<PAGE> 1
As filed with the Securities and Exchange Commission on February 13, 1995
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
JOHNSON CONTROLS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Wisconsin 39-0380018
(State of incorporation) (I.R.S. Employer Identification Number)
</TABLE>
5757 North Green Bay Avenue
Milwaukee, Wisconsin 53209
(414) 228-1200
(Address, including zip code, and telephone number, including area code, of
principal executive offices)
John P. Kennedy
Vice President, Secretary and General Counsel
5757 North Green Bay Avenue
Milwaukee, Wisconsin 53209
(414) 228-1200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-------------------------
Copy to:
James B. Carlson
Mayer, Brown & Platt
787 Seventh Avenue
New York, New York 10019
Approximate date of commencement of proposed sale to the public: From time
to time after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: /X/
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
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PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER SHARE(1) PRICE(1) FEE
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<S> <C> <C> <C> <C>
Debt Securities..................... $332,800,000 100% $332,800,000 $114,759
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Warrants to Purchase Debt
Securities........................ (2)
</TABLE>
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(1) Estimated solely for purposes of determining the amount of the registration
fee.
(2) Warrants may be issued to purchase Debt Securities. The amount to be
registered is the maximum aggregate principal amount of Debt Securities to
be issued with or without any such Warrants and includes all Debt Securities
deliverable upon the exercise of such Warrants.
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
constituting a part of this Registration Statement also relates to $17,200,000
principal amount of Debt Securities, registered by the Registrant under the
Securities Act of 1933 in Registration Statement No. 33-22357.
-------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SUPPLEMENT SHALL NOT CONSTITUTE AN OFFER
TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE
OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE
WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE
SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED FEBRUARY 13, 1995
PROSPECTUS SUPPLEMENT
(To Prospectus Dated , 1995)
U.S. $350,000,000
JOHNSON CONTROLS, INC.
MEDIUM-TERM NOTES, SERIES C
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
Johnson Controls, Inc. (the "Company") may from time to time offer its
Medium-Term Notes, Series C (the "Notes"), in an aggregate principal amount of
up to U.S. $350,000,000 or the equivalent thereof in other currencies, subject
to reduction as a result of the concurrent sale of other Debt Securities of the
Company. The Notes will be offered at varying maturities of nine months or more
from their dates of issue and may be subject to redemption at the option of the
Company or repayment at the option of the Holder prior to maturity. Each Note
may be denominated in U.S. dollars, other currencies, European Currency Units
("ECU") or such other composite currencies (the "Specified Currency") as may be
described in a pricing supplement (the "Pricing Supplement") to this Prospectus
Supplement. See "Important Currency Information" and "Currency Risks." Each Note
will bear interest at a fixed rate (a "Fixed Rate Note"), which may be zero in
the case of certain Notes issued at a price representing a discount from the
principal amount payable at maturity, or at a floating rate (a "Floating Rate
Note") determined by referenced to the CD Rate, the Commercial Paper Rate, the
Eleventh District Cost of Funds Rate, the Federal Funds Rate, LIBOR, the Prime
Rate, the Treasury Rate or any other Base Rate set forth in the Pricing
Supplement, as adjusted by the Spread or Spread Multiplier, if any, applicable
to such Note. See "Description of Medium-Term Notes, Series C."
Each Note will be represented by either a global security registered in the name
of a nominee of The Depository Trust Company, as Depositary, or other depositary
(a "Book-Entry Note"), or a certificate issued in definitive form (a
"Certificated Note"), as set forth in the applicable Pricing Supplement.
Beneficial interests in Book-Entry Notes will be shown on, and transfers thereof
will be effected only through, records maintained by the Depositary and its
participants.
The Notes will be issued in denominations of U.S. $1,000 or any larger amount
that is an integral multiple of U.S. $1,000 or, in the case of Notes denominated
in a Specified Currency other than U.S. dollars, in the denominations set forth
in the applicable Pricing Supplement.
Unless otherwise indicated, interest on each Fixed Rate Note will accrue from
its date of issue and will be payable semiannually on each June 1 and December 1
and at maturity, and interest on each Floating Rate Note will accrue from its
date of issue and will be payable monthly, quarterly, semiannually or annually,
as set forth in the applicable Pricing Supplement, and at maturity.
The Specified Currency, any applicable interest rate or interest rate formula,
the issue price, the maturity, any interest payment dates, any redemption
provisions and any repayment provisions for each Note, whether such Note will be
a Book-Entry Note or a Certificated Note and the other variable terms of such
Note will be established at the time of issuance of such Note and set forth
therein and in the applicable Pricing Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT HERETO OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
PRICE TO AGENT'S PROCEEDS TO
PUBLIC(1) COMMISSION(2) THE COMPANY(2)(3)
<S> <C> <C> <C>
Per Note..................................... 100.000% .125%-.750% 99.875%-99.250%
Total(4)..................................... U.S. $350,000,000 U.S. $ 437,500 - U.S. $349,562,500 -
U.S. $2,625,000 U.S. $347,375,000
</TABLE>
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(1) The Notes will be sold at 100% of their principal amount except as may be
provided in the Pricing Supplement hereto.
(2) The Company will pay to Salomon Brothers Inc, J.P. Morgan Securities Inc.,
Lehman Brothers, Lehman Brothers Inc. (including its affiliate Lehman
Government Securities Inc.), or BA Securities, Inc. (each an "Agent," and
together, the "Agents") a commission, which may be in the form of a
discount, ranging from .125% to .750% of the principal amount of any Note,
depending upon its maturity, sold through such Agent. Commissions on any
Notes with a maturity greater than 30 years will be negotiated at the time
of sale. See "Plan of Distribution."
(3) Before deducting other expenses payable by the Company estimated to be
$335,000 including reimbursement of certain of the Agents' expenses.
(4) Or the equivalent thereof in other currencies or composite currencies.
The Notes are being offered on a continuous basis by the Company through the
Agents, each of whom has agreed to use its reasonable efforts to solicit
purchases of such Notes. The Company may sell Notes at a discount to each Agent
for its own account or for resale to one or more investors or other purchasers
at varying prices related to prevailing market prices at the time of resale, as
determined by such Agent, or if so specified in an applicable Pricing
Supplement, for resale at a fixed public offering price. In addition, the Agents
may offer Notes purchased by them as principal to other dealers. Unless
otherwise specified in an applicable Pricing Supplement, any Note purchased by
an Agent as principal will be purchased at 100% of the principal amount thereof
less a percentage equal to the commission applicable to an agency sale of a Note
of identical maturity. The Company also may sell the Notes directly to investors
on its behalf. The Notes will not be listed on any securities exchange, and
there can be no assurance that the Notes offered by this Prospectus Supplement
will be sold or that there will be a secondary market for any of the Notes. The
Company reserves the right to withdraw, cancel or modify the offer made hereby
without notice. The Company or the Agent who solicits any offer may reject such
offer in whole or in part. See "Plan of Distribution."
SALOMON BROTHERS INC J.P. MORGAN SECURITIES INC.
LEHMAN BROTHERS BA SECURITIES, INC.
The date of this Prospectus Supplement is , 1995.
<PAGE> 3
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
------------------------------------
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of earning to fixed charges(a)............................ 5.4 4.4 3.9 3.1 3.2
</TABLE>
- -------------------------
(a) For the purpose of computing this ratio, "earnings" consist of (a) income
before income taxes (adjusted for undistributed earnings or recognized
losses of partially owned affiliates which are less than 50% owned, minority
interests in earnings or losses of subsidiaries, and amortization of
previously capitalized interest), plus, (b) fixed charges, minus (c)
interest capitalized during the period. "Fixed charges" consist of (a)
interest incurred and amortization of debt expense plus (b) the portion of
rent expense representative of the interest factor.
DESCRIPTION OF MEDIUM-TERM NOTES, SERIES C
THE INFORMATION HEREIN CONCERNING THE NOTES SHOULD BE READ IN CONJUNCTION
WITH THE STATEMENTS UNDER "DESCRIPTION OF DEBT SECURITIES" IN THE PROSPECTUS.
THE FOLLOWING DESCRIPTION WILL APPLY TO THE NOTES UNLESS OTHERWISE SPECIFIED IN
THE APPLICABLE PRICING SUPPLEMENT.
GENERAL
The Notes are limited to an aggregate principal amount of U.S. $350,000,000
or the equivalent thereof in other currencies, subject to reduction as a result
of the concurrent sale of other Debt Securities of the Company.
The Debt Securities will rank equally with all other unsecured and
unsubordinated debt of the Company. The Indenture does not limit the amount of
debt, either secured or unsecured, which may be issued by the Company under the
Indenture or otherwise. The Debt Securities may be issued in one or more series
with the same or various maturities and may be sold at par, a premium or an
original issue discount. Debt Securities sold at an original issue discount may
bear no interest or interest at a rate which is below market rates.
Since the Company is a holding company, the right of the Company, and hence
the rights of creditors and shareholders of the Company, to participate in any
distribution of assets of any subsidiary upon its liquidation or reorganization
or otherwise is accordingly subject to prior claims of creditors of the
subsidiary, except to the extent that claims of the Company as a creditor of the
subsidiary may be recognized.
The Notes will be offered on a continuous basis and will mature at par on
any Business Day (as defined below) nine months or more from the date of issue,
as selected by the purchaser and agreed to by the Company, and may be subject to
redemption or repayment prior to maturity at the price or prices specified in
the applicable Pricing Supplement. Each Note will bear interest at either (i) a
fixed rate (a "Fixed Rate Note"), which may be zero in the case of certain Notes
issued at an Issue Price (as defined below) representing a discount from the
principal amount payable at maturity (a "Zero Coupon Note"), or (ii) a floating
rate determined by reference to the Interest Rate Basis or combination of
Interest Rate Bases (each defined below) (the "Base Rate") specified in the
applicable Pricing Supplement (a "Floating Rate Note") that may be adjusted by a
Spread or Spread Multiplier (each as defined below).
Each Note will be issued initially as either a Book-Entry Note or a
Certificated Note in fully registered form without coupons. Except as set forth
in the Prospectus under "Description of Debt Securities -- Global Securities,"
Book-Entry Notes will not be issuable in certificated form. See "Book-Entry
System" below. It is currently contemplated that only Notes which have a
Specified Currency of U.S. dollars will be issued as Book-Entry Notes.
The authorized denominations of the Notes denominated in U.S. dollars will
be U.S. $1,000 or any larger amount that is an integral multiple of U.S. $1,000.
The authorized denominations of Notes denominated in a Specified Currency other
than U.S. dollars will be set forth in the applicable Pricing Supplement.
S-2
<PAGE> 4
"Business Day" means any day, other than a Saturday or Sunday, that meets
each of the following applicable requirements: the day is (a) not a day on which
banking institutions are authorized or required by law or regulation to be
closed in the City of New York and (b) if the Note is denominated in a Specified
Currency other than U.S. dollars, (i) not a day on which banking institutions
are authorized or required by law or regulation to close in the financial center
of the country issuing the Specified Currency (which in the case of ECU shall be
London and Luxembourg City, Luxembourg) and (ii) a day on which banking
institutions in such financial center are carrying out transactions in such
Specified Currency, and (c) with respect to LIBOR Notes, a London Banking Day.
"London Banking Day" means any day on which dealings in deposits in U.S. dollars
are transacted in the London interbank market.
"Original Issue Discount Note" means (i) a Note, including any Zero Coupon
Note, which has a stated redemption price at maturity that exceeds its Issue
Price by at least 0.25% of its principal amount, multiplied by the number of
full years from the Original Issue Date to the Maturity Date (each as defined
below) for such Note, and (ii) any other Note designated by the Company as
issued with original issue discount for United States Federal income tax
purposes.
The Pricing Supplement relating to each Note will describe the following
terms: (1) the Specified Currency with respect to such Note (and, if such
Specified Currency is other than U.S. dollars, certain other terms relating to
such Note, including the authorized denominations); (2) whether such Note is a
Fixed Rate Note, a Floating Rate Note or a Zero Coupon Note; (3) the price
(expressed as a percentage of the aggregate principal amount thereof) at which
such Note will be issued (the "Issue Price"); (4) the date on which such Note
will be issued (the "Original Issue Date"); (5) the date on which such Note will
mature (the "Maturity Date"); (6) if such Note is a Fixed Rate Note, the rate
per annum at which such Note will bear interest, if any; (7) if such Note is a
Floating Rate Note, the Base Rate, the Initial Interest Rate, the Interest Reset
Period, the Interest Reset Dates, the Interest Payment Period, the Interest
Payment Dates, the Index Maturity, the Maximum Interest Rate and the Minimum
Interest Rate, if any, and the Spread or Spread Multiplier, if any (all as
defined herein), and any other terms relating to the particular method of
calculating the interest rate for such Note; (8) whether such Note may be
redeemed or repaid prior to the Maturity Date and, if so, the provisions
relating to such redemption or repayment; (9) whether such Note will be issued
initially as a Book-Entry Note or a Certificated Note; and (10) any other terms
of such Note not inconsistent with the provisions of the related Indenture.
PAYMENT OF PRINCIPAL AND INTEREST
The principal of and any premium and interest on Notes are payable by the
Company in the Specified Currency. If the Specified Currency for a Note is other
than U.S. dollars, the Company will (unless otherwise specified in the
applicable Pricing Supplement) appoint an agent (initially Chemical Bank) (the
"Exchange Rate Agent") to determine the exchange rate for converting all
payments in respect of such Note in U.S. dollars in the manner described in the
following paragraph. Notwithstanding the foregoing, the holder of a Note
denominated in a Specified Currency other than U.S. dollars may (if the
applicable Pricing Supplement and the Note so indicate) elect to receive all
such payments in the Specified Currency by delivery of a written request to the
Paying Agent (as defined below), which must be received by the Paying Agent on
or prior to the applicable Record Date or at least 15 calendar days prior to
maturity, as the case may be. Such election shall remain in effect unless and
until changed by written notice to the Paying Agent, but the Paying Agent must
receive written notice of any such change on or prior to the applicable Record
Date or at least 15 calendar days prior to maturity, as the case may be. Until
the Notes are paid or payment thereof is provided for, the Company will, at all
times, maintain a paying agent (the "Paying Agent") in the City of New York
capable of performing the duties described herein to be performed by the Paying
Agent. The Company has initially appointed Chemical Bank as Paying Agent. The
Company will notify the holders of the Notes in accordance with the Indenture of
any change in the Paying Agent or its address.
In the case of a Note denominated in a Specified Currency other than U.S.
dollars, unless the holder has elected otherwise, payment in respect of such a
Note shall be made in U.S. dollars based upon the exchange rate as determined by
the Exchange Rate Agent based on the highest firm bid quotation for U.S. dollars
received by such Exchange Rate Agent at approximately 11:00 a.m., New York City
time, on the second
S-3
<PAGE> 5
Business Day preceding the applicable payment date (or, if no such rate is
quoted on such date, the last date on which such rate was quoted), from three
recognized foreign exchange dealers in the City of New York selected by the
Exchange Rate Agent and approved by the Company (one of which may be the
Exchange Rate Agent) for the purchase by the quoting dealer, for settlement on
such payment date, of the aggregate amount of the Specified Currency payable on
such payment date in respect of all Notes denominated in such Specified Currency
(the "Market Exchange Rate"). All currency exchange costs will be borne by the
holders of such Notes by deductions from such payments. If no such bid
quotations are available, payments will be made in the Specified Currency,
unless such Specified Currency is unavailable due to the imposition of exchange
controls or to other circumstances beyond the Company's control, in which case
payment will be made as described under "Currency Risks -- Payment Currency"
below.
Unless otherwise specified in the applicable Pricing Supplement, payments
in U.S. dollars of interest on Notes (other than interest payable at maturity or
upon earlier redemption or repayment) will be made by mailing a check to the
holder at the address of such holder appearing on the Register on the applicable
Record Date (which in the case of Global Securities representing Book-Entry
Notes, will be a nominee of the Depositary). Notwithstanding the foregoing, a
holder of U.S. $10,000,000 or more in aggregate principal amount of Notes of
like tenor and terms (or a holder of the equivalent thereof in a Specified
Currency other than U.S. dollars) shall be entitled to receive such payments in
U.S. dollars by electronic transfer of immediately available funds, but only if
appropriate payment instructions have been received in writing by the Paying
Agent not less than 15 days prior to the applicable Interest Payment Date.
Simultaneously with the election by any holder to receive payments in a
Specified Currency other than U.S. dollars (by written request to the Paying
Agent, as provided above), such holder shall provide appropriate payment
instructions to the Paying Agent, and all such payments will be made by
electronic transfer of immediately available funds to an account maintained by
the payee with a bank located outside the United States. Unless otherwise
specified in the applicable Pricing Supplement, principal and any premium and
interest payment at maturity or upon earlier redemption or repayment in respect
of a Note will be paid by electronic transfer of immediately available funds
upon surrender of such Note at the office of the Paying Agent.
Any payment required to be made in respect of a Note on a date that is not
a Business Day for such Note need not be made on such date, but may be made on
the next succeeding Business Day with the same force and effect as if made on
such date, and no additional interest shall accrue as a result of such delayed
payment.
Unless otherwise specified in the applicable Pricing Supplement, if the
principal of any Original Issue Discount Note is declared to be due and payable
immediately as described in the accompanying Prospectus under "Events of
Default," the amount of principal due and payable with respect to such Note
shall be limited to the sum of the aggregate principal amount of such Note
multiplied by the Issue Price (expressed as a percentage of the aggregate
principal amount) plus the original issue discount accrued from the date of
issue to the date of declaration, which accrual shall be calculated using the
"interest method" (computed in accordance with generally accepted accounting
principles) in effect on the date of declaration.
The "Record Date" with respect to any Interest Payment Date (as defined
below) shall be the date 15 calendar days (unless otherwise specified in the
applicable Pricing Supplement) immediately preceding such Interest Payment Date,
whether or not such date shall be a Business Day. Interest payable and
punctually paid or duly provided for on any Interest Payment Date will be paid
to the person in whose name a Note is registered at the close of business on the
Record Date next preceding such Interest Payment Date; provided, however, that
the first payment of interest on any Note with an Original Issue Date between a
Record Date and an Interest Payment Date or on an Interest Payment Date will be
made on the Interest Payment Date following the next succeeding Record Date to
the registered owner on such next succeeding Record Date; provided, further,
that interest payable at maturity or upon earlier redemption or repayment will
be payable to the person to whom principal shall be payable.
All percentages resulting from any calculations will be rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point, with
five one-millionths of a percentage point being rounded upwards, and all
currency or currency unit amounts used and resulting from such calculations on
the Notes will be rounded to the nearest one-hundredth of a unit (with .005 of a
unit being rounded upwards).
S-4
<PAGE> 6
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from its Original Issue Date at the
rate per annum stated on the face thereof until the principal amount thereof is
paid or made available for payment. Unless otherwise set forth in an applicable
Pricing Supplement, interest on each Fixed Rate Note will be payable
semiannually each June 1 and December 1 (each an "Interest Payment Date") and at
maturity or upon earlier termination or repayment. Each payment of interest in
respect of an Interest Payment Date shall include interest accrued to but
excluding such Interest Payment Date. Interest on Fixed Rate Notes will be
computed on the basis of a 360-day year of twelve 30-day months.
FLOATING RATE NOTES
Each Floating Rate Note will bear interest from its Original Issue Date at
rates determined by reference to the Base Rate plus or minus the Spread, if any,
or multiplied by the Spread Multiplier, if any (each as specified in the
applicable Pricing Supplement) until the principal thereof is paid or made
available for payment. The "Spread" is the number of basis points (one basis
point equals one one-hundredth of a percentage point) specified in the
applicable Pricing Supplement as being applicable to such Floating Rate Note,
and the "Spread Multiplier" is the percentage specified in the applicable
Pricing Supplement as being applicable to such Note. Any Floating Rate Note may
also have either or both of the following: (i) a maximum numerical interest rate
limitation, or ceiling, on the rate of interest which may accrue during any
interest period (the "Maximum Interest Rate"); and (ii) a minimum numerical
interest rate limitation, or floor, on the rate of interest which may accrue
during any interest period (the "Minimum Interest Rate"). The applicable Pricing
Supplement will designate one of the following Base Rates as applicable to each
Floating Rate Note: (a) the CD Rate (a "CD Rate Note"), (b) the Commercial Paper
Rate (a "Commercial Paper Rate Note"), (c) the Eleventh District Cost of Funds
Rate (an "Eleventh District Cost of Funds Rate Note"), (d) the Federal Funds
Rate (a "Federal Funds Rate Note"), (e) LIBOR (a "LIBOR Note"), (f) the Prime
Rate (a "Prime Rate Note"), (g) the Treasury Rate (a "Treasury Rate Note"), or
(h) such other Base Rate as is set forth in the applicable Pricing Supplement.
Interest on each Floating Rate Note will be payable monthly, quarterly,
semiannually or annually (the "Interest Payment Period"). The rate of interest
on each Floating Rate Note will be reset daily, weekly, monthly, quarterly,
semiannually or annually (the "Interest Reset Period"), as specified in the
applicable Pricing Supplement. Unless otherwise specified in the applicable
Pricing Supplement, the date or dates on
S-5
<PAGE> 7
which interest will be reset (each an "Interest Reset Date") and the date or
dates on which interest will be payable (each an "Interest Payment Date") will
be as set forth in the following table:
<TABLE>
<CAPTION>
INTEREST RESET PERIOD INTEREST RESET DATES INTEREST PAYMENT DATES
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Daily Each Business Day Third Wednesday of each month
or of each March, June,
September and December
(as specified in the Pricing
Supplement)
Weekly (other than Treasury
Rate Notes) Each Wednesday Third Wednesday of each month
or of each March, June,
September and December
(as specified in the Pricing
Supplement)
Weekly (Treasury Rate Notes) Each Tuesday Third Wednesday of each month
or of each March, June,
September and December
(as specified in the Pricing
Supplement)
Monthly Third Wednesday of each month Third Wednesday of each month
or of each March, June,
September and December
(as specified in the Pricing
Supplement)
Quarterly Third Wednesday of each Third Wednesday of each
March, June, September and March, June, September and
December December
Semiannually Third Wednesday of each of Third Wednesday of each of
two months specified in the two months specified in the
Pricing Supplement Pricing Supplement
Annually Third Wednesday of month Third Wednesday of month
specified in the Pricing specified in the Pricing
Supplement Supplement
</TABLE>
Notwithstanding the preceding table, if an Interest Reset Date would otherwise
be a day that is not a Business Day, such Interest Reset Date will be postponed
to the next Business Day, except that, in the case of a LIBOR Note, if such
Business Day would fall in the next calendar month, such Interest Reset Date
will be the immediately preceding Business Day.
Interest payments on each Interest Payment Date for Floating Rate Notes
(except in the case of Floating Rate Notes which reset daily or weekly) will
include accrued interest from and including the Original Issue Date or from and
including the last date in respect of which interest has been paid, as the case
may be, to, but excluding, such Interest Payment Date. In the case of Floating
Rate Notes that reset daily or weekly, interest payments will include accrued
interest from and including the Original Issue Date or from and including the
last date in respect of which interest has been paid, as the case may be, to,
and including the Record Date immediately preceding the applicable Interest
Payment Date, and that at maturity the interest payable will include interest
accrued from and including the Original Issue Date or from and including the
last date in respect of which interest has been paid, as the case may be, to,
but excluding, the Maturity Date. Accrued interest will be calculated by
multiplying the principal amount of a Floating Rate Note by an accrued interest
factor. This accrued interest factor will be computed by adding the interest
factors calculated for each day in the period for which accrued interest is
being calculated. The interest factor (expressed as a decimal) for each such day
will be computed by dividing the interest rate applicable to such day by 360, in
the case of CD Rate
S-6
<PAGE> 8
Notes, Commercial Paper Rate Notes, Eleventh District Cost of Funds Rate Notes,
Federal Funds Rate Notes, LIBOR Notes and Prime Rate Notes, or by the actual
number of days in the year, in the case of Treasury Rate Notes. The interest
rate in effect on each day will be (a) if such day is an Interest Reset Date,
the interest rate with respect to the Interest Determination Date (as defined
below) pertaining to such Interest Reset Date, or (b) if such day is not an
Interest Reset Date, the interest rate with respect to the Interest
Determination Date pertaining to the next preceding Interest Reset Date, subject
in either case to any Maximum or Minimum Interest Rate limitation referred to
above and to any adjustment by a Spread or a Spread Multiplier referred to
above; provided, however, that the interest rate in effect for the period from
the Original Issue Date to the first Interest Reset Date set forth in the
Pricing Supplement with respect to a Floating Rate Note will be the "Initial
Interest Rate" specified in the applicable Pricing Supplement. The interest rate
on the Floating Rate Notes will in no event be higher than the maximum rate
permitted by New York law. Under present New York law, the maximum interest rate
is 25% per annum on a simple interest basis. This limit may not apply to Notes
in which U.S. $2,500,000 or more has been invested.
The "Interest Determination Date" pertaining to an Interest Reset Date for
CD Rate Notes, Commercial Paper Rate Notes, Eleventh District Cost of Funds Rate
Notes, Federal Funds Rate Notes and Prime Rate Notes will be the second Business
Day next preceding such Interest Reset Date. The Interest Determination Date
pertaining to an Interest Reset Date for LIBOR Notes (defined below as the
"LIBOR Determination Date") will be the second London Banking Day next preceding
such Interest Reset Date. The Interest Determination Date pertaining to an
Interest Reset Date for a Treasury Rate Note will be the day of the week in
which such Interest Reset Date falls on which Treasury bills of the Index
Maturity (as defined below) specified on the face of the Treasury Rate Notes are
auctioned. Treasury bills are normally sold at auction on Monday of each week,
unless that day is a legal holiday, in which case the auction is normally held
on the following Tuesday, except that such auction may be held on the preceding
Friday. If, as the result of a legal holiday, an auction is so held on the
preceding Friday, such Friday will be the Interest Determination Date pertaining
to the Interest Reset Date occurring in the next succeeding week. The "Index
Maturity" of an instrument or obligation is the period to maturity of such
instrument or obligation with respect to which the relevant Interest Rate Basis
or Bases will be calculated.
Unless otherwise specified in the applicable Pricing Supplement, the
"Calculation Date," if applicable, pertaining to any Interest Determination Date
will be the earlier of (i) the tenth calendar day after such Interest
Determination Date, or, if such day is not a Business Day, the next succeeding
Business Day or (ii) the Business Day immediately preceding the applicable
Interest Payment Date or Maturity, as the case may be.
Unless otherwise specified in the applicable Pricing Supplement, Chemical
Bank shall be the calculation agent (the "Calculation Agent") with respect to
the Floating Rate Notes. Upon request of the holder of any Floating Rate Note,
the Calculation Agent will provide the interest rate then in effect and, if
determined, the interest rate which will become effective on the next Interest
Reset Date with respect to such Floating Rate Note.
CD Rate Notes
CD Rate Notes will bear interest at the interest rates (calculated with
reference to the CD Rate and the Spread or Spread Multiplier, if any) specified
in the CD Rate Notes and in the applicable Pricing Supplement.
"CD Rate" means, with respect to any Interest Determination Date, the rate
on such date for negotiable certificates of deposit having the Index Maturity
designated in the applicable Pricing Supplement as published by the Board of
Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates," or any successor publication of the Board of Governors
of the Federal Reserve System ("H.15(519)") under the heading "CDs (Secondary
Market)" or, if not so published by 9:00 a.m., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the CD Rate
will be the rate on such Interest Determination Date for negotiable certificates
of deposit of the Index Maturity designated in the applicable Pricing Supplement
as published by the Federal Reserve Bank of New York in its
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daily statistical release, "Composite 3:30 p.m. Quotations for U.S. Government
Securities" ("Composite Quotations") under the heading "Certificates of
Deposit." If such rate is not yet published by 3:00 p.m., New York City time, on
the Calculation Date pertaining to such Interest Determination Date, then the CD
Rate on such Interest Determination Date will be calculated by the Calculation
Agent and will be the arithmetic mean of the secondary market offered rates as
of 10:00 a.m., New York City time, on such Interest Determination Date, of three
leading nonbank dealers in negotiable U.S. dollar certificates of deposit in The
City of New York selected by the Calculation Agent for negotiable certificates
of deposit of major United States money center banks of the highest credit
standing (in the market for negotiable certificates of deposit) with a remaining
maturity closest to the Index Maturity designated in the Pricing Supplement in a
denomination of U.S. $5,000,000; provided, however, that if the dealers selected
as aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the CD Rate will be the CD Rate in effect on such Interest
Determination Date.
CD Rate Notes, like other Notes, are not deposit obligations of a bank and
are not insured by the Federal Deposit Insurance Corporation.
Commercial Paper Rate Notes
Commercial Paper Rate Notes will bear interest at the interest rates
(calculated with reference to the Commercial Paper Rate and the Spread or Spread
Multiplier, if any) specified in the Commercial Paper Rate Notes and in the
applicable Pricing Supplement.
"Commercial Paper Rate" means with respect to any Interest Determination
Date, the Money Market Yield (as defined below) of the rate on that date for
commercial paper having the Index Maturity designated in the applicable Pricing
Supplement as published in H.15(519), under the heading "Commercial Paper." In
the event that such rate is not published by 9:00 a.m., New York City time, on
the Calculation Date pertaining to such Interest Determination Date, then the
Commercial Paper Rate shall be the Money Market Yield of the rate on that
Interest Determination Date for commercial paper having the Index Maturity
designated in the applicable Pricing Supplement as published in Composite
Quotations under the heading "Commercial Paper." If by 3:00 p.m., New York City
time, on such Calculation Date such rate is not yet published in Composite
Quotations, the Commercial Paper Rate for that Interest Determination shall be
calculated by the Calculation Agent and shall be the Money Market Yield of the
arithmetic mean of the offered rates of three leading dealers of commercial
paper in The City of New York selected by the Calculating Agent as of 11:00
a.m., New York City time, on that Interest Determination Date, for commercial
paper having the Index Maturity designated in the applicable Pricing Supplement
placed for an industrial issuer whose bond rating is "AA," or the equivalent,
from a nationally recognized rating agency; provided, however, that if the
dealers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Commercial Paper Rate will be the Commercial
Paper Rate in effect on such Interest Determination Date.
"Money Market Yield" shall be a yield calculated in accordance with the
following formula:
<TABLE>
<S> <C> <C>
D X 360
---------------------------------
Money Market Yield = 360 - (D X M) X100
</TABLE>
where "D" refers to the per annum rate for commercial paper, quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
Eleventh District Cost of Funds Rate Notes
Eleventh District Cost of Funds Rate Notes will bear interest at the rates
(calculated with reference to the Eleventh District Cost of Funds Rate and the
Spread and/or Spread Multiplier, if any) specified in the Eleventh District Cost
of Funds Rate Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Eleventh
District Cost of Funds Rate" means, with respect to any Interest Determination
Date, the rate equal to the monthly weighted average cost
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of funds for the calendar month preceding such Interest Determination Date as
set forth under the caption "11th District" on Telerate Page 7058 as of 11:00
a.m., San Francisco time, on such Interest Determination Date. If such rate does
not appear on Telerate Page 7058 on any Interest Determination Date, the
Eleventh District Cost of Funds Rate for such Interest Determination Date shall
be the monthly weighted average cost of funds paid by member institutions of the
Eleventh Federal Home Loan Bank District that was most recently announced (the
"Index") by the FHLB of San Francisco as such cost of funds for the calendar
month preceding the date of such announcement. If the FHLB of San Francisco
fails to announce such rate for the calendar month next preceding such Interest
Determination Date, then the Eleventh District Cost of Funds Rate for such
Interest Determination Date will be the Eleventh District Cost of Funds Rate in
effect on such Interest Determination Date. "Telerate Page 7058" means the
display on the Dow Jones Telerate Service on such page (or such other page as
may replace such page on the service for the purpose of displaying the Eleventh
District Cost of Funds Rate) for the purpose of displaying the monthly average
cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank
District.
Federal Funds Rate Notes
Federal Funds Rate Notes will bear interest at the interest rates
(calculated with reference to the Federal Funds Rate and the Spread or Spread
Multiplier, if any) specified in the Federal Funds Rate Notes and in the
applicable Pricing Supplement.
"Federal Funds Rate" means, with respect to any Interest Determination
Date, the rate on that day for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)" or, if not so published by 9:00 a.m., New
York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Federal Funds Rate will be the rate on such Interest
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate." If such rate is not yet published by 3:00 p.m.,
New York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Federal Funds Rate for such Interest Determination Date
will be calculated by the Calculation Agent and will be the arithmetic mean of
the rates for the last transaction in overnight Federal Funds arranged by three
leading brokers of Federal Funds transactions in the City of New York selected
by the Calculation Agent as of 11:00 a.m., New York City time, on such Interest
Determination Date; provided, however, that if the brokers selected as aforesaid
by the Calculation Agent are not quoting as mentioned in this sentence, the
Federal Funds Rate will be the Federal Funds Rate in effect on such Interest
Determination Date.
LIBOR Notes
Each LIBOR Note will bear interest for each Interest Reset Period at the
interest rate calculated with reference to LIBOR and the Spread or Spread
Multiplier, if any, specified in such Note and in the applicable Pricing
Supplement.
"LIBOR" for each Interest Reset Period will be determined by the
Calculation Agent for such LIBOR Notes as follows:
(i) On the second London Banking Day prior to the Interest Reset Date
for such Interest Reset Period (a "LIBOR Determination Date"), the
Calculation Agent for such LIBOR Note will determine the arithmetic mean of
the offered rates for deposits in the Specified Currency for the period of
the Index Maturity specified in the applicable Pricing Supplement,
commencing on such Interest Reset Date, which appear on the Designated
LIBOR Page at approximately 11:00 a.m., London time, on such LIBOR
Determination Date. "Designated LIBOR Page" means "LIBOR Telerate," which
shall be the display designated as page "3750" on the Dow Jones Telerate
Service (or such other page as may replace page "3750" on such service or
such other service as may be nominated by the British Bankers' Association
for the purpose of displaying the London interbank offered rates of major
banks), unless "LIBOR Reuters" is designated in the applicable Pricing
Supplement, in which case "Designated LIBOR Page" means the display
designated as page "LIBO" on the Reuters Monitor Money Rates
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<PAGE> 11
Service (or such other page as may replace the LIBO page on such service or
such other service as may be nominated by the British Bankers' Association
for the purpose of displaying London interbank offered rates of major
banks). If at least two such offered rates appear on the Designated LIBOR
Page, "LIBOR" for such Interest Reset Period will be the arithmetic mean of
such offered rates as determined by the Calculation Agent for such LIBOR
Note.
(ii) If fewer than two offered rates appear on the Designated LIBOR
Page on such LIBOR Determination Date, the Calculation Agent for such LIBOR
Note will request the principal London offices of each of four major banks
in the London interbank market selected by such Calculation Agent to
provide such Calculation Agent with its offered quotations for deposits in
U.S. dollars for the period of the specified Index Maturity, commencing on
such Interest Reset Date, to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on such LIBOR Determination Date and
in a principal amount equal to an amount of not less than U.S. $1,000,000
that is representative of a single transaction in such market at such time.
If at least two such quotations are provided, "LIBOR" for such Interest
Reset Period will be the arithmetic mean of such quotations. If fewer than
two such quotations are provided, "LIBOR" for such Interest Reset Period
will be the arithmetic mean of rates quoted by three major banks in The
City of New York selected by the Calculation Agent for such LIBOR Note at
approximately 11:00 a.m., New York City time, on such LIBOR Determination
Date for loans in U.S. dollars to leading European banks, for the period of
the specified Index Maturity, commencing on such Interest Reset Date, and
in a principal amount equal to an amount of not less than U.S. $1,000,000
that is representative of a single transaction in such market at such time;
provided, however, that if fewer than three banks selected as aforesaid by
such Calculation Agent are quoting rates as mentioned in this sentence,
"LIBOR" for such Interest Reset Period will be the same as LIBOR for the
immediately preceding Interest Reset Period (or, if there was no such
Interest Reset Period, the Initial Interest Rate).
Prime Rate Notes
Prime Rate Notes will bear interest rates (calculated with reference to the
Prime Rate as described below, and then applying the Spread and/or Spread
Multiplier, if any, which is applicable to the Interest Reset Period) specified
in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Interest Determination Date relating to a Prime
Rate Note, the rate set forth on such date in H.15(519) under the heading "Bank
Prime Loan." In the event that such rate is not published prior to 9:00 a.m.,
New York City time, on the Calculation Date pertaining to such Interest
Determination Date, then the Prime Rate will be determined by the Calculation
Agent and will be the arithmetic mean of the rates of interest publicly
announced by each bank that appears on the Reuters Screen NYMF Page (as defined
herein) as such bank's prime rate or base lending rate as in effect for that
Interest Determination Date. If fewer than four such rates appear on the Reuters
Screen NYMF Page for the Interest Determination Date, the Prime Rate will be
determined by the Calculation Agent and will be the arithmetic mean of the prime
rates quoted on the basis of the actual number of days in the year divided by a
360-day year as of the close of business on such Interest Determination Date by
at least two of three major money center banks in The City of New York selected
by the Calculation Agent. If fewer than two such rates are quoted as aforesaid,
the Prime Rate will be determined by the Calculation Agent on the basis of the
rates furnished in The City of New York by one or two, as the case may be,
substitute banks or trust companies organized and doing business under the laws
of the United States, or any State thereof, having total equity capital of at
least U.S. $500,000,000 and being subject to supervision or examination by
federal or state authority, selected by the Calculation Agent to provide such
rate or rates; provided, however, that if the banks selected as aforesaid are
not quoting as set forth above, the Prime Rate will remain the Prime Rate then
in effect on such Interest Determination Date. "Reuters Screen NYMF Page" means
the display designated as page "NYMF" on the Reuters Monitor Money Rates Service
(or such other page as may replace the NYMF page on that service for the purpose
of displaying the prime rate or base lending rate of major U.S. banks).
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<PAGE> 12
Treasury Rate Notes
Treasury Rate Notes will bear interest at the interest rates (calculated
with reference to the Treasury Rate and the Spread or Spread Multiplier, if any)
specified in the Treasury Notes and in the applicable Pricing Supplement.
"Treasury Rate" means, with respect to any Interest Determination Date, the
rate for the auction held on such Interest Determination Date of direction
obligations of the United States ("Treasury bills") having the Index Maturity
designated in the applicable Pricing Supplement as published in H.15(519) under
the heading "U.S. Government Securities -- Treasury bill -- auction average
(investment)" or, if not so published by 9:00 a.m., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the action
average rate (expressed as a bond equivalent, on the basis of a year of 365 or
366 days, as applicable, and applied on a daily basis) as otherwise announced by
the United States Department of the Treasury. In the event that the results of
the auction of Treasury bills having the Index Maturity designated in the
applicable Pricing Supplement are not published or reported as provided above by
3:00 p.m. New York City time, on such Calculation Date or if no such auction is
held in a particular week, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 p.m., New York City time, on such Interest
Determination Date, of three leading primary United States government securities
dealers selected by the Calculation Agent for the issue of Treasury bills with a
remaining maturity closest to the Index Maturity designated in the applicable
Pricing Supplement; provided, however, that if the dealers selected as aforesaid
by the Calculation Agent are not quoting as mentioned in this sentence, the
Treasury Rate will be the Treasury Rate in effect on such Interest Determination
Date.
AMORTIZING NOTES
The Company may from time to time offer Amortizing Notes. Unless otherwise
specified in the applicable Pricing Supplement, interest on each Amortizing Note
will be computed on the basis of a 360-day year of twelve 30-day months. Further
information concerning additional terms and provisions of Amortizing Notes will
be specified in the applicable Pricing Supplement. A table setting forth
repayment information in respect of each Amortizing Note will be included in the
applicable Pricing Supplement and set forth in each such Note.
ORIGINAL ISSUE DISCOUNT NOTES
The Company may offer Original Issue Discount Notes from time to time. Such
Original Issue Discount Notes may currently pay no interest or interest at a
rate which at the time of issuance is below market rates. In the event of
redemption, repayment or acceleration of maturity in respect of an Original
Issue Discount Note, the amount payable to the holder of such Original Issue
Discount Note will be equal to (i) the Amortized Face Amount (as defined below)
as of the date of such event, plus (ii) with respect to any redemption of an
Original Issue Discount Note, the Initial Redemption Percentage specified in the
applicable Pricing Supplement (as adjusted by the Annual Redemption Percentage
Reduction, if applicable) minus 100% multiplied by the Issue Price specified in
such Pricing Supplement, net of any portion of such Issue Price which has been
paid prior to the date of redemption, or the portion of the Issue Price (or the
net amount) proportionate to the portion of the unpaid principal amount to be
redeemed, plus (iii) any accrued interest to the date of such event, the payment
of which would constitute qualified stated interest payments within the meaning
of Treasury Regulation 1.1273-1(c) under the Internal Revenue Code of 1986, as
amended (the "Code"). The "Amortized Face Amount" of an Original Issue Discount
Note means an amount equal to (i) the Issue Price thereof, plus (ii) the
aggregate portions of the original issue discount (the excess of the amounts
considered as part of the "stated redemption price at maturity" of such Original
Issue Discount Note within the meaning of Section 1273(a)(2) of the Code,
whether denominated as principal or interest, over the Issue Price) which shall
theretofore have accrued pursuant to Section 1272 of the Code (without regard to
Section 1272(a)(7) of the Code) from the date of issue of such Original Issue
Discount Note to the date of determination, minus (iii) any amount considered as
part of the "stated redemption price at maturity" of such
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Original Issue Discount Note which has been paid from the date of issue to the
date of determination. Certain additional considerations relating to the
offering of any Original Issue Discount Notes may be set forth in the applicable
Pricing Supplement.
INDEXED NOTES
Notes may be issued with the amount of principal, premium and/or interest
payable in respect thereof to be determined with reference to the price or
prices of specified commodities or stocks, the exchange rate of one or more
specified currencies (including a composite currency such as the ECU) relative
to an indexed currency or such other price or exchange rate ("Indexed Notes"),
as set forth in the applicable Pricing Supplement. In certain cases, Holders of
Indexed Notes may receive a principal amount on the Maturity Date that is
greater than or less than the face amount of the Notes depending upon the
relative value on the Maturity Date of the specified indexed item. Information
as to the method for determining the amount of principal, premium, if any,
and/or interest payable in respect of Indexed Notes, certain historical
information with respect to the specified indexed item and tax considerations
associated with an investment in such Indexed Notes will be set forth in the
applicable Pricing Supplement.
DUAL CURRENCY NOTES
"Dual Currency Notes" are Notes as to which the Company has a one-time
option, exercisable on a date or dates specified in the applicable Pricing
Supplement (each an "Option Election Date") in whole, but not in part, with
respect to all Dual Currency Notes issued on the same day and having the same
terms (a "Tranche"), of making all payments of principal, premium, if any, and
interest after the exercise of such option, whether at maturity or otherwise
(which payments would otherwise be made in the currency in which such Note is
denominated (the "Face Amount Currency") specified in the applicable Pricing
Supplement), in the alternative currency for payment (the "Optional Payment
Currency") specified in the applicable Pricing Supplement.
The Pricing Supplement for each issuance of Dual Currency Notes will
specify, among other things, the aggregate face amount of the Dual Currency
Notes of such issuance, the Face Amount Currency and Optional Payment Currency
of such issuance and the exchange rate designated for such issuance (the
"Designated Exchange Rate"), which will be a fixed exchange rate used for
converting amounts denominated in the Face Amount Currency into amounts
denominated in the Optional Payment Currency. Information as to the relative
value of the Face Amount Currency compared to the Optional Payment Currency and
as to tax considerations associated with an investment in Dual Currency Notes
will also be set forth in the applicable Pricing Supplement. The Pricing
Supplement will also specify the Option Election Dates and Interest Payment
Dates for such issuance of Dual Currency Notes. Each Option Election Date will
be approximately ten calendar days before an Interest Payment Date or the stated
maturity date.
If the Company elects to make scheduled payments in the Optional Payment
Currency, the amount payable in such Optional Payment Currency shall be
determined using the Designated Exchange Rate specified in the applicable
Pricing Supplement. If such election is made, notice of such election shall be
mailed in accordance with the Indenture within two Business Days of the Option
Election Date and shall state (i) the Interest Payment Date or stated maturity
date and (ii) the Designated Exchange Rate. Any such notice by the Company, once
given, may not be withdrawn.
If the Company elects on any Option Election Date specified in the
applicable Pricing Supplement to pay in the Optional Payment Currency instead of
the Face Amount Currency, payments of interest, premium, if any, and principal
made after such Option Election Date may be worth less, at the then-current
exchange rate, than if the company had made such payment in the Face Amount
Currency. For further information regarding certain risks inherent in Notes
denominated in currencies other than U.S. dollars, see "Currency Risks."
Dual Currency Notes for which either the Face Amount Currency or the
Optional Payment Currency is Deutschemarks will be offered and sold by the
Company in compliance with then-current rules, regulations and policy statements
of the Deutsche Bundesbank.
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REDEMPTION
The Pricing Supplement relating to each Note will indicate either that such
Note cannot be redeemed prior to maturity or that such Note will be redeemable
at the option of the Company on a date or dates specified prior to maturity, at
a price or prices set forth in the applicable Pricing Supplement, together with
accrued interest to the date of redemption. The Notes will not be subject to any
sinking fund. The Company may redeem any of the Notes which are redeemable and
remain outstanding, either in whole or from time to time in part, upon not less
than 30 nor more than 60 days' notice. If less than all of the Notes with like
tenor and terms are to be redeemed, the Notes to be redeemed shall be selected
by the Trustee by such method as the Trustee shall deem fair and appropriate.
REPAYMENT AND REPURCHASE
The Pricing Supplement relating to each Note will indicate either that such
Note cannot be repaid prior to maturity or that the Note will be repayable at
the option of the holder on a date or dates specified prior to maturity at a
price or prices set forth in the applicable Pricing Supplement, together with
accrued interest to the date of repayment.
In order for a Note to be repaid, the Paying Agent must receive at least 30
days, but not more than 45 days, prior to the repayment date (i) the Note with
the form entitled "Option to Elect Repayment" on the reverse of the Note duly
completed or (ii) a telegram, telex, facsimile transmission or a letter from a
member of a national securities exchange or the National Association of
Securities Dealers, Inc. or a commercial bank or trust company in the United
States setting forth the name of the holder of the Note, the principal amount of
the Note, the principal amount of the Note to be repaid, the certificate number
or a description of the tenor and terms of the Note, a statement that the option
to elect repayment is being exercised thereby and a guarantee that the Note to
be repaid with the form entitled "Option to Elect Repayment" on the reverse of
the Note duly completed will be received by the Paying Agent not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter and such Note and form duly completed are received by the Paying Agent by
such fifth Business Day. Exercise of the repayment option by the holder of a
Note shall be irrevocable. The repayment option may be exercised by the holder
of a Note for less than the entire principal amount of the Note, provided that
the principal amount of the Note remaining outstanding after repayment is an
authorized denomination.
The Company may at any time purchase Notes at any price in the open market
or otherwise. Notes so purchased by the Company may be held or resold or, at the
discretion of the Company, may be surrendered to the applicable Trustee for
cancellation.
BOOK-ENTRY SYSTEM
Upon issuance, all Book-Entry Notes having the same Specified Currency,
Issue Date, Maturity Date, redemption provisions, repayment provisions, Interest
Payment Period and Dates and, in the case of Fixed Rate Notes, interest rate or,
in the case of Floating Rate Notes, Base Rate, Initial Interest Rate, Index
Maturity, Interest Reset Period and Dates, Spread of Spread Multiplier, if any,
Minimum Interest Rate, if any, and Maximum Interest Rate, if any, will be
represented by a single Global Security. Each Global Security representing
Book-Entry Notes will be deposited with, or on behalf of, The Depository Trust
Company, New York, New York (the "Depositary") or such other depositary as is
specified in the Pricing Supplement, and registered in the name of a nominee of
the Depositary. Book-Entry Notes will not be exchangeable for Certificated Notes
and, except under the circumstances described in the Prospectus under
"Description of the Debt Securities -- Global Securities," will not otherwise be
issuable in definitive form. The Depositary currently only accepts Notes which
have a Specified Currency of U.S. dollars.
The Depositary has advised the Company and the Agents as follows: The
Depositary is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. The Depositary was created to hold securities of its participants
and to facilitate the clearance and settlement of securities
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<PAGE> 15
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. The Depositary's participants
include securities brokers and dealers (including the Agents), banks, trust
companies, clearing corporations, and certain other organizations, some of whom
(and/or their representatives) own the Depositary. Access to the Depositary's
book-entry system is also available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, either directly or indirectly.
A further description of the Depositary's procedures with respect to Global
Securities representing Book-Entry Notes is set forth in the Prospectus under
"Description of the Debt Securities -- Global Securities." The Depositary has
confirmed to the Company, the Agents and the Trustees that it intends to follow
such procedures.
IMPORTANT CURRENCY INFORMATION
Purchasers are required to pay for the Notes in the Specified Currency.
Currently, there are limited facilities in the United States for conversion of
U.S. dollars into foreign currencies and vice versa, and banks do not generally
offer non-U.S.-dollar checking or savings account facilities in the United
States. However, if requested by a prospective purchaser of Notes denominated in
a Specified Currency other than U.S. dollars, the Agent soliciting the offer to
purchase will arrange for the conversion of U.S. dollars into such Specified
Currency to enable the purchaser to pay for such Notes. Such requests must be
made on or before the fifth Business Day (as defined above) preceding the date
of delivery of the Notes, or by such other date as determined by the Agent that
presents the offer to the Company. Each such conversion will be made by the
relevant Agent on such terms and subject to such conditions, limitations and
charges as such Agent may from time to time establish in accordance with its
regular foreign exchange practice. All costs of exchange will be borne by
purchasers of the Notes.
CURRENCY RISKS
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in Notes that are denominated in a Specified Currency other
than the currency of the country in which a purchaser is resident or the
currency (including any composite currency) in which a purchaser conducts its
business (the "home currency") entails significant risks that are not associated
with a similar investment in a security denominated in the home currency. Such
risks include, without limitation, the possibility of significant changes in
rates of exchange between the home currency and the Specified Currency and the
possibility of the imposition or modification of foreign exchange controls with
respect to the Specified Currency. Such risks generally depend on factors over
which the Company has no control, such as economic and political events and the
supply of and demand for the relevant currencies. In recent years, rates of
exchange for certain currencies have been highly volatile, and such volatility
may be expected in the future. Fluctuations in any particular exchange rate that
have occurred in the past are not necessarily indicative, however, of
fluctuations in the rate that may occur during the term of any Note.
Depreciation of the Specified Currency in which a Note is denominated against
the relevant home currency would result in a decrease in the effective yield of
such note below its coupon rate, and in certain circumstances could result in a
loss to the investor on a home currency basis.
Governments have from time to time imposed, and may in the future impose,
exchange controls that could affect exchange rates as well as the availability
of a Specified Currency on an Interest Payment Date or the Maturity Date with
respect to a Note. At present, the Company has identified any currencies and
currency units which are freely convertible at the time of issuance of a
particular Note as the currencies and currency units in which payments of
principal and interest on such Note may be made. There can be no assurances that
exchange controls will not restrict or prohibit payments of principal or
interest in any such currency or currency unit. Even if there are no actual
exchange controls, it is possible that on an Interest Payment Date or
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Maturity Date with respect to any particular Note, a Specified Currency for such
Note would not be available to the Company to make payments of interest and
principal then due.
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT DESCRIBE
ALL THE RISKS OF AN INVESTMENT IN NOTES DENOMINATED IN A CURRENCY (INCLUDING ANY
COMPOSITE CURRENCY) OTHER THAN U.S. DOLLARS, AND THE COMPANY DISCLAIMS ANY
RESPONSIBILITY TO ADVISE PROSPECTIVE PURCHASERS OF SUCH RISKS AS THEY EXIST AT
THE DATE OF THIS PROSPECTUS SUPPLEMENT OR AS SUCH RISKS MAY CHANGE FROM TIME TO
TIME. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL
ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN NOTES DENOMINATED IN
CURRENCIES (INCLUDING COMPOSITE CURRENCIES) OTHER THAN U.S. DOLLARS. SUCH NOTES
ARE NOT AN APPROPRIATE INVESTMENT FOR PERSONS WHO ARE UNSOPHISTICATED WITH
RESPECT TO FOREIGN CURRENCY TRANSACTIONS.
Pricing Supplements relating to Notes denominated in a Specified Currency
other than the U.S. dollar will contain information concerning historical
exchange rates for such Specified Currency against the U.S. dollar, a
description of the currency and any exchange controls affecting such currency.
PAYMENT CURRENCY
Except as set forth below, if payment on a Note is required to be made in a
foreign currency and such currency is unavailable due to the imposition of
exchange controls or other circumstances beyond the Company's control, or is no
longer used by the government of the country issuing such currency or for the
settlement of transactions by public institutions of or within the international
banking community, then all payments due on that due date with respect to such
Note shall be made in U.S. dollars. The amount so payable on any date in such
foreign currency shall be converted into U.S. dollars at a rate determined by
the Exchange Rate Agent on the basis of the most recently available Market
Exchange Rate or as otherwise indicated in an applicable Pricing Supplement.
If payment on a Note is required to be made in ECU and ECU is unavailable
due to the imposition of exchange controls or other circumstances beyond the
Company's control, or is no longer used in the European Monetary System, all
payments due on that due date with respect to the Notes shall be made in U.S.
dollars. The amount so payable on any date in ECU shall be converted into U.S.
dollars, at a rate determined by the Exchange Rate Agent as of the second
Business Day prior to the date on which such payment is due on the following
basis. The component currencies of the ECU for this purpose (the "Components")
shall be the currency amounts which were components of the ECU as of the last
date on which the ECU was used in the European Monetary System. The equivalent
of the ECU in U.S. dollars shall be calculated by aggregating the U.S. dollar
equivalents of the Components. The U.S. dollar equivalent of each of the
Components shall be determined by the Exchange Rate Agent on the basis of the
most recently available Market Exchange Rate, or as otherwise indicated in the
applicable Pricing Supplement.
If the official unit of any component currency is altered by way of
combination or subdivision, the number of units of that currency as a Component
shall be divided or multiplied in the same proportion. If two or more component
currencies are consolidated into a single currency, the amounts of those
currencies as Components shall be replaced by an amount in such single currency
equal to the sum of the amounts of the consolidated component currencies
expressed in such single currency. If any component currency is divided into two
or more currencies, the amount of that currency as a Component shall be replaced
by amounts of such two or more currencies, each of which shall have a value on
the date of division equal to the amount of the former component currency
divided by the number of currencies into which that currency was divided.
All determinations referred to above made by the Exchange Rate Agent shall
be at its sole discretion (except to the extent expressly provided herein that
any determination is subject to approval by the Company) and, in the absence of
manifest error, shall be conclusive for all purposes and binding on holders of
the Notes and the Exchange Rate Agent shall have no liability therefor.
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FOREIGN CURRENCY JUDGMENTS
The Notes will be governed by and construed in accordance with the laws of
the State of New York. A judgment for money damages by courts in the United
States, including a money judgment based on an obligation expressed in a foreign
currency, will ordinarily be rendered only in U.S. dollars. New York statutory
law provides that a court shall render a judgment or decree in the foreign
currency of the underlying obligation and that the judgment or decree shall be
converted into U.S. dollars at the exchange rate prevailing on the date of entry
of the judgment or decree.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary of certain United States Federal income tax
consequences of the purchase, ownership and disposition of the Notes is based
upon laws, regulations, rulings and decisions now in effect, all of which are
subject to change (including changes in effective dates) or possible differing
interpretations. It deals only with Notes held as capital assets and does not
purport to deal with persons in special tax situations, such as financial
institutions, insurance companies, regulated investment companies, dealers in
securities or currencies, persons holding Notes as a hedge against currency
risks or as a position in a "straddle" for tax purposes, or persons whose
functional currency is not the United States dollar. It also does not deal with
holders other than original purchasers (except where otherwise specifically
noted). In addition, the summary does not address amortizing notes or Indexed
Notes. The Federal income tax consequences of such Notes will be addressed in
the applicable Pricing Supplement. Persons considering the purchase of the Notes
should consult their own tax advisors concerning the application of United
States Federal income tax laws to their particular situations as well as any
consequences of the purchase, ownership and disposition of the Notes arising
under the laws of any other taxing jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a Note
that is for United States Federal income tax purposes (i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any political
subdivision thereof, (iii) an estate or trust the income of which is subject to
United States Federal income taxation regardless of its source or (iv) any other
person whose income or gain in respect of a Note is effectively connected with
the conduct of a United States trade or business. As used herein, the term
"non-U.S. Holder" means a holder of a Note that is not a U.S. Holder.
U.S. HOLDERS
Payments of Interest. Payments of "qualified stated interest" on a Note (as
defined below) generally will be taxable to a U.S. Holder as ordinary interest
income at the time such payments are accrued or are received (in accordance with
the U.S. Holder's regular method of tax accounting).
Original Issue Discount. The following summary is a general discussion of
the United States Federal income tax consequences to U.S. Holders of the
purchase, ownership and disposition of Original Issue Discount Notes.
For United States Federal income tax purposes, original issue discount is
the excess of the stated redemption price at maturity of a Note over its issue
price, if such excess equals or exceeds a de minimis amount (generally 1/4 of 1%
of the Note's stated redemption price at maturity multiplied by the number of
complete years to its maturity from its issue date). The issue price of an issue
of Notes equals the first price to the public at which a substantial amount of
such Notes has been sold (ignoring sales to bond houses, brokers, or similar
persons or organizations acting in the capacity of underwriters, placement
agents or wholesalers). The stated redemption price at maturity of a Note is the
sum of all payments provided by the Note other than "qualified stated interest"
payments. The term "qualified stated interest" generally means stated interest
that is unconditionally payable in cash or property (other than debt instruments
of the issuer) at least annually at a single fixed rate. In addition, if a Note
bears interest for one or more accrual periods at a rate below the rate
applicable for the remaining term of such Note (e.g., Notes with teaser rates or
interest holidays), and if the greater of either the resulting foregone interest
on such Note or any "true" discount on such Note (i.e., the
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excess of the Note's stated principal amount over its issue price) equals or
exceeds a specified de minimis amount, then the stated interest on the Note
would be treated as original issue discount rather than qualified stated
interest.
A U.S. Holder of a discount note must include original issue discount in
income as ordinary interest for United States Federal income tax purposes as it
accrues under a constant yield method in advance of receipt of the cash payments
attributable to such income, regardless of such U.S. Holder's regular method of
tax accounting. In general, the amount of original issue discount included in
income by the initial U.S. Holder of a Discount Note is the sum of the daily
portions of original issue discount with respect to such Discount Note for each
day during the taxable year (or portion of the taxable year) on which such U.S.
Holder held such Discount Note. The "daily portion" of original issue discount
on any Discount Note is determined by allocating to each day in any accrual
period a ratable portion of the original issue discount allocable to that
accrual period. An "accrual period" may be of any length and the accrual periods
may vary in length over the term of the Discount Note, provided that each
accrual period is no longer than one year and each scheduled payment of
principal or interest occurs either on the final day of an accrual period or on
the first day of an accrual period. The Company will specify the accrual period
it intends to use in the applicable Pricing Supplement, but a holder is not
bound by the Company's choice of accrual period. The amount of original issue
discount allocable to each accrual period is generally equal to the difference
between (i) the product of the Discount Note's adjusted issue price at the
beginning of such accrual period and its yield to maturity (determined on the
basis of compounding at the close of each accrual period and appropriately
adjusted to take into account the length of the particular accrual period) and
(ii) the amount of any qualified stated interest payments, if any, allocable to
such accrual period. The "adjusted issue price" of a Discount Note at the
beginning of any accrual period is the sum of the issue price of the Discount
Note, plus the amount of original issue discount allocable to all prior accrual
periods, minus the amount of any prior payments on the Discount Note that were
not qualified stated interest payments. Under these rules, U.S. Holders
generally will have to include in income increasingly greater amounts of
original issue discount in successive accrual periods.
A U.S. Holder who purchases a Discount Note for an amount that is greater
than its adjusted issue price as of the purchase date and less than or equal to
the sum of all amounts payable on the Discount Note after the purchase date,
other than payments of qualified stated interest, will be considered to have
purchased the Discount Note at an "acquisition premium." Under the acquisition
premium rules, the amount of original issue discount which such U.S. Holder must
include in its gross income with respect to such Discount Note for any taxable
year (or portion thereof in which the U.S. Holder holds the Discount Note) will
be reduced (but not below zero) by the portion of the acquisition premium
properly allocable to the period.
Floating Rate Notes are subject to special rules whereby a Floating Rate
Note will qualify as a "variable rate debt instrument" if (a) its issue price
does not exceed the total noncontingent principal payments due under the
Floating Rate Note by more than a specified de minimis amount and (b) it
provides for stated interest, paid or compounded at least annually, at current
values of (i) one or more qualified floating rates, (ii) a single fixed rate and
one or more qualified floating rates, (iii) a single objective rate, or (iv) a
single fixed rate and a single objective rate that is a qualified inverse
floating rate.
A "qualified floating rate" is any variable rate where variations in the
value of such rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the
Floating Rate Note is denominated. Although a multiple of a qualified floating
rate will generally not itself constitute a qualified floating rate, a variable
rate equal to the product of a qualified floating rate and a fixed multiple that
is greater than zero but not more than 1.35 will constitute a qualified floating
rate. A variable rate equal to the product of a qualified floating rate and a
fixed multiple that is greater than zero but not more than 1.35, increased or
decreased by a fixed rate, will also constitute a qualified floating rate. In
addition, two or more qualified floating rates that can reasonably be expected
to have approximately the same values throughout the term of the Floating Rate
Note (e.g., two or more qualified floating rates with values within 25 basis
points of each other as determined on the Floating Rate Note's issue date) will
be treated as a single qualified floating rate. Notwithstanding the foregoing, a
variable rate that would otherwise constitute a qualified floating rate but
which is subject to one or more restrictions such as a maximum numerical
limitation (i.e., a cap) or a minimum numerical limitation (i.e., a floor) may,
under certain circumstances, fail to be
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treated as a qualified floating rate. An "objective rate" is a rate that is not
itself a qualified floating rate but which is determined using a single fixed
formula and which is based upon (i) one or more qualified floating rates, (ii)
one or more rates where each rate would be a qualified floating rate for a debt
instrument denominated in a currency other than the currency in which the
Floating Rate Note is denominated, (iii) either the yield or changes in the
price of one or more items of actively traded personal property (other than
stock or debt of the issuer or a related party) or (iv) a combination of
objective rates. Other variable interest rates may be treated as objective rates
if so designated by the IRS in the future. Despite the foregoing, a variable
rate of interest on a Floating Rate Note will not constitute an objective rate
if it is reasonably expected that the average value of such rate during the
first half of the Floating Rate Note's term will be either significantly less
than or significantly greater than the average value of the rate during the
final half of the Floating Rate Note's term. A "qualified inverse floating rate"
is an objective rate where such rate is equal to a fixed rate minus a qualified
floating rate, as long as variations in the rate can reasonably be expected to
inversely reflect contemporaneous variations in the cost of newly borrowed
funds. If a Floating Rate Note provides for stated interest at a fixed rate for
an initial period of less than one year followed by a variable rate that is
either a qualified floating rate or an objective rate and if the variable rate
on the Floating Rate Note's issue date is intended to approximate the fixed rate
(e.g., the value of the variable rate on the issue date does not differ from the
value of the fixed rate by more than 25 basis points), then the fixed rate and
the variable rate together will constitute either a single qualified floating
rate or objective rate, as the case may be.
If a Floating Rate Note that provides for stated interest at either a
single qualified floating rate or a single objective rate throughout the term
thereof qualifies as a "variable rate debt instrument," then any stated interest
on such Note which is unconditionally payable in cash or property (other than
debt instruments of the issuer) at least annually will constitute qualified
stated interest and will be taxed accordingly. Thus, a Floating Rate Note that
provides for stated interest at either a single qualified floating rate or a
single objective rate throughout the term thereof and that qualifies as a
"variable rate debt instrument" will generally not be treated as having been
issued with original issue discount unless the Floating Rate Note is issued at a
"true" discount (i.e., at a price below the Note's stated principal amount) in
excess of a specified de minimis amount. Original issue discount on such a
Floating Rate Note arising from "true" discount is allocated to an accrual
period using the constant yield method described above by assuming that the
variable rate is a fixed rate equal to (i) in the case of a qualified floating
rate or qualified inverse floating rate, the value as of the issue date of the
qualified floating rate or qualified inverse floating rate, or (ii) in the case
of an objective rate (other than a qualified inverse floating rate), a fixed
rate that reflects the yield that is reasonably expected for the Floating Rate
Note.
In general, any other Floating Rate Note that qualifies as a "variable rate
debt instrument" will be converted into an "equivalent" fixed rate debt
instrument for purposes of determining the amount and accrual of original issue
discount and qualified stated interest on the Floating Rate Note. Treasury
Regulations generally require that such a Floating Rate Note be converted into
an "equivalent" fixed rate debt instrument by substituting any qualified
floating rate or qualified inverse floating rate provided for under the terms of
the Floating Rate Note with a fixed rate equal to the value of the qualified
floating rate or qualified inverse floating rate, as the case may be, as of the
Floating Rate Note's issue date. Any objective rate (other than a qualified
inverse floating rate) provided for under the terms of the Floating Rate Note is
converted into a fixed rate that reflects the yield that is reasonably expected
for the Floating Rate Note. In the case of a Floating Rate Note that qualifies
as a "variable rate debt instrument" and provides for stated interest at a fixed
rate in addition to either one or more qualified floating rates or a qualified
inverse floating rate, the fixed rate is initially converted into a qualified
floating rate (or a qualified inverse floating rate, if the Floating Rate Note
provides for a qualified inverse floating rate). Under such circumstances, the
qualified floating rate or qualified inverse floating rate that replaces the
fixed rate must be such that the fair market value of the Floating Rate Note as
of the Floating Rate Note's issue date is approximately the same as the fair
market value of an otherwise identical debt instrument that provides for either
the qualified floating rate or qualified inverse floating rate rather than the
fixed rate. Subsequent to converting the fixed rate into either a qualified
floating rate or a qualified inverse floating rate, the Floating Rate Note is
then converted into an "equivalent" fixed rate debt instrument in the manner
described above.
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Once the Floating Rate Note is converted into an "equivalent" fixed rate
debt instrument pursuant to the foregoing rules, the amount of original issue
discount and qualified stated interest, if any, are determined for the
"equivalent" fixed rate debt instrument by applying the general original issue
discount rules to the "equivalent" fixed rate debt instrument and a U.S. Holder
of the Floating Rate Note will account for such original issue discount and
qualified stated interest as if the U.S. Holder held the "equivalent" fixed rate
debt instrument. In each accrual period, appropriate adjustments will be made to
the amount of qualified stated interest or original issue discount assumed to
have been accrued or paid with respect to the "equivalent" fixed rate debt
instrument in the event that such amounts differ from the actual amount of
interest accrued or paid on the Floating Rate Note during the accrual period.
If a Floating Rate Note does not qualify as a "variable rate debt
instrument," then the Floating Rate Note would be treated as a contingent
payment debt obligation. It is not entirely clear under current law how a
Floating Rate Note would be taxed if such Note were treated as a contingent
payment debt obligation. The proper United States Federal income tax treatment
of Floating Rate Notes that are treated as contingent payment debt obligations
will be more fully described in the applicable Pricing Supplement.
Certain of the Notes (i) may be redeemable at the option of the Company
prior to their stated maturity (a "call option") and/or (ii) may be repayable at
the option of the holder prior to their stated maturity (a "put option"). Notes
containing such features may be subject to rules that differ from the general
rules discussed above. Investors intending to purchase Notes with such features
should consult their own tax advisors, since the original issue discount
consequences will depend, in part, on the particular terms and features of the
purchased Notes.
U.S. Holders may generally, upon election, include in income all interest
(including stated interest, acquisition discount, original issue discount, de
minimis original issue discount, market discount, de minimis market discount,
and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium) that accrues on a debt instrument by using the constant
yield method applicable to original issue discount, subject to certain
limitations and exceptions.
Short-Term Notes. Notes that have a fixed maturity of one year or less
("Short-Term Notes") will be subject to special rules regarding short-term debt
obligations. Under these rules, a Note will be considered to have discount to
the extent the stated redemption price at maturity of the Note exceeds the
Note's issue price. For this purpose, all payments, including stated interest,
will be included in the stated redemption price at maturity. In general, an
individual or other cash method U.S. Holder is not required to accrue such
discount currently unless the U.S. Holder elects to do so. If such an election
is not made, any gain recognized by the U.S. Holder on the sale, exchange or
maturity of the Short-Term Note will be ordinary income to the extent of the
discount accrued on a straight-line basis, or upon election under the
constant-yield method (based on daily compounding), through the date of sale or
maturity, and a portion of the deductions otherwise allowable to the U.S. Holder
for interest on borrowings allocable to the Short-Term Note will be deferred
until a corresponding amount of income is realized. U.S. Holders who report
income for United States Federal income tax purposes under the accrual method,
and certain other holders including banks and dealers in securities, are
required to accrue discount on a Short-Term Note on a straight-line basis unless
an election is made to accrue the discount under a constant-yield method (based
on daily compounding).
Market Discount. If a U.S. Holder purchases a Note, other than a Discount
Note, for an amount that is less than its issue price (or, in the case of a
subsequent purchaser, its stated redemption price at maturity) or, in the case
of a Discount Note, for an amount that is less than its adjusted issue price as
of the purchase date, the amount of the difference will be treated as "market
discount," unless such difference is less than a specified de minimis amount.
Under the market discount rules, a U.S. Holder will be required to treat
any partial principal payment (or, in the case of a Discount Note, any payment
that does not constitute qualified stated interest) on, or any gain realized on
the sale, exchange, retirement or other disposition of, a Note as ordinary
income to the extent of the lesser of (i) the amount of such payment or realized
gain or (ii) the market discount which has not previously been included in
income and is treated as having accrued on such Note at the time of such payment
or disposition. Market discount will be considered to accrue ratably during the
period from the date of
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acquisition to the maturity date of the Note, unless the U.S. Holder elects to
accrue market discount on the basis of semiannual compounding.
A U.S. Holder may be required to defer the deduction of all or a portion of
the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a Note with market discount until the maturity of the Note or
its earlier disposition in a taxable transaction, because a current deduction is
only allowed to the extent the interest expense exceeds an allocable portion of
market discount. A U.S. Holder may elect to include market discount in income
currently as it accrues (on either a ratable or semiannual compounding basis),
in which case the rules described above regarding the treatment as ordinary
income of gain upon the disposition of the Note and upon the receipt of certain
cash payments and regarding the deferral of interest deductions will not apply.
Generally, such currently included market discount is treated as ordinary
interest for United States Federal income tax purposes.
Premium. If a U.S. Holder purchases a Note for an amount that is greater
than its stated redemption price at maturity, such U.S. Holder will be
considered to have purchased the Note with "amortizable bond premium" equal in
amount to such excess. A U.S. Holder may elect to amortize such premium using a
constant-yield method over the remaining term of the Note and may offset
interest otherwise required to be included in respect of the Note during any
taxable year by the amortized amount of such excess for the taxable year.
However, if the Note may be optionally redeemed after the U.S. Holder acquires
it at a price in excess of its stated redemption price at maturity, special
rules would apply which could result in a deferral of the amortization of some
bond premium until later in the term of the Note.
Disposition of a Note. Except as discussed above regarding Short-Term Notes
and market discount, upon the sale, exchange or retirement of a Note, a U.S.
Holder generally will recognize capital gain or loss equal to the difference
between the amount realized on the sale, exchange or retirement (not including
any amount attributable to accrued but unpaid interest) and such U.S. Holder's
adjusted tax basis in the Note. A U.S. Holder's adjusted tax basis in a Note
generally will equal such U.S. Holder's initial investment in the Note increased
by any original issue discount included in income (and accrued market discount,
if any, if the U.S. Holder has included such market discount in income) and
decreased by the amount of any payments, other than qualified stated interest
payments, received and amortizable bond premium taken with respect to such Note.
Such gain or loss generally will be long-term capital gain or loss if the Note
were held for more than one year.
NOTES DENOMINATED OR ON WHICH INTEREST IS PAYABLE IN A FOREIGN CURRENCY
As used herein, "Foreign Currency" means a currency or currency unit other
than U.S. dollars.
Payments of Interest in a Foreign Currency.
CASH METHOD. A U.S. Holder who uses the cash method of accounting for
United States Federal income tax purposes and who receives a payment of interest
on a Note (other than original issue discount or market discount) will be
required to include in income the U.S. dollar value of the Foreign Currency
payment (determined on the date such payment is received), regardless of whether
the payment is in fact converted to U.S. dollars at that time, and such U.S.
dollar value will be the U.S. Holder's tax basis in such Foreign Currency.
ACCRUAL METHOD. A U.S. Holder who uses the accrual method of accounting for
United States Federal income tax purposes, or who otherwise is required to
accrue interest prior to receipt, will be required to include in income the U.S.
dollar value of the amount of interest income (including original issue discount
or market discount and reduced by amortizable bond premium to the extent
applicable) that has accrued and is otherwise required to be taken into account
with respect to a Note during an accrual period. The U.S. dollar value of such
accrued income will be determined by translating such income at the average rate
of exchange for the accrual period or, with respect to an accrual period that
spans two taxable years, at the average rate for the partial period within the
taxable year. A U.S. Holder may elect, however, to translate such accrued
interest income using the rate of exchange on the last day of the accrual period
or, with respect to an accrual period that spans two taxable years, using the
rate of exchange on the last day of the taxable year. If the last day of an
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accrual period is within five business days of the date of receipt of the
accrued interest, a U.S. Holder may translate such interest using the rate of
exchange on the date of receipt. The above election will apply to other debt
obligations held by the U.S. Holder and may not be changed without the consent
of the IRS. A U.S. Holder should consult a tax advisor before making the above
election. A U.S. Holder will recognize exchange gain or loss (which will be
treated as ordinary income or loss) with respect to accrued interest income on
the date such income is received. The amount of ordinary income or loss
recognized will equal the difference, if any, between the U.S. dollar value of
the Foreign Currency payment received (determined on the date such payment is
received) in respect of such accrual period and the U.S. dollar value of
interest income that has accrued during such accrual period (as determined
above).
Purchase, Sale and Retirement of Notes. A U.S. Holder who purchases a Note
with previously owned Foreign Currency will recognize ordinary income or loss in
an amount equal to the difference, if any, between such U.S. Holder's tax basis
in the Foreign Currency and the U.S. dollar fair market value of the Foreign
Currency used to purchase the Note, determined on the date of purchase.
Except as discussed above with respect to Short-Term Notes and market
discount, upon the sale, exchange or retirement of a Note, a U.S. Holder will
recognize taxable gain or loss equal to the difference between the amount
realized on the sale, exchange or retirement and such U.S. Holder's adjusted tax
basis in the Note. Such gain or loss generally will be capital gain or loss
(except to the extent of any accrued market discount not previously included in
the U.S. Holder's income) and will be long-term capital gain or loss if at the
time of sale, exchange or retirement the Note has been held by such U.S. Holder
for more than one year. To the extent the amount realized represents accrued but
unpaid interest, however, such amounts must be taken into account as interest
income, with exchange gain or loss computed as described in "Payments of
Interest in a Foreign Currency" above. If a U.S. Holder receives Foreign
Currency on such a sale, exchange or retirement, the amount realized will be
based on the U.S. dollar value of the Foreign Currency on (i) the date of
receipt of such Foreign Currency in the case of a cash basis U.S. Holder and
(ii) the date of disposition in the case of an accrual basis U.S. Holder. In the
case of a Note that is denominated in Foreign Currency and is traded on an
established securities market, a cash basis U.S. Holder (or, upon election, an
accrual basis U.S. Holder) will determine the U.S. dollar value of the amount
realized by translating the Foreign Currency payment at the spot rate of
exchange on the settlement date of the sale. A U.S. Holder's adjusted tax basis
in a Note will equal the cost of the Note to such holder, increased by the
amounts of any market discount or original issue discount previously included in
income by the holder with respect to such Note and reduced by any amortized
acquisition or other premium and any principal payments received by the holder.
A U.S. Holder's tax basis in a Note, and the amount of any subsequent
adjustments to such holder's tax basis, will be the U.S. dollar value of the
Foreign Currency amount paid for such Note, or of the Foreign Currency amount of
the adjustment, determined on the date of such purchase or adjustment.
Gain or loss realized upon the sale, exchange or retirement of a Note that
is attributable to fluctuations in currency exchange rates will be ordinary
income or loss which will not be treated as interest income or expense. Gain or
loss attributable to fluctuations in exchange rates will equal the difference
between the U.S. dollar value of the Foreign Currency principal amount of the
Note, determined on the date such payment is received or the Note is disposed
of, and the U.S. dollar value of the Foreign Currency principal amount of the
Note, determined on the date the U.S. Holder acquired the Note. Such Foreign
Currency gain or loss will be recognized only to the extent of the total gain or
loss realized by the U.S. Holder on the sale, exchange or retirement of the
Note.
Original Issue Discount. In the case of a Discount Note or Short-Term Note,
(i) original issue discount is determined in units of the Foreign Currency, (ii)
accrued original issue discount is translated into U.S. dollars as described in
"Payments of Interest in a Foreign Currency -- Accrual Method" above and (iii)
the amount of Foreign Currency gain or loss on the accrued original issue
discount is determined by comparing the amount of income received attributable
to the discount (either upon payment, maturity or an earlier disposition), as
translated into U.S. dollars at the rate of exchange on the date of such
receipt, with the amount of original issue discount accrued, as translated
above.
S-21
<PAGE> 23
Premium and Market Discount. In the case of a Note with market discount,
(i) market discount is determined in units of the Foreign Currency, (ii) accrued
market discount taken into account upon the receipt of any partial principal
payment or upon the sale, exchange, retirement or other disposition of the Note
(other than accrued market discount required to be taken into account currently)
is translated into U.S. dollars at the exchange rate on such disposition date
(and no part of such accrued market discount is treated as exchange gain or
loss) and (iii) accrued market discount currently includible in income by a U.S.
Holder for any accrual period is translated into U.S. dollars on the basis of
the average exchange rate in effect during such accrual period, and the exchange
gain or loss is determined upon the receipt of any partial principal payment or
upon the sale, exchange, retirement or other disposition of the Note in the
manner described in "Payments of Interest in a Foreign Currency -- Accrual
Method" above with respect to computation of exchange gain or loss on accrued
interest.
With respect to a Note issued with amortizable bond premium, such premium
is determined in the relevant Foreign Currency and reduces interest income in
units of the Foreign Currency. Although not entirely clear, a U.S. Holder should
recognize exchange gain or loss equal to the difference between the U.S. dollar
value of the bond premium amortized with respect to a period, determined on the
date the interest attributable to such period is received, and the U.S. dollar
value of the bond premium determined on the date of the acquisition of the Note.
Exchange of Foreign Currencies. A U.S. Holder will have a tax basis in any
Foreign Currency received as interest or on the sale, exchange or retirement of
a Note equal to the U.S. dollar value of such Foreign Currency, determined at
the time the interest is received or at the time of the sale, exchange or
retirement. Any gain or loss realized by a U.S. Holder on a sale or other
disposition of Foreign Currency (including its exchange for U.S. dollars or its
use to purchase Notes) will be ordinary income or loss.
NON-U.S. HOLDERS
A non-U.S. Holder will not be subject to United States Federal income taxes
on payments of principal, premium (if any) or interest (including original issue
discount, if any) on a Note, unless such non-U.S. Holder is (i) a direct or
indirect 10% or greater shareholder of the Company, (ii) a controlled foreign
corporation related to the Company or (iii) a bank receiving interest described
in section 881(c)(3)(A) of the Code. To qualify for the exemption from taxation,
the last United States payor in the chain of payment prior to payment to a
non-U.S. Holder (the "Withholding Agent") must have received in the year in
which a payment of interest or principal occurs, or in either of the two
preceding calendar years, a statement that (i) is signed by the beneficial owner
of the Note under penalties of perjury, (ii) certifies that such owner is not a
U.S. Holder and (iii) provides the name and address of the beneficial owner. The
statement may be made on an IRS Form W-8 or a substantially similar form, and
the beneficial owner must inform the Withholding Agent of any change in the
information on the statement within 30 days of such change. If a Note is held
through a securities clearing organization or certain other financial
institutions, the organization or institution may provide a signed statement to
the Withholding Agent. However, in such case, the signed statement must be
accompanied by a copy of the IRS Form W-8 or the substitute form provided by the
beneficial owner to the organization or institution. The Treasury Department is
considering implementation of further certification requirements aimed at
determining whether the issuer of a debt obligation is related to holders
thereof.
Generally, a non-U.S. Holder will not be subject to Federal income taxes on
any amount which constitutes capital gain upon retirement or disposition of a
Note, provided the gain is not effectively connected with the conduct of a trade
or business in the United States by the non-U.S. Holder or such non-U.S. holder
is an individual who is present for 183 days or more in the taxable year of sale
and certain other conditions are met. Certain other exceptions also may be
applicable, and a non-U.S. Holder should consult its tax advisor in this regard.
The Notes will not be includible in the estate of a non-U.S. Holder unless
the individual is a direct or indirect 10% or greater shareholder of the Company
or, at the time of such individual's death, payments in respect of the Notes
would have been effectively connected with the conduct by such individual of a
trade or business in the United States.
S-22
<PAGE> 24
BACKUP WITHHOLDING
Backup withholding of United States Federal income tax at a rate of 31% may
apply to payments made in respect of the Notes to registered owners who are not
"exempt recipients" and who fail to provide certain identifying information
(such as the registered owner's taxpayer identification number) in the required
manner. Generally, individuals are not exempt recipients, whereas corporations
and certain other entities generally are exempt recipients. Payments made in
respect of the Notes to a U.S. Holder must be reported to the IRS, unless the
U.S. Holder is an exempt recipient or establishes an exemption. Compliance with
the identification procedures described in the preceding section would establish
an exemption from backup withholding for those non-U.S. Holders who are not
exempt recipients.
In addition, upon the sale of a Note to (or through) a broker, the broker
must withhold 31% of the entire purchase price, unless either (i) the broker
determines that the seller is a corporation or other exempt recipient or (ii)
the seller provides, in the required manner, certain identifying information
and, in the case of a non-U.S. Holder, certifies that such seller is a non-U.S.
Holder (and certain other conditions are met). Such a sale must also be reported
by the broker to the IRS, unless either (i) the broker determines that the
seller is an exempt recipient or (ii) the seller certifies its non-U.S. status
(and certain other conditions are met). Certification of the registered owner's
non-U.S. status would be made normally on an IRS Form W-8 under penalties of
perjury, although in certain cases it may be possible to submit other
documentary evidence.
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States Federal income tax, provided the required
information is furnished to the IRS.
PLAN OF DISTRIBUTION
The Notes are being offered on a continuous basis by the Company through
Salomon Brothers Inc, J.P. Morgan Securities Inc., Lehman Brothers, Lehman
Brothers Inc. (including its affiliate Lehman Government Securities Inc.) and BA
Securities, Inc. (the "Agents"), each of whom has agreed to use its reasonable
efforts to solicit purchases of the Notes. The Company will pay each Agent a
commission, which may be in the form of a discount, of .125% to .750% of the
principal amount of each Note sold through such Agent, depending upon maturity
of the Note. Commissions on Notes with a maturity greater than 30 years will be
negotiated at the time of sale. The Company may also sell the Notes directly to
investors on its behalf. In the case of the sales made directly by the Company
no commission will be payable. The Company has agreed to reimburse the Agents
for certain expenses.
The Company will have the sole right to accept offers to purchase Notes and
may reject any proposed purchase of Notes in whole or in part. Each Agent will
have the right, in its discretion reasonably exercised, to reject any offer to
purchase Notes received by it in whole or in part.
The Company may also sell Notes to an Agent as principal. Unless otherwise
specified in an applicable Pricing Supplement, any Note sold to an Agent as
principal will be purchased by such Agent at a price equal to 100% of the
principal amount thereof, less a percentage equal to the commission applicable
to an agency trade of identical maturity. Notes may be resold by an Agent to
investors or other purchasers from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined by such Agent at the time of sale, or may be sold to
certain dealers as described below. After the initial public offering of Notes
to be resold to investors or other purchasers, the public offering price (in the
case of Notes to be resold at a fixed offering price), the concession and
discount may be changed. In addition, any Agent may sell Notes to any dealer at
a discount and, unless otherwise specified in an applicable Pricing Supplement,
such discount allowed to any dealer will not be in excess of the discount to be
received by the Agent from the Company.
The Agents, and certain affiliates thereof, engage in transactions with and
perform services for the Company in the ordinary course of business.
The Company has agreed to indemnify each Agent against certain liabilities,
including liabilities under the Securities Act of 1993 (the "Act"), or to
contribute to payments such Agent may be required to make in respect thereof.
Each Agent may be deemed to be an "Underwriter" within the meaning of the Act.
S-23
<PAGE> 25
GLOSSARY
"Act" has the meaning set forth on page S-23.
"adjusted issue price" has the meaning set forth on page S-17.
"Agents" has the meaning set forth on page S-23.
"Amortized Face Amount" has the meaning set forth on page S-11.
"Base Rate" has the meaning set forth on page S-2.
"Book-Entry Note" has the meaning set forth on the cover page.
"Business Day" has the meaning set forth on page S-3.
"Calculation Agent" has the meaning set forth on page S-7.
"Calculation Date" has the meaning set forth on page S-7.
"CD Rate" has the meaning set forth on page S-7.
"CD Rate Note" has the meaning set forth on page S-5.
"Certificated Note" has the meaning set forth on the cover page.
"Code" has the meaning set forth on page S-11.
"Commercial Paper Rate" has the meaning set forth on page S-8.
"Commercial Paper Rate Note" has the meaning set forth on page S-5.
"Company" has the meaning set forth on the cover page.
"Components" has the meaning set forth on page S-15.
"Composite Quotations" has the meaning set forth on page S-8.
"Depositary" has the meaning set forth on page S-13.
"Designated Exchange Rate" has the meaning set forth on page S-12.
"Designated LIBOR Page" has the meaning set forth on page S-9.
"Dual Currency Notes" has the meaning set forth on page S-12.
"ECU" means one or more European Currency Units.
"Eleventh District Cost of Funds Rate" has the meaning set forth on page
S-8.
"Eleventh District Cost of Funds Rate Notes" has the meaning set forth on
page S-5.
"Exchange Rate Agent" has the meaning set forth on page S-3.
"Face Amount Currency" has the meaning set forth on page S-12.
"Federal Funds Rate" has the meaning set forth on page S-9.
"Federal Funds Rate Note" has the meaning set forth on page S-5.
"Fixed Rate Note" has the meaning set forth on the cover page and S-2.
"Floating Rate Note" has the meaning set forth on the cover page and S-2.
"Foreign Currency" has the meaning set forth on page S-20.
"H.15(519)" has the meaning set forth on page S-7.
"home currency" has the meaning set forth on page S-14.
"Index" has the meaning set forth on page S-9.
"Index Maturity" has the meaning set forth on page S-7.
A-1
<PAGE> 26
"Indexed Notes" has the meaning set forth on page S-12.
"Initial Interest Rate" has the meaning set forth on page S-7.
"Interest Determination Date" has the meaning set forth on page S-7.
"Interest Payment Date" has the meaning set forth on page S-6.
"Interest Payment Period" has the meaning set forth on page S-5.
"Interest Reset Date" has the meaning set forth on page S-6.
"Interest Reset Period" has the meaning set forth on page S-5.
"Issue Price" has the meaning set forth on page S-3.
"LIBOR" has the meaning set forth on pages S-9 and S-10.
"LIBOR Determination Date" has the meaning set forth on page S-9.
"LIBOR Note" has the meaning set forth on page S-5.
"LIBOR Telerate" has the meaning set forth on page S-9.
"London Banking Day" has the meaning set forth on page S-3.
"Market Exchange Rate" has the meaning set forth on page S-4.
"Maturity Date" has the meaning set forth on page S-3.
"Maximum Interest Rate" has the meaning set forth on page S-5.
"Minimum Interest Rate" has the meaning set forth on page S-5.
"Money Market Yield" has the meaning set forth on page S-8.
"non-U.S. Holder" has the meaning set forth on page S-16.
"Notes" has the meaning set forth on the cover page.
"objective rate" has the meaning set forth on page S-18.
"Option Election Date" has the meaning set forth on page S-12.
"Optional Payment Currency" has the meaning set forth on page S-12.
"Original Issue Date" has the meaning set forth on page S-3.
"Original Issue Discount Note" has the meaning set forth on page S-3.
"Paying Agent" has the meaning set forth on page S-3.
"Pricing Supplement" has the meaning set forth on the cover page.
"Prime Rate" has the meaning set forth on page S-10.
"Prime Rate Note" has the meaning set forth on page S-5.
"qualified floating rate" has the meaning set forth on page S-17.
"qualified inverse floating rate" has the meaning set forth on page S-18.
"qualified stated interest" has the meaning set forth on page S-16.
"Record Date" has the meaning set forth on page S-4.
"Reuters Screen NYMF Page" has the meaning set forth on page S-10.
"Short-Term Notes" has the meaning set forth on page S-19.
"Specified Currency" means the currency in which a Note is denominated.
"Spread" has the meaning set forth on page S-5.
A-2
<PAGE> 27
"Spread Multiplier" has the meaning set forth on page S-5.
"Tranche" has the meaning set forth on page S-12.
"Treasury bills" has the meaning set forth on page S-11.
"Treasury Rate" has the meaning set forth on page S-11.
"Treasury Rate Note" has the meaning set forth on page S-5.
"U.S. Holder" has the meaning set forth on page S-16.
"Withholding Agent" has the meaning set forth on page S-22.
"Zero Coupon Note" has the meaning set forth on page S-2.
A-3
<PAGE> 28
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
PROSPECTUS
Subject to Completion, dated February 13, 1995
U.S. $350,000,000
JOHNSON CONTROLS, INC.
DEBT SECURITIES AND
WARRANTS TO PURCHASE DEBT SECURITIES
Johnson Controls, Inc. (the "Company") intends to offer from time to time up to
U.S. $350,000,000 aggregate principal amount of its debt securities (the "Debt
Securities"), or warrants to purchase the Debt Securities (the "Debt Warrants").
The Debt Securities and Debt Warrants (collectively, the "Securities") will be
offered in one or more separate series or issues in amounts, at prices, in
currencies or currency units and on terms to be determined at the time of
offering. The Debt Warrants may be offered with the Debt Securities or
separately. See "Plan of Distribution." If so provided in the accompanying
supplement to this Prospectus (the "Prospectus Supplement"), the Debt Securities
of any series may be represented by a single global note registered in the name
of a depositary's nominee and, if so represented, beneficial interests in the
global note will be shown on, and transfers thereof will be effected only
through, records maintained by the depositary and its participants.
The terms of the Debt Securities, including, where applicable, the specific
designations, aggregate principal amount, authorized denominations, maturity,
rate (or manner of calculation thereof) and time of payment of interest, if any,
and any redemption or repayment terms (and similar information with respect to
the Debt Securities purchasable upon exercise of each Debt Warrant), the
currency, currencies, or currency unit or units in which the Debt Securities
shall be payable, the terms of the Debt Warrants, including the exercise price,
detachability, expiration date and other terms, the net proceeds to the Company,
the names of, and the principal amount of Debt Securities or number of Debt
Warrants to be purchased by or through, underwriters, dealers or agents, if any,
the compensation of such persons and other special terms in connection with the
offering and sale of the applicable series of the Debt Securities and the Debt
Warrants, as the case may be, in respect of which this Prospectus is being
delivered are set forth in the accompanying Prospectus Supplement (the
"Prospectus Supplement").
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 or
dealers. See "Plan of Distribution."
-------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------------
The date of this Prospectus is , 1995.
<PAGE> 29
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY AGENT, UNDERWRITER OR DEALER. THIS PROSPECTUS
AND THE PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE DEBT SECURITIES OR DEBT WARRANTS IN
ANY JURISDICTION TO ANY PERSON TO WHOM SUCH OFFER WOULD BE UNLAWFUL. THE
DELIVERY OF THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT AT ANY TIME DOES NOT
IMPLY THAT THE INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
AVAILABLE INFORMATION
Johnson Controls, Inc., a Wisconsin corporation ("Johnson Controls" or the
"Company"), is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Proxy statements, reports and other information
concerning the Company can be inspected and copied at the Commission's Office at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the Commission's Regional Offices located at Citicorp Center, 500 West
Madison Street, Chicago, Illinois 60661; and Seven World Trade Center, New York,
New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. Such reports, proxy statements and other information
concerning the Company may also be inspected at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a registration statement on Form
S-3 (together with all amendments and exhibits, the "Registration Statement")
under the Securities Act of 1933, as amended (the "1933 Act"), with respect to
the Debt Securities and Debt Warrants offered hereby. This Prospectus does not
contain all 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 pertaining to the Debt Securities, Debt
Warrants and the Company, reference is made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the Commission
pursuant to the Exchange Act (File No. 1-5097) and are hereby incorporated
herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1994.
2. The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended December 31, 1994.
All documents filed by the Company 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 and Debt Warrants shall
be deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF
THIS PROSPECTUS IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF SUCH PERSON, A
COPY OF ANY AND ALL OF THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE (NOT
INCLUDING THE EXHIBITS TO SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY
INCORPORATED BY REFERENCE IN SUCH DOCUMENTS). REQUESTS FOR SUCH COPIES SHOULD BE
DIRECTED TO SECRETARY, JOHNSON CONTROLS, INC., 5757 NORTH GREEN BAY AVENUE,
MILWAUKEE, WISCONSIN 53209, TELEPHONE (414) 228-1200.
2
<PAGE> 30
THE COMPANY
The Company has four business segments: automotive, controls, plastics and
battery. The automotive segment is the world's largest independent supplier of
automotive seating systems and a leading supplier of automotive seating
components. The controls segment is a leading worldwide supplier of facility
services and control systems to education, health care, office, government,
industrial and retail buildings. The plastics segment is the world's largest
producer of polyethylene terepthalate plastic containers with manufacturing
plants in the United States and Europe, and also is the leading worldwide
supplier of plastic blowmolding machinery, injection mold tooling and parts. The
battery segment is a leading supplier to the North American automotive battery
market, serving both the original equipment and replacement battery markets.
Johnson Controls was founded in 1885 as the Johnson Electric Service
Company. Johnson Controls' principal executive offices are located at 5757 North
Green Bay Avenue, Milwaukee, Wisconsin 53209 and its phone number is (414)
228-1200.
CERTAIN FACTORS RELATING TO FOREIGN CURRENCIES
Debt Securities denominated or payable in foreign currencies or currency
units may entail significant risks. These risks include, without limitation, the
possibility of significant fluctuations in the foreign currency markets, the
imposition or modification of foreign exchange controls and potential
illiquidity in the secondary market. These risks will vary depending upon the
currency or currencies involved. These risks will be more fully described in the
Prospectus Supplement relating thereto.
USE OF PROCEEDS
Except as may be set forth in the Prospectus Supplement, the net proceeds
from the sale of the Debt Securities and the proceeds, if any, from the exercise
of Debt Warrants will be used for general corporate purposes.
DESCRIPTION OF THE DEBT SECURITIES
The following description of the Debt Securities sets forth the material
terms and provisions of the Debt Securities to which any Prospectus Supplement
may relate. The Debt Securities are to be issued under an Indenture, dated as of
, 1995 (the "Indenture"), between the Company and Chemical Bank
Delaware, as Trustee (the "Trustee"), a copy of the form of which is filed as an
exhibit to the Registration Statement of which this Prospectus is a part. The
particular terms of the Debt Securities offered by any Prospectus Supplement
(the "Offered Debt Securities") and the extent, if any, to which such general
provisions may apply to the Offered Debt Securities, will be described in the
Prospectus Supplement relating to such Offered Debt Securities.
The following summaries of the material provisions of the Indenture do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all of the provisions of the Indenture, including the
definitions therein of certain terms. Wherever particular articles, sections or
defined terms of the Indenture are referred to, it is intended that such
articles, sections or defined terms shall be incorporated herein by reference,
and the statement in connection with which such reference is made is qualified
in its entirety by such reference.
GENERAL
The Debt Securities will rank equally with all other unsecured and
unsubordinated debt of the Company. The Indenture does not limit the amount of
debt, either secured or unsecured, which may be issued by the Company under the
Indenture or otherwise. The Debt Securities may be issued in one or more series
with the same of various maturities and may be sold at par, a premium or an
original issue discount. Debt Securities sold at an original issue discount may
bear no interest or interest at a rate which is below market rates.
3
<PAGE> 31
Since the Company is a holding company, the right of the Company, and hence
the rights of creditors and shareholders of the Company, to participate in any
distribution of assets of any subsidiary upon its liquidation or reorganization
or otherwise is accordingly subject to prior claims of creditors of the
subsidiary, except to the extent that claims of the Company as a creditor of the
subsidiary may be recognized.
The Prospectus Supplement relating to the particular Debt Securities
offered thereby will describe the following terms of the Offered Debt
Securities: (1) the title of the Offered Debt Securities; (2) any limit on the
aggregate principal amount of the Offered Debt Securities; (3) the price
(expressed as a percentage of the aggregate principal amount thereof) at which
the Offered Debt Securities will be issued; (4) the date or dates on which the
Offered Debt Securities will mature; (5) the rate or rates (which may be fixed
or variable) per annum at which the Offered Debt Securities will bear interest,
if any, or the method by which such rate or rates will be determined; (6) the
date from which such interest will accrue, the dates on which such interest, if
any, will be payable, the date on which payment of such interest will commence
and any Regular Record Dates applicable to the dates on which interest will be
so payable; (7) the place or places where the principal of (and premium, if any)
and interest, if any, on the series will be payable and each office or agency
where the Offered Debt Securities may be presented for transfer or exchange; (8)
the dates on which and the price or prices at which the Offered Debt Securities
will, pursuant to any mandatory sinking fund provisions, or may, pursuant to any
optional sinking fund provisions, be redeemed by the Company, and the other
terms and provisions of such sinking fund; (9) the currency in which payment of
the principal of, premium, if any, and interest on, the Offered Debt Securities
will be payable, if other than the currency of the United States; (10) the
period or periods within which, and the terms and conditions upon which, an
election may be made by the Company or a holder, as the case may be, for payment
of the principal (and premium, if any) and interest, if any, on the series in
the currency, other than that in which the series is stated to be payable; (11)
whether such Offered Debt Securities are to be issued in the form of one or more
permanent Global Securities and, if so, the identity of the Depositary for such
Global Security or Securities; (12) the date after which and the price or prices
at which and the currency in which the Offered Debt Securities may, pursuant to
any optional redemption provisions, be redeemed at the option of the Company or
of the Holder thereof and the other terms and provisions of such optional
redemption; (13) the inapplicability of certain provisions relating to discharge
and defeasance described below under "Defeasance, Satisfaction and Discharge
Prior to Maturity or Redemption"; (14) if other than denominations of $1,000 and
any integral multiple thereof, the denominations in which the Offered Debt
Securities will be issuable; (15) information with respect to book-entry
procedures, if any; (16) any deletions from, modifications of or additions to
the Events of Default or covenants with respect to the Offered Debt Securities;
and (17) any other terms of the Offered Debt Securities (which terms shall not
be inconsistent with the provisions of the Indenture). Unless otherwise
indicated in the Prospectus Supplement, principal of (and premium, if any) and
interest, if any, on the Offered Debt Securities will be payable, and transfers
of the Offered Debt Securities will be registrable, at the Corporate Trust
Office of the Trustee, provided that at the option of the Company payment of
interest may be made by check mailed to the address of the person entitled
thereto as it appears in the Debt Security Register. (Sections 3.01 and 3.03)
Unless otherwise indicated in the Prospectus Supplement, the Offered Debt
Securities will be issued only in fully registered form without coupons in
denominations of U.S. $1,000 or any integral multiple thereof, or the equivalent
thereof in Foreign Currency. (Section 3.02) No service charge will be made for
any registration of transfer or exchange of Offered 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 3.06)
If the purchase price of any of the Offered Debt Securities is denominated
in a foreign currency or currencies or foreign currency unit or units or if the
principal of (and premium, if any) or interest, if any, on any series of Offered
Debt Securities is payable in a foreign currency or currencies or foreign
currency unit or units, the restrictions, elections, tax consequences, specific
terms and other information with respect to such issue of Offered Debt
Securities and such foreign currency or currencies or foreign currency unit or
units will be set forth in the applicable Prospectus Supplement relating
thereto.
The Company shall not be required to (i) issue, register the transfer of,
or exchange Debt Securities of any series during the period from 15 days prior
to the mailing of notice of redemption of Debt Securities of
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that series to the date of such mailing or (ii) register the transfer of or
exchange any Debt Security so selected for redemption, except the unredeemed
portion of any Debt Security being redeemed in part. (Section 3.06)
Some of the Debt Securities may be issued under the Indenture as Original
Issue Discount Securities to be sold at a substantial discount below their
principal amount. Federal income tax and other considerations applicable to any
such Original Issue Discount Securities will be described in the Prospectus
Supplement relating thereto.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a Depositary identified in the Prospectus Supplement relating to such
series.
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. The Company anticipates that the following provisions will apply to
all depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book-entry registration and transfer
system, the respective principal amounts of the Debt Securities represented by
such Global Security. Such accounts shall be designated by the underwriters or
agents with respect to such Debt Securities or by the Company if such Debt
Securities are offered and sold directly by the Company. Ownership of beneficial
interests in a Global Security will be limited to persons that have accounts
with the Depositary for such Global Security or its nominee ("participants") or
persons that may hold interests through participants. Ownership of beneficial
interests in such Global Security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the Depositary or
its nominee (with respect to interests of participants) for such Global Security
and on the records of participants (with respect to interests of persons other
than participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or Holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture governing such Debt Securities. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled to have Debt
Securities of the series represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of Debt
Securities of such series in definitive form and will not be considered the
owners or holders thereof under the Indenture governing Debt Securities.
Principal of, premium, if any, and interest payments on Debt Securities
registered in the name of a Depositary or its nominee will be made to the
Depositary or its nominee, as the case may be, as the registered owner of the
Global Security representing such Debt Securities. Neither the Company, the
Trustee for such Debt Securities, any Paying Agent nor the Security Registrar
for such Debt Securities will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of the Global Security for such Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Company expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal of, premium, if any, or
interest thereon, will credit immediately participants' accounts with payments
in amounts proportionate to their respective beneficial interest in the
principal amount of the Global Security for such Debt Securities as shown on the
records of such Depositary or its nominee. The Company also expects that
payments by participants to owners of beneficial interests in such Global
Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers registered in "street name," and will be the
responsibility of such participants.
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If a Depositary for a series of Debt Securities is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed by
the Company within 90 days, the Company will issue Debt Securities of such
series in definitive form in exchange for the Global Security representing such
series of Debt Securities. Further, if the Company so specifies with respect to
the Debt Securities of a series, an owner of a beneficial interest in a Global
Security representing Debt Securities of such series may, on terms acceptable to
the Company and the Depositary for such Global Security, receive Debt Securities
of such series in definitive form. In any such instance, an owner of a
beneficial interest in a Global Security will be entitled to physical delivery
in definitive form of Debt Securities of the series represented by such Global
Security equal in principal amount to such beneficial interest and to have such
Debt Securities registered in its name. Debt Securities of such series so issued
in definitive form will be issued in denominations, unless otherwise specified
by the Company, of U.S. $1,000 and integral multiples thereof.
CERTAIN DEFINITIONS
The following terms are defined substantially as follows in Section 1.01 of
the Indenture and are used herein as so defined.
The term "Consolidated Current Liabilities" means the aggregate of the
current liabilities of the Company and its Restricted Subsidiaries (excluding
liabilities of Unrestricted Subsidiaries and excluding billings on uncompleted
contracts in excess of related costs and profits) appearing on the most recent
available consolidated balance sheet of the Company and its Restricted
Subsidiaries, all in accordance with generally accepted accounting principles.
In no event shall Consolidated Current Liabilities include any obligation of the
Company and its Restricted Subsidiaries issued under a revolving credit or
similar agreement if the obligation issued under such agreement matures by its
terms within 12 months from the date thereof but by the terms of such agreement
such obligation may be renewed or extended or the amount thereof reborrowed or
refunded at the option of the Company or any Restricted Subsidiary for a term in
excess of 12 months from the date of determination. (Section 1.01)
The term "Consolidated Net Tangible Assets" means Consolidated Tangible
Assets after deduction of Consolidated Current Liabilities. (Section 1.01)
The term "Consolidated Tangible Assets" means the aggregate of all assets
of the Company and its Restricted Subsidiaries (including the value of all
existing Sale and Leaseback Transactions (as defined) and any assets resulting
from the capitalization of other long-term lease obligations in accordance with
generally accepted accounting principles, but excluding the value of assets of
or investments in any Unrestricted Subsidiary or any non-majority owned
Subsidiary) appearing on the most recent available consolidated balance sheet of
the Company and its Restricted Subsidiaries at their net book values, after
deducting related depreciation, amortization and other valuation reserves and
excluding (a) any capital write-ups resulting from reappraisals of assets or of
other investments after December 31, 1994 (other than a write-up of any assets
constituting part of the assets and business of another corporation made in
connection with the acquisition, direct or indirect, of the assets and business
of such other corporation) except as permitted in accordance with generally
accepted accounting principles, (b) treasury stock, (c) patent and trademark
rights, goodwill, unamortized discounts and expenses and any other intangible
items, all prepared in accordance with generally accepted accounting principles.
(Section 1.01)
The term "Funded Debt" means all indebtedness for money borrowed having a
maturity of more than twelve months from the date of the most recent
consolidated balance sheet of the Company and its Restricted Subsidiaries
(excluding indebtedness of Unrestricted Subsidiaries) or renewable and
extendable beyond twelve months at the option of the borrower and all
obligations in respect of lease rentals which under generally accepted
accounting principles would be shown on the consolidated balance sheet of the
Company as a liability item other than a current liability; provided, however,
that Funded Debt shall not include any of the foregoing to the extent that such
indebtedness or obligations are not required by generally accepted accounting
principles to be shown on the balance sheet of the Company.
The term "Principal Property" means any manufacturing plant, warehouse,
office building or parcel of real property (including fixtures but excluding
leases and other contract rights which might otherwise be
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deemed real property) owned by the Company or any Restricted Subsidiary, whether
owned on the date of the Indenture or thereafter, provided each such plant,
warehouse, office building or parcel of real property has a gross book value
(without deduction for any depreciation reserves) at the date as of which the
determination is being made of in excess of two percent of the Consolidated Net
Tangible Assets of the Company and the Restricted Subsidiaries, other than any
such plant, warehouse, office building or parcel of real property or portion
thereof which, in the opinion of the Board of Directors of the Company
(evidenced by a certified Board Resolution delivered to the Trustee), is not of
material importance to the business conducted by the Company and its Restricted
Subsidiaries taken as a whole. (Section 1.01)
The term "Restricted Subsidiary" means (a) any Subsidiary other than an
Unrestricted Subsidiary and (b) any Subsidiary which was an Unrestricted
Subsidiary but which, subsequent to December 31, 1994, is designated by the
Company (by Board Resolution) to be a Restricted Subsidiary; provided, however,
that the Company may not designate any such Subsidiary to be a Restricted
Subsidiary if the Company would thereby breach any covenant or agreement
contained in the Indenture (on the assumption that any Secured Debt of such
Subsidiary was incurred at the time of such designation and that any Sale and
Leaseback Transaction (as defined) to which such Subsidiary is then a party was
entered into at the time of such designation). (Section 1.01)
The term "Secured Debt" means indebtedness for borrowed money and any
Funded Debt which is secured by a Security Interest in (a) any Principal
Property or (b) any shares of capital stock or indebtedness of any Restricted
Subsidiary.
The term "Subsidiary" means any corporation of which the Company, or the
Company and one or more Subsidiaries, or any one or more Subsidiaries, directly
or indirectly own more than 50% of the Voting Stock (as defined). (Section 1.01)
The term "Unrestricted Subsidiary" means (a) any Subsidiary acquired or
organized after March 31, 1989; provided, however, that such Subsidiary shall
not be a successor, directly or indirectly, to any Restricted Subsidiary; (b)
any Subsidiary whose principal business or assets are located outside the United
States of America, its territories and possessions, Puerto Rico or Canada; (c)
any Subsidiary the principal business of which consists of financing or
assisting in financing of customer construction projects or the acquisition or
disposition of products of dealers, distributors or other customers; (d) any
Subsidiary engaged in the insurance business or whose principal business is the
ownership, leasing, purchasing, selling or development of real property; and (e)
any Subsidiary substantially all the assets of which consist of stock or other
securities of a Subsidiary or Subsidiaries referred to above in this sentence,
unless and until any such Subsidiary is designated to be a Restricted
Subsidiary, as referred to above. (Section 1.01)
LIMITATION ON SECURED DEBT
The Company will not, and will not permit any Restricted Subsidiary to,
create, assume, or guarantee any Secured Debt without making effective provision
for securing the Debt Securities equally and ratably with such Secured Debt
(Section 5.05). This covenant does not apply to debt secured by (i) certain
purchase money mortgages created to secure payment for the acquisition or
construction of any property including, but not limited to, any indebtedness
incurred by the Company or a Restricted Subsidiary prior to, at the time of, or
within 180 days after the later of the acquisition, the completion of
construction (including any improvements on an existing property) or the
commencement of commercial operation of such property, which indebtedness is
incurred for the purpose of financing all or any part of the purchase price of
such property or construction or improvements on such property, (ii) mortgages,
pledges, liens, security interests or encumbrances (collectively referred to
herein as "security interests") on property, or any conditional sales agreement
or any title retention with respect to property, existing at the time of
acquisition thereof, whether or not assumed by the Company or a Restricted
Subsidiary, (iii) security interests on property or shares of capital stock or
indebtedness of any corporation or firm existing at the time such corporation or
firm becomes a Restricted Subsidiary, (iv) security interests in property or
shares of capital stock or indebtedness of a corporation existing at the time
such corporation is merged into or consolidated with the Company or a Restricted
Subsidiary or at the time of a sale, lease, or other disposition of the
properties of a corporation or firm as an
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entirety or substantially as an entirety to the Company or a Restricted
Subsidiary, provided that no such security interests shall extend to any other
Principal Property of the Company or such Restricted Subsidiary prior to such
acquisition or to other Principal Property thereafter acquired other than
additions to such acquired property, (v) security interests on property of the
Company or a Restricted Subsidiary in favor of the United States of America or
any state thereof, or in favor of any other country, or any department, agency,
instrumentality or political subdivision thereof (including, without limitation,
security interests to secure indebtedness of the pollution control or industrial
revenue type) in order to permit the Company or any Restricted Subsidiary to
perform a contract or to secure indebtedness incurred for the purpose of
financing all or any part of the purchase price for the cost of constructing or
improving the property subject to such security interests or which is required
by law or regulation as a condition to the transaction of any business or the
exercise of any privilege, franchise or license, (vi) security interests on any
property or assets of any Restricted Subsidiary to secure indebtedness owing by
it to the Company or to another Restricted Subsidiary, (vii) any mechanics',
materialmen's, carriers' or other similar lien arising in the ordinary course of
business (including construction of facilities) in respect of obligations which
are not yet due or which are being contested in good faith; (viii) any security
interest for taxes, assessments or government charges or levies not yet
delinquent, or already delinquent, but the validity of which is being contested
in good faith; (ix) any security interest arising in connection with legal
proceedings being contested in good faith, including any judgment lien so long
as execution thereof is being stayed; (x) landlords' liens on fixtures located
on premises leased by the Company or a Restricted Subsidiary in the ordinary
course of business; or (xi) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any security
interest referred to in the foregoing clauses (i) to (x) inclusive. (Section
5.05)
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS
Sale and Leaseback Transactions (which are defined to include, among other
things, certain leases of more than three years) by the Company or any
Restricted Subsidiary of any Principal Property, completion of construction of
which and commencement of full operation of which have occurred more than 180
days prior to such sale or transfer, will be prohibited unless either (a) the
Company or such Restricted Subsidiary would be entitled to incur Secured Debt
equal in amount to the amount realized or to be realized upon such sale or
transfer secured by a lien on the Principal Property to be leased without
equally and ratably securing the Securities, or (b) an amount equal to the value
(as defined) of the Principal Property so leased is applied (subject to credits
for certain voluntary retirements of the Debt Securities) to the retirement,
within 120 days of the effective date of such arrangement, of indebtedness for
borrowed money incurred or assumed by the Company or a Restricted Subsidiary
which is recorded as Funded Debt (defined to include the Debt Securities and
other long-term indebtedness of the Company or any Restricted Subsidiary) as
shown on the most recent consolidated balance sheet of the Company and which in
the case of such indebtedness of the Company, is not subordinate and junior in
right of payment to the prior payment of the Debt Securities. (Section 5.06)
EXEMPTED INDEBTEDNESS
Notwithstanding the limitations on Secured Debt and Sale and Leaseback
Transactions described above, the Company and any one or more Restricted
Subsidiaries may, without securing the Debt Securities, issue, assume, or
guarantee Secured Debt which would otherwise be subject to the foregoing
restrictions, provided that, after giving effect thereto, the aggregate amount
of such Secured Debt then outstanding (not including Secured Debt permitted
under the foregoing exceptions) and the aggregate value of Sale and Leaseback
Transactions (other than Sale and Leaseback Transactions in connection with
which indebtedness has been, or will be, retired in accordance with clause (b)
of the preceding paragraph) at such time does not exceed 10% of Consolidated Net
Tangible Assets. (Section 5.05(b))
RESTRICTIONS ON TRANSFER OF PRINCIPAL PROPERTY TO CERTAIN SUBSIDIARIES
The Indenture provides that, so long as the Debt Securities of any series
are outstanding, the Company will not, and will not cause or permit any
Restricted Subsidiary to, transfer any Principal Property to any Subsidiary
which was not a Restricted Subsidiary at the time of such transfer unless it
shall apply within one
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year after the effective date of such transaction, or shall have committed
within one year of such effective date to apply, an amount equal to the fair
value of such Principal Property at the time of such transfer (as determined by
the Board of Directors of the Company) (i) to the acquisition, construction,
development or improvement of properties, facilities or equipment which are, or
upon such acquisition, construction, development or improvement will be, a
Principal Property or Properties or a part thereof or (ii) to the redemption of
Securities or (iii) to the repayment of Funded Debt of the Company or any
Restricted Subsidiary (other than Funded Debt owed to any Restricted
Subsidiary), or in part to such acquisition, construction, development or
improvement and in part to such redemption and/or repayment. In lieu of applying
all or any part of such amount to such redemption the Company may, within one
year of such transfer, deliver to the Trustee Debt Securities of any series
(other than Debt Securities made the basis of a reduction in a mandatory sinking
fund payment) for cancellation and thereby reduce the amount to be applied to
the redemption of Debt Securities by an amount equivalent to the aggregate
principal amount of the Debt Securities so delivered. (Section 5.07)
MERGER
The Indenture provides that the Company may, without the consent of the
Holders, consolidate with, or sell, lease or convey all or substantially all of
its assets to, or merge into any other corporation, provided that in any such
case, (i) the successor corporation shall be a corporation organized and
existing under the laws of the United States or a State thereof and such
corporation shall expressly assume the due and punctual payment of the principal
of (and premium, if any) and interest on all the Debt Securities, according to
their tenor, and the due and punctual performance and observance of all the
covenants and conditions of the Indenture to be performed by the Company by
supplemental indenture satisfactory to the Trustee, executed and delivered to
the Trustee by such corporation; and (ii) immediately after giving effect to
such transaction, no Default shall have occurred and be continuing. (Article
Twelve)
Other than the covenants described above, or as set forth in any
accompanying Prospectus Supplement, the Indenture does not contain any covenants
or other provisions designed to afford holders of the Debt Securities protection
in the event of a takeover, recapitalization or a highly leveraged transaction
involving the Company.
MODIFICATION OF THE INDENTURE
With the consent of the holders ("Holders") of more than 50% in aggregate
principal amount of any series of Debt Securities then outstanding, waivers,
modifications and alterations of the terms of the Indenture may be made which
affect the rights of the Holders of such series of Debt Securities, except that
no such modification or alteration may be made which will (a) extend the time or
terms of payment of the principal at maturity of, or the interest on, any such
series of Debt Securities, or reduce principal or premium or the rate of
interest, without the consent of the Holder thereof, or (b) without the consent
of all of the Holders of any series of Debt Securities then outstanding, reduce
the percentage of Debt Securities of any such series, the Holders of which are
required to consent (i) to any such supplemental indenture, (ii) to rescind and
annul a declaration that the Debt Securities of any series are due and payable
as a result of the occurrence of an Event of Default, (iii) to waive any past
Event of Default under the Indenture and its consequences and (iv) to waive
compliance with certain other provisions contained in the Indenture. (Sections
5.09, 11.01 and 11.02) In addition, as indicated under "Events of Default"
below, Holders of more than 50% in aggregate principal amount of the Debt
Securities of any series then outstanding may waive past Events of Default in
certain circumstances and may direct the Trustee in enforcement of remedies.
(Section 7.07) The Company and the Trustee may, without the consent of any
Holders, modify and supplement the Indenture (i) to evidence the succession of
another corporation to the Company under the Indenture; (ii) to evidence and
provide for the replacement of the Trustee; (iii) with the Company's
concurrence, to add to the covenants of the Company for the benefit of the
Holders; (iv) to modify the Indenture to permit the qualification of any
supplemental indenture under the Trust Indenture Act of 1939; and for certain
other purposes. (Section 11.01)
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DEFEASANCE, SATISFACTION AND DISCHARGE PRIOR TO MATURITY OR REDEMPTION
Defeasance of any Series. If the Company shall deposit with the Trustee, in
trust, at or before maturity or redemption, lawful money or direct obligations
of the United States (or of any other government which issued the currency in
which the Debt Securities of a series are denominated) or obligations the
principal of and interest on which are guaranteed by the United States (or by
such other government) in such amounts and maturing at such times that the
proceeds of such obligations to be received upon the respective maturities and
interest payment dates of such obligations will provide funds sufficient, in the
opinion of a nationally-recognized firm of independent public accountants, to
pay when due the principal (and premium, if any) and interest to maturity or to
the redemption date, as the case may be, with respect to any series of Debt
Securities then outstanding, then the Company may cease to comply with the terms
of the Indenture, including the restrictive covenants described under
"Limitation on Secured Debt," "Limitation on Sale and Leaseback Transactions"
and "Restrictions on Transfer of Principal Property to Certain Subsidiaries"
above and the Events of Default described in clauses (d) and (e) under "Events
of Default" below, except for (1) the Company's obligation to duly and
punctually pay the principal of (and premium, if any) and interest on such
series of Debt Securities if the Debt Securities are not paid from the money or
securities held by the Trustee, (2) the Events of Default described in clauses
(a), (b), (c), (f) and (g) under "Events of Default" below, and (3) certain
other provisions of the Indenture including, among others, those relating to
registration, transfer and exchange, lost or stolen securities, maintenance of
place of payment and, to the extent applicable to such series, the redemption
and sinking fund provisions of the Indenture. Defeasance of Debt Securities of
any series is subject to the satisfaction of certain specified conditions,
including, among others, (i) the absence of an Event of Default at the date of
the deposit, and (ii) the perfection of the Holders' security interest in such
deposit. (Section 13.02)
Satisfaction and Discharge of any Series. Upon the deposit of money or
securities contemplated above and the satisfaction of certain conditions, the
Company may also cease to comply with its obligation duly and punctually to pay
the principal of (and premium, if any) and interest on a particular series of
Debt Securities, or with any Events of Default with respect thereto, and
thereafter the Holders of such series of Debt Securities shall be entitled only
to payment out of the money or securities deposited with the Trustee. Such
conditions include, among others, except in certain limited circumstances
involving a deposit made within one year of maturity or redemption, (i) the
absence of an Event of Default at the date of deposit or on the 91st day
thereafter, (ii) the delivery to the Trustee by the Company of an opinion of
nationally-recognized tax counsel, or receipt by the Company from, or
publication of a ruling by the United States Internal Revenue Service, to the
effect that 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 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 and discharge had not occurred, and (iii) that such satisfaction and
discharge will not result in the delisting of the Debt Securities of that series
from any nationally-recognized exchange on which they are listed. (Section
13.01)
Federal Income Tax Consequences. Under current Federal income tax law, the
deposit and defeasance described above under "Defeasance of any Series" will not
result in a taxable event to any Holder of Debt Securities or otherwise affect
the Federal income tax consequences of an investment in the Debt Securities of
any series.
The Federal income tax treatment of the deposit and discharge described
above under "Satisfaction and Discharge of any Series" is not clear. A deposit
and discharge may be treated as a taxable exchange of such Debt Securities for
beneficial interests in the trust consisting of the deposited money or
securities. In that event, a Holder of Debt Securities may be required to
recognize gain or loss equal to the difference between the Holder's adjusted
basis for the Debt Securities and the amount realized in such exchange (which
generally will be the fair market value of the Holder's beneficial interest in
such trust). Thereafter, such Holder may be required to include in income a
share of the income, gain and loss of the trust. As described above, it is
generally a condition to such a deposit and discharge to obtain an opinion of
tax counsel, or receipt by the Company from, or publication of a ruling by the
United States Internal Revenue Service, to the effect that such deposit and
discharge will not alter the Holders' tax consequences that would have been
applicable in the
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absence of the deposit and discharge. Purchasers of the Debt Securities should
consult their own advisors with respect to the tax consequences to them of such
deposit and discharge, including the applicability and effect of tax laws other
than Federal income tax law.
EVENTS OF DEFAULT
As to any series of Debt Securities, an Event of Default is defined in the
Indenture as being: (a) default for 30 days in payment of any interest on the
Debt Securities of such series; (b) failure to pay principal or premium with
respect to the Debt Securities of such series, if any, when due; (c) failure in
the deposit of any sinking fund installment with respect to any series of Debt
Securities when due; (d) failure to observe or perform any other covenant in the
Indenture or Debt Securities of any series (other than a covenant or warranty, a
default in whose performance or whose breach is specifically dealt with in the
section of the Indenture governing Events of Default), if such failure continues
for 60 days after written notice by the Trustee or the Holders of at least 25%
in aggregate principal amount of the Debt Securities of such series then
outstanding; (e) uncured or unwaived failure to pay principal of or interest on
any other obligation for borrowed money of the Company (including default under
any other series of Debt Securities and including default by the Company on any
guaranty of an obligation for borrowed money of a Restricted Subsidiary) beyond
any period of grace with respect thereto if (i) the aggregate principal amount
of any such obligation is in excess of $25,000,000 and (ii) the default in such
payment is not being contested by the Company in good faith and by appropriate
proceedings; (f) certain events of bankruptcy, insolvency, receivership or
reorganization; or (g) any other Event of Default provided with respect to Debt
Securities of that series. (Section 7.01) The Trustee or the Holders of 25% in
aggregate principal amount of the outstanding Debt Securities of any series may
declare the Debt Securities of such series immediately due and payable upon the
occurrence of any Event of Default (after expiration of any applicable grace
period); in certain cases, the Holders of a majority in principal amount of the
Debt Securities of any series then outstanding may waive any past default and
its consequences, except a default in the payment of principal, premium, if any,
or interest (including sinking fund payments). (Sections 7.01 and 7.07)
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of a default with respect to any such series for which there are Debt
Securities outstanding which is continuing, give to the Holders of such Debt
Securities notice of all uncured defaults known to it (the term default to
include the events specified above without grace periods); provided that, except
in the case of default in the payment of principal (or premium, if any) or
interest on any of the Debt Securities of any series or the payment of any
sinking fund installment on the Debt Securities of any series, the Trustee shall
be protected in withholding such notice if it in good faith determines that the
withholding notice is in the interest of the Debt Security Holders. (Section
7.08)
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default with respect to any series of such Debt
Securities 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 any of the Holders of
Debt Securities outstanding of any series unless such Holders shall have offered
to the Trustee reasonable indemnity. (Sections 8.01 and 8.02) The right of a
Holder to institute a proceeding with respect to the Indenture is subject to
certain conditions precedent including notice and indemnity to the Trustee, but
the Holder has a right to receipt of principal, premium, if any, and interest
(subject to certain limitations with respect to defaulted interest) on their due
dates or to institute suit for the enforcement thereof. (Sections 7.04 and 7.10)
So long as the Debt Securities of any series remain outstanding the Company
will be required to furnish annually to the Trustee an Officers' Certificate
stating whether, to the best of the knowledge of the signers, the Company is in
default under any of the provisions of the Indenture, and specifying all such
defaults, and the nature thereof, of which they have knowledge. (Section 5.08)
The Company will also be required to furnish to the Trustee copies of certain
reports filed by the Company with the Securities and Exchange Commission.
(Section 6.03)
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The Holders of a majority in principal amount of the Debt Securities
outstanding of such series will have the right to direct the time, method and
place for conducting any proceeding for any remedy available to the Trustee, or
exercising any power or trust conferred on the Trustee, provided that such
direction shall be in accordance with law and the provisions of the Indenture,
provided that the Trustee may decline to follow any such direction if the
Trustee shall determine on the advice of counsel that the proceeding may not be
lawfully taken or would be materially or unjustly prejudicial to Holders not
joining in such direction. (Section 7.07) The Trustee will be under no
obligation to act in accordance with such direction unless such Holders shall
have offered the Trustee reasonable security or indemnity against costs,
expenses and liabilities which may be incurred thereby. (Section 8.02)
INFORMATION CONCERNING THE TRUSTEE
The Company from time to time borrows from an affiliate of the Trustee, and
maintains deposit accounts and conducts other banking transactions with such
affiliate in the ordinary course of business.
Under the Indenture, the Trustee is required to transmit annual reports to
all Holders regarding its eligibility and qualifications as Trustee under the
Indenture and certain related matters. (Section 7.06)
DESCRIPTION OF DEBT WARRANTS
The Company may issue Debt Warrants in registered certificated form for the
purchase of Debt Securities. Debt Warrants may be issued together with or
separately from any Debt Securities offered by any Prospectus Supplement and, if
issued together with any Debt Securities, may be attached to or separate from
such Debt Securities. Debt Warrants are to be issued under Debt Warrant
Agreements to be entered into between the Company and a bank or trust company,
as Debt Warrant Agent, all as set forth in the Prospectus Supplement relating to
the particular issue of Debt Warrants. Copies of the forms of Debt Warrant
Agreements and Debt Warrant Certificates are filed as exhibits to the
Registration Statement. The following summaries of certain provisions of the
forms of Debt Warrant Agreements and Debt Warrant Certificates do not purport to
be complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Debt Warrant Agreements and the Debt Warrant
Certificates. Section references herein are references to particular provisions
of the Debt Warrant Agreements. Capitalized terms used in this Description of
Debt Warrants but not defined herein have the meanings ascribed to such terms in
the Debt Warrant Agreements.
GENERAL
The Prospectus Supplement will describe the terms of the Debt Warrants
offered thereby, the Debt Warrant Agreement relating to such Debt Warrants and
the Debt Warrant Certificates representing such Debt Warrants, including the
following: (1) the offering price; (2) the designation, aggregate principal
amount and terms of the Debt Securities purchasable upon exercise of the Debt
Warrants; (3) if applicable, the designation and terms of the Debt Securities
with which the Debt Warrants are issued and the number of Debt Warrants issued
with each such Debt Security; (4) if applicable, the date on and after which the
Debt Warrants and the related Debt Securities will be separately transferable;
(5) the principal amount of Debt Securities purchasable upon exercise of one
Debt Warrant and the price at which such principal amount of Debt Securities may
be purchased upon such exercise; (6) the date on which the right to exercise the
Debt Warrants shall commence and the date (the "Debt Warrant Expiration Date")
on which such right shall expire; (7) federal income tax consequences; (8) the
identity of the Debt Warrant Agent; and (9) any other terms of the Debt
Warrants.
Debt Warrant Certificates may be exchanged for new Debt Warrant
Certificates of different denominations, may be presented for registration of
transfer, and may be exercised at the corporate trust office of the Debt Warrant
Agent or any other office indicated in the Prospectus Supplement. (Section 4.01)
12
<PAGE> 40
EXERCISE OF DEBT WARRANTS
Each Debt Warrant will entitle its holder to purchase such principal amount
of Debt Securities at such exercise price as shall in each case be set forth in,
or calculable from, the Prospectus Supplement relating to the Debt Warrants.
(Section 1.01) Debt Warrants may be exercised at any time up to 5:00 p.m., New
York City time, on the Debt Warrant Expiration Date set forth in the Prospectus
Supplement relating to such Debt Warrants. After such time on the Debt Warrant
Expiration Date (or such later date to which such Debt Warrant Expiration Date
may be extended by the Company), unexercised Debt Warrants will be void.
(Section 2.02)
Debt Warrants may be exercised by delivery to the Debt Warrant Agent of
payment as provided in the Prospectus Supplement of the amount required to
purchase the Debt Securities purchasable upon such exercise together with
certain information set forth on the reverse side of the Debt Warrant
Certificate. Debt Warrants will be deemed to have been exercised upon receipt of
the exercise price, subject to the receipt within five business days of the Debt
Warrant Certificate evidencing such Debt Warrants. Upon receipt of such payment
and the Debt Warrant Certificate properly completed and duly executed at the
corporate trust office of the Debt Warrant Agent or any other office indicated
in the Prospectus Supplement, the Company will, as soon as practicable, issue
and deliver the Debt Securities purchasable upon such exercise. If fewer than
all of the Debt Warrants represented by such Debt Warrant Certificate are
exercised, a new Debt Warrant Certificate will be issued for the remaining
amount of Debt Warrants. (Section 2.03)
MODIFICATIONS
The Debt Warrant Agreement and the terms of the Debt Warrants may be
amended by the Company and the Debt Warrant Agent, without the consent of the
holders, for the purpose of curing any ambiguity, or curing, correcting or
supplementing any defective provision contained therein, or in any other manner
which the Company and the Debt Warrant Agent may deem necessary or desirable and
which will not adversely affect the interests of the holders. (Section 6.01)
ENFORCEABILITY OF RIGHTS BY HOLDERS; GOVERNING LAW
The Debt Warrant Agent will act solely as an agent of the Company in
connection with the Debt Warrant Certificates and will not assume any obligation
or relationship of agency or trust for or with any holders of Debt Warrant
Certificates. (Section 5.02) Holders may, without the consent of the Debt
Warrant Agent or the Trustee for the applicable series of Debt Securities,
enforce by appropriate legal action, on their own behalf, their right to
exercise their Debt Warrants in the manner provided in their Debt Warrant
Certificates and the Debt Warrant Agreement. (Section 3.03) Prior to the
exercise of their Debt Warrants, holders of Debt Warrants will not have any of
the rights of Holders of the Debt Securities purchasable upon such exercise,
including the right to receive payments of principal of (and premium, if any) or
interest, if any, on the Debt Securities purchasable upon such exercise or to
enforce covenants in the Indenture. (Section 3.01) Except as may otherwise be
provided in the Prospectus Supplement relating thereto, each issue of Debt
Warrants and the applicable Debt Warrant Agreement will be governed by and
construed in accordance with the laws of the State of New York. (Section 6.04)
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities and the Debt Warrants (i) through
underwriters or dealers, (ii) directly to one or more institutional purchasers
or (iii) through agents. The Prospectus Supplement with respect to the Debt
Securities or the Debt Warrants being offered thereby sets forth the terms of
the offering thereof, including the name or names of any underwriters, their
purchase price 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 they may be listed. Only
underwriters so named in the Prospectus Supplement are deemed to be underwriters
in connection with the Debt Securities or the Debt Warrants offered thereby.
13
<PAGE> 41
If underwriters are used in the sale, the Debt Securities or the Debt
Warrants will be acquired by the underwriters for their own account and may be
resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The obligations of the underwriters to purchase such Debt
Securities or Debt Warrants will be subject to certain conditions precedent, and
the underwriters will be obligated to purchase all the Debt Securities or the
Debt Warrants offered by the Prospectus Supplement relating to such series if
any are purchased. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
Debt Securities or Debt Warrants may also be sold directly by the Company
or through agents designated by the Company from time to time. Any agent
involved in the offering and sale thereof in respect of which this Prospectus is
delivered is named and any commissions payable by the Company to such agent are
set forth in the Prospectus Supplement relating to such series. Unless otherwise
indicated in such Prospectus Supplement, any such agent is acting on a best
efforts basis for the period of its appointment.
If so indicated in a Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain institutional
investors to purchase Debt Securities or Debt Warrants, as the case may be, to
which such Prospectus Supplement relates providing for payment and delivery on a
future date specified in such Prospectus Supplement. There may be limitations on
the minimum amount which may be purchased by any such institutional investor or
on the portion of the aggregate amount of the particular Debt Securities or Debt
Warrants which may be sold pursuant to such arrangements. Institutional
investors to which such offers may be made, when authorized, include commercial
and savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and such other institutions as may be
approved by the Company. The obligations of any such purchasers pursuant to such
delayed delivery and payment arrangements will not be subject to any conditions
except that (i) such purchase 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, and (ii) if the particular Debt Securities or Debt
Warrants are being sold to underwriters, the Company shall have sold to such
underwriters the total amount of such Debt Securities or Debt Warrants less the
amount thereof covered by such arrangements. Underwriters will not have any
responsibility in respect of the validity of such arrangements or the
performance of the Company or such institutional investors thereunder.
Agents and underwriters may be entitled under agreements entered into with
the Company to indemnification by the Company against certain civil liabilities,
including liabilities under the 1933 Act, or to contribution with respect to
payments which the agents or underwriters may be required to make in respect
thereof. Agents and underwriters may engage in transactions with, or perform
services for, the Company in the ordinary course of business.
The Company has not determined whether or not it will list any Securities
on a national securities exchange. Additionally, the Company has not been
advised by any underwriters that, in the event the Company determines not to
list any Securities on a national securities exchange, such underwriters intend
to make a market in such Securities. No assurances can be given as to the
liquidity of, or trading markets for, any Securities.
LEGAL OPINIONS
The legality of the Securities will be passed upon for the Company by John
P. Kennedy, Esq., Vice President, Secretary and General Counsel of the Company.
Certain legal matters will be passed upon for any underwriters by Mayer, Brown &
Platt, New York, New York 10019.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Company's Annual Report on Form 10-K for the year ended
September 30, 1994 have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in accounting and auditing.
14
<PAGE> 42
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IN CONNECTION WITH THE
OFFER CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER. THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IS NOT AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN
SUCH STATE. THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Ratio of Earnings to Fixed Charges... S-2
Description of Medium-Term Notes,
Series C........................... S-2
Important Currency Information....... S-14
Currency Risks....................... S-14
Certain United States Federal Income
Tax Considerations................. S-16
Plan of Distribution................. S-23
Glossary............................. A-1
PROSPECTUS
Available Information................ 2
Incorporation of Certain Documents by
Reference.......................... 2
The Company.......................... 3
Certain Factors Relating to Foreign
Currencies......................... 3
Use of Proceeds...................... 3
Description of the Debt Securities... 3
Description of Debt Warrants......... 12
Plan of Distribution................. 13
Legal Opinions....................... 14
Experts.............................. 14
</TABLE>
$350,000,000
JOHNSON CONTROLS, INC.
MEDIUM-TERM NOTES,
SERIES C
DUE NINE MONTHS OR MORE
FROM DATE OF ISSUE
SALOMON BROTHERS INC
J.P. MORGAN SECURITIES INC.
LEHMAN BROTHERS
BA SECURITIES, INC.
PROSPECTUS SUPPLEMENT
DATED , 1995
<PAGE> 43
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection with
the issuance and distribution of the securities registered hereby, all of which
will be paid by the Registrant:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee................ $115,000
Trustee's fees..................................................... 5,000
Printing and engraving expenses.................................... 25,000
Rating agency fees................................................. 130,000
Accounting fees and expenses....................................... 10,000
Legal fees and expenses............................................ 25,000
Blue Sky fees and expenses......................................... 15,000
Miscellaneous...................................................... 10,000
--------
Total......................................................... $335,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Sections 180.042 through 180.059 of the Wisconsin Business Corporation Law
provide for the indemnification of the Company's directors and officers in a
variety of circumstances, which may include liabilities under the Securities Act
of 1933. Section 180.044 provides mandatory indemnification for the successful
defense of a proceeding and for any proceeding unless it has been determined
that the director or officer has committed a willful failure to deal fairly with
the corporation where a material conflict of interest exists, or has violated a
criminal law, or has derived improper personal profit, or has committed willful
misconduct. Under Section 180.049, the Company has entered into Indemnification
Agreements with its directors and officers providing them with the
indemnification allowed under the law of Wisconsin. Section 180.059 expressly
recognizes as the public policy of the State of Wisconsin to allow
indemnification against proceedings involving Securities regulation.
The Company has purchased insurance as permitted by Wisconsin law on behalf
of directors and officers, which may cover liabilities under the Securities Act
of 1933.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
See Exhibit Index included herewith which is incorporated herein by
reference.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement;
II-1
<PAGE> 44
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement;
Provided, however, that paragraphs (a)(i) and (a)(ii) do not apply
if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(b) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions set forth or described in Item 15 of this
Registration Statement, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE> 45
SIGNATURES
Pursuant to the requirements of the Securities Act, the Company certifies
that it has reasonable grounds to believe that it meets all the requirements for
filing on Form S-3 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Milwaukee and State of Wisconsin on the 13th day of February, 1995.
JOHNSON CONTROLS, INC.
By /s/ JAMES H. KEYES
--------------------------------------
James H. Keyes
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
James H. Keyes, Ben C.M. Bastianen, Stephen A. Roell and John P. Kennedy and
each of them, the true and lawful attorneys-in-fact and agents of the
undersigned, with full power of substitution and resubstitution, for and in the
name, place and stead of the undersigned, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, and hereby
grants to such attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done, as fully to all intents and purposes as the undersigned might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on the 13th day of February, 1995.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------- ------------------------------------
<S> <C>
/S/ JAMES H. KEYES Chairman of the Board and Chief
- --------------------------------------------- Executive Officer
James H. Keyes
/S/ FRANKLIN H. SMITH, JR. Controller
- ---------------------------------------------
Franklin H. Smith, Jr.
/S/ STEPHEN A. ROELL Vice President and Chief
- --------------------------------------------- Financial Officer
Stephen A. Roell
Director
- ---------------------------------------------
William F. Andrews
/S/ ROBERT L. BARNETT Director
- ---------------------------------------------
Robert L. Barnett
/S/ FRED L. BRENGEL Director
- ---------------------------------------------
Fred L. Brengel
/S/ PAUL A. BRUNNER Director
- ---------------------------------------------
Paul A. Brunner
</TABLE>
<PAGE> 46
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------- ------------------------------------
<S> <C>
/S/ ROBERT A. CORNOG Director
- ---------------------------------------------
Robert A. Cornog
Director
- ---------------------------------------------
Willie D. Davis
Director
- ---------------------------------------------
Southwood J. Morcott
Director
- ---------------------------------------------
Martha R. Seger
/S/ DONALD TAYLOR Director
- ---------------------------------------------
Donald Taylor
/S/ GILBERT R. WHITAKER, JR. Director
- ---------------------------------------------
Gilbert R. Whitaker, Jr.
/S/ R. DOUGLAS ZIEGLER Director
- ---------------------------------------------
R. Douglas Ziegler
/S/ RICHARD F. TEERLINK Director
- ---------------------------------------------
Richard F. Teerlink
</TABLE>
<PAGE> 47
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL PAGE
NUMBER DESCRIPTION NUMBER
- ------ ---------------------------------------------------------------------- ---------------
<S> <C> <C>
1.1 Form of Selling Agency Agreement between the Registrant and Salomon
Brothers Inc, J.P. Morgan Securities Inc., Lehman Brothers, Lehman
Brothers, Inc. and BA Securities, Inc.................................
4.1 Form of Indenture between the Registrant and Chemical Bank Delaware...
4.2 Form of Debt Warrant Agreements including Form of Debt Warrant
Certificates (incorporated by reference to Exhibit 4(b) to the
Registration Statement with Registration No. 33-22357)................
5 Opinion of John P. Kennedy............................................
12 Statement regarding the Computation of the Ratio of Earnings to Fixed
Charges...............................................................
23.1 The consent of John P. Kennedy is contained in the opinion filed as
Exhibit 5 to this Registration Statement..............................
23.2 Consent of Price Waterhouse LLP.......................................
24 Powers of Attorney (contained on the signature page of the original
Registration Statement)...............................................
25 Statement of Eligibility and Qualification on Form T-1 (separately
bound)................................................................
</TABLE>
<PAGE> 1
Exhibit 1.1
Johnson Controls, Inc.
$350,000,000 Medium-Term Notes
Due Nine Months or More
From Date of Issue
Selling Agency Agreement
, 1995
New York, New York
Salomon Brothers Inc
Seven World Trade Center
New York, NY 10048
J.P. Morgan Securities Inc.
60 Wall Street
New York, NY 10260
Lehman Brothers
Lehman Brothers Inc.
3 World Financial Center
12th Floor
New York, NY 10285
BA Securities, Inc.
233 South LaSalle Street
17th Floor
Chicago, IL 60697
Ladies and Gentlemen:
Johnson Controls, Inc., a Wisconsin corporation (the "Company"), confirms its
agreement with each of you (including in the case of Lehman Brothers Inc., its
affiliate Lehman Government Securities Inc.) with respect to the issue and sale
by the Company of up to $350,000,000 aggregate principal amount of its
Medium-Term Notes Due Nine Months or More from Date of Issue (the "Notes").
The Notes will be issued under an indenture (the "Indenture") dated as of
, 1995 between the Company and Chemical Bank Delaware, as trustee (the
"Trustee"). Unless otherwise specifically provided for and set forth in a
Pricing Supplement (as defined below), the Notes will be issued in minimum
denominations of $1,000 and in denominations exceeding such amount by integral
multiples of $1,000, will be issued only in fully registered form and will have
the interest rates, maturities and, if applicable, other terms set forth in
such Pricing Supplement. The Notes will be issued, and the terms thereof
established, in accordance with the Indenture and the
<PAGE> 2
Medium-Term Notes Administrative Procedures attached hereto as Exhibit A (the
"Procedures") (unless a Terms Agreement (as defined in Section 2(b)) modifies
or otherwise supersedes such Procedures with respect to the Notes issued
pursuant to such Terms Agreement). The Procedures may be amended only by
written agreement of the Company and you after notice to, and with the approval
of, the Trustee. For the purposes of this Agreement, the term "Agent" shall
refer to any of you acting solely in the capacity as agent for the Company
pursuant to Section 2(a) and not as principal (collectively, the "Agents"), the
term "Purchaser" shall refer to one of you acting solely as principal pursuant
to Section 2(b) and not as agent, and the term "you" shall refer to you
collectively whether at any time any of you is acting in both such capacities
or in either such capacity. In acting under this Agreement, in whatever
capacity, each of you is acting individually and not jointly.
1. Representations and Warranties. The Company represents and warrants to,
and agrees with, you as set forth below in this Section 1. Certain terms used
in this Section 1 are defined in paragraph (d) hereof.
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933 (the "Act") and has filed with the Securities and
Exchange Commission (the "Commission") a registration statement on such Form
(File Number: 33- ), including a basic prospectus, which has become
effective, for the registration under the Act of $350,000,000 aggregate
principal amount of debt securities (the "Securities"), including the Notes.
Such registration statement, as amended at the date of this Agreement, meets
the requirements set forth in Rule 415(a)(1)(ix) or (x) under the Act and
complies in all other material respects with said Rule or Release. The
Company has included in such registration statement, or has filed or will
file with the Commission pursuant to the applicable paragraph of Rule 424(b)
under the Act, a supplement to the form of prospectus included in such
registration statement relating to the Notes and the plan of distribution
thereof (the "Prospectus Supplement"). In connection with the sale of Notes
the Company proposes to file with the Commission pursuant to the applicable
paragraph of Rule 424(b) under the Act further supplements to the Prospectus
Supplement (each a "Pricing Supplement") specifying the interest rates,
maturity dates and, if appropriate, other similar terms of the Notes sold
pursuant hereto or the offering thereof.
(b) As of the Execution Time, on the Effective Date, when any supplement to
the Prospectus is filed with the Commission, as of the date of a Terms
Agreement and at the date of delivery by the Company of any Notes sold
hereunder
-2-
<PAGE> 3
(a "Closing Date"), (i) the Registration Statement, as amended as of any such
time, and the Prospectus, as supplemented as of any such time, and the
Indenture will comply in all material respects with the applicable
requirements of the Act, the Trust Indenture Act of 1939 (the "Trust
Indenture Act") and the Securities Exchange Act of 1934 (the "Exchange Act")
and the respective rules thereunder; (ii) the Registration Statement, as
amended as of any such time, did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading;
and (iii) the Prospectus, as supplemented as of any such time, will not
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to (i) that part
of the Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act of the
Trustee or (ii) the information contained in or omitted from the Registration
Statement or the Prospectus (or any supplement thereto) in reliance upon and
in conformity with information furnished in writing to the Company by any of
you specifically for inclusion in the Registration Statement or the
Prospectus (or any supplement thereto).
(c) As of the time any Notes are issued and sold hereunder, the Indenture
will constitute a legal, valid and binding instrument enforceable against the
Company in accordance with its terms (subject, as to enforcement of remedies,
to applicable bankruptcy, reorganization, insolvency, moratorium or other
laws affecting creditors' rights generally from time to time in effect) and
such Notes will have been duly authorized, executed, authenticated and, when
paid for by the purchasers thereof, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the Indenture.
(d) The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "the Effective Date" shall mean each date that
the Registration Statement and any post-effective amendment or amendments
thereto became or become effective and each date after the date hereof on
which a document incorporated by reference in the Registration Statement is
filed. "Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto. "Basic Prospectus" shall mean
the form of basic prospectus relating to the Securities contained in the
Registration Statement at the Effective
-3-
<PAGE> 4
Date. "Prospectus" shall mean the Basic Prospectus as supplemented by the
Prospectus Supplement. "Registration Statement" shall mean the registration
statement referred to in paragraph (a) above, including incorporated
documents, exhibits and financial statements, as amended at the Execution
Time. "Rule 415" and "Rule 424" refer to such rules under the Act. Any
reference herein to the Registration Statement, the Basic Prospectus, the
Prospectus Supplement or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, the Prospectus Supplement or the Prospectus, as the case may be;
and any reference herein to the terms "amend", "amendment" or "supplement"
with respect to the Registration Statement, the Basic Prospectus, the
Prospectus Supplement or the Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the Effective
Date of the Registration Statement or the issue date of the Basic Prospectus,
the Prospectus Supplement or the Prospectus, as the case may be, deemed to be
incorporated therein by reference.
2. Appointment of Agents; Solicitation by the Agents of Offers to Purchase;
Sales of Notes to a Purchaser. (a) Subject to the terms and conditions set
forth herein, the Company hereby authorizes each of the Agents to act as its
agent to solicit offers for the purchase of all or part of the Notes from the
Company.
On the basis of the representations and warranties, and subject to the terms
and conditions set forth herein, each of the Agents agrees, as agent of the
Company, to use its reasonable efforts to solicit offers to purchase the Notes
from the Company upon the terms and conditions set forth in the Prospectus (and
any supplement thereto) and in the Procedures. Each Agent shall make
reasonable efforts to assist the Company in obtaining performance by each
purchaser whose offer to purchase Notes has been solicited by such Agent and
accepted by the Company, but such Agent shall not, except as otherwise provided
in this Agreement, be obligated to disclose the identity of any purchaser or
have any liability to the Company in the event any such purchase is not
consummated for any reason. Except as provided in Section 2(b), under no
circumstances will any Agent be obligated to purchase any Notes for its own
account. It is understood and agreed, however, that any Agent may purchase
Notes as principal pursuant to Section 2(b).
The Company reserves the right, in its sole discretion, to instruct the
Agents to suspend at any time, for any period of
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<PAGE> 5
time or permanently, the solicitation of offers to purchase Notes. Upon
receipt of instructions from the Company, the Agents will forthwith suspend
solicitation of offers to purchase Notes from the Company until such time as
the Company has advised them that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, on the Closing Date with
respect to each sale of Notes by the Company as a result of a solicitation made
by such Agent, in an amount equal to that percentage specified in Schedule I
hereto of the aggregate principal amount of the Notes sold by the Company.
Such commission shall be payable as specified in the Procedures.
Subject to the provisions of this Section and to the Procedures, offers for
the purchase of Notes may be solicited by an Agent as agent for the Company at
such time and in such amounts as such Agent deems advisable. The Company may
from time to time offer Notes for sale otherwise than through an Agent;
provided, however, that so long as this Agreement is in effect the Company
shall not solicit or accept offers to purchase Notes through any agent other
than an Agent unless (i) such other agent shall have entered into an agreement
with the Company containing terms substantially identical (including the
commission schedule) to those set forth in this Agreement and (ii) the Company
shall provide to each of the Agents notice of any agent that signs an agreement
as provided in the foregoing clause (i).
(b) Subject to the terms and conditions stated herein, whenever the Company
and any of you determines that the Company shall sell Notes directly to any of
you as principal, each such sale of Notes shall be made in accordance with the
terms of this Agreement and a supplemental agreement relating to such sale.
Each such supplemental agreement (which may be either an oral or written
agreement) is herein referred to as a "Terms Agreement". Each Terms Agreement
shall describe the Notes to be purchased by the Purchaser pursuant thereto and
shall specify the aggregate principal amount of such Notes, the price to be
paid to the Company for such Notes, the maturity date of such Notes, the rate
at which interest will be paid on such Notes, the dates on which interest will
be paid on such Notes and the record date with respect to each such payment of
interest, the Closing Date for the purchase of such Notes, the place of
delivery of the Notes and payment therefor, the method of payment and any
requirements for the delivery of opinions of counsel, certificates from the
Company or its officers or a letter from the Company's independent public
accountants as described in Section 6(b). Any such Terms Agreement may also
specify the period of time referred to in Section 4(m). Any written Terms
Agreement may be in the form attached hereto as Exhibit B. The Purchaser's
commitment to purchase Notes shall be deemed to have been made on the basis of
the representations and warranties of the Company herein
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<PAGE> 6
contained and shall be subject to the terms and conditions herein set forth.
Delivery of the certificates for Notes sold to the Purchaser pursuant to a
Terms Agreement shall be made not later than the Closing Date agreed to in such
Terms Agreement, against payment of funds to the Company in the net amount due
to the Company for such Notes by the method and in the form set forth in the
Procedures unless otherwise agreed to between the Company and the Purchaser in
such Terms Agreement.
Unless otherwise agreed to between the Company and the Purchaser in a Terms
Agreement, any Note sold to a Purchaser (i) shall be purchased by such
Purchaser at a price equal to 100% of the principal amount thereof less a
percentage equal to the commission applicable to an agency sale of a Note of
identical maturity and (ii) may be resold by such Purchaser at varying prices
from time to time or, if set forth in the applicable Terms Agreement and
Pricing Supplement, at a fixed public offering price. In connection with any
resale of Notes purchased, a Purchaser may use a selling or dealer group and
may reallow to any broker or dealer any portion of the discount or commission
payable pursuant hereto.
3. Offering and Sale of Notes. Each Agent and the Company agree to perform
the respective duties and obligations specifically provided to be performed by
them in the Procedures.
4. Agreements. The Company agrees with you that:
(a) Prior to the termination of the offering of the Notes (including by way
of resale by a Purchaser of Notes), the Company will not file any amendment
of the Registration Statement or supplement to the Prospectus (except for (i)
periodic or current reports filed under the Exchange Act, (ii) a supplement
relating to any offering of Notes providing solely for the specification of
or a change in the maturity dates, interest rates, issuance prices or other
similar terms of any Notes or (iii) a supplement relating to an offering of
Securities other than the Notes) unless the Company has furnished each of you
a copy for your review prior to filing and given each of you a reasonable
opportunity to comment on any such proposed amendment or supplement. Subject
to the foregoing sentence, the Company will cause each supplement to the
Prospectus to be filed with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will provide
evidence satisfactory to you of such filing. The Company will promptly
advise each of you (i) when the Prospectus, and any supplement thereto, shall
have been filed with the Commission pursuant to Rule 424(b),
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<PAGE> 7
(ii) when, prior to termination of any offering of Notes, any amendment of
the Registration Statement shall have been filed or become effective, (iii)
of any request by the Commission for any amendment of the Registration
Statement or supplement to the Prospectus or for any additional information,
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or threatening
of any proceeding for that purpose and (v) of the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Notes for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order and, if issued, to obtain as soon
as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Notes is required to
be delivered under the Act, any event occurs as a result of which the
Prospectus as then supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it shall be necessary to amend the Registration
Statement or to supplement the Prospectus to comply with the Act or the
Exchange Act or the respective rules thereunder, the Company promptly will
(i) notify each of you to suspend solicitation of offers to purchase Notes
(and, if so notified by the Company, each of you shall forthwith suspend such
solicitation and cease using the Prospectus as then supplemented), (ii)
prepare and file with the Commission, subject to the first sentence of
paragraph (a) of this Section 4, an amendment or supplement which will
correct such statement or omission or effect such compliance and (iii) supply
any supplemented Prospectus to each of you in such quantities as you may
reasonably request. If such amendment or supplement, and any documents,
certificates and opinions furnished to each of you pursuant to paragraph (g)
of this Section 4 in connection with the preparation or filing of such
amendment or supplement are satisfactory in all respects to you, you will,
upon the filing of such amendment or supplement with the Commission and upon
the effectiveness of an amendment to the Registration Statement, if such an
amendment is required, resume your obligation to solicit offers to purchase
Notes hereunder.
(c) The Company, during the period when a prospectus relating to the Notes
is required to be delivered under the Act, will file promptly all documents
required to be filed with the Commission pursuant to Section 13(a), 13(c), 14
or
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<PAGE> 8
15(d) of the Exchange Act and will furnish to each of you copies of such
documents. In addition, on or prior to the date on which the Company makes
any announcement to the general public concerning earnings or concerning any
other event which is required to be described, or which the Company proposes
to describe, in a document filed pursuant to the Exchange Act, the Company
will furnish to each of you the information contained or to be contained in
such announcement. The Company also will furnish to each of you copies of
all press releases or announcements furnished to news or wire services and
any other material press releases and announcements. The Company will
immediately notify each of you of (i) any decrease in the rating of the Notes
or any other debt securities of the Company by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Act) or (ii) any notice given of any intended or potential decrease
in any such rating or of a possible change in any such rating with negative
implications, as soon as the Company learns of any such decrease or notice.
(d) As soon as practicable, the Company will make generally available to
its security holders and to each of you an earnings statement or statements
of the Company and its subsidiaries which will satisfy the provisions of
Section 11(a) of the Act and Rule 158 under the Act.
(e) The Company will furnish to each of you and your counsel, without
charge, copies of the Registration Statement (including exhibits thereto)
and, so long as delivery of a prospectus may be required by the Act, as many
copies of the Prospectus and any supplement thereto as you may reasonably
request.
(f) The Company will arrange for the qualification of the Notes for sale
under the laws of such jurisdictions as any of you may designate, will
maintain such qualifications in effect so long as required for the
distribution of the Notes, and will arrange for the determination of the
legality of the Notes for purchase by institutional investors; provided,
however, that the Company shall not be obligated thereby to qualify as a
foreign corporation, or to become subject to taxes, in any jurisdiction in
which it is not currently so qualified or so subject.
(g) The Company shall furnish to each of you such information, documents,
certificates of officers of the Company and opinions of counsel for the
Company relating to the business, operations and affairs of the Company, the
Registration Statement, the Prospectus, and any amendments thereof or
supplements thereto, the Indenture, the Notes,
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<PAGE> 9
this Agreement, the Procedures and the performance by the Company and you of
its and your respective obligations hereunder and thereunder as any of you
may from time to time and at any time prior to the termination of this
Agreement reasonably request.
(h) The Company shall, whether or not any sale of the Notes is consummated,
(i) pay all expenses incident to the performance of its obligations under
this Agreement and any Terms Agreement, including the fees and disbursements
of its accountants and counsel, the cost of printing or other production and
delivery of the Registration Statement, the Prospectus, all amendments
thereof and supplements thereto, the Indenture, this Agreement, any Terms
Agreement and all other documents relating to the offering, the cost of
preparing, printing, packaging and delivering the Notes, the fees and
disbursements, including fees of counsel, incurred in compliance with Section
4(f), the fees and disbursements of the Trustee and the fees of any agency
that rates the Notes and (ii) reimburse each of you upon written request for
all reasonable out-of-pocket expenses, if any, incurred by you in connection
with this Agreement.
(i) Each acceptance by the Company of an offer to purchase Notes will be
deemed to be an affirmation that its representations and warranties contained
in this Agreement are true and correct at the time of such acceptance, as
though made at and as of such time, and a covenant that such representations
and warranties will be true and correct at the time of delivery to the
purchaser of the Notes relating to such acceptance, as though made at and as
of such time (it being understood that for purposes of the foregoing
affirmation and covenant such representations and warranties shall relate to
the Registration Statement and Prospectus as amended or supplemented at each
such time). Each such acceptance by the Company of an offer for the purchase
of Notes shall be deemed to constitute an additional representation, warranty
and agreement by the Company that, as of the settlement date for the sale of
such Notes, after giving effect to the issuance of such Notes, of any other
Notes to be issued on or prior to such settlement date and of any other
Securities to be issued and sold by the Company on or prior to such
settlement date, the aggregate amount of Securities (including any Notes)
which have been issued and sold by the Company will not exceed the amount of
Securities registered pursuant to the Registration Statement. The Company
will inform you promptly upon your request of the aggregate amount of
Securities registered under the Registration Statement which remain unsold.
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<PAGE> 10
(j) Each time that the Registration Statement or the Prospectus is amended
or supplemented (other than by an amendment or supplement relating to any
offering of Securities other than the Notes or providing solely for the
specification of or a change in the maturity dates, the interest rates, the
issuance prices or other similar terms of any Notes sold pursuant hereto),
the Company will deliver or cause to be delivered promptly to each of you a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the Company,
dated the date of the effectiveness of such amendment or the date of the
filing of such supplement, in form reasonably satisfactory to you, of the
same tenor as the certificate referred to in Section 5(d) but modified to
relate to the last day of the fiscal quarter for which financial statements
of the Company were last filed with the Commission and to the Registration
Statement and the Prospectus as amended and supplemented to the time of the
effectiveness of such amendment or the filing of such supplement.
(k) Each time that the Registration Statement or the Prospectus is amended
or supplemented (other than by an amendment or supplement (i) relating to any
offering of Securities other than the Notes, (ii) providing solely for the
specification of or a change in the maturity dates, the interest rates, the
issuance prices or other similar terms of any Notes sold pursuant hereto or
(iii) setting forth or incorporating by reference financial statements or
other information as of and for a fiscal quarter, unless, in the case of
clause (iii) above, in the reasonable judgment of any of you, such financial
statements or other information are of such a nature that an opinion of
counsel should be furnished), the Company shall furnish or cause to be
furnished promptly to each of you a written opinion of counsel of the Company
reasonably satisfactory to each of you, dated the date of the effectiveness
of such amendment or the date of the filing of such supplement, in form
satisfactory to each of you, of the same tenor as the opinion referred to in
Section 5(b) but modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of the effectiveness of
such amendment or the filing of such supplement or, in lieu of such opinion,
counsel last furnishing such an opinion to you may furnish each of you with a
letter to the effect that you may rely on such last opinion to the same
extent as though it were dated the date of such letter authorizing reliance
(except that statements in such last opinion will be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of the effectiveness of such amendment or the filing of such
supplement).
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<PAGE> 11
(l) Each time that the Registration Statement or the Prospectus is amended
or supplemented to include or incorporate amended or supplemental financial
information, the Company shall cause its independent public accountants
promptly to furnish each of you a letter, dated the date of the effectiveness
of such amendment or the date of the filing of such supplement, in form
reasonably satisfactory to each of you, of the same tenor as the letter
referred to in Section 5(e) with such changes as may be necessary to reflect
the amended and supplemental financial information included or incorporated
by reference in the Registration Statement and the Prospectus, as amended or
supplemented to the date of such letter; provided, however, that, if the
Registration Statement or the Prospectus is amended or supplemented solely to
include or incorporate by reference financial information as of and for a
fiscal quarter, the Company's independent public accountants may limit the
scope of such letter, which shall be reasonably satisfactory in form to each
of you, to the unaudited financial statements, the related "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
the information contained in the updated Exhibit 12 to the Registration
Statement and any other information of an accounting, financial or
statistical nature included in such amendment or supplement, unless, in the
reasonable judgment of any of you, such letter should cover other information
or changes in specified financial statement line items. The Company shall
not be required to comply with the provisions of this Section 4(1) during any
period (which may occur from time to time during the term of this Agreement)
for which the Company has instructed the Agents to suspend the solicitation
of offers to purchase Notes; provided that, during any such period, any
Purchaser does not then hold any Notes pursuant to a Terms Agreement. The
Company shall be required to comply with the provisions of this Section 4(1)
prior to instructing the Agents to resume the solicitation of offers to
purchase Notes or prior to entering into a Terms Agreement.
(m) During the period, if any, specified (whether orally or in writing) in
any Terms Agreement, the Company shall not, without the prior consent of the
Purchaser thereunder, offer, sell or contract to sell, or otherwise dispose
of, directly or indirectly, or announce the offering of, any debt securities
issued or guaranteed by the Company (other than the Notes being sold pursuant
to such Terms Agreement).
(n) The Company confirms as of the date hereof, and each acceptance by the
Company of an offer to purchase Notes will be deemed to be an affirmation,
that the Company is in
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<PAGE> 12
compliance with all provisions of Section 1 of Laws of Florida, Chapter
92-198, An Act Relating to Disclosure of Doing Business with Cuba, and the
Company further agrees that if it commences engaging in business with the
government of Cuba or with any person or affiliate located in Cuba after the
date the Registration Statement becomes or has become effective with the
Securities and Exchange Commission or with the Florida Department of Banking
and Finance (the "Department"), whichever date is later, or if the
information reported in the Prospectus, if any, concerning the Company's
business with Cuba or with any person or affiliate located in Cuba changes in
any material way, the Company will provide the Department notice of such
business or change, as appropriate, in a form acceptable to the Department.
(o) Each time that the Registration Statement or the Prospectus is amended
or supplemented by means of the filing of the Company's Quarterly Report on
Form 10-Q, the Company shall include with such filing an update to Exhibit 12
to the Registration Statement.
5. Conditions to the Obligations of the Agents. The obligations of each
Agent to solicit offers to purchase the Notes shall be subject to the accuracy
of the representations and warranties on the part of the Company contained
herein as of the Execution Time, on the Effective Date, when any supplement to
the Prospectus is filed with the Commission and as of each Closing Date, to the
accuracy of the statements of the Company made in any certificates pursuant to
the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Prospectus, and any such supplement, shall have
been filed in the manner and within the time period required by Rule 424(b);
and no stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have been
instituted or threatened.
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<PAGE> 13
(b) The Company shall have furnished to each Agent the opinion of John P.
Kennedy, Esq., Vice President, Secretary and General Counsel of the Company,
or other counsel reasonably satisfactory to each Agent, dated the Execution
Time, to the effect that:
(i) each of the Company and each of its subsidiaries that is a
"Significant Subsidiary" of the Company as that term is defined in
Regulation S-X of the Commission (individually a "Subsidiary" and
collectively the "Subsidiaries") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full corporate
power and authority to own its properties and conduct its business as
described in the Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns or leases
material properties or conducts material business;
(ii) all the outstanding shares of capital stock of each Subsidiary have
been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of the Subsidiaries are owned by the
Company either directly or through wholly owned subsidiaries free and clear
of any perfected security interest and, to the knowledge of such counsel,
after due inquiry, any other security interests, claims, liens or
encumbrances;
(iii) the Company's authorized equity capitalization is as set forth in
the Prospectus; and the Notes conform to the description thereof contained
in the Prospectus (subject to the insertion in the Notes of the maturity
dates, the interest rates and other similar terms thereof which will be
described in supplements to the Prospectus as contemplated by the fourth
sentence of Section 1(a) of this Agreement);
(iv) the Indenture has been duly authorized, executed and delivered, has
been duly qualified under the Trust Indenture Act, and constitutes a legal,
valid and binding instrument enforceable against the Company in accordance
with its terms (subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect); and the Notes have
been duly authorized
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<PAGE> 14
and, when executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the purchasers thereof, will
constitute legal, valid and binding obligations of the Company entitled to
the benefits of the Indenture;
(v) to the best knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of
its subsidiaries, of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the Prospectus,
and there is no franchise, contract or other document of a character
required to be described in the Registration Statement or Prospectus, or to
be filed as an exhibit, which is not described or filed as required; and the
statements included or incorporated by reference in the Prospectus
describing any legal proceedings or material contracts or agreements
relating to the Company fairly summarize such matters;
(vi) the Registration Statement has become effective under the Act; any
required filing of the Prospectus, and any supplements thereto, pursuant to
Rule 424(b) has been or will be made in the manner and within the time
period required by Rule 424(b); to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or
threatened; and the Registration Statement and the Prospectus (other than
the financial statements and other financial and statistical information
contained therein as to which such counsel need express no opinion) comply
as to form in all material respects with the applicable requirements of the
Act, the Exchange Act and the Trust Indenture Act and the respective rules
thereunder; and such counsel has no reason to believe that the Registration
Statement at the Effective Date or at the Execution Time contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus includes any untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
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<PAGE> 15
(vii) this Agreement has been duly authorized, executed and delivered by
the Company;
(viii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated herein except such as have been obtained under the
Act and such as may be required under the blue sky laws of any jurisdiction
in connection with the sale of the Notes as contemplated by this Agreement
and such other approvals (specified in such opinion) as have been obtained;
(ix) neither the execution and delivery of the Indenture, the issue and
sale of the Notes, nor the consummation of any other of the transactions
herein contemplated nor the fulfillment of the terms hereof will conflict
with, result in a breach or violation of, or constitute a default under any
law or the charter or by-laws of the Company or the terms of any indenture
or other agreement or instrument known to such counsel and to which the
Company or any of its subsidiaries is a party or bound or any judgment,
order, regulation or decree known to such counsel to be applicable to the
Company or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over the Company or any of its subsidiaries; and
(x) no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters involving
the application of laws of any jurisdiction other than the State of Wisconsin
or the United States, to the extent deemed proper and specified in such
opinion, upon the opinion of other counsel of good standing believed to be
reliable and who are satisfactory to counsel for the Agent and (B) as to
matters of fact, to the extent deemed proper, on certificates of responsible
officers of the Company and public officials. References to the Prospectus
in this paragraph (b) include any supplements thereto at the date such
opinion is rendered.
(c) Each Agent shall have received from Mayer, Brown & Platt (or other
counsel satisfactory to the Agents), counsel for the Agents, such opinion or
opinions, dated the date hereof, with respect to the issuance and sale of the
Notes, the Indenture, the Registration Statement, the Prospectus (together
with any supplement thereto) and other related
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<PAGE> 16
matters as the Agents may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(d) The Company shall have furnished to each Agent a certificate of the
Company, signed by the Chairman of the Board or the President and the
principal financial or accounting officer of the Company, dated the Execution
Time, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Prospectus, any supplement to the
Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement
are true and correct in all material respects on and as of the date hereof
with the same effect as if made on the date hereof and the Company has
complied with all the agreements and satisfied all the conditions on its
part to be performed or satisfied as a condition to the obligation of the
Agents to solicit offers to purchase the Notes;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened; and
(iii) since the date of the most recent financial statements included
in the Prospectus (exclusive of any supplement thereto), there has been no
material adverse change in the condition (financial or other), earnings,
business or properties of the Company and its subsidiaries, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(e) At the Execution Time, Price Waterhouse LLP shall have furnished to
each Agent a letter or letters (which may refer to letters previously
delivered to the Agents), dated as of the Execution Time, in form and
substance satisfactory to the Agents, confirming that they are independent
accountants within the meaning of the Act and the Exchange Act and the
respective applicable published rules and regulations thereunder and stating
in effect that:
(i) in their opinion the audited financial statements, financial statement
schedules and pro forma financial statements, if any, included or
incorporated in the Registration Statement and the Prospectus and
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<PAGE> 17
reported on by them comply in form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and the
related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries; carrying out
certain specified procedures (but not an examination in accordance with
generally accepted auditing standards) which would not necessarily reveal
matters of significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the stockholders,
directors and committees of the Company and the Subsidiaries; and inquiries
of certain officials of the Company who have responsibility for financial
and accounting matters of the Company and its subsidiaries as to
transactions and events subsequent to the date of the most recent audited
financial statements included or incorporated in the Prospectus, nothing
came to their attention which caused them to believe that:
(1) any unaudited financial statements included or incorporated in the
Registration Statement and the Prospectus do not comply in form in all
material respects with applicable accounting requirements and with the
published rules and regulations of the Commission with respect to
financial statements included or incorporated in quarterly reports on Form
10-Q under the Exchange Act; and said unaudited financial statements are
not in conformity with generally accepted accounting principles applied on
a basis substantially consistent with that of the audited financial
statements included or incorporated in the Registration Statement and the
Prospectus;
(2) with respect to the period subsequent to the date of the most
recent financial statements (other than any capsule information), audited
or unaudited, included or incorporated in the Registration Statement and
the Prospectus, there were any changes, at a specified date not more than
five business days prior to the date of the letter, or such other date
mutually agreed upon by the Company and the Agents, in the long-term debt
of the Company and its subsidiaries or capital stock of the Company or
decreases in the stockholders' equity of the Company as compared
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<PAGE> 18
with the amounts shown on the most recent consolidated balance sheet
included or incorporated in the Registration Statement and the Prospectus,
or for the period from the date of the most recent financial statements
included or incorporated in the Registration Statement and the Prospectus
to such specified date there were any decreases, as compared with the
corresponding period in the preceding year in net revenues or income
before income taxes or in total or per share amounts of net income of the
Company and its subsidiaries, except in all instances for changes or
decreases set forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the significance
thereof unless said explanation is not deemed necessary by the Agents; or
(3) the amounts included in any unaudited "capsule" information included
or incorporated in the Registration Statement and the Prospectus do not
agree with the amounts set forth in the unaudited financial statements for
the same periods or were not determined on a basis substantially
consistent with that of the corresponding amounts in the audited financial
statements included or incorporated in the Registration Statement and the
Prospectus;
(iii) they have performed certain other specified procedures as a result
of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial
or statistical information derived from the general accounting records of
the Company and its subsidiaries) set forth in the Registration Statement
and the Prospectus and in Exhibit 12 to the Registration Statement,
including the information included or incorporated in the specified Items of
the Company's Annual Report on Form 10-K, incorporated in the Registration
Statement and the Prospectus, and the information included in the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included or incorporated in the Company's Quarterly Reports on
Form 10-Q, incorporated in the Registration Statement and the Prospectus,
agrees with the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation; and
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<PAGE> 19
(iv) if unaudited pro forma financial statements are included or
incorporated in the Registration Statement and the Prospectus, on the basis
of a reading of the unaudited pro forma financial statements, carrying out
certain specified procedures, inquiries of certain officials of the Company
and the acquired company who have responsibility for financial and
accounting matters, and proving the arithmetic accuracy of the application
of the pro forma adjustments to the historical amounts in the pro forma
financial statements, nothing came to their attention which caused them to
believe that the pro forma financial statements do not comply in form in all
material respects with the applicable accounting requirements of Rule 11-02
of Regulation S-X or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of such statements.
References to the Prospectus in this paragraph (e) include any supplement
thereto at the date of the letter.
(f) Prior to the Execution Time, the Company shall have furnished to each
Agent such further information, documents, certificates and opinions of
counsel as the Agents may reasonably request.
If any of the conditions specified in this Section 5 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or
if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to such Agents and counsel for the Agents, this Agreement and all
obligations of any Agent hereunder may be cancelled at any time by the Agents.
Notice of such cancellation shall be given to the Company in writing or by
telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall be delivered
at the office of Mayer, Brown & Platt, 190 South LaSalle Street, Chicago,
Illinois 60603, on the date hereof (or the office of other counsel designated
by and satisfactory to the Purchaser).
6. Conditions to the Obligations of a Purchaser. The obligations of a
Purchaser to purchase any Notes will be subject to the accuracy of the
representations and warranties on the part of the Company herein as of the date
of the related Terms Agreement and as of the Closing Date for such Notes, to
the performance and observance by the Company of all covenants and
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<PAGE> 20
agreements herein contained on its part to be performed and observed and to the
following additional conditions precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been instituted or threatened.
(b) To the extent agreed to between the Company and the Purchaser in a
Terms Agreement, the Purchaser shall have received, appropriately updated,
(i) a certificate of the Company, dated as of the Closing Date, to the effect
set forth in Section 5(d) (except that references to the Prospectus shall be
to the Prospectus as supplemented as of the date of such Terms Agreement),
(ii) the opinion of John P. Kennedy, Esq., Vice President, Secretary and
General Counsel of the Company, or other counsel reasonably satisfactory to
the Purchaser, dated as of the Closing Date, to the effect set forth in
Section 5(b), (iii) the opinion of Mayer, Brown & Platt (or other counsel
satisfactory to the Purchaser), counsel for the Purchaser, dated as of the
Closing Date, to the effect set forth in Section 5(c), and (iv) letter of
Price Waterhouse LLP, independent accountants for the Company, dated as of
the Closing Date, to the effect set forth in Section 5(e).
(c) Prior to the Closing Date, the Company shall have furnished to the
Purchaser such further information, certificates and documents as the
Purchaser may reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement and
the applicable Terms Agreement, or if any of the opinions and certificates
mentioned above or elsewhere in this Agreement or such Terms Agreement and
required to be delivered to the Purchaser pursuant to the terms hereof and
thereof shall not be in all material respects reasonably satisfactory in form
and substance to the Purchaser and its counsel, such Terms Agreement and all
obligations of the Purchaser thereunder and with respect to the Notes subject
thereto may be cancelled at, or at any time prior to, the respective Closing
Date by the Purchaser. Notice of such cancellation shall be given to the
Company in writing or by telephone or telegraph confirmed in writing.
7. Right of Person Who Agreed to Purchase to Refuse to Purchase. (a) The
Company agrees that any person who has agreed to purchase and pay for any Note
pursuant to a solicitation by any of the Agents shall have the right to refuse
to purchase such
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<PAGE> 21
Note if, at the Closing Date therefor, any condition set forth in Section 5 or
6, as applicable, shall not be satisfied.
(b) The Company agrees that any person who has agreed to purchase and pay
for any Note pursuant to a solicitation by any of the Agents shall have the
right to refuse to purchase such Note if, subsequent to the agreement to
purchase such Note, any change, condition or development specified in any of
Sections 9(b)(i) through (v) shall have occurred (with the judgment of the
Agent which presented the offer to purchase such Note being substituted for any
judgment of a Purchaser required therein) the effect of which is, in the
judgment of the Agent which presented the offer to purchase such Note, so
material and adverse as to make it impractical or inadvisable to proceed with
the sale and delivery of such Note (it being understood that under no
circumstance shall any such Agent have any duty or obligation to the Company or
to any such person to exercise the judgment permitted to be exercised under
this Section 7(b) and Section 9(b)).
8. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless each of you, the directors, officers, employees and agents of
each of you and each person who controls each of you within the meaning of
either the Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which you, they or any of you or them may
become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement for the registration of
the Securities as originally filed or in any amendment thereof, or in the
Prospectus or any preliminary Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that (i) the Company will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by any of you specifically for inclusion therein and
(ii) such indemnity with respect to the Prospectus or any preliminary
Prospectus shall not inure to the benefit of any of you (or any person
controlling any of you) from whom the person asserting any
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<PAGE> 22
such loss, claim or damage or liability purchased the Notes which are the
subject thereof (or the Prospectus as supplemented) excluding documents
incorporated therein by reference at or prior the confirmation of the sale of
such Notes to such person in any case where such delivery is required by the
Act and the untrue statement or omission of a material fact contained in the
Prospectus or any preliminary Prospectus was corrected in the Prospectus (or
the Prospectus as supplemented). This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Each of you agrees to indemnify and hold harmless the Company, each of
its directors, each of its officers who signs the Registration Statement and
each person who controls the Company within the meaning of either the Act or
the Exchange Act, to the same extent as the foregoing indemnity from the
Company to you, but only with reference to written information relating to such
of you furnished to the Company by such of you specifically for inclusion in
the documents referred to in the foregoing indemnity. This indemnity agreement
will be in addition to any liability which you may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page, and under the heading "Plan of Distribution", of the Prospectus
Supplement constitute the only information furnished in writing by any of you
for inclusion in the documents referred to in the foregoing indemnity, and you
confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
this Section 8, notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure results in
the forfeiture by the indemnifying party of substantial rights and defenses and
(ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be
entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in
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<PAGE> 23
an action, the indemnified party shall have the right to employ separate
counsel (including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel (provided,
however, that the indemnifying party shall not be liable for the fees, costs or
expenses of more than one separate counsel) if (i) the use of counsel chosen by
the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or potential defendants
in, or targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such action
or (iv) the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. An indemnifying
party will not, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and each of you agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and one or more of
you may be subject in such proportion as is appropriate to reflect the relative
benefits received by the Company and by each of you from the offering of the
Notes from which such Losses arise; provided, however, that in no case shall
any of you be responsible for any amount in excess of the commissions received
by such of you in connection with the sale of Notes from which such Losses
arise (or, in the case of Notes sold pursuant to a Terms Agreement, the
aggregate commissions that would have been received by such of you if such
commissions had been payable). If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and each of you
shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and of each of you
in
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<PAGE> 24
connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the
Company shall be deemed to be equal to the total net proceeds from the offering
(before deducting expenses) of the Notes from which such Losses arise, and
benefits received by each of you shall be deemed to be equal to the total
commissions received by such of you in connection with the sale of Notes from
which such Losses arise (or, in the case of Notes sold pursuant to a Terms
Agreement, the aggregate commissions that would have been received by such of
you if such commissions had been payable). Relative fault shall be determined
by reference to whether any alleged untrue statement or omission relates to
information provided by the Company or any of you. The Company and each of you
agree that it would not be just and equitable if contribution were determined
by pro rata allocation or any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls
any of you within the meaning of the Act or the Exchange Act and each director,
officer, employee and agent of any of you shall have the same rights to
contribution as you and each person who controls the Company within the meaning
of either the Act or the Exchange Act, each officer of the Company who shall
have signed the Registration Statement and each director of the Company shall
have the same rights to contribution as the Company, subject in each case to
the applicable terms and conditions of this paragraph (d).
9. Termination. (a) This Agreement will continue in effect until
terminated as provided in this Section 9. This Agreement may be terminated
either by the Company as to any Agent or by any of you insofar as this
Agreement relates to any Agent, by giving written notice of such termination to
such Agent or the Company, as the case may be. This Agreement shall so
terminate at the close of business on the first business day following the
receipt of such notice by the party to whom such notice is given. In the event
of such termination, no party shall have any liability to the other party
hereto, except as provided in the fourth paragraph of Section 2(a), Section
4(h), Section 8 and Section 10.
(b) Each Terms Agreement shall be subject to termination in the absolute
discretion of the Purchaser, by notice given to the Company prior to delivery
of any payment for any Note to be purchased thereunder, if prior to such time
(i) there shall have occurred, subsequent to the agreement to purchase such
Note, any change, or any development involving a
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<PAGE> 25
prospective change, in or affecting the business or properties of the Company
and its subsidiaries the effect of which is, in the judgment of the Purchaser,
so material and adverse as to make it impractical or inadvisable to proceed
with the offering or delivery of such Note, (ii) there shall have been,
subsequent to the agreement to purchase such Note, any decrease in the rating
of any of the Company's debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Act) or any notice given of any intended or potential decrease in any such
rating or of a possible change in any such rating with negative implications,
(iii) trading in the Company's Common Stock shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange, (iv) a banking moratorium
shall have been declared by either Federal or New York State authorities or (v)
there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the judgment of the Purchaser, impracticable or inadvisable to proceed
with the offering or delivery of such Notes as contemplated by the Prospectus
(exclusive of any supplement thereto).
10. Survival of Certain Provisions. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of you set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of you or the Company or any of the directors, officers, employees,
agents or controlling persons referred to in Section 8 hereof, and will survive
delivery of and payment for the Notes. The provisions of Sections 4(h) and 8
hereof shall survive the termination or cancellation of this Agreement. The
provisions of this Agreement (including without limitation Section 7 hereof)
applicable to any purchase of a Note for which an agreement to purchase exists
prior to the termination hereof shall survive any termination of this
Agreement. If at the time of termination of this Agreement any Purchaser shall
own any Notes with the intention of selling them, the provisions of Section 4
shall remain in effect until such Notes are sold by the Purchaser.
11. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to any of you, will be mailed, delivered,
facsimiled or telegraphed and confirmed to such of you, at the address
specified in Schedule I hereto; or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at 5757 North Green Bay Avenue,
Milwaukee, Wisconsin 53209, attention of the Secretary.
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<PAGE> 26
12. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto, their respective successors, the directors, officers,
employees, agents and controlling persons referred to in Section 8 hereof and,
to the extent provided in Section 7, any person who has agreed to purchase
Notes, and no other person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the
Company and you.
Very truly yours,
Johnson Controls, Inc.
By: ___________________________
Vice-President
By: ___________________________
Treasurer
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
Salomon Brothers Inc
By:_____________________
Vice President
J.P. Morgan Securities Inc.
By:_____________________
Vice President
Lehman Brothers
Lehman Brothers Inc.
By:_____________________
Vice President
BA Securities, Inc.
By:______________________
Managing Director
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<PAGE> 27
SCHEDULE I
Commissions:
The Company agrees to pay each Agent a commission equal to the following
percentage of the principal amount of each Note sold on an agency basis by such
Agent:
<TABLE>
<CAPTION>
Term Commission Rate
---- ---------------
<S> <C>
More than nine months to less than twelve months .125%
Twelve months to less than eighteen months .150
Eighteen months to less than two years .200
Two years to less than three years .250
Three years to less than four years .350
Four years to less than five years .450
Five years to less than six years .500
Six years to less than seven years .550
Seven years to less than ten years .600
Ten years to less than fifteen years .625
Fifteen years to less than twenty years .700
Twenty years to and including thirty years .750
Thirty years or more Negotiated at the
Time of Sale
</TABLE>
Unless otherwise specified in the applicable Terms Agreement, the
discount or commission payable to a Purchaser shall be determined on the basis
of the commission schedule set forth above.
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<PAGE> 28
Address for Notice to you:
Notices to Salomon Brothers Inc shall be directed to it at
Seven World Trade Center, New York, NY 10048, Attention of the Medium-Term Note
Department.
Notices to J.P. Morgan Securities Inc. shall be directed to it
at 60 Wall Street, New York, NY 10260, Attention of the Medium-Term Note
Department.
Notices to Lehman Brothers, Lehman Brothers Inc. shall be
directed to it at 3 World Financial Center, 12th Floor, New York, NY 10285,
Attention of the Medium-Term Note Deparment.
Notices to BA Securities, Inc. shall be directed to it at 233
South LaSalle Street, 17th Floor, Chicago, IL 60697, Attention of Corporate
Bond Syndicate Desk and Andrew J. McCarthy, Managing Director.
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<PAGE> 29
EXHIBIT A
JOHNSON CONTROLS, INC.
Medium-Term Note Administrative Procedures
_________, 1995
The Medium-Term Notes, Series C, Due Nine Months or More from
Date of Issue (the "Notes") of Johnson Controls, Inc. (the "Company") are to be
offered on a continuing basis. Salomon Brothers Inc, J.P. Morgan Securities
Inc., Lehman Brothers, Lehman Brothers Inc. and BA Securities, Inc., as agents
(each an "Agent"), have agreed to solicit purchases of Notes issued in fully
registered form. The Agents will not be obligated to purchase Notes for their
own account. The Notes are being sold pursuant to a Selling Agency Agreement
between the Company and the agents named therein (including the Agents) dated
the date hereof (the "Agency Agreement"). The Notes will rank equally with all
other unsecured and unsubordinated debt of the Company and have been registered
with the Securities and Exchange Commission (the "Commission"). The Notes will
be issued under an Indenture dated as of _________ __, 1995 (the "Indenture"),
between the Company and Chemical Bank Delaware, as trustee (the "Trustee").
The Agency Agreement provides that Notes may also be purchased
by an Agent acting solely as principal and not as agent. In the event of any
such purchase, the functions of both the Agent and the beneficial owner under
the administrative procedures set forth below shall be performed by such Agent
acting solely as principal, unless otherwise agreed to between the Company and
such Agent acting as principal.
Each Note will be represented by either a Global Security (as
defined hereinafter) delivered to Chemical Bank ("Chemical"), as agent for The
Depository Trust Company ("DTC"), and recorded in the book-entry system
maintained by DTC (a "Book-Entry Note") or a certificate delivered to the
Holder thereof or a Person designated by such Holder (a "Certificated Note").
Only Notes denominated and payable in U.S. dollars may be issued as Book-Entry
Notes. An owner of a Book-Entry Note will not be entitled to receive a
certificate representing such Note.
The procedures to be followed during, and the specific terms
of, the solicitation of orders by the Agents and the sale as a result thereof
by the Company are explained below. Administrative and record-keeping
responsibilities will be handled for the Company by its Treasury Department.
The Company will advise the Agents and the Trustee in writing of those
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<PAGE> 30
persons handling administrative responsibilities with whom the Agents and the
Trustee are to communicate regarding orders to purchase Notes and the details
of their delivery.
Administrative procedures and specific terms of the offering
are explained below. Book-Entry Notes will be issued in accordance with the
administrative procedures set forth in Part I hereof, as adjusted in accordance
with changes in DTC's operating requirements, and Certificated Notes will be
issued in accordance with the administrative procedures set forth in Part II
hereof. Unless otherwise defined herein, terms defined in the Indenture and
the Notes shall be used herein as therein defined. Notes for which interest is
calculated on the basis of a fixed interest rate, which may be zero, are
referred to herein as "Fixed Rate Notes". Notes for which interest is
calculated on the basis of a floating interest rate are referred to herein as
"Floating Rate Notes". To the extent the procedures set forth below conflict
with the provisions of the Notes, the Indenture, DTC's operating requirements
or the Agency Agreement, the relevant provisions of the Notes, the Indenture,
DTC's operating requirements and the Agency Agreement shall control.
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<PAGE> 31
PART I
Administrative Procedures for
Book-Entry Notes
In connection with the qualification of the Book-Entry Notes
for eligibility in the book-entry system maintained by DTC, Chemical Bank
("Chemical") will perform the custodial, document control and administrative
functions described below, in accordance with its respective obligations under
a Letter of Representation from the Company and Chemical to DTC dated as of the
date hereof and a Medium-Term Note Certificate Agreement between Chemical and
DTC and its obligations as a participant in DTC, including DTC's Same-Day Funds
Settlement system ("SDFS").
<TABLE>
<S> <C>
Issuance: On any date of settlement (as defined under "Settlement" below) for one or more Book-Entry
Notes, the Company will issue a single global security in fully registered form without coupons
(a "Global Security") representing up to $150,000,000 principal amount of all such Book-Entry
Notes that have the same original issue date, original issue discount provisions, if any,
Interest Payment Dates, Regular Record Dates, Interest Payment Period, redemption, repayment
and extension provisions, if any, Maturity Date, and, in the case of Fixed Rate Notes, interest
rate, or, in the case of Floating Rate Notes, initial interest rate, Base Rate,
Index Maturity, Interest Reset Period, Interest Reset Dates, Spread or Spread Multiplier, if
any, minimum interest rate, if any, and maximum interest rate, if any (collectively, the
"Terms"). Each Global Security will be dated and issued as of the date of its authentication by
the Trustee. Each Global Security will bear an original issue date, which will be (i) with
respect to an original Global Security (or any portion thereof), the original issue date
specified in such Global Security and (ii) following a consolidation of Global Securities, with
respect to the Global Security resulting from such consolidation, the most recent Interest
Payment Date to which interest has been paid or duly provided for on the predecessor Global
Securities, regardless of the date of authentication of such resulting Global Security. No
Global
</TABLE>
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<PAGE> 32
<TABLE>
<S> <C>
Security will represent (i) both Fixed Rate and Floating Rate Book-Entry Notes or (ii) any
Certificated Note.
Identification The Company has arranged with the CUSIP Service Bureau of Standard & Poor's Corporation (the
Numbers: "CUSIP Service Bureau") for the reservation of a series of CUSIP numbers, which series
consists of approximately 900 CUSIP numbers and relates to Global Securities representing
Book-Entry Notes and book-entry medium-term notes issued by the Company with other series
designations. Chemical, the Company and DTC have obtained from the CUSIP Service Bureau a
written list of such reserved CUSIP numbers. The Company will assign CUSIP numbers to Global
Securities as described below under Settlement Procedure "B". DTC will notify the CUSIP
Service Bureau periodically of the CUSIP numbers that the Company has assigned to Global
Securities. Chemical will notify the Company at any time when fewer than 100 of the reserved
CUSIP numbers remain unassigned to Global Securities, and, if it deems necessary , the Company
will reserve additional CUSIP numbers for assignment to Global Securities. Upon obtaining such
additional CUSIP numbers, the Company shall deliver a list of such additional CUSIP numbers to
Chemical and DTC.
Registration: Global Securities will be issued only in fully registered form without coupons. Each Global
Security will be registered in the name of CEDE & CO., as nominee for DTC, on the securities
register for the Notes maintained under the Indenture. The beneficial owner of a Book-Entry
Note (or one or more indirect participants in DTC designated by such owner) will designate one
or more participants in DTC (with respect to such Book-Entry Note, the "Participants") to act
as agent or agents for such owner in connection with the book-entry system maintained by
DTC, and DTC will record in book-entry form, in accordance with instructions provided by such
Participants, a credit balance with respect to such beneficial owner in such
</TABLE>
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<PAGE> 33
<TABLE>
<S> <C>
Book-Entry Note in the account of such Participants. The ownership interest of such beneficial
owner (or such participant) in such Book-Entry Note will be recorded through the records of
such Participants or through the separate records of such Participants and one or more
indirect participants in DTC; provided, however, so long as DTC is the registered owner of a
Note, DTC will be the sole owner and holder of the Book-Entry Note represented by such Global
Security for all purposes under the Indenture.
Transfers: Transfers of a Book-Entry Note will be accomplished by book entries made by DTC and, in
turn, by Participants (and in certain cases, one or more indirect participants in DTC)
acting on behalf of beneficial transferors and transferees of such Note.
Exchanges: Chemical may deliver to DTC and the CUSIP Service Bureau at any time a written notice of
consolidation (a copy of which shall be attached to the resulting Global Security described
below) specifying (i) the CUSIP numbers of two or more outstanding Global Securities that
represent (A) Fixed Rate Book-Entry Notes having the same Terms and for which interest has
been paid to the same date or (B) Floating Rate Book-Entry Notes having the same Terms and for
which interest has been paid to the same date, (ii) a date, occurring at least thirty days
after such written notice is delivered and at least thirty days before the next Interest
Payment Date for such Book-Entry Notes, on which such Global Securities shall be exchanged for
a single replacement Global Security and (iii) a new CUSIP number, obtained from the Company,
to be assigned to such replacement Global Security. Upon receipt of such a notice, DTC will
send to its participants (including Chemical) a written reorganization notice to the effect
that such exchange will occur on such date. Prior to the specified exchange date, Chemical
will deliver to the CUSIP Service Bureau a written notice setting forth such
</TABLE>
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<PAGE> 34
<TABLE>
<S> <C>
exchange date and such new CUSIP number and stating that, as of such exchange date, the CUSIP
numbers of the Global Securities to be exchanged will no longer be valid. On the specified
exchange date, Chemical will exchange such Global Securities for a single Global Security
bearing the new CUSIP number and the CUSIP numbers of the exchanged Global Securities will, in
accordance with CUSIP Service Bureau procedures, be cancelled and not immediately reassigned.
Notwithstanding the foregoing, if the Global Securities to be exchanged exceed $150,000,000 in
aggregate principal amount, one Global Security will be authenticated and issued to represent
each $150,000,000 of principal amount of the exchanged Global Securities and an additional
Global Security will be authenticated and issued to represent any remaining principal amount of
such Global Securities (see "Denominations" below).
Maturities: Each Book-Entry Note will mature on a date not less than nine months after the original issue
date for such Note. A Floating Rate Book-Entry Note will mature only on an Interest Payment
Date for such Note.
Denominations: Book-Entry Notes will be issued in principal amounts of $1,000 or any amount in excess thereof
that is an integral multiple of $1,000. Global Securities will be denominated in principal
amounts not in excess of $150,000,000. If one or more Book-Entry Notes having an aggregate
principal amount in excess of $150,000,000 would, but for the preceding sentence, be
represented by a single Global Security, then one Global Security will be authenticated and
issued to represent each $150,000,000 principal amount of such Book-Entry Note or Notes and an
additional Global Security will be authenticated and issued to represent any remaining
principal amount of such Book-Entry Note or Notes. In such a case, each of the Global
Securities representing such Book-Entry Note or Notes shall be assigned the same CUSIP number.
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Interest: General. Interest, if any, on each Book-Entry Note will accrue from the Original Issue Date
for the first interest period or the last date to which interest has been paid, if any, for
each subsequent interest period, on the Global Security representing such Book-Entry Note, and
will be calculated and paid in the manner described in such Book-Entry Note and in the
Prospectus (as defined in the Agency Agreement), as supplemented by the applicable Pricing
Supplement. Unless otherwise specified therein, each payment of interest on a Book-Entry Note
will include interest accrued to but excluding the Interest Payment Date (provided that, in
the case of Floating Rate Book-Entry Notes which reset daily or weekly, interest payments will
include accrued interest to but excluding the Regular Record Date immediately preceding the
Interest Payment Date) or to but excluding Maturity (other than a Maturity of a Fixed Rate
Book-Entry Note occurring on the 31st day of a month, in which case such payment of interest
will include interest accrued to but excluding the 30th day of such month. Interest payable at
the Maturity of a Book-Entry Note will be payable to the Person to whom the principal of such
Note is payable. Standard & Poor's Corporation will use the information received in the
pending deposit message described under Settlement Procedure "C" below in order to include the
amount of any interest payable and certain other information regarding the related Global
Security in the appropriate (daily or weekly) bond report published by Standard & Poor's
Corporation.
Regular Record Dates. The Regular Record Date with respect to any Interest Payment Date
shall be the date fifteen calendar days immediately preceding such Interest Payment Date
(whether or not a Business Date).
Interest Payment Dates on Fixed Rate Book-Entry Notes. Unless otherwise specified pursuant
to Settlement Procedure "A" below, interest payments on Fixed Rate Book-Entry
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<TABLE>
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Notes will be made semiannually on June 1 and December 1 of each year and at Maturity;
provided, however, that if an Interest Payment Date for a Fixed Rate Book-Entry Note is not a
Business Day, the payment due on such day shall be made on the next succeeding Business
Day and no interest shall accrue on such payment for the period from and after such Interest
Payment Date; provided further, that in the case of a Fixed Rate Book-Entry Note issued between
a Regular Record Date and an Interest Payment Date, the first interest payment will be made on
the Interest Payment Date following the next succeeding Regular Record Date.
Interest Payment Dates on Floating Rate Book-Entry Notes. Interest payments will be made on
Floating Rate Book-Entry Notes monthly, quarterly, semi-annually or annually. Unless otherwise
agreed upon, interest will be payable, in the case of Floating Rate Book-Entry Notes with a
monthly Interest Payment Period, on the third Wednesday of each month; with a quarterly
Interest Payment Period, on the third Wednesday of March, June, September and December of each
year; with a semi-annual Interest Payment Period on the third Wednesday of the two months
specified pursuant to Settlement Procedure "A" below; and with an annual Interest Payment
Period, on the third Wednesday of the month specified pursuant to Settlement Procedure "A"
below; provided, however, that if an Interest Payment Date for a Floating Rate Book-Entry Note
would otherwise be a day that is not a Business Day with respect to such Floating Rate
Book-Entry Note, such Interest Payment Date will be the next succeeding Business Day with
respect to such Floating Rate Book-Entry Note, except in the case of a Floating Rate Book-Entry
Note for which the Base Rate is LIBOR, if such Business Day is in the next succeeding calendar
month, such Interest Payment Date will be the immediately preceding Business Day; and provided
further, that in the case of a Floating Rate Book- Entry Note issued
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between a Regular Record Date and an Interest Payment Date, the first interest payment will be
made on the Interest Payment Date following the next succeeding Regular Record Date.
Notice of Interest Payment and Regular Record Dates. On the first Business Day of January,
April, July and October of each year, Chemical will deliver to the Company and DTC a
written list of Regular Record Dates and Interest Payment Dates that will occur with respect to
Book-Entry Notes during the six-month period beginning on such first Business Day. Promptly
after each Interest Determination Date for Floating Rate Book-Entry Notes, Chemical, as
Calculation Agent, will notify Standard & Poor's Corporation of the interest rates determined
on such Interest Determination Date.
Calculation of Fixed Rate Book-Entry Notes. Interest on Fixed Rate Book-Entry Notes (including interest
Interest: for partial periods) will be calculated on the basis of a 360-day year of twelve 30-day months.
Floating Rate Book-Entry Notes. Interest rates on Floating Rate Book-Entry Notes will be
determined as set forth in the form of Notes. Interest on Floating Rate Book-Entry Notes,
except as otherwise set forth therein, will be calculated on the basis of actual days elapsed
and a year of 360 days, except that in the case of a Floating Rate Book-Entry Note for which
the Base Rate is Treasury Rate, interest will be calculated on the basis of the actual number
of days in the year.
Payments of Payment of Interest Only. Promptly after each Regular Record Date, Chemical will
Principal and deliver to the Company and DTC a written notice setting forth, by CUSIP number, the amount of
Interest: interest to be paid on each Global Security on the following Interest Payment Date (other than
an Interest Payment Date coinciding with Maturity) and the total of such amounts. DTC will
confirm the amount payable on each
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<TABLE>
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Global Security on such Interest Payment Date by reference to the appropriate (daily or weekly)
bond reports published by Standard & Poor's Corporation. The Company will pay to Chemical, as
paying agent, the total amount of interest due on such Interest Payment Date (other than at
Maturity), and Chemical will pay such amount to DTC, at the times and in the manner set
forth below under "Manner of Payment". If any Interest Payment Date for a Book-Entry Note is
not a Business Day, the payment due on such day shall be made on the next succeeding Business
Day and no interest shall accrue on such payment for the period from and after such Interest
Payment Date.
Payments at Maturity. On or about the first Business Day of each month, Chemical will deliver
to the Company, DTC and the Trustee a written list of principal and interest to be paid on each
Global Security maturing (on a Maturity or Redemption Date or otherwise) in the following
month. Chemical, the Company and DTC will confirm the amounts of such principal and interest
payments with respect to each such Global Security on or about the fifth Business Day preceding
the Maturity of such Global Security. On or before Maturity, the Company will pay to Chemical,
as paying agent, the principal amount of such Global Security, together with interest due
at such Maturity. Chemical will pay such amount to DTC at the times and in the manner set
forth below under "Manner of Payment". If any Maturity of a Global Security representing Book-
Entry Notes is not a Business Day, the payment due on such day shall be made on the next
succeeding Business Day and no interest shall accrue on such payment for the period from and
after such Maturity. Promptly after payment to DTC of the principal and interest due at
Maturity of such Global Security, the Trustee will cancel such Global Security in accordance
with the Indenture and so advise the Company. On the first Business Day of each month,
Chemical will deliver to the Trustee a
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<TABLE>
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written statement indicating the total principal amount of Outstanding Global Securities as of
the immediately preceding Business Day. If the Maturity of a Book-Entry Note is not a
Business Day, the payment due on such day shall be made on the next succeeding Business Day and
no interest shall accrue on such payment for the period from and after such Maturity.
Manner of Payment. The total amount of any principal and interest due on Global Securities on
any Interest Payment Date or at Maturity shall be paid by the Company to Chemical in
immediately available funds no later than such time required by Chemical on such date. The
Company will make such payment on such Global Securities by wire transfer or automated clearing
house to Chemical. The Company will confirm any such instructions in writing to Chemical.
Prior to 10 A.M. (New York City time) on the date of Maturity or as soon as possible
thereafter, Chemical will pay by separate wire transfer (using Fedwire message entry
instructions in a form previously specified by DTC) to an account at the Federal Reserve Bank
of New York previously specified by DTC, in funds available for immediate use by DTC, each
payment of principal (together with interest thereon) due on a Global Security on such date.
On each Interest Payment Date (other than at Maturity), interest payments shall be made to DTC,
in funds available for immediate use by DTC, in accordance with existing arrangements between
Chemical and DTC. On each such date, DTC will pay, in accordance with its SDFS operating
procedures then in effect, such amounts in funds available for immediate use to the respective
Participants in whose names the Book-Entry Notes represented by such Global Securities are
recorded in the book-entry system maintained by DTC. None of the Company (as issuer or as
paying agent), the Trustee or Chemical shall have any direct responsibility or liability for
the payment by DTC to such Participants of the principal of and interest on the Book-Entry
Notes.
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Withholding Taxes. The amount of any taxes required under applicable law to be withheld from
any interest payment on a Book-Entry Note will be determined and withheld by the
Participant, indirect participant in DTC or other Person responsible for forwarding payments
and materials directly to the beneficial owner of such Note.
Procedures upon Company Notice to Trustee Regarding Exercise of Optional Redemption. At least 45 days
Company's prior to the date on which it intends to redeem a Book- Entry Note, the Company will notify the
Exercise of Trustee that it is exercising such option with respect to such Book-Entry Note on such date.
Optional
Redemption: Trustee Notice to DTC Regarding Company's Exercise of Optional Redemption. After receipt of
notice that the Company is exercising its option to redeem a Book-Entry Note, the Trustee will,
at least 30 days before the redemption date for such Book-Entry Note, hand deliver to DTC a
notice identifying such Book-Entry Note by CUSIP number and informing DTC of the
Company's exercise of such option with respect to such Book-Entry Note.
Deposit of Redemption Price. On or before any redemption date, the Company shall deposit with
such Trustee an amount of money sufficient to pay the redemption price, plus interest
accrued to such redemption date, for all the Book-Entry Notes or portions thereof which are to
be repaid on such redemption date. Such Trustee will use such money to repay such Book-Entry
Notes pursuant to the terms set forth in such Notes.
Procedure for Rate The Company and the Agents will discuss from time to time the aggregate principal amount of,
Setting and the issuance price of, and the interest rates to be borne by, Book-Entry Notes that may be
Posting: sold as a result of the solicitation of orders by the Agents. If the Company decides to set
prices of, and rates borne by, any Book-Entry Notes in
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<TABLE>
<S> <C>
respect of which the Agents are to solicit orders (the setting of such prices and rates to be
referred to herein as "posting") or if the Company decides to change prices or rates
previously posted by it, it will promptly advise the Agents of the prices and rates to be
posted.
Acceptance and Unless otherwise instructed by the Company, each Agent will advise the Company promptly by
Rejection of telephone of all orders to purchase Book-Entry Notes received by such Agent, other than those
Orders: rejected by it in whole or in part in the reasonable exercise of its discretion. Unless
otherwise agreed by the Company and the Agents, the Company has the right to accept orders to
purchase Book-Entry Notes and may reject any such orders in whole or in part.
Preparation of If any order to purchase a Book-Entry Note is accepted by or on behalf of the Company, the
Pricing Company will prepare a pricing supplement (a "Pricing Supplement") reflecting the applicable
Supplement: interest rates and other terms of such Book-Entry Note and will arrange to have copies thereof
filed with the Commission in accordance with the applicable paragraph of Rule 424(b) under the
Act and will supply one copy thereof (and additional copies if requested) to the Agent which
presented the order (the "Presenting Agent"). The Presenting Agent will cause a Prospectus and
Pricing Supplement to be delivered to the purchaser of such Book-Entry Note.
In each instance that a Pricing Supplement is prepared, the Presenting Agent will affix the
Pricing Supplement to Prospectuses prior to their use. Outdated Pricing Supplements (other
than those retained for files) will be destroyed.
Suspension of The Company reserves the right, in its sole discretion, to instruct the Agents to suspend at
Solicitation; any time, for any period of time or permanently, the solicitation of orders to purchase
Amendment or Book-Entry Notes. Upon receipt of such instructions, the Agents will forthwith
Supplement:
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suspend solicitation until such time as the Company has advised them that such solicitation may
be resumed.
In the event that at the time the Company suspends solicitation of purchases there shall be any
orders outstanding for settlement, the Company will promptly advise the Agents, the Trustee and
Chemical whether such orders may be settled and whether copies of the Prospectus as in effect
at the time of the suspension, together with the appropriate Pricing Supplement, may be
delivered in connection with the settlement of such orders. The Company will have the sole
responsibility for such decision and for any arrangements that may be made in the event that
the Company determines that such orders may not be settled or that copies of such Prospectus
may not be so delivered.
If the Company decides to amend or supplement the Registration Statement (as defined in the
Agency Agreement) or the Prospectus, it will promptly advise the Agents and furnish the Agents
with the proposed amendment or supplement and with such certificates and opinions as are
required, all to the extent required by and in accordance with the terms of the Agency
Agreement. Subject to the provisions of the Agency Agreement, the Company may file with the
Commission any such supplement to the Prospectus relating to the Notes. The Company will
provide the Agents, the Trustee and Chemical with copies of any such supplement, and confirm to
the Agents that such supplement has been filed with the Commission pursuant to the applicable
paragraph of Rule 424(b).
Procedures For When the Company has determined to change the interest rates of Book-Entry Notes being offered,
Rate Changes: it will promptly advise the Agents and the Agents will forthwith suspend solicitation of
orders. The Agents will telephone the Company with recommendations as to the changed
interest rates. At such time as the Company has advised the Agents of the new interest
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rates, the Agents may resume solicitation of orders. Until such time only "indications of
interest" may be recorded.
Delivery of A copy of the Prospectus and a Pricing Supplement relating to a Book-Entry Note must accompany
Prospectus: or precede the earliest of any written offer of such Book-Entry Note, confirmation of the
purchase of such Book-Entry Note and payment for such Book-Entry Note by its purchaser. If
notice of a change in the terms of the Book-Entry Notes is received by the Agents between the
time an order for a Book-Entry Note is placed and the time written confirmation thereof is sent
by the Presenting Agent to a customer or his agent, such confirmation shall be accompanied by a
Prospectus and Pricing Supplement setting forth the terms in effect when the order was placed.
Subject to "Suspension of Solicitation; Amendment or Supplement" above, the Presenting Agent
will deliver a Prospectus and Pricing Supplement as herein described with respect to each
Book-Entry Note sold by it. The Company will make such delivery if such Book-Entry Note is sold
directly by the Company to a purchaser (other than an Agent).
Confirmation: For each order to purchase a Book-Entry Note solicited by any Agent and accepted by or on
behalf of the Company, the Presenting Agent will issue a confirmation to the purchaser, with a
copy to the Company, setting forth the details set forth above and delivery and payment
instructions.
Settlement: The receipt by the Company of immediately available funds in payment for a Book-Entry Note and
the authentication and issuance of the Global Security representing such Book-Entry Note shall
constitute "settlement" with respect to such Book-Entry Note. All orders accepted by the
Company will be settled on the fifth Business Day following the date of sale of such Book-Entry
Note pursuant to the timetable for settlement set forth below unless the Company and the
purchaser agree to settlement on another
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day which shall be no earlier than the next Business Day following the date of sale.
Settlement Settlement Procedures with regard to each Book-Entry Note sold by the Company through any
Procedures: Agent, as agent, shall be as follows:
A. The Presenting Agent will advise the Company by telephone of the following settlement
information:
1. Principal amount.
2. Maturity Date.
3. In the case of a Fixed Rate Book-Entry Note, the interest rate or, in the case
of a Floating Rate Book-Entry Note, the Base Rate, initial interest rate (if
known at such time), Index Maturity, Interest Reset Period, Interest Reset Dates,
Spread or Spread Multiplier (if any), Minimum Interest Rate (if any) and Maximum
Interest Rate (if any).
4. Interest Payment Dates and the Interest Payment Period.
5. Redemption, repayment and extension provisions, if any.
6. Settlement date.
7. Price.
8. Presenting Agent's commission, determined as provided in Section 2 of the Agency
Agreement.
9. Whether such Book-Entry Note is issued at an original issue discount and, if so,
the total amount of OID, the yield to maturity and the initial accrual period
OID.
B. The Company will assign a CUSIP number to the Global Security representing
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<S> <C>
such Book-Entry Note and then advise Chemical by telephone (confirmed in writing at any
time on the same date) or electronic transmission of the information set forth in
Settlement Procedure "A" above, such CUSIP number and the name of the Presenting Agent.
The Company will also notify the Presenting Agent by telephone of such CUSIP number as
soon as practicable. Each such communication by the Company shall constitute a
representation and warranty by the Company to Chemical, the Trustee and the Presenting
Agent that (i) such Note is then, and at the time of issuance and sale thereof will be,
duly authorized for issuance and sale by the Company, (ii) such Note, and the Global
Security representing such Note, will conform with the terms of the Indenture for such
Note, and (iii) upon authentication and delivery of such Global Security, the aggregate
initial offering price of all Notes issued under the Indenture will not exceed
$350,000,000 (except for Book-Entry Notes represented by Global Securities authenticated
and delivered in exchange for or in lieu of Global Securities pursuant to the Indenture
and except for Certificated Notes authenticated and delivered upon registration of
transfer of, in exchange for, or in lieu of Certificated Notes pursuant to any such
Section).
C. Chemical will enter a pending deposit message through DTC's Participant Terminal
System providing the following settlement information to DTC (which shall route such
information to Standard & Poor's Corporation), the Presenting Agent and, upon request,
the Trustee:
1. The information set forth in Settlement Procedure "A".
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2. Identification as a Fixed Rate Book-Entry Note or a Floating Rate Book-Entry
Note.
3. Initial Interest Payment Date for such Book-Entry Note, number of days by
which such date succeeds the related Regular Record Date and amount of interest
payable on such Interest Payment Date.
4. The Interest Payment Period.
5. CUSIP number of the Global Security representing such Book-Entry Note.
6. Whether such Global Security will represent any other Book-Entry Note
(to the extent known at such time).
D. To the extent the Company has not already done so, the Company will deliver
to Chemical a Global Security in a form that has been approved by the Company, the
Agents and the Trustee.
E. Chemical will complete such Book-Entry Note, stamp the appropriate legend, as
instructed by DTC, if not already set forth thereon, and authenticate the Global
Security representing such Book-Entry Note.
F. DTC will credit such Book-Entry Note to Chemical's participant account at DTC.
G. Chemical will enter an SDFS deliver order through DTC's Participant Terminal
System instructing DTC to (i) debit such Book-Entry Note to Chemical's participant
account and credit such Book-Entry Note to the Presenting Agent's participant account
and (ii) debit the Presenting Agent's settlement account and credit Chemical's
settlement account for an amount equal to the price of such Book-Entry Note less the
Presenting Agent's commission. The entry of such a deliver order shall constitute a
representation and warranty by Chemical
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to DTC that (i) the Global Security representing such Book-Entry Note has been issued
and authenticated and (ii) Chemical is holding such Global Security pursuant to the
Medium-Term Note Certificate Agreement between Chemical and DTC.
H. The Presenting Agent will enter an SDFS deliver order through DTC's Participant
Terminal System instructing DTC (i) to debit such Book-Entry Note to the Presenting
Agent's participant account and credit such Book-Entry Note to the participant accounts
of the Participants with respect to such Book-Entry Note and (ii) to debit the
settlement accounts of such Participants and credit the settlement account of the
Presenting Agent for an amount equal to the price of such Book-Entry Note.
I. Transfers of funds in accordance with SDFS deliver orders described in Settlement
Procedures "G" and "H" will be settled in accordance with SDFS operating procedures
in effect on the settlement date.
J. Chemical will, upon receipt of funds from the Presenting Agent in accordance with
Settlement Procedure "G", credit to an account of the Company maintained at Chemical
funds available for immediate use in the amount transferred to Chemical in accordance
with Settlement Procedure "G".
K. The Presenting Agent will confirm the purchase of such Book-Entry Note to the purchaser
either by transmitting to the Participants with respect to such Book-Entry Note a
confirmation order or orders through DTC's institutional delivery system or by
mailing a written confirmation to such purchaser.
Settlement
Procedures For orders of Book-Entry Notes solicited by any Agent and accepted by the Company for
Timetable: settlement on the first
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<TABLE>
<S> <C>
Business Day after the sale date, Settlement Procedures "A" through "K" set forth
above shall be completed as soon as possible but not later than the respective
times (New York City time) set forth below:
<CAPTION>
Settlement
Procedure Time
--------- ----
<S> <C>
A 11:00 A.M. on the sale
date
B 12:00 Noon on the sale
date
C 2:00 P.M. on the sale
date
D 3.00 P.M. on the Business Day before
settlement
E 9:00 A.M. on settlement
date
F 10:00 A.M. on settlement
date
G-H 2:00 P.M. on settlement
date
I 4:45 P.M. on settlement
date
J-K 5:00 P.M. on settlement
date
If a sale is to be settled more than one Business Day after the sale date, Settlement
Procedures "A", "B" and "C" shall be completed as soon as practicable but no later than
11:00 A.M. and 12:00 Noon on the first Business Day after the sale date and no later
than 2:00 P.M. on the Business Day before the settlement date, respectively. If the
initial interest rate for a Floating Rate Book-Entry Note has not been determined
at the time that Settlement Procedure "A" is completed, Settlement Procedures "B" and
"C" shall be completed as soon as such rate has been determined but no later than 12:00
Noon and 2:00 P.M., respectively, on the Business Day before the settlement date.
Settlement Procedure "I" is subject to extension in accordance with any extension of
Fedwire closing deadlines and in the other events specified in SDFS operating procedures
in effect on the settlement date.
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If settlement of a Book-Entry Note is rescheduled or cancelled, Chemical will deliver to DTC,
through DTC's Participant Terminal System, a cancellation message to such effect by no later
than 2:00 P.M. on the Business Day immediately preceding the scheduled settlement date.
Failure to Settle: If Chemical fails to enter an SDFS deliver order with respect to a Book-Entry Note pursuant to
Settlement Procedure "G", Chemical may deliver to DTC, through DTC's Participant Terminal
System, as soon as practicable, a withdrawal message instructing DTC to debit such Book-Entry
Note to Chemical's participant account. DTC will process the withdrawal message, provided that
Chemical's participant account contains a principal amount of the Global Security representing
such Book-Entry Note that is at least equal to the principal amount to be debited. If a
withdrawal message is processed with respect to all the Book-Entry Notes represented by a
Global Security, the Trustee will cancel such Global Security in accordance with the
Indenture and so advise the Company and Chemical, and Chemical will make appropriate entries in
its records. The CUSIP number assigned to such Global Security shall, in accordance with CUSIP
Service Bureau procedures, be cancelled and not immediately reassigned. If a withdrawal
message is processed with respect to one or more, but not all, of the Book-Entry Notes
represented by a Global Security, Chemical will exchange such Book-Entry Note for two Global
Securities, one of which shall represent such Book-Entry Notes and shall be cancelled
immediately after issuance and the other of which shall represent the other Book-Entry Notes
previously represented by the surrendered Global Security and shall bear the CUSIP number of
the surrendered Global Security.
If the purchase price for any Book-Entry Note is not timely paid to the Participants with
respect to such Note by the beneficial purchaser thereof (or a Person, including an indirect
participant in DTC, acting on
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behalf of such purchaser), such Participants and, in turn, the Presenting Agent may enter SDFS
deliver orders through DTC's Participant Terminal System reversing the orders entered pursuant
to Settlement Procedures "H" and "G", respectively. Thereafter, Chemical will deliver the
withdrawal message and take the related actions described in the preceding paragraph.
If such failure shall have occurred for any reason other than a default by the Presenting Agent
in the performance of its obligations hereunder and under the Agency Agreement, then the
Company will reimburse the Presenting Agent or Chemical, as applicable, on an equitable basis
for the loss of the use of the funds during the period when they were credited to the account
of the Company.
Notwithstanding the foregoing, upon any failure to settle with respect to a Book-Entry Note,
DTC may take any actions in accordance with its SDFS operating procedures then in effect. In
the event of a failure to settle with respect to one or more, but not all, of the Book-Entry
Notes to have been represented by a Global Security, Chemical will provide, in accordance with
Settlement Procedure "E", for the authentication and issuance of a Global Security representing
the other Book-Entry Notes to have been represented by such Global Security and will make
appropriate entries in its records.
Trustee and Chemical Nothing herein shall be deemed to require the Trustee or Chemical to risk or expend its own
Not to Risk Funds: funds in connection with any payment to the Company, DTC, the Agents or the purchaser,
it being understood by all parties that payments made by the Trustee or Chemical to the
Company, DTC, the Agents or the purchaser shall be made only to the extent that funds are
provided to the Trustee or Chemical for such purpose.
Authenticity of The Company will cause the Trustee to furnish Chemical and the Agents from time to time
Signatures: with the specimen signatures of each of the Trustee's officers, employees
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<S> <C>
or agents who has been authorized by the Trustee to authenticate Book-Entry Notes, but neither
Chemical nor any Agent will have any obligation or liability to the Company or the Trustee in
respect of the authenticity of the signature of any officer, employee or agent of the Company
or the Trustee on any Book-Entry Note.
Periodic Statements Periodically, Chemical will send to the Company a statement setting forth the principal
from Chemical: amount of Book-Entry Notes Outstanding as of that date and setting forth a brief description of
any sales of Book-Entry Notes which the Company has advised Chemical but which have not yet
been settled.
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PART II
Administrative Procedures for Certificated Notes
Chemical will serve as registrar and transfer agent in connection with
the Certificated Notes.
<TABLE>
<S> <C>
Issuance: Each Certificated Note will be dated and issued as of the date of its authentication by the
Trustee. Each Certificated Note will bear an Original Issue Date, which will be (i) with
respect to an original Certificated Note (or any portion thereof), its original issuance
date (which will be the settlement date) and (ii) with respect to any Certificated Note (or
portion thereof) issued subsequently upon transfer or exchange of a Certificated Note or in
lieu of a destroyed, lost or stolen Certificated Note, the Original Issue Date of the
predecessor Certificated Note, regardless of the date of authentication of such subsequently
issued Certificated Note.
Registration: Certificated Notes will be issued only in fully registered form without coupons.
Transfers and A Certificated Note may be presented for transfer or exchange at the principal corporate trust
for Exchanges: office in the City of New York of Chemical. Certificated Notes will be exchangeable for other
Certificated Notes having identical terms but different authorized denominations without
service charge. Certificated Notes will not be exchangeable for Book-Entry Notes.
Maturities: Each Certificated Note will mature on a date not less than nine months after the settlement
date for such Note. A Floating Rate Certificated Note will mature only on an Interest Payment
Date for such Note. Any Note denominated in Japanese yen will mature on a date not less than
one year from the Original Issue Date (as defined below) for such Note. Any Note denominated
in Pounds Sterling will mature on a date not less than one year, nor more than five years,
after its Original Issue Date.
Denominations: The denomination of any Certificated Note denominated in U.S. dollars will be a minimum of
$1,000 or any amount in excess thereof that is an integral multiple of $1,000. The
authorized denominations of
</TABLE>
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<PAGE> 53
<TABLE>
<S> <C>
Certificated Notes denominated in any other currency will be specified pursuant to
"Settlement Procedures" below.
Interest: General. Interest, if any, on each Certificated Note will accrue from the original issue date
for the first interest period or the last date to which interest has been paid, if any, for
each subsequent interest period, and will be calculated and paid in the manner described in
such Note and in the Prospectus, as supplemented by the applicable Pricing Supplement.
Unless otherwise specified therein, each payment of interest on a Certificated Note will
include interest accrued to but excluding the Interest Payment Date (provided that, in the case
of Certificated Notes which reset daily or weekly, interest payments will include accrued
interest to but excluding the Regular Record Date immediately preceding the Interest Payment
Date) or to but excluding Maturity (other than a Maturity of a Fixed Rate Certificated Note
occurring on the 31st day of a month, in which case such payment of interest will include
interest accrued to but excluding the 30th day of such month).
Regular Record Dates. The Regular Record Dates with respect to any Interest Payment Date
shall be the date fifteen calendar days immediately preceding such Interest Payment Date
(whether or not a Business Day).
Fixed Rate Certificated Notes. Unless otherwise specified pursuant to Settlement Procedure
"A" below, interest payments on Fixed Rate Certificated Notes will be made semi-annually on
June 1 and December 1 of each year and at Maturity; provided, however, that if any Interest
Payment Date for a Fixed Rate Certificated Note is not a Business Day, the payment due on such
day shall be made on the next succeeding Business Day and no interest shall accrue on
such payment for the period from and after such Interest Payment Date; provided further, that
in the case of a Fixed Rate Certificated Note issued between a Regular Record Date and an
Interest Payment Date, the first interest payment will be made on the Interest Payment Date
following the next succeeding Regular Record Date.
</TABLE>
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<PAGE> 54
<TABLE>
<S> <C>
Floating Rate Certificated Notes. Interest payments will be made on Floating Rate Certificated
Notes monthly, quarterly, semi-annually or annually. Interest will be payable, in the case of
Floating Rate Certificated Notes with a monthly Interest Payment Period, on the third Wednesday
of each month; with a quarterly interest Payment Period, on the third Wednesday of March, June,
September and December of each year; with a semi-annual Interest Payment Period, on the third
Wednesday of the two months specified pursuant to Settlement Procedure "A" below; and with
an annual Interest Payment Period, on the third Wednesday of the month specified pursuant to
Settlement Procedure "A" below; provided, however, that if an Interest Payment Date for a
Floating Rate Certificated Note would otherwise be a day that is not a Business Day with
respect to such Floating Rate Certificated Note, such Interest Payment Date will be the next
succeeding Business Day with respect to such Floating Rate Certificated Note, except in the
case of a Floating Rate Certificated Note for which the Base Rate is LIBOR, if such Business
Day is in the next succeeding calendar month, such Interest Payment Date will be the
immediately preceding Business Day; and provided further, that in the case of a Floating Rate
Certificated Note issued between a Regular Record Date and an interest Payment Date, the first
interest payment will be made on the Interest Payment Date following the next succeeding
Regular Record Date.
Calculation of Fixed Rate Certificated Note. Interest on Fixed Rate Certificated Notes (including interest
Interest: for partial periods) will be calculated on the basis of a 360-day year of twelve 30-day months.
Floating Rate Certificated Notes. Interest rates on Floating Rate Certificated Notes will be
determined as set forth in the form of Notes. Interest on Floating Rate Certificated Notes,
except as otherwise set forth therein, will be calculated on the basis of actual days elapsed
and a year of 360 days, except that in the case of a Floating Rate Certificated Note for
which the Base Rate is Treasury Rate, interest
</TABLE>
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<PAGE> 55
<TABLE>
<S> <C>
will be calculated on the basis of the actual number of days in the year.
Payments of Interest, if any, on each Certificated Note will be calculated and paid in the manner
Principal and described in such Note and in the Prospectus, as supplemented by the applicable Pricing
Interest: Supplement. Unless otherwise provided in the Indenture or the Certificated Note, the first
payment of interest on any Certificated Note originally issued between a Record Date and an
Interest Payment Date will be made on the next succeeding Interest Payment Date. Interest
payable at the Maturity of a Certificated Note will be payable to the Person to whom the
principal of such Note is payable. Unless other arrangements are made, all interest
payments (excluding interest payments made on the Maturity Date) will be made by check
mailed to the person entitled thereto as provided above; provided, however, that the
holder of $10,000,000 (or the equivalent thereof in other currencies) or more of
Certificated Notes with similar tenor and terms will be entitled to receive payment
by wire transfer or automated clearing house in U.S. dollars.
Within 10 days following each Record Date, the Trustee will inform the Company of the total
amount of the interest payments to be made by the Company on the next succeeding Interest
Payment Date. The Trustee will provide monthly to the Company a list of the principal and
interest to be paid on Certificated Notes maturing in the next succeeding month.
Chemical will be responsible for withholding taxes on interest paid on Certificated Notes as
required be applicable law.
If the Maturity of a Certificated Note is not a Business Day, the payment due on such day shall
be made on the next succeeding Business Day and no interest shall accrue on such payment for
the period from and after such Maturity.
</TABLE>
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<TABLE>
<S> <C>
Procedures upon Company Notice to Trustee Regarding Exercise of Optional Redemption. At least 45 days prior
Company's to the date on which it intends to redeem a Certificated Note, the Company will notify the
Exercise of Trustee that it is exercising such option with respect to such Certificated Note on such date.
Optional
Redemption: Trustee Notice to Holders Regarding Company's Exercise of Optional Redemption. After receipt
of notice that the Company is exercising its option to redeem a Certificated Note, the Trustee
will, at least 30 days before the redemption date for such Certificated Note, mail a notice,
first class, postage prepaid, to the Holder of such Certificated Note informing such
Holder of the Company's exercise of such option with respect to such Certificated Note.
Deposit of Redemption Price. On or before any redemption date, the Company shall deposit with
such Trustee an amount of money sufficient to pay the redemption price, plus interest
accrued to such redemption date, for all the Certificated Notes or portions thereof and which
are to be repaid on such redemption date. Such Trustee will use such money to repay such
Certificated Notes pursuant to the terms set forth in such Notes.
Procedure for Rate The Company and the Agents will discuss from time to time the aggregate principal amount of,
Setting and the issuance price of, and the interest rates to be borne by, Notes that may be sold as a
Posting: result of the solicitation of orders by the Agents. If the Company decides to set prices of,
and rates borne by, any Notes in respect of which the Agents are to solicit orders (the
setting of such prices and rates to be referred to herein as "posting") or if the Company
decides to change prices or rates previously posted by it, it will promptly advise the Agents
of the prices and rates to be posted.
Acceptance and Unless otherwise instructed by the Company, each Agent will advise the Company promptly by
Rejection of Orders: telephone of all orders to purchase Certificated Notes received by such Agent, other than
those rejected by it in whole or in part in the reasonable
</TABLE>
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<TABLE>
<S> <C>
exercise of its discretion. Unless otherwise agreed by the Company and the Agents, the Company
has the sole right to accept orders to purchase Certificated Notes and may reject any such
orders in whole or in part. Before accepting any order to purchase a Certificated Note to
be settled in less than three Business Days, the Company shall verify that the Trustee will
have adequate time to prepare and authenticate such Note.
Preparation of If any order to purchase a Certificated Note is accepted by or on behalf of the Company, the
Pricing Company will prepare a pricing supplement (a "Pricing Supplement") reflecting the interest
Supplement: rates and other terms of such Certified Note and will arrange to have copies thereof filed with
the Commission in accordance with the applicable paragraph of Rule 424(b) under the Act and
will supply one copy thereof (and additional copies if requested) to the Agent which presented
the order (the "Presenting Agent"). The Presenting Agent will cause a Prospectus and Pricing
Supplement to be delivered to the purchaser of such Certificated Note.
In each instance that a Pricing Supplement is prepared, the Presenting Agent will affix the
Pricing Supplement to Prospectuses prior to their use. Outdated Pricing Supplements (other
than those retained for files) will be destroyed.
Suspension of The Company reserves the right, in its sole discretion, to instruct the Agents to suspend at
Solicitation; any time for any period of time or permanently, the solicitation of orders to purchase
Amendment or Certificated Notes. Upon receipt of such instructions, the Agents will forthwith suspend
Supplement: solicitation until such time as the Company has advised them that such solicitation may be
resumed.
In the event that at the time the Company suspends solicitation of purchases there shall be any
orders outstanding for settlement, the Company will promptly advise the Agents, the Trustee
and Chemical whether such orders may be settled and whether copies of the Prospectus as in
effect at the time of the suspension,
</TABLE>
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<PAGE> 58
<TABLE>
<S> <C>
together with the appropriate Pricing Supplement, may be delivered in connection with the
settlement of such orders. The Company will have the sole responsibility for such
decision and for any arrangements that may be made in the event that the Company determines
that such orders may not be settled or that copies of such Prospectus may not be so delivered.
If the Company decides to amend or supplement the Registration Statement or the Prospectus, it
will promptly advise the Agents and furnish the Agents with the proposed amendment or
supplement and with such certificates and opinions as are required, all to the extent
required by and in accordance with the terms of the Agency Agreement. Subject to the
provisions of the Agency Agreement, the Company may file with the Commission any supplement to
the Prospectus relating to the Notes. The Company will provide the Agents, the Trustee and
Chemical with copies of any such supplement, and confirm to the Agents that such supplement has
been filed with the Commission pursuant to the applicable paragraph of Rule 424(b).
Procedure for When the Company has determined to change the interest rates of Certificated Notes being
Rate Changes: offered, it will promptly advise the Agents and the Agents will forthwith suspend solicitation
of orders. The Agents will telephone the Company with recommendations as to the changed
interest rates. At such time as the Company has advised the Agents of the new interest rates,
the Agents may resume solicitation of orders. Until such time only "indications of interest"
may be recorded.
Delivery of A copy of the Prospectus and a Pricing Supplement relating to a Certificated Note must
Prospectus: accompany or precede the earliest of any written offer of such Certificated Note, confirmation
of the purchase of such Certificated Note and payment for such Certificated Note by its
purchaser. If notice of a change in the terms of the Certificated Notes is received by the
Agents between the time an order for a Certificated Note is placed and the time written
confirmation thereof is sent by the Presenting Agent to a customer or his
</TABLE>
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<TABLE>
<S> <C>
agent, such confirmation shall be accompanied by a Prospectus and Pricing Supplement setting
forth the terms in effect when the order was placed. Subject to "Suspension of Solicitation;
Amendment or Supplement" above, the Presenting Agent will deliver a Prospectus and Pricing
Supplement as herein described with respect to each Certificated Note sold by it. The
Company will make such delivery if such Certificated Note is sold directly by the Company to
a purchaser (other than any Agent).
Confirmation: For each order to purchase a Certificated Note solicited by any Agent and accepted by or on
behalf of the Company, the Presenting Agent will issue a confirmation to the purchaser,
with a copy to the Company, setting forth the details set forth above and delivery and payment
instructions.
Settlement: The receipt by the Company of immediately available funds in exchange for an authenticated
Certificated Note delivered to the Presenting Agent and the Presenting Agent's delivery of such
Certificated Note against receipt of immediately available funds shall, with respect to such
Certificated Note, constitute "settlement". All orders accepted by the Company will be settled
on the fifth Business Day following the date of sale pursuant to the timetable for settlement
set forth below, unless the Company and the purchaser agree to settlement on another day which
shall be no earlier than the next Business Day following the date of sale.
Settlement Settlement Procedures with regard to each Certificated Note sold by the Company through any
Procedures: Agent, as agent, shall be as follows:
A. The Presenting Agent will advise the Company by telephone of the following settlement
information, in time for the Trustee to prepare and authenticate the required Note:
1. Name in which such Certificated Note is to be registered ("Registered Owner").
</TABLE>
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<PAGE> 60
<TABLE>
<S> <C>
2. Address of the Registered Owner and address for payment of principal and
interest.
3. Taxpayer identification number of the Registered Owner (if available).
4. Principal amount.
5. Maturity Date.
6. In the case of a Fixed Rate Certificated Note, the interest rate or, in the
case of a Floating Rate Certificated Note, the initial interest rate (if known at
such time), Base Rate, Index Maturity, Interest Reset Period, Interest Reset
Dates, Spread or Spread Multiplier (if any), Minimum Interest Rate (if any) and
Maximum Interest Rate (if any).
7. Interest Payment Dates and the Interest Payment Period.
8. Specified Currency and whether the option to elect payment in a Specified
Currency applies and if the Specified Currency is not U.S. dollars, the
authorized denominations.
9. Redemption, repayment or extension provisions, if any.
10. Settlement date.
11. Price (including currency).
12. Presenting Agent's commission, determined as provided in Section 2 of the
Agency Agreement.
13. Whether such Certificated Note is issued at an original issue discount, and,
if so, the total amount of OID, the yield to maturity and the initial accrual
period OID.
B. The Company will advise Chemical by telephone (confirmed in writing at any time on
the sale date) or electronic
</TABLE>
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<TABLE>
<S> <C>
transmission of the information set forth in Settlement Procedure "A" above and
the name of the Presenting Agent.
C. The Company will deliver to Chemical a pre-printed five-ply packet for such
Certificated Note, which packet will contain the following documents in forms that have
been approved by Company, the Agents and the Trustee:
1. Certificated Note with customer confirmation.
2. Stub One - For Trustee.
3. Stub Two - For the Presenting Agent.
4. Stub Three - For the Company.
5. Stub Four - For the Authenticating Agent.
D. Chemical will complete such Certificated Note and will authenticate such
Certificated Note and deliver it (with the confirmation) and Stubs One and Two to the
Presenting Agent, all in accordance with the written directions (or oral instructions
confirmed in writing on the next Business Day) of the Company, and the Presenting Agent
will acknowledge receipt of the Note by stamping or otherwise marking Stub One and
returning it to the Trustee. Such delivery will be made only against such
acknowledgment of receipt. In the event that the instructions given by the Presenting
Agent for payment to the account of the Company are revoked, the Company will as
promptly as possible wire transfer to the account of the Presenting Agent an amount of
immediately available funds equal to the amount of such payment made.
E. The Presenting Agent will deliver such Certificated Note (with the confirmation) to
the customer against payment in immediately payable funds. The Presenting Agent will
obtain the acknowledgement of receipt of such Certificated Note by retaining Stub Two.
</TABLE>
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<TABLE>
<S> <C>
F. Chemical will send Stub Three to the Company by first-class mail and retain Stub Four
for its records.
Settlement For orders of Certificated Notes solicited by any Agent, as agent, and accepted by the
Procedures Company, Settlement Procedures "A" through "F" set forth above shall be completed on or before
Timetable: the respective times (New York City time) set forth below:
<CAPTION>
Settlement
Procedure Time
--------- ----
<S> <C>
A 2:00 P.M. on the day before settlement
B-C 3:00 P.M. on the Business Day before
settlement
D 2:15 P.M. on settlement date
E 3:00 P.M. on settlement date
F 5:00 P.M. on settlement date
<S> <C>
Failure to If a purchaser fails to accept delivery of and make payment for any Certificated Note, the
Settle: Presenting Agent will notify the Company and Chemical by telephone and return such
Certificated Note to the Trustee. Upon receipt of such notice, the Company will immediately
wire transfer to the account of the Presenting Agent an amount equal to the amount previously
credited to the account of Company in respect of such Certificated Note. Such wire transfer
will be made on the settlement date, if possible, and in any event not later than the Business
Day following the settlement date. If the failure shall have occurred for any reason other
than a default by the Presenting Agent in the performance of its obligations hereunder and
under the Agency Agreement, then the Company will reimburse the Presenting Agent or Chemical,
as appropriate, on an equitable basis for its loss of the use of the funds during the period
when they were credited to the account of the Company. Immediately upon receipt of the
Certificated Note in respect of which such failure occurred, the Trustee
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<TABLE>
<S> <C>
will cancel such Certificated Note in accordance with the Indenture and so advise the Company
and Chemical, and Chemical will make appropriate entries in its records.
Trustee and Chemical Nothing herein shall be deemed to require the Trustee or Chemical to risk or expend its own
Not to Risk Funds: funds in connection with any payment to the Company, the Agents or the purchaser, it
being understood by all parties that payments made by the Trustee or Chemical to the Company,
the Agents or the purchaser shall be made only to the extent that funds are provided to the
Trustee or Chemical for such purpose.
Authenticity of The Company will cause the Trustee to furnish Chemical and the Agents from time to time with
Signatures: the specimen signatures of each of the Trustee's officers, employees or agents who has been
authorized by the Trustee to authenticate Certificated Notes, but neither Chemical nor any
Agent will have any obligation or liability to the Company or the Trustee in respect of the
authenticity of the signature of any officer, employee or agent of the Company or the Trustee
on any Certificated Note.
Periodic Statements Periodically, Chemical will send to the Company a statement setting forth the principal
from Chemical: amount of Certificated Notes Outstanding as of that date and setting forth a brief description
of any sales of Certificated Notes which the Company has advised Chemical but which have not
yet been settled.
</TABLE>
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<PAGE> 64
EXHIBIT B
JOHNSON CONTROLS, INC.
Medium Term Notes, Series C
Due Nine Months
or More from Date of Issue
TERMS AGREEMENT
______________, 199__
Attention:
Subject in all respects to the terms and conditions of the Selling
Agency Agreement (the "Agreement") dated , 1995, between Salomon
Brothers Inc, J.P. Morgan Securities Inc., Lehman Brothers, Lehman Brothers
Inc. and BA Securities, Inc., and you, the undersigned agrees to purchase the
following Notes of Johnson Controls, Inc.
[Add additional terms as may be needed to identify Notes.]
<TABLE>
<S> <C>
[Specified Currency]:
Aggregate Principal Amount: $
Interest Rate:
Date of Maturity:
Interest Payment Dates:
Regular Record Dates:
Discount or Commission: % of Principal Amount
Purchase Price: % of Principal Amount [plus accrued interest from ____________, 199__]
Purchase Date and Time:
Place for Delivery of Notes
and Payment Therefor:
Method of Payment:
</TABLE>
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<PAGE> 65
Modification, if any, in
the requirements to
deliver the documents
specified in Section 6(b)
of the Agreement:
Period during which additional
Notes may not be sold pursuant
to Section 4(m) of the Agreement:
[Purchaser]
By:____________________
Accepted:
Johnson Controls, Inc.
By:_______________________
Title:
-65-
<PAGE> 1
Exhibit 4.1
================================================================================
JOHNSON CONTROLS, INC.
TO
CHEMICAL BANK DELAWARE,
TRUSTEE
___________
INDENTURE
Dated as of _________ __, 1995
___________
DEBT SECURITIES
================================================================================
<PAGE> 2
TABLE OF CONTENTS*
<TABLE>
<CAPTION>
Page
----
<S> <C>
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE.
Definitions.
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Capitalized Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request and Company Order . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Current Liabilities . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Net Tangible Assets . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Tangible Assets . . . . . . . . . . . . . . . . . . . . . . . 4
Conversion Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Currency Determination Agent . . . . . . . . . . . . . . . . . . . . . . . 4
Current Market Price . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Debt Security or Debt Securities . . . . . . . . . . . . . . . . . . . . . 5
Debt Security Register . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Depository . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Dollar Equivalent of the Foreign Currency . . . . . . . . . . . . . . . . . 5
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Foreign Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Funded Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Global Debt Security . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Indexed Debt Security . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
</TABLE>
__________________________________
* This table of contents shall not, for any purpose, be deemed to be a part of
the Indenture.
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
Market Exchange Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Original Issue Discount Debt Security . . . . . . . . . . . . . . . . . . . . . . . . . 8
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Predecessor Debt Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Principal Office of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Principal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Public Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Restricted Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Secured Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Trust Indenture Act of 1939 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Unrestricted Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Valuation Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Voting Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE TWO.
Debt Security Forms.
SECTION 2.01. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.02. Forms of Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.03. Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . 14
SECTION 2.04. Debt Securities in Global Form . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE THREE.
The Debt Securities.
SECTION 3.01. Title and Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.02. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
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----
<S> <C> <C>
SECTION 3.03. Payment of Principal and Interest . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.04. Execution of Debt Securities . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.05. Temporary Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.06. Exchange and Registration of Transfer of Debt Securities . . . . . . . . . 22
SECTION 3.07. Mutilated, Destroyed, Lost or Stolen Debt Securities . . . . . . . . . . . 23
SECTION 3.08. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . 24
SECTION 3.09. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.10. Cancellation of Debt Securities Paid, etc . . . . . . . . . . . . . . . . 26
SECTION 3.11. Currency and Manner of Payments . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE FOUR.
Redemption of Debt Securities; Sinking Funds.
SECTION 4.01. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.02. Notice of Redemption; Selection of Debt Securities . . . . . . . . . . . . 28
SECTION 4.03. Payment of Debt Securities Called for Redemption . . . . . . . . . . . . . 29
SECTION 4.04. Exclusion of Certain Securities from Eligibility
for Selection for Redemption . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.05. Provisions with Respect to any Sinking Funds . . . . . . . . . . . . . . . 30
ARTICLE FIVE.
Particular Covenants of the Company
SECTION 5.01. Payment of Principal, Premium and Interest . . . . . . . . . . . . . . . . 32
SECTION 5.02. Offices for Notices and Payments, etc . . . . . . . . . . . . . . . . . . 32
SECTION 5.03. Appointments to Fill Vacancies in Trustee's Office . . . . . . . . . . . . 33
SECTION 5.04. Provisions as to Paying Agent . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.05. Limitation on Secured Debt . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.06. Sale and Leaseback Transactions . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.07. Restrictions on Transfer of Principal Property to Unrestricted
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.08. Certificate to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.09. Waivers of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE SIX.
Holders' Lists and Reports by the Company and the Trustee.
SECTION 6.01. Holders' Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.02. Preservation and Disclosure of Lists . . . . . . . . . . . . . . . . . . . 39
</TABLE>
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<TABLE>
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<S> <C>
SECTION 6.03. Reports by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.04. Reports by the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE SEVEN.
Remedies of the Trustee and Holders on Event of Default.
SECTION 7.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.02. Payment of Debt Securities Upon Default; Suit Therefor . . . . . . . . . . . . . . . . 43
SECTION 7.03. Application of Moneys Collected by Trustee . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 7.04. Proceedings by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 7.05. Proceedings by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 7.06. Remedies Cumulative and Continuing . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.07. Direction of Proceedings and Waiver of Defaults by
Majority of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.08. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 7.09. Undertaking to Pay Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 7.10. Unconditional Right of Holders to Receive Principal,
Premium and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE EIGHT.
Concerning the Trustee.
SECTION 8.01. Duties and Responsibilities of Trustee . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 8.02. Reliance on Documents, Opinions, etc . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 8.03. No Responsibility for Recitals, etc . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 8.04. Trustee and Agents May Own Debt Securities . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 8.05. Moneys to be Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 8.06. Compensation and Expenses of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 8.07. Officers' Certificate as Evidence . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 8.08. Conflicting Interest of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 8.09. Eligibility of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 8.10. Resignation or Removal of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 8.11. Acceptance by Successor Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 8.12. Succession by Merger, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 8.13. Limitation on Rights of Trustee as a Creditor . . . . . . . . . . . . . . . . . . . . 55
SECTION 8.14. Authenticating Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
</TABLE>
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<TABLE>
<CAPTION>
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ARTICLE NINE.
Concerning the Holders.
<S> <C> <C>
SECTION 9.01. Action by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 9.02. Proof of Execution by Holders . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 9.03. Who Are Deemed Absolute Owners . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.04. Company-Owned Debt Securities Disregarded . . . . . . . . . . . . . . . . . . 59
SECTION 9.05. Revocation of Consents; Future Holders Bound . . . . . . . . . . . . . . . . . 59
ARTICLE TEN
Holders' Meetings.
SECTION 10.01. Purposes of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 10.02. Call of Meetings by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 10.03. Call of Meetings by Company or Holders . . . . . . . . . . . . . . . . . . . 61
SECTION 10.04. Qualifications for Voting . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.05. Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.06. Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 10.07. No Delay of Rights by Meeting . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE ELEVEN.
Supplemental Indentures.
SECTION 11.01. Supplemental Indentures without Consent of Holders . . . . . . . . . . . . . 63
SECTION 11.02. Supplemental Indentures with Consent of Holders . . . . . . . . . . . . . . . 65
SECTION 11.03. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 11.04. Notation on Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 11.05. Evidence of Compliance of Supplemental Indenture to be
Furnished Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE TWELVE.
Consolidation, Merger, Sale and Conveyance.
SECTION 12.01. Company May Consolidate, etc., on Certain Terms . . . . . . . . . . . . . . . 66
SECTION 12.02. Debt Securities to be Secured in Certain Events . . . . . . . . . . . . . . . 67
SECTION 12.03. Successor Corporation to be Substituted . . . . . . . . . . . . . . . . . . . 67
SECTION 12.04. Opinion of Counsel to Be Given Trustee . . . . . . . . . . . . . . . . . . . 68
</TABLE>
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<TABLE>
<CAPTION>
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ARTICLE THIRTEEN.
Satisfaction and Discharge of Indenture.
<S> <C>
SECTION 13.01. Satisfaction, Discharge and Defeasance of Debt Securities of any Series . . . . . . 68
SECTION 13.02. Defeasance of Debt Securities of any Series . . . . . . . . . . . . . . . . . . . . 70
SECTION 13.03. Application of Trust Funds; Indemnification . . . . . . . . . . . . . . . . . . . . 71
SECTION 13.04. Return of Unclaimed Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE FOURTEEN.
Immunity of Incorporators, Stockholders, Officers and Directors.
SECTION 14.01. Indenture and Debt Securities Solely Corporate Obligations . . . . . . . . . . . . 72
ARTICLE FIFTEEN.
Miscellaneous Provisions.
SECTION 15.01. Provisions Binding on Successors of the Company . . . . . . . . . . . . . . . . . . 73
SECTION 15.02. Indenture for Sole Benefit of Parties and Holders of Debt Securities. . . . . . . . 73
SECTION 15.03. Addresses for Notices, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 15.04. New York Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 15.05. Evidence of Compliance with Conditions Precedent . . . . . . . . . . . . . . . . . 74
SECTION 15.06. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 15.07. Trust Indenture Act of 1939 to Control . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 15.08. Table of Contents, Headings, etc . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 15.09. Determination of Principal Amount . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 15.10. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
</TABLE>
vi
<PAGE> 8
CROSS REFERENCE SHEET
BETWEEN
Provisions of Sections 310 through 318(a) inclusive of Trust Indenture Act of
1939 and the Indenture dated as of _________ __, 1995 between Johnson Controls,
Inc. and Chemical Bank Delaware, as Trustee.
<TABLE>
<CAPTION>
SECTION OF ACT SECTION OF INDENTURE
-------------- --------------------
<S> <C>
310(a)(1) and (2) . . . . . . . . . . . . . . . . . . . . . . 8.09
310(a)(3) and (4) . . . . . . . . . . . . . . . . . . . . . . *
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.08 and 8.10
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.13(a)
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.13(b)
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01 and 6.02(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.02(b)
312(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.02(c)
313(a)(1), (2), (3), (4), (6) and (7) . . . . . . . . . . . . 6.04(a)(1-6)
313(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . *
313(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . *
313(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.04(b)
313(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.04(c)
313(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.04(d)
314(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.03(a)
314(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.03(b)
314(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.03(c)
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
314(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 15.05
314(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 15.05
314(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . *
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
314(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.05
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
315(a), (c) and (d) . . . . . . . . . . . . . . . . . . . . . 8.01
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08
315(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.09
316(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.07
316(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . *
316(a) last para. . . . . . . . . . . . . . . . . . . . . . . 9.04
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
317(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02
317(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.07
</TABLE>
______________________
* Not applicable.
** This cross reference sheet shall not, for any purpose, be deemed to be
part of the Indenture.
<PAGE> 9
THIS INDENTURE, dated as of ____________ __, 1995,
between Johnson Controls, Inc., a Wisconsin corporation (the "Company"), and
Chemical Bank Delaware, a Delaware banking corporation, as trustee (the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and
delivery of this Indenture to provide for the issue from time to time of its
unsecured debentures, notes, bonds or other evidences of indebtedness to be
issued in one or more series as in this Indenture provided, up to such
principal amount or amounts as may from time to time be authorized in or
pursuant to one or more resolutions of the Board of Directors.
All things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the
purchase or acceptance of the Debt Securities by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of the
respective Holders from time to time of the Debt Securities or of any series
thereof as follows:
ARTICLE ONE.
DEFINITIONS.
SECTION 1.01. Definitions. The terms defined in
this Section 1.01 (except as herein otherwise expressly provided or unless the
context otherwise requires) for all purposes of this Indenture and of any
indenture supplemental hereto shall have the respective meanings specified in
this Section 1.01. All other terms used in this Indenture which are defined in
the Trust Indenture Act of 1939 or which are by reference therein defined in
the Securities Act of 1933, as amended, shall have (except as herein otherwise
expressly provided or unless the context otherwise requires) the meanings
assigned to such terms in said Trust Indenture Act of 1939 and in said
Securities Act as in force at the date of the execution of this Indenture. All
accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with generally accepted accounting principles and, except as
otherwise herein expressly provided, the term "generally accepted accounting
principles" with respect to any computation required or permitted hereunder
shall mean such accounting principles as are generally accepted at the date of
such computation. All references to such terms herein shall be both to the
singular or the plural, as the context so requires.
<PAGE> 10
AFFILIATE:
The term "Affiliate", when used with respect to any
specified Person, means any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
AUTHENTICATING AGENT:
The term "Authenticating Agent" shall mean the agent
of the Trustee, if any, which at the time shall be appointed and acting
pursuant to Section 8.14.
BOARD OF DIRECTORS:
The term "Board of Directors" shall mean the Board of
Directors of the Company or any authorized committee of such Board designated
by the Board of Directors or the by-laws or the articles of incorporation of
the Company to act for such Board for purposes of this Indenture.
BOARD RESOLUTION:
The term "Board Resolution" means a copy of a
resolution certified by a Vice President, the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such certification, and
delivered to the Trustee.
BUSINESS DAY:
The term "Business Day", when used with respect to
any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in that Place of
Payment are authorized or obligated by law to close.
CAPITALIZED RENT:
The term "Capitalized Rent" means the total net
amount of rent payable for the remaining term as of the date of determination
thereof under a lease of Principal Property by the Company or any of its
Restricted Subsidiaries, discounted from the respective due dates thereof to
such date at the rate per annum equal to the weighted average interest rate
borne by the Debt Securities. The weighted average interest rate borne by the
Debt Securities shall be calculated by dividing the aggregate of the annual
interest payments
2
<PAGE> 11
required on the Debt Securities, based on the amount Outstanding at the latest
date any Debt Securities were issued hereunder, by the aggregate principal
amount of the Debt Securities Outstanding at such date. The total net amount of
rent payable under any such lease for any period shall be the total amount of
the rent payable by the lessee with respect to such period but shall not
include amounts required to be paid on account of maintenance and repairs,
insurance, taxes, assessments, water rates, sewer rents and similar charges and
contingent rents such as those based on sales. The remaining term under any
lease shall be calculated without giving effect to any unexercised option
of the lessee for the renewal or extension of any term. In the case of any
lease which is terminable by the lessee upon the payment of a penalty, such net
amount shall also include the amount of such penalty, but not rent shall be
considered as required to be paid under such lease subsequent to the first date
upon which it may be so terminated.
COMPANY:
The term "Company" shall mean Johnson Controls, Inc.,
a Wisconsin corporation, and, subject to Article Twelve, shall include its
successors and assigns.
COMPANY REQUEST AND COMPANY ORDER:
The terms "Company Request" and "Company Order" mean,
respectively, a written request or order signed in the name of the Company by
its Chairman of the Board, Vice Chairman of the Board, President or a Vice
President, and by its Treasurer, Secretary, Assistant Secretary or Assistant
Treasurer, and delivered to the Trustee.
CONSOLIDATED CURRENT LIABILITIES:
The term "Consolidated Current Liabilities" means the
aggregate of the current liabilities of the Company and its Restricted
Subsidiaries (excluding liabilities of Unrestricted Subsidiaries and excluding
billings on uncompleted contracts in excess of related costs and profits)
appearing on the most recent available consolidated balance sheet of the
Company and its Restricted Subsidiaries, all in accordance with generally
accepted accounting principles; provided, however, that in no event shall
Consolidated Current Liabilities include any obligation of the Company and its
Restricted Subsidiaries issued under a revolving credit or similar agreement if
the obligation issued under such agreement matures by its terms within 12
months from the date thereof but by the terms of such agreement such obligation
may be renewed or extended or the amount thereof reborrowed or refunded at the
option of the Company or any Restricted Subsidiary for a term in excess of 12
months from the date of determination.
3
<PAGE> 12
CONSOLIDATED NET TANGIBLE ASSETS:
The term "Consolidated Net Tangible Assets" means
Consolidated Tangible Assets after deduction of Consolidated Current
Liabilities.
CONSOLIDATED TANGIBLE ASSETS:
The term "Consolidated Tangible Assets" means the
aggregate of all assets of the Company and its Restricted Subsidiaries
(including the value of all existing Sale and Leaseback Transactions and any
assets resulting from the capitalization of other long-term lease obligations
in accordance with generally accepted accounting principles but excluding the
value of assets or investments in any Unrestricted Subsidiary or any
non-majority-owned Subsidiary) appearing on the most recent available
consolidated balance sheet of the Company and its Restricted Subsidiaries at
their net book values, after deducting related depreciation, amortization and
other valuation reserves and excluding (a) any capital write-ups resulting from
reappraisals of assets or of other investments after December 31, 1994 (other
than a write-up of any assets constituting part of the assets and business
of another corporation made in connection with the acquisition, direct or
indirect, of the assets and business of such other corporation) except as
permitted in accordance with generally accepted accounting principles, (b)
treasury stock, (c) patent and trademark rights, good will, unamortized
discounts and expenses and any other intangible items, all in accordance with
generally accepted accounting principles.
CONVERSION DATE:
The term "Conversion Date" shall have the meaning set
forth in Section 3.11:
CURRENCY DETERMINATION AGENT:
The term "Currency Determination Agent" shall mean
the financial institution, if any, from time to time selected by the Company
and approved by the Trustee for purposes of Section 3.11.
CURRENT MARKET PRICE:
The term "Current Market Price" means the closing
price (or, if none, the average of the last daily bid and asked prices) of the
applicable class of capital stock as quoted by the primary securities exchange
on which the stock is traded, or, if none, the primary inter-dealer quotation
system, which reports quotations for the class of capital stock, for the last
trading day immediately prior to the Calculation Date.
4
<PAGE> 13
DEBT SECURITY OR DEBT SECURITIES:
The terms "Debt Security" or "Debt Securities" shall
mean any unsecured notes, debentures or other indebtedness of any series, as
the case may be, issued by the Company from time to time, and authenticated and
delivered under this Indenture.
DEBT SECURITY REGISTER:
The term "Debt Security Register" shall have the
meaning set forth in Section 3.06.
DEPOSITORY:
The term "Depository" shall mean, unless otherwise
specified by the Company pursuant to Section 3.01, with respect to Securities
of any series issuable or issued as a Global Security, The Depository Trust
Company, New York, New York, or any successor thereto registered as a clearing
agency pursuant to the provisions of Section 17A of the Securities Exchange Act
of 1934, as amended, or other applicable statute or regulation.
DOLLAR:
The terms "Dollar" shall mean the coin or currency of
the United States of America which as of the time of payment is legal tender
for the payment of public and private debts.
DOLLAR EQUIVALENT OF THE FOREIGN CURRENCY:
The term "Dollar Equivalent of the Foreign Currency"
shall have the meaning set forth in Section 3.11.
EVENT OF DEFAULT:
The term "Event of Default" shall mean any event
specified in Section 7.01, continued for the period of time, if any, and after
the giving of the notice, if any, therein designated.
FOREIGN CURRENCY:
The term "Foreign Currency" shall mean a currency
issued by the government of any country other than the United States of
America.
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FUNDED DEBT:
The term "Funded Debt" means all indebtedness for
money borrowed having a maturity of more than twelve months from the date of
the most recent consolidated balance sheet of the Company and its Restricted
Subsidiaries (excluding indebtedness of Unrestricted Subsidiaries) or renewable
and extendible beyond twelve months at the option of the borrower and all
obligations in respect of lease rentals which under generally accepted
accounting principles would be shown on a consolidated balance sheet of the
Company as a liability item other than a current liability; provided, however,
that Funded Debt shall not include any of the foregoing to the extent that such
indebtedness or obligations are not required by generally accepted accounting
principles to be shown on the balance sheet of the Company.
GLOBAL DEBT SECURITY:
The term "Global Debt Security" means a Debt Security
issued to evidence all or part of a series of Debt Securities.
GOVERNMENT OBLIGATIONS:
The term "Government Obligations" means securities
which are (i) direct obligations of the government which issued the currency in
which the Debt Securities of a series are denominated or (ii) obligations of a
person controlled or supervised by and acting as an agency or instrumentality
of the government which issued the currency in which the Debt Securities of
such series are denominated, the payment of which obligations is
unconditionally guaranteed by such government, and which, in either case, are
full faith and credit obligations of such government, are denominated in the
currency in which the Debt Securities of such series are denominated and which
are not callable or redeemable at the option of the issuer thereof.
HOLDER:
The term "Holder" means any Person in whose name a
Debt Security of any series is registered in the Debt Security Register
applicable to Debt Securities of such series.
INDENTURE:
The term "Indenture" shall mean this instrument as
originally executed or, if amended or supplemented as herein provided, as so
amended or supplemented, pursuant to the applicable provisions hereof.
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INDEXED DEBT SECURITY
The term "Indexed Debt Security" means a Debt
Security the terms of which provide that the principal amount thereof payable
at Stated Maturity may be more or less than the principal face amount thereof
at original issuance.
INTEREST:
The term "interest", when used with respect to an
Original Issue Discount Debt Security which by its terms bears interest only
after maturity, means interest payable after maturity.
INTEREST PAYMENT DATE:
The term "Interest Payment Date", when used with
respect to any series of Debt Securities, means the Stated Maturity of an
installment of interest on such Debt Securities.
MARKET EXCHANGE RATE:
The term "Market Exchange Rate" shall have the
meaning set forth in Section 3.11.
OFFICERS' CERTIFICATE:
The term "Officers' Certificate", when used with
respect to the Company, shall mean a certificate signed by its Chairman of the
Board, Vice Chairman of the Board, President, or a Vice President and by its
Treasurer, Secretary, Assistant Secretary or Assistant Treasurer and delivered
to the Trustee. Each such certificate shall include the statements provided
for in Section 15.05 to the extent required by the provisions of such Section.
OPINION OF COUNSEL:
The term "Opinion of Counsel" shall mean an opinion
in writing signed by legal counsel who may be an employee of or counsel to the
Company, and who shall be reasonable acceptable to the Trustee. Each such
opinion shall include the statements provided for in Section 3.04 and Section
15.05 to the extent required by the provisions of such Sections.
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ORIGINAL ISSUE DISCOUNT DEBT SECURITY:
The term "Original Issue Discount Date 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 7.01.
OUTSTANDING:
The term "Outstanding", when used with respect to
Debt Securities or Debt Securities of any series, means, as of the date of
determination, all such Debt Securities theretofore authenticated and delivered
under this Indenture, except:
(i) such Debt Securities theretofore cancelled by
the Trustee or delivered to the Trustee for
cancellation;
(ii) such Debt Securities for whose payment or
redemption money in the necessary amount and in the
specified currency has been theretofore deposited
with the Trustee or any paying agent (other than the
Company) in trust or set aside and segregated in
trust by the Company (if the Company shall act as its
own paying agent) for the Holders of such Debt
Securities, provided, however, that if such Debt
Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the
Trustee has been made;
(iii) such Debt Securities in exchange for or in
lieu of which other such Debt Securities have been
authenticated and delivered pursuant to this
Indenture, or such Debt Securities which have been
paid, pursuant to this Indenture, unless proof
satisfactory to the Trustee is presented that any
such Debt Securities are held by Persons in whose
hands any of such Debt Securities are a legal, valid
and binding obligation of the Company, and
(iv) such Debt Securities the indebtedness in
respect to which has been discharged in accordance
with Section 13.02.
provided, however, that in determining whether the Holders of the requisite
principal amount of such Outstanding Debt Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, such
Debt Securities owned by the Company or such other obligor upon such Debt
Securities or any Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only such Debt
Securities which the Trustee knows to be so owned shall be so disregarded.
Such Debt Securities so owned
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which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so
to act with respect to such Debt Securities and that the pledgee is not the
Company or any other such obligor upon such Debt Securities or any Affiliate of
the Company or such other obligor. In case of a dispute as to such right, the
decision of the Trustee upon the advice of counsel shall be full protection to
the Trustee. Upon request of the Trustee, the Company shall furnish to
the Trustee promptly an Officers' Certificate listing and identifying all such
Debt Securities, if any, known by the Company to be owned or held by or for the
account of any of the above described Persons; and, subject to the provisions
of Section 8.01, the Trustee shall be entitled to accept such Officers'
Certificate as conclusive evidence of the facts therein set forth and of the
fact that all such Debt Securities not listed therein are Outstanding for the
purpose of any such determination.
PERSON:
The term "Person" means any individual, corporation,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
PLACE OF PAYMENT:
The term "Place of Payment", when used with respect
to the Debt Securities of any series, means the place or places where the
principal of (premium, if any) and interest on the Debt Securities of that
series are payable as specified in accordance with Section 3.01.
PREDECESSOR DEBT SECURITY:
The term "Predecessor Debt Security" of any
particular Debt Security means every previous Debt Security evidencing all or a
portion of the same debt as that evidenced by such particular Debt Security,
and for the purposes of this definition, any Debt Security authenticated and
delivered under Section 3.07 in lieu of a mutilated, lost, destroyed or stolen
Debt Security shall be deemed to evidence the same debt as the mutilated, lost,
destroyed or stolen Debt Security.
PRINCIPAL OFFICE OF THE TRUSTEE:
The term "principal office of the Trustee", or other
similar terms, means the principal office of the Trustee in Wilmington,
Delaware, at which at any particular time its corporate trust business shall be
administered, which office on the date hereof is located at 222 Delaware
Avenue, Wilmington, Delaware 19801.
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PRINCIPAL PROPERTY:
The term "Principal Property" means any manufacturing
plant, warehouse, office building or parcel of real property (including
fixtures but excluding leases and other contract rights which might otherwise
be deemed real property) owned by the Company or any Restricted Subsidiary,
whether owned on the date hereof or thereafter, provided each such plant,
warehouse, office building or parcel of real property has a gross book value
(without deduction for any depreciation reserves) at the date as of which the
determination is being made of in excess of two percent of the Consolidated Net
Tangible Assets of the Company and the Restricted Subsidiaries, other than any
such plant, warehouse, office building or parcel of real property or portion
thereof which, in the opinion of the Board of Directors (evidenced by a
certified Board Resolution thereof delivered to the Trustee), is not of
material importance to the business conducted by the Company and its Restricted
Subsidiaries taken as a whole.
PUBLIC NOTICE:
The term "Public Notice" shall, without limitation,
include any filing or report made in accordance with the requirements of the
Securities and Exchange Commission or any press release or public announcement
made by the Company.
REDEMPTION DATE:
The term "Redemption Date", when used with respect to
any Debt Security to be redeemed, means the date fixed for such redemption by
or pursuant to this Indenture.
REDEMPTION PRICE:
The term "Redemption Price", when used with respect
to any Debt Security to be redeemed, means the price specified in such Debt
Security at which it is to be redeemed pursuant to this Indenture.
REGULAR RECORD DATE:
The term "Regular Record Date" for the interest
payable on any Debt Security on any Interest Payment Date means the date
specified in such Debt Security as the "Regular Record Date" as contemplated by
Section 3.01.
RESPONSIBLE OFFICER:
The term "Responsible Officer", when used with
respect to the Trustee, means the chairman or any vice-chairman of the board of
directors, the chairman or any vice-chairman of the executive committee of the
board of directors, the chairman of the trust
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committee, the president, any vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, the cashier, any assistant
cashier, any trust officer or assistant trust officer, the controller or any
assistant controller or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
RESTRICTED SUBSIDIARY:
The term "Restricted Subsidiary" means (a) any
Subsidiary other than an Unrestricted Subsidiary and (b) any Subsidiary which
was an Unrestricted Subsidiary but which, subsequent to December 31, 1994, is
designated by the Company (by Board Resolution) to be a Restricted Subsidiary;
provided however, that the Company may not designate any such Subsidiary to be
a Restricted Subsidiary if the Company would thereby breach any covenant or
agreement herein contained (on the assumptions that any outstanding Secured
Debt of such Subsidiary was incurred at the time of such designation and that
any Sale and Leaseback Transaction (as defined in Section 5.06) to which such
Subsidiary is then a party was entered into at the time of such designation).
SECURED DEBT:
The term "Secured Debt" means indebtedness for money
borrowed and any Funded Debt which is secured by a Security Interest in (a) any
Principal Property or (b) any shares of capital stock or indebtedness of any
Restricted Subsidiary.
SECURITY INTEREST:
The term "Security Interest" shall mean any mortgage,
pledge, lien, encumbrance, conditional sale, title retention agreement or other
security interest which secures payment or performance of an obligation.
SPECIAL RECORD DATE:
The term "Special Record Date" for the payment of any
Defaulted Interest (as defined in Section 3.08) means a date fixed by the
Trustee pursuant to Section 3.08.
STATED MATURITY:
The term "Stated Maturity" when used with respect to
any Debt Security or any instalment of principal thereof or of interest
thereon, means the date specified in such Debt Security as the fixed date on
which the principal of such Debt Security, or such instalment of interest, is
due and payable.
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SUBSIDIARY:
The term "Subsidiary" means any corporation of which
the Company, or the Company and one or more Subsidiaries, or any one or more
Subsidiaries, directly or indirectly own more than 50% of the Voting Stock.
TRUSTEE:
The term "Trustee" shall mean Chemical Bank
(Delaware) and, subject to the provisions of Article Eight hereof, shall also
include its successors and assigns as Trustee hereunder.
TRUST INDENTURE ACT OF 1939:
The term "Trust Indenture Act of 1939" means the
Trust Indenture Act of 1939, as amended, as in force at the date as of which
this Indenture was executed; provided, however, that in the event the Trust
Indenture Act of 1939 is amended after such date, "Trust Indenture Act of 1939"
means to the extent required by any such amendment, the Trust Indenture Act of
1939 as so amended.
UNRESTRICTED SUBSIDIARY:
The term "Unrestricted Subsidiary" means (a) any
Subsidiary acquired or organized after March 31, 1989, provided, however,
that such Subsidiary shall not be a successor, directly or indirectly, to any
Restricted Subsidiary; (b) any Subsidiary whose principal business or assets
are located outside the United States of America, its territories and
possessions, Puerto Rico or Canada; (c) any Subsidiary the principal business
of which consists of financing or assisting in financing of customer
construction projects or the acquisition or disposition of products of dealers,
distributors or other customers; (d) any Subsidiary engaged in the insurance
business or whose principal business is the ownership, leasing, purchasing,
selling or development of real property; and (e) any Subsidiary substantially
all the assets of which consist of stock or other securities of a Subsidiary or
Subsidiaries of a character described in clauses (a) through (d) of this
paragraph, unless and until any such Subsidiary shall have been designated to
be a Restricted Subsidiary pursuant to clause (b) of the definition of
"Restricted Subsidiary."
VALUATION DATE:
The term "Valuation Date" shall have the meaning set
forth in Section 3.11.
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VOTING STOCK:
The term "Voting Stock" means outstanding shares of
capital stock having under ordinary circumstances voting power for the election
of directors whether at all times or only so long as no senior class of stock
has such voting power by reason of the happening of any contingency.
ARTICLE TWO.
DEBT SECURITY FORMS.
SECTION 2.01. Forms Generally. The Debt Securities
of each series and the certificates of authentication thereon shall have such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture (the provisions of which shall be
appropriate to reflect the terms of each series of Debt Securities, including
the currency or denomination, which may be Dollars or Foreign Currency), and
may have such letters, numbers or other marks of identification and such
legends or endorsements placed thereon, as may be required to comply with the
rules of any securities exchange, or as may, consistently herewith, be
determined by the officers executing such Debt Securities, as evidenced by
their signing of such Debt Securities. Any portion of the text of any Debt
Security may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Debt Security.
The definitive Debt Securities shall be printed,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange, all as determined by the officers executing such Debt Securities, as
evidenced by their signing of such Debt Securities.
SECTION 2.02. Forms of Debt Securities. The Debt
Securities of each series shall be in such form or forms (including global
form) as shall be established by or pursuant to a Board Resolution.
Prior to the delivery of a Debt Security of any
series in any such form to the Trustee for the Debt Securities of such series
for authentication, the Company shall deliver to the Trustee the following:
(1) The Board Resolution by or pursuant to which
such form of Debt Security has been approved;
(2) An Officers' Certificate dated the date such
Certificate is delivered to the Trustee stating that all conditions precedent
provided for in this Indenture relating to the authentication and delivery of
Debt Securities in such form have been complied with; and
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(3) An Opinion of Counsel stating that Debt
Securities in such form, together with any coupons appertaining thereto, when
(a) completed by appropriate insertions and executed and delivered by the
Company to the Trustee for authentication in accordance with this Indenture,
(b) authenticated and delivered by such Trustee in accordance with this
Indenture within the authorization as to aggregate principal amount established
from time to time by the Board of Directors, and (c) sold in the manner
specified in such Opinion of Counsel, will be the legal, valid and binding
obligations of the Company, subject to applicable bankruptcy, reorganization,
insolvency and other similar laws generally affecting creditors' rights, to
general equitable principles and to such other qualifications as such counsel
shall conclude do not materially affect the rights of Holders of such Debt
Securities.
The definitive Debt Securities and coupons, if any,
shall be printed, lithographed or engraved or produced by any combination of
these methods on a steel engraved border or steel engraved borders or may be
produced in any other manner, all as determined by the officers executing such
Debt Securities or coupons, as evidenced by their execution thereof.
SECTION 2.03. Form of Trustee's Certificate of
Authentication. The following is the form of the Certificate of Authentication
of the Trustee to be endorsed on the face of all Debt Securities substantially
as follows:
This is one of the Debt Securities of the series
designated herein issued under the within-mentioned Indenture.
CHEMICAL BANK DELAWARE
as Trustee
By____________________________________
Authorized Officer
SECTION 2.04. Debt Securities in Global Form. (a)
If the Company shall establish pursuant to Section 3.01 that the Debt
Securities of a particular series are to be issued in whole or in part in the
form of one or more Global Debt Securities, then the Company shall execute and
the Trustee or its agent shall, in accordance with Section 3.04 and the Company
Order delivered to the Trustee or its agent thereunder, authenticate and
deliver such Global Debt Security or Global Debt Securities, which (i) shall
represent, and shall be denominated in an amount equal to the aggregate
principal amount of, the Outstanding Debt Securities of such series to be
represented by such Global Debt Security or Global Debt Securities, or such
portion thereof as the Company shall specify in a Company Order, (ii) shall be
registered in the name of the Depository for such Global Debt Security or
Global Debt Securities or its nominee, (iii) shall be delivered by the Trustee
or its agent to the Depository or pursuant to the Depository's instruction and
(iv) shall bear a legend substantially to the following effect: "Unless this
certificate is presented by an authorized
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representative of the Depository to the Company or its agent for registration
of transfer, exchange, or payment, and any certificate issued is registered in
the name of the nominee of the Depository or in such other name as is requested
by an authorized representative of the Depository (and any payment is made to
the nominee of the Depository or to such other entity as is requested by
an authorized representative of the Depository), ANY TRANSFER, PLEDGE, OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, the nominee of the Depository, has an interest
herein."
(b) Notwithstanding any other provision of this
Section 2.04 or of Section 3.06, and subject to the provisions of paragraph (c)
below, unless the terms of a Global Debt Security expressly permit such Global
Debt Security to be exchanged in whole or in part for individual certificates
representing Debt Securities, a Global Debt Security may be transferred, in
whole but not in part and in the manner provided in Section 3.06, only to a
nominee of the Depository for such Global Debt Security, or to the Depository,
or a successor Depository for such Global Debt Security selected or approved by
the Company, or to a nominee of such successor Depository.
(c) (1) If at any time the Depository for a Global
Debt Security notifies the Company that it is unwilling or unable to continue
as Depository for such Global Debt Security or if at any time the Depository
for the Global Debt Securities for such series shall no longer be eligible or
in good standing under the Securities Exchange Act of 1934, as amended, or
other applicable statute or regulation, the Company shall appoint a successor
Depository with respect to such Global Debt Security. If a successor
Depository for such Global Debt Security is not appointed by the Company within
90 days after the Company receives notice or becomes aware of such
ineligibility, the Company will execute, and the Trustee or its agent, upon
receipt of a Company Request for the authentication and delivery of
certificates representing Debt Securities of such series in exchange for such
Global Debt Security, will authenticate and deliver, certificates representing
Debt Securities of such series of like tenor and terms in an aggregate
principal amount equal to the principal amount of the Global Debt Security in
exchange for such Global Debt Security.
(2) The Company may at any time and in its sole
discretion determine that the Debt Securities of any series or portion thereof
issued or issuable in the form of one or more Global Debt Securities shall no
longer be represented by such Global Debt Security or Global Debt Securities.
In such event the Company will execute, and the Trustee, upon receipt of a
Company Request for the authentication and delivery of certificates
representing Debt Securities of such series in exchange in whole or in part for
such Global Debt Security, will authenticate and deliver certificates
representing Debt Securities of such series of like tenor and terms in
definitive form in an aggregate principal amount equal to the principal amount
of such Global Debt Security or Global Debt Securities representing such series
or portion thereof in exchange for such Global Debt Security or Global Debt
Securities.
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(3) If specified by the Company pursuant to Section
3.01 with respect to Debt Securities issued or issuable in the form of a Global
Debt Security, the Depository for such Global Debt Security may surrender such
Global Debt Security in exchange in whole or in part for certificates
representing Debt Securities of such series of like tenor and terms in
definitive form on such terms as are acceptable to the Company and such
Depository. Thereupon the Company shall execute, and the Trustee or its agent
shall authenticate and deliver, without a service charge, (1) to each Holder
specified by the Security Registrar or the Depository a certificate or
certificates representing Securities of the same series of like tenor and terms
and of any authorized denomination as requested by such person in an aggregate
principal amount equal to and in exchange for such Holder's beneficial interest
as specified by the Security Registrar or the Depository in the Global Debt
Security; and (2) to such Depository a new Global Debt Security of like tenor
and terms and in an authorized denomination equal to the difference, if any,
between the principal amount of the surrendered Global Debt Security and the
aggregate principal amount of certificates representing Debt Securities
delivered to Holders thereof.
(4) In any exchange provided for in any of the
preceding three paragraphs, the Company will execute and the Trustee or its
agent will authenticate and deliver certificates representing Debt Securities
in definitive registered form in authorized denominations for Debt Securities
of the same series or any integral multiple thereof. Upon the exchange of the
entire principal amount of a Global Debt Security for certificates representing
Debt Securities, such Global Debt Security shall be cancelled by the Trustee or
its agent. Except as provided in the preceding paragraph, certificates
representing Debt Securities issued in exchange for a Global Debt Security
pursuant to this Section shall be registered in such names and in such
authorized denominations for Debt Securities of that Series or any integral
multiple thereof, as the Security Registrar or Depository shall instruct the
Trustee or its agent. The Trustee or the Security Registrar shall deliver at
its Corporate Trust Office such certificates representing Debt Securities to
the Holders in whose names such Debt Securities are so registered.
ARTICLE THREE.
THE DEBT SECURITIES.
SECTION 3.01. Title and Terms. The aggregate
principal amount of Debt Securities which may be authenticated and delivered
under this Indenture is unlimited. The Debt Securities may be issued up to the
aggregate principal amount of Debt Securities from time to time authorized by
or pursuant to a Board Resolution.
The Debt Securities may be issued in one or more
series. All Debt Securities of each series issued under this Indenture shall
in all respects be equally and ratably entitled to the benefits hereof with
respect to such series without preference, priority
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or distinction on account of the actual time or times of the authentication and
delivery or maturity of the Debt Securities of such series. There shall be
established in or pursuant to a Board Resolution, and set forth in an
Officers' Certificate to the extent not established in a Board Resolution, or
established in one or more indentures supplemental hereto, prior to the
issuance of Debt Securities of any series:
(1) the title of the Debt Securities of the
series (which shall distinguish the Debt Securities
of the series from all other series of Debt
Securities);
(2) any limit upon the aggregate principal amount
of the Debt Securities of the series which may be
authenticated and delivered under this Indenture
(except for Debt Securities authenticated and
delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Debt Securities of
that series pursuant to this Article Three, the
second paragraph of Section 4.03, or Section 11.04);
(3) the date or dates (or the manner of
calculation thereof) on which the principal of the
Debt Securities of the series is payable;
(4) the rate or rates (or the manner of
calculation thereof) at which the Debt Securities of
the series shall bear interest, if any, the date or
dates from which such interest shall accrue, the
Interest Payment Dates on which such interest shall
be payable and the Regular Record Date for the
Interest payable on any Interest Payment Date;
(5) the Place of Payment;
(6) the period or periods within which, the price
or prices at which, the currency or currency units in
which, and the terms and conditions upon which Debt
Securities of the series may be redeemed, in whole or
in part, at the option of the Company;
(7) the obligation, if any, of the Company to
redeem or purchase Debt Securities of the series
pursuant to any sinking fund or analogous provisions
or at the option of a Holder thereof and the period
or periods within which, the price or prices in the
currency at which, the currency or currency units in
which, and the terms and conditions upon which Debt
Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such
obligation;
(8) the denominations in which the Debt
Securities of such series shall be issuable if other
than denominations of $1,000 and any integral
multiple thereof;
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(9) the application, if any, of Section 13.02;
(10) if other than Dollars, the currencies in
which payments of interest or principal of (and
premium, if any, with respect to) the Debt Securities
of the series are to be made;
(11) if the interest on or principal of (or
premium, if any, with respect to) the Debt Securities
of the series are to be payable, at the election of
the Company or a Holder thereof or otherwise, in a
currency other than that in which such Debt
Securities are payable, the period or periods within
which, and the other terms and conditions upon which,
such election may be made, and the time and manner of
determining the exchange rate between the currency in
such Debt Securities are denominated or stated to be
payable and the currency in which such Debt
Securities or any of them are to be so payable;
(12) whether the amount of payments of interest
on or principal of (or premium, if any, with respect
to) the Debt Securities of such series may be
determined with reference to an index, formula or
other method (which index, formula or method or
method may be based, without limitation, on one or
more currencies, commodities, equity indices or other
indices), and, if so, the terms and conditions upon
which and the manner in which such amounts shall be
determined and paid or payable;
(13) the extent to which any Debt Securities will
be issuable in permanent global form, the manner in
which any payments on a permanent global Debt
Security will be made, and the appointment of any
Depository relating thereto;
(14) any deletions from, modifications of or
additions to the Events of Default or covenants with
respect to the Debt Securities of such series,
whether or not such Events of Default or covenants
are consistent with the Events of Default or
covenants set forth herein;
(15) if any of the Debt Securities of such series
are to be issuable upon the exercise of warrants,
this shall be so established as well as the time,
manner and place for such Debt Securities to be
authenticated and delivered;
(16) any other terms of the series (which terms
shall not be inconsistent with the provisions of
this Indenture).
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All Debt Securities of any one series shall be
substantially identical except as to denomination and except as may otherwise
be provided in or pursuant to such Board Resolution and set forth in such
Officers' Certificate or in any such indenture supplemental hereto.
SECTION 3.02. Denominations. The Debt Securities of
each series shall be issuable in registered form without coupons in such
denominations as shall be specified as contemplated in Section 3.01. In the
absence of any specification with respect to the Debt Securities of any series,
the Debt Securities of such series shall be issuable in denominations of $1,000
and any integral multiple thereof, which may be in Dollars or any Foreign
Currency.
SECTION 3.03. Payment of Principal and Interest.
The principal of, premium, if any, and interest on the Debt Securities shall be
payable at the office or agency of the Company designated for that purpose in
the Place of Payment, as provided in Section 5.02; provided, however, that
interest may be payable at the option of the Company by check mailed to the
address of the Person entitled thereto as such address shall appear on the Debt
Security Register on the record date for such interest payment.
SECTION 3.04. Execution of Debt Securities. The
Debt Securities shall be executed manually or by facsimile in the name and on
behalf of the Company by its Chairman of the Board of Directors, its President,
one of its Vice Presidents or its Treasurer and by its Secretary or one of its
Assistant Secretaries under its corporate seal (which may be printed, engraved
or otherwise reproduced thereon, by facsimile or otherwise). Only such Debt
Securities as shall bear thereon a certificate of authentication substantially
in the form hereinbefore recited, manually executed by the Trustee, shall be
entitled to the benefits of this Indenture or be valid or become obligatory for
any purpose. Such certificate by the Trustee upon any Debt Security executed
by the Company shall be conclusive evidence that the Debt Security so
authenticated has been duly authenticated and delivered hereunder and that the
Holder is entitled to the benefits of this Indenture.
In case any officer of the Company who shall have
executed any of the Debt Securities shall cease to be such officer before the
Debt Securities so executed shall have been authenticated and delivered by the
Trustee, or disposed of by the Company, such Debt Securities nevertheless shall
be valid and binding and may be authenticated and delivered or disposed of as
though the Person who executed such Debt Securities had not ceased to be such
officer of the Company; and any Debt Securities may be executed on behalf of
the Company by such Persons as, at the actual date of the execution of such
Debt Security, shall be the proper officers of the Company, although at the
date of such Debt Security or of the execution of this Indenture any such
Person was not such an officer.
At any time and from time to time after the execution
and delivery of this Indenture, the Company may deliver Debt Securities of any
series, properly created in
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accordance with Section 3.01 and executed by the Company, to the Trustee
for authentication; and the Trustee shall authenticate and deliver such Debt
Securities upon Company Order. In the event that any other Person performs the
Trustee's duties as Authenticating Agent pursuant to a duly executed agreement,
the Company shall notify the Trustee in writing of the issuance of any Debt
Securities hereunder, such notice to be delivered in accordance with the
provisions of Section 15.03 on the date such Debt Securities are delivered by
the Company for authentication to such other Person.
Prior to any such authentication and delivery, the
Trustee shall be entitled to receive, and shall be fully protected in relying
upon, in addition to the Opinion of Counsel to be furnished to the Trustee
pursuant to Section 15.05 and the Officers' Certificate relating to the
issuance of any series of Debt Securities pursuant to Sections 15.05 and 3.01,
Opinions of Counsel stating that:
(1) all instruments furnished to the Trustee
conform to the requirements of this Indenture and
constitute sufficient authority hereunder for the
Trustee to authenticate and deliver such Debt
Securities;
(2) all laws and requirements with respect to the
form and execution by the Company of the supplemental
indenture, if any, have been complied with, the
execution and delivery of the supplemental indenture,
if any, will not violate the terms of this Indenture,
the supplemental indenture has been duly qualified
under the Trust Indenture Act of 1939, the Company
has corporate power to execute and deliver any such
supplemental indenture and has taken all necessary
corporate action for those purposes and any such
supplemental indenture has been executed and
delivered and constitutes the legal, valid and
binding obligation of the Company enforceable in
accordance with its terms (subject, as to enforcement
of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to
time in effect);
(3) the form and terms of such Debt Securities
have been established in conformity with the
provisions of this Indenture;
(4) all laws and requirements with respect to the
execution and delivery by the Company of such Debt
Securities have been complied with, the
authentication and delivery of the Debt Securities by
the Trustee will not violate the terms of this
Indenture, the Company has the corporate power to
issue such Debt Securities and such Debt Securities,
assuming due authentication and delivery by the
Trustee, constitute legal, valid and binding
obligations of the Company in accordance with their
terms and are entitled to the benefits of this
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Indenture, equally and ratably with all other
Outstanding Debt Securities, if any, of such series;
and
(5) such other matters as the Trustee may
reasonably request.
The Trustee shall not be required to authenticate
such Debt Securities if the issue thereof will adversely affect the Trustee's
own rights, duties or immunities under the Debt Securities and this Indenture
or otherwise in a manner which is not reasonably acceptable to the Trustee or
such action would expose the Trustee to personal liability to existing Holders.
Unless otherwise provided in the form of Debt
Security for any series, all Debt Securities shall be dated the date of their
authentication.
No Debt Security shall be entitled to any benefit
under this Indenture or be valid or obligatory for any purpose, unless there
appears on such Debt Security a certificate of authentication substantially in
the form provided for herein executed by the Trustee by manual signature, and
such certificate upon any Debt Security shall be conclusive evidence, and the
only evidence, that such Debt Security has been duly authenticated and
delivered hereunder.
SECTION 3.05. Temporary Debt Securities. Pending
the preparation of definitive Debt Securities of any series, the Company may
execute, and upon receipt of the documents required by Sections 2.02, 3.01 and
3.04, together with a Company Order, the Trustee shall authenticate and
deliver, such temporary Debt Securities which may be printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denominations, substantially of the tenor of such definitive Debt Securities in
lieu of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such temporary
Debt Securities may determine, as evidenced by their execution of such
temporary Debt Securities.
If temporary Debt Securities of any series are
issued, the Company will cause definitive Debt Securities of such series to be
prepared without unreasonable delay. After the preparation of definitive Debt
Securities of any series, the temporary Debt Securities of such series shall be
exchangeable for definitive Debt Securities of such series, upon surrender of
the temporary Debt Securities of such series at any office or agency maintained
by the Company for such purposes as provided in Section 5.02, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary Debt
Securities of any series, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefore a like principal amount of
definitive Debt Securities of such series having the same interest rate and
Stated Maturity and bearing interest from the same date of any authorized
denominations. Until so exchanged the temporary Debt Securities of such series
shall in all respects be entitled to the same benefits under this Indenture as
definitive Debt Securities of such series.
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SECTION 3.06. Exchange and Registration of Transfer
of Debt Securities. Debt Securities may be exchanged for a like aggregate
principal amount of Debt Securities of such series that are of other authorized
denominations. Debt Securities to be exchanged shall be surrendered at any
office or agency to be maintained for such purpose by the Company, as provided
in Section 5.02, and the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefore the Debt Security or Debt
Securities of authorized denominations which the Debt Securityholder making the
exchange shall be entitled to receive. Each agent of the Company appointed
pursuant to Section 5.02 as a person authorized to register and register
transfer of Debt Securities is sometimes herein referred to as a "Debt Security
registrar."
The Company shall keep, at each such office or agency
of the Company maintained for such purpose, as provided in Section 5.02, a
register for each series of Debt Securities hereunder (the registers of all
Debt Security registrars being herein sometimes collectively referred to as the
"Debt Security Register") in which, subject to such reasonable regulations as
it may prescribe, the Company shall provide for the registration of Debt
Securities and shall register the transfer of Debt Securities as in this
Article Three provided. At all reasonable times, such Debt Security Register
shall be open for inspection by the Trustee and any Debt Security registrar
other than the Trustee. Upon due presentment for registration of transfer of
any Debt Security at any such office or agency, the Company shall execute and
register and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new Debt Security or Debt Securities of authorized
denominations for an equal aggregate principal amount. Registration or
registration of transfer of any Debt Security by any Debt Security registrar in
the registry books maintained by such Debt Security registrar, and delivery of
such Debt Security, duly authenticated, shall be deemed to complete the
registration or registration of transfer of such Debt Security.
The Company will at all times designate one Person
(who may be the Company and who need not be a Debt Security registrar) to act
as repository of a master list of names and addresses of Holders of the Debt
Securities. The Trustee shall act as such repository unless and until some
other Person is, by written notice from the Company to the Trustee and each
Debt Security registrar, designated by the Company to act as such. The Company
shall cause each Debt Security registrar to furnish to such repository, on a
current basis, such information as such repository may reasonably request as to
registrations, transfers, exchanges and other transactions effected by such
registrar, as may be necessary or advisable to enable such repository to
maintain such master list on as current a basis as is reasonably practicable.
No Person shall at any time be appointed as or act as
a Debt Security registrar unless such Person is at such time empowered under
applicable law to act as such and duly registered to act as such under and to
the extent required by applicable law and regulations.
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All Debt Securities presented to a Debt Security
registrar for registration of transfer shall be duly endorsed by, or be
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company and such Debt Security registrar duly executed by
the registered Holder or his attorney duly authorized in writing.
No service charge shall be made for any exchange or
registration of transfer of Debt Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith.
The Company shall not be required to issue, exchange
or register a transfer of (a) any Debt Securities of any series for a period of
15 days next preceding the mailing of a notice of redemption of Debt Securities
of such series and ending at the close of business on the day of the mailing of
a notice of redemption of Debt Securities of such series so selected for
redemption, or (b) any Debt Securities selected, called or being called for
redemption except, in the case of any Debt Security to be redeemed in part, the
portion thereof not so to be redeemed.
All Debt Securities issued in exchange for or upon
registration of transfer of Debt Securities shall be valid obligations of the
Company, evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Debt Securities surrendered for such exchange or registration
of transfer.
None of the Trustee, any agent of the Trustee, any
Paying Agent or the Company will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of a Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
SECTION 3.07. Mutilated, Destroyed, Lost or Stolen
Debt Securities. In case any temporary or definitive Debt Security shall
become mutilated or be destroyed, lost or stolen, the Company in its discretion
may execute, and upon its request the Trustee shall authenticate and deliver, a
new Debt Security, bearing a number, letter or other distinguishing mark not
contemporaneously Outstanding, in exchange and substitution for the mutilated
Debt Security, or in lieu of and in substitution for the Debt Security so
destroyed, lost or stolen. In every case the applicant for a substituted Debt
Security shall furnish to the Company and to the Trustee such security or
indemnity as may be required by them to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and to the Trustee evidence to their satisfaction of the
destruction, loss or theft, of such Debt Security and of the ownership thereof.
In the absence of notice to the Trustee or the
Company that such Debt Security has been acquired by a bona fide purchaser, the
Trustee shall authenticate any such substituted Debt Security and deliver the
same upon any Company Request. Upon the issuance of any substituted Debt
Security, the Company may require the payment of a sum
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sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses connected therewith. In
case any Debt Security which has matured or is about to mature shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing
a substituted Debt Security, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated Debt Security) if the
applicant for such payment shall furnish to the Company and to the Trustee such
security or indemnity as may be required by them to save each of them harmless
and, in case of destruction, loss or theft, evidence satisfactory to the
Company and to the Trustee of the destruction, loss or theft of such Debt
Security and of the ownership thereof.
Every substituted Debt Security issued pursuant to
the provisions of this Section 3.07 by virtue of the fact that any Debt
Security is destroyed, lost or stolen shall constitute an additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Debt Security shall be found at any time, and shall be entitled to all
the benefits of this Indenture equally and proportionately with any and all
other Debt Securities duly issued hereunder. All Debt Securities shall be held
and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Debt Securities and shall preclude (to the extent permitted by
law) any and all other rights or remedies with respect to the replacement or
payment of negotiable instruments or other securities without their surrender.
SECTION 3.08. Payment of Interest; Interest Rights
Preserved. Interest which is payable, and is punctually paid or duly provided
for, on any Interest Payment Date, on any Debt Security, shall unless otherwise
provided in such Debt Security be paid to the Person in whose name the Debt
Security (or one or more Predecessor Debt Securities) is registered at the
close of business on the Regular Record Date for such interest.
Unless otherwise stated in the form of Debt Security
of a series, interest on the Debt Securities of any series shall be computed on
the basis of a 360 day year comprised of twelve 30 day months.
Any interest on any Debt Security which is payable,
but is not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of having been
such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names any
such Debt Securities (or their respective Predecessor
Debt Securities) are registered at the close of
business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Debt Security
and the date of the proposed
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payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in
this clause provided. Thereupon the Trustee shall
fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the
name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefore to be
mailed, first-class postage prepaid, to each Holder
of such Debt Securities, at his address as it appears
in the Debt Security Register, not less than 10 days
prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the
Special Record Date therefore having been mailed as
aforesaid, such Defaulted Interest shall be paid to
the Persons in whose names such Debt Securities (or
their respective Predecessor Debt Securities) are
registered on such Special Record Date and shall no
longer be payable pursuant to the following Clause
(2).
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent
with the requirements of any securities exchange on
which the Debt Securities of that series may be
listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company
to the Trustee of the proposed payment pursuant to
this Clause, such payment shall be deemed practicable
by the Trustee.
Subject to the foregoing provisions of this Section,
each Debt Security delivered under this Indenture upon transfer of or in
exchange for or in lieu of any other Debt Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Debt Security.
SECTION 3.09. Persons Deemed Owners. The Company,
the Trustee and any agent of the Company or the Trustee may treat the Person in
whose name any Debt Security is registered as the owner of such Debt Security
for the purpose of receiving payment of principal of, premium, if any, and
(subject to Section 3.08) interest on, such Debt Security and for all other
purposes whatsoever whether or not such Debt Security be overdue, and neither
the Company, the Trustee, nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
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SECTION 3.10. Cancellation of Debt Securities Paid,
etc. All Debt Securities surrendered for the purpose of payment, redemption,
exchange or registration of transfer or delivered in satisfaction in whole or
in part of any sinking fund obligation shall, if surrendered to the Company or
any agent of the Trustee or the Company under this Indenture, be delivered to
the Trustee and promptly cancelled by it, or, if surrendered to the Trustee,
shall be promptly cancelled by it, and no Debt Securities shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Indenture. The Trustee shall dispose of cancelled Debt Securities in
accordance with a Company Order.
SECTION 3.11. Currency and Manner of Payments. (a)
With respect to Debt Securities denominated in Dollars or a Foreign Currency,
the following payment provisions shall apply:
(1) Except as provided in subparagraph (a)(2) or
in paragraph (c) of this Section 3.11, payment of
principal of and premium, if any, on any Debt
Securities will be made at the offices established
pursuant to Section 5.02 by delivery of a check in
the currency in which the Debt Security is
denominated on the payment date against surrender of
such Debt Security, and any interest on any Debt
Security will be paid at such office by mailing a
check in the currency in which the Debt Securities
were issued to the Person entitled thereto at the
address of such Person appearing on the Debt Security
Register.
(2) Payment of the principal of and premiums, if
any, and interest on such Debt Security may also,
subject to applicable laws and regulations, be made
at such other place or places as may be designated by
the Company by any appropriate method.
(b) Not later than the fourth Business Day after
the Record Date for such Interest Payment Date, the Paying Agent will deliver
to the Company a written notice specifying, in the currency in which each
series of the Debt Securities are denominated, the respective aggregate amounts
of principal of and premium, if any, and interest on the Debt Securities to be
made on such payment date, specifying the amounts so payable in respect of the
Debt Securities. The failure of the Paying Agent to deliver such notice shall
not relieve the Company from its obligation to make all payments with respect
to any Debt Security when due.
(c) If the Foreign Currency in which any of the
Debt Securities are denominated ceases to be used both by the government of the
country which issued such currency and for the settlement of transactions by
public institutions of or within the international banking community, then with
respect to each date for the payment of Foreign Currency occurring after the
last date on which the Foreign Currency was so used (the "Conversion Date"),
the Dollar shall be the currency of payment for use on each such Interest
Payment Date. The Dollar amount to be paid by the Company to the Trustee and
by
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the Trustee or any paying agent to the Holder of such Debt Securities with
respect to such payment date shall be the Dollar Equivalent of the Foreign
Currency as determined by the Currency Determination Agent as of the Record
Date (the "Valuation Date") in the manner provided in paragraph (d).
(d) The "Dollar Equivalent of the Foreign Currency"
shall be determined by the Currency Determination Agent as of each Valuation
Date and shall be obtained by converting the specified Foreign Currency into
Dollars at the Market Exchange Rate on the Valuation Date.
(e) The "Market Exchange Rate" shall mean, for any
currency, the highest firm bid quotation for U.S. dollars received by the
Currency Determination Agent at approximately 11:00 a.m., New York City time,
on the second Business Day preceding the applicable payment date (or, if no
such rate is quoted on such date, the last date on which such rate was quoted),
from three recognized foreign exchange dealers in the City of New York selected
by the Currency Determination Agent and approved by the Company (one of which
may be the Currency Determination) for the purchase by the quoting dealer, for
settlement on such payment date, of the aggregate amount of such currency
payable on such payment in respect of all Notes denominated in such currency.
All decisions and determinations of the Currency
Determination Agent regarding the Dollar Equivalent of the Foreign Currency and
the Market Exchange Rate shall be in its sole discretion and shall, in the
absence of manifest error, be conclusive for all purposes and irrevocably
binding upon the Company and all Holders of the Debt Securities. In the event
that the Foreign Currency ceases to be used both by the government of the
country which issued such currency and for the settlement of transactions by
public institutions of or within the international banking community, the
Company, after learning thereof, will immediately give notice thereof to the
Trustee (and the Trustee will promptly thereafter give notice in the manner
provided in Section 15.03 to the Holders) specifying the Conversion Date.
The Trustee shall be fully justified and protected in
relying on and acting upon the information so received by it from the Company
or the Currency Determination Agent and shall not otherwise have any duty or
obligation to determine such information independently.
If the principal of (and premium, if any) and
interest on any Debt Securities is payable in a Foreign Currency and such
Foreign Currency is not available for payment due to the imposition of exchange
controls or other circumstances beyond the control of the Company, then the
Company shall be entitled to satisfy its obligations to Holders under this
Indenture by making such payment in Dollars on the basis of the Market Exchange
Rate for such Foreign Currency on the latest date for which such rate was
established on or before the date on which payment is due. Any payment made
pursuant to
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this Section 3.11 in Dollars where the required payment is in a
Foreign Currency shall not constitute a default under this Indenture.
ARTICLE FOUR.
REDEMPTION OF DEBT SECURITIES; SINKING FUNDS.
SECTION 4.01. Applicability of Article. The Company
may reserve the right to redeem and pay before Stated Maturity all or any part
of the Debt Securities of any series, either by optional redemption, sinking
fund (mandatory or optional) or otherwise, by provision therefor in the form of
Debt Security for such series on such terms as are specified in such form or
the Board Resolution or Officers' Certificate delivered pursuant to Section
3.01 or the indenture supplemental hereto as provided in Section 3.01 with
respect to Debt Securities of such series. Redemption of Debt Securities of
any series shall be made in accordance with the terms of such Debt Securities
and, to the extent that this Article does not conflict with such terms, in
accordance with this Article.
SECTION 4.02. Notice of Redemption; Selection of
Debt Securities. In case the Company shall desire to exercise the right to
redeem all, or, as the case may be, any part of a series of Debt Securities
pursuant to Section 4.01, the Company shall fix a date for redemption and the
Company, or, at the Company's request, the Trustee in the name of and at the
expense of the Company, shall mail a notice of such redemption at least 30 and
not more than 60 days prior to the date fixed for redemption to the Holders of
Debt Securities so to be redeemed as a whole or in part at their last addresses
as the same appear on the Debt Securities Register. Such mailing shall be by
first class mail. The notice if mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice. In any case, failure to give such notice by mail or any
defect in the notice to the Holder of any Debt Security designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Debt Security.
Notice of redemption shall be given in the name of
the Company and shall specify the date fixed for redemption, the redemption
price at which Debt Securities of any series are to be redeemed, the place of
payment (which shall be at the offices or agencies to be maintained by the
Company pursuant to Section 5.02), that payment of the redemption price will be
made upon presentation and surrender of such Debt Securities, that interest
accrued to the date fixed for redemption will be paid as specified in said
notice,that on and after said date interest thereon or on the portions thereof
to be redeemed will cease to accrue, and the Section of this Indenture pursuant
to which Debt Securities will be redeemed. In case less than all Debt
Securities of any series are to be redeemed, the notice of redemption shall
also identify the particular Debt Securities to be redeemed as a whole or in
part and shall state that the redemption is for the sinking fund, if such is
the case. In case any Debt Security is to be redeemed in part only, the notice
of redemption shall state the portion of the principal amount thereof to be
redeemed and shall state that on and after the date fixed for
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redemption, upon surrender of such Debt Security, a new Debt Security or Debt
Securities of such series in aggregate principal amount equal to the unredeemed
portion thereof will be issued without charge to the Holder.
If less than all the Debt Securities of any series
are to be redeemed, the Company shall give the Trustee notice, at least 45 days
(or such shorter period acceptable to the Trustee) in advance of the date fixed
for redemption, as to the aggregate principal amount of Debt Securities to be
redeemed. Debt Securities may be redeemed in part in multiples equal to the
minimum authorized denomination for Debt Securities of such Series or any
multiple thereof. Thereupon the Trustee shall select, in such manner as in its
sole discretion it shall deem appropriate and fair, the Debt Securities or
portions thereof to be redeemed, and shall as promptly as practicable notify
the Company of the Debt Securities or portions thereof so selected. For all
purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Debt Securities of any series shall
relate, in the case of any Debt Security redeemed or to be redeemed only in
part, to the portion of the principal amount of such Debt Security which has
been or is to be redeemed.
On or prior to the date fixed for redemption
specified in the notice of redemption given as provided in this Section 4.02,
the Company will deposit with the Trustee or with the paying agent an amount of
money in the currency in which the Debt Securities of such series are payable
sufficient to redeem on the date fixed for redemption all the Debt Securities
so called for redemption at the appropriate redemption price, together with
accrued interest to the date fixed for redemption.
The Trustee shall not mail any notice of redemption
of any series of Debt Securities during the continuation of any default in
payment of interest on any series of Debt Securities when due or of any Event
of Default, except that where notice of redemption with respect to any series
of Debt Securities shall have been mailed prior to the occurrence of such
default or Event of Default, the Trustee shall redeem such Debt Securities
provided funds are deposited with it for such purpose.
SECTION 4.03. Payment of Debt Securities Called for
Redemption. If notice of redemption has been given as herein provided, the
Debt Securities or portions of Debt Securities with respect to which such
notice has been given shall become due and payable on the date and at the place
stated in such notice at the applicable redemption price, together with
interest accrued to the date fixed for redemption, and on and after said date
(unless the Company shall default in the payment of such Debt Securities or
portions thereof at the redemption price, together with interest accrued to
said date) interest on the Debt Securities or portions of Debt Securities so
called for redemption shall cease to accrue, and such Debt Securities and
portions of Debt Securities shall be deemed not to be Outstanding hereunder and
shall not be entitled to any benefit under this Indenture except to receive
payment of the redemption price, together with accrued interest to the date
fixed for redemption. On presentation and surrender of such Debt Securities at
the place of payment in said notice specified, the said Debt Securities or the
specified portions thereof shall be
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paid and redeemed by the Company at the applicable redemption price, together
with interest accrued thereon to the date fixed for redemption; provided,
however, that any installments of interest becoming due on the date fixed for
redemption shall be payable to the Holders of such Debt Securities, or one or
more previous Debt Securities evidencing all or a portion of the same debt as
that evidenced by such particular Debt Securities, registered as such on the
relevant record dates according to their terms and the provisions of Section
3.08.
Upon presentation and surrender of any Debt Security
redeemed in part only, with, if the Company or the Trustee so required, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the Company,
a new Debt Security or Debt Securities of the same series having the same
interest rate and Stated Maturity and bearing interest from the same date, of
any authorized denominations as requested by such Holder, in aggregate
principal amount equal to the unredeemed portion of the Debt Security so
presented and surrendered.
SECTION 4.04. Exclusion of Certain Securities from
Eligibility for Selection for Redemption. Debt Securities shall be excluded
from eligibility for selection for redemption if they are identified by
registration and certificate number in a written statement signed by a
Responsible Officer of the Company and delivered to the Trustee at least 45
days prior to the last date on which notice of redemption may be given as being
owned of record and beneficially by, and not pledged or hypothecated by, either
(a) the Company or (b) an entity specifically identified in such written
statement directly or indirectly controlling or controlled by or under direct
or indirect common control with the Company.
SECTION 4.05. Provisions with Respect to any Sinking
Funds. Unless the form or terms of any series of Debt Securities shall provide
otherwise, in lieu of making all or any part of any mandatory sinking fund
payment with respect to such series of Debt Securities in cash, the Company may
at its option (1) deliver to the Trustee for cancellation any Debt Securities
of such series theretofore acquired by the Company, or (2) receive credit for
any Debt Securities of such series (not previously so credited) acquired by the
Company and theretofore delivered to the Trustee for cancellation, then Debt
Securities so delivered or credited shall be credited at the applicable sinking
fund Redemption Price with respect to the Debt Securities of such series.
On or before the 45th day next preceding each sinking
fund Redemption Date, the Company will deliver to the Trustee a certificate
signed by the Chief Financial Officer, any Vice President, the Treasurer or any
Assistant Treasurer of the Company specifying (i) the portion of the mandatory
sinking fund payment to be satisfied by deposit of cash in the currency in
which the Debt Securities of such series are payable, by delivery of Debt
Securities theretofore purchased or otherwise acquired by the Company (which
Debt Securities shall accompany such certificate) and by credit for Debt
Securities
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acquired by the Company and theretofore delivered to the Trustee for
cancellation redeemed by the Company and stating that the credit to be applied
has not theretofore been so applied or applied in lieu of retiring Funded Debt
pursuant to Section 5.06 and (ii) whether the Company intends to exercise its
right, if any, to make an optional sinking fund payment, and, if so, the amount
thereof. Such certificate shall also state that no Event of Default has
occurred and is continuing. Such certificate shall be irrevocable and upon its
delivery the Company shall be obligated to make the payment or payments therein
referred to, if any, on or before the next succeeding sinking fund payment
date. In case of the failure of the Company on or before the 45th day next
preceding each sinking fund Redemption Date to deliver such certificate (or to
deliver the Debt Securities specified in this paragraph), the sinking fund
payment due on the next succeeding sinking fund payment date shall be paid
entirely in cash (in the currency described above) and shall be sufficient to
redeem the principal amount of Debt Securities as a mandatory sinking fund
payment, without the option to deliver or credit Debt Securities as provided in
the first paragraph of this Section 4.04 and without the right to make an
optional sinking fund payment as provided herein.
If the sinking fund payment or payments (mandatory or
optional) with respect to any series of Debt Securities made in cash (in the
currency described above) shall exceed the minimum authorized denomination set
forth in an Officers' Certificate pursuant to Section 3.01 or the equivalent in
the currency in which the Debt Securities of such series are payable (or a
lesser sum if the Company shall so request), unless otherwise provided by the
terms of such series of Debt Securities, said cash shall be applied by the
Trustee on the sinking fund Redemption Date with respect to Debt Securities of
such series at the applicable sinking fund Redemption Price with respect to
Debt Securities of such series, together with accrued interest, if any, to the
date fixed for redemption, with the effect provided in Section 4.03. The
Trustee shall select, in the manner provided in Section 4.02, for redemption on
such sinking fund Redemption Date a sufficient principal amount of Debt
Securities of such series to utilize said cash and shall thereupon cause notice
of redemption of the Debt Securities of such series for the sinking fund to be
given in the manner provided in Section 4.02 (and with the effect provided in
Section 4.03) for the redemption of Debt Securities in part at the option of
the Company. Debt Securities of any series which are identified by
registration and certificate number in an Officer's Certificate at least 45
days prior to the sinking fund Redemption Date as being beneficially owned by,
and not pledged or hypothecated by, the Company or an entity directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company shall be excluded from Debt Securities of such series
eligible for selection for redemption. Any sinking fund moneys not so applied
or allocated by the Trustee to the redemption of Debt Securities of such series
shall be added to the next cash sinking fund payment with respect to Debt
Securities of such series received by the Trustee and, together with such
payment, shall be applied in accordance with the provisions of this Section
4.05. Any and all sinking fund moneys with respect to Debt Securities of any
series held by the Trustee at the maturity of Debt Securities of such series,
and not held for the payment or redemption of particular Debt Securities of
such series, shall be applied by the Trustee, together with other moneys, if
necessary, to be
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deposited sufficient for the purpose, to the payment of the principal of the
Debt Securities of such series at maturity.
The Trustee shall not convert any currency in which
the Debt Securities of such series are payable for the purposes of such sinking
fund application unless a Company Request is made, and any such conversion
agreed to by the Trustee in response to such request shall be for the account
and at the expense of the Company and shall not affect the Company's obligation
to pay the Holders in the currency to which such Holder is entitled.
On or before each sinking fund Redemption Date
provided with respect to Debt Securities of any series, the Company shall pay
to the Trustee in cash in the currency described above a sum equal to all
accrued interest, if any, to the date fixed for redemption on Debt Securities
to be redeemed on such sinking fund Redemption Date pursuant to this Section
4.05.
ARTICLE FIVE.
PARTICULAR COVENANTS OF THE COMPANY.
SECTION 5.01. Payment of Principal, Premium and
Interest. The Company will duly and punctually pay or cause to be paid (in the
currency in which the Debt Securities of such series are payable) the principal
of and premium, if any, and interest on each of the Debt Securities at the
place (subject to Section 3.03), at the respective times and in the manner
provided in each series of Debt Securities and in this Indenture.
SECTION 5.02. Offices for Notices and Payments, etc.
(a) So long as the Debt Securities of any series remain Outstanding, the
Company will maintain at the Place of Payment, an office or agency where the
Debt Securities may be presented for payment, an office or agency where the
Debt Securities may be presented for registration of transfer and for exchange
as in this Indenture provided, and an office or agency where notices and
demands to or upon the Company in respect of the Debt Securities or of this
Indenture may be served and shall give the Trustee written notice thereof and
any changes in the location thereof. In case the Company shall at any time
fail to maintain any such office or agency, or shall fail to give notice to the
Trustee of any change in the location thereof, presentation and demand may be
made and notice may be served in respect of the Debt Securities or of this
Indenture at said office of the Trustee.
(b) In addition to the office or agency maintained
by the Company pursuant to Section 5.02(a), the Company may from time to time
designate one or more other offices or agencies where the Debt Securities may
be presented for payment and presented for registration of transfer and for
exchange in the manner provided in this Indenture, and the Company may from
time to time rescind such designations, as the Company may deem desirable or
expedient; provided, however, that no such designation or
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rescission shall in any manner relieve the Company of its obligation to
maintain such office and agency at the Place of Payment, for the purposes
abovementioned. The Company will give to the Trustee prompt written notice of
(i) any such designation or rescission thereof, and (ii) the location of any
such office or agency outside the Place of Payment and of any change of
location thereof.
SECTION 5.03. Appointments to Fill Vacancies in
Trustee's Office. The Company, whenever necessary to avoid or fill a vacancy
in the office of Trustee, will appoint, in the manner provided in Section 8.10,
a Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 5.04. Provisions as to Paying Agent. (a)
(1) Whenever the Company shall have one or more Paying Agents for any series
of Debt Securities other than the Trustee, it will, on or before each due date
of the principal of (and premium, if any) or interest on any Debt Securities of
such series, deposit with a Paying Agent a sum sufficient to pay such amount
becoming due, such sum to be held as provided by the Trust Indenture Act of
1939, and (unless such Paying Agent is the Trustee) the Company will promptly
notify the Trustee of its action or failure so to act.
(2) The Company will cause each Paying Agent other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will: (i) comply with the provisions of
the Trust Indenture Act of 1939 applicable to it as a Paying Agent and (ii)
during the continuance of any default by the Company (or any other obligor upon
any series of Debt Securities) in the making of any payment in respect of the
Debt Securities of such series, upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent as
such.
(b) If the Company shall act as its own paying
agent, it will, on or prior to each due date of the principal of and premium,
if any, or interest on Debt Securities of any series, set aside, segregate and
hold in trust for the benefit of the Holders of such Debt Securities a sum
sufficient to pay such principal and premium, if any, or interest so becoming
due and will notify the Trustee of any failure to take such action and of any
failure by the Company (or by any other obligor on such series of Debt
Securities) to make any payment of the principal of and premium, if any, or
interest on the Debt Securities when the same shall become due and payable.
(c) Anything in this Section 5.04 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture with respect to any or all series
of Debt Securities then Outstanding, or for any other reason, pay or cause to
be paid to the Trustee all sums held in trust by the Company, or any paying
agent hereunder, as required by this Section 5.04, such sums to be held by the
Trustee upon the trusts herein contained.
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(d) Anything in this Section 5.04 to the contrary
notwithstanding, the agreement to hold sums in trust provided in this Section
5.04 is subject to Section 13.04.
(e) Whenever the Company shall have one or more
paying agents, it will, prior to each due date of the principal of and premium,
if any, and on or prior to each due date of interest on any series of Debt
Securities, deposit with a paying agent a sum sufficient to pay the principal
and premium, if any, or interest, so becoming due, such sum to be held in trust
for the benefit of the Persons entitled to such principal, premium, if any, or
interest, and (unless such paying agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
SECTION 5.05. Limitation on Secured Debt.
(a) So long as the Debt Securities shall remain
Outstanding, the Company will not at any time create, assume or guarantee, and
will not cause, suffer or permit a Restricted Subsidiary to create, assume or
guarantee any Secured Debt without making effective provision (and the Company
covenants that in such case it will make or cause to be made effective
provision) whereby the Debt Securities then Outstanding subject to applicable
priorities of payment shall be secured by such Security Interest equally and
ratably with any and all other obligations and indebtedness which shall be so
secured; provided, however, that the foregoing covenants shall not be
applicable to the following:
(1) (a) any Security Interest on any property
hereafter acquired or constructed by the Company or a
Restricted Subsidiary to secure or provide for the
payment of all or any part of the purchase price or
construction cost of such property, including, but
not limited to, any indebtedness incurred by the
Company or a Restricted Subsidiary prior to, at the
time of, or within 180 days after the later of the
acquisition, the completion of construction
(including any improvements on an existing property)
or the commencement of commercial operation of such
property, which indebtedness is incurred for the
purpose of financing all or any part of the purchase
price thereof or construction or improvements
thereon; or (b) the acquisition of property subject
to any Security Interest upon such property existing
at the time of acquisition thereof, whether or not
assumed by the Company or such Restricted Subsidiary;
or (c) any Security Interest existing on the property
or on the outstanding shares of capital stock or
indebtedness of a corporation at the time such
corporation shall become a Restricted Subsidiary; or
(d) a Security Interest on property or shares of
capital stock or indebtedness of a corporation
existing at the time such corporation is merged into
or consolidated with the Company or a Restricted
Subsidiary or at the time of a sale, lease or other
disposition of the properties of a corporation or
firm as an entirety or substantially as an entirety
to the Company or a Restricted Subsidiary, provided,
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however, that no such Security Interest shall extend
to any other Principal Property of the Company or
such Restricted Subsidiary prior to such acquisition
or to the other Principal Property thereafter
acquired other than (a) additions to such acquired
property;
(2) Security Interests in property of the Company
or a Restricted Subsidiary in favor of the United
States of America or any State thereof, or any
department, agency or instrumentality or political
subdivision of the United States of America or any
State thereof, or in favor of any other country, or
any department, agency or instrumentality or
political subdivision thereof (including, without
limitation, Security Interests to secure indebtedness
of the pollution control or industrial revenue bond
type), in order to permit the Company or a Restricted
Subsidiary to perform any contract or subcontract
made by it with or at the request of any of the
foregoing, or to secure partial, progress, advance or
other payments pursuant to any contract or statute or
to secure any indebtedness incurred for the purpose
of financing all or any part of the purchase price or
the cost of constructing or improving the property
subject to such Security Interests;
(3) Any Security Interest on any property or
assets of any Restricted Subsidiary to secure
indebtedness owing by it to the Company or to a
Restricted Subsidiary;
(4) Mechanics', materialmen's, carriers' or other
like liens arising in the ordinary course of business
(including construction of facilities) in respect of
obligations which are not due or which are being
contested in good faith;
(5) Any Security Interest arising by reason of
deposits with, or the giving of any form of security
to, any governmental agency or any body created or
approved by law or governmental regulations, which is
required by law or governmental regulation as a
condition to the transaction of any business, or the
exercise of any privilege, franchise to license;
(6) Security Interests for taxes, assessments or
governmental charges or levies not yet delinquent, or
the Security Interests for taxes, assessments or
government charges or levies already delinquent but
the validity of which is being contested in good
faith;
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(7) Security Interests (including judgment liens)
arising in connection with legal proceedings so long
as such proceedings are being contested in good faith
and, in the case of judgment liens, execution thereon
is stayed;
(8) Landlords' liens on fixtures located on
premises leased by the Company or a Restricted
Subsidiary in the ordinary course of business; or
(9) Any extension, renewal or replacement (or
successive extensions, renewals or replacements) in
whole or in part of any Security Interest permitted
by subsection (a) of this Section 5.05.
(b) Notwithstanding the provisions of subsection
(a) of this Section 5.05, the Company and any one or more Restricted
Subsidiaries may without securing the Debt Securities issue, assume or
guarantee Secured Debt which would otherwise be subject to the foregoing
restrictions in an aggregate amount which, together with all other Secured Debt
of the Company and its Restricted Subsidiaries which would otherwise be subject
to the foregoing restrictions (not including Secured Debt permitted to be
secured under subsection (a) above) and the aggregate value of the Sale and
Leaseback Transactions (as defined in Section 5.06) in existence at such time
(not including Sale and Leaseback Transactions the proceeds of which have been
or will be applied in accordance with Section 5.06(b)), does not exceed 10% of
Consolidated Net Tangible Assets, determined as of a date not more than 90 days
prior thereto.
(c) In the event that the Company shall hereafter
secure the Debt Securities of each series equally and ratably with any other
obligation or indebtedness pursuant to the provisions of this Section 5.05, the
Trustee is hereby authorized to enter into an indenture or agreement
supplemental hereto and to take such action, if any, as it may deem advisable
to enable it to enforce effectively the rights of the Holders of the Securities
so secured, equally and ratably with such other obligation or indebtedness.
SECTION 5.06. Sale and Leaseback Transactions. So
long as the Debt Securities shall remain Outstanding, the Company will not, and
will not permit any Restricted Subsidiary to, sell or transfer (except to the
Company or one or more Restricted Subsidiaries, or both) any Principal Property
owned by it and in full operation for more than 180 days with the intention of
taking back a lease on such property (except a lease for a term of no more than
three years entered into with the intent that the sue by the Company or such
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Restricted Subsidiary of such property will be discontinued on or before the
expiration of such term) (herein referred to as a "Sale and Leaseback
Transaction") unless either (a) the Company or such Restricted Subsidiary would
be entitled, pursuant to the provisions of Section 5.05 hereof, to incur
Secured Debt equal in amount to the amount realized or to be realized upon such
sale or transfer secured by a Security Interest on the property to be leased
without equally and ratably securing the Debt Securities, or (b) the Company or
a Restricted Subsidiary shall apply an amount equal to the value of the
property so leased to the retirement (other than any mandatory retirement),
within 120 days of the effective date of any such arrangement, of Funded Debt
as shown on the most recent consolidated balance sheet of the Company and
which, in the case of such Funded Debt of the Company, is not subordinate and
junior in right of payment to the prior payment of the Debt Securities;
provided, however, that in lieu of applying all or any part of such amount to
such retirement, the Company may at its option (x) deliver to the Trustee Debt
Securities theretofore purchased or otherwise acquired by the Company, or (y)
receive credit for the Debt Securities theretofore redeemed at its option. If
the Company shall so deliver the Debt Securities to the Trustee (or receive
credit for Debt Securities so delivered), the amount which the Company shall be
required to apply to the retirement of indebtedness pursuant to this Section
5.06 shall be reduced by an amount equal to the aggregate principal amount of
such Debt Securities.
The term "value" shall mean, with respect to a Sale
and Leaseback Transaction, as of any particular time, the amount equal to the
greater of (i) the Capitalized Rent with respect thereto, or (ii) the fair
value of such property at the time of entering into such Sale and Leaseback
Transaction as determined by the Board of Directors.
SECTION 5.07. Restrictions on Transfer of Principal
Property to Unrestricted Subsidiaries. So long as the Debt Securities of any
series remain Outstanding, the Company will not itself, and will not cause,
suffer or permit any Restricted Subsidiary to, transfer (whether by merger,
consolidation or otherwise) any Principal Property to any Unrestricted
Subsidiary, unless it shall apply, within one year after the effective date of
such transaction, or shall have committed within one year after such effective
date to apply, an amount equal to the fair value of such Principal Property at
the time of such transfer, as determined by the Board of Directors, to (a) the
acquisition, construction, development or improvement of properties, facilities
or equipment which are, or, upon, such acquisition, construction, development
or improvement will be, a Principal Property or Properties or a part thereof,
(b) the redemption of Debt Securities of any series in accordance with the
provisions of Article Four and at the redemption price referred to in Section
4.01 applicable at the time of such redemption, (c) the repayment of Funded
Debt of the Company or of any Restricted Subsidiary (other than any Funded Debt
owed to any Restricted Subsidiary), or in part to such acquisition,
construction, development or improvement and in part to such redemption and/or
repayment; provided that, in lieu of applying an amount equivalent to all or
any part of such fair value to such redemption, the Company may, within one
year after such transfer, deliver to the Trustee Debt Securities (other than
Debt Securities made the basis of reduction in a mandatory sinking fund payment
pursuant to Section 4.05) for
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cancellation and thereby reduce the amount to be applied to the redemption of
the Debt Securities of that series pursuant to clause (b) above by an amount
equivalent to the aggregate principal amount of the Debt Securities so
delivered. Redemption of Debt Securities pursuant to this Section 5.07 shall
not be used as credits against mandatory sinking fund payments.
SECTION 5.08. Certificate to Trustee. So long as
the Debt Securities of any series remain Outstanding, the Company will deliver
to the Trustee on or before 120 days after the end of each fiscal year an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as officers of the Company, they would normally have
knowledge of any default by the Company in the performance or fulfillment or
observance of any covenants or agreements contained herein during the preceding
fiscal year, stating whether or not they have knowledge of any such default
and, if so, specifying each such default of which the signers have knowledge
and the nature thereof. The Officers' Certificate need not comply with Section
15.05.
SECTION 5.09. Waivers of Covenants. Anything in
this Indenture to the contrary notwithstanding, the Company may fail or omit,
in respect of any series of Debt Securities, and in any particular instance, to
comply with a covenant, agreement or condition contained in Sections 5.02 and
5.04 (other than in 5.04(a)(1) and (2)) to 5.08, inclusive, if the Company
shall have obtained and filed with the Trustee before or after the time for
such compliance the consent in writing of the Holders of more than 50% in
aggregate principal amount of the Debt Securities of the series affected by
such waiver at the time Outstanding, either waiving such compliance in such
instance or generally waiving compliance with such covenant or condition, but
no such waiver shall extend to or affect any obligation not expressly waived
nor impair any right consequent thereon and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such covenant or condition shall remain in full force and
effect.
ARTICLE SIX.
HOLDERS' LISTS AND REPORTS BY THE COMPANY
AND THE TRUSTEE.
SECTION 6.01. Holders' Lists. The Company covenants
and agrees that it will furnish or cause to be furnished to the Trustee, not
more than 15 days after each Regular Record Date with respect to the Debt
Securities of any series, and at such other times as the Trustee may request in
writing, within 30 days after receipt by the Company of any such request, a
list in such form as the Trustee may reasonably require of the names and
addresses of the Holders of Debt Securities of such series as of a date not
more than 15 days prior to the time such information is furnished; provided,
however, that no such list with respect to any particular series of Debt
Securities need be furnished at any such time if the
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Trustee is in possession thereof by reason of its acting as the Debt Security
registrar for such series designated under Section 3.06 or otherwise.
SECTION 6.02. Preservation and Disclosure of Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders of
Debt Securities contained in the most recent list furnished to it as provided
in Section 6.01 or received by the Trustee in the capacity of the Debt Security
registrar (if so acting) under Section 3.06. The Trustee may destroy any list
furnished to it as provided in Section 6.01 upon receipt of a new list so
furnished.
(b) The rights of Holders to communicate with
other Holders with respect to their rights under this Indenture or under the
Debt Securities of any series or of all Debt Securities, and the corresponding
rights and duties of the Trustee, shall be as provided by the Trust Indenture
Act of 1939.
(c) Every Holder of Debt Securities, by receiving
and holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any agent of either of them shall be held
accountable by reason of any disclosure of information as to names and
addresses of Holders made pursuant to the Trust Indenture Act of 1939.
SECTION 6.03. Reports by the Company. The Company
agrees to file with the Trustee and the Commission, and transmit to Holders,
such information, documents and other reports, and such summaries thereof, as
may be required pursuant to the Trust Indenture Act of 1939 at the times and in
the manner provided pursuant to such Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, shall
be filed with the Trustee within 15 days after the same is so required to be
filed with the Commission.
SECTION 6.04. Reports by the Trustee. (a) The
Trustee shall transmit to Holders such reports concerning the Trustee and its
actions under this Indenture as may be required pursuant to the Trust Indenture
Act of 1939 at the times and in the manner provided pursuant thereto. The
interval between transmissions of reports to be transmitted at intervals shall
be twelve months or such shorter time required by the Trust Indenture Act of
1939. If the Trust Indenture Act of 1939 does not specify the date on which a
report is due, the such report shall be due on May 15 of each year following
the first issuance of Debt Securities.
(b) A copy of each such report shall, at the time
of such transmission to Holders, be filed by the Trustee with each stock
exchange upon which Debt Securities of any series are listed, with the
Commission and with the Company. The Company will notify the Trustee when the
Debt Securities of any series are listed on any stock exchange.
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ARTICLE SEVEN.
REMEDIES OF THE TRUSTEE AND HOLDERS
ON EVENT OF DEFAULT.
SECTION 7.01. Events of Default. Event of Default,
with respect to any series of Debt Securities, wherever used herein, means any
one of the following events (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body), unless such event is
either inapplicable to a particular series or it is specifically deleted or
modified in the supplemental indenture under which such series of Debt
Securities is issued or in the form of Debt Security for such series:
(a) default in the payment of any installment of
interest upon any Debt Security of such series as and
when the same shall become due and payable, and
continuance of such default for a period of 30 days;
or
(b) default in the payment of the principal of and
premium, if any, on any Debt Security of such series
as and when the same shall become due and payable
either at maturity, upon redemption, by declaration
of acceleration or otherwise; or
(c) default in the payment or satisfaction of any
sinking fund payment or analogous obligation, if any,
with respect to the Debt Securities of such series as
and when the same shall become due and payable by the
terms of the Debt Securities of such series; or
(d) failure on the part of the Company duly to
observe or perform any of the covenants, warrants or
agreements on the part of the Company in respect of
the Debt Securities of such series in this Indenture
(other than a covenant, warranty or agreement a
default in whose performance or whose breach is
elsewhere in this Section specifically dealt with)
continued for a period of 60 days after the date on
which written notice of such failure, specifying such
failure and requiring the same to be remedied, shall
have been given to the Company by the Trustee, by
registered mail, or to the Company and the Trustee by
the Holders of at least 25% in aggregate principal
amount of the Outstanding Debt Securities of such
series; or
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(e) an event of default with respect to any other
series of Debt Securities issued or hereafter issued
pursuant to this Indenture or if default shall be
made (and shall not have been cured or waived) in the
payment of principal of or interest on any other
obligation for borrowed money of the Company beyond
any period of grace with respect thereto if (i) the
aggregate principal amount (or, in the case of
Original Issue Discount Debt Securities, such portion
of the principal amount as may be specified in the
terms of such indebtedness as due and payable upon
acceleration) of any such obligation in respect of
which principal or interest is and remains in default
is in excess of $25,000,000 and (ii) the default in
such payment is not being contested by the Company in
good faith and by appropriate proceedings; provided,
however, that subject to the provisions of Section
7.08 and Section 8.01 the Trustee shall not be
charged with knowledge of any such default unless
written notice thereof shall have been given to the
Trustee by the Company, by the holders or an agent of
the holders of any such indebtedness, by the trustee
then acting under any indenture or other instrument
under which such default shall have occurred, or by
the Holders of not less than 25% in aggregate
principal amount of such series of Debt Securities at
the time Outstanding; or
(f) a decree or order by a court having
jurisdiction in the premises shall have been entered
adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking
reorganization of the Company under the Federal
bankruptcy laws or any other similar applicable
Federal or state law, and such decree or order shall
have continued undischarged and unstayed for a period
of 60 days; or a decree or order of a court having
jurisdiction in the premises for the appointment of a
receiver or liquidator or trustee or assignee or
other similar official in bankruptcy or insolvency of
the Company or of all or substantially all of its
property, or for the winding up or liquidation of its
affairs, shall have been entered, and such decree or
order shall have continued undischarged and unstayed
for a period of 60 days; or
(g) the Company shall institute proceedings to be
adjudicated a voluntary bankrupt, or shall consent to
the filing of a bankruptcy proceeding against it, or
shall file a petition or answer or consent seeking an
arrangement or a reorganization under the Federal
bankruptcy laws or any other similar applicable
Federal or state law, or shall consent to the filing
of any such petition, or shall consent to the
appointment of a receiver or liquidator or trustee or
assignee or other similar official in bankruptcy or
insolvency of it or of all or substantially all of
its property, or shall make an assignment for the
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benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become
due; or
(h) any other Event of Default provided in the
supplemental indenture under which such series of
Debt Securities is issued or in the form of Debt
Security for such series;
then and in each and every such case, so long as such Event of Default with
respect to any series of Debt Securities for which there are Debt Securities
Outstanding occurs and is continuing and shall not have been remedied or waived
to the extent permitted by the terms of this Indenture, unless the principal of
all of the Debt Securities of such series shall have already become due and
payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Outstanding Debt Securities of such series, by notice
in writing to the Company (and to the Trustee if given by Holders), may declare
the principal (or, if the Debt Securities of that series are Original Issue
Discount Debt Securities, such portion of the principal amount as may be
specified in the terms of that series) of all the Debt Securities of such
series and the interest accrued thereon to be due and payable immediately, and
upon any such declaration the same shall become and shall be immediately due
and payable, anything in this Indenture or in the Debt Securities of such
series contained to the contrary notwithstanding. This provision, however, is
subject to the condition that if, at any time after the principal of the Debt
Securities of such series shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay in the currency in which the
Debt Securities of such series are payable all matured installments of interest
upon all of the Debt Securities and the principal of and premium, if any, on
any and all Debt Securities of such series which shall have become due
otherwise than by such declaration (with interest on overdue installments of
interest to the extent that payment of such interest is enforceable under
applicable law and on such principal and premium, if any, at the rate borne by
the Debt Securities of such series or as otherwise provided in the form of Debt
Security for such series, to the date of such payment or deposit) and the
expenses of the Trustee (subject to Section 8.06), and any and all defaults
under this Indenture, other than the nonpayment of principal of and accrued
interest on Debt Securities of such series which shall have become due by such
declaration, shall have been cured or shall have been waived in accordance with
Section 7.07 or provision deemed by the Trustee to be adequate shall have been
made therefor - then and in every such case the Holders of at least a majority
in aggregate principal amount of the Debt Securities of such series then
Outstanding, by written notice to the Company and to the Trustee, may rescind
and annul such declaration and its consequences; but no such rescission and
annulment shall extend to or shall affect any subsequent default, or shall
impair any right consequent thereon.
In case the Trustee or any Holders shall have
proceeded to enforce any right under this Indenture and such proceedings shall
have been discontinued or abandoned because of such rescission and annulment or
for any other reason or shall have been
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determined adversely to the Trustee, then and in every such case the Company,
the Trustee and the Holders shall be restored respectively to their several
positions and rights hereunder, and all rights, remedies and powers of the
Company, the Trustee and the Holders shall continue as though no such
proceeding had been taken.
SECTION 7.02. Payment of Debt Securities Upon
Default; Suit Therefor. The Company covenants that (a) in case default shall
be made in the payment of any instalment of interest upon any Debt Security of
any series as and when the same shall become due and payable, and such default
shall have continued for a period of 30 days, or (b) in case default shall be
made in the payment of the principal of and premium, if any, on any Debt
Security of any series as and when the same shall have become due and payable,
whether at maturity of the Debt Security or upon redemption or by declaration
or otherwise or (c) in case default shall be made in the making or satisfaction
of any sinking fund payment or analogous obligation with respect to the Debt
Securities of any series when the same becomes due by the terms of the Debt
Securities of any series--then, upon demand of the Trustee, the Company will
pay to the Trustee, for the benefit of the Holders (or Holders of Debt
Securities of any such series in the case of clause (c) above), the whole
amount that then shall have become due and payable on any such Debt Security
(or Debt Securities of any such series in the case of clause (3) above) for
principal and premium, if any, or interest, or both, as the case may be, with
interest upon the overdue principal and premium, if any, and (to the extent
that payment of such interest is enforceable under applicable law) upon the
overdue installments of interest at the rate borne by the Debt Securities of
such series or as otherwise provided in the form of Debt Security of such
series; and, in addition thereto, such further amount as shall be sufficient to
cover the costs and expenses of collection, including a reasonable compensation
to the Trustee, its agents, attorneys and counsel, and any expenses or
liabilities incurred and advances made by the Trustee, except compensation or
advances arising, or expenses or liabilities incurred, as a result of the
Trustee's negligence or bad faith.
Until such demand is made by the Trustee, the Company
may pay the principal of and premium, if any, and interest on the Debt
Securities of any series to the Persons entitled thereto, whether or not the
principal of and premium, if any, and interest on the Debt Securities of such
series are overdue.
In case the Company shall fail forthwith to pay such
amounts upon such demand, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute any actions or
proceedings at law or in equity for the collection of the sums so due and
unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Company
or any other obligor on such Debt Securities and collect, in the manner
provided by law out of the property of the Company or any other obligor on such
Debt Securities wherever situated, the moneys adjudged or decreed to be
payable. If any Event of Default with respect to any series of Debt Securities
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Debt
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Securities of such series by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
In case there shall be pending proceedings for the
bankruptcy or for the reorganization of the Company or any other obligor on the
Debt Securities of any series under the Federal bankruptcy laws or any other
applicable law, or in case a receiver or trustee shall have been appointed for
the property of the Company or such other obligor, or in the case of any other
similar judicial proceedings relative to the Company or other obligor upon the
Debt Securities of any series, or to the creditors or property of the Company
or such other obligor, the Trustee, irrespective of whether the principal of
the Debt Securities of such series shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand pursuant to the provisions of this Section
7.02, shall be entitled and empowered by intervention in such proceedings or
otherwise, (a) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Debt Securities of
such series, and, in case of any judicial proceedings, to file such proofs of
claim and other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee and of the Holders of the Debt Securities of
such series allowed in such judicial proceedings relative to the Company or any
other obligor on such Debt Securities, its or their creditors, or its or their
property, (b) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of any Debt Securities of any series in any election of a
trustee or a standby trustee in arrangement, reorganization, liquidation or
other bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings, and (c) to collect and receive any moneys
or other property payable or deliverable on any such claims, and to distribute
the same after the deduction of its charges and expenses; and any receiver,
assignee or trustee in bankruptcy or reorganization is hereby authorized by
each of the Holders of the Debt Securities of such series to make such payments
to the Trustee, and, in the event that the Trustee shall consent to the making
of such payments directly to such Holders, to pay to the Trustee such amount as
shall be sufficient to cover reasonable compensation to the Trustee, its
agents, attorneys and counsel, and all other expenses and liabilities incurred
and advances made by the Trustee except compensation or advances arising, or
expenses or liabilities incurred, as a result of the Trustee's negligence or
bad faith.
Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept, or adopt on behalf of any
Holder any plan or reorganization, arrangement, adjustment or composition
affecting the Debt Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder (except, as
aforesaid, for the election of a trustee in bankruptcy or other Person
performing similar functions) in any such proceeding.
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All rights of action and of asserting claims under
this Indenture, or under any of the Debt Securities of any series, may be
enforced by the Trustee without the possession of any of such Debt Securities,
or the production thereof on any trial or other proceeding relative thereto,
and any such suit or proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall
be for the ratable benefit of the Holders of the Debt Securities of such series
in respect of which such judgment has been recovered.
In any proceedings brought by the Trustee (and also
any proceedings involving the interpretation of any provision of this Indenture
to which the Trustee shall be a party), the Trustee shall be held to represent
all the Holders of the Debt Securities in respect to which such action was
taken, and it shall not be necessary to make any Holders of such Debt
Securities parties to any such proceedings.
SECTION 7.03. Application of Moneys Collected by
Trustee. Any moneys collected by the Trustee pursuant to Section 7.02 shall be
applied in the order following, at the date or dates fixed by the Trustee for
the distribution of such moneys, upon presentation of the Debt Securities of
such series, and stamping thereon the payment, if only partially paid, and upon
surrender thereof, if fully paid:
FIRST: To the payment of costs and expenses of
collection and reasonable compensation to the
Trustee, its agents, attorneys and counsel, and of
all other expenses and liabilities incurred, and all
advances made, by the Trustee except compensation or
advances arising, or expenses or liabilities
incurred, as a result of its negligence or bad faith,
and any other amounts owing the Trustee under Section
8.06;
SECOND: In case the principal of the Debt
Securities of such series shall not have become due
and be unpaid, to the payment of interest on such
Debt Securities, in the order of the maturity of the
installments of such interest, with interest (to the
extent that such interest has been collected by the
Trustee) upon the overdue installments of interest at
the rate borne by such Debt Securities, such payments
to be made ratable to the Persons entitled thereto;
THIRD: In case the principal of the Debt
Securities of such series shall have become due, by
declaration or otherwise, to the payment of the whole
amount then owing and unpaid upon such Debt
Securities for principal and premium, if any, and
interest, with interest on the overdue principal and
premium, if any, and (to the extent that such
interest has been collected by the Trustee) upon
overdue installments of interest at the rate borne by
such Debt Securities; and in case such moneys shall
be insufficient to pay in full the whole amounts so
due
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and unpaid upon such Debt Securities, then, to the
payment of such principal and premium, if any, and
interest without preference or priority of principal
and premium, if any, over interest, or of interest
over principal and premium, if any, or of any
instalment of interest over any other instalment of
interest, or of any Debt Security of such series over
any other such Debt Security, ratably to the
aggregate of such principal and premium, if any, and
accrued and unpaid interest;
FOURTH: To the payment of any surplus then
remaining to the Company, its successors or assigns,
or to whomsoever may be lawfully entitled to receive
the same.
SECTION 7.04. Proceedings by Holders. No Holder of
any Debt Security of any series shall have any right by virtue of or by
availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law or in bankruptcy or otherwise upon or under or
with respect to this Indenture or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless such Holder previously shall have
given to the Trustee written notice of default and of the continuance thereof,
as hereinbefore provided, and unless also the Holders of not less than 25% in
aggregate principal amount of the Debt Securities of such series then
Outstanding shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such action, suit
or proceeding (and no direction inconsistent with such written request shall
have been given to the Trustee pursuant to Section 7.07), it being understood
and intended, and being expressly covenanted by the taker and Holder of every
Debt Security of every series with every other taker and Holder and the
Trustee, that no one or more Holders of Debt Securities shall have any right in
any manner whatever by virtue of or by availing of any provision of this
Indenture to affect, disturb or prejudice the rights of any other Holder of
such Debt Securities, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all Holders of Debt Securities.
SECTION 7.05. Proceedings by Trustee. In case of an
Event of Default hereunder the Trustee may in its discretion proceed to protect
and enforce the rights vested in it by this Indenture by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any of such rights, either by suit in equity or by action at law or by
proceeding in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture, or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
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SECTION 7.06. Remedies Cumulative and Continuing.
All powers and remedies given by this Article Seven to the Trustee or to the
Holders shall, to the extent permitted by law, be deemed cumulative and not
exclusive of any thereof or of any other powers and remedies available to the
Trustee or the Holders, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture, and no delay or omission of the Trustee or of any Holder to exercise
any right or power accruing upon any default occurring and continuing as
aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or an acquiescence therein; and, subject to the
provisions of Section 7.04, every power and remedy given by this Article Seven
or by law to the Trustee or to the Holders may be exercised from time to time,
and as often as shall be deemed expedient, by the Trustee or by the Holders.
SECTION 7.07. Direction of Proceedings and Waiver of
Defaults by Majority of Holders. The Holders of a majority in aggregate
principal amount of the Outstanding Debt Securities of any series shall have
the right to direct the time, method, and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee with respect to the Debt Securities by this Indenture;
provided, however, that (subject to the provisions of Section 8.01) the Trustee
shall have the right to decline to follow any such direction if the Trustee
shall determine upon advice of counsel that the action or proceeding so
directed may not lawfully be taken or would be materially and unjustly
prejudicial to the rights of Holders not joining in such direction or if the
Trustee in good faith by its board of directors or trustees, executive
committee, or a trust committee of directors or trustees and/or Responsible
Officers shall determine that the action or proceeding so directed would
involve the Trustee in personal liability or if the Trustee in good faith shall
so determine that the actions or forebearances specified in or pursuant to such
direction would be unduly prejudicial to the interests of Holders of the Debt
Securities of all series not joining in the giving of said direction, it being
understood that (subject to Section 8.01) the Trustee shall have no duty to
ascertain whether or not such actions or forebearances are duly prejudicial to
such Holders. The Trustee may take any other action deemed proper by the
Trustee not inconsistent with such direction. The Holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of any series may
on behalf of the Holders of all the Debt Securities of such series waive any
past default or Event of Default hereunder and its consequences except a
default in the payment of principal of or premium, if any, or interest on such
Debt Securities, or a default in the making of any sinking fund payment with
respect to such Debt Securities. Upon any such waiver the Company, the Trustee
and the Holders of such Debt Securities shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent thereon. Whenever any default or Event of Default shall have been
waived as permitted by this Section 7.07, said default or Event of Default
shall for all purposes of the Debt Securities and this Indenture be deemed to
have been cured and to be not continuing.
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This Section 7.07 shall be in lieu of Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act of 1939 and such
Sections 316(a)(1)(A) and Section 316(a)(1)(B) are hereby expressly excluded
from this Indenture, as permitted by the Trust Indenture Act of 1939.
SECTION 7.08. Notice of Defaults. The Trustee shall
give the Holders notice of any default hereunder as and to the extent provided
by the Trust Indenture Act of 1939; provided, however, that in the case of any
default of the character specified in Section 7.07(d), no such notice to
Holders shall be given until at least 60 days after the occurrence thereof.
For the purpose of this Section, the term "default" means any event which is,
or after notice or lapse of time or both would become, an Event of Default.
SECTION 7.09. Undertaking to Pay Costs. In any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
a court may require any party litigant in such suit to file an undertaking to
pay the costs of such suit, and may assess costs against any such party
litigant, in the manner and to the extent provided in the Trust Indenture Act
of 1939; provided that neither this Section nor the Trust Indenture Act of 1939
shall be deemed to authorize any court to require such an undertaking or to
make such an assessment in any suit instituted by the Company, and any
provision of the Trust Indenture Act of 1939 to such effect is hereby expressly
excluded from this Indenture, as permitted by the Trust Indenture Act of 1939.
SECTION 7.10. Unconditional Right of Holders to
Receive Principal, Premium and Interest. Notwithstanding any other provision
in this Indenture, the Holder of any Debt Security shall have the rights, which
are absolute and unconditional, to receive payment of the principal of,
premium, if any, and (subject to Section 3.08) interest on such Debt Security
on the respective Stated Maturities expressed in such Debt Security (or in the
case of redemption or repayment, on the date for redemption or repayment, as
the case may be) and to institute suit for the enforcement of any such payment,
and such rights shall be impaired without the consent of such Holder.
ARTICLE EIGHT.
CONCERNING THE TRUSTEE.
SECTION 8.01. Duties and Responsibilities of
Trustee. The duties and responsibilities of the Trustee shall be as provided
by the Trust Indenture Act of 1939. Notwithstanding the foregoing, no implied
covenants or obligations, except as provided by the Trust Indenture Act of
1939, shall be read into this Indenture against the Trustee, and no provision
of this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in
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the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it. Whether or not
therein expressly so provided, every provision of this Indenture relating to
the conduct or affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section.
SECTION 8.02. Reliance on Documents, Opinions,
etc. Subject to the provisions of Section 8.01,
(a) the Trustee may rely and shall be protected
in acting or refraining from acting upon any
resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order,
bond, debenture, note or other paper document
believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request, direction, order or demand of
the Company mentioned herein shall be sufficiently
evidenced by an Officers' Certificate (unless
otherwise evidence in respect thereof be herein
specifically prescribed); and any resolution of the
Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the Secretary or an
Assistant Secretary of the Company;
(c) the Trustee may consult with counsel and the
advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and
protection in respect of any action taken or omitted
by it hereunder in good faith and in accordance with
such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by
this Indenture at the request, order or direction of
any of the Holders, pursuant to the provisions of
this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby;
(e) the Trustee shall not be liable for any
action taken or omitted by it in good faith and
believed by it to be authorized or within the
discretion or rights or powers conferred upon it by
this Indenture;
(f) prior to the occurrence of an Event of
Default with respect to the Debt Securities of any
series and after the curing or waiving of all Events
of Default with respect to such Debt Securities, the
Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion,
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report, notice, request, consent, order, approval,
bond, debenture, note, or other paper or document,
unless requested in writing to do so by the Holders
of not less than a majority in principal amount of
such Debt Securities then Outstanding; provided,
however, that the reasonable expenses of every such
investigation shall be paid by the Company or, if
paid by the Trustee, shall be repaid by the Company
upon demand; and provided, further, that if the
payment within a reasonable time to the Trustee of
the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation
is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it
by the terms of this Indenture, the Trustee may
require reasonable indemnity against such expenses or
liabilities as a condition to so proceeding;
(g) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder
either directly or by or through agents or attorneys,
and the Trustee shall not be liable or responsible
for any misconduct, bad faith or negligence on the
part of any agent or attorney appointed with due care
by it hereunder; and
(h) the Trustee shall not be deemed to have
knowledge of any default or Event of Default unless a
Responsible Officer of the Trustee has actual
knowledge thereof or Holders of greater than 50% of
the outstanding principal amount of Debt Securities
of any series shall have notified the Trustee
thereof.
SECTION 8.03. No Responsibility for Recitals, etc.
The recitals contained herein and in the Debt Securities (except in the
Trustee's certificate of authentication) shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for the correctness of
the same. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Debt Securities of any series. The
Trustee represents that it is duly authorized to execute and deliver this
Indenture and perform its obligations hereunder. Neither the Trustee nor the
Authenticating Agent shall be accountable for the use or application by the
Company or any Debt Securities or the proceeds of any Debt Securities
authenticated and delivered by the Trustee in conformity with the provisions of
this Indenture.
SECTION 8.04. Trustee and Agents May Own Debt
Securities. The Trustee, any paying agent, or any agent of the Trustee or the
Company under this Indenture, in its individual or any other capacity, may
become the owner or pledgee of Debt Securities of any series with the same
rights it would have if it were not Trustee or such agent and, subject to
Sections 8.08 and 8.13, if operative, may otherwise deal with the Company and
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receive, collect, hold, and retain collections from the Company with the same
rights it would have if it were not the Trustee or such agent.
SECTION 8.05. Moneys to be Held in Trust. Subject
to the provisions of Section 13.04, all moneys received by the Trustee shall,
until used or applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated from other funds except to
the extent required by law. Neither the Trustee nor any paying agent shall be
under any liability for interest on any moneys received by it hereunder except
such as it may agree with the Company to pay thereon. So long as no Event of
Default with respect to the Debt Securities of any series shall have occurred
and be continuing, all interest allowed on any such moneys shall be paid from
time to time upon the written order of the Company, signed by its President,
its Chief Financial Officer, any Vice President, its Treasurer or an Assistant
Treasurer.
SECTION 8.06. Compensation and Expenses of Trustee.
The Company covenants and agrees to pay to the Trustee from time to time, and
the Trustee shall be entitled to, reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust), and the Company will pay or reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of
its counsel and all persons not regularly in its employ and any amounts paid by
the Trustee to any Authenticating Agent pursuant to Section 8.14) except any
such expense, disbursement or advance as may arise from its negligence or bad
faith. The Company also covenants to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without negligence or
bad faith on the part of the Trustee and arising out of or in connection with
the acceptance or administration of this trust, or the performance of its
duties hereunder, including the current payment of all costs and expenses of
defending itself against any claim of liability in the premises. The
obligations of the Company under this Section 8.06 to compensate and indemnify
the Trustee and to pay or reimburse the Trustee for expenses, disbursements and
advances shall constitute additional indebtedness hereunder. Such additional
indebtedness shall be secured by a lien prior to that of the Debt Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the benefit of the Holders of particular Debt
Securities.
SECTION 8.07. Officers' Certificate as Evidence.
Subject to the provisions of Section 8.01, whenever in the administration of
the provisions of this Indenture the Trustee shall deem it necessary or
desirable that a matter be proved or established prior to taking or omitting
any action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of negligence or bad faith
on the part of the Trustee, be deemed to be conclusively proved and established
by an Officers' Certificate delivered to the Trustee, and such Certificate, in
the absence of negligence or bad faith on the part of the Trustee, shall be
full warrant to the Trustee for any action taken or omitted by it under the
provisions of this Indenture upon the faith thereof.
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SECTION 8.08. Conflicting Interest of Trustee. If
the Trustee has or shall acquire any conflicting interest within the meaning of
the Trust Indenture Act of 1939, the Trustee shall either eliminate such
conflicting interest or resign in the manner provided by, and subject to the
provisions of, the Trust Indenture Act of 1939 and this Indenture.
SECTION 8.09. Eligibility of Trustee. There shall
at all times be a Trustee with respect to each series of Debt Securities
hereunder which shall be a corporation organized and doing business under the
laws of the United States or any state or territory thereof or of the District
of Columbia authorized under such laws to exercise corporate trust power's,
having a combined capital and surplus of at least $5,000,000, subject to
supervision or examination by Federal, state, territorial, or District of
Columbia authority and having its principal office and place of business in
Wilmington, Delaware, if there be such a corporation having its principal
office and place of business in said City and willing to act as Trustee
hereunder. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purposes of this Section 8.09, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee with respect to any
series of Debt Securities shall cease to be eligible in accordance with the
provisions of this Section 8.09, such Trustee shall resign immediately in the
manner and with the effect specified in Section 8.10.
SECTION 8.10. Resignation or Removal of Trustee.
(a) The Trustee may at any time resign with respect to any series of Debt
Securities by giving written notice by first class mail of such resignation to
the Company and to the Holders of such series of Debt Securities at their
addresses as they shall appear on the Debt Security Register. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
trustee with respect to such series by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor trustee.
If no successor trustee with respect to such series shall have been so
appointed and have accepted appointment within 60 days after the mailing of
such notice of resignation to the Holders, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor trustee,
or any Holder of such series of Debt Securities who has been a bona fide Holder
of a Debt Security or Debt Securities of such series for at least six months
may, subject to the provisions of Section 7.09, on behalf of himself and all
others similarly situated, petition any such court for the appointment of a
successor trustee with respect to such series. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, appoint such
successor trustee.
(b) In case at any time any of the following shall occur--
(1) the Trustee shall fail to comply with the
provisions of subsection (a) of Section 8.08 after
written request therefor by the Company or by
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any Holder who has been a bona fide Holder of a Debt
Security or Debt Securities of such series for at
least six months, unless the Trustee's duty to resign
is stayed in accordance with the provisions of
Section 310(b) of the Trust Indenture Act of 1939, or
(2) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.09 and
shall fail to resign after written request therefor
by the Company or by any such Holder of a note of
such series, or
(3) the Trustee shall become incapable of acting
with respect to any series of Debt Securities, or
shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, the Company may remove the Trustee with respect to such
series and appoint a successor trustee for such series by written instrument,
in duplicate, executed on instruction of the President, The Chief Financial
Officer or the Treasurer of the Company, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee, or,
subject to the provisions of Section 7.09, any Holder who has been a bona fide
Holder of a Debt Security or Debt Securities of such series for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee with respect to such series. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove such Trustee and appoint such successor trustee.
(c) The Holders of a majority in aggregate principal
amount of the Outstanding Debt Securities of any series may at any time remove
the Trustee with respect to such series by delivering to the Trustee so
removed, to the successor trustee so appointed and to the Company the evidence
provided for in Section 9.01 of the action in that regard taken by the Holders,
and nominate a successor Trustee which shall be deemed appointed as successor
Trustee unless within ten days after such nomination the Company objects
thereto, in which case the Trustee so removed or any Holder of a Debt Security
or Debt Securities of such series, upon the terms and conditions and otherwise
as in subsection (a) of this Section 8.10 provided, may petition any court of
competent jurisdiction for an appointment of a successor Trustee with respect
to such series.
(d) Any resignation or removal of the Trustee with
respect to all or any series of Debt Securities and any appointment of a
successor Trustee pursuant to any of the provisions of this Section 8.10 shall
become effective upon acceptance of appointment by the successor Trustee as
provided in Section 8.11.
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SECTION 8.11. Acceptance by Successor Trustee. Any
successor Trustee appointed as provided in Section 8.10 shall execute,
acknowledge and deliver to the Company and to its predecessor Trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor Trustee shall become effective with respect to
all or any series as to which it is resigning as Trustee, and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, duties and obligations of its predecessor hereunder
with respect to all or any such series, with like effect as if originally named
as Trustee herein with respect to all or any such series; nevertheless, on the
written request of the Company or of the successor Trustee, the Trustee ceasing
to act shall, upon payment of any amounts then due it pursuant to the
provisions of Section 8.06, execute and deliver an instrument transferring to
such successor Trustee all the rights and powers of the Trustee with respect to
all or any such series so ceasing to act. Upon request of any such successor
Trustee, the Company shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor Trustee all
such rights and powers. Any Trustee ceasing to act shall, nevertheless, retain
a lien upon all property or funds held or collected by such Trustee with
respect to all or any series as to which it is resigning as Trustee, to secure
any amounts and shall be entitled to any indemnities then due it pursuant to
the provisions of Section 8.06.
No successor Trustee shall accept appointment as
provided in this Section 8.11 unless at the time of such acceptance such
successor Trustee shall be qualified under the provisions of Section 8.08 and
eligible under the provisions of Section 8.09.
Upon acceptance of appointment by a successor Trustee
with respect to all or any series of Debt Securities as provided in this
Section 8.11, the Company shall mail notice of the succession of such Trustee
hereunder to the Holders of Debt Securities of such series at their addresses
as they shall appear on the Debt Security Register. If the Company fails to
mail such notice within ten days after acceptance of appointment by the
successor Trustee, the successor Trustee shall cause such notice to be mailed
at the expense of the Company.
In case the appointment hereunder of a successor
Trustee with respect to the Debt Securities of one or more (but not all)
series, the Company, the retiring Trustee and each successor Trustee with
respect to the Debt Securities of any applicable series shall execute and
deliver an indenture supplemental hereto which shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Debt Securities
of any series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be Trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee.
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SECTION 8.12. Succession by Merger, etc. Subject to
Sections 8.08 and 8.09, any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder without the execution
or filing of any paper or any further act on the part of any of the parties
hereto.
In case at the time any successor to the Trustee
shall succeed to the trusts created by this Indenture any of the Debt
Securities shall have been authenticated but not delivered, any such successor
to the Trustee may adopt the certificate of authentication of any predecessor
Trustee, and deliver such Debt Securities so authenticated; and in case at that
time any of the Debt Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Debt Securities either in the
name of such successor Trustee or, if such successor Trustee is a successor by
merger, conversion or consolidation, the name of any predecessor hereunder; and
in all such cases such certificate shall have the full force which it is
anywhere in the Debt Securities or in this Indenture provided that the
certificate of the Trustee shall have.
SECTION 8.13. Limitation on Rights of Trustee as a
Creditor. If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act of 1939 regarding the collection of
claims against the Company (or any such other obligor).
SECTION 8.14. Authenticating Agents. There may be
an Authenticating Agent or Authenticating Agents appointed by the Trustee from
time to time with power to act on its behalf and subject to its direction in
the authentication and delivery of any series of Debt Securities issued upon
original issuance, exchange, transfer or redemption thereof as fully to all
intents and purposes as though such Authenticating Agent (or Authenticating
Agents) had been expressly authorized to authenticate and deliver such Debt
Securities, and Debt Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes
as though authenticated by the Trustee hereunder. For all purposes of this
Indenture, the authentication and delivery of Debt Securities by any
Authenticating Agent pursuant to this Section 8.14 shall be deemed to be the
authentication and delivery of such Debt Securities "by the Trustee", and
whenever this Indenture provides that "the Trustee shall authenticate and
deliver" Debt Securities or that Debt Securities "shall have been authenticated
and delivered by the Trustee", such authentication and delivery by any
Authenticating Agent shall be deemed to be authentication and delivery by the
Trustee. Any such Authenticating Agent shall at all times be a corporation
organized and doing business under the laws of the United States of America or
of any State or Territory or the District of Columbia, with a combined capital
and surplus of at least $5,000,000 and authorized under such laws to act as an
authenticating agent, duly registered to act as such, if and to the extent
required by applicable law and subject to supervision or examination by Federal
or State authority. If such corporation publishes
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reports of its condition at least annually pursuant to law or the requirements
of such authority, then for the purposes of this Section 8.14 the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section 8.14, or to be duly
registered if and to the extent required by applicable law and regulations, it
shall resign immediately in the manner and with the effect herein specified in
this Section 8.14.
Whenever reference is made in this Indenture to the
authentication and delivery of Debt Securities of any series by the Trustee or
the Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by its
Authenticating Agent appointed with respect to the Debt Securities of such
series and a certificate of authentication executed on behalf of the Trustee by
its Authenticating Agent appointed with respect to the Debt Securities of such
series.
Any corporation into which any Authenticating Agent
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, consolidation or conversion to which any
Authenticating Agent shall be a party, or any corporation succeeding to the
authenticating agency business of any Authenticating Agent, shall be the
successor of such Authenticating Agent hereunder, if such successor corporation
is otherwise eligible under this Section 8.14, without the execution or filing
of any paper or any further act on the part of the parties hereto or such
Authenticating Agent or such successor corporation.
In case at the time such successor to any such agency
shall succeed to such agency any of the Debt Securities shall have been
authenticated but not delivered, any such successor to such Authenticating
Agent may adopt the certificate of authentication of any predecessor
Authenticating Agent and deliver such Debt Securities so authenticated; and in
case at that time any of the Debt Securities shall not have been authenticated,
any successor to any Authenticating Agent may authenticate such Debt Securities
either in the name of any predecessor hereunder or in the name of the successor
Authenticating Agent; and in all cases such certificate shall have the full
force which it has anywhere in the Debt Securities or in this Indenture
provided that the certificate of the predecessor Authenticating Agent shall
have had such force; provided, however, that the right to adopt the certificate
of authentication of any predecessor Authenticating Agent or to authenticate
Debt Securities in the name of any predecessor Authenticating Agent shall apply
only to its successor or successors by merger, conversion or consolidation.
Any Authenticating Agent may at any time resign as
Authenticating Agent with respect to any series of Debt Securities by giving
written notice of resignation to the Trustee and to the Company. The Trustee
may at any time terminate the agency of any Authenticating Agent with respect
to any series of Debt Securities by giving written notice of termination to
such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time Authenticating
Agent shall
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cease to be eligible under this Section 8.14, the Trustee may, and shall, upon
request of the Company, promptly use its best efforts to appoint a successor
Authenticating Agent.
Upon the appointment, at any time after the original
issuance of any of the Debt Securities, of any successor, additional or new
Authenticating Agent, the Trustee shall give written notice of such appointment
to the Company and shall at the expense of the Company mail notice of such
appointment to all Holders of Debt Securities of such series as the names and
addresses of such Holders appear on the Debt Security Register.
Any successor Authenticating Agent with respect to
any series of Debt Securities upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as though originally named as an Authenticating
Agent herein with respect to such series. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 8.14
and duly registered if and to the extent required under applicable law and
regulations.
Any Authenticating Agent by the acceptance of its
appointment with respect to any series of Debt Securities shall be deemed to
have agreed with the Trustee that: it will perform and carry out the duties of
an Authenticating Agent as herein set forth with respect to such series,
including among other things the duties to authenticate and deliver Debt
Securities when presented to it in connection with exchanges, registrations of
transfer or redemptions thereof; it will keep and maintain, and furnish to the
Trustee from time to time as requested by the Trustee appropriate records of
all transactions carried out by it as Authenticating Agent and will furnish the
Trustee such other information and reports as the Trustee may reasonably
require; it is eligible for appointment as Authenticating Agent under this
Section 8.14 and will notify the Trustee promptly if it shall cease to be so
qualified; and it will indemnify the Trustee against any loss, liability or
expense incurred by the Trustee and will defend any claim asserted against the
Trustee by reason of any acts or failures to act of the Authenticating Agent
with respect to such series but it shall have no liability for any action taken
by it at the specific written direction of the Trustee.
The Company agrees to pay to each Authenticating
Agent from time to time reasonable compensation and expenses for its services,
and the Trustee shall have no liability for such payments.
The provisions of Sections 8.02(a), (b), (c), (e) and
(f), 8.03, 8.04, 8.06 (insofar as it pertains to indemnification), 9.01, 9.02
and 9.03 shall bind and inure to the benefit of each Authenticating Agent to
the same extent that they bind and inure to the benefit of the Trustee.
If an appointment with respect to one or more series
is made pursuant to this Section 8.14, the Debt Securities of such series may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternate certificate of authentication in the following
form:
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This is one of the Debt Securities of the series
designated herein issued under the within-mentioned Indenture.
<TABLE>
<S> <C>
CHEMICAL BANK DELAWARE CHEMICAL BANK DELAWARE
As Trustee As Trustee
</TABLE>
- OR -
<TABLE>
<S> <C> <C>
By: By: Chemical Bank
----------------------------------
Authorized Officer As Authenticating Agent
By:
--------------------------------
Authorized Officer
</TABLE>
ARTICLE NINE.
CONCERNING THE HOLDERS.
SECTION 9.01. Action by Holders. Whenever in this
Indenture it is provided that the Holders of a specified percentage in
aggregate principal amount of the Debt Securities of any series may take any
action (including the making of any demand or request, the giving of any
notice, consent or waiver or the taking of any other action) the fact that at
the time of taking any such action the Holders of such specified percentage of
such series have joined therein may be evidenced (a) by any instrument or any
number of instruments of similar tenor executed by Holders of such series in
person or by agent or proxy appointed in writing, or (b) by the record of the
Holders of such series voting in favor thereof at any meeting of such Holders
duly called and held in accordance with the provisions of Article Ten, or (c)
by a combination of such instrument or instruments and any such record of such
a meeting of Holders of such series.
SECTION 9.02. Proof of Execution by Holders.
Subject to the provisions of Sections 8.01, 8.02 and 10.05, proof of the
execution of any instrument by a Holder or his agent or proxy shall be
sufficient if made in accordance with such reasonable rules and regulations as
may be prescribed by the Trustee or in such manner as shall be satisfactory to
the Trustee. The ownership of Debt Securities shall be provided by the Debt
Security Register or by a certificate of the Debt Security registrar with
respect to a series of Debt Securities.
The record of any Holders' meeting shall be proved in
the manner provided in Section 10.06.
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SECTION 9.03. Who Are Deemed Absolute Owners. The
Company, the Trustee with respect to a series of Debt Securities, and any agent
of the Trustee or the Company under this Indenture may deem the Person in whose
name such Debt Security shall be registered upon the Debt Security Register to
be, and may treat him as, the absolute owner of such Debt Security (whether or
not such Debt Security shall be overdue and notwithstanding any notation of
ownership or other writing thereon made by anyone other than the Company, the
Trustee or any such agent) for the purpose of receiving payment of or on
account of the principal of and premium, if any, and interest on such Debt
Security and for all other purposes; and neither the Company nor the Trustee
nor any such agent shall be affected by any notice to the contrary. All such
payments so made to any Holder for the time being or upon his order shall, to
the extent of the sum or sums so paid, be effectual to satisfy and discharge
the liability for moneys payable upon any such Debt Security.
SECTION 9.04. Company-Owned Debt Securities
Disregarded. In determining whether the Holders of the requisite aggregate
principal amount of Debt Securities of any series have concurred in any
direction or consent under this Indenture, Debt Securities of such series which
are owned by the Company or any other obligor on the Debt Securities of such
series or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company or any other obligor
on such Debt Securities shall be disregarded and deemed not to be Outstanding
for the propose of any such determinations; provided, however, that for the
purposes of determining whether the Trustee shall be protected in relying on
any such direction or consent only such Debt Securities which the Trustee knows
are so owned shall be so disregarded. Debt Securities so owned which have been
pledged in good faith may be regarded as Outstanding notwithstanding this
Section 9.04 if the pledgee shall establish to the satisfaction of the Trustee
the right of the pledgee to vote such Debt Securities and that the pledgee is
not a Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any such other obligor.
Upon request of the Trustee, the Company shall furnish to the Trustee promptly
an Officer's Certificate listing and identifying all Debt Securities of a
series, if any, known by the Company to be owned or held by or for the account
of the Company or any other obligor on such Debt Securities or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any other obligor on such Debt Securities;
and, subject to the provisions of Section 8.01, the Trustee shall be entitled
to accept such Officers' Certificates as conclusive evidence of the facts
therein set forth and of the fact that all such Debt Securities not listed
therein are Outstanding for the purpose of any such determination.
SECTION 9.05. Revocation of Consents; Future Holders
Bound. At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 9.01, of the taking of any action by the Holders of the
percentage in aggregate principal amount of the Debt Securities of any series
specified in this Indenture in connection with such action, any Holder of a
Debt Security which is shown by the evidence to be included in the Debt
Securities the Holders of which have consented to or are bound by consents to
such action,
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may, by filing written notice with the Trustee at its principal office and upon
proof of holding as provided in Section 9.02, revoke such action so far as
concerns such Debt Security. Except as aforesaid any such action taken by the
Holder of any Debt Security shall be conclusive and binding upon such Holder
and upon all future Holders and owners of such Debt Security and of any Debt
Security issued on transfer thereof or in exchange or substitution therefor,
irrespective of whether or not any notation in regard thereto is made upon any
such Debt Security. Any action taken by the Holders of the percentage in
aggregate principal amount of the Debt Securities specified in this Indenture
in connection with such action shall be conclusively binding upon the Company,
the Trustee and the Holders of all of the Debt Securities affected by such
action.
ARTICLE TEN
HOLDERS' MEETINGS.
SECTION 10.01. Purposes of Meetings. A meeting of
Holders of the Debt Securities of all or any series may be called at any time
and from time to time pursuant to the provisions of this Article Ten for any of
the following purposes:
(1) to give any notice to the Company or to the
Trustee with respect to such series, or to give any
directions to the Trustee, or to consent to the
waiving of any default hereunder and its
consequences, or to take any other action authorized
to be taken by Holders pursuant to any of the
provisions of Article Seven;
(2) to remove the Trustee and nominate a
successor trustee pursuant to the provisions
of Article Eight;
(3) to consent to the execution of an indenture
or indentures supplemental hereto pursuant to the
provisions of Section 11.02; or
(4) to take any other action authorized to be
taken by or on behalf of the Holders of any specified
aggregate principal amount of the Debt Securities of
all or any series, as the case may be, under any
other provision of this Indenture or under applicable
law.
SECTION 10.02. Call of Meetings by Trustee. The
Trustee may at any time call a meeting of Holders of Debt Securities of all or
any series to take any action specified in Section 10.01, to be held at such
time and at such place as the Trustee shall determine. Notice of every meeting
of the Holders of Debt Securities of all or any series, setting forth the time
and place of such meeting and in general terms the action proposed to be taken
at such meeting, shall be mailed by the Trustee to Holders of Debt Securities
of each series that may be affected by the action proposed to be taken at such
meeting at their
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addresses as they shall appear on the Debt Security Register. Such notice
shall be mailed not less than 20 nor more than 90 days prior to the date fixed
for the meeting.
SECTION 10.03. Call of Meetings by Company or
Holders. In case at any time the Company, pursuant to a resolution by the
Board of Directors, or the Holders of at least 10% in aggregate principal
amount of the Debt Securities then Outstanding of each series that may be
affected by the action proposed to be taken shall have requested the Trustee to
call a meeting of such Holders, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall
not have mailed the notice of such meeting within 20 days after receipt of such
request, then the Company or such Holders may determine the time and place for
such meeting and may call such meeting to take any action authorized in Section
10.01, by mailing notice thereof as provided in Section 10.02.
SECTION 10.04. Qualifications for Voting. To be
entitled to vote at any meeting of Holders of Debt Securities a person shall
(a) be a Holder of one or more Debt Securities of a series affected by the
action proposed to be taken or (b) be a Person appointed by an instrument in
writing as proxy by a Holder of one or more such Debt Securities. The rights
of Holders of Debt Securities to have their votes counted shall be subject to
the provision in the definition of "Outstanding" in Section 1.01. The only
Persons who shall be entitled to be present or to speak at any meeting of
Holders of Debt Securities shall be the Persons entitled to vote at such
meeting and their counsel, any representatives of the Trustee and its counsel
and any representatives of the Company and its counsel.
SECTION 10.05. Regulations. Notwithstanding any
other provisions of this Indenture, the Trustee may make such reasonable
regulations as it may deem advisable for any meeting of Holders of Debt
Securities, in regard to proof of the holding of Debt Securities and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit. Except as otherwise permitted or
required by any such regulation, the holding of Debt Securities shall be proved
in the manner specified in Section 9.02 and the appointment of any proxy shall
be proved in the manner specified in said Section 9.02 or by having the
signature of the Person executing the proxy witnessed or guaranteed by any
bank, broker or trust company.
The Trustee shall, by an instrument in writing,
appoint a temporary chairman of the meeting, unless the meeting shall have been
called by the Company or by Holders of Debt Securities as provided in Section
10.03, in which case the Company or the Holders of Debt Securities as provided
in Section 10.03, in which case the Company or the Holders of Debt Securities
calling the meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a secretary of the meeting shall
be elected by vote of the Holders of a majority in aggregate principal amount
of the Debt Securities represented at the meeting and entitled to vote.
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Subject to the provisions of Section 9.04, at any
meeting each Holder of a Debt Security of a series entitled to vote at such
meeting or proxy shall be entitled to one vote for each $1,000 principal amount
of Debt Securities of such series held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of any
Debt Security challenged as not Outstanding and ruled by the chairman of the
meeting to be not Outstanding. The chairman of the meeting shall have no right
to vote except as a Holder of Debt Securities of such series or proxy therefor.
Any meeting of Holders of Debt Securities duly called pursuant to the
provisions of Section 10.02 or 10.03 may be adjourned from time to time and the
meeting may be held as so adjourned without further notice.
At any meeting of Holders of Debt Securities, the
presence of Persons holding or representing Debt Securities in an aggregate
principal amount sufficient to take action upon the business for the
transaction of which such meeting was called shall be necessary to constitute a
quorum; but, if less than quorum be present, the Persons holding or
representing a majority of the Debt Securities represented at the meeting may
adjourn such meeting with the same effect, for all intents and purposes, as
though a quorum had been present.
SECTION 10.06. Voting. The vote upon any resolution
submitted to any meeting of Holders of Debt Securities shall be by written
ballots on which shall be subscribed the signatures of the holders of Debt
Securities entitled to vote at such meeting or of their representatives by
proxy, and the letter or letters, serial number or numbers or other
distinguishing marks of the Debt Securities held or represented by him. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate
of the proceedings of each meeting of Holders of Debt Securities shall be
prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more persons having knowledge of the
facts setting forth a copy of the notice of the meeting and showing that said
notice was mailed as provided in Section 10.02. The record shall be signed and
verified by the affidavits of the permanent chairman and secretary of the
meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have
attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive
evidence of the matters therein stated.
SECTION 10.07. No Delay of Rights by Meeting.
Nothing in this Article Ten contained shall be deemed or construed to authorize
or permit, by reason of any call of a meeting of Holders of Debt Securities of
any or all series or any rights expressly or impliedly conferred hereunder to
make such call, any hindrance or delay in the exercise of
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any right or rights conferred upon or reserved to the Trustee or to the Holders
of Debt Securities under any of the provisions of this Indenture or of the Debt
Securities.
ARTICLE ELEVEN.
SUPPLEMENTAL INDENTURES.
SECTION 11.01 Supplemental Indentures without
Consent of Holders. The Company, when authorized by a Board Resolution, and
the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act of 1939 as in force at the date of the execution thereof)
for one or more of the following purposes:
(a) to evidence the succession of another
corporation to the Company, or successive
successions, and the assumption by the successor
corporation of the covenants, agreements and
obligations of the Company pursuant to Articles Five
and Twelve hereof;
(b) to add to the covenants of the Company such
further covenants, restrictions, conditions or
provisions as the Board of Directors and the Trustee
shall consider to be for the protection of the
Holders of Debt Securities of any or all series, and
to make the occurrence, or the occurrence and
continuance, of a default in any of such additional
covenants, restrictions, conditions or provisions a
default or an Event of Default with respect to such
series permitting the enforcement of all or any of
the several remedies provided in this Indenture as
herein set forth; provided, however, that in respect
of any such additional covenant, restriction or
condition, such supplemental indenture may provide
for a particular period of grace after default (which
period may be shorter or longer than that allowed in
the case of other defaults) or may provide for an
immediate enforcement upon such default or may limit
the remedies available to the Trustee upon such
default;
(c) to cure any ambiguity or to correct or
supplement any provision contained herein or in any
supplemental indenture which may be defective or
inconsistent with any other provision contained
herein or in any supplemental indenture; to convey,
transfer, assign, mortgage or pledge any property to
or with the Trustee; or to make such other provisions
in regard to matters or questions arising under this
Indenture as shall not adversely affect the interests
of the Holders of the Debt Securities;
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(d) to secure the Debt Securities of all series
in accordance with the provisions of Sections 5.05;
(e) to evidence and provide for the acceptance of
appointment by another corporation as a successor
Trustee hereunder with respect to one or more series
of Debt Securities and to add to or change any of the
provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, pursuant
to Section 8.11;
(f) to modify, amend or supplement this Indenture
in such a manner as to permit the qualification of
any indenture supplemental hereto under the Trust
Indenture Act of 1939 as then in effect, except that
nothing herein contained shall permit or authorize
the inclusion in any indenture supplemental hereto of
the provisions referred to in Section 316(a)(2) of
the Trust Indenture Act of 1939;
(g) to provide for the issuance under this
Indenture of Debt Securities in coupon form
(including Debt Securities registrable as to
principal only) and to provide for exchangeability of
such Debt Securities with Debt Securities of the same
series issued hereunder in fully registered form and
to make all appropriate changes for such purpose;
(h) to change or eliminate any of the provisions
of this Indenture, provided, however, that any such
change or elimination shall become effective only
when there is no Debt Security Outstanding of any
series created prior to the execution of such
supplemental indenture which is entitled to the
benefit of such provision; or
(i) to establish any additional form of Debt
Security, as permitted by Section 2.02, and to
provide for the issuance of any additional series of
Debt Securities, as permitted by Section 3.01, and to
set forth the terms thereof.
The Trustee is hereby required to join with the
Company in the execution of any such supplemental indenture, to make any
further appropriate agreements and stipulations which may be therein contained
and to accept the conveyance, transfer, assignment, mortgage or pledge of any
property thereunder, but the Trustee shall not be obligated to enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the
provisions of this Section 11.01 may be executed by the Company and the Trustee
without the consent of the Holders
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of any of the Debt Securities at the time Outstanding, notwithstanding any of
the provisions of Section 11.02.
SECTION 11.02. Supplemental Indentures with Consent
of Holders. With the consent (evidenced as provided in Section 9.01) of the
Holders of greater than 50% in aggregate principal amount of the Outstanding
Debt Securities of each series affected by such supplemental indenture (all
such Holders voting as a single class), by act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by a Board Resolution,
and the Trustee may from time to time and at any time enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Indenture or of any supplemental indenture or of modifying in any manner the
rights of the Holders of the Debt Securities of each series under this
Indenture; provided, however, that no such supplemental indenture shall (i)
without the consent of the Holder of each Outstanding Debt Security affected
thereby, extend the fixed maturity of any Debt Security, or reduce the rate or
extend the time of payment of interest thereon, or reduce the principal amount
thereof or any premium thereon, or make the principal thereof or interest or
premium thereon payable in any coin or currency other than that provided in the
Debt Securities or (ii) without the consent of the Holders of all of the
Outstanding Debt Securities of each series affected reduce the aforesaid
percentage of Debt Securities, the Holders of which are required to consent (a)
to any such supplemental indenture, (b) to rescind and annul a declaration that
any Debt Securities are due and payable as a result of the occurrence of an
Event of Default, (c) to waive any past default under the Indenture and its
consequences and (d) to waive compliance with Sections 5.02 and 5.04 (other
than 5.04(a)(1) and (2)) to 5.08, inclusive.
Upon the request of the Company, accompanied by a
copy of a Board Resolution certified by its Secretary or Assistant Secretary
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Holders of Debt
Securities as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the
Holders of Debt Securities under this Section 11.02 to approve the particular
form of any proposed supplemental indenture, but it shall be sufficient if such
consent shall approve the substance thereof.
SECTION 11.03. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture pursuant to the provisions of
this Article Eleven, this Indenture shall be and be deemed to be modified and
amended in accordance therewith and the respective rights, limitation of
rights, obligations, duties and immunities under this Indenture of the Trustee,
the Company and the Holders of Debt Securities shall thereafter be
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determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 11.04. Notation on Debt Securities. Debt
Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to the provisions of this Article Eleven may bear a notation
in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company or the Trustee shall so determine, new
Debt Securities of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors to any modification of this Indenture
contained in any such supplemental indenture may be prepared and executed by
the Company, authenticated by the Trustee and delivered in exchange for the
Outstanding Debt Securities of such series.
SECTION 11.05. Evidence of Compliance of
Supplemental Indenture to be Furnished Trustee. The Trustee, subject to the
provisions of Sections 8.01 and 7.02, shall receive, and shall be fully
protected in relying upon, an Officer's Certificate and an Opinion of Counsel
as conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article Eleven and is authorized and
permitted by this Indenture.
ARTICLE TWELVE.
CONSOLIDATION, MERGER, SALE AND CONVEYANCE.
SECTION 12.01. Company May Consolidate, etc., on
Certain Terms. Nothing contained in this Indenture or in any of the Debt
Securities shall prevent any consolidation or merger of the Company with or
into any other corporation or corporations (whether or not affiliated with the
Company), or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any sale,
conveyance or lease of all or substantially all of the property of the Company
to any other corporation (whether or not affiliated with the Company)
authorized to acquire and operate the same; provided, however, and the Company
hereby covenants and agrees, that any such consolidation, merger, sale,
conveyance or lease shall be upon the condition that (a) immediately after such
consolidation, merger, sale, conveyance or lease the corporation (whether the
Company or such other corporation) formed by or surviving any such
consolidation or merger, or to which such sale, conveyance or lease shall have
been made, shall not be in default in the performance or observance of any of
the terms, covenants and conditions of this Indenture to be kept or performed
by the Company; (b) the corporation (if other than the Company) formed by or
surviving any such consolidation or merger or to which such sale, conveyance or
lease shall have been made, shall be a corporation organized under the laws of
the United States of
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America or any state thereof; and (c) the due and punctual payment of the
principal of and premium, if any, and interest on all of the Debt Securities,
according to their tenor, and the due and punctual performance and observance
of all of the covenants and conditions of this Indenture to be performed or
observed by the Company, shall be expressly assumed, by supplemental indenture
satisfactory in form to the Trustee, executed and delivered to the Trustee by
the Corporation (if other than the Company) formed by such consolidation, or
into which the Company shall have been merged, or by the corporation which
shall have acquired or leased such property.
SECTION 12.02. Successor Corporation to be
Substituted. In case of any such consolidation, merger, sale, conveyance or
lease and upon the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form to
the Trustee, of the due and punctual payment of the principal of and premium,
if any, and interest on all of the Debt Securities and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to performed or observed by the Company, such successor corporation
shall succeed to and be substituted for the Company, with the same effect as if
it had been named herein as the party of the first part, and (except in the
event of a conveyance by way of lease) the predecessor corporation shall be
relieved of any further obligation under this Indenture and the Debt
Securities. Such successor corporation thereupon may cause to be signed, and
may issue either in its own name or in the name of Johnson Controls, Inc. any
or all of the Debt Securities issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee; and, upon the
order of such successor corporation instead of the Company and subject to all
the terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Debt Securities which previously shall
have been signed and delivered by the officers of the Company to the Trustee
for authentication, and any Debt Securities which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All the Debt Securities of each series so issued shall in all
respects have the same legal rank and benefit under this Indenture as the Debt
Securities of such series theretofore or thereafter issued in accordance
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with the terms of this Indenture as though all of such Debt Securities had been
issued at the date of the execution hereof.
In case of any such consolidation, merger, sale,
conveyance or lease such changes in phraseology and form (but not in substance)
may be made in the Debt Securities thereafter to be issued as may be
appropriate.
SECTION 12.03. Opinion of Counsel to Be Given
Trustee. The Trustee, subject to Sections 8.01 and 8.02, shall receive an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale or conveyance and any such assumption complies with the provisions of this
Article Twelve and that all conditions precedent herein provided relating to
such transactions have been complied with.
ARTICLE THIRTEEN.
SATISFACTION AND DISCHARGE OF INDENTURE.
SECTION 13.01. Satisfaction, Discharge and
Defeasance of Debt Securities of any Series. The Company shall be deemed to
have paid and discharged the entire indebtedness on all the Debt Securities of
a series, the provisions of this Indenture (except as to (x) the rights of
Holders of Debt Securities of such series to receive, from the money, in the
currency required, and Government Obligations deposited with the Trustee
pursuant to Section 13.03 or the interest and principal received by the Trustee
in respect of such Government Obligations, payment of the principal of (and
premium, if any) and any installment of principal of (and premium, if any) or
interest on such Debt Securities on the Stated Maturities thereof or upon the
Redemption Dates for Debt Securities required to be redeemed pursuant to any
mandatory sinking fund or analogous provisions relating to Debt Securities of
that series or pursuant to any call for redemption relating to Debt Securities
of that series, (y) the Company's rights and obligations with respect to such
Debt Securities under Sections 3.06, 3.07, 13.03 and 13.04, 5.02, 5.04, 6.01,
8.06, 8.10, 8.11 and, to the extent applicable to such series, Article Four, so
long as the principal of (and premium, if any) and interest on the Debt
Securities of such series remain unpaid and, thereafter, only the Company's
rights and obligations under Sections 5.04, 8.06, 13.03 and 13.04, and (z) the
rights, powers, trusts, duties and immunities of the Trustee with respect to
the Debt Securities of such series) as it relates to such Debt Securities shall
no longer be in effect, and the Trustee, at the expense of the Company, shall,
upon Company Request, execute proper instruments acknowledging the same if:
(a) (1) all Debt Securities of such series
therefore authenticated and delivered (other than (i)
Debt Securities which have been destroyed, lost or
stolen and which have been replaced or paid as
provided in Section 3.07 and (ii) Debt Securities for
whose payment money has
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theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to
the Company or discharged from such trust, as
provided in Sections 13.03 and 13.04) have been
delivered to the Trustee for cancellation;
(2) the Company has paid or caused to be paid in
the currency required all other sums payable under
this Indenture in respect of the Debt Securities of
such series; and
(3) the Company has delivered to the Trustee an
Officers' Certificate, an Opinion of Counsel and a
written opinion of independent public accountants,
each stating that all conditions precedent herein
provided for relating to the satisfaction of the
entire indebtedness of all Debt Securities of any
such series and the discharge of the Indenture as it
relates to such Debt Securities have been complied
with; or
(b) (1) all Debt Securities of such series not
theretofore delivered to the Trustee for cancellation
(i) have become due and payable, or (ii) will become
due and payable at their Stated Maturity within one
year, or (iii) are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense of the
Company;
(2) the condition described in paragraph (1) of
Section 13.02 has been satisfied; and
(3) the conditions described in paragraphs (a)(2)
and (a)(3) of this Section 13.01 have been
satisfied; or
(c) (1) the conditions referred to in paragraphs
(b)(2) and (b)(3) of this Section 13.01 have been
satisfied;
(2) no Event of Default or event which with
notice or lapse of time would become an Event of
Default shall have occurred and be continuing on the
date of the deposit referred to in paragraph (1) of
Section 13.02 or on the ninety-first day after the
date of such deposit; provided, however, that should
that condition fail to be satisfied on or before such
ninety-first day, the Trustee shall promptly, upon
satisfactory receipt of evidence of such failure,
return such deposit to the Company;
(3) the Company has either (i) delivered to the
Trustee an opinion of counsel of a nationally-
recognized independent tax counsel to the
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effect that 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 the satisfaction, discharge and
defeasance contemplated by this paragraph (c) of this
Section 13.01 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 or (ii) the
Company shall have received from, or there shall have
been published by, the United States Internal Revenue
Service a ruling to the effect stated in (i) of this
Section 13.01(c)(3); and
(4) the Company has received an Opinion of
Counsel to the effect that the satisfaction,
discharge and defeasance contemplated by this Section
13.01 will not result in the delisting of the Debt
Securities of that series from any
nationally-recognized securities exchange on which
they are listed.
SECTION 13.02. Defeasance of Debt Securities of any
Series. The provisions of this Indenture (except as to (x) the rights of
Holders of Debt Securities of any series to receive, from the money, in the
currency required, and Government Obligations deposited with the Trustee
pursuant to paragraph (1) below or the interest and principal received by the
Trustee in respect of such Government Obligations, payment of the principal of
(and premium, if any) and any installment of principal of (and premium, if any)
or interest on such Debt Securities on the Stated Maturities thereof or upon
the Redemption Dates for Debt Securities required to be redeemed pursuant to
any mandatory sinking or analogous provisions relating to Securities of that
series or pursuant to any call for redemption relating to Debt Securities of
that series, (y) the Company's rights and obligations with respect to such Debt
Securities under Sections 3.06, 3.07, 13.03, 13.04, Article Seven (other than
subsections (d) and (e) of Section 7.01), Sections 5.01, 5.02, 5.04, 6.01,
8.06, 8.10, 8.11 and, to the extent application to such series, Article Four,
so long as the principal of (and premium, if any) and interest on the Debt
Securities of such series remain unpaid and, thereafter, only the Company's
rights and obligations under Sections 5.04, 8.06, 13.03 and 13.04, and (z) the
rights, powers, trusts, duties and immunities of the Trustee with respect to
the Debt Securities of such series) as it relates to Debt Securities of any
series shall no longer be in effect, and the Trustee, at the expense of the
Company shall, upon Company Request, execute proper instruments acknowledging
the same if:
(1) the Company has deposited or caused to be
deposited with the Trustee as trust funds in trust
for the purpose (A) the Dollars of Foreign Currency,
as applicable, in an amount, or (B) Government
Obligations which through the payment of interest and
principal in respect thereof in accordance with their
terms will provide on or before the due date of any
payment in respect of such series of Debt Securities
in an amount, or (C) a combination thereof,
sufficient, after payment of
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all Federal, state and local taxes in respect thereof
payable by the Trustee, in the opinion of a
nationally-recognized firm of independent public
accountants expressed in a written certification
thereof delivered to the Trustee, to pay and
discharge (i) the principal of (and premium, if any)
and each installment of principal (and premium, if
any) and interest on the Outstanding Debt Securities
of that series on the Stated Maturity of such
principal or installment of principal or interest and
(ii) any mandatory sinking fund payments or analogous
payments or payments pursuant to any call for
redemption applicable to Debt Securities of such
series on the day on which such payments are due and
payable in accordance with the terms of the Indenture
and such Debt Securities;
(2) no Event of Default or event which with
notice or lapse of time would become an Event of
Default shall have occurred and be continuing on the
date of such deposit;
(3) the interest of the Holders in such deposit
shall have been duly perfected under the applicable
provisions of the Uniform Commercial Code; and
(4) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent herein provided
for relating to the defeasance contemplated by this
Section have been complied with.
SECTION 13.03. Application of Trust Funds;
Indemnification. (a) Subject to the provisions of Section 13.04, all money
and Government Obligations deposited with the Trustee pursuant to Section 13.01
or 13.02 and all money received by the Trustee in respect of Government
Obligations deposited with the Trustee, shall be held in trust and applied by
it, in accordance with the provisions of the Debt Securities and this
Indenture, to the payment, either directly or through any paying agent
(including the Company acting as its own paying agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money and Government Obligations have
been deposited with or received by the Trustee as contemplated by Section 13.01
or 13.02.
(b) The Company shall pay and shall indemnify the
Trustee against any tax, fee or other charge imposed on or assessed against
Government Obligations deposited pursuant to Section 13.01 or 13.02 or the
interest and principal received in respect of such obligations, other than any
such tax, fee or other charge payable by or on behalf of Holders. The Company
shall be entitled to prompt notice of an assessment or the commencement of any
proceeding for which indemnification may be sought hereunder and,
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at its election, to contest such assessment or to participate in, assume the
defense of, or settle such proceeding.
(c) The Trustee shall deliver or pay to the Company
from time to time upon Company Request any Government Obligations or money held
by it as provided in Section 13.01 or 13.02 which, in the opinion of a
nationally-recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are then in excess of
the amount thereof which then would have been required to be deposited for the
purpose for which such obligations or money were deposited or received.
(d) If the Trustee is unable to apply any money or
Government Obligations in accordance with Section 13.02 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Debt Securities, if any, of
such series shall be revived and reinstated as though no deposit had occurred
pursuant to Section 13.02 until such time as the Trustee is permitted to apply
all such money or Government Obligations in accordance with Section 13.02;
provided, however, that if the Company has made any payment of interest on or
principal of (and premium, if any) on any Debt Securities, if any, of such
series because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such series of Debt Securities, if
any, to receive such payment from the money or Government Obligations held by
the Trustee.
SECTION 13.04. Return of Unclaimed Moneys. Any
moneys deposited with or paid to the Trustee or any paying agent for payment of
the principal of and premium, if any, or interest on Debt Securities and not
applied but remaining unclaimed by the Holders of Debt Securities for two years
after the date upon which the principal of and premium, if any, or interest on
such Debt Securities, as the case may be, shall have become due and payable,
shall be repaid to the Company by the Trustee or such paying agent on demand;
and the Holder of any of the Debt Securities entitled to receive such payment
shall thereafter look only to the Company for any payment thereof.
ARTICLE FOURTEEN.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS.
SECTION 14.01. Indenture and Debt Securities Solely
Corporate Obligations. No recourse under or upon any obligation, covenant or
agreement of this Indenture, any supplemental indenture, or of any Debt
Security, or for any claim based thereon or otherwise in respect thereof, shall
be had against any incorporator, stockholder,
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officer, director or employee, as such, past, present or future, of the Company
or any Subsidiary or of any predecessor or successor corporation, either
directly or through the Company, whether by virtue of any constitution, statute
or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that this Indenture and the
obligations issued hereunder are solely corporate obligations, and that no such
personal liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers, directors or employees, as such, of the
Company or of any predecessor or successor corporation, or any of them, because
of the creation of the indebtedness hereby authorized, or under or by reason of
the obligations, covenants or agreements contained in this Indenture, or in any
of the Debt Securities or implied thereby; and that any and all such personal
liability, either at common law or in equity or by constitution or statute of,
and any and all such rights and claims against, every such incorporator,
stockholder, officer, director or employee, as such, because of the creation of
the indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of the Debt
Securities or implied thereby, are hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of such Debt Securities.
ARTICLE FIFTEEN.
MISCELLANEOUS PROVISIONS.
SECTION 15.01. Provisions Binding on Successors of
the Company. All of the covenants, stipulations, promises and agreements in
this Indenture contained by the Company shall bind its successors and assigns
whether so expressed or not.
SECTION 15.02. Indenture for Sole Benefit of Parties
and Holders of Debt Securities. Nothing in this Indenture or in the Debt
Securities, expressed or implied, shall give or be construed to give to any
Person, firm or corporation, other than the parties hereto, any agent of the
Trustee or the Company under this Indenture and the Holders of the Debt
Securities, any legal or equitable right, remedy or claim under or in respect
of this Indenture, or under any covenant, condition or provision herein
contained; all such covenants, conditions and provisions being, subject to the
provisions of Articles Twelve and Fourteen, for the sole benefit of the parties
hereto, any agent of the Trustee or the Company under this Indenture and the
Holders of the Debt Securities.
SECTION 15.03. Addresses for Notices, etc. Any
notice or demand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the Holders of Debt
Securities on the Company may be given or served by being deposited, registered
or certified mail postage prepaid, in a post office letter box in the United
States addressed (until another address is filed by the Company with the
Trustee) to the Company, 5757 North Green Bay Road, Milwaukee, Wisconsin 53201,
Attention:
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Secretary. Any notice, direction, request or demand by any Holder of a Debt
Security or the Company to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or made in writing at
the principal office of the Trustee, addressed to the attention of its
Corporate Trust Department. Any notice, report or other instrument required by
any of the provisions of this Indenture to be given by the Trustee to the
Holders of Debt Securities of any or all series shall be deemed to have been
sufficiently given, for all purposes, when mailed by first class mail.
SECTION 15.04. New York Contract. This Indenture
and the Debt Securities shall for all purposes be construed in accordance with
and governed by the laws of the State of New York.
SECTION 15.05. Evidence of Compliance with
Conditions Precedent. Upon any Company request to the Trustee to take any
action under any of the provisions of this Indenture, the Company shall furnish
to the Trustee an Officers' Certificate stating that all conditions precedent,
if any (including any covenant, compliance with which constitutes a condition
precedent) provided for in this Indenture relating to the proposed action have
been complied with and an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent have been complied with, except
that in the case of any such application or demand as to which the furnishing
of such document is specifically required by any provision of this Indenture
relating to such particular application or demand, no additional certificate or
opinion need be furnished.
Each certificate or opinion provided for in this
Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant provided for in this Indenture shall include (1) a
statement that the Person making such certificate or opinion has read such
covenant or condition; (2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based; (3) a statement that, in the opinion of
such Person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether or not, in
the opinion of such Person, such condition or covenant has been complied with.
SECTION 15.06. Legal Holidays. In any case where
the date of maturity of interest on or principal of or premium, if any, on any
series of Debt Securities or the date fixed for redemption of any Debt Security
or Debt Securities will be a legal holiday or a day on which banking
institutions are legally authorized or obligated to close in Delaware or any
other location where a paying agent appointed pursuant to Section 5.02 is
located, then payment of such interest on or principal of and premium, if any,
on such Debt Securities need not be made by such paying agent on such date but
may be made by such paying agent on the next succeeding business day that is
not a day in such location that is either a legal holiday or a day on which
banking institutions are legally authorized or obligated to close, with the
same force and effect as if made on such date of maturity or the
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date fixed for redemption and no interest shall accrue for the period from and
after such prior date.
SECTION 15.07. Trust Indenture Act of 1939 to
Control. If any provision hereof limits, qualifies or conflicts with the
duties imposed by any of Sections 310 through 317 of the Trust Indenture Act of
1939, by the operation of Section 318(c) thereof, such imposed duties shall
control, except as, and to the extent, expressly excluded from this Indenture,
as permitted by the Trust Indenture Act of 1939. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act of 1939
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
SECTION 15.08. Table of Contents, Headings, etc.
The table of contents and the titles and headings of the articles and sections
of this Indenture have been inserted for convenience of reference only, are not
to be considered a part hereof, and shall in no way modify or restrict any of
the terms or provisions hereof.
SECTION 15.09. Determination of Principal Amount.
In determining whether the Holders of the requisite principal amount of
Outstanding Debt Securities of any series have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, or whether
sufficient funds are available for redemption or for any other purpose, (i) the
principal amount of an Original Issue Discount Debt Security that shall be
deemed to be Outstanding for such purposes shall be the amount of the principal
thereof that would be due and payable as of the date of such determination upon
a declaration of acceleration of the maturity thereof pursuant to Section 7.01,
(ii) the principal amount of any Debt Securities denominated in a Foreign
Currency that shall be deemed to be Outstanding for such purposes shall be
determined by converting the Foreign Currency into Dollars at the Market
Exchange Rate as of the date of such determination and (iii) the principal
amount of any Indexed Debt Security that shall be deemed to be Outstanding for
such purposes shall be the amount of the principal face amount of such Indexed
Debt Security at original issuance, unless otherwise provided in or pursuant to
this Indenture.
SECTION 15.10. Execution in Counterparts. This
Indenture may be executed in any number of counterparts, each of which shall be
an original and such counterparts shall together constitute but one and the
same instrument. Chemical Bank Delaware hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
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IN WITNESS WHEREOF, JOHNSON CONTROLS, INC. has caused
this Indenture to be signed and acknowledged by its President and either its
Chief Financial Officer or its Treasurer, and its corporate seal to be affixed
hereunto, and the same to be attested by its Secretary or an Assistant
Secretary, and CHEMICAL BANK DELAWARE has caused this Indenture to be signed
and acknowledged by one of its Senior Trust Officers, has caused its corporate
seal to be affixed hereunto, and the same to be attested by its Secretary or
one of its Assistant Secretaries, as of the day and year first written above.
JOHNSON CONTROLS INC.
By ______________________________________
By______________________________________
By______________________________________
(CORPORATE SEAL)
ATTEST:
__________________________________________
CHEMICAL BANK DELAWARE
By______________________________________
(CORPORATE SEAL)
ATTEST:
__________________________________________
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STATE OF ILLINOIS )
) SS:
COUNTY OF COOK )
On the ____ day of _________, 1995, before me personally came
______________ and ____________, to me known, who, being by me duly sworn, did
depose and say that they are _______________ and ____________, respectively, of
JOHNSON CONTROLS, INC., one of the corporations described in and which executed
the foregoing instrument; that they know the seal of said corporation; that the
seal affixed to said instrument bearing the name of said corporation is such
corporate seal; that it was so affixed by authority of the Board of Directors
of said corporation; that they signed their names thereto by like authority;
and said they acknowledged said instrument to be their free act and deed and
the free act and deed of said corporation.
WITNESS my hand and official seal the day and year first above
written.
_______________________________
Notary Public
(NOTARIAL SEAL) My commission expires:_________
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<PAGE> 86
STATE OF DELAWARE
SS.:
COUNTY OF NEW CASTLE
On this ____ day of ___________, 1995, before me personally came
_____________, to me known, who, being by me duly sworn, did depose and say
that he resides at __________________; that he is a Senior Trust Officer of
Chemical Bank Delaware, one of the corporations described in and which executed
the foregoing instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument bearing the name of said corporation is such
corporate seal; that it was so affixed by authority of the Board of Directors
of said corporation; and that he signed his name thereto by like authority; and
said _____________ acknowledged said instrument to be his free act and deed and
the free act and deed of said corporation.
WITNESS my hand and official seal the day and year first above
written.
______________________________
Notary Public
(NOTARIAL SEAL) My commission expires:_________
78
<PAGE> 1
Exhibit 5
February 13, 1995
Johnson Controls, Inc.
5757 Green Bay Avenue
Milwaukee, Wisconsin 53209
Re: Registration Statement on Form S-3
$332,800 Principal Amount of Debt Securities and
Warrants to Purchase Debt Securities
Ladies and Gentlemen:
I refer to the registration statement on Form S-3 (the "Registration
Statement") being filed by Johnson Controls, Inc., a Wisconsin corporation (the
"Company"), relating to the offering pursuant to Rule 415 under the Securities
Act of 1933, as amended, of $332.8 million principal amount of the Company's
debt securities (the "Debt Securities") and warrants to purchase Debt Securities
(the "Warrants") and the corporate proceedings (the "Corporate Proceedings")
taken and to be taken in connection therewith. The Debt Securities are to be
issued under an indenture (the "Indenture") between the Company and Chemical
Bank Delaware, as trustee. In this connection, I have examined such corporate
and other records, instruments, certificate and documents as I considered
necessary to enable me to express this opinion.
Based on the foregoing, it is my opinion that, upon completion of the
Corporate Proceedings:
1. The Debt Securities will have been duly authorized for issuance
and, when the Indenture has been duly executed and delivered by the parties
thereto and when each series of Debt Securities is duly executed, authenticated,
issued and delivered, such series will constitute valid and legally binding
obligations of the Company entitled to the benefits of the Indenture, subject
to bankruptcy, insolvency, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditor's rights and to general
equity principles (whether considered in a proceeding at law or in equity); and
2. The Warrants will have been duly authorized for issuance and,
when the Warrants are duly executed,
<PAGE> 2
authenticated, issued and delivered, the Warrants will constitute valid and
legally binding obligations of the Company, subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity principles (whether
considered in a proceeding at law or in equity).
I consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the caption "Legal
Opinions" therein.
Very truly yours,
/s/ John P. Kennedy
John P. Kennedy
<PAGE> 1
EXHIBIT 12
RATIO OF EARNINGS TO FIXED CHARGES (UNAUDITED)
For the purpose of computing these ratios, "earnings" consist of (a)
income before income taxes (adjusted for undistributed earnings or recognized
losses of partially-owned affiliates which are less than 50% owned, minority
interests in earnings or losses of subsidiaries, and amortization of previously
capitalized interest), plus (b) fixed charges, minus (c) interest capitalized
during the period. "Fixed charges" consist of (a) interest incurred and
amortization of debt expense plus (b) the portion of rent expense
representative of the interest factor.
<TABLE>
<CAPTION>
Three Months
Ended
Year Ended September 30, December 31,
--------------------------------------------------- -------------
1990 1991 1992 1993(a) 1994 1994
---- ---- ---- ------- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Income before cumulative effect of
accounting changes $92.4 $95.1 $123.0 $137.9 $165.2 $41.2
Provision for income taxes 80.4 80.9 104.7 112.8 140.3 34.9
Undistributed earnings of partially-
owned affiliates, less than 50%
owned (0.9) (3.6) (7.9) (4.6) (4.6) (1.7)
Minority interests in net earnings of
subsidiaries 0.7 4.1 8.6 15.5 20.9 5.0
Amortization of previously
capitalized interest 1.4 1.4 2.0 2.6 3.1 0.8
------------------------------------------------------------ -----------
174.0 177.9 230.4 264.2 324.9 80.2
Fixed charges:
Interest incurred and amortization
of debt expense 59.4 64.2 55.8 53.0 48.8 15.8
Estimated portion of rent expense 18.1 20.8 21.7 24.0 24.3 6.7
------------------------------------------------------------ -----------
Fixed charges 77.5 85.0 77.5 77.0 73.1 22.5
Less: Interest capitalized during
period (5.1) (2.9) (4.4) (3.0) (5.9) (2.2)
------------------------------------------------------------ -----------
72.4 82.1 73.1 74.0 67.2 20.3
------------------------------------------------------------ -----------
Earnings 246.4 260.0 303.5 338.2 392.1 100.5
=========================================================================
Ratio of earnings to fixed charges 3.2 3.1 3.9 4.4 5.4 4.5
===== ===== ===== ===== ===== =====
</TABLE>
(a) Effective October 1, 1992, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions", No. 109, "Accounting for Income
Taxes", and No. 112, "Employers' Accounting for Postemployment Benefits." The
combined cumulative effect of the accounting changes was a one time charge of
$122 million, after taxes.
<PAGE> 1
Exhibit 23.2
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated October 24, 1994, which appears on page 39 of the 1994 Annual Report to
Shareholders of Johnson Controls, Inc., which is incorporated by reference in
Johnson Controls, Inc.'s Annual Report on Form 10-K for the year ended
September 30, 1994. We also consent to the incorporation by reference of our
report on the Financial Statement Schedules, which appears on page 29 of such
Annual Report on Form 10-K. We also consent to the reference to us under the
heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
Milwaukee, Wisconsin
February 10, 1995
<PAGE> 1
Exhibit 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHEMICAL BANK DELAWARE
(Exact name of trustee as specified in its charter)
<TABLE>
<S> <C>
Delaware 51-0266457
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
1201 Market Street,
Wilmington, Delaware 19801
(Address of principal executive offices) (Zip Code)
</TABLE>
David J. Clark
Counsel
1201 Market Street
Wilmington, DE 19801
(302) 428-3330
(Name, address and telephone number
of agent for service)
JOHNSON CONTROLS, INC.
(Exact name of obligor as specified in its charter)
<TABLE>
<S> <C>
Delaware 39-0380018
(State or other jurisdiction of (I.R.S. employer
incorporation or organization identification No.)
15757 North Green Bay Avenue 53209
Milwaukee, Wisconsin (Zip Code)
(Address of principal executive offices)
</TABLE>
Subordinated Debt Securities
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Office of the State Bank Commissioner, 555 East Lockerman
Street
Suite 210, Dover, DE 19901
Federal Deposit Insurance Corporation,
New York Regional Office
452 Fifth Avenue, 21st Floor, New York, New York 10018-2796
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
<PAGE> 3
Item 16. List of Exhibits.
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee
as now in effect, including the Organization Certificate and the Certificates
of Amendment dated February 25, 1988 and June 22, 1992 (see Exhibit to Form T-1
filed in connection with Registration Statement No. 33-58124, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee
to Transact Business (see Exhibit 2 to form T-1 filed in connection with
Registration Statement No.33-595 which is incorporated by reference).
3. None, authorization to exercise corporate trust powers
being contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-laws of the Trustee (see
Exhibit 4 to Form T-1 filed in connection with Registration Statement No.
33-58124, which is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b)
of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration
Statement No. 33-33595, which is incorporated by reference).
7. A copy of the latest report of condition of Chemical
Bank Delaware, published pursuant to law or the requirements of its supervising
or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Chemical Bank Delaware, a corporation organized and existing under the
laws of the State of Delaware, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
The City of Wilmington and State of Delaware, on the 8th day of February, 1995.
Chemical Bank Delaware
By: _________________
John J. Cashin
Senior Trust Officer
<PAGE> 4
EXHIBIT 7
REPORT OF CONDITION
Consolidated Report of Condition of CHEMICAL BANK DELAWARE of Wilmington,
Delaware and Foreign and Domestic Subsidiaries, at the closing of business on
December 31, 1994, published in accordance with a call made by the State Bank
Commissioner under Title 5, Delaware Code, Section 904.
Statement of Resources and Liablilities
<TABLE>
<CAPTION>
Thousands of Dollars
ASSETS
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin $ 12,232
Interest-bearing balances 207,932
Securities:
Held-to-maturity securities 41,199
Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds sold 199,700
Loans and lease financing receivables:
Loans and leases, net of unearned income 7,753
LESS: Allowances for loan and lease losses 6,087
Loans and leases, net of unearned income, allowance, and reserve 1,666
Premises and fixed assets (including capitalized leases) 40,001
Other real estate owned 2,861
Customers' liability to this bank on acceptances outstanding 1,619
Intangible assets 26
Other assets 15,128
-------
TOTAL ASSETS $ 522,364
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
LIABILITIES
<S> <C> <C>
Deposits:
In domestic offices $ 295,282
Noninterest-bearing 51,564
Interest-bearing 243,718
In foreign offices, Edge and Agreement subsidiaries, and IBFs 72,272
Interest-bearing 72,272
Demand notes issued to the U.S. Treasury 1,599
Other borrowed money:
With original maturity of one year or less 2,741
Mortage indebtedness and obligations under capitalized leases 1,152
Bank liability on acceptances executed and outstanding 1,619
Other liabilities 30,478
------
TOTAL LIABILITIES $ 405,077
EQUITY CAPITAL
Common stock $ 25,000
Surplus 51,002
Undivided profits and capital reserves 41,285
------
Total equity capital 117,287
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK, AND EQUITY CAPITAL $ 522,364
</TABLE>
I, Christopher M. Marini, Controller, of the above-named bank do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal Regulatory authority and is true
and correct to the best of my knowledge and belief.
Christopher M. Marini
January 31, 1995
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal Regulatory authority and is true and correct.
Richard J. Nolan, Jr.
Glenn S. Havlicek
Joseph L. Sciafani
Directors
