived from
our audited consolidated financial statements. Our historical financial
information for the nine months ended September 26, 1998 and September 25, 1999
was derived from our unaudited condensed consolidated financial statements and
is not necessarily indicative of the results of operations to be expected for
the full year.
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE
NINE MONTHS NINE MONTHS FISCAL YEAR ENDED
ENDED ENDED DECEMBER 26,
SEPTEMBER 25, 1999 SEPTEMBER 26, 1998 1998
------------------ ------------------ -----------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
Net Sales.................... $10,224,509 $9,769,973 $12,848,635
Net Sales by Segment:
Fresh Meats................ $ 9,097,244 $8,933,620 $11,696,190
Enterprises................ 1,127,265 836,353 1,152,445
EBITDA(1).................... $ 485,174 $ 311,701 $ 499,961
Net Earnings before
extraordinary items........ 231,747 113,033 204,822
</TABLE>
- -------------------------
(1) We define EBITDA as income from operations plus depreciation and
amortization expense. We have included EBITDA because we understand that it
is one measure used by investors to determine our operating cash flow and
historical ability to service our indebtedness. However, other companies in
our business may present EBITDA differently. EBITDA is not a measurement of
financial performance under generally accepted accounting principles and
should not be considered an alternative to cash flow from operating
activities or as a measure of liquidity or an alternative to net income as
an indicator of our operating performance or any other measures of
performance derived in accordance with generally accepted accounting
principles.
S-4
<PAGE> 7
THE OFFERING
The following is a brief summary of certain terms of this offering. For a
more complete description of the terms of the notes, see "Description of Notes."
TERMS OF THE NOTES
Aggregate Principal Amount...... $300,000,000
Interest Rate................... 7.95% per year
Maturity Date................... February 1, 2010
Interest Payment Dates.......... February 1 and August 1 of each year,
beginning August 1, 2000.
Interest Calculations........... Based on a 360-day year of twelve 30-day
months.
Ranking......................... The notes will rank equally with all other
existing and future unsubordinated and
unsecured debt of IBP.
Optional Redemption............. The notes are redeemable by us prior to
their maturity.
Sinking Fund.................... None.
Denominations................... $1,000 and integral multiples of $1,000.
Settlement...................... Same-day -- immediately available funds.
Use of Proceeds................. We estimate that we will receive net
proceeds from the offering of approximately
$295 million. We intend to use the proceeds
to repay indebtedness having maturities
ranging from one day to approximately eleven
months and having an average interest rate
of 5.58%, at September 25, 1999.
S-5
<PAGE> 8
USE OF PROCEEDS
We estimate that we will receive net proceeds from the offering of
approximately $295 million. We intend to use the proceeds to repay indebtedness
having maturities ranging from one day to approximately eleven months and having
an average interest rate of 5.58%, at September 25, 1999.
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The pro forma financial information set forth below assumes that the
acquisitions of Diversified Foods Group, H&M Food Systems, Russer Foods, Wilton
Foods, the assets of Thorn Apple Valley and the pending acquisition of Corporate
Brand Foods America had occurred at the beginning of fiscal year 1998. This
information has not been audited and has been prepared for comparative purposes
only and does not purport to be indicative of what would have occurred had each
acquisition been made at the beginning of fiscal year 1998, or of the future
results.
PRO FORMA AMOUNTS
(IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE
NINE MONTHS FOR THE
ENDED FISCAL YEAR ENDED
SEPTEMBER 25, 1999 DECEMBER 26, 1998
------------------ -----------------
<S> <C> <C>
Net Sales.................................... $11,080 $14,350
Net Sales by Segment:
Fresh Meats................................ $ 8,980 $11,625
Enterprises................................ 2,100 2,725
EBITDA(1).................................... $ 547 $ 605
</TABLE>
- -------------------------
(1) We define EBITDA as income from operations plus depreciation and
amortization expense. We have included EBITDA because we understand that it
is one measure used by investors to determine our operating cash flow and
historical ability to service our indebtedness. However, other companies in
our business may present EBITDA differently. EBITDA is not a measurement of
financial performance under generally accepted accounting principles and
should not be considered an alternative to cash flow from operating
activities or as a measure of liquidity or an alternative to net income as
an indicator of our operating performance or any other measures of
performance derived in accordance with generally accepted accounting
principles.
S-6
<PAGE> 9
CAPITALIZATION
The following table sets forth our consolidated capitalization and
short-term debt as of September 25, 1999, and as adjusted to give effect to the
offering (after deducting underwriting discounts and estimated offering
expenses) and the anticipated application of the net proceeds. From time to
time, we may issue additional debt or equity securities. The following
information should be read in conjunction with our consolidated financial
statements and related notes incorporated in this Prospectus Supplement by
reference.
<TABLE>
<CAPTION>
AS OF SEPTEMBER 25, 1999
-------------------------
ACTUAL ADJUSTED
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt:
Notes payable to banks................................ $ 588,948 $ 463,948
Current maturities of long-term debt.................. 1,472 1,472
Current obligations under capital leases.............. 2,913 2,913
---------- ----------
Total short-term debt......................... $ 593,333 $ 468,333
Long-term debt:
Long-term debt........................................ $ 563,069 $ 388,069
Notes offered hereby.................................. 0 300,000
Long-term obligations under capital leases............ 24,551 24,551
---------- ----------
Total long-term debt.......................... $ 587,620 $ 712,620
Stockholders' equity:
Common stock.......................................... $ 4,750 $ 4,750
Additional Paid-In Capital............................ 401,925 401,925
Retained earnings..................................... 1,292,551 1,292,551
Other................................................. (10,529) (10,529)
Treasury stock, at cost............................... (60,753) (60,753)
---------- ----------
Total stockholders' equity.................... $1,627,944 $1,627,944
---------- ----------
Total capitalization and short-term debt...... $2,808,897 $2,808,897
========== ==========
</TABLE>
S-7
<PAGE> 10
CONSOLIDATED FINANCIAL INFORMATION
The following table presents our summary historical financial information
as of and for the fiscal years ended 1996, 1997 and 1998 and as of and for the
nine months ended September 26, 1998 and September 25, 1999. Our historical
financial information as of and for the fiscal years ended 1996, 1997 and 1998
were derived from our audited consolidated financial statements. Our historical
financial information as of and for the nine months ended September 26, 1998 and
September 25, 1999 were derived from our unaudited condensed consolidated
financial statements and is not necessarily indicative of the results of
operations that will be achieved for the full year.
<TABLE>
<CAPTION>
FISCAL YEAR-END
SEPT. 25, SEPT 26, ---------------------------------------
1999 1998 1998 1997 1996
----------- ---------- ----------- ----------- -----------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
FINANCIAL POSITION
Cash and cash
equivalents........ $ 28,010 $ 39,932 $ 27,254 $ 69,022 $ 94,164
Net working
capital............ 143,062 242,154 231,003 207,109 540,903
Total assets......... 3,753,789 2,920,433 3,008,096 2,838,941 2,174,495
Long-term
obligations........ 587,620 566,592 575,522 568,281 260,008
Stockholders'
equity............. 1,627,944 1,316,042 1,400,914 1,237,069 1,203,655
</TABLE>
<TABLE>
<CAPTION>
39 WEEKS 39 WEEKS 52 WEEKS
ENDED ENDED ENDED
----------- ---------- ---------------------------------------
SEPT. 25, SEPT 26, DEC. 26, DEC. 27, DEC. 28,
1999 1998 1998 1997 1996
----------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS
Net sales............ $10,224,509 $9,769,973 $12,848,635 $13,258,784 $12,538,753
Cost of products
sold............... 9,573,696 9,346,752 12,186,427 12,815,892 12,095,171
----------- ---------- ----------- ----------- -----------
Gross profit......... $ 650,813 $ 423,221 $ 662,208 $ 442,892 $ 443,582
Selling, general and
administrative
expense............ $ 266,252 $ 206,092 $ 288,473 $ 216,176 $ 120,674
----------- ---------- ----------- ----------- -----------
Earnings from
operations......... $ 384,561 $ 217,129 $ 373,735 $ 226,716 $ 322,908
Net interest
expense............ $ 33,014 $ 34,596 $ 43,213 $ 38,002 $ 3,373
----------- ---------- ----------- ----------- -----------
Earnings before
income taxes and
extraordinary
item............... $ 351,547 $ 182,533 $ 330,522 $ 188,714 $ 319,535
Income taxes......... 119,800 69,500 125,700 71,700 120,800
----------- ---------- ----------- ----------- -----------
Earnings before
extraordinary
item............... $ 231,747 $ 113,033 $ 204,822 $ 117,014 $ 198,735
Extraordinary loss on
early
extinguishment of
debt, less
applicable taxes... -- (14,815) (14,815) -- --
----------- ---------- ----------- ----------- -----------
Net earnings......... $ 231,747 $ 98,218 $ 190,007 $ 117,014 $ 198,735
=========== ========== =========== =========== ===========
EARNINGS PER SHARE
Earnings before
extraordinary
item............... $ 2.51 $ 1.22 $ 2.21 $ 1.26 $ 2.10
Extraordinary item... -- (.16) (.16) -- --
----------- ---------- ----------- ----------- -----------
Net earnings......... $ 2.51 $ 1.06 $ 2.05 $ 1.26 $ 2.10
</TABLE>
S-8
<PAGE> 11
<TABLE>
<CAPTION>
39 WEEKS 39 WEEKS 52 WEEKS
ENDED ENDED ENDED
----------- ---------- ---------------------------------------
SEPT. 25, SEPT 26, DEC. 26, DEC. 27, DEC. 28,
1999 1998 1998 1997 1996
----------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
EARNINGS PER SHARE --
ASSUMING DILUTION
Earnings before
extraordinary
item............ $ 2.48 $ 1.21 $ 2.19 $ 1.25 $ 2.07
Extraordinary item... -- (.16) (.16) -- --
----------- ---------- ----------- ----------- -----------
Net Earnings......... $ 2.48 $ 1.05 $ 2.03 $ 1.25 $ 2.07
=========== ========== =========== =========== ===========
OTHER HISTORICAL DATA
(in thousands)
Depreciation and
amortization....... $ 81,300 $ 74,841 $ 100,821 $ 92,292 $ 73,910
Amortization of
intangibles........ 19,313 19,731 25,405 17,638 8,780
CASH FLOWS FROM
Operations
Activities...... 51,204 128,365 360,830 187,917 267,978
Investing
Activities...... (527,652) (174,353) (278,976) (286,481) (289,849)
Financing
Activities...... 477,421 17,017 (122,074) 74,168 (316)
EBITDA(1)............ 485,174 311,701 499,961 336,646 405,598
Capital expenditures
(including
acquisitions)...... $ 535,948 $ 123,182 $ 245,692 $ 458,816 $ 170,664
Dividends paid....... 6,922 6,943 9,252 9,300 9,473
FINANCIAL RATIOS
Current ratio........ 1.1 1.3 1.3 1.2 1.9
Earnings to fixed
charges............ 8.0 4.6 6.1 4.3 14.5
Net earnings as a
percent of net
sales.............. 2.3% 1.0% 1.5% 0.9% 1.6%
EBITDA as a percent
of net sales....... 4.7% 3.2% 3.9% 2.5% 3.2%
Dividends as a
percent of net
earnings........... 3.0% 7.1% 4.9% 7.9% 4.8%
Debt as a percent of
total
capitalization..... 26.5% 30.1% 29.1% 31.5% 17.8%
</TABLE>
- -------------------------
(1) We define EBITDA as income from operations plus depreciation and
amortization expense. We have included EBITDA because we understand that it
is one measure used by investors to determine our operating cash flow and
historical ability to service our indebtedness. However, other companies in
our business may present EBITDA differently. EBITDA is not a measurement of
financial performance under generally accepted accounting principles and
should not be considered an alternative to cash flow from operating
activities or as a measure of liquidity or an alternative to net income as
an indicator of our operating performance or any other measures of
performance derived in accordance with generally accepted accounting
principles.
S-9
<PAGE> 12
IBP, INC.
GENERAL
We operate through two business segments: Fresh Meats and Enterprises.
Fresh Meats produces fresh and processed beef and pork products. Fresh Meats'
primary products include fresh boxed beef and boxed pork, which are marketed
mainly in the United States to grocery chains, meat distributors, wholesalers,
retailers, restaurant and hotel chains, and processors who produce cured and
smoked products, such as bacon, ham, luncheon meats and sausage items. Fresh
Meats also produces inedible allied products, such as hides and other items used
to manufacture products such as leather, animal feed and pharmaceuticals, and
edible allied products, which include variety meat items. Enterprises' primary
products consist mainly of consumer-ready food products, such as deli meats,
pizza toppings, pizza crusts, wraps, appetizers, hors d'oeuvres, soups, sauces
and side dishes.
Food safety and product quality are extremely critical to our success. We
plan to continue to invest substantial amounts in these areas in the future. We
have recently installed state-of-the-art steam pasteurization systems in all of
our beef processing plants, and we are in the preliminary testing phase with
Titan Corporation to pasteurize ground beef.
FRESH MEATS BUSINESS SEGMENT
We are the leader in the fed beef processing industry in the United States.
We operate eleven fed beef production facilities, ten of which are strategically
located in seven cattle-producing states in the United States and one which is
located in Brooks, Canada. These facilities reduce live cattle to dressed
carcass form for further processing. Eight of these beef plants have processing
operations that fabricate the carcasses into fresh boxed beef. Fed beef animals
consist primarily of young steers and heifers specifically raised for beef
consumption. We operate one cow boning facility in Nebraska which reduces cows
and bulls to dressed carcass form and further processes these carcasses into
boneless meat products. We are currently evaluating the continued operation of
this facility. We also operate a ground beef facility in Nebraska which produces
ground beef products for the foodservice and retail food industries.
IBP is also a leading processor of pork products, operating six fresh pork
facilities in Indiana, Iowa and Nebraska. These operations reduce live hogs to
dressed carcass form and process these carcasses into fresh boxed pork. Our
seventh pork plant, located in Council Bluffs, Iowa, produces processed and
further processed pork products. The production processes for our pork
facilities are similar to those employed in our beef operations.
ENTERPRISES BUSINESS SEGMENT
Although we began to diversify our operations into foodservice in 1990, we
completed our first major step towards diversification with the acquisition of
Foodbrands America, Inc. in 1997. Known as Enterprises, this business segment
consists of our wholly-owned subsidiaries Foodbrands America, Inc., The Bruss
Company and IBP Foods, Inc. These subsidiaries are extensions of IBP's Fresh
Meats business and offer a wide range of value-added food products, such as
products for the "away-from-home" food preparation market. Foodbrands America,
which we purchased in 1997, manufactures and markets over 1,600
S-10
<PAGE> 13
branded and custom frozen and refrigerated food products, such as pepperoni,
beef and pork toppings, pizza crusts, appetizers, hors d'oeuvres, desserts,
prepared meals, Mexican and Italian foods, soups, sauces, side dishes, and
branded and processed meats. Its products are designed to meet the foodservice
industry's growing demand for products offering consistent quality and flavor
and requiring little "back-of-the-house" preparation. The Bruss Company, which
we also purchased in 1997, processes and markets premium quality,
portion-controlled steaks, pork chops and other products to national accounts.
The addition of the Bruss Company extended our reach into casual and fine dining
restaurants and strengthened our position as a provider to the growing
foodservice industry.
In August 1998, we acquired the assets of the appetizer division of
Diversified Foods Group, L.L.C., which we currently operate under the name DFG
Foods, Inc. DFG Foods operates as a subsidiary of Foodbrands and has production
plants in Chicago, Illinois and Newark, New Jersey. DFG Foods markets a variety
of premium quality hors d'oeuvres, appetizers, desserts and prepared meals under
the brand names Restauranic, Fayes, Cohen's Famous and Casino Chef. Its full
line of product offerings also includes kosher items. DFG Foods' primary
customers are foodservice companies, club stores and retail grocery outlets.
In April 1999, we acquired H&M Food Systems Company, Inc. and Zemco
Industries, Inc., owner of Russer Foods. H&M Foods Systems is a leading producer
of pre-cooked meat products and prepared foods and has two manufacturing
facilities in Texas. Russer Foods produces and markets a full line of premium
deli hams, bologna, loaves, and specialty sausage products, as well as
self-serve deli meats. It has two production facilities in New York and
Massachusetts.
In July 1999, we purchased Wilton Foods, Inc. Wilton Foods produces hors
d'oeuvre, appetizers, premium kosher meals and prepared foods for the U.S.,
Canadian, Mexican and European markets. It has a production facility in Goshen,
New York.
In August 1999, we purchased substantially all of the operating assets of
Thorn Apple Valley, which we currently operate under the IBP Foods, Inc. name.
As part of this purchase, we acquired certain brand names and trademarks of
Thorn Apple Valley.
In December 1999, we announced an agreement to acquire Corporate Brand
Foods America which had approximately $720 million in sales in fiscal year 1998,
which includes the 1998 revenues for Wright Brand Foods which it acquired in
1999. Corporate Brand Foods America is one of the largest private meat
processors in the United States. It operates eleven manufacturing facilities and
produces a wide range of processed meats, sausage, bacon, lunch meats, and deli
meats.
STRATEGIC INITIATIVES
Our strategy to build a larger, more diversified and more predictable
earnings base consists of four different initiatives:
Grow Foodservice Business. To achieve future revenue growth and operating
margin improvement, we plan to continue to grow our foodservice business
internally and through additional acquisitions that provide us with new higher
margin products to sell and new markets in which to sell them. Our acquisitions
of Corporate Brand Foods America, Thorn Apple Valley, Wilton Foods, H&M Food
Systems and Russer Foods demonstrate our commitment to grow our foodservice
business.
S-11
<PAGE> 14
Emphasize Sales of Higher Margin Products. Though we are known for
producing high-quality boxed meat, we are seeking to provide a growing range of
higher-margin, value-added products to meet the demands of consumers and
foodservice operators for even more convenience. In 1998, for example, we
introduced a new case-ready "Consumer Friendly" ground beef product which not
only reduces the need for grocery stores to handle the product but also extends
the products' shelf life. Additionally, in the fourth quarter of 1998, we
created a new corporate division dedicated to producing and marketing branded
beef and pork. This division, known as the Value-Added Products Group, is
focused on the continued development and commercialization of value-added items,
including branding, for our core fresh meat products. Our Council Bluffs, Iowa
facility is dedicated to producing case ready cuts of beef and pork products.
Our goal of expanding the production of higher margin products has also
manifested itself in our efforts to process lines of Certified Angus Beef
Products, which is a desired type of beef. This focus resulted in a significant
increase in sales of this product in 1998 and earned us both Marketer of the
Year and Top Sales Volume Exporter of the Certified Angus Beef organization. We
are further developing a line of marinated pork, which will provide a more
tender cooked product.
Building Our Core Fresh Meat Operations. We will continue to build and
improve the core of our business, the fresh meat operations. In that regard, we
have increased our sales within Canada through the expansion of the processing
capacity of our Lakeside, Alberta, Canada facility. Our recent purchase and
upcoming renovation of our facility in Norfolk, Nebraska will allow us to
process more beef through maximizing and rationalizing our slaughter and
processing facilities. The improvement of our fresh meats operations takes many
forms. We continue to evaluate and improve the efficiencies of our facilities by
the installation of state of the art equipment.
Export Sales. Although the majority of IBP's sales are domestic, export
sales accounted for approximately 12% of our net sales in 1998. We are the
nation's largest exporter of U.S. red meat and allied products and are committed
to expanding our international presence, especially in Asia.
Export volumes increased 7% in the first nine months of 1999 compared to
the first nine months of 1998, while export sales increased 3% over the same
period. Year-to-date 1999 export sales to Japan, our most significant export
destination, increased 2% over 1998 despite a volume decrease of 8% from the
prior year. Additionally, year-to-date export volume into Korea, Taiwan and
Mexico grew over the first nine months of 1998.
As global economies improve, especially in Asia, and new markets emerge, we
believe that, through our international sales offices in Canada, England, Japan,
Korea, Taiwan, Russia, China and Mexico, we will be positioned to capture
additional growth.
RECENT LITIGATION DEVELOPMENTS
On January 12, 2000, The United States Department of Justice, on behalf of
the Environmental Protection Agency ("EPA"), filed a lawsuit against us in U.S.
District Court for the District of Nebraska, alleging violations of various
environmental laws at our Dakota City Facility. This action alleges, among other
things, violations of: (1) the Clean Air Act for allegedly failing to obtain
necessary Prevention of Significant Deterioration ("PSD") permits related to
certain improvements and modifications made at Dakota City; (2) the Clean Water
Act for allegedly violating ammonia and whole effluent toxicity limits
S-12
<PAGE> 15
related to our National Pollution Discharge Elimination System ("NPDES") permit
at this facility; (3) the Resource, Conservation and Recovery Act ("RCRA") for
allegedly not disposing of spent gun shells and air filters as "hazardous
waste;" and (4) the Comprehensive Environmental Response Compensation and
Liability Act ("CERCLA") and the Emergency Planning and Community Right to Know
Act ("EPCRA") for allegedly failing to properly fill out Form R reports and
allegedly failing to report hydrogen sulfide fugitive emissions from our
wastewater treatment facility. The action seeks injunctive relief to remedy
alleged violations and damages of $25,000 per violation per day for alleged
violations which occurred prior to January 30, 1997, and $27,500 per violation
per day for alleged violations after that date. The complaint alleges that some
violations began to occur as early as 1989 and continue into the present,
although the majority of the violations are alleged to have occurred much later.
We believe that we have meritorious defenses on each of these allegations and we
intend to aggressively defend these claims. The EPA has also sent us an
information request under the Clean Air Act and CERCLA seeking additional
information regarding hydrogen sulfide emissions from our Dakota City facility.
The EPA claims it seeks information to determine whether the emissions pose an
imminent and substantial endangerment to human health or the environment. If the
EPA makes this finding, it could trigger further action, including an
administrative order for compliance concerning the facility. We dispute, and
would vigorously contest, any claim that the emissions pose any such a threat.
Although no assurance are possible, we believe the resolution of these matters
will have no material adverse effect on our financial condition or results of
operations.
S-13
<PAGE> 16
DESCRIPTION OF NOTES
The following description of the particular terms of the notes supplements
and, to the extent inconsistent, replaces the description of the general terms
and provisions of Debt Securities found in the accompanying prospectus. Certain
terms used in this prospectus supplement that are not defined in this prospectus
supplement are defined in the prospectus and in the Indenture.
GENERAL
The notes will be:
- unsubordinated and unsecured general obligations of IBP, ranking equally
in right of payment with all other existing and future unsubordinated and
unsecured debt of IBP;
- limited to $300 million aggregate principal amount; and
- issued only in registered book-entry form (and in no event in bearer
form), in denominations of $1,000 and integral multiples of $1,000.
The notes will be issued under the Indenture dated January 26, 1996 between
IBP and The Bank of New York, as trustee. (For a more complete description of
the Indenture, please see "Description of the Debt Securities" in the
accompanying prospectus.)
The notes will mature on February 1, 2010. The notes will bear interest
from January 31, 2000 or from the most recent interest payment date to which
interest has been paid or provided for, at the rate of 7.95% per year. We will
pay interest on the notes twice a year, on February 1 and August 1, beginning
August 1, 2000, to the persons in whose names the notes are registered at the
close of business on the January 15 or July 15 that precedes the date on which
interest will be paid.
Although the aggregate principal amount of the notes is limited to
$300,000,000, the Indenture does not limit the amount of Debt Securities that
may be issued and provides that Debt Securities may be issued from time to time
in one or more series.
We will not pay Additional Amounts (defined in the Indenture as payments to
non-U.S. holders of notes in respect of any tax, assessment or governmental
charge) on the notes.
In some circumstances, we may elect to discharge our obligations on the
notes through defeasance or covenant defeasance. (Please see "Description of the
Debt Securities -- Defeasance and Discharge" and "-- Defeasance of Certain
Covenants" in the accompanying prospectus for more information about how we may
do this.)
SINKING FUND
There is no sinking fund.
OPTIONAL REDEMPTION
We will have the right to redeem the notes, as a whole or in part, at any
time, upon not less than 30 days' nor more than 60 days' notice. We will pay a
redemption price equal
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<PAGE> 17
to the greater of (1) 100% of the principal amount of the notes to be redeemed
and (2) the sum of the present values of the Remaining Scheduled Payments (as
defined below) on the notes to be redeemed, discounted to the applicable
redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at a rate equal to the sum of the Treasury Rate (as
defined below) plus 25 basis points plus, in either case, accrued interest on
the principal amount being redeemed to the redemption date. However,
installments of interest on notes which are due and payable on an interest
payment date falling on or prior to the relevant redemption date will be payable
to the holders of those notes registered as such at the close of business on the
relevant record date.
"Treasury Rate" means, for any redemption date, the rate per annum equal to
the semiannual equivalent yield to maturity of the Comparable Treasury Issue,
assuming a price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for that redemption
date.
"Comparable Treasury Issue" means, with respect to any redemption date for
the notes, the United States Treasury security, selected by a Reference Treasury
Dealer appointed by us, as having a maturity comparable to the remaining term of
the notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining term of those notes.
"Comparable Treasury Price" means, for any redemption date, (1) the average
of the Reference Treasury Dealer Quotations for that redemption date after
excluding the highest and lowest of those Reference Treasury Dealer Quotations
or (2) if the Trustee obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all the quotations actually obtained by the Trustee.
"Reference Treasury Dealer" means each of Salomon Smith Barney Inc.,
Donaldson, Lufkin & Jenrette Securities Corporation and Banc of America
Securities LLC and their respective successors; provided, however, that if any
of the foregoing ceases to be a primary U.S. Government securities dealer in New
York City (a "Primary Treasury Dealer"), we will substitute another Primary
Treasury Dealer for it.
"Reference Treasury Dealer Quotations" means, for each Reference Treasury
Dealer and any redemption date, the average, as determined by the trustee, of
the bid and asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its
principal amount) quoted in writing to the trustee by that Reference Treasury
Dealer at 5:00 p.m., New York City time, on the third business day preceding
that redemption date. As used in this paragraph, the term "business day" means
each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
banking institutions in The City of New York are authorized or obligated by law
or executive order to close.
"Remaining Scheduled Payments" means, for each note to be redeemed, the
remaining scheduled payments of principal of and interest on that note that
would be due after the related redemption date but for that redemption; provided
that if that redemption date is not an interest payment date with respect to
that note, the amount of the next succeeding scheduled interest payment on that
note will be reduced by the amount of interest accrued on that note to that
redemption date.
On and after the redemption date, interest will cease to accrue on the
notes or any portion of the notes called for redemption (unless we default in
the payment of the
S-15
<PAGE> 18
redemption price and accrued interest). On or before the redemption date, we
will deposit with a paying agent (or the trustee) money sufficient to pay the
redemption price of and accrued interest on the notes to be redeemed on that
date. If less than all of the notes are to be redeemed, the trustee will select
the notes for redemption on a pro rata basis, by lot or in such other manner it
deems fair and appropriate. The notes may be redeemed in part in multiples of
$1,000 only.
BOOK-ENTRY SECURITIES
We will issue the notes in the form of one or more fully registered global
securities. We will deposit these global securities with, or on behalf of, The
Depository Trust Company, New York, New York, known as DTC, and register these
securities in the name of DTC's nominee, Cede & Co. DTC will keep a computerized
record of its participants (for example, your broker) whose clients have
purchased the notes. The participant would then keep a record of its clients who
purchased the notes. A global security may not be transferred, except that DTC,
its nominees and their successors may transfer an entire global security to one
another.
Because the notes will be issued in book-entry form only, we will not
deliver securities in certificate form to individual purchasers of the notes,
and no person holding a beneficial interest in a global security will be treated
as a holder for any purpose under the Indenture. Accordingly, holders of
beneficial interests must rely on the procedures of DTC and the participant
through which such person owns its interest in order to exercise any rights of a
holder under such global security or the Indenture. Beneficial interests in
global securities will be shown on, and transfers of global securities will be
made only through, records maintained by DTC and its participants.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in certificated form. Such
limits and laws may impair the ability to transfer beneficial interests in a
global security representing book-entry only securities.
DTC has provided us with the following information: 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 under
the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds
securities of institutions that have accounts with it or its participants.
Through its maintenance of an electronic book-entry system, DTC facilitates the
clearance and settlement of securities transactions among its participants and
eliminates the need to deliver securities certificates physically. DTC's
participants include securities brokers and dealers, banks, trust companies,
clearing corporations and other organizations.
DTC is owned by a number of its participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc. Access to DTC's book-entry system is also available
to others such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly. DTC agrees with and represents to its participants that it will
administer its book-entry system in accordance with its rules and bylaws and
requirements of law. The rules applicable to DTC and its participants are on
file with the SEC.
S-16
<PAGE> 19
We will wire principal and interest payments to Cede & Co., DTC's nominee.
We and the trustee will treat Cede & Co. as the owner of the global securities
for all purposes. Accordingly, we and the trustee will have no direct
responsibility or liability to pay amounts due on the securities to owners of
beneficial interests in the global securities.
It is DTC's current practice, when it receives any payment of principal or
interest, to credit direct participants' accounts on the payment date according
to their respective holdings of beneficial interests in the global securities as
shown on DTC's records. In addition, it is DTC's current practice to assign any
consenting or voting rights to direct participants whose accounts are credited
with securities on a record date, by using an omnibus proxy. Customary practices
between the participants and owners of beneficial interests, as is the case with
securities held for the account of customers registered in "street name," will
govern payments by participants to owners of beneficial interests in the global
securities, and voting by participants. However, these payments will be the
responsibility of the participants and not of DTC, the trustee or us.
The notes represented by a global security will be exchangeable for notes
in certificated form with the same terms in authorized denominations only if:
- DTC notifies us that it is unwilling or unable to continue as depository
or if DTC ceases to be a clearing agency registered under applicable law
and we do not appoint a successor depository within 90 days; or
- we make a decision to permit the notes to be issued in certificated form
and notify the trustee of that decision; or
- an event has happened and is continuing that constitutes or, after notice
or passage of time or both, would constitute an Event of Default.
According to DTC, the information in the preceding two paragraphs with
respect to DTC has been provided to the industry for informational purposes only
and is not intended to serve as a representation, warranty, or contract
modification of any kind.
The information in this section concerning DTC and DTC's system has been
obtained from sources that we believe to be reliable, but we take no
responsibility for the accuracy of such information.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the notes will be made by the underwriters in immediately
available funds. So long as the notes are represented by global securities
registered in the name of DTC or its nominee, all payments of principal and
interest will be made by IBP in immediately available funds. In addition, so
long as the notes are represented by such global securities, the notes will
trade in DTC's Same-Day Funds Settlement System, and secondary market trading
activity in the notes will therefore be required by DTC to settle in immediately
available funds. No assurance can be given as to the effect, if any, of
settlement in immediately available funds on trading activity in the notes.
CONCERNING THE TRUSTEE
The Bank of New York is the trustee under the Indenture, and we have
appointed it as registrar and paying agent with respect to the notes.
S-17
<PAGE> 20
UNDERWRITING
Subject to the terms and conditions stated in the Underwriting Agreement
dated January 26, 2000 and the Terms Agreement dated January 26, 2000, each
underwriter named below has severally agreed to purchase, and IBP has agreed to
sell to each underwriter, the principal amount of the notes set forth opposite
the name of each such underwriter.
<TABLE>
<CAPTION>
UNDERWRITER OF NOTES PRINCIPAL AMOUNT
- -------------------- ----------------
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation......... $127,500,000
Salomon Smith Barney Inc.................................... 127,500,000
Banc of America Securities LLC.............................. 45,000,000
------------
Total............................................. $300,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligations of the several
underwriters to pay for and accept delivery of the notes are subject to the
approval of certain legal matters by counsel to the underwriters and to certain
other conditions. The Underwriting Agreement and the Terms Agreement provide
that the underwriters are obligated to purchase all of the notes if they
purchase any of the notes.
The notes are a new issue of securities with no established trading market.
We do not intend to list the notes on any national securities exchange. The
underwriters have advised us that they intend to make a market in the notes, but
they have no obligation to do so, and may discontinue market making at any time
without providing any notice. We cannot assure you as to the depth or liquidity
of any trading market that may develop for the notes.
The underwriters initially propose to offer some of the notes directly to
the public at the public offering price stated on the cover page of this
prospectus supplement and some of the notes to certain dealers at the public
offering price less a concession not in excess of .4% of the principal amount of
the notes. The underwriters may allow, and these dealers may re-allow, a
concession not in excess of .25% of the principal amount of the notes on sales
to certain other dealers. After the initial offering of the notes to the public,
the underwriters may, from time to time, change the public offering price and
these concessions.
The following table shows the underwriting discounts and commissions we
will pay to the underwriters in connection with this offering, expressed as a
percentage of the aggregate principal amount of the notes.
<TABLE>
<CAPTION>
PAID BY IBP
-----------
<S> <C>
Per note.................................................... .650%
</TABLE>
In connection with the offering, the underwriters may purchase and sell
notes in the open market. These transactions may include over-allotment,
syndicate covering transactions and stabilizing transactions. Over-allotment
involves syndicate sales of notes in excess of the principal amount of notes to
be purchased by the underwriters in the offering, which creates a syndicate
short position. Syndicate covering transactions involve purchases of the notes
in the open market after the distribution has been completed in order to cover
syndicate short positions. Stabilizing transactions consist of certain bids or
purchases of notes made for the purpose of preventing or retarding a decline in
the market price of the notes while the offering is in progress.
S-18
<PAGE> 21
The underwriters may also impose a penalty bid. Penalty bids permit the
underwriters to reclaim a selling concession from a syndicate member when the
underwriters, in covering syndicate short positions or making stabilizing
purchases, repurchase notes originally sold by that syndicate member.
Any of these activities may cause the price of the notes to be higher than
the price that otherwise would exist in the open market in the absence of such
transactions. These transactions may be effected in the over-the-counter market
or otherwise and, if commenced, may be discontinued at any time.
We estimate that we will spend approximately $500,000 for printing, rating
agency, trustee and legal fees, and other expenses related to the offering.
In the ordinary course of their respective businesses, the underwriters and
their affiliates have engaged, and may in the future engage, in commercial
banking and/or investment banking transactions with us and our affiliates.
Additionally, John S. Chalsty, Chairman of Donaldson, Lufkin & Jenrette
Securities Corporation, serves as a director of IBP.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, or to contribute to
payments the underwriters may be required to make in respect of any of those
liabilities.
LEGAL MATTERS
Certain legal matters in connection with the notes will be passed for IBP
by Sheila Hagen, Esq., Corporate Secretary, Vice President and General Counsel
of IBP, inc. The validity of the notes will be passed on for the underwriters by
Mayer, Brown & Platt, Chicago, Illinois.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file at the SEC's public reference room located at 450 Fifth
Street, N.W., Washington, D.C. 20549, as well as at the regional offices of the
SEC located at 7 World Trade Center, New York, New York 10048 and Citicorp
Center, 500 West Madison Street, Chicago, Illinois 60661. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms and their
copy charges.
Our common stock is listed on the New York Stock Exchange. You may also
inspect the information we file with the SEC at the New York Stock Exchange, 20
Broad Street, New York, New York 10005.
We are "incorporating by reference" specified documents that we file with
the SEC, which means:
- incorporated documents are considered part of this prospectus supplement;
- we are disclosing important information to you by referring you to those
documents; and
S-19
<PAGE> 22
- information we file with the SEC will automatically update and supersede
this prospectus supplement.
We incorporate by reference the documents listed below and any documents
that we file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 after the date of this prospectus supplement and
before the end of the offering of the notes:
- our annual report on Form 10-K for the fiscal year ended December 26,
1998;
- our quarterly reports on Form 10-Q for the quarters ended March 27, 1999,
June 26, 1999, and September 25, 1999; and
- our proxy statement dated March 17, 1999.
You may also request a copy of these filings (excluding exhibits), at no
cost, by writing, telecopying or telephoning IBP Investor Relations at the
following address or number:
IBP Investor Relations Department
800 Stevens Port Drive Suite 834
Dakota Dunes, SD 57049
Phone: (605) 235-2587
Telecopy: (605) 235-2404
S-20
<PAGE> 23
PROSPECTUS
$500,000,000
IBP, INC.
DEBT SECURITIES
------------------------
IBP, inc. ("IBP" or the "Company") may offer from time to time its senior
unsecured debt securities (the "Debt Securities") at an aggregate initial
offering price of up to $500,000,000 (or the equivalent thereof if any of the
Debt Securities are denominated other than in U.S. dollars) on terms to be
determined at the time of offering. The series, specific designation, aggregate
principal amount, maturity, rate (or manner of rate calculation) and time of
payment of any interest, purchase price, any terms relating to mandatory or
optional redemption or repayment (including any sinking fund), any modification
of the covenants and any other specific terms in connection with the sale of the
Debt Securities in respect of which this Prospectus is being delivered are set
forth in an accompanying Prospectus Supplement. The Prospectus Supplement also
includes information concerning any listing on a stock exchange of the Debt
Securities with respect to which this Prospectus and the Prospectus Supplement
are being delivered.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The Debt Securities may be offered directly by the Company, through agents
designated from time to time, through dealers or through underwriters. See "Plan
of Distribution." Any such agents, dealers or underwriters are set forth in the
accompanying Prospectus Supplement. If an agent of IBP or a dealer or
underwriter is involved in the offering of the Debt Securities, the name of such
agent, dealer or underwriter, any applicable commissions or discounts, and net
proceeds to IBP will be set forth in the Prospectus Supplement with respect to
such Debt Securities. Any agents, dealers or underwriters participating in the
offering may be deemed "underwriters" within the meaning of the Securities Act
of 1933, as amended.
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by a Prospectus Supplement.
------------------------
The date of this Prospectus is January 17, 1996.
<PAGE> 24
AVAILABLE INFORMATION
IBP is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files
reports, proxy materials and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy materials and other
information concerning IBP and the Registration Statement (as defined below) can
be inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the regional offices maintained by the Commission at The Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and
at Seven World Trade Center, 13th Floor, New York, New York 10048. Copies can be
obtained by mail from the Commission at prescribed rates from the Public
Reference Section of the Commission at its principal office at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and copies can be obtained
electronically through the Commission's Electronic Data Gathering, Analysis, and
Retrieval (EDGAR) system. In addition, reports, proxy statements and other
information concerning IBP can be inspected at the office of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York, on which IBP's common stock
is listed.
IBP has filed with the Commission a registration statement on Form S-3
(herein, together with all information incorporated by reference therein and all
amendments and exhibits thereto, referred to as the "Registration Statement")
under the Securities Act of 1933, as amended (the "Securities Act"). This
Prospectus and any applicable Prospectus Supplement do not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information, reference is hereby made to the Registration Statement
including the exhibits filed as a part thereof. Statements made in this
Prospectus and any applicable Prospectus Supplement as to the contents of any
documents referred to are not necessarily complete, and in each instance
reference is made to such exhibit for a more complete description and each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by IBP with the Commission (File No. 1-6085)
pursuant to the Exchange Act are incorporated in and made a part of this
Prospectus by reference thereto:
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
1994;
(b) Quarterly Reports on Form 10-Q for the thirteen weeks ended April
1, 1995, the twenty-six weeks ended July 1, 1995, and the thirty-nine weeks
ended September 30, 1995; and
(c) Current Reports on Form 8-K filed with the Commission on August 7,
1995 and January 16, 1996, respectively.
All other documents filed by IBP pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Debt Securities made hereby shall be
deemed incorporated by reference in this Prospectus and any applicable
Prospectus Supplement and to be a part hereof from the date of filing of such
documents. Any statement contained in the documents incorporated or deemed to be
incorporated herein by reference, or contained in this Prospectus or any
applicable Prospectus Supplement, shall be deemed to be modified or superseded
for purposes of this Prospectus or any applicable Prospectus Supplement to the
extent that a statement contained herein or in any subsequently filed document
that 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 or any applicable Prospectus Supplement.
IBP will provide without charge to each person to whom this Prospectus and
any Prospectus Supplement have been delivered, upon written or oral request of
such person, a copy (without exhibits other than exhibits specifically
incorporated by reference) of any or all documents incorporated by reference
into this Prospectus or any applicable Prospectus Supplement. Requests for such
copies should be directed to Investor Relations Department, IBP, inc., Post
Office Box 515 #52A, Dakota City, Nebraska 68731; telephone number (402)
241-2559.
2
<PAGE> 25
THE COMPANY
IBP is the world's leading producer of fresh beef and pork, with fiscal
1994 net sales of approximately $12.1 billion. Customers include food retailers,
distributors, wholesalers, restaurant and hotel chains and other food
processors. IBP also produces fully cooked meats for the retail and food service
industries. Its allied products line includes more than 250 items, including
tanned hides for leather makers, ingredients for pharmaceuticals and raw
materials for animal feeds.
Founded in 1960 as Iowa Beef Packers, Inc., the Company began operations in
1961 with one plant in western Iowa. Today, IBP has 23 plant sites in North
America, regional sales offices throughout the United States and international
sales offices in England and Japan.
IBP is a Delaware corporation with executive offices located at IBP Avenue,
Dakota City, Nebraska 68731-0515. The telephone number of its Investor Relations
Department is (402) 241-2559. Unless the context indicates otherwise, all
references in this Prospectus to "IBP" or the "Company" include IBP, inc. and
its subsidiaries.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for IBP for each of the periods set
forth below is as follows:
<TABLE>
<CAPTION>
THIRTY-NINE WEEKS ENDED FISCAL YEARS ENDED
- ----------------------------- ------------------------------------------------------------------------
SEPTEMBER 30, SEPTEMBER 24, DECEMBER 31, DECEMBER 25, DECEMBER 26, DECEMBER 28, DECEMBER 29,
1995 1994 1994(1) 1993 1992 1991 1990
- ------------- ------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
11.44x 5.78x 7.28x 3.64x 2.84x 1.01x 2.07x
</TABLE>
- ---------------
(1) Fiscal year consisted of 53 weeks.
The ratio of earnings to fixed charges has been computed by dividing
pre-tax earnings available for fixed charges (earnings before income taxes
adjusted for interest expense and one-third of operating lease/rent expense) by
fixed charges. Fixed charges include interest expense (incurred interest before
capitalized interest and interest income) and one-third of operating lease/rent
expense. The Company's management believes that one-third of operating
lease/rent expense is representative of the interest factor.
USE OF PROCEEDS
Except as otherwise provided in the applicable Prospectus Supplement, the
net proceeds to IBP from the sale of the Debt Securities offered hereby will be
added to the working capital of IBP and will be available for general corporate
purposes.
DESCRIPTION OF THE DEBT SECURITIES
The Debt Securities are to be issued under an Indenture (the "Indenture")
between the Company and The Bank of New York, as trustee (the "Trustee"). A form
of the Indenture has been filed as an exhibit to the Registration Statement. The
statements made under this heading relating to the Debt Securities and the
Indenture are summaries of the provisions thereof and do not purport to be
complete. Parenthetical references below are to the Indenture or to sections of
the Trust Indenture Act of 1939, as amended (the "TIA"), certain provisions of
which govern the terms of the Indenture, and, whenever any particular provision
of the Indenture or the TIA or any defined term used therein is referred to,
such provision or defined term is incorporated by reference as a part of the
statement in connection with which such reference is made, and the statement in
connection with which such reference is made is qualified in its entirety by
such reference. Capitalized terms used herein but not otherwise defined shall
have the meanings assigned to them in the Indenture.
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GENERAL
The Indenture does not limit the amount of Debt Securities which may be
issued thereunder and provides that Debt Securities may be issued thereunder
from time to time in one or more series up to the aggregate principal amount
which may be authorized by the Company for each series. The Debt Securities will
be unsecured and unsubordinated Debt of the Company and will rank equally and
ratably with all other unsecured and unsubordinated indebtedness of the Company.
The particular terms of each series of Debt Securities, as well as any
modifications of or additions to the general terms of the Debt Securities as
described herein that may be applicable in the case of a particular series of
Debt Securities, will be described in the Prospectus Supplement relating to such
series of Debt Securities. Accordingly, for a description of the terms of a
particular series of Debt Securities, reference must be made to both the
Prospectus Supplement relating thereto and the description of Debt Securities
set forth in this Prospectus.
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for a description of the following
terms or additional provisions of the Debt Securities: (1) the title of such
Debt Securities; (2) any limit on the aggregate principal amount of such Debt
Securities; (3) the price or prices at which such Debt Securities will be
issued; (4) the date or dates, or the method by which such date or dates will be
determined or extended, on which the principal of such Debt Securities will be
payable; (5) the rate or rates per annum (which may be fixed, floating or
adjustable) at which such Debt Securities will bear interest, if any, or the
formula pursuant to which such rate or rates shall be determined; (6) the date
or dates from which interest, if any, on such Debt Securities shall accrue or
the method by which such date or dates shall be determined, the dates on which
such interest, if any, will be payable, the date on which payment of such
interest, if any, will commence, the Regular Record Dates for such Interest
Payment Dates, if any, and the Person to whom any interest on such Debt
Securities will be payable, if other than the Person in whose name such Debt
Securities are registered on any Regular Record Date; (7) the date, if any,
after which and the price or prices at which such Debt Securities may, pursuant
to any optional or mandatory redemption provisions, be redeemed at the option of
the Company or the Holder and any other terms and provisions of such optional or
mandatory redemptions; (8) the obligation, if any, of the Company to redeem,
repay or purchase such Debt Securities pursuant to any sinking fund or analogous
provision or at the option of a Holder thereof and the period or periods within
which or the date or dates on which, the price or prices at which, the Currency
in which, and the other terms and conditions upon which, such Debt Securities
shall be redeemed, repaid or purchased, in whole or in part, pursuant to such
obligation; (9) whether such Debt Securities are to be issuable as Registered
Securities or Bearer Securities or both, whether any of such Debt Securities
shall be issuable in whole or in part in temporary or permanent global form or
in the form of Book-Entry Securities and, if so, the circumstances under which
any such global security or global securities or Book-Entry Securities may be
exchanged for Debt Securities registered in the name of, and any transfer of
such global or Book-Entry Securities may be registered to, a Person other than
the depository for such temporary or permanent global securities or Book-Entry
Securities or its nominee; (10) if other than Dollars, the Currency in which
such Debt Securities will be denominated and in which the principal of (and
premium, if any) and any interest on such Debt Securities will be payable; (11)
whether the amount of payments of principal of (and premium, if any) or
interest, if any, on such Debt Securities may be determined with reference to an
index, formula or other method (which index, formula or method may be based on
one or more Currencies, commodities, equity indices or other indices) and the
manner in which such amounts shall be determined; (12) whether the Company or
Holder may elect payment of the principal of (and premium, if any) or interest,
if any, on such Debt Securities in one or more Currencies other than that in
which such Debt Securities are denominated or stated to be payable, the period
or periods within which, and the terms and conditions upon which, such election
may be made, and the time and manner of determining the exchange rate between
the Currency in which such Debt Securities are denominated or stated to be
payable and the Currency in which such Debt Securities are to be so payable;
(13) the place or places, if any, other than or in addition to the Borough of
Manhattan, The City of New York, where the principal of (and premium, if any)
and any interest on such Debt Securities shall be payable, any Registered
Securities of the series may be surrendered for registration of transfer, such
Debt Securities may be surrendered for exchange and notice or demands to or upon
the Company in respect of such Debt Securities and the Indenture may be served;
(14) if other than denominations of $1,000 and any integral multiple thereof,
the denominations in which any
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Registered Securities of the series shall be issuable and, if other than the
denomination of $5,000, the denomination or denominations in which any Bearer
Securities of the series shall be issuable; (15) the applicability, if at all,
to such Debt Securities of the provisions of Article XIV of the Indenture
described under "Defeasance and Covenant Defeasance" below, and any provisions
in modification of, in addition to or in lieu of any of the provisions of such
Article; (16) the Person to whom any interest on any Registered Security of the
series shall be payable, if other than the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, the manner in which, or the Person
to whom, any interest on any Bearer Security of the series shall be payable, if
otherwise than upon presentation and surrender of the coupons appertaining
thereto as they severally mature, and the extent to which, or the manner in
which, any interest payable on a temporary global security on an Interest
Payment Date will be paid if other than in the manner provided in the Indenture;
(17) whether and under what circumstances the Company will pay Additional
Amounts as contemplated by Section 10.4 of the Indenture on such Debt Securities
to any Holder who is not a United States Person (including any modification to
the definition of such term as contained in the Indenture as originally
executed) in respect of any tax, assessment or governmental charge and, if so,
whether the Company will have the option to redeem such Debt Securities rather
than pay such Additional Amounts (and the terms of any such option); (18)
provisions, if any, granting special rights to the Holders of such Debt
Securities upon the occurrence of such events as may be specified; (19) any
deletions from, modifications of or additions to the Events of Default or
covenants of the Company with respect to such Debt Securities, whether or not
such Events of Default or covenants are consistent with the Events of Default or
covenants set forth herein; (20) the date as of which any Bearer Securities of
the series and any temporary global security shall be dated if other than the
date of original issuance of the first of such Debt Securities; (21) if such
Debt Securities are to be issuable in definitive form (whether upon original
issue or upon exchange of a temporary security of such series) only upon receipt
of certain certificates or other documents or satisfaction of other conditions,
then the form and/or terms of such certificates, documents or conditions; (22)
the designation of the initial Exchange Rate Agent, if any; and (23) any other
terms of such Debt Securities (Section 3.1).
The Indenture does not contain any provisions that afford Holders of Debt
Securities of any series protection in the event of a highly leveraged
transaction, reorganization, restructuring, merger or similar transaction
involving the Company that may adversely affect Holders of the Debt Securities
(except to the limited extent that the covenants described below under "Certain
Restrictions" might affect the Company's ability to consummate such
transactions). Any provision that does provide such protection, if applicable to
the Debt Securities, will be described in the applicable Prospectus Supplement
relating thereto.
Some or all of the Debt Securities may be issued under the Indenture as
Original Issue Discount Securities (bearing no interest or interest at a rate
that at the time of issuance is below market rates) or as deferred interest Debt
Securities (paying interest at a later date) to be issued at prices below their
stated principal amounts. Certain federal income tax consequences and other
special considerations applicable to any such Original Issue Discount Securities
and deferred interest Debt Securities will be described in the applicable
Prospectus Supplement.
Debt Securities denominated or payable in foreign currencies may entail
significant risks. These risks include, without limitation, the possibility of
significant fluctuations in the foreign currency markets. These risks will vary
depending upon the currency or currencies involved and will be more fully
described in the applicable Prospectus Supplement.
DENOMINATIONS, REGISTRATION AND TRANSFER
Debt Securities of a series may be issuable in definitive form solely as
Registered Securities, solely as Bearer Securities or as both Registered
Securities and Bearer Securities. Registered Securities will be issuable in
denominations of $1,000 and integral multiples of $1,000 and Bearer Securities
will be issuable in the denomination of $5,000 or, in each case, in such other
denominations as may be in the terms of the Debt Securities of any particular
series. The Indenture also provides that Debt Securities of a series may be
issuable in temporary or permanent global form and may be issued as Book-Entry
Securities that will be deposited with, or on behalf of, The Depository Trust
Company or another depository named by the Company (the
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"Depository") and identified in a Prospectus Supplement with respect to such
series (Section 3.1). Unless otherwise specified in an applicable Prospectus
Supplement, Bearer Securities will have interest coupons attached (Section 2.1).
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations. If (but only if)
provided in an applicable Prospectus Supplement, Bearer Securities (with all
unmatured coupons, except as provided below, and all matured coupons in default)
of any series may be exchanged for Registered Securities of the same series of
any authorized denominations and of a like aggregate principal amount and tenor.
In such event, Bearer Securities surrendered in a permitted exchange for
Registered Securities between a Regular Record Date or a Special Record Date and
the relevant date for payment of interest shall be surrendered without the
coupon relating to such date for payment of interest, and interest will not be
payable on such date for payment of interest in respect of the Registered
Security issued in exchange for such Bearer Security, but will be payable only
to the holder of such coupon when due in accordance with the terms of the
Indenture. Unless otherwise specified in the applicable Prospectus Supplement,
Bearer Securities will not be issued in exchange for Registered Securities
(Section 3.5).
The Debt Securities may be presented for exchange as described above, and
Registered Securities may be presented for registration of transfer (duly
endorsed or accompanied by a written instrument of transfer), at the corporate
trust office of the Trustee in the Borough of Manhattan, The City of New York,
or at the office of any transfer agent designated by the Company for such
purpose with respect to any series of Debt Securities and referred to in the
applicable Prospectus Supplement. No service charge will be made for any
transfer or exchange of Debt Securities, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith (Section 3.5). If a Prospectus Supplement refers to any
transfer agent (in addition to the Trustee) initially designated by the Company
with respect to any series of Debt Securities, the Company may at any time
rescind the designation of any such transfer agent or approve a change in the
location through which any such transfer agent acts, except that, if Debt
Securities of a series are issuable solely as Registered Securities, the Company
will be required to maintain a transfer agent in each Place of Payment for such
series and, if Debt Securities of a series may be issuable both as Registered
Securities and as Bearer Securities, the Company will be required to maintain
(in addition to the Trustee) a transfer agent in a Place of Payment for such
series located outside the United States. The Company may at any time designate
additional transfer agents with respect to any series of Debt Securities
(Section 10.2).
The Company shall not be required to (i) issue, register the transfer of or
exchange Debt Securities of any series during a period beginning at the opening
of business 15 days before any selection of Debt Securities of that series to be
redeemed and ending at the close of business on (A) if Debt Securities of the
series are issuable only as Registered Securities, the day of mailing of the
relevant notice of redemption and (B) if Debt Securities of the series are
issuable as Bearer Securities, the day of the first publication of the relevant
notice of redemption or, if Debt Securities of the series are also issuable as
Registered Securities and there is no publication, the mailing of the relevant
notice of redemption; (ii) register the transfer of or exchange any Registered
Security, or portion thereof, called for redemption, except the unredeemed
portion of any Registered Security being redeemed in part, (iii) exchange any
Bearer Security selected for redemption, except to exchange such Bearer Security
for a Registered Security of that series and like tenor which is simultaneously
surrendered for redemption; or (iv) issue, register the transfer of or exchange
any Debt Securities which has been surrendered for repayment at the option of
the Holder, except the portion, if any, thereof not to be so repaid (Section
3.5).
CERTAIN LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In order to avoid certain adverse United States federal income tax
consequences to the Company, Bearer Securities will not be offered, sold, resold
or delivered in connection with their original issuance in the United States or
to United States persons (each as defined in the Internal Revenue Code of 1986,
as amended (the "Code"), and the regulations thereunder), except as otherwise
permitted by Treasury Regulation Section 1.163-5(c)(2)(i)(D), including offers
and sales to offices located outside the United States of United States
financial institutions (as defined in Treasury Regulation Section
1.165-12(c)(1)(v)) that agree in writing to
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comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Code and
the regulations thereunder. Any underwriters, agents and dealers participating
in the offering of Debt Securities must agree in writing that they will not
offer any Bearer Securities for sale or resale in the United States or to United
States persons (other than the financial institutions described above) or
deliver Bearer Securities within the United States. In addition, any such
underwriters, agents and dealers must agree to send confirmations to each
purchaser of a Bearer Security confirming that such purchaser represents that it
is not a United States person or that it is a financial institution described
above and, if such person is a dealer, that it will send similar confirmations
to purchasers from it. A Bearer Security may be delivered in connection with its
original issuance only if the person entitled to receive such Bearer Security
furnishes written certification of the beneficial ownership of the Bearer
Security as required by Treasury Regulation Section 1.163-5(c)(2)(i)(D)(3). In
the case of a Bearer Security in permanent global form, such certification must
be given in connection with notation of a beneficial owner's interest therein in
connection with the original issuance of such Debt Security (Section 3.3).
Bearer Securities and any coupons appertaining thereto must bear the
following legend: "Any United States person who holds this obligation will be
subject to limitations under the United States income tax laws, including the
limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue
Code." Under Sections 165(j) and 1287(a) of the Code, Holders that are United
States persons, with certain exceptions, will not be entitled to deduct any loss
on Bearer Securities and must treat as ordinary income any gain realized on the
sale or other disposition (including the receipt of principal) of Bearer
Securities.
Other restrictions and additional tax considerations may apply to the
issuance and holding of Bearer Securities. A description of any such
restrictions and federal income tax consequences will be set forth in the
applicable Prospectus Supplement.
GLOBAL AND BOOK-ENTRY DEBT SECURITIES
If Debt Securities to be sold in the United States are designated by the
Company in a Prospectus Supplement as Book-Entry Securities, a global security
representing the Book-Entry Securities will be deposited in the name of the
nominee for the Depository, representing the Debt Securities to be sold in the
United States. Upon such deposit of the Book-Entry Securities, the Depository
shall credit an account maintained or designated by an institution to be named
by the Company or any purchaser of the Debt Securities represented by the
Book-Entry Securities with an aggregate amount of Debt Securities equal to the
total number of Debt Securities that have been so purchased. The specific terms
of any depository arrangement with respect to any portion of a series of Debt
Securities to be represented by one or more global securities will be described
in the applicable Prospectus Supplement. Beneficial interests in such Debt
Securities will only be evidenced by, and transfers thereof will only be
effected through, records maintained by the Depository and the institutions that
are Depository participants.
If so specified in an applicable Prospectus Supplement, the portion of the
Debt Securities of a series which are issuable as Bearer Securities will
initially be represented by one or more temporary or permanent global Debt
Securities, without interest coupons, to be deposited with a common depository
in London for the Euroclear System ("Euroclear") and CEDEL S.A. ("CEDEL") for
credit to the designated accounts. Unless otherwise indicated by an applicable
Prospectus Supplement, on or after 40 days following its issuance, each such
temporary global Debt Security will be exchangeable for definitive Bearer
Securities, definitive Registered Securities or all or a portion of a permanent
global Debt Security, or any combination thereof, as specified in an applicable
Prospectus Supplement, only upon written certification in the form and to the
effect described under "Denominations, Registration and Transfer." No Bearer
Security (including a Debt Security in permanent global form) delivered in
exchange for a portion of a temporary or permanent global Debt Security shall be
mailed or otherwise delivered to any location in the United States in connection
with such exchange (Sections 3.4 and 3.5).
A Person having a beneficial interest in a permanent global Debt Security
will, except with respect to payment of principal of, premium, if any, and
interest on such permanent global Debt Security, be treated as a Holder of such
principal amount of Outstanding Debt Securities represented by such permanent
global Debt
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Security as shall be specified in a written statement of the Holder of such
permanent global Debt Security or, in the case of a permanent global Debt
Security in bearer form, of the operator of Euroclear or CEDEL which is provided
to the Trustee by such Person (Section 2.3).
CERTAIN RESTRICTIONS
RESTRICTIONS ON LIENS
The Indenture provides that neither the Company nor any Significant
Subsidiary of the Company shall incur, create, issue, assume, guarantee or
otherwise become liable for any Debt for money borrowed that is secured by a
Lien on any asset now owned or hereafter acquired by it unless the Company makes
or causes to be made effective provision whereby the Securities issued under the
Indenture will be secured by such Lien equally and ratably with (or prior to)
all other Debt thereby secured so long as any such Debt shall be secured. The
foregoing restriction does not apply to the following:
(i) Liens existing as of the date of the Indenture;
(ii) Liens created by Subsidiaries of the Company to secure Debt of
such Subsidiaries to the Company or to one or more other Subsidiaries of
the Company;
(iii) Liens affecting property of a Person existing at the time it
becomes a Subsidiary of the Company or at the time it merges into or
consolidates with the Company or a Subsidiary of the Company or at the time
of a sale, lease or other disposition of all or substantially all of the
properties of such Person to the Company or its Subsidiaries;
(iv) Liens on property existing at the time of the acquisition thereof
or incurred to secure payment of all or a part of the purchase price
thereof, including the expenses incurred in connection therewith, or to
secure Debt incurred prior to, at the time of, or within one year after the
acquisition thereof for the purpose of financing all or a part of the
purchase price thereof, including the expenses incurred in connection
therewith;
(v) Liens on any property to secure all or part of the cost of
improvements or construction thereon or Debt incurred to provide funds for
such purpose in a principal amount not exceeding the cost of such
improvements or construction, including the expenses incurred in connection
therewith;
(vi) Liens on shares of stock, Debt or other securities of a Person
that is not a Subsidiary;
(vii) Liens relating to accounts receivable of the Company or any of
its Subsidiaries which have been sold, assigned or otherwise transferred to
another Person in a transaction classified as a sale of accounts receivable
in accordance with generally accepted accounting principles (to the extent
the sale by the Company or the applicable Subsidiary is deemed to give rise
to a Lien in favor of the purchaser thereof in such accounts receivable or
the proceeds thereof);
(viii) Liens created pursuant to applications or reimbursement
agreements pertaining to commercial letters of credit which encumber only
the goods, or documents of title covering the goods that are sold or
shipped in the transaction for which such letters of credit were issued;
(ix) Liens incurred by the Company after the date of this Agreement in
connection with industrial revenue bond financing for facilities (including
pollution control equipment) to be used by the Company or any Subsidiary;
(x) Liens in favor of governmental bodies to secure progress, advance
or other payments;
(xi) other Liens arising in connection with Debt of the Company and
its Subsidiaries in an aggregate principal amount for the Company and its
Subsidiaries not exceeding 10% of the Consolidated Net Assets of the
Company at the time such Lien is issued, created or assumed; and
(xii) any extension, renewal or replacement (or successive extensions,
renewals or replacements) of any Lien referred to in the foregoing clauses
(i) through (xi) inclusive, or of any Debt secured thereby, provided that
the principal amount of Debt secured thereby shall not exceed the greater
of (A) the principal amount of Debt so secured at the time of such
extension, renewal or replacement and (B) the
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principal amount of Debt secured at the time the Lien was issued, created,
assumed or otherwise permitted, plus in either of (A) or (B) the expenses
of the Company and its Subsidiaries (including any premium) incurred in
connection with any such extension, renewal or replacement, and provided
further that such extension, renewal or replacement Lien shall be limited
to all or part of substantially the same property that secured the Lien
extended, renewed or replaced (plus improvements on such property) (Section
10.6).
RESTRICTIONS UPON SALE AND LEASEBACK TRANSACTIONS
The Company is not permitted, and may not permit a Significant Subsidiary,
to enter into any arrangement on or after the date of the Indenture, or such
other date as may be specified in any Prospectus Supplement for an applicable
series of Debt Securities issued pursuant to the Indenture, with any Person
(other than the Company or another Subsidiary) providing for the leasing by the
Company or any such Significant Subsidiary of any Principal Property (except a
lease for a temporary period, including renewals, of not more than 24 months by
the end of which it is intended that the use of such property by the lessee will
be discontinued) except (i) where the Company or such Subsidiary would be
entitled to incur Debt secured by a Lien on the property to be leased in an
amount equal to the Attributable Debt with respect to such Sale and Leaseback
Transaction without equally and ratably securing the Debt Securities, (ii) where
the Sale and Leaseback Transaction is entered into in respect of property
acquired by the Company or a Subsidiary within 24 months of such acquisition,
(iii) where such Sale and Leaseback Transaction is entered into by the Company
or a Subsidiary in respect of property within 24 months of the Company's or a
Subsidiary's acquisition of, or merger with, the Person owning such property, or
(iv) where the Company within 120 days of entering into the Sale and Leaseback
Transaction applies to the retirement of Debt Securities of any series an amount
equal to the greater of (a) the net proceeds of the sale of the property leased
pursuant to such Transaction or (b) the fair market value of the property so
leased (Section 10.7).
RESTRICTIONS UPON MERGER AND SALE OF ASSETS
The Indenture provides that the Company may not consolidate with or merge
into any other Person, or sell, convey, transfer, lease, or otherwise dispose
of, or permit one or more of its Subsidiaries to sell, convey, transfer, lease,
or otherwise dispose of, all or substantially all of the property and assets of
the Company, on a consolidated basis, to any Person unless, among other things,
(i) either the Company is the continuing 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,
and assumes by supplemental indenture all the obligations of the Company under
the Indenture and the Debt Securities, and (ii) immediately after the
transaction no Default or Event of Default shall exist (Section 8.1).
EVENTS OF DEFAULT
The Indenture defines an Event of Default with respect to the Debt
Securities of any series as being any one of the following events: (i) default
for 30 days in any payment of interest upon or any Additional Amounts payable in
respect of any Debt Security of that series when due; (ii) default in any
payment of principal of (or premium, if any, upon) any Debt Security of that
series when due; (iii) default in the deposit of any sinking fund payment, when
and as due by the terms of any Debt Security of that series; (iv) default for 60
days after appropriate notice in the performance of any other covenant in the
Indenture with respect to any Debt Security of that series; (v) certain events
in bankruptcy, insolvency, reorganization or other similar laws; and (vi) any
other Event of Default provided with respect to Debt Securities of that series
(Section 5.1).
In case an Event of Default shall occur and be continuing with respect to
the Debt Securities of any series, the Trustee or the Holders of not less than
25% in aggregate principal amount of the Debt Securities then Outstanding of
that series may declare the principal of the Debt Securities of such series (or,
if the Debt Securities of that series were issued as discounted Debt Securities,
such portion of the principal as may be specified in the terms of that series)
and the accrued interest thereon, if any, to be due and payable (Section 10.8).
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The Indenture requires the Company to file annually with the Trustee an
Officers' Certificate as to the absence of certain defaults under the terms of
the Indenture (Section 10.8). The Indenture provides that the Trustee may
withhold notice to the Holders of any default (except in payment of principal or
premium, if any, or interest) if it considers it in the interest of the Holders
to do so (Section 6.1).
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default shall occur and be continuing, the
Indenture provides that the Trustee shall be under no obligation to exercise any
of its rights or powers under the Indenture at the request, order or direction
of Holders unless such Holders shall have offered to the Trustee reasonable
indemnity and security against the costs, expenses and liabilities which might
be incurred by it in compliance with such request (Section 5.7). Subject to such
provisions for indemnification and certain other rights of the Trustee, the
Indenture provides that the Holders of a majority in principal amount of the
Debt Securities of any series then Outstanding shall have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee
(Section 5.12).
The Holders of at least a majority in aggregate principal amount of the
Outstanding Debt Securities of each series may, on behalf of the Holders of all
the Debt Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive portions of the Indenture
and, if applicable, such Debt Securities, unless a greater percentage of such
aggregate principal amount is specified in the applicable Prospectus Supplement.
The Holders of not less than a majority in principal amount of the Outstanding
Debt Securities of any series may on behalf of the Holders of all the Debt
Securities of such series and any related coupons waive any past default under
the Indenture with respect to such series and its consequences, except a default
(i) in the payment of the principal of (or premium, if any) or interest on or
Additional Amounts payable in respect of any Debt Security of such series, or
(ii) in respect of a covenant or provision that cannot be modified or amended
without the consent of the Holder of each Outstanding Debt Security of such
series affected thereby (Section 5.13).
MODIFICATION OF THE INDENTURE
Modification and amendment of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount of all Outstanding Debt Securities of any series that
are affected by such modification or amendment unless a greater percentage of
such aggregate principal amount is specified in the Prospectus Supplement;
provided, however, that no such modification or amendment may, without the
consent of the Holder of each Outstanding Debt Security of such series, among
other things: (i) change the Stated Maturity of the principal of, or any
installment of interest on, any Debt Security of such series; (ii) reduce the
principal amount of, the rate of interest on, or any premium payable upon the
redemption of, any Debt Security of such series; (iii) change any obligation of
the Company to pay Additional Amounts in respect of any Debt Security of such
series; (iv) reduce the amount of principal of an Original Issue Discount
Security of such series that would be due and payable upon a declaration of
acceleration of the Maturity thereof; (v) change the Place of Payment or
Currency of Payment of principal of, or any premium or interest on, any Debt
Security of such series; (vi) impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof or any
Redemption Date therefor; (vii) reduce the above-stated percentage of Holders of
Outstanding Debt Securities of such series necessary to modify or amend the
Indenture or to consent to any waiver thereunder or reduce the requirements for
voting or quorum described below; or (viii) modify the foregoing requirements or
reduce the percentage of Outstanding Debt Securities of such series necessary to
waive any past default (Section 9.2).
Modification and amendment of the Indenture may be made by the Company and
the Trustee without the consent of any Holder, for any of the following
purposes: (i) to evidence the succession of another Person to the Company as
obligor under the Indenture; (ii) to add to the covenants of the Company for the
benefit of the Holders of all or any series of Debt Securities; (iii) to add
Events of Default for the benefit of the Holders of all or any series of Debt
Securities; (iv) to add or change any provisions of the Indenture to facilitate
the issuance of Bearer Securities; (v) to change or eliminate any provisions of
the Indenture, provided that any such change or elimination shall become
effective only when there are no Outstanding Debt Securities of any
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series created prior thereto which are entitled to the benefit of such
provision; (vi) to establish the form or terms of Debt Securities of any series
and any related coupons; (vii) to secure the Debt Securities; (viii) to provide
for the acceptance of appointment by a successor Trustee; (ix) to cure any
ambiguity, defect or inconsistency in the Indenture, provided such action does
not adversely affect the interests of Holders of Debt Securities of any series
in any material respect; or (x) to supplement any of the provisions of the
Indenture to the extent necessary to permit or facilitate defeasance and
discharge of any series of Debt Securities, provided such action shall not
adversely affect the interests of the Holders of any Debt Securities in any
material respect (Section 9.1).
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given any
request, demand, authorization, direction, notice, consent, waiver or other
action thereunder or are present at a meeting of Holders of Debt Securities for
quorum purposes, (i) the principal amount of an Original Issue Discount Security
that shall be deemed to be Outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such determination upon
acceleration of the Maturity thereof, and (ii) the principal amount of a Debt
Security denominated in a foreign currency or currency units shall be the Dollar
Equivalent of the Currency Unit, determined on the date of original issuance of
such Debt Security or, in the case of an Original Issue Discount Security, the
Dollar Equivalent of the Currency Unit, determined on the date of original
issuance of such Debt Security, of the amount determined as provided in (i)
above (Section 3.12).
The Indenture contains provisions for convening meetings of the Holders of
Debt Securities of any series. A meeting may be called at any time by the
Trustee, and also, upon request, by the Company or the Holders of at least 10%
in principal amount of the Outstanding Debt Securities of any such series, in
any such case upon notice given as provided in the Indenture. Except for any
consent that must be given by the Holder of each Debt Security affected thereby,
as described above, any resolution presented at a meeting or adjourned meeting
at which a quorum is present may be adopted by the affirmative vote of the
Holders of a majority in principal amount of the Outstanding Debt Securities of
that series; provided, however, that any resolution with respect to any request,
demand, authorization, direction, notice, consent, waiver or other action that
may be made, given or taken by the Holders of a specified percentage, which is
less than a majority, in principal amount of Outstanding Debt Securities of a
series may be adopted at a meeting or adjourned meeting duly reconvened at which
a quorum is present by the affirmative vote of the Holders of such specified
percentage in principal amount of the Outstanding Debt Securities of that
series. Any resolution passed or decision taken at any meeting of Holders of
Debt Securities of any series duly held in accordance with the Indenture will be
binding on all Holders of Debt Securities of that series and the related
coupons. The quorum at any meeting called to adopt a resolution, and at any
reconvened meeting, will be the Persons entitled to vote a majority in principal
amount of the Outstanding Debt Securities of a series; provided, however, that
if any action is to be taken at such meeting with respect to a consent or waiver
that may be given by the Holders of a specified percentage in principal amount
of the Outstanding Debt Securities of a series, the Persons entitled to vote
such specified percentage in principal amount of the Outstanding Debt Securities
of such series will constitute a quorum (Article XV).
DEFEASANCE AND DISCHARGE
The Indenture provides that, if so specified with respect to the Debt
Securities of any series, the Company will be discharged from any and all
obligations in respect of the Debt Securities of such series upon the deposit
with the Trustee, in trust, of money and/or U.S. Government Obligations which
through the payment of interest and principal in respect thereof in accordance
with the terms will provide money in an amount sufficient to pay the principal
of (and premium, if any), each installment of interest on, and any sinking fund
payments on, the Debt Securities of such series on the Stated Maturity of such
payments in accordance with the terms of the Indenture and the Debt Securities
of such series. Such a trust may only be established if, among other things, the
Company has delivered to the Trustee an Opinion of Counsel to the effect that
(i) the Company has received from, or there has been published by, the Internal
Revenue Service a rule, or (ii) since the date of the Indenture there has been a
change in applicable federal income tax law, in either case to the effect that,
and based thereon such Opinion of Counsel shall confirm that, the Holders of
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Debt Securities of such series will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit, defeasance and
discharge, and will be subject to federal income tax on the same amounts and in
the same manner and at the same times as would have been the case if such
deposit, defeasance and discharge had not occurred. In the event of any such
defeasance and discharge of Debt Securities of such series, Holders of Debt
Securities of such series would be able to look only to such trust fund for
payment of principal of and any premium and any interest on their Debt
Securities until Maturity (Section 14.2).
DEFEASANCE OF CERTAIN COVENANTS
The Indenture provides covenants that, if so specified with respect to the
Debt Securities of any series, the Company may omit to comply with the
restrictive covenants described under "Certain Restrictions" above and any other
covenants applicable to such Debt Securities which are subject to covenant
defeasance and any such omission shall not be an Event of Default with respect
to the Debt Securities of such series, upon the deposit with the Trustee, in
trust, of money and/or U.S. Government Obligations which through the payment of
interest and principal in respect thereof in accordance with their terms will
provide money in an amount sufficient to pay the principal of (and premium, if
any), each installment of interest on, and any sinking fund payments on, the
Debt Securities of such series on the Stated Maturity of such payments in
accordance with the terms of the Indenture and the Debt Securities of such
series. The obligations of the Company under the Indenture and the Debt
Securities of such series other than with respect to such covenant shall remain
in full force and effect. Such a trust may be established only if, among other
things, the Company has delivered to the Trustee an Opinion of Counsel to the
effect that the Holders of the Debt Securities of such series will not recognize
income, gain or loss for federal income tax purposes as a result of such deposit
and defeasance of certain obligations and will be subject to federal income tax
on the same amounts and in the same manner and at the same times as would have
been the case if such deposit and defeasance had not occurred (Section 14.3).
In the event the Company exercises its option to omit compliance with the
covenants described under "Certain Restrictions" above with respect to the Debt
Securities of any series as described above and the Debt Securities of such
series are declared due and payable because of the occurrence of any Event of
Default, then the amount of money and U.S. Government Obligations on deposit
with the Trustee will be sufficient to pay amounts due on the Debt Securities of
such series at the time of their Stated Maturity but may not be sufficient to
pay amounts due on the Debt Securities of such series at the time of the
acceleration resulting from such Default. The Company shall in any event remain
liable for such payments as provided in the Indenture.
Unless otherwise provided in the Prospectus Supplement, if, after the
Company has deposited funds and/or U.S. Government Obligations to effect
defeasance and discharge or covenant defeasance with respect to Debt Securities
of any series, (a) the Holder of a Debt Security of such series is entitled to,
and does, elect pursuant to the terms of such Debt Security to receive payment
in a Currency other than that in which such deposit has been made in respect of
such Debt Security, or (b) the Currency in which such deposit has been made in
respect of any Debt Security of such series ceases to be used by its government
of issuance, the Debt represented by such Debt Security shall be deemed to have
been, and will be, fully discharged and satisfied through the payment of the
principal of (and premium, if any) and interest, if any, on such Debt Security
as they become due out of the proceeds yielded by converting the amount so
deposited in respect of such Debt Security into the Currency in which such Debt
Security becomes payable as a result of such election or such cessation of usage
based on the applicable Market Exchange Rate (Section 14.5). Unless otherwise
provided in the Prospectus Supplement, all payments of principal of (and
premium, if any) and interest, if any, and Additional Amounts, if any, on any
Debt Security that is payable in a Foreign Currency that ceases to be used by
its government of issuance shall be made in Dollars (Section 3.12).
The Prospectus Supplement may further describe the provisions, if any,
permitting such defeasance or covenant defeasance, including any modifications
to the provisions described above, with respect to the Debt Securities of or
within a particular series and any related coupons.
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MEDIUM-TERM NOTES
The Company may offer from time to time medium-term notes (the "Medium-Term
Notes") as a series of Debt Securities under the Indenture. The particular terms
and provisions of the Medium-Term Notes will be described in the Prospectus
Supplement relating to such Medium-Term Notes.
THE TRUSTEE
The Company from time to time maintains bank accounts and has other
customary banking relationships with and obtains credit facilities and lines of
credit from the Trustee in the ordinary course of business. The Trustee may also
serve as trustee under other indentures covering other debt securities of the
Company.
PAYMENT AND PAYING AGENTS
Unless otherwise provided in an applicable Prospectus Supplement,
principal, premium, if any, and interest, if any, and Additional Amounts, if
any, on Bearer Securities will be payable, subject to any applicable laws and
regulations, at the offices of such Paying Agents outside the United States as
the Company may designate from time to time (Section 10.2). Unless otherwise
provided in the Prospectus Supplement, payment of interest and certain
Additional Amounts on Bearer Securities on any Interest Payment Date will be
made only against presentation and surrender of the coupon relating to such
Interest Payment Date (Section 10.1). Unless otherwise provided in the
Prospectus Supplement, no payment with respect to any Bearer Security will be
made at any office or agency of the Company in the United States or by check
mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States. Notwithstanding the
foregoing, payments of principal, premium, if any, and interest, if any, and
Additional Amounts, if any, in respect of Bearer Securities payable in Dollars
will be made at the office of the Company's Paying Agent in the Borough of
Manhattan, The City of New York, if (but only if) payment of the full amount
thereof in Dollars at all offices or agencies outside the United States is
illegal or effectively precluded by exchange controls or other similar
restrictions (Section 10.2).
Unless otherwise provided in an applicable Prospectus Supplement,
principal, premium, if any, and interest, if any, and Additional Amounts, if
any, on Registered Securities will be payable at the office of such Paying Agent
or Paying Agents as the Company may designate from time to time, except that, at
the option of the Company, interest (including Additional Amounts, if any) may
be paid (i) by check mailed to the address of the Person entitled thereto as
such address shall appear in the Security Register or (ii) by transfer to an
account maintained by the payee located inside the United States. Unless
otherwise provided in the Prospectus Supplement, payment of any installment of
interest on Registered Securities will be made to the Person in whose name such
Registered Security is registered at the close of business on the Regular Record
Date for such interest (Section 3.7).
Any Paying Agents outside the United States and any other Paying Agents in
the United States initially designated by the Company for the Debt Securities
will be named in the Prospectus Supplement. The Company may at any time
designate additional Paying Agents or rescind the designation of any Paying
Agent or approve a change in the office through which any Paying Agent acts,
except that, if Debt Securities of a series are issuable only as Registered
Securities, the Company will be required to maintain a Paying Agent in each
Place of Payment for such series and, if Debt Securities of a series are also
issuable as Bearer Securities, the Company will be required to maintain (i) a
Paying Agent in the Borough of Manhattan, The City of New York, for payments
with respect to any Registered Securities of the series (and for payments with
respect to Bearer Securities of the series in the circumstances described above,
but not otherwise) and (ii) a Paying Agent in a Place of Payment located outside
the United States where Debt Securities of such series and any related coupons
may be presented and surrendered for payment; provided that if the Debt
Securities of such series are listed upon application by the Company on any
stock exchange located outside the United States and such stock exchange shall
so require, the Company will maintain a Paying Agent in any other required city
located outside the United States, as the case may be, for the Debt Securities
of such series (Section 10.2).
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Payments of principal of, premium, if any, and interest on Book-Entry
Securities registered in the name of any Depository or its nominee will be made
to the Depository or its nominee, as the case may be, as the registered owner of
the global security representing such Book-Entry Securities. The Company expects
that the Depository, upon receipt of any payment of principal, premium or
interest, will credit immediately participants' accounts with payments in
amounts proportionate to their respective beneficial interests as shown on the
records of such Depository or its nominee. None of the Company, the Trustee, any
Paying Agent or the Securities Registrar for such Debt Securities will have any
responsibility or liability for any aspects of the records relating to, or
payments made on account of, such beneficial ownership interests in the
Book-Entry Securities or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
CERTAIN DEFINITIONS
"Consolidated Net Assets" means the total assets of the Company and its
consolidated Subsidiaries as shown on the consolidated balance sheet of the
Company for the most recently completed accounting period for which financial
statements are publicly available, after deducting the amount of all current
liabilities (excluding any constituting Funded Debt by reason of their being
renewable or extendible).
"Funded Debt" means indebtedness for money borrowed which by its terms
matures at, or is extendible or renewable at the option of the obligor to, a
date more than 12 months after the date of the creation of such indebtedness for
money borrowed.
"Holder," when used with respect to any Security, means, in the case of a
Registered Security, the Person in whose name the Security is registered in the
Security Register and, in the case of a Bearer Security, the bearer thereof and,
when used with respect to any coupon, means the bearer thereof.
"Lien" means any pledge, mortgage, lien, charge, encumbrance or security
interest.
"Original Issue Discount Security" means any Debt Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 5.2.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Principal Property" means any facility (together with the land on which it
is erected, any future additions or improvements thereto, and all machinery and
equipment included therein) used by the Company or a Subsidiary primarily for
producing, processing, packaging, storing, or distributing its products, raw
materials, inventories or other materials and supplies, located in the United
States or Canada, owned or leased by the Company or a Subsidiary, and having an
acquisition cost plus capitalized improvements in excess of 2% of Consolidated
Net Assets as of the date of such determination, but shall not include any such
property financed through the issuance of tax-exempt governmental obligations,
or any such property or portion thereof that has been determined by Board
Resolution not to be of material importance to the respective business conducted
by the Company or a Subsidiary, effective as of the date such Board Resolution
is adopted.
"Significant Subsidiary" means, at any time, any Subsidiary that would be a
"Significant Subsidiary" at such time, as such term is defined in Regulation S-X
promulgated by the Commission, as in effect as of the date of the Indenture.
"Subsidiary" means any corporation, partnership, limited liability company,
joint venture, trust, association or unincorporated organization more than 50%
of the outstanding voting interest of which is owned, directly or indirectly, by
the Company or by one or more other Subsidiaries, or by the Company and one or
more other Subsidiaries.
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PLAN OF DISTRIBUTION
The Company may sell the Debt Securities to or through underwriters, and
also may sell the Debt Securities directly to other purchasers or through
agents, and any such sales may be made on a continuing basis. The Prospectus
Supplement with respect to the Debt Securities being offered thereby sets forth
the terms of the offering of such Debt Securities, including the name or names
of any underwriters or agents, the purchase price of such Debt Securities and
the proceeds to the Company from such sale, any underwriting discounts and other
items constituting underwriters' compensation, any initial public offering
price, any discounts or concessions allowed or reallowed or paid to dealers and
any securities exchanges on which such Debt Securities may be listed.
The distribution of the Debt Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices relating to such
prevailing market prices or at negotiated prices.
In connection with the sale of Debt Securities, underwriters may receive
compensation from the Company or from purchasers of Debt Securities for whom
they may act as agents in the form of discounts, concessions or commissions.
Underwriters, dealers and agents that participate in the distribution of Debt
Securities may be deemed to be underwriters and any discounts or commissions
received by them and any profit on the resale of Debt Securities by them may be
deemed to be underwriting discounts and commissions under the Securities Act.
Any such underwriter or agent will be identified, and any such compensation will
be described, in a Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of Debt Securities may be
entitled to indemnification by the Company against certain civil liabilities,
including liabilities under the Securities Act.
If so indicated in the Prospectus Supplement, the Company will authorize
the underwriters to solicit offers by certain institutions to purchase Debt
Securities from the Company at the public offering price set forth in the
Prospectus Supplement pursuant to Delayed Delivery Contracts providing for
payment and delivery on the date stated in the Prospectus Supplement. Each such
contract will be for an amount not less than, and unless the Company otherwise
agrees, the aggregate principal amount of Debt Securities sold pursuant to such
contracts shall not be more than, the respective amounts stated in the
Prospectus Supplement. Institutions with which such contracts, when authorized,
may be made include commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable institutions, and other
institutions, but shall in all cases be subject to the approval of the Company.
Delayed Delivery Contracts will not be subject to any conditions except that the
purchase by an institution of the Debt Securities covered thereby shall not at
the time of delivery be prohibited under the laws of any jurisdiction in the
United States to which such institution is subject.
VALIDITY OF THE DEBT SECURITIES
The validity of the Debt Securities will be passed upon for the Company by
Paul, Weiss, Rifkind, Wharton & Garrison, New York, New York and certain matters
will be passed upon for any underwriters by Skadden, Arps, Slate, Meagher &
Flom, New York, New York. Skadden, Arps, Slate, Meagher & Flom from time to time
provides legal services to the Company.
EXPERTS
The financial statements and schedules included in IBP's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994, which are incorporated by
reference herein and in the Registration Statement, have been audited by Price
Waterhouse LLP, independent public accountants, as indicated in their report
with respect thereto, which is incorporated by reference herein. Such financial
statements and schedules are incorporated by reference herein in reliance upon
the report of Price Waterhouse LLP, given upon its authority as experts in
accounting and auditing.
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$300,000,000
IBP, INC.
7.95% NOTES DUE 2010
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PROSPECTUS SUPPLEMENT
January 26, 2000
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Joint Book Running Managers
DONALDSON, LUFKIN & JENRETTE SALOMON SMITH BARNEY
BANC OF AMERICA SECURITIES LLC
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