As filed with the Securities and Exchange Commission on October 16, 1996
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
------------------------------------
Lowe's Companies, Inc.
(Exact name of registrant as specified in its charter)
North Carolina 56-0578072
(State or other jurisdiction of (I.R.S. Employer
incorporation) Identification No.)
P. O. Box 1111
North Wilkesboro, North Carolina 28656
(919) 651-4000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
------------------------------------
William C. Warden, Jr.
Executive Vice President and General Counsel
Lowe's Companies, Inc.
P. O. Box 1111
North Wilkesboro, North Carolina 28656
(919) 651-4000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------------
Copies to:
Lathan M. Ewers, Jr.
Randall S. Parks
Hunton & Williams
951 East Byrd Street
Richmond, Virginia 23219
------------------------------------
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
------------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Proposed maximum Proposed maximum
Title of each class Amount to be offering price per aggregate offering Amount of
of securities to be registered(1) registered(2)(3) unit(3)(4) price(2)(3)(4)(5) registration fee(6)(9)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Debt Securities, Preferred Stock (par value $5.00
per share), Depositary Shares,(7) Common Stock
(par value $.50 per share) Preferred Share
Purchase Rights(8) and Warrants.................. --- --- $275,050,000 $83,348.49
====================================================================================================================================
</TABLE>
(1) This Registration Statement also covers such indeterminate amount of
securities as may be issued in exchange for, or upon conversion or exercise
of, as the case may be, the securities registered hereunder and delayed
delivery contracts that may be issued by the Registrant under which the
counterparty may be required to purchase Debt Securities, Preferred Stock,
Depositary Shares, Preferred Share Purchase Rights Common Stock or
Warrants. In addition, any of the securities registered hereunder may be
sold separately or as units with other securities registered hereunder.
(2) If any Debt Securities are issued at an original issue discount, then such
greater principal amount as shall result in an aggregate initial offering
price of $275,050,000. In no event will the aggregate initial offering
price of Debt Securities, Preferred Stock, Depositary Shares, Preferred
Share Purchase Rights, Common Stock and Warrants issued under this
Registration Statement and not previously registered under the Securities
Act of 1933, as amended (the "Securities Act"), exceed $275,050,000.
(3) Not specified as to each class of securities to be registered pursuant to
General Instruction II.D of Form S-3 under the Securities Act.
(4) The proposed maximum offering price per unit will be determined from time
to time by the Registrant in connection with, and at the time of, the
issuance by the Registrant of the securities registered hereunder.
(5) No separate consideration will be received for any securities registered
hereunder that are issued in exchange for, or upon conversion or exercise
of, other securities registered hereunder.
(6) Calculated pursuant to Rule 457(o) of the Rules and Regulations of the
Securities and Exchange Commission (the "Commission") under the Securities
Act.
(7) Such indeterminate number of Depositary Shares to be evidenced by Depositary
Receipts issued pursuant to a Deposit Agreement. In the event the
Registrant elects to offer to the public fractional interests in shares of
the Preferred Stock registered hereunder, Depositary Receipts will be
distributed to those persons purchasing such fractional interests and such
shares will be issued to the Depositary Bank under the Deposit Agreement.
(8) The Rights to purchase Participating Cumulative Preferred Stock, Series A,
will be attached to and trade with shares of the Common Stock.
(9) Pursuant to Rule 429 under the Securities Act, this Registration Statement
also relates to $74,950,000 aggregate offering price of the Registrant's
Debt Securities, Preferred Stock, Depositary Shares, Common Stock and
Preferred Share Purchase Rights registered under its Registration Statement
on Form S-3 (File No. 33-51865). Registrant previously paid a registration
fee of $172,415 in connection with such Registration Statement, which
originally covered $500,000,000 aggregate offering price of securities.
------------------------------------
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 the Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act, or until the Registration Statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may
determine.
Pursuant to Rule 429 under the Securities Act, the combined Prospectus
included in this Registration Statement also relates to Debt Securities,
Preferred Stock, Depositary Shares, Common Stock and Preferred Share Purchase
Rights covered by the Registrant's Registration Statement on Form S-3 (File No.
33-51865).
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PROSPECTUS SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED OCTOBER 16, 1996
$350,000,000
Lowe's Companies, Inc.
Securities
----------------------
Lowe's Companies, Inc. ("Lowe's" or the "Company") intends to issue
from time to time in one or more series up to $350,000,000 aggregate offering
price of its (i) unsecured debt securities ("Debt Securities"), which may be
either senior debt securities ("Senior Debt Securities") or subordinated debt
securities ("Subordinated Debt Securities"), (ii) shares of preferred stock, par
value $5.00 per share ("Preferred Stock"), which may be issued in the form of
depositary shares evidenced by depositary receipts ("Depositary Shares"), (iii)
shares of common stock, par value $.50 per share ("Common Stock"), and (iv)
warrants to purchase shares of Common Stock or Preferred Stock ("Warrants") on
terms to be determined at the time of sale (the Debt Securities, Preferred
Stock, Depositary Shares, Common Stock and Warrants are referred to collectively
as the "Securities"). The Securities offered hereby (the "Offered Securities")
may be offered separately or as units with other Offered Securities, in separate
series in amounts, at prices and on terms to be determined at the time of sale
and to be set forth in a supplement to this Prospectus (a "Prospectus
Supplement").
The Senior Debt Securities will rank equally with all other
unsubordinated and unsecured indebtedness of the Company. The Subordinated Debt
Securities will be subordinated in right of payment to all existing and future
Senior Indebtedness, as defined in the Senior Indenture described herein. Both
the Senior Debt Securities and the Subordinated Debt Securities will be
effectively subordinated to any secured indebtedness of the Company and its
subsidiaries and to any unsecured, unsubordinated indebtedness and other
liabilities of the Company's subsidiaries. At July 31, 1996, the Company and its
subsidiaries had $25.7 million of secured indebtedness outstanding and the
Company had $349 million of unsecured and unsubordinated indebtedness
outstanding. At July 31, 1996, the Company's subsidiaries had $39.7 million of
unsubordinated indebtedness outstanding, of which $25.0 million is secured. The
indentures governing Debt Securities will not contain any restrictions on the
ability of the Company to incur additional unsecured indebtedness or any
provisions that would afford holders of the Debt Securities protection in the
event of a significant transaction involving the Company that might adversely
affect the holders of the Debt Securities. See "Description of Debt Securities."
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered, such as, where applicable, (i) in the case of
Debt Securities, the specific designation (including whether senior or
subordinated), aggregate principal amount, denomination, maturity, premium, if
any, priority, interest rate (which may be variable or fixed), time of payment
of any premium and any interest, terms for optional redemption or repayment or
for sinking fund payments, terms for conversion into or exchange for other
Offered Securities, and the initial public offering price; (ii) in the case of
Preferred Stock, the specific title and stated value, number of shares or
fractional interests therein, and the dividend, liquidation, redemption,
conversion, voting and other rights, the initial public offering price, and
whether interests in the Preferred Stock will be represented by Depositary
Shares; (iii) in the case of Common Stock, the initial offering price; (iv) in
the case of Warrants, the number and terms thereof, the description and the
number of securities issuable upon their exercise, the exercise price, the terms
of the offering and sale thereof and, where applicable, the duration and
detachability thereof, and (v) in the case of all Offered Securities, whether
such Offered Security will be offered separately or as a unit with other Offered
Securities, will be set forth in a Prospectus Supplement. The Prospectus
Supplement will also contain information, where applicable, about material
United States federal income tax considerations relating to, and any listing on
a securities exchange of, the Offered Securities covered by the Prospectus
Supplement.
The Offered Securities may be sold for public offering to underwriters
or dealers, which may be a group of underwriters represented by one or more
managing underwriters, or through such firms or other firms acting alone or
through dealers. The Offered Securities may also be sold directly by the Company
or through agents to investors. The names of any agents, dealers or managing
underwriters, and of any underwriters, involved in the sale of the Offered
Securities in respect of which this Prospectus is being delivered, the
applicable agent's commission, dealer's purchase price or underwriter's discount
and the net proceeds to the Company from such sale will be set forth in the
Prospectus Supplement. See "Plan of Distribution."
----------------------
(continued . . .)
<PAGE>
(cover page continued)
This Prospectus may not be used to consummate the sale of the
Securities unless accompanied by a Prospectus Supplement.
----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------------
The date of this Prospectus is , 1996.
<PAGE>
AVAILABLE INFORMATION
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"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
at Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and 7 World Trade Center, New York, New York 10045. 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,
Inc. at 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission in Washington, D.C. a
Registration Statement on Form S-3 (herein, together with all amendments and
exhibits thereto, referred to as the "Registration Statement") under the
Securities Act with respect to the Securities to which this Prospectus relates.
As permitted by the Rules and Regulations of the Commission, this Prospectus
does not contain all the information set forth in the Registration Statement,
including the exhibits thereto, which may be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 upon
payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission under
Section 13 of the Exchange Act are hereby incorporated by reference in this
Prospectus: (i) the Company's Annual Report on Form 10-K for the fiscal year
ended January 31, 1996; (ii) the Company's Quarterly Reports on Form 10-Q for
the fiscal quarters ended April 30 and July 31, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of the Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing 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 is
deemed to be incorporated by reference herein modifies or supersedes such
earlier statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus or the Prospectus Supplement.
2
<PAGE>
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the foregoing documents incorporated herein by reference
(other than exhibits to such documents). Written or telephone requests should be
directed to Lowe's Companies, Inc., P. O. Box 1111, North Wilkesboro, North
Carolina 28656, Attention: Richard D. Elledge, (919) 651-4271.
THE COMPANY
Lowe's Companies, Inc. ("Lowe's" or the "Company") is a specialty
retailer of building materials and related products for the do-it-yourself home
improvement, home decor, and home construction, repair and remodeling markets.
As of July 31, 1996, Lowe's operated 382 retail stores with more than 27.3
million square feet of sales floor located principally in the South Atlantic and
South Central regions of the United States. According to National Home Center
News, an industry publication, Lowe's is the second largest home center retailer
in the United States. Lowe's general offices are located in North Wilkesboro,
North Carolina.
USE OF PROCEEDS
Except as may be otherwise set forth in the Prospectus Supplement
accompanying this Prospectus, the net proceeds from the sale of the Securities
will be used for general corporate purposes, which may include financing the
acquisition of land, buildings and equipment for new and existing stores, the
repayment of certain long-term indebtedness and short-term borrowings and the
repurchase of outstanding securities of the Company, including Common Stock.
Funds not required immediately for those purposes may be invested temporarily in
short-term marketable securities.
3
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges is computed by dividing earnings
by fixed charges. For this purpose, "earnings" include pretax earnings plus
fixed charges. "Fixed charges" include interest expense, capitalized interest
and the portion of rental expense which is representative of the interest factor
in these rentals.
<TABLE>
<CAPTION>
Six Months
Ended July 31, Years Ended January 31,
-------------- --------------------------------------------------------
1996 1995 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
<S> <C>
Historical ratio of earnings to
fixed charges...................... 6.79x 7.63x 5.76x 6.82x 6.45x 5.73x 1.15x*
</TABLE>
- ---------------
* During the fourth quarter of the fiscal year ended January 31, 1992, the
Company recorded a $71.3 million pre-tax charge to earnings related to the
planned conversion from a chain of small stores to a chain of large stores.
See Note 15 to the Company's consolidated financial statements included in
its Annual Report on form 10-K for the fiscal year ended January 31, 1996.
Excluding the effect of this restructuring charge, the ratio of earnings to
fixed charges for the fiscal year ended January 31, 1992 would have been
4.01x.
DESCRIPTION OF DEBT SECURITIES
The following sets forth certain general terms and provisions of the
Debt Securities offered hereby. Further terms of the Offered Securities are set
forth in the Prospectus Supplement.
The Senior Debt Securities are to be issued under an Amended and
Restated Indenture, dated as of December 1, 1995, between the Company and The
First National Bank of Chicago, as Trustee (the "Senior Trustee"). The
Subordinated Debt Securities are to be issued under an Indenture between the
Company and The Bank of New York, as Trustee (the "Subordinated Trustee"). The
Senior Indenture and the Subordinated Indenture are sometimes referred to
individually as an "Indenture" and collectively as the "Indentures." The Senior
Trustee and the Subordinated Trustee are sometimes referred to individually as a
"Trustee" and collectively as the "Trustees." The Senior Indenture and the form
of the Subordinated Indenture are filed as exhibits to the Registration
Statement. The following summaries of material provisions of the Indentures do
not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all the provisions of the Indentures, including the
definitions therein of certain terms. Whenever particular Sections, Articles or
defined terms of the Indentures are referred to, it is intended that such
Sections, Articles or defined terms shall be incorporated herein by reference.
4
<PAGE>
General
The Debt Securities to be offered by this Prospectus are limited to
$350,000,000 in aggregate principal amount of unsecured debt obligations of the
Company. However, the Indentures do not limit the aggregate principal amount of
Debt Securities which may be issued thereunder and provide that Debt Securities
may be issued thereunder from time to time in one or more series. (Section 301).
The Company has outstanding $100,000,000 aggregate principal amount of 63/8%
Senior Notes due December 15, 2005 (the "63/8% Senior Notes"). No Debt
Securities are currently issued and outstanding under the Subordinated
Indenture. Neither the Indentures nor the Debt Securities will limit or
otherwise restrict the amount of Senior Indebtedness (as defined below under
"--Subordination of Debt Securities") which may be incurred by the Company or
any of its subsidiaries.
The Senior Debt Securities will be unsecured obligations of the Company
and will rank on a parity with the 63/8% Senior Notes and all other unsecured
and unsubordinated indebtedness of the Company. The Senior Debt Securities will
be effectively subordinated to any secured indebtedness of the Company and its
subsidiaries and to any unsecured, unsubordinated indebtedness of the Company's
subsidiaries. At July 31, 1996, the Company and its subsidiaries had $25.7
million of secured indebtedness outstanding and the Company had $349 million of
Senior Indebtedness outstanding. At July 31, 1996, the Company's subsidiaries
had $39.7 million of unsubordinated indebtedness outstanding, of which $25.0
million is secured. The Subordinated Debt Securities will be unsecured
obligations of the Company and will be subordinated in right of payment to all
Senior Indebtedness.
Reference is made to the applicable Prospectus Supplement for the
specific terms of the series of Debt Securities offered thereby including (1)
the title of the Debt Security; (2) the aggregate principal amount and
denominations; (3) the maturity or maturities; (4) the price to be received by
the Company from the sale of such Debt Securities; (5) the interest rate or
rates (or the method of calculation thereof) to be established for the Debt
Securities, which rate or rates may vary from time to time; (6) the date or
dates on which principal of the Debt Securities is payable; (7) the date or
dates from which interest on the Debt Securities shall accrue and the payment
and record date or dates for payments of interest or the methods by which any
such dates will be determined; (8) the place or places where principal of,
premium, if any, and interest, if any, on the Debt Securities is payable; (9)
the terms of any sinking fund and analogous provisions with respect to the Debt
Securities; (10) the respective redemption and repayment rights, if any, of the
Company and of the holders of the Debt Securities and the related redemption and
repayment prices and any limitations on such redemption or repayment rights;
(11) any provisions relating to the conversion or exchange of the Debt
Securities; (12) any addition to or change in the affirmative or negative
covenants, if any, to be imposed upon the Company relating to any of the Debt
Securities; (13) any trustee or fiscal or authenticating or payment agent,
issuing and paying agent, transfer agent or registrar or any other person or
entity to act in connection with such Debt Securities for or on behalf of the
holders thereof or the Company or an affiliate; (14) whether such Debt
Securities are to be issuable initially in temporary global form and whether any
such Debt Securities are to be
5
<PAGE>
issuable in permanent global form and, if so, whether beneficial owners of
interests in any such permanent global security may exchange such interests for
Debt Securities of like tenor of any authorized form and denomination and the
circumstances under which any such exchanges may occur; (15) the listing of the
Debt Securities on any securities exchange or inclusion in any other market or
quotation or trading system; and (16) any other specific terms, conditions and
provisions of the Debt Securities.
The holders of Debt Securities of a specified series that are
convertible into Common Stock ("Convertible Debt Securities") will be entitled
at certain times specified in the Prospectus Supplement relating to such
Convertible Debt Securities, subject to prior redemption, repayment or
repurchase, to convert any Convertible Debt Securities of such series into
Common Stock, at the conversion price set forth in such Prospectus Supplement,
subject to adjustment and to such other terms as are set forth in such
Prospectus Supplement. (Senior Indenture, Article 14; Subordinated Indenture,
Article 15).
Unless otherwise provided in the Prospectus Supplement, principal of
and any premium and interest on the Debt Securities shall be payable, and the
transfer of the Debt Securities will be registrable, at the office of the
applicable Trustee, except that, at the option of the Company, interest may be
paid by mailing a check to the address of the person entitled thereto as it
appears on the register for the Debt Securities. (Sections 305 and 1002).
Unless otherwise indicated in the Prospectus Supplement, the Debt
Securities will be issued only in fully registered form without coupons and in
denominations of $1,000 or any integral multiple thereof. No service charge will
be made for any registration of transfer or exchange of the Debt Securities, but
the Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. (Sections 302 and 305).
Debt Securities may be issued as Original Issue Discount Securities (as
defined in the Indentures) to be sold at a substantial discount below their
principal amount. Special federal income tax and other considerations applicable
thereto will be described in the Prospectus Supplement relating thereto.
Certain Covenants Applicable to Senior Debt Securities
Unless otherwise indicated in the applicable Prospectus Supplement with
respect to a series of Senior Debt Securities, Senior Debt Securities will have
the benefit of the following covenants contained in the Senior Indenture. Unless
otherwise indicated in the applicable Prospectus Supplement with respect to
Subordinated Debt Securities of a series, the Subordinated Debt Securities will
not have the benefit of such covenants. Certain capitalized terms used in this
section are defined below under "Certain Definitions." Other capitalized terms
not otherwise defined herein have the meanings ascribed to them in the Senior
Indenture.
6
<PAGE>
Restrictions on Debt. The Senior Indenture provides that the Company
will not itself, and will not permit any Subsidiary to, incur, issue, assume or
guarantee any Debt secured by a Mortgage on any Principal Property of the
Company or any Subsidiary, or any shares of Capital Stock or Debt of any
Subsidiary, without effectively providing that the Securities of each series of
Senior Debt Securities then Outstanding (together with, if the Company shall so
determine, any other Debt of the Company or such Subsidiary then existing or
thereafter created which is not subordinate to the Securities of each series
then Outstanding) will be secured equally and ratably with (or, at the option of
the Company, prior to) such secured Debt, so long as such secured Debt shall be
so secured, and will not permit any Subsidiary to incur, issue, assume or
guarantee any unsecured Debt or to issue any Preferred Stock, in each instance
unless the aggregate amount of all such secured Debt together with the aggregate
preferential amount to which such Preferred Stock would be entitled on any
involuntary distribution of assets and all Attributable Debt of the Company and
its Subsidiaries in respect of sale and leaseback transactions would not exceed
10% of Consolidated Net Tangible Assets. This restriction does not apply to, and
there shall be excluded in computing Debt for the purpose of such restriction:
(a) Debt secured by Mortgages on any property acquired, constructed or improved
by the Company or any Subsidiary after the first date on which a Senior Debt
Security is authenticated by the Trustee under the Senior Indenture, which
Mortgages are created or assumed contemporaneously with, or within 30 months
after, such acquisition, or completion of such construction or improvement, or
within six months thereafter pursuant to a firm commitment for financing
arranged with a lender or investor within such 30-month period, to secure or
provide for the payment of all or any part of the purchase price of such
property or the cost of such construction or improvement incurred after the
first date on which a Senior Debt Security is authenticated by the Trustee under
the Senior Indenture or Mortgages on any property existing at the time of the
acquisition thereof if any such Mortgage does not apply to any property
previously owned by the Company or any Subsidiary other than, in the case of any
such construction or improvement, any previously unimproved real property on
which the property so constructed, or the improvement, is located; (b) Debt of
any corporation existing at the time such corporation is merged with or into the
Company or a Subsidiary; (c) Debt of any corporation existing at the time such
corporation becomes a Subsidiary; (d) Debt of a Subsidiary to the Company or to
another Subsidiary; (e) Debt secured by Mortgages securing obligations issued by
a state, territory or possession of the United States, or any political
subdivision of any of the foregoing, or the District of Columbia to finance the
acquisition of or construction on property, and on which the interest is not, in
the opinion of counsel, includable in gross income of the holder; and (f)
certain extensions, renewals or replacements of any Debt referred to in the
foregoing clauses (a) through (e) inclusive. This restriction does not apply to
any issuance of Preferred Stock by a Subsidiary to the Company or another
Subsidiary, provided that such Preferred Stock is thereafter transferable to any
Person other than the Company or a Subsidiary. (Senior Indenture, Section 1008).
Restrictions on Sales and Leasebacks. The Senior Indenture provides
that the Company will not itself, and will not permit any Subsidiary to, after
the first date on which a Senior Debt Security is authenticated by the Trustee
under the Senior Indenture, enter into any sale and
7
<PAGE>
leaseback transaction involving any Principal Property which has been or is to
be sold or transferred, unless, after giving effect thereto, the aggregate
amount of all Attributable Debt with respect to such transactions plus all Debt
to which Section 1008 of the Senior Indenture is applicable, would not exceed
10% of Consolidated Net Tangible Assets. This restriction will not apply to, and
there shall be excluded in computing Attributable Debt for the purpose of such
restriction, Attributable Debt with respect to any sale and leaseback
transaction if: (a) the lease in such transaction is for a period (including
renewal rights) not exceeding three years; (b) the Company or a Subsidiary,
within 180 days after such transaction, applies an amount not less than the
greater of the net proceeds of the sale of the Principal Property leased
pursuant to such arrangement or the fair market value of the Principal Property
so leased at the time of entering into such arrangement (as determined by the
Board of Directors) to, subject to certain restrictions, the retirement of
Funded Debt of the Company ranking on a parity with or senior to the Senior Debt
Securities or the retirement of Funded Debt of a Subsidiary; (c) such
transaction is entered into prior to, at the time of, or within 30 months after
the later of the acquisition of the Principal Property or the completion of the
construction thereon; (d) the lease in such transaction secures or relates to
obligations issued by a state, territory or possession or the United States, or
any political subdivision thereof, or the District of Columbia, to finance the
acquisition of or construction on property, and on which the interest is not, in
the opinion of counsel, includable in the gross income of the holder; or (e)
such transaction is entered into between the Company and a Subsidiary or between
Subsidiaries. (Senior Indenture, Section 1009).
Certain Definitions. The Senior Indenture defines the following terms
used in this section:
"Attributable Debt" means, as to any particular lease under which any
Person is at the time liable, at any date as of which the amount thereof is to
be determined, the total net amount of rent required to be paid by such Person
under such lease during the remaining term thereof (excluding any subsequent
renewal or other extension options held by the lessee), discounted from the
respective due dates thereof to such date at the rate of 10% per annum
compounded annually. The net amount of rent required to be paid under any such
lease for any such period shall be the amount of the rent payable by the lessee
with respect to such period, after excluding amounts required to be paid on
account of maintenance and repairs, insurance, taxes, assessments, water rates
and similar charges and contingent rents (such as those based on sales). 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 no
rent shall be considered as required to be paid under such lease subsequent to
the first date upon which it may be so terminated.
"Capital Stock", as applied to the stock of any corporation, means the
capital stock of every class whether now or hereafter authorized, regardless of
whether such capital stock shall be limited to a fixed sum or percentage with
respect to the rights of the holders thereof to participate in dividends and in
the distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding up of such corporation.
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"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities, and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the most recent balance sheet of the Company
and its consolidated subsidiaries and computed in accordance with generally
accepted accounting principles.
"Debt" means loans, notes, bonds, indentures or other similar evidences
of indebtedness for money borrowed.
"Funded Debt" means all indebtedness for money borrowed having a
maturity of more than 12 months from the date as of which the amount thereof is
to be determined or having a maturity of less than 12 months but by its terms
being renewable or extendible beyond 12 months from such date at the option of
the borrower.
"Preferred Stock" means any stock of any class of the Company which has
a preference over Common Stock in respect of dividends or of amounts payable in
the event of any voluntary or involuntary liquidation, dissolution or winding up
of the Company and which is not mandatorily redeemable or repayable, or
redeemable or repayable at the option of the Holder, otherwise than in shares of
Common Stock or Preferred Stock of another class or series or with the proceeds
of the sale of Common Stock or Preferred Stock.
"Principal Property" means any building, structure or other facility,
together with the land upon which it is erected and fixtures comprising a part
thereof, used primarily for selling home improvement products or the
manufacturing, warehousing or distributing of such products, owned or leased by
the Company or any Subsidiary of the Company. (Senior Indenture, Section 101).
Subordination of Subordinated Debt Securities
The obligations of the Company to make any payment on account of the
principal of and premium, if any, and interest on the Subordinated Debt
Securities will be subordinate and junior in right of payment, to the extent set
forth in the Subordinated Indenture, to all Senior Indebtedness of the Company.
(Subordinated Indenture, Article 14).
In the event that the Company shall default in the payment of any
principal of or any premium or interest on any Senior Indebtedness when the same
becomes due and payable, whether at maturity or at a date fixed for prepayment
or by declaration of acceleration or otherwise, then, unless and until such
default shall have been cured or waived or shall have ceased to exist, no direct
or indirect payment (in cash, property, securities by set-off or otherwise) will
be made or agreed to be made for principal of or any premium or interest on the
Subordinated Debt Securities, or in respect of any redemption, retirement,
purchase or other acquisition of any of the Subordinated Debt Securities.
(Subordinated Indenture, Section 1401). Senior Indebtedness is defined in the
Subordinated Indenture as (a) all indebtedness of the
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Company for money borrowed or constituting reimbursement obligations with
respect to letters of credit and interest or currency swap agreements (including
indebtedness secured by a mortgage, conditional sales contract or other lien
which is (i) given to secure all or a part of the purchase price of property
subject thereto, whether given to the vendor of such property or to another, or
(ii) existing on property at the time of acquisition thereof); (b) all
indebtedness of the Company evidenced by notes, debentures, bonds or other
securities sold by the Company for money; (c) lease obligations (including but
not limited to capitalized lease obligations); (d) all indebtedness of others of
the kinds described in either of the preceding clauses (a) or (b) and all lease
obligations and obligations of others of the kind described in the preceding
clause (c) assumed by or guaranteed in any manner by the Company or in effect
guaranteed by the Company through an agreement to purchase, contingent or
otherwise; and (e) all (whether initial or seriatim) renewals, deferrals,
increases, extensions or refundings of and modifications to indebtedness of the
kinds described in any of the preceding clauses (a), (b) or (d) and all renewals
or extensions of leases of the kinds described in either of the preceding
clauses (c) or (d); unless, in the case of any particular indebtedness, lease,
renewal, extension or refunding, the instrument or lease creating or evidencing
the same or the assumption or guarantee of the same expressly provides that such
indebtedness, lease, renewal, extension, deferral, increase, modification or
refunding is not superior in right of payment to the Subordinated Debt
Securities or is expressly subordinated by its terms in right of payment to all
other indebtedness of the Company (including the Subordinated Debt Securities).
In the event of (1) any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other similar
proceeding relating to the Company, its creditors or its property; (2) any
proceeding for the liquidation, dissolution or other winding up of the Company,
voluntary or involuntary, whether or not involving insolvency or bankruptcy
proceedings; (3) any assignment by the Company for the benefit of creditors; or
(4) any other marshalling of the assets of the Company, all Senior Indebtedness
(including any interest thereon accruing after the commencement of any such
proceedings) shall first be paid in full before any payment or distribution,
whether in cash, securities or other property, is made to any holder of any of
the Subordinated Debt Securities on account thereof. In such event, any payment
or distribution on account of the principal of or any premium or interest on the
Subordinated Debt Securities, whether in cash, securities or other property
(other than securities of the Company or any other corporation provided for by a
plan of reorganization or readjustment the payment of which is subordinate, at
least to the extent provided in the subordination provisions with respect to the
Subordinated Debt Securities, to the payment of all Senior Indebtedness at the
time outstanding, and to any securities issued in respect thereof under any such
plan of reorganization or readjustment), which would otherwise (but for the
subordination provisions) be payable or deliverable in respect of the
Subordinated Debt Securities, shall be paid or delivered directly to the holders
of Senior Indebtedness in accordance with the priorities then existing among
such holders until all Senior Indebtedness (including any interest thereon
accruing after the commencement of any such proceedings) has been paid in full.
In the event of any such proceeding, after payment in full of all sums owing
with respect to Senior Indebtedness, the Holder or Holders of Subordinated Debt
Securities, together with the holders of any obligations of the Company ranking
on a parity with the Subordinated Debt Securities, shall be entitled to
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be paid from the remaining assets of the Company the amounts at the time due and
owing on account of unpaid principal of (and premium, if any) and interest on
the Subordinated Debt Securities and such other obligations before any payment
or other distribution, whether in cash, property or otherwise, shall be made on
account of any capital stock or obligations of the Company ranking junior to the
Subordinated Debt Securities and such other obligations. If any payment or
distribution on account of the principal of or any premium or interest on the
Subordinated Debt Securities of any character, whether in cash, securities or
other property (other than securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in the subordination provisions
with respect to the Subordinated Debt Securities, to the payment of all Senior
Indebtedness at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment), or any security
shall be received by the Trustee or any Holder of any Subordinated Debt
Securities in contravention of any of the terms of the Indenture and before all
the Senior Indebtedness shall have been paid in full, such payment or
distribution or security will be received in trust for the benefit of, and will
be paid over or delivered and transferred to, the holders of the Senior
Indebtedness at the time outstanding in accordance with the priorities then
existing among such holders for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all such Senior
Indebtedness in full. (Subordinated Indenture, Section 1401).
By reason of such subordination, in the event of the insolvency of the
Company, holders of Senior Indebtedness may receive more, ratably, and any
Holder or Holders of the Subordinated Debt Securities having a claim pursuant to
such Subordinated Debt Securities may receive less, ratably, than the other
creditors of the Company. Such subordination will not prevent the occurrence of
an Event of Default in respect of the Subordinated Debt Securities.
Effect of Corporate Structure
The Debt Securities are obligations exclusively of the Company. Because
the operations of the Company are currently conducted through subsidiaries, the
cash flow and the consequent ability to service debt of the Company, including
the Debt Securities, are dependent, in part, upon the earnings of its
subsidiaries and the distribution of those earnings to the Company or upon loans
or other payments of funds by those subsidiaries to the Company. The
subsidiaries are separate and distinct legal entities and have no obligation,
contingent or otherwise, to pay any amounts due pursuant to the Debt Securities
or to make any funds available therefor, whether by dividends, loans or other
payments. In addition, the payment of dividends and the making of loans and
advances to the Company by its subsidiaries may be subject to statutory or
contractual restrictions, are contingent upon the earnings of those subsidiaries
and are subject to various business considerations.
Although the Senior Indenture limits the incurrence of such
indebtedness, as described above under "--Certain Covenants Applicable to Senior
Debt Securities," the Debt Securities will be effectively subordinated to all
indebtedness and other liabilities, including current liabilities and
commitments under leases, if any, of the Company's subsidiaries. Any right of
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the Company to receive assets of any of its subsidiaries upon liquidation or
reorganization of the subsidiary (and the consequent right of the holders of the
Debt Securities to participate in those assets) will be effectively subordinated
to the claims of that subsidiary's creditors (including trade creditors), except
to the extent that the Company is itself recognized as a creditor of such
subsidiary, in which case the claims of the Company would still be subordinated
to any security interests in the assets of such subsidiary and any indebtedness
of such subsidiary senior to that held by the Company.
No Restriction on Sale or Issuance of Stock of Subsidiaries
The Indentures contain no covenant that the Company will not sell,
transfer or otherwise dispose of any shares of, or securities convertible into,
or options, warrants, or rights to subscribe for or purchase shares of, voting
stock of any of its subsidiaries, nor does it prohibit any subsidiary from
issuing any shares of, securities convertible into, or options, warrants or
rights to subscribe for or purchase shares of, voting stock of such subsidiary.
Consolidation, Merger and Sale of Assets
The Company, without the consent of the Holder or Holders of any of the
outstanding Debt Securities, may consolidate or merge with or into, or convey,
transfer or lease its properties and assets substantially as an entirety, to any
corporation organized under the laws of any domestic jurisdiction, provided that
the successor corporation assumes the Company's obligations on the Debt
Securities and under the Indentures and that after giving effect to the
transaction no Event of Default, and no event which, after notice or lapse of
time would become an Event of Default, has occurred and is continuing, and that
certain other conditions are met. (Section 801).
Events of Default
Events of Default with respect to Debt Securities of any series issued
thereunder are defined in the Indentures as being: (a) default for thirty days
in payment when due of any interest on any Debt Security of that series or any
additional amount payable with respect to Debt Securities of such series as
specified in the applicable Prospectus Supplement; (b) default in payment when
due of principal, premium, if any, or on redemption or otherwise, or in the
making of a mandatory sinking fund payment of any Debt Securities of that
series; (c) default for sixty days after notice to the Company by the Trustee
for such series, or by the holders of 25% in aggregate principal amount of the
Debt Securities of such series then outstanding, in the performance of any other
agreement in the Debt Securities of that series, in the Indentures or in any
supplemental indenture or board resolution referred to therein under which the
Debt Securities of that series may have been issued; (d) default in the payment
of principal when due or resulting in acceleration of other indebtedness of the
Company for borrowed money where the aggregate principal amount with respect to
which such default or acceleration has occurred exceeds $10 million and such
acceleration is not rescinded or annulled within ten days after the written
notice thereof to the Company by the trustee or to the Company and the Trustee
by the
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holders of 25% in aggregate principal amount of the Debt Securities of such
series then outstanding, provided that such Event of Default will be cured or
waived if the default that resulted in the acceleration of such other
indebtedness is cured or waived or such indebtedness is discharged; and (e)
certain events of bankruptcy, insolvency or reorganization of the Company.
(Section 501). Events of Default with respect to a specified series of Debt
Securities may be added to the Indenture under which the series is issued and,
if so added, will be described in the applicable Prospectus Supplement. (Section
301). No Event of Default with respect to a particular series of Debt Securities
issued under the Indentures necessarily constitutes an Event of Default with
respect to any other series of Debt Securities issued thereunder.
The Indentures provide that the Trustee for any series of Debt
Securities shall, within ninety days after the occurrence of a Default with
respect to Debt Securities of that series, give to the holder of the Debt
Securities of that series notice of all uncured Defaults known to it, provided,
that, except in the case of default in payment on the Debt Securities of that
series, the Trustee may withhold the notice if and so long as it in good faith
determines that withholding such notice is in the interest of the holders of the
Debt Securities of that series, provided, further, that no notice of a default
made in the performance of any covenant or a breach of any warranty contained in
the Indentures shall be given until at least 60 days after the occurrence
thereof. "Default" means any event which is, or, after notice or passage of time
or both, would be, an Event of Default. (Section 602).
If an Event of Default with respect to Debt Securities of any series at
the time outstanding occurs and is continuing, either the Trustee or the Holder
or Holders of at least 25% in aggregate principal amount of the outstanding Debt
Securities of that series may declare the principal amount (or, if the Debt
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) of all
the Debt Securities of that series to be due and payable immediately. At any
time after a declaration of acceleration with respect to Debt Securities of any
series has been made, but before a judgment or decree based on acceleration has
been obtained, the Holder or Holders of a majority in aggregate principal amount
of outstanding Debt Securities of that series may, under certain circumstances,
rescind and annul such acceleration. (Section 502).
The Indentures provide that, subject to the duty of the Trustees in the
case of an Event of Default to act with the required standard of care, the
Trustees will be under no obligation to exercise any of these rights or powers
under the Indentures at the request or direction of any of the Holders, unless
such Holder or Holders shall have offered to the Trustees reasonable indemnity.
(Sections 601 and 603). Subject to such provisions for the indemnification of
the Trustees, the Holder or Holders of a majority in aggregate principal amount
of the outstanding Debt Securities of each series will have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustees, or exercising any trust or power conferred on the Trustees with
respect to the Debt Securities of that series. (Section 512).
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The Company is required to furnish to the Trustees annually a statement
as to the performance by the Company of certain of its obligations under the
Indentures and as to any default in such performance. (Section 1005).
Global Securities
The Debt Securities of a series may be issued in the form of one or
more fully registered securities in global form (each a "Global Security") that
will be deposited with, or on behalf of, a depositary (the "Depositary Bank")
identified in the Prospectus Supplement relating to such series and will be
registered in the name of the Depositary Bank or its nominee. In such case, one
or more Global Securities will be issued in a denomination or aggregate
denominations equal to the aggregate principal amount of outstanding Debt
Securities of the series represented by such Global Security or Securities.
Unless and until any such Global Security is exchanged in whole or in part for
Debt Securities in definitive certificated form, such Global Security may not be
transferred except as a whole by the Depositary Bank for such Global Security to
a nominee of such Depositary Bank or by a nominee of such Depositary Bank to
such Depositary Bank or another nominee of such Depositary Bank or by such
Depositary Bank or any such nominee to a successor of such Depositary Bank or a
nominee of such successor and except as described in the applicable Prospectus
Supplement. (Section 303).
The specific terms of the depositary arrangement with respect to a
series of Debt Securities to be represented by a Global Security 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 any Global Security, and the deposit of such
Global Security with or on behalf of the Depositary Bank for such Global
Security, the Depositary Bank will credit, on its book-entry registration and
transfer system, the respective principal amounts of the Debt Securities
represented by such Global Security to the accounts of institutions
("participants") that have accounts with such Depositary Bank or its nominee.
The accounts to be credited will be designated by the underwriters or agents
engaging in the distribution or placement of such Debt Securities or by the
Company, if such Debt Securities are offered and sold directly by the Company.
Ownership of beneficial interests in such Global Security will be limited to
participants or persons that may hold interests through participants. Ownership
of beneficial interests by participants in such Global Security will be shown by
book-keeping entries on, and the transfer of that ownership interest will be
effected only through book-keeping entries to, records maintained by the
Depositary Bank or its nominee for such Global Security. Ownership of beneficial
interests in such Global Security by persons that hold through participants will
be shown by book-keeping entries on, and the transfer of that ownership interest
among or through such participants will be effected only through book-keeping
entries to, records maintained by such participants. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive certificated form rather than
book-entry form. Such laws may impair the ability to own, transfer or pledge
beneficial interests in any Global Security.
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So long as the Depositary Bank for a Global Security or its nominee is
the registered owner of such Global Security, such Depositary Bank 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. Except as set forth below or otherwise specified in the applicable
Prospectus Supplement, 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 certificated
form and will not be considered the holders thereof for any purposes under the
Indenture. Accordingly, each person owning a beneficial interest in such Global
Security must rely on the procedures of the Depositary Bank and, if such person
is not a participant, on the procedures of the participant through which such
person directly or indirectly owns its interest, to exercise any rights of a
holder under the Indenture. The Indenture provides that the Depositary Bank may
grant proxies and otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which
a holder is entitled to give or take under the Indenture. (Section 104). The
Company understands that under existing industry practices, if the Company
requests any action of holders or any owner of a beneficial interest in such
Global Security desires to give any notice or take any action that a holder is
entitled to give or take under the Indenture, the Depositary Bank for such
Global Security would authorize the participants holding the relevant beneficial
interest to give such notice or take such action, and such participants would
authorize beneficial owners owning through such participants to give such notice
or take such action or would otherwise act upon the instructions of beneficial
owners owning through them.
Principal and any premium and interest payments on Debt Securities
represented by a Global Security registered in the name of a Depositary Bank or
its nominee will be made to such Depositary Bank or its nominee, as the case may
be, as the registered owner of such Global Security. None of the Company, the
Trustee or any paying agent for such Debt Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in any Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests. (Section 308).
The Company expects that the Depositary Bank for any series of Debt
Securities represented by a Global Security, upon receipt of any payment of
principal, premium or interest, will credit immediately participants' accounts
with payments in amounts proportionate to their respective beneficial interests
in the principal amount of such Global Security as shown on the records of such
Depositary Bank. The Company also expects that payments by participants to
owners of beneficial interests in such Global Security or Securities 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 the Depositary Bank for any series of Debt Securities represented by
a Global Security is at any time unwilling or unable to continue as Depositary
Bank and a successor Depositary Bank is not appointed by the Company within 90
days, the Company will issue such Debt Securities in definitive certificated
form in exchange for such Global Security. In addition, the Company may at any
time and in its sole discretion determine not to have the Debt Securities of a
series represented by one or more Global Securities and, in such event, will
issue Debt Securities of such series in definitive certificated form in exchange
for the Global Security representing such series of Debt Securities. (Section
305).
Further, an owner of a beneficial interest in a Global Security
representing Debt Securities of a series may, on terms acceptable to the Company
and the Depositary Bank for such Global Security, receive Debt Securities of
such series in definitive certificated form, if the Company so specifies with
respect to the Debt Securities of such series. In any such instance, an owner of
a beneficial interest in a Global Security will be entitled to have Debt
Securities of the series represented by such Global Security equal in principal
amount to such beneficial interest registered in its name and will be entitled
to physical delivery of such Debt Securities in definitive certificated form.
Debt Securities of such series so issued in definitive certificated form will,
except as set forth in the applicable Prospectus Supplement, be issued in
denominations of $1,000 and integral multiples thereof and will be issued in
registered form. (Section 305).
Modification and Waiver
Modifications and amendments of the Indentures may be made by the
Company and the applicable Trustee with the consent of the Holder or Holders of
a majority in principal amount of the Debt Securities of all affected series;
provided, however, that no such modification or amendment may, without the
consent of the Holder or Holders of all of the outstanding Debt Securities
affected thereby, (i) change the stated maturity date of the principal of, or
any installment of principal of, or premium, if any, or interest, if any, on,
any Debt Security; (ii) reduce the principal amount of, or premium, if any, or
interest, if any, on, any Debt Security, change the method of calculation
thereon or reduce the amount payable on redemption thereof; (iii) reduce the
amount of principal of a Debt Security payable upon acceleration of the maturity
thereof; (iv) change the place or currency of payment of principal of, or
premium, if any, or interest, if any, on, any Debt Security; (v) impair the
rights of any holder of any Debt Securities to conversion rights; (vi) impair
the right to institute suit for the enforcement of any payment on or with
respect to any Debt Security; or (vii) reduce the percentage in principal amount
of the Debt Security, the consent of whose Holder or Holders is required for
modification or amendment of the Indentures or for waiver of compliance with
certain provisions of the Indentures or for waiver of certain defaults.
(Sections 901 and 902).
The Holder or Holders of a majority in principal amount of the Debt
Securities of all affected series may, on behalf of the Holder or Holders of
such Debt Securities, waive compliance by the Company with certain restrictive
provisions of the Indentures. The Holder or Holders of a majority in principal
amount of the Debt Securities of all affected series also
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may, on behalf of the Holder or Holders of all such Debt Securities, waive any
past default under the Indentures with respect to such Debt Securities, except a
default in the payment of the principal, or premium, if any, or interest on, any
Debt Security or in respect of a provision which under the Indentures cannot be
modified or amended without the consent of the Holder or Holders of all of the
outstanding Debt Securities affected thereby. (Section 513).
Regarding the Trustees
The First National Bank of Chicago is the Trustee under the Senior
Indenture. Notice to the Senior Trustee Bank should be directed to its
Corporate Trust Office, One First National Plaza, Suite 0126, Chicago, Illinois
00670-0126, Attention: Corporate Trust Administrator.
The Bank of New York is the Trustee under the Subordinated Indenture.
Notice to the Subordinated Trustee should be directed to its Corporate Trust
Office, located at 101 Barclay Street, New York, New York 10286.
DESCRIPTION OF PREFERRED STOCK
General
The following summary does not purport to be complete and is subject in
all respects to applicable North Carolina law and the Company's Restated and
Amended Charter and Bylaws.
The Company is authorized by its Restated and Amended Charter to issue
5,000,000 shares of Preferred Stock. The Board of Directors is authorized to
designate with respect to each new series of Preferred Stock the number of
shares in each series, the dividend rates and dates of payment, voluntary and
involuntary liquidation preferences, redemption prices, whether or not dividends
shall be cumulative and, if cumulative, the date or dates from which the same
shall be cumulative, the sinking fund provisions, if any, for redemption or
purchase of shares, the rights, if any, and the terms and conditions on which
shares can be converted into or exchanged for, or the rights to purchase, shares
of any other class or series, and the voting rights, if any. Any Preferred Stock
issued will rank prior to the Common Stock as to dividends and as to
distributions in the event of liquidation, dissolution or winding up of the
Company. The ability of the Board of Directors to issue Preferred Stock, while
providing flexibility in connection with possible acquisitions and other
corporate purposes, could, among other things, adversely affect the voting
powers of holders of Common Stock and, under certain circumstances, may
discourage an attempt by others to gain control of the Company. The Company may
amend from time to time its Restated and Amended Charter to increase the number
of authorized shares of Preferred Stock. Any such amendment would require the
approval of the holders of a majority of the outstanding shares of Common Stock,
and the approval of the holders of a majority of the outstanding shares of all
series of Preferred Stock voting together as a single class without regard to
series. As of the date of this Prospectus, the Company had no shares of
Preferred Stock outstanding.
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The Prospectus Supplement relating to each series of the Preferred
Stock will describe the following terms thereof:
(a) title and stated value of such series;
(b) the number of shares in such series;
(c) the dividend payment dates and the dividend rate or method of
determination or calculation of such terms applicable to the
series;
(d) applicable redemption provisions, if any;
(e) sinking fund or purchase fund provisions, if any;
(f) the fixed liquidation price and fixed liquidation premium, if
any, applicable to the series;
(g) the rate or basis of exchange or conversion into other
securities or method of determination thereof applicable to
the series, if any;
(h) the conversion rights, if any;
(i) applicable voting rights; and
(j) any other terms applicable thereto.
Redemption
A series of Preferred Stock may be redeemable, in whole or in part, at
the option of the Company, and may be subject to mandatory redemption pursuant
to a sinking fund, in each case upon terms, at the times and at the redemption
prices set forth in the Prospectus Supplement relating to such series.
The Prospectus Supplement relating to a series of Preferred Stock that
is subject to mandatory redemption shall specify the number of shares of such
series of Preferred Stock which shall be redeemed by the Company in each year
commencing after a date to be specified, at a redemption price per share to be
specified, together with an amount equal to any accrued and unpaid dividends
thereon to the date of redemption.
If fewer than all the outstanding shares of any series of Preferred
Stock are to be redeemed, whether by mandatory or optional redemption, the
selection of the shares to be redeemed shall be determined by lot or pro rata as
may be determined by the Board of Directors or a duly authorized committee
thereof, or by any other method which may be determined by the Board of
Directors or such committee to be equitable. From and after the date of
redemption (unless default shall be made by the Company in providing for the
payment of the redemption price), dividends shall cease to accrue on the shares
of Preferred Stock called for redemption and all rights of the holders thereof
(except the right to receive the redemption price) shall cease.
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Conversion Rights; Preemptive Rights
The Prospectus Supplement for any series of Preferred Stock will state
the terms, if any, on which shares of that series are convertible into shares of
Common Stock or another series of preferred stock of the Company. The Preferred
Stock will have no preemptive rights.
Dividend Rights
The holders of the Preferred Stock of each series shall be entitled to
receive, if and when declared payable by the Board of Directors, out of assets
available therefor, dividends at, but not exceeding, the dividend rate for such
series (which may be fixed or variable), payable at such intervals and on such
dates as are provided in the resolution of the Board of Directors creating such
series. If such intervals and dividend payment dates shall vary from time to
time for such series, such resolution shall set forth the method by which such
intervals and such dates shall be determined. Such dividends on Preferred Stock
shall be paid before any dividends, other than a dividend payable in Common
Stock of the Company, may be paid upon or set apart for any shares of capital
stock ranking junior to the Preferred Stock in respect of dividends or
liquidation rights (referred to in this Prospectus as "stock ranking junior to
the Preferred Stock").
Voting Rights
Except as indicated below or in the Prospectus Supplement relating to a
particular series of Preferred Stock, or except as expressly required by the
laws of the State of North Carolina or other applicable law, the holders of the
Preferred Stock will not be entitled to vote. Except as indicated in the
Prospectus Supplement relating to a particular series of Preferred Stock, each
such share will be entitled to one vote on matters on which holders of such
series of the Preferred Stock are entitled to vote. However, as more fully
described below under "Depositary Shares," if the Company elects to issue
Depositary Shares representing a fraction of a share of a series of Preferred
Stock, each such Depositary Share will, in effect, be entitled to such fraction
of a vote, rather than a full vote. Since each full share of any series of
Preferred Stock shall be entitled to one vote, the voting power of such series,
on matters on which holders of such series and holders of other series of
preferred stock are entitled to vote as a single class, shall depend on the
number of shares in such series, not the aggregate liquidation preference or
initial offering price of the shares of such series of Preferred Stock.
In addition to the foregoing voting rights, under the North Carolina
Business Corporation Act as now in effect, the holders of Preferred Stock will
have the voting rights set forth above under "General" with respect to
amendments to the Company's Restated and Amended Charter which would increase
the number of authorized shares of Preferred Stock of the Company.
19
<PAGE>
Liquidation Rights
In the event of any liquidation, dissolution or winding up of the
Company, the holders of Preferred Stock shall be entitled to receive, for each
share thereof, the fixed liquidation or stated value for the respective series
together in all cases with all dividends accrued or in arrears thereon, before
any distribution of the assets shall be made to the holders of any stock ranking
junior to the Preferred Stock. If the assets distributable among the holders of
Preferred Stock should be insufficient to permit the payment of the full
preferential amounts fixed for all series, then the distribution shall be made
among the holders of each series ratably in proportion to the full preferential
amounts to which they are respectively entitled.
Depositary Shares
General. The Company may, at its option, elect to offer fractional
shares of Preferred Stock, rather than full shares of Preferred Stock. In the
event such option is exercised, the Company will issue to the public receipts
for Depositary Shares, each of which will represent a fraction (to be set forth
in the Prospectus Supplement relating to a particular series of Preferred Stock)
of a share of a particular series of Preferred Stock as described below.
The shares of any series of Preferred Stock represented by Depositary
Shares will be deposited under a Deposit Agreement (the "Deposit Agreement")
between the Company and a bank or trust company selected by the Company having
its principal office in the United States and having a combined capital and
surplus of at least $50,000,000 (the "Depositary Bank"). Subject to the terms of
the Deposit Agreement, each owner of a Depositary Share will be entitled, in
proportion to the applicable fraction of a share of Preferred Stock represented
by such Depositary Share, to all the rights and preferences of the Preferred
Stock represented thereby (including dividend, voting, redemption and
liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of
Preferred Stock in accordance with the terms of the offering. If Depositary
Shares are issued, copies of the forms of Deposit Agreement and Depositary
Receipt will be incorporated by reference in the Registration Statement of which
this Prospectus is a part, and the following summary is qualified in its
entirety by reference to such documents.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary Bank may, upon the written order of the Company, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts but
not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay, and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at the Company's expense.
20
<PAGE>
Withdrawal of Preferred Stock. Upon surrender of the Depositary
Receipts to the Depositary Bank, the owner of the Depositary Shares evidenced
thereby is entitled to delivery at such office of the number of whole shares of
Preferred Stock represented by such Depositary Shares. If the Depositary
Receipts delivered by the holder evidence a number of Depositary Shares in
excess of the number of Depositary Shares representing the number of whole
shares of Preferred Stock to be withdrawn, the Depositary Bank will deliver to
such holder at the same time a new Depositary Receipt evidencing such excess
number of Depositary Shares. Owners of Depositary Shares will be entitled to
receive only whole shares of Preferred Stock. In no event will fractional shares
of Preferred Stock (or cash in lieu thereof) be distributed by the Depositary
Bank. Consequently, a holder of a Depositary Receipt representing a fractional
share of Preferred Stock would be able to liquidate his position only by sale to
a third party (in a public trading market transaction or otherwise), unless the
Depositary Shares are redeemed by the Company or converted by the holder.
Dividends and Other Distributions. The Depositary Bank will distribute
all cash dividends or other cash distributions received in respect of the
Preferred Stock to the record holders of Depositary Shares relating to such
Preferred Stock in proportion to the number of such Depositary Shares owned by
such holders.
In the event of a distribution other than in cash, the Depositary Bank
will distribute property received by it to the record holders of Depositary
Shares entitled thereto, unless the Depositary Bank determines that it is not
feasible to make such distribution, in which case the Depositary Bank may, with
the approval of the Company, sell such property and distribute the net proceeds
from such sale to such holders.
Redemption of Depositary Shares. If a series of Preferred Stock
represented by Depositary Shares is subject to redemption, the Depositary Shares
will be redeemed from the proceeds received by the Depositary Bank resulting
from the redemption, in whole or in part, of such series of Preferred Stock held
by the Depositary Bank. The redemption price per Depositary Share will be equal
to the applicable fraction of the redemption price per share payable with
respect to such series of Preferred Stock. Whenever the Company redeems shares
of Preferred Stock held by the Depositary Bank, the Depositary Bank will redeem
as of the same redemption date the number of Depositary Shares representing the
shares of Preferred Stock so redeemed. If fewer than all the Depositary Shares
are to be redeemed, the Depositary Shares to be redeemed will be selected by lot
or pro rata as may be determined by the Depositary Bank.
Voting the Preferred Stock. Upon receipt of notice of any meeting at
which the holders of Preferred Stock are entitled to vote, the Depositary Bank
will mail the information contained in such notice of meeting to the record
holders of the Depositary Shares relating to such Preferred Stock. Each record
holder of such Depositary Shares on the record date (which will be the same date
as the record date for the Preferred Stock) will be entitled to instruct the
Depositary Bank as to the exercise of the voting rights pertaining to the amount
of Preferred Stock represented by such holder's Depositary Shares. The
Depositary Bank will endeavor,
21
<PAGE>
insofar as practicable, to vote the amount of Preferred Stock represented by
such Depositary Shares in accordance with such instructions, and the Company
will agree to take all action which may be deemed necessary by the Depositary
Bank in order to enable the Depositary Bank to do so. The Depositary Bank may
abstain from voting shares of Preferred Stock to the extent it does not receive
specific instructions from the holders of Depositary Shares representing such
Preferred Stock.
Amendment and Termination of the Depositary Agreement. The form of
Depositary Receipt evidencing the Depositary Shares and any provision of the
Deposit Agreement may at any time be amended by agreement between the Company
and the Depositary Bank. However, any amendment that materially and adversely
alters the rights of the holders of Depositary Shares will not be effective
unless such amendment has been approved by the holders of at least a majority of
the Depositary Shares then outstanding. The Deposit Agreement may be terminated
by the Company or the Depositary Bank only if (i) all outstanding Depositary
Shares have been redeemed or (ii) there has been a final distribution in respect
of the Preferred Stock in connection with any liquidation, dissolution or
winding up of the Company and such distribution has been distributed to the
holders of Depositary Receipts.
Charges of Depositary Bank. The Company will pay all transfer and other
taxes and governmental charges arising solely from the existence of the
depositary arrangements. The Company will pay charges of the Depositary Bank in
connection with the initial deposit of the Preferred Stock and any redemption of
the Preferred Stock. Holders of Depositary Receipts will pay other transfer and
other taxes and governmental charges and such other charges, including a fee for
the withdrawal of shares of Preferred Stock upon surrender of Depositary
Receipts, as are expressly provided in the Deposit Agreement to be for their
accounts.
Miscellaneous. The Depositary Bank will forward to holders of
Depository Receipts all reports and communications from the Company that are
delivered to the Depositary Bank and that the Company is required to furnish to
the holders of Preferred Stock.
Neither the Depositary Bank nor the Company will be liable if it is
prevented or delayed by law or any circumstance beyond its control in performing
its obligations under the Deposit Agreement. The obligations of the Company and
the Depositary Bank under the Deposit Agreement will be limited to performance
in good faith of their duties thereunder and they will not be obligated to
prosecute or defend any legal proceeding in respect of any Depositary Shares or
Preferred Stock unless satisfactory indemnity is furnished. They may rely upon
written advice of counsel or accountants, or upon information provided by
persons presenting Preferred Stock for deposit, holders of Depositary Receipts
or other persons believed to be competent and on documents believed to be
genuine.
Resignation and Removal of Depositary Bank. The Depositary Bank may
resign at any time by delivering to the Company notice of its election to do so,
and the Company may at any time remove the Depositary Bank, any such resignation
or removal to take effect upon the appointment of a successor Depositary Bank
and its acceptance of such appointment. Such
22
<PAGE>
successor Depositary Bank must be appointed within 60 days after delivery of the
notice of resignation or removal and must be a bank or trust company having its
principal office in the United States and having a combined capital and surplus
of at least $50,000,000.
Miscellaneous
The Preferred Stock when issued and full consideration is received for
such Preferred Stock will be fully paid and nonassessable.
DESCRIPTION OF COMMON STOCK
General
The following summary does not purport to be complete and is subject in
all respects to applicable North Carolina law, the Company's Restated and
Amended Charter and Bylaws, and the Rights Agreement, dated September 9, 1988,
between the Company and Wachovia Bank of North Carolina, N.A., as Rights Agent.
The Company is authorized by its Restated and Amended Charter to issue
700,000,000 shares of Common Stock and had 172,597,431 shares of Common Stock
outstanding at July 31, 1996. Each share of Common Stock is entitled to one vote
on all matters submitted to a vote of shareholders. Holders of Common Stock are
entitled to receive dividends when and as declared by the Board of Directors of
the Company out of funds legally available therefor. Dividends may be paid on
the Common Stock only if all dividends on any outstanding Preferred Stock have
been paid or provided for.
The issued and outstanding shares of Common Stock are fully paid and
nonassessable. Holders of Common Stock have no preemptive or conversion rights
and are not subject to further calls or assessments by the Company.
In the event of the voluntary or involuntary dissolution, liquidation
or winding up of the Company, holders of Common Stock are entitled to receive,
pro rata, after satisfaction in full of the prior rights of creditors and
holders of Preferred Stock, if any, all the remaining assets of the Company
available for distribution.
Directors are elected by a vote of the holders of Common Stock. Holders
of Common Stock are not entitled to cumulative voting rights.
Wachovia Bank of North Carolina, N.A. of Winston-Salem, North Carolina,
acts as the transfer agent and registrar for the Common Stock.
23
<PAGE>
Preferred Share Purchase Rights
In 1988, pursuant to the Company's Shareholder Rights Plan, the Company
distributed as a dividend one Right for each outstanding share of Common Stock.
As a consequence of a 100% stock dividend effective June 26, 1992, and a
two-for-one stock split effective April 14, 1994, the number of Rights
outstanding was adjusted such that each share of Common Stock had associated
with it one-quarter Right. Each Right entitles the holder to buy one
one-thousandth of a share of Participating Cumulative Preferred Stock, Series A,
at an exercise price of $100, subject to adjustment. The Rights will become
exercisable only if a person or group acquires or announces a tender offer for
20% or more of the outstanding Common Stock. When exercisable, the Company may
issue a share of Common Stock in exchange for each Right other than those held
by such person or group. If a person or group acquires 30% or more of the
outstanding Common Stock, each Right will entitle the holder, other than the
acquiring person, upon payment of the exercise price, to acquire Preferred Stock
or, at the option of the Company, Common Stock, having a value equal to twice
the Right's exercise price. If the Company is acquired in a merger or other
business combination or if 50% of its earnings power is sold, each Right will
entitle the holder, other than the acquiring person, to purchase securities of
the surviving company having a market value equal to twice the exercise price of
the Right. The Rights will expire on September 9, 1998, and may be redeemed by
the Company at a price of $.01 per right at any time prior to the tenth day
after an announcement that a 20% position has been acquired.
Until such time as a person or group acquires or announces a tender
offer for 20% or more of the Common Stock, (i) the Rights will be evidenced by
the Common Stock certificates and will be transferred with and only with such
Common Stock certificates, and (ii) the surrender for transfer of any
certificate for Common Stock will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. Rights may not
be transferred, directly or indirectly (i) to any person or group that has
acquired, or obtained the right to acquire, beneficial ownership of 20% or more
of the Rights (an "Acquiring Person"); (ii) to any person in connection with a
transaction in which such person becomes an Acquiring Person; or (iii) to any
affiliate or associate of any such person. Any Right that is the subject of a
purported transfer to any such person will be null and void.
The Rights may have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that acquires more than 20% of
the outstanding shares of Common Stock of the Company if certain events
thereafter occur without the Rights having been redeemed. However, the Rights
should not interfere with any merger or other business combination approved by
the Board of Directors and the shareholders because the Rights are redeemable
under certain circumstances.
Change of Control Provisions
The rights of holders of Common Stock are governed by other provisions
which are intended to affect any attempted change of control of the Company.
24
<PAGE>
Board of Directors. The Restated and Amended Charter classifies the
Board of Directors into three separate classes, with the term of one-third of
the directors expiring at each annual meeting. A director may be removed only
upon the affirmative vote of 70% of outstanding voting shares.
Fair Price Provisions. Provisions of the Restated and Amended Charter
(the "Fair Price Provisions") limit the ability of an Interested Shareholder to
effect certain transactions involving the Company. Unless the Fair Price
Provisions are satisfied, an Interested Shareholder (defined as the beneficial
owner of 20% of outstanding voting shares) may not engage in a business
combination, which includes a merger, consolidation, share exchange, or similar
transaction, involving the Company unless approved by 70% of the Company's
outstanding voting shares. In general, the Fair Price Provisions require that an
Interested Shareholder pay shareholders the same amount of cash or the same
amount and type of consideration paid by the Interested Shareholder when it
initially acquired the Company's shares.
The Fair Price Provisions are designed to discourage attempts to take
over Lowe's in non-negotiated transactions utilizing two-tier pricing tactics,
which typically involve the accumulation of a substantial block of the target
corporation's stock followed by a merger or other reorganization of the acquired
company on terms determined by the purchaser. Due to the difficulties of
complying with the requirements of the Fair Price Provisions, the Fair Price
Provisions generally may discourage attempts to obtain control of the Company.
North Carolina Shareholder Protection Act. The North Carolina
Shareholder Protection Act requires the affirmative vote of 95% of a
corporation's voting shares to approve a business combination with any person
that beneficially owns 25% of the voting shares of the corporation unless the
"fair price" provisions of the Act are satisfied. The statute's intended effect
is similar to the Fair Price Provisions of the Company's Restated and Amended
Charter.
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Preferred Stock or
Common Stock. Warrants may be issued independently or together with any other
Offered Securities and may be attached to or separate from such securities. Each
series of Warrants will be issued under a separate warrant agreement (each a
"Warrant Agreement") to be entered into between the Company and a warrant agent
("Warrant Agent"). The Warrant Agent will act solely as an agent of the Company
in connection with the Warrants of such series and will not assume any
obligation or relationship of agency or trust for or with any holders or
beneficial owners of Warrants. The following sets forth certain general terms
and provisions of the Warrants offered hereby. Further terms of the Warrants and
the applicable Warrant Agreement will be set forth in the applicable Prospectus
Supplement. If Warrants are issued, copies of the forms of Warrant Agreement and
the certificate evidencing the Warrants will be incorporated by reference in the
Registration Statement of which this Prospectus is a part, and the following
summary is qualified in its entirety by reference to such documents.
25
<PAGE>
The applicable Prospectus Supplement will describe the following terms,
where applicable, of the Warrants in respect of which this Prospectus is being
delivered:
(a) the title of such Warrants;
(b) the aggregate number of such Warrants;
(c) the price or prices at which such Warrants will be issued;
(d) the designation, aggregate principal amount and terms of the
securities purchasable upon exercise of such Warrants;
(e) the designation and terms of the Offered Securities with which
such Warrants are issued and the number of such Warrants
issued with each such security;
(f) if applicable, the date on and after which such Warrants and
the related securities will be separately transferable;
(g) the price at which the securities purchasable upon exercise of
such Warrants may be purchased;
(h) the date on which the right to exercise such Warrants shall
commence and the date on which such right shall expire;
(i) the minimum or maximum amount of such Warrants which may be
exercised at any one time;
(j) information with respect to book-entry procedures, if any;
(k) a discussion of material Federal income tax considerations;
and
(l) any other terms of such Warrants, including terms, procedures
and limitations relating to the exchange and exercise of such
Warrants.
PLAN OF DISTRIBUTION
The Offered Securities may be sold for public offering to underwriters
or dealers, which may be a group of underwriters represented by one or more
managing underwriters, or through such firms or other firms acting alone or
through dealers. The Offered Securities may also be sold directly by the Company
or through agents to investors. The names of any agents, dealers or managing
underwriters, and of any underwriters, involved in the sale of the Offered
Securities in respect of which this Prospectus is being delivered, the
applicable agent's commission, dealer's purchase price or underwriter's discount
and the net proceeds to the Company from such sale will also be set forth in the
Prospectus Supplement.
Any underwriting compensation paid by the Company to underwriters or
agents in connection with the offering of Offered Securities and any discounts,
concessions or commissions allowed by underwriters to participating dealers will
be set forth in the Prospectus Supplement. Underwriters, dealers and agents
participating in the distribution of the Offered Securities may be deemed to be
"underwriters" within the meaning of the Securities Act, and any discounts and
commissions received by them and any profit realized by them on resale of the
Offered Securities may be deemed to be underwriting discounts and commissions
under the Securities Act.
26
<PAGE>
If an underwriter or underwriters are utilized in the sale of the
Offered Securities, the Company will execute an underwriting agreement with such
underwriter or underwriters at the time an agreement for such sale is reached.
The underwriting agreement will provide that the obligations of the underwriters
are subject to certain conditions precedent and that the underwriters with
respect to a sale of Offered Securities will be obligated to purchase all such
Offered Securities if any are purchased. In connection with the sale of Offered
Securities, underwriters may be deemed to have received compensation from the
Company in the form of underwriting discounts or commissions and may also
receive commissions from purchasers of Offered Securities for whom they may act
as agent. Underwriters may sell Offered Securities to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agent. Under such underwriting agreements, underwriters,
dealers and agents who participate in the distribution of the Offered
Securities, may be entitled to indemnification by the Company against certain
civil liabilities, including liabilities under the Securities Act or
contribution with respect to payments which the underwriters, dealers or agents
may be required to make in respect thereof. The underwriter or underwriters with
respect to an underwritten offering of Offered Securities will be set forth in
the Prospectus Supplement relating to such offering and, if an underwriting
syndicate is used, the managing underwriter or underwriters will be set forth on
the cover of such Prospectus Supplement.
If so indicated in an applicable Prospectus Supplement, the Company
will authorize dealers acting as the Company's agents to solicit offers by
certain institutions to purchase Offered Securities from the Company at the
public offering price set forth in such Prospectus Supplement pursuant to
Delayed Delivery Contracts ("Contracts") providing for payment and delivery on
the date or dates stated in such Prospectus Supplement. Each Contract will be
for an amount not less than, and the aggregate principal amount of Offered
Securities sold pursuant to Contracts shall not be less nor more than, the
respective amounts stated in such Prospectus Supplement. Institutions with whom
Contracts, when authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and other institutions, but will in all cases be subject
to the approval of the Company. Contracts will not be subject to any conditions
except (i) the purchase by an institution of the Offered Securities covered by
its Contracts 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 Offered Securities are being sold to underwriters, the Company shall
have sold to such underwriters the total principal amount of the Offered
Securities less the principal amount thereof covered by Contracts. Agents and
underwriters will have no responsibility in respect of the delivery or
performance of Contracts.
Certain of the underwriters and their affiliates may be customers of,
engage in transactions with, and perform services for, the Company and its
subsidiaries and the Trustees in the ordinary course of business.
27
<PAGE>
The Offered Securities may or may not be listed on a national
securities exchange or a foreign securities exchange. No assurances can be given
that there will be a market for the Offered Securities.
LEGAL MATTERS
The validity of the Securities offered hereby will be passed upon for
the Company by Hunton & Williams, Richmond, Virginia.
EXPERTS
The consolidated financial statements of the Company incorporated in
this Prospectus by reference from the Company's Annual Report on Form 10-K for
the year ended January 31, 1996 have been audited by Deloitte & Touche LLP,
independent auditors, incorporated herein by reference and have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
With respect to the unaudited interim financial information for the
periods ended April 30, 1996 and 1995 and July 31, 1996 and 1995, which is
incorporated herein by reference, Deloitte & Touche LLP have applied limited
procedures in accordance with professional standards for a review of such
information. However, as stated in their reports included in the Company's
Quarterly Reports on Form 10-Q for the quarters ended April 30 and July 31,
1996, and incorporated by reference herein, they did not audit and they do not
express an opinion on that interim financial information. Accordingly, the
degree of reliance on their reports on such information should be restricted in
light of the limited nature of the review procedures applied. Deloitte & Touche
LLP are not subject to the liability provisions of Section 11 of the Securities
Act of 1933 for their reports on the unaudited interim financial information
because their reports are not "reports" or a "part" of the registration
statement prepared or certified by an accountant within the meaning of Sections
7 and 11 of the Act.
28
<PAGE>
No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained in this Prospectus and,
if given or made, such information or representation must not be relied upon as
having been authorized by the Company or any underwriter, agent or dealer.
Neither the delivery of this Prospectus nor any sale made hereunder shall under
any circumstances create an implication that there has been no change in the
affairs of the Company since the date hereof. This Prospectus does not
constitute an offer or solicitation by anyone in any jurisdiction in which such
offer or solicitation is not authorized or in which the person making such offer
or solicitation is not qualified to do so or to anyone to whom it is unlawful to
make such offer or solicitation.
--------------------
TABLE OF CONTENTS
Page
Available Information..................................................... 2
Incorporation of Certain Documents by
Reference.............................................................. 2
The Company............................................................... 3
Use of Proceeds........................................................... 3
Ratio of Earnings to Fixed Charges....................................... 4
Description of Debt Securities............................................ 4
Description of Preferred Stock............................................ 17
Description of Common Stock............................................... 23
Description of Warrants................................................... 25
Plan of Distribution...................................................... 26
Legal Matters............................................................. 28
Experts................................................................... 28
$275,050,000
[LOGO]
Securities
--------------------
PROSPECTUS
--------------------
, 1996
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Estimated expenses in connection with the issuance and distribution of
the securities being registered, other than underwriting compensation, are as
follows:
Securities and Exchange Commission registration fee $83,348
Blue Sky fees and expenses 30,000
Legal fees 30,000
Accounting fees 15,000
Rating agency fees 75,000
Trustee fees 7,500
Printing, engraving and postage expenses 15,000
Miscellaneous expenses 19,152
--------
Total $275,000
========
Item 15. Indemnification of Directors and Officers
Article IV of the Company's Bylaws provides that the Company will
indemnify any person as an officer or director of the Company or as an officer,
director, trustee or partner of another corporation, trust, partnership or
employee benefit plan at the request of the Company, against any liability
incurred in connection with any proceeding arising out of such service. To the
extent that such person is successful on the merits or otherwise in defense of
any such proceeding, the Company will indemnify him against expenses actually
and reasonably incurred in such defense. No indemnification is available if, at
the time of the activities which are the subject of the proceeding, such person
knew or believed that such activities were clearly in conflict with the best
interests of the Company. Further, Section 55-8-51 of the North Carolina
Business Corporation Act provides that a corporation may not indemnify a
director in connection with a proceeding by or in the right of the corporation
in which such director was adjudged liable to the corporation or in connection
with any other proceeding charging improper personal benefit to him, whether or
not involving action in his official capacity, in which he is adjudged liable on
the basis that personal benefit was improperly received by him.
II-1
<PAGE>
The Company maintains an insurance policy for the benefit of directors
and officers insuring them against claims that are made against them by reason
of any wrongful act (as defined) committed in their capacity as directors or
officers.
Item 16. Exhibits
4.1 --Amended and Restated Indenture, dated as of December 1, 1995, between the
Company and The First National Bank of Chicago (incorporated herein by
reference to exhibit 4.1 of the Company's Current Report on Form 8-K
dated December 15, 1995)
4.2 --Form of Subordinated Indenture between the Company and The Bank of New
York
4.3 --Rights Agreement dated September 9, 1988 between the Company and Wachovia
Bank of North Carolina, N.A. as Rights Agent (incorporated herein by
reference to Exhibit 4.1 of the Company's Current Report on Form 8-K
dated September 9, 1988)
4.4 --Form of Deposit Agreement*
4.5 --Form of Deposit Receipt*
4.6 --Form of Warrant Agreement*
4.7 --Form of Warrant Certificate*
5 --Opinion of Hunton & Williams
12 --Statement re Computation of Ratios
15 --Letter of Deloitte & Touche LLP re Unaudited Interim Financial Information
23.1 --Consent of Deloitte & Touche LLP
23.2 --Consent of Hunton & Williams (included in Exhibit 5)
24 --Powers of Attorney of Directors and Officers of the Company (included on
signature pages)
25.1 --Statement of Eligibility and Qualification on Form T-1 of The First
National Bank of Chicago, as the Trustee, under the Trust Indenture Act
of 1939
25.2 --Statement of Eligibility and Qualification on Form T-1 of The Bank of New
York as the Trustee, under the Trust Indenture Act of 1939
- -------------
*To be filed subsequent to effectiveness of this Registration Statement and
incorporated by reference pursuant to a Report on Form 8-K.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post- effective amendment to this registration statement;
II-2
<PAGE>
(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; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement; provided, however,
that the undertakings set forth in subparagraphs (i) and (ii)
above do not apply if the information required to be included
in a post-effective amendment by those paragraphs is contained
in periodic reports filed with or furnished to the Commission
by the Registrant pursuant to Sections 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) 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 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to section 15(d) of
the Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(5) 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 described under Item 15
above, or otherwise, the registrant has been advised that in the opinion of the
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
II-3
<PAGE>
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.
(6) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in the form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part
of this registration statement as of the time it was declared effective.
(7) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(8) To file an application for the purpose of determining the
eligibility of a trustee to act under subsection (a) of Section 310 of the Trust
Indenture Act of 1939 in accordance with the rules and regulations prescribed by
the Commission under Section 305(b)(2) of the Trust Indenture Act of 1939.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of North Wilkesboro, State of North Carolina, on October
14, 1996.
LOWE'S COMPANIES, INC.
(Registrant)
By: /s/ Robert L. Tillman
----------------------
Robert L. Tillman
President and Chief
Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on October 14, 1996. Each of the directors and/or officers
of Lowe's Companies, Inc. whose signature appears below hereby appoints Robert
L. Tillman, William C. Warden, Jr. and Lathan M. Ewers, Jr., and each of them
severally, as his attorney-in-fact to sign in his name and behalf, in any and
all capacities stated below, and to file with the Commission any and all
amendments, including post-effective amendments, to this registration statement,
making such changes in the registration statement as appropriate, and generally
to do all such things in their behalf in their capacities as officers and
directors to enable Lowe's Companies, Inc. to comply with the provisions of the
Securities Act of 1933, and all requirements of the Securities and Exchange
Commission.
Signature Title
/s/ Robert L. Strickland Chairman of the Board of Directors
- ------------------------ and Director
Robert L. Strickland
/s/ Robert L. Tillman President, Chief Executive Officer
- --------------------- and Director (Principal Executive)
Robert L. Tillman
/s/ Thomas E. Whiddon Executive Vice President and Chief Financial
- --------------------- Officer (Principal Financial Officer)
Thomas E. Whiddon
/s/ Richard D. Elledge Senior Vice President and Chief Accounting
- ---------------------- Officer (Principal Accounting Officer)
Richard D. Elledge
/s/ William A. Andres Director
- ---------------------
William A. Andres
/s/ John M. Belk Director
- ----------------
John M. Belk
II-5
<PAGE>
Signature Title
/s/ James F. Halpin Director
- -------------------
James F. Halpin
/s/ Carol A. Farmer Director
- -------------------
Carol A. Farmer
/s/ Leonard G. Herring Director
- ----------------------
Leonard G. Herring
/s/ Petro Kulynych Director
- ------------------
Petro Kulynych
/s/ Russell B. Long Director
- -------------------
Russell B. Long
/s/ Claudine B. Malone Director
- ----------------------
Claudine B. Malone
Director
Robert G. Schwartz
II-6
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit
4.1 --Amended and Restated Indenture, dated as of December 1,
1995, between the Company and The First National Bank of
Chicago (incorporated herein by reference to exhibit 4.1 of
the Company's Current Report on Form 8-K dated December 15,
1995)
4.2 --Form of Subordinated Indenture between the Company and The Bank of New
York
4.3 --Rights Agreement dated September 9, 1988 between the Company and Wachovia
Bank of North Carolina, N.A. as Rights Agent (incorporated herein by
reference to Exhibit 4.1 of the Company's Current Report on Form 8-K
dated September 9, 1988)
4.4 --Form of Deposit Agreement*
4.5 --Form of Deposit Receipt*
4.6 --Form of Warrant Agreement*
4.7 --Form of Warrant Certificate*
5 --Opinion of Hunton & Williams
12 --Statement re Computation of Ratios
15 --Letter of Deloitte & Touche LLP re Unaudited Interim Financial Information
23.1 --Consent of Deloitte & Touche LLP
23.2 --Consent of Hunton & Williams (included in Exhibit 5)
24 --Powers of Attorney of Directors and Officers of the Company (included on
signature pages)
25.1 --Statement of Eligibility and Qualification on Form T-1 of The First
National Bank of Chicago, as the Trustee, under the Trust Indenture Act
of 1939
25.2 --Statement of Eligibility and Qualification on Form T-1 of The Bank of New
York as the Trustee, under the Trust Indenture Act of 1939
- -------------
*To be filed subsequent to effectiveness of this Registration Statement and
incorporated by reference pursuant to a Report on Form 8-K.
Exhibit 4.2
LOWE'S COMPANIES, INC.
AND
THE BANK OF NEW YORK, Trustee
Indenture
Dated as of __________ __, 199_
Subordinated Debt Securities
<PAGE>
Reconciliation and tie between
the Trust Indenture Act of 1939 and Indenture,
dated as of _________ __, 199_*
Trust Indenture
Act Section Indenture Section
ss. 310(a)(1)...............................................................609
(a)(2).............................................................609
(a)(3)..................................................Not Applicable
(a)(4)..................................................Not Applicable
(a)(5)........................................................608, 610
(b).......................................................... 608, 610
(c).....................................................Not Applicable
ss. 311(a)..................................................................613
(b)................................................................613
ss. 312(a)..........................................................701, 702(a)
(b).............................................................702(b)
(c)................................................................703
ss. 313(a)..................................................................703
(b)................................................................703
(c)................................................................703
(d)................................................................703
ss. 314(a)............................................................704, 1005
(b).....................................................Not Applicable
(c)(1).............................................................102
(c)(2).............................................................102
(c)(3)..................................................Not Applicable
(d).....................................................Not Applicable
(e)................................................................102
(f).....................................................Not Applicable
ss. 315(a)..................................................................601
(b)................................................................602
(c)................................................................601
(d)................................................................601
(e)................................................................514
ss. 316(a)..................................................................101
(a)(1)(A)..........................................................512
(a)(1)(B)..........................................................513
(a)(2)..................................................Not Applicable
(b)................................................................508
ss. 317(a)(1)...............................................................503
(a)(2).............................................................504
(b)...............................................................1003
ss. 318(a)..................................................................107
(c)................................................................107
- ---------------------
* This table shall not, for any purpose, be deemed to be a part of the
Indenture.
<PAGE>
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION....... 1
Section 101. Definitions.................................................. 1
Section 102. Compliance Certificates and Opinions......................... 8
Section 103. Form of Documents Delivered to Trustee....................... 8
Section 104. Acts of Holders.............................................. 9
Section 105. Notices, Etc., to Trustee and Company........................ 11
Section 106. Notice to Holders; Waiver.................................... 11
Section 107. Conflict with Trust Indenture Act............................ 12
Section 108. Effect of Headings and Table of Contents..................... 12
Section 109. Successors and Assigns....................................... 12
Section 110. Separability Clause.......................................... 12
Section 111. Benefits of Indenture........................................ 12
Section 112. Governing Law................................................ 12
Section 113. Legal Holidays............................................... 13
ARTICLE TWO
SECURITY FORMS............................ 13
Section 201. Forms of Securities.......................................... 13
Section 202. Form of Trustee's Certificate of Authentication.............. 14
Section 203. Securities in Global Form.................................... 14
ARTICLE THREE
THE SECURITIES............................ 14
Section 301. Amount Unlimited; Issuable in Series......................... 14
Section 302. Denominations................................................ 16
Section 303. Execution, Authentication, Delivery and Dating............... 16
Section 304. Temporary Securities......................................... 18
Section 305. Registration, Registration of Transfer and Exchange.......... 19
Section 306. Mutilated, Destroyed, Lost and Stolen Securities............. 21
Section 307. Payment of Interest; Interest Rights Preserved............... 22
Section 308. Persons Deemed Owners........................................ 23
Section 309. Cancellation................................................. 23
Section 310. Computation of Interest...................................... 24
ARTICLE FOUR
SATISFACTION AND DISCHARGE...................... 24
Section 401. Satisfaction and Discharge of Indenture...................... 24
Section 402. Application of Trust Money................................... 25
ARTICLE FIVE
REMEDIES............................... 26
Section 501. Events of Default............................................ 26
Section 502. Acceleration of Maturity; Rescission and Annulment........... 28
<PAGE>
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee...................................................... 30
Section 504. Trustee May File Proofs of Claim............................. 31
Section 505. Trustee May Enforce Claims Without Possession of
Securities................................................... 31
Section 506. Application of Money Collected............................... 31
Section 507. Limitation on Suits.......................................... 32
Section 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest................................................. 33
Section 509. Restoration of Rights and Remedies........................... 33
Section 510. Rights and Remedies Cumulative............................... 33
Section 511. Delay or Omission Not Waiver................................. 33
Section 512. Control by Holders........................................... 34
Section 513. Waiver of Past Defaults...................................... 34
Section 514. Undertaking for Costs........................................ 35
Section 515. Waiver of Stay or Extension Laws............................. 35
ARTICLE SIX
THE TRUSTEE...................... 36
Section 601. Certain Duties and Responsibilities.......................... 36
Section 602. Notice of Defaults........................................... 37
Section 603. Certain Rights of Trustee.................................... 37
Section 604. Not Responsible for Recitals or Issuance of Securities....... 39
Section 605. May Hold Securities.......................................... 39
Section 606. Money Held in Trust.......................................... 39
Section 607. Compensation and Reimbursement............................... 39
Section 608. Disqualification; Conflicting Interests...................... 40
Section 609. Corporate Trustee Required; Eligibility...................... 40
Section 610. Resignation and Removal; Appointment of Successor............ 40
Section 611. Acceptance of Appointment by Successor....................... 42
Section 612. Merger, Conversion, Consolidation or Succession to Business.. 43
Section 613. Preferential Collection of Claims Against Company............ 43
Section 614. Appointment of Authenticating Agent.......................... 44
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY.......... 45
Section 701. Company to Furnish Trustee Names and Addresses of
Holders...................................................... 45
Section 702. Preservation of Information; Communications to Holders....... 46
Section 703. Reports by Trustee........................................... 46
Section 704. Reports by Company........................................... 47
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE......... 49
Section 801. Company May Consolidate, Etc., Only on Certain Terms......... 49
Section 802. Successor Substituted........................................ 50
ii
<PAGE>
ARTICLE NINE
SUPPLEMENTAL INDENTURES....................... 51
Section 901. Supplemental Indentures Without Consent of Holders........... 51
Section 902. Supplemental Indentures With Consent of Holders.............. 52
Section 903. Execution of Supplemental Indentures......................... 53
Section 904. Effect of Supplemental Indentures............................ 54
Section 905. Conformity with Trust Indenture Act.......................... 54
Section 906. Reference in Securities to Supplemental Indentures........... 54
Section 907. Notice of Supplemental Indentures............................ 54
Section 908. Subordination Unimpaired..................................... 54
ARTICLE TEN
COVENANTS.............................. 55
Section 1001. Payment of Principal, Premium and Interest................... 55
Section 1002. Maintenance of Office or Agency.............................. 55
Section 1003. Money for Securities Payments to Be Held in Trust............ 55
Section 1004. Corporate Existence.......................................... 57
Section 1005. ........................................................ 57
Section 1006. Usury Laws................................................... 57
Section 1007. Waiver of Certain Covenants.................................. 57
ARTICLE ELEVEN
REDEMPTION OF SECURITIES....................... 57
Section 1101. Applicability of Article..................................... 58
Section 1102. Election to Redeem; Notice to Trustee........................ 58
Section 1103. Selection by Trustee of Securities to Be Redeemed............ 58
Section 1104. Notice of Redemption......................................... 58
Section 1105. Deposit of Redemption Price.................................. 59
Section 1106. Securities Payable on Redemption Date........................ 59
Section 1107. Securities Redeemed in Part.................................. 60
ARTICLE TWELVE
SINKING FUNDS........................... 60
Section 1201. Applicability of Article..................................... 60
Section 1202. Satisfaction of Sinking Fund Payments with Securities........ 60
Section 1203. Redemption of Securities for Sinking Fund.................... 61
ARTICLE THIRTEEN
REPAYMENT OF SECURITIES AT OPTION OF HOLDERS............. 61
Section 1301. Applicability of Article..................................... 61
Section 1302. Notice of Repayment Date..................................... 61
Section 1303. Deposit of Repayment Price................................... 62
iii
<PAGE>
Section 1304. Securities Payable on Repayment Date......................... 62
Section 1305. Securities Repaid in Part.................................... 63
ARTICLE FOURTEEN
SUBORDINATION OF SECURITIES...... 63
Section 1401. Securities Subordinate to Senior Indebtedness................ 63
Section 1402. Trustee and Holders of Securities May Rely on Certificate of
Liquidating Agent; Trustee May Require Further Evidence as
to Ownership of Senior Indebtedness; Trustee Not Fiduciary to
Holders of Senior Indebtedness............................... 66
Section 1403. Payment Permitted If No Default.............................. 66
Section 1404. Trustee Not Charged with Knowledge of Prohibition............ 67
Section 1405. Trustee to Effectuate Subordination.......................... 67
Section 1406. Rights of Trustee as Holder of Senior Indebtedness........... 68
Section 1407. Article Applicable to Paying Agents.......................... 68
Section 1408. Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness.................... 68
ARTICLE FIFTEEN
CONVERSION OF SECURITIES............... 68
Section 1501. General...................................................... 68
Section 1502. Right to Convert............................................. 69
Section 1503. Manner of Exercise of Conversion Privilege; Delivery of
Common Stock; No Adjustment for Interest or Dividends........ 69
Section 1504. Cash Payments in Lieu of Fractional Shares................... 70
Section 1505. Conversion Price Adjustments; Effect of Reclassification,
Mergers, Consolidations and Sales of Assets.................. 71
Section 1506. Taxes on Shares Issued....................................... 75
Section 1507. Shares to be Fully Paid; Compliance with Governmental
Requirements; Listing of Common Stock........................ 75
Section 1508. Responsibility of Trustee.................................... 76
Section 1509. Covenant to Reserve Shares................................... 76
Section 1510. Other Conversions. .......................................... 76
ARTICLE SIXTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS.............. 76
Section 1601. Immunity of Incorporators, Stockholders, Officers and
Directors........................................... 76
iv
<PAGE>
INDENTURE, dated as of __________ __, 199_, between LOWE'S COMPANIES,
INC., a corporation duly organized and existing under the laws of the State of
North Carolina (herein called the "Company"), having its principal office at
Highway 268 East, North Wilkesboro, North Carolina 28656, and THE BANK OF NEW
YORK, a corporation duly organized and existing under the laws of the United
States of America, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
subordinated debentures, notes or other evidences of indebtedness (herein called
the "Securities"), to be issued in one or more series as in this Indenture
provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of any
series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term
1
<PAGE>
"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;
and
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Authorized Newspaper" means a newspaper of general circulation in the
relevant area, printed in the English language and customarily published on each
Business Day therein.
"Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board or any director or directors
and/or officer or officers of the Company to whom that board or committee shall
have duly delegated its authority.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or, if
at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
2
<PAGE>
"Common Stock" means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President or
a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary, and delivered to the Trustee.
"Conversion Price" means with respect to any series of Securities which
are convertible into Common Stock, the price per share of Common Stock at which
the Securities of such series are so convertible as set forth in the Board
Resolution with respect to such series (or in any supplemental indenture entered
into pursuant to Section 901(8) with respect to such series), as the same may be
adjusted from time to time in accordance with Section 1505 (or such supplemental
indenture pursuant to Section 1501).
"Corporate Trust Office" means the office of the Trustee in
____________________, ____________________, at which at any particular time its
corporate trust business shall be principally administered, which office at the
date of execution of this Indenture is located at
- ----------------------------------------.
"corporation" includes corporations, associations, companies and
business trusts.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of a Global Security, a clearing agency
registered under the Securities Exchange Act of 1934, as amended, or any
successor thereto, which shall in either case be designated by the Company
pursuant to Section 301 or 305 until a successor Depositary shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Depositary" shall mean or include each Person who is then a Depositary
hereunder, and if at any time there is more than one such Person, "Depositary"
as used with respect to the Securities of any such series shall mean the
Depositary with respect to the Securities of that series.
"Event of Default" has the meaning specified in Section 501.
3
<PAGE>
"Global Security or Securities" means one or more fully registered
Securities in global form evidencing all or a part of a series of Securities
issued to the Depositary for such series or its nominee or registered in the
name of the Depositary or its nominee.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 301.
"interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or by repayment or otherwise.
"Officers' Certificate" means a certificate signed by at least two
officers of the Company, one signature being that of the Chairman of the Board,
the President or a Vice President, and the other signature being that of the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of
the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by
4
<PAGE>
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has
been made; and
(iii) Securities which have been paid pursuant to Section 306
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company.
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (a) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding 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 502, and (b) Securities owned by the
Company or any other obligor upon the Securities or any Affiliate of the Company
or of such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Securities which the Trustee knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if any)
and interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
5
<PAGE>
"Preferred Stock" means any stock of any class of the Company which has
a preference over Common Stock in respect of dividends or of amounts payable in
the event of any voluntary or involuntary liquidation, dissolution or winding up
of the Company and which is not mandatorily redeemable or repayable, or
redeemable or repayable at the option of the Holder, otherwise than in shares of
Common Stock or Preferred Stock of another class or series or with the proceeds
of the sale of Common Stock or Preferred Stock.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.
"Repayment Date" means, when used with respect to any Security to be
repaid at the option of the Holder, the date fixed for such repayment by or
pursuant to this Indenture.
"Repayment Price" means, when used with respect to any Security to be
repaid at the option of the Holder, the price at which it is to be repaid by or
pursuant to this Indenture.
"Responsible Officer", when used with respect to the Trustee, means any
officer of the Trustee customarily performing corporate trust functions.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" means the principal of, premium, if any, and
interest on, and any other payment due pursuant to the terms of, an instrument
(including, without limitation of, fees, expenses, collection expenses
(including attorneys' fees), interest yield amounts, post-petition interest
(whether or not earned) and taxes) creating, securing or evidencing any of the
following, whether outstanding on the date of the Indenture or thereafter
incurred or created: (a) all indebtedness of the Company for money borrowed or
constituting reimbursement obligations with respect to letters of credit and
interest or currency swap agreements (including indebtedness secured by a
mortgage, conditional sales contract or other lien which is (i) given to secure
all or a part of the purchase price of property subject thereto, whether given
to the vendor of such property or to another, or (ii) existing on property at
the time of acquisition thereof); (b) all indebtedness of the Company evidenced
by notes, debentures, bonds or other securities sold by
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the Company for money; (c) lease obligations (including but not limited to
capitalized lease obligations); (d) all indebtedness of others of the kinds
described in either of the preceding clauses (a) or (b) and all lease
obligations and obligations of others of the kind described in the preceding
clause (c) assumed by or guaranteed in any manner by the Company or in effect
guaranteed by the Company through an agreement to purchase, contingent or
otherwise; and (e) all (whether initial or seriatim) renewals, deferrals,
increases, extensions or refundings of and modifications to indebtedness of the
kinds described in any of the preceding clauses (a), (b) or (d) and all renewals
or extensions of leases of the kinds described in either of the preceding
clauses (c) or (d); unless, in the case of any particular indebtedness, lease,
renewal, extension or refunding, the instrument or lease creating or evidencing
the same or the assumption or guarantee of the same expressly provides that such
indebtedness, lease, renewal, extension, deferral, increase, modification or
refunding is not superior in right of payment to the Securities or is expressly
subordinated by its terms in right of payment to all other indebtedness of the
Company (including the Securities).
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal or such installment of
principal, premium, if any, or interest on such Security is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has 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 any contingency.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"United States" means the United States of America.
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"Vice President", when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president".
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) A statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, he 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, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
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Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion are based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor
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or in lieu thereof in respect of anything done, omitted or suffered to be done
by the Trustee or the Company in reliance thereon, whether or not notation of
such action is made upon such Security.
(e) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders of Securities of any series entitled to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action, or to
vote on any action, authorized or permitted to be given or taken by Holders of
Securities of such series. If not set by the Company prior to the first
solicitation of a Holder of Securities of such series made by any Person in
respect of any such action, or , in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 701) prior to such first solicitation or vote, as the case
may be. With regard to any record date for action to be taken by the Holders of
one or more series of Securities, only the Holders of Securities of such series
on such date (or their duly designated proxies) shall be entitled to give or
take, or vote on, the relevant action.
(f) Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount. Any notice given or
action taken by a Holder or its agents with regard to different parts of such
principal amount pursuant to this paragraph shall have the same effect as if
given or taken by separate Holders of each such different part.
(g) Without limiting the generality of the foregoing, unless otherwise
specified pursuant to Section 301 or pursuant to one or more indentures
supplemental hereto, a Holder, including a Depositary that is the Holder of a
Global Security, may make, give or take, by a proxy or proxies duly appointed in
writing, any request, demand, authorization, direction, notice, consent, waiver
or other action provided in this Indenture to be made, given or taken by
Holders, and a Depositary that is the Holder of a Global Security may provide
its proxy or proxies to the beneficial owners of interests in any such Global
Security through such Depositary's standing instructions and customary
practices.
(h) The Trustee shall fix a record date for the purpose of determining
the Persons who are beneficial owners of interests in any Global Security held
by a Depositary entitled under the procedures of such Depositary to make, give
or take, by a proxy or proxies duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided in
this Indenture to be made, given or taken by Holders. If such a record date is
fixed, the Holders on such record date or their duly appointed proxy or proxies,
and only such Persons, shall be entitled to make, give or take such request,
demand, authorization, direction, notice, consent, waiver or other action,
whether or not such Holders remain Holders after such record date. No such
request, demand, authorization, direction, notice, consent, waiver or other
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action shall be valid or effective if made, given or taken more than 90 days
after such record date.
Section 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trustee Administration, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this instrument,
Attention: Secretary, or at any other address previously furnished in
writing to the Trustee by the Company.
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Any notice to a Holder which is mailed in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not such Holder receives such notice. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause, it shall be impracticable to give
notice of any event to Holders by mail when such notice is required to be given
pursuant to any provision of this Indenture, then such notification as shall be
made with the approval of the Trustee shall constitute a sufficient notification
for every purpose hereunder.
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Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with the duties
imposed by any of Sections 310 through 317, inclusive, of the Trust Indenture
Act through the operation of Section 318(c) thereof, such imposed duties shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or shall be
deemed to be so excluded, as the case may be.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, any Paying Agent, the Holders and the holders of Senior Indebtedness,
any benefit or any legal or equitable right, remedy or claim under this
Indenture; provided that this Section 111 shall not limit the rights of any
Holder of a Global Security to give any notice or take any action, or appoint
any agents, with regard to any part or different parts of the principal amount
of such Global Security pursuant to Section 104.
Section 112. Governing Law.
This Indenture and the Securities and the rights, duties, standard of
care and immunities of the Trustee in connection with the administration of its
trust hereunder shall be governed by the laws of the State of New York.
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Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, Repayment
Date, sinking fund payment date or Stated Maturity of any Security shall not be
a Business Day at any Place of Payment, then (notwithstanding any other
provision of this Indenture or of the Securities) payment of interest or
principal (and premium, if any) need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made on
the Interest Payment Date, Redemption Date, Repayment Date, sinking fund payment
date or at the Stated Maturity, provided that no interest shall accrue for the
period from and after such Interest Payment Date, Redemption Date, Repayment
Date, sinking fund payment date or Stated Maturity, as the case may be.
ARTICLE TWO
SECURITY FORMS
Section 201. Forms of Securities.
The 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 or in
one or more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with any law or with any rules made pursuant thereto or the
rules of any securities exchange or as may, consistently herewith, be determined
by the officers executing such Securities, as evidenced by their execution of
such Securities. If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.
The Trustee's certificates of authentication shall be in substantially
the form set forth in this Article.
The definitive Securities shall be printed, lithographed or engraved or
may be produced in any other manner permitted by the rules of any securities
exchange upon which the Securities may be listed and (with respect to Global
Securities of any Series) the rules of the Depositary, all as determined by the
officers executing such Securities, as evidenced by their execution of such
Securities.
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Section 202. Form of Trustee's Certificate of Authentication.
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By..............................
Authorized Officer
Section 203. Securities in Global Form.
If any Security of a series is issuable in global form, such Security
may provide that it shall represent the aggregate amount of Outstanding
Securities from time to time endorsed thereon and also may provide that the
aggregate amount of Outstanding Securities represented thereby may from time to
time be reduced to reflect exchanges. Any endorsement of a Security in global
form to reflect the amount, or any increase or decrease in the amount, of
Outstanding Securities represented thereby shall be made by the Trustee and in
such manner as shall be specified in such Security. Any instructions by the
Company with respect to a Security in global form, after its initial issuance,
shall be in writing but need not comply with Section 102.
ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. All 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 or distinction on account of the actual time of the
authentication and delivery or Maturity of the Securities of such series. There
shall be established in or pursuant to a Board Resolution, and, to the extent
not set forth therein, set forth in an Officers' Certificate, or established in
one or more indentures supplemental hereto, prior to the issuance of Securities
of any series:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other series of
Securities);
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(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of that series pursuant to Section 304, 305,
306, 906, 1107, 1305 or 1503);
(3) the date or dates on which the principal and premium, if
any, of the Securities of the series is payable;
(4) the rate or rates, or the method of determination
thereof, at which the Securities of the series shall bear interest, if
any, the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest shall be payable and the
Regular Record Date for the interest payable on any Interest Payment
Date;
(5) if other than the Corporate Trust Office, the place or
places where the principal of (and premium, if any) and interest on
Securities of the series shall be payable;
(6) the period or periods within which, the price or prices
at which and the terms and conditions upon which Securities of the
series may be redeemed, in whole or in part, at the option of the
Company;
(7) the obligation, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the
period or periods within which, the price or prices at which and the
terms and conditions upon which Securities of the series shall be
redeemed or purchased, in whole or in part, pursuant to such
obligation;
(8) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(9) if other than the principal amount thereof, the portion
of the principal amount of Securities of the series which shall be
payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 502;
(10) if the Securities of the series shall be issued in
whole or in part in the form of a Global Security or Securities, the
Depositary for such Global Security or Securities;
(11) any addition to or change in the Events of Default
which applies to any Securities of the series;
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(12) any addition to or change in the covenants set forth in
Article Ten which applies to Securities of the series;
(13) if the Securities of the series are convertible into
Common Stock, the Conversion Price therefor, the period during which
such Securities are convertible and any terms and conditions for the
conversion of such Securities which differ from Article Fifteen; and
(14) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
The Securities shall be subordinate and junior in right of payment to
Senior Indebtedness of the Company as provided in Article Fourteen.
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to such Board Resolution and set forth in such Officers' Certificate, to the
extent applicable, or in any such indenture supplemental hereto. All Securities
of any one series need not be issued at the same time and, unless otherwise
provided, a series may be reopened, without the consent of the Holders, for
issuance of additional Securities of such series.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Board Resolution or
the Officers' Certificate setting forth the terms of the series.
Section 302. Denominations.
The Securities of each series shall be issuable in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 301. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its President or one of its Vice Presidents, under its
corporate seal reproduced thereon and attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Securities
may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such
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individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Securities or did not hold such offices at
the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, and the Trustee shall authenticate
and deliver such Securities upon Company Order. If all the Securities of any one
series are not to be originally issued at one time and if a Board Resolution
relating to such Securities shall so permit, such Company Order may set forth
procedures (acceptable to the Trustee) for the issuance and authentication of
such Securities.
If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating:
(a) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such
form has been established in conformity with the provisions of this
Indenture;
(b) if the terms of such Securities have been established by
or pursuant to Board Resolution as permitted by Section 301, that such
terms have been established in conformity with the provisions of this
Indenture; and
(c) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Board Resolution or Officers'
Certificate otherwise required pursuant to Section 301 or the Company Order and
Opinion of Counsel otherwise required pursuant to such preceding paragraph at or
prior to the time of authentication of each Security of such series if such
documents are delivered at or prior to the authentication upon original issuance
of the first
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Security of such series to be issued and such documents reasonably contemplate
the issuance of all Securities of such series.
Unless otherwise provided in the form of Security for any series, each
Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature of an authorized officer, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder
and is entitled to the benefits of this Indenture.
If the Company shall establish pursuant to Section 301 that the
Securities of a series are to be issued in the form of one or more Global
Securities, then the Company shall execute and the Trustee shall, in accordance
with this Section and the Company Order with respect to such series,
authenticate and deliver one or more Global Securities that (i) shall represent
and shall be denominated in an amount equal to the aggregate principal amount of
all of the Securities of such series having the same terms issued and not yet
canceled, (ii) shall be registered in the name of the Depositary for such Global
Security or Securities or the nominee of such Depositary, (iii) shall be
delivered by the Trustee to such Depositary or pursuant to such Depositary's
instructions and (iv) shall bear a legend substantially to the following effect:
"Unless and until it is exchanged in whole or in part for Securities in
definitive registered form, this Security may not be transferred except as a
whole by the Depositary to the nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary."
Section 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to
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the Holder. Upon surrender for cancellation of any one or more temporary
Securities of any series the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of the same series of authorized denominations. Until so
exchanged the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
Section 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at one of its offices or agencies
maintained pursuant to Section 1002 a register (the register maintained in such
office being herein sometimes referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Securities and of transfers of Securities. The
Person responsible for the maintenance of the Security Register is referred to
herein as the "Security Registrar." The Trustee is hereby initially appointed
Security Registrar for the purpose of registering Securities and transfers of
Securities as herein provided.
Upon surrender for registration of transfer of any Security of any
series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount.
At the option of the Holder, Securities of any series (except Global
Securities) may be exchanged for other Securities of the same series, of any
authorized denominations and of a like aggregate principal amount, upon
surrender of the Securities to be exchanged at such office or agency. Whenever
any Securities are so surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and deliver, the Securities which the Holder
making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Security Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or
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exchange of Securities, other than exchanges pursuant to Section 304, 906, 1107,
1305 or 1503 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange Securities of any series during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1103 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
Notwithstanding any other provision of this Section 305, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Global Security representing all or a portion of the
Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such series or
a nominee of such successor Depositary.
If at any time the Depositary for the Securities of a series notifies
the Company that it is unwilling or unable to continue as Depositary for the
Securities of such series or if at any time the Depositary for the Securities of
a series shall no longer be registered or in good standing under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation, the
Company shall appoint a successor Depositary with respect to the Securities of
such series. If a successor Depositary for the Securities of such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, the Company shall execute, and the Trustee,
upon receipt of a Company Order for the authentication and delivery of
definitive Securities of such series, shall authenticate and deliver Securities
of such series in definitive form in an aggregate principal amount equal to the
principal amount of the Global Security or Securities representing such series
in exchange for such Global Security or Securities.
The Company may at any time and in its sole discretion determine that
the Securities of any series issued in the form of one or more Global Securities
shall no longer be represented by a Global Security or Securities. In such event
the Company shall execute, and the Trustee, upon receipt of a Company Order for
the authentication and delivery of definitive Securities of such series, shall
authenticate and deliver, Securities of such series in definitive registered
form without coupons, in any authorized denominations, in an aggregate principal
amount equal to the principal amount of the Global Security or Securities
representing such series, in exchange for such Global Security or Securities.
If specified by the Company pursuant to Section 301 with respect to a
series of Securities, the Depositary for such series of Securities may surrender
a Global Security for such series of Securities in exchange in whole or in part
for Securities of such series in definitive registered form on such terms as are
acceptable to the Company and such Depositary.
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Thereupon, the Company shall execute, and the Trustee shall authenticate and
deliver, without service charge,
(i) to the Person specified by such Depositary a new
Security or Securities of the same series, of any authorized
denomination as requested by such Person, in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest
in the Global Security; and
(ii) to such Depositary a new Global Security in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security and the aggregate principal
amount of Securities authenticated and delivered pursuant to Clause
(i) above.
Upon the exchange of a Global Security for Securities in definitive
registered form, in authorized denominations, such Global Security shall be
canceled by the Trustee. Securities in definitive registered form issued in
exchange for a Global Security pursuant to this Section 305 shall be registered
in such names and in such authorized denominations as the Depositary for such
Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall not be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions. The Trustee shall,
at Company expense, deliver such Securities to or as directed by the Persons in
whose names such Securities are so registered.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, together with
such other security or indemnity as may be reasonably required by the Trustee to
save it harmless, the Company shall execute and the Trustee shall authenticate
and deliver in exchange therefor a new Security of the same series and of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security, subject to satisfaction of
the foregoing conditions.
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Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest. The Company and the Trustee understand that interest on any
Global Security will be disbursed or credited by the Depositary to the Persons
having ownership thereof pursuant to a book entry or other system maintained by
the Depositary.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or Clause (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security of such series and the
date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to
be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Clause provided. Thereupon
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the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder of Securities of such series at his address as
it appears in the Security Register, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 308. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of (and premium,
if any) and (subject to Section 307) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar 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 309. Cancellation.
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All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to the
Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly canceled by the Trustee, except that
if a Global Security is so surrendered, the Company shall execute and the
Trustee shall authenticate and deliver to the Depositary for such Global
Security, without service charge, a new Global Security or Securities in a
denomination equal to and in exchange for the portion of the Global Security so
surrendered not to be paid, redeemed, repaid or registered for transfer or
exchange or for credit. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Securities held by the
Trustee shall be disposed of in accordance with its customary procedures and a
certificate of disposition shall be delivered to the Company, unless, by a
Company Order, the Company shall direct the canceled Securities be returned to
it.
Section 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture.
Upon Company Request, this Indenture shall cease to be of further
effect with respect to the Securities of a particular series (except as to any
surviving rights to convert Securities into Common Stock, or rights of
registration of transfer or exchange of Securities herein expressly provided
for), and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture as to
such Securities, when:
(1) either:
(A) all Securities of such series theretofore authenticated
and delivered (other than (i) Securities which have been destroyed,
lost or stolen and which have been replaced or paid as provided in
Section 306 and (ii) Securities for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the Company
and thereafter repaid to the Company or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee for
cancellation; or
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(B) all 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,
and the Company, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as trust funds in trust for the purpose sums sufficient to pay
and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for principal
(and premium, if any) and interest to the date of such deposit (in the
case of Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be; and
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company with respect to such Securities; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture with
respect to the Securities of such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture with respect to
the Securities of a particular series, the obligations of the Company to the
Trustee under Section 607, the obligations, if any, of the Trustee to any
Authenticating Agent under Section 614 and, if money shall have been deposited
with the Trustee pursuant to subclause (B) of clause (1) of this Section, the
obligations of the Trustee under Section 402 and the last paragraph of Section
1003, in each case with respect to such Securities, shall survive.
Notwithstanding the cessation, termination and discharge of all obligations,
covenants and agreements of the Company under this Indenture with respect to any
series of Securities, the obligations of the Company to the Trustee under
Section 607, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive with respect to such series of
Securities.
Section 402. Application of Trust Money.
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Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent), as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee. All money deposited with the Trustee pursuant to Section 401 (and held
by it or any Paying Agent) for the payment of Securities subsequently converted
into Common Stock shall be returned to the Company upon Company Request.
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or Article Fourteen or pursuant to any judgment, decree or
order of any court or any order, rule or regulation of any administrative or
governmental body):
(1) default in the payment, whether or not prohibited by the
provisions of Article Fourteen, of any installment of interest upon any
of the Securities of that Series as and when the same shall become due
and payable, and continuance of such default for a period of 30 days;
or
(2) default in the payment, whether or not prohibited by the
provisions of Article Fourteen, of the principal of or premium, if any,
on any of the Securities of that series as and when the same shall
become due and payable either at maturity, upon redemption by the
Company pursuant to Article Eleven, by declaration or otherwise; or
(3) default in the payment of any sinking fund payment,
as and when the same shall become due and payable by the terms of the
Securities of that series; or
(4) failure on the part of the Company to perform in any
material respect any covenant or breach of any warranty of the Company
contained in the Securities or in this Indenture (other than a covenant
or warranty a default in whose performance or whose breach is elsewhere
in this Section specifically dealt with or which has been expressly
included in this Indenture solely for the benefit of other series of
Securities) for a period of 60 days after the date on which
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written notice specifying such failure, requiring the same to be
remedied and stating that it is a "Notice of Default" hereunder, shall
have been given to the Company by the Trustee by registered mail, which
the Trustee shall do upon receipt of requests to do so by the Holders
of at least 25% in principal amount of Outstanding Securities, or to
the Company and the Trustee by the Holders of at least 25% in principal
amount of Outstanding Securities; or
(5) a default under any mortgage, indenture, or instrument
under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Company or any
consolidated Subsidiary, whether such indebtedness now exists or shall
hereafter be created, which default shall have resulted in such
indebtedness, in an aggregate principal amount exceeding $10 million,
becoming or being declared due and payable prior to the date on which
it would otherwise have become due and payable, without such
indebtedness having been discharged, or such acceleration having been
rescinded or annulled, or there having been deposited in trust a sum of
money sufficient to discharge in full such indebtedness, within a
period of 30 days after there shall have been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in principal amount of the
Securities, a written notice specifying such default and requiring the
Company to cause such indebtedness to be discharged, to cause there to
be deposited in trust a sum sufficient to discharge in full such
indebtedness or to cause such acceleration to be rescinded or annulled
and stating that such notice is a "Notice of Default" hereunder; or
(6) a court having jurisdiction in the premises shall have
entered a decree or order for relief in respect of the Company in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Company or for all or any substantial part of its
property, or ordering the winding-up or liquidation of its affairs, and
such decree or order shall have remained unstayed or in effect for a
period of 90 consecutive days; or
(7) the Company shall have commenced a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or shall have consented to the entry of an order
for relief in an involuntary case under any such law, or shall have
consented to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or similar
official) of the Company or for all or any substantial part of its
property, or shall have made an assignment for the benefit of
creditors, or shall have failed generally to pay its debts as they
become due or shall have taken any corporate action in furtherance of
any of the foregoing; or
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(8) any other Event of Default provided with respect to
Securities of that series.
Upon receipt by the Trustee of any proposed Notice of Default from any
Holder with respect to Securities of a series all or part of which is
represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Securities of such series entitled to join in
such proposed Notice of Default, which record date shall be at the close of
business on the day the Trustee receives such proposed Notice of Default. The
Holders on such record date, or their duly designated proxies, and only such
Persons, shall be entitled to join in such proposed Notice of Default, whether
or not such Holders remain Holders after such record date; provided, that unless
Holders of at least 25% in principal amount of the Outstanding Securities of
such series, or their proxies, shall have joined in such proposed Notice of
Default prior to the day which is 90 days after such record date, such proposed
Notice of Default shall automatically and without further action by any Holder
be canceled and of no further effect. Nothing in this paragraph shall prevent a
Holder, or a proxy of a Holder, from giving (i) after expiration of such 90-day
period, a new proposed Notice of Default identical to a proposed Notice of
Default which has been canceled pursuant to the proviso to the preceding
sentence, or (ii) during any such 90-day period, an additional proposed Notice
of Default with respect to any new or different fact or circumstance permitting
the giving of a proposed Notice of Default with respect to Securities of such
series, in either of which events a new record date shall be established
pursuant to the provisions of this Section 501. Any such proposed Notice of
Default shall be considered a Notice of Default hereunder at such time, if any,
that Holders of at least 25% in principal amount of the Outstanding Securities
shall have joined in such proposed Notice of Default by giving timely notice to
the Trustee hereunder.
Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case, the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if any of the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified in the terms
thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable. Upon payment of said amounts,
all obligations of the Company in respect of payment of principal of the
Securities of such series shall terminate.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
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(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of
that series,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than
by such declaration of acceleration and any interest thereon
at the rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of
that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, with respect to Securities of
a series all or part of which is represented by a Global Security, a record date
shall be established for determining Holders of Outstanding Securities of such
series entitled to join in such notice, which record date shall be at the close
of business on the day the Trustee receives such notice. The Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to join in such notice, whether or not such Holders remain Holders
after such record date; provided, that unless such declaration of acceleration,
or rescission and annulment, as the case may be, shall have become effective by
virtue of the requisite percentage having joined in such notice prior to the day
which is 90 days after such record date, such notice of declaration of
acceleration, or rescission and annulment, as the case may be, shall
automatically and without further action by any Holder be canceled and of no
further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of
a Holder, from giving, (i) after expiration of such 90-day period, a new written
notice of declaration of acceleration or rescission and annulment thereof, as
the case may be, that is identical to a written notice which has been canceled
pursuant to the proviso to the preceding sentence, or (ii) during any such
90-day period, an additional written notice of declaration of
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acceleration with respect to Securities of such series, or an additional written
notice of rescission and annulment of any declaration of acceleration with
respect to any other Event of Default with respect to Securities of such series,
in either of which events a new record date shall be established pursuant to the
provisions of this Section 502.
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days,
(2) default is made in the payment of the principal of
(or premium, if any, on) any Security at the Maturity thereof, or
(3) default is made in the making or satisfaction of any
sinking fund payment when it becomes due pursuant to the terms of the
securities of any series,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest, at the rate
or rates prescribed therefor in such Securities and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may, but shall
not be obligated to, institute a judicial proceeding for the collection of the
sums so due and unpaid, may prosecute such proceeding to judgment or final
decree, and may enforce the same against the Company or any other obligor upon
such Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon such Securities, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
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Section 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to file and prove a
claim for the whole amount of principal, premium and interest owing and unpaid
in respect of the Securities and to file such other papers or documents as may
be necessary or advisable in order to have claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements, and advances of
the Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding, and to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
Section 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
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FIRST: To the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal (and premium, if any) and interest, respectively; and
THIRD: The balance, if any, to the Company or to whomsoever
may be lawfully entitled to receive the same as a court of competent
jurisdiction may direct.
Section 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities
of that series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or of the Holders of Outstanding Securities of any other series,
or to obtain or to seek to obtain priority or preference over any
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other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
Section 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 307) interest on such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption or repayment at the
option of the Holder, on the Redemption Date or the Repayment Date, as the case
may be) and (if the terms of such Security so provide) to have such Security
converted into Common Stock pursuant to Article Fifteen and to institute suit
for the enforcement of any such payment or conversion, and such rights shall not
be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
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Section 512. Control by Holders.
The Holders of at least a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, expose the Trustee to personal liability or
be unduly prejudicial to Holders not joining therein, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Upon receipt by the Trustee of any such direction with respect to
Securities of a series all or part of which is represented by a Global Security,
a record date shall be established for determining Holders of Outstanding
Securities of such series entitled to join in such direction, which record date
shall be determined in accordance with Section 104(e). The Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to join in such direction, whether or not such Holders remain Holders
after such record date; provided, that unless Holders of at least a majority in
principal amount of the outstanding Securities of such series, or their proxies,
shall have been joined in such direction prior to the day which is 90 days after
such record date, such direction shall automatically and without further action
by any Holder be canceled and of no further effect. Nothing in this paragraph
shall prevent a Holder, or a proxy of a Holder, from giving, (i) after
expiration of such 90-day period, a new direction identical to a direction which
has been canceled pursuant to the provisions to the preceding sentence or (ii)
during any such 90-day period a new direction contrary to or different from such
direction, in either of which events a new record date shall be established
pursuant to the provisions of this Section 512.
Section 513. Waiver of Past Defaults.
By Act delivered to the Company and the Trustee, the Holders of not
less than a majority in principal amount of the Outstanding Securities of any
affected series may on behalf of the Holders of all the Securities of such
series waive any past default hereunder with respect to such series and its
consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series or in the payment of any
sinking fund installment with respect to the Securities of such series,
or
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(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to waive any past default
hereunder. If a record date is fixed, the Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to waive any
default hereunder, whether or not such Holders remain Holders after such record
date; provided, that unless such majority in principal amount shall have been
obtained prior to the date which is 90 days after such record date, any such
waiver previously given shall automatically and without further action by any
Holder be canceled and of no further effect.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Trustee, by any Holder, or
group of Holders, holding in the aggregate more than 10% in principal amount of
the Outstanding Securities of any series, or by any Holder for the enforcement
of the payment of the principal of (or premium, if any) or interest on any
Security on or after the Stated Maturity expressed in such Security (or, in the
case of redemption or repayment at the option of the Holder, on or after the
Redemption Date or Repayment Date, as the case may be, and (if the terms of such
Security so provide) to have such Security converted into Common Stock pursuant
to Article Fifteen).
Section 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions
which by any provision of this Indenture are specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture; and
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(4) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
Section 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with
respect to Securities of any series, the Trustee shall transmit by mail to all
Holders of Securities of such series, as their names and addresses appear in the
Security Register, notice of such default hereunder known to the Trustee, unless
such default shall have been cured or waived; provided, however, that, except in
the case of a default in the payment of the principal, premium or interest on
any Security of such series or in the payment of any sinking fund instalment
with respect to the Securities of such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee of the board of directors and/or Responsible Officers of the Trustee
in good faith determine that the withholding of such notice is in the interests
of the Holders of the Securities of such series; and provided, further, that in
the case of any default of the character specified in Section 501(4) with
respect to the Securities of such series 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 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
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(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(h) the Trustee shall not be required to take notice or be
deemed to have notice of any default hereunder (except failure by the
Company to pay principal of or interest on any series of Securities so
long as the Trustee is also acting as Paying Agent for such series of
Securities) unless the Trustee shall be specifically notified in
writing of such default by the Company by the Holders of at least 10%
in aggregate principal amount of all Outstanding Securities, and all
such notices or other instruments required by this Indenture to be
delivered to the Trustee must, in order to be effective, be delivered
at the principal Corporate Trust Office of the Trustee, and in the
absence of such notice the Trustee may conclusively assume there is no
default except as aforesaid.
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Section 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. The Trustee
or any Authenticating Agent shall not be accountable for the use or application
by the Company of Securities or the proceeds thereof. The Trustee shall not be
deemed to have knowledge of the identity of any Subsidiary unless either (A) a
Responsible Officer of the Trustee shall have actual knowledge thereof or (B)
the Trustee shall have received written notice thereof from the Company or any
Holder.
Section 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
Section 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
Section 607. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
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(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a lien prior to the 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 Securities.
Section 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of Section 310 of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture. To
the extent permitted by the Trust Indenture Act, the Trustee shall not be deemed
to have a conflicting interest with respect to the Securities of any series by
virtue of being Trustee with respect to the Securities of any particular series
of Securities other than that series.
Section 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000. If such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of Federal, State, Territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any
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court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to any or all Securities, or (ii) subject to Section 514,
any Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to any or
all Securities and the appointment of a successor Trustee or Trustees with
respect to such series.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of that or those series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, become the successor Trustee with respect to the
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Securities of such series and to that extent supersede the successor Trustee
appointed by the Company. If no successor Trustee with respect to the Securities
of any series shall have been so appointed by the Company or the Holders and
accepted appointment in the manner required by Section 611, any Holder who has
been a bona fide Holder of a Security of such series for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series to all
Holders of Securities of such series in the manner provided in Section 106. Each
notice of appointment shall include the name of the successor Trustee with
respect to the Securities of such series and the address of its Corporate Trust
Office.
Section 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder, subject nevertheless to its
lien, if any, provided for in Section 607.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall
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constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
Section 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities. In case
any Securities shall not have been authenticated by such predecessor Trustee,
any such successor Trustee may authenticate and deliver such Debt Securities, in
either its own name or that of its predecessor Trustee, with the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee.
Section 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of Section 311 of the Trust Indenture Act regarding the collection of
such claims against the Company (or any such
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other obligor). A Trustee that has resigned or been removed shall be subject to
and comply with said Section 311 to the extent required thereby.
Section 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities (which may be an Affiliate of the Company)
which shall be authorized to act on behalf of the Trustee to authenticate
Securities issued upon registration of transfer or partial redemption or
repayment thereof or pursuant to Section 306, and Securities so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business and in good standing under the
laws of the United States of America, any State or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of no less than $50,000,000 and subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may resign at any
time by giving written notice thereof to the Trustee for such series and to the
Company. The Trustee for any series of Securities may at any time terminate the
agency of an Authenticating Agent for such series by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee of such series may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall mail
written notice of such appointment by first-class mail,
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postage prepaid, to all Holders of Securities of the series with respect to
which such Authenticating Agent will serve, as their names and addresses appear
in the Security Register. Any successor Authenticating Agent upon acceptance of
its appointment thereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named as
an Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
Except with respect to an Authenticating Agent appointed at the request
of the Company, the Trustee agrees to pay to each Authenticating Agent from time
to time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, pursuant to the
provisions of Section 607.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series described therein referred
to in the within-mentioned Indenture.
---------------------------------------,
as Trustee
By__________________________________________
As Authenticating Agent
By__________________________________________
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
With respect to each series of Securities, the Company will furnish or
cause to be furnished to the Trustee for the Securities of such Series
(a) semiannually, not more than 15 days after each Regular
Record Date relating to that series (or, if there is no Regular Record
Date relating to that
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series, on June 30 and December 31), a list, in such form as such
Trustee may reasonably require, of the names and addresses of the
Holders of that series as of such date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished;
provided, however, that if and so long as the Trustee is Security Registrar with
respect to Securities of a particular series no such list shall be required with
respect to the Securities of such series.
Section 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.
Section 703. Reports by Trustee.
(a) Within 60 days after _______ of each year commencing with the year
____, 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 if and to the extent and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
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Section 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, shall be filed with the Trustee within 15 days after the same is so
required to be filed with the Commission. Delivery of such reports to the
Trustee is for informational purposes only and the Trustee's receipt of such
reports shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
Section 705. Holders' Meetings.
(a) A meeting of Holders of any or all series may be called at any time
and from time to time pursuant to the provisions of this Section 705 for any of
the following purposes:
(1) to give any notice to the Company or to the Trustee for
such series, or to give any directions to the Trustee for such series,
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 FIVE;
(2) to remove the Trustee for such series and appoint a
successor Trustee pursuant to the provisions of Article Six;
(3) to consent to the execution of an indenture or
supplemental indentures hereto pursuant to the provisions of Section
902;
(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 Outstanding Securities of any one or more or all series, as the
case may be, under any other provision of this Indenture or under
applicable law.
(b) The Trustee for any series may at any time call a meeting of
Holders of such series to take any action specified in paragraph (a) of this
Section 705, to be held at such time or times and at such place or places as the
Trustee for such series shall determine. Notice of every meeting of the Holders
of any series, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be given to
Holders of such series in the manner and to the extent provided in Section 105.
Such notice shall be given not less than 20 days nor more than 90 days prior to
the date fixed for the meeting.
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(c) In case at any time the company, pursuant to a Board Resolution, or
the Holders of at least 10% in aggregate principal amount of the Outstanding
Securities of a series or of all series, as the case may be, shall have
requested the Trustee for such series to call a meeting of Holders of any or all
such series by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have given the
notice of such meeting within 20 days after the receipt of such request, then
the Company or such Holders may determine the time or times and the place or
places for such meetings and may call such meetings to take any action
authorized by giving notice thereof as provided in the preceding paragraph.
(d) to be entitled to vote at any meeting of Holders a Person shall be
(a) a Holder of a Security of the series with respect to which such meeting is
being held or (b) a Person appointed by an instrument in writing as agent or
proxy by such Holder. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders shall be the Persons entitled to vote at such
meeting and their counsel and any representatives of the Trustee for the series
with respect to which such meeting is being held and its counsel and any
representatives of the Company and its counsel.
(e) Notwithstanding any other provisions of this Indenture, the Trustee
for any series may make such reasonable regulations as it may deem advisable for
any meeting of Holders of such series, in regard to proof of the holding of
Securities of such series 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 deem
appropriate.
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 such series as provided in paragraph (c) of this
Section 705, in which case the Company or the Holders calling the meeting, as
the case may be, shall in like manner appoint a temporary chairman. A permanent
chairman and a permanent secretary of the meeting shall be elected by a majority
vote of the meeting.
Subject to the provisos in the definition of "Outstanding," at any
meeting each Holder of a Security of the series with respect to which such
meeting is being held or proxy therefor shall be entitled to one vote for each
$1,000 principal amount (or such other amount as shall be specified as
contemplated by Section 301) of 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 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 other than by virtue of Outstanding Securities of such series held
by him or instruments in writing duly designating him as the person to vote on
behalf of Holders of Debt Securities of such series. Any meeting of Holders with
respect to which a meeting was duly called pursuant to the provisions of
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paragraph (b) or (c) of this Section 705 may be adjourned from time to time by a
majority of such Holders present and the meeting may be held as so adjourned
without further notice.
(f) The vote upon any resolution submitted to any meeting of Holders
with respect to which such meeting is being held shall be by written ballots on
which shall be subscribed the signatures of such Holders or of their
representatives by proxy and the serial number or numbers of the Securities held
or represented by them. 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 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 transmitted as provided in paragraph (b) of this Section 705. The
record shall show the serial numbers of the Securities voting in favor of or
against any resolution. 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.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
(g) Nothing contained in this Section 705 shall be deemed or construed
to authorize or permit, by reason of any call of a meeting of Holders or any
rights expressly or impliedly conferred hereunder to make such call, any
hindrance or delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to any Holder under any of the provisions of this
Indenture or of the Securities of any series.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Company May Consolidate, Etc., Only on Certain Terms.
(a) The Company shall not consolidate with or merge into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company, unless:
(1) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety
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shall be a corporation, partnership or trust, shall be organized and
validly existing under the laws of the United States of America, any
State thereof or the District of Columbia and shall expressly assume,
by an indenture supplemental hereto, executed and delivered to the
Trustee the due and punctual payment of the principal of and any
premium and interest on all the Securities and the performance or
observance of every covenant of this Indenture on the part of the
Company to be performed or observed;
(2) immediately after giving effect to such transaction, no
Event of Default, and no event which, after notice or lapse of time or
both, would become an Event of Default, shall have happened and be
continuing; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
(b) For purposes of this Section, any indebtedness that becomes an
obligation of the Company or any Subsidiary as a result of such transaction
shall be treated as having been incurred by the Company or such Subsidiary at
the time of such transaction.
Section 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities. In the case of a lease, the
predecessor Person shall not be released from its obligations to pay the
principal of, premium, if any, and interest on the Securities. All Securities
issued by the successor Person shall in all respects have the same legal
priority as the Securities theretofore or thereafter authenticated, issued and
delivered in accordance with the terms of this Indenture.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein
conferred upon the Company; or
(3) to add any additional Events of Default for the benefit of
the Holders of all or any series of Securities (and if such Events of
Default are to be for the benefit of less than all series of
Securities, stating that such Events of Default are expressly being
included solely for the benefit of such series); or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate
the issuance of Securities in bearer form, registrable or not
registrable as to principal and with or without interest coupons, or to
permit or facilitate the issuance of Securities in uncertificated form;
or
(5) to add to, change or eliminate any of the provisions of
this Indenture in respect of one or more series of Securities, provided
that any such addition, change or elimination (i) shall neither (A)
apply to any Security of any series created prior to the execution of
such supplemental indenture and entitled to the benefit of such
provision nor (B) modify the rights of the Holder of any such Security
with respect to such provision or (ii) shall become effective only when
there is no such Security Outstanding; or
(6) to establish the form or terms of Securities of any
series as permitted by Sections 201 and 301; or
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(7) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 611(b); or
(8) to add to or change any provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance
of Securities convertible into other securities; or
(9) to effectuate the provisions of Section 1505(b); or
(10) to add or change or eliminate any provisions of this
Indenture as shall be necessary or desirable in accordance with any
amendments to the Trust Indenture Act; or
(11) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, provided that such
action pursuant to this clause (11) shall not adversely affect the
interests of the Holders of Securities of any series in any material
respect.
Section 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of, premium, if any, or interest on, any
Security, or reduce the principal amount thereof or the rate of
interest thereon or any premium payable upon the redemption thereof,
change the method of determination of interest thereon, or reduce the
amount of the principal of an Original Issue Discount Security that
would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502, or adversely affect any right
of repayment at the option of the Holder of any Security, or change any
Place of Payment where, or the coin or currency in which, any Security
or any premium
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or the interest thereon is payable or impair the right of any Holders
of Securities of a Series entitled to the conversion rights set forth
in Article Fifteen to receive securities upon the exercise of such
conversion rights, or impair the right to institute suit for the
enforcement of any such payment or delivery of Common Stock for
Securities converted pursuant to Article Fifteen on or after the Stated
Maturity thereof (or, in the case of redemption or repayment at the
option of the Holder, on or after the Redemption Date or Repayment
Date, as the case may be, or in the case of such conversion, on or
after the date of conversion), or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513
or Section 1007, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby; provided, however, that this clause shall not be
deemed to require the consent of any Holder with respect to changes in
the references to "the Trustee" and concomitant changes in this Section
and Section 1007, or the deletion of this proviso, in accordance with
the requirements of Sections 611(b) and 901(7).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
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Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
Section 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
Section 907. Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, the Company
shall give notice to all Holders of such fact, setting forth in general terms
the substance of such supplemental indenture, in the manner provided in Section
106. Any failure of the Company to give such notice, or any defect therein,
shall not in any way impair or affect the validity of any such supplemental
indenture.
Section 908. Subordination Unimpaired.
No supplemental indenture executed pursuant to this Article shall
directly or indirectly modify the provisions of Article Fourteen in any manner
which might alter the subordination of the Securities.
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ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities of that series in accordance with the
terms of the Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer, conversion or exchange and
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served. The Company will give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company terminates the appointment of a Paying Agent
or Security Registrar or conversion agent or otherwise shall fail to maintain
any such required office or agency, the Company shall use its reasonable best
efforts to appoint a successor Paying Agent or Security Registrar or conversion
agent reasonably acceptable to the Trustee. If the Company fails to maintain a
Paying Agent or Security Registrar or conversion agent, the Trustee will act as
such, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in each
Place of Payment for such purposes. The Company will give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
Section 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee in writing
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, prior to each due date of the principal of (and
premium, if any) or interest
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on any Securities of that series, deposit with a Paying Agent a sum sufficient
to pay the principal (and premium, if any) or interest so becoming due, such sum
to be held in trust for the benefit of the Persons entitled to such principal,
premium or interest, and (unless such Paying Agent is the Trustee) the Company
will promptly notify the Trustee in writing of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest on Securities of that series in
trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided;
(2) give the Trustee written notice of any default by the
Company (or any other obligor upon the Securities of that series) in
the making of any payment of principal (and premium, if any) or
interest on the Securities of that series; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security of any series and remaining unclaimed for two
years after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in an Authorized Newspaper in
the Borough of Manhattan, The City of New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days
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from the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
Section 1004. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and that of each Subsidiary and the rights (charter and statutory) and
franchises of the Company and its Subsidiaries; provided, however, that the
Company shall not be required to preserve any such right or franchise if in the
judgment of the Company it shall be necessary, advisable or in the interest of
the Company to discontinue the same.
Section 1005. Statement by Officers as to Default.
Pursuant to Section 314(a) of the Trust Indenture Act, the Company will
deliver to the Trustee, within 120 days after the end of each fiscal year of the
Company ending after the date hereof, a certificate signed by the principal
executive, financial or accounting officer of the Company, stating whether or
not to the best knowledge of the signer thereof the Company is in default in the
performance and observance of any of the terms, provisions, covenants and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided, hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and status thereof of which
they may have knowledge.
Section 1006. Usury Laws.
The Company will not voluntarily claim, and will actively resist any
attempts to claim, the benefit of any usury laws against any holder of the
Securities of any series.
Section 1007. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Section 1004 with respect to the
Securities of any series if before the time for such compliance the Holders of
at least a majority in principal amount of the Outstanding Securities of such
series shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
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Section 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated in Section 301 for Securities of any series)
in accordance with this Article.
Section 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution. In case of any redemption at the election of the Company
of less than all the Securities of any series, the Company shall, at least 60
days prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of such Redemption
Date, of the principal amount of Securities of such series to be redeemed and,
if applicable, of the tenor of the Securities to be redeemed. In the case of any
redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction.
Section 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed
(unless all of the Securities of such series and of a specified tenor are to be
redeemed), the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, in a manner
which the Trustee deems fair and appropriate, which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series. If the
Company shall so specify and identify the appropriate Securities, Securities
owned of record and beneficially by the Company or any Subsidiary shall not be
included in the Securities selected for redemption.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
Section 1104. Notice of Redemption.
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Notice of redemption shall, unless otherwise specified by the terms of
the Securities to be redeemed, be given not less than 30 nor more than 60 days
prior to the Redemption Date, to each Holder of Securities to be redeemed, in
accordance with Section 106.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series
are to be redeemed (unless all the Securities of such series of a
specified tenor are to be redeemed), the identification (and, in the
case of partial redemption of any Securities, the principal amounts) of
the particular Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after
said date,
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price, which shall be the
office or agency of the Company in each Place of Payment, and
(6) that the redemption is for a sinking fund, if such is
the case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
Section 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon
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surrender of any such Security for redemption in accordance with said notice,
such Security shall be paid by the Company at the Redemption Price, together
with accrued interest to the Redemption Date; provided, however, that, unless
otherwise specified as contemplated by Section 301, installments of interest
whose Stated Maturity is on or prior to the Redemption Date will be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
Section 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered. If a Global Security is so surrendered, such new
Security so issued shall be a new Global Security.
ARTICLE TWELVE
SINKING FUNDS
Section 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.
Section 1202. Satisfaction of Sinking Fund Payments with Securities.
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The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
Section 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202 and the basis for such credit and will also deliver to
the Trustee any Securities to be so delivered which have not theretofore been
delivered to the Trustee. Not less than 30 days before each such sinking fund
payment date, the Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 1104. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 1105, 1106 and 1107.
ARTICLE THIRTEEN
REPAYMENT OF SECURITIES AT OPTION OF HOLDERS
Section 1301. Applicability of Article.
Securities of any series that are repayable before their Stated
Maturity at the option of the Holders shall be repaid in accordance with their
terms and (except as otherwise specified as contemplated by Section 301 for
Securities of any series) in accordance with this Article.
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Section 1302. Notice of Repayment Date.
Notice of any Repayment Date with respect to Securities of any series
shall, unless otherwise specified by the terms of the Securities of such series,
be given by the Company not less than 45 nor more than 60 days prior to such
Repayment Date, to the Trustee and to each Holder of Securities of such series
in accordance with Sections 105 and 106, respectively.
The notice as to Repayment Date shall state:
(1) the Repayment Date;
(2) the Repayment Price;
(3) the place or places where such Securities are to be
surrendered for payment of the Repayment Price, which shall be the
office or agency of the Company in each Place of Payment, and the date
by which Securities must be so surrendered in order to be repaid;
(4) a description of the procedure which a Holder must
follow to exercise a repayment right; and
(5) that exercise of the option to elect repayment is
irrevocable.
No failure of the Company to give the foregoing notice shall limit any
Holder's right to exercise a repayment right.
Section 1303. Deposit of Repayment Price.
On or prior to any Repayment Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Repayment Price of and (except if the Repayment Date
shall be an Interest Payment Date) accrued interest on, all the Securities of
such series which are to be repaid on that date.
Section 1304. Securities Payable on Repayment Date.
The form of option to elect repayment having been delivered as
specified in the form of Security for such series as provided in Section 201,
the Securities so to be repaid shall, on the Repayment Date, become due and
payable at the Repayment Price applicable thereto, and from and after such date
(unless the Company shall default in the payment of the Repayment Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender
of any such Security for repayment in accordance with said notice, such Security
shall be paid by the Company at the Repayment Price, together with accrued
interest to the Repayment Date;
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provided, however, that, unless otherwise specified as contemplated by Section
301, installments of interest whose Stated Maturity is on or prior to such
Repayment Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Date according to their terms and the provisions of Section 307.
If any Security to be repaid shall not be so paid upon surrender
thereof for repayment, the principal shall, until paid, bear interest from the
Repayment Date at the rate prescribed in the Security.
Section 1305. Securities Repaid in Part.
Any Security which by its terms may be repaid in part at the option of
the Holder and which is to be repaid only in part shall be surrendered at any
office or agency of the Company designated for that purpose pursuant to Section
1002 (with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Security, without service charge, a new Security
or Securities of the same series and of like tenor, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal to
and in exchange for the unrepaid portion of the principal of the Security so
surrendered. If a Global Security is so surrendered, such new Security so issued
shall be a new Global Security.
ARTICLE FOURTEEN
SUBORDINATION OF SECURITIES
Section 1401. Securities Subordinate to Senior Indebtedness.
The Company covenants and agrees that anything in this Indenture or the
Securities of any series to the contrary notwithstanding, the indebtedness
evidenced by the Securities of each series is subordinate and junior in right of
payment to all Senior Indebtedness to the extent provided herein, and each
Holder of Securities of each series, by his acceptance thereof, likewise
covenants and agrees to the subordination herein provided and shall be bound by
the provisions hereof. Senior Indebtedness shall continue to be Senior
Indebtedness and entitled to the benefits of these subordination provisions
irrespective of any amendment, modification or waiver of any term of the Senior
Indebtedness or extension or renewal of the Senior Indebtedness.
In the event that the Company shall default in the payment of any
principal of (or premium, if any) or interest on any Senior Indebtedness when
the same becomes due and payable, whether at maturity or at a date fixed for
repayment or by declaration of acceleration or otherwise, then, upon written
notice of such default to the Company by the holders of Senior
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Indebtedness or any trustee therefor or representative thereof, unless and until
such default shall have been cured or waived or shall have ceased to exist, no
direct or indirect payment (in cash, property, securities, by set-off or
otherwise) shall be made or agreed to be made on account of the principal of (or
premium, if any) or interest on any of the Securities, or in respect of any
redemption, retirement, purchase or other acquisition of any of the Securities.
In the event of
(a) any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other similar
proceeding relating to the Company, its creditors or its property,
(b) any proceeding for the liquidation, dissolution or
other winding up of the Company, voluntary or involuntary, whether or
not involving insolvency or bankruptcy proceedings,
(c) any assignment by the Company for the benefit of
creditors, or
(d) any other marshalling of the assets of the Company,
all Senior Indebtedness (including any interest thereon accruing after the
commencement of any such proceedings) shall first be paid in full before any
payment or distribution, whether in cash, securities or other property, shall be
made to any Holder of any of the Securities on account thereof. Any payment or
distribution, whether in cash, securities or other property (other than
securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in these subordination provisions with respect to the
indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment), which would
otherwise (but for these subordination provisions) be payable or deliverable in
respect of the Securities of any series shall be paid or delivered directly to
the holders of Senior Indebtedness in accordance with the priorities then
existing among such holders until all Senior Indebtedness (including any
interest thereof accruing after the commencement of any such proceedings) shall
have been paid in full. In the event of any such proceeding, after payment in
full of all sums owing with respect to Senior Indebtedness, the Holders of the
Securities, together with the holders of any obligations of the Company ranking
on a parity with the Securities, shall be entitled to be paid from the remaining
assets of the Company the amounts at the time due and owing on account of unpaid
principal of (and premium, if any) and interest on the Securities and such other
obligations before any payment or other distribution, whether in cash, property
or otherwise, shall be made on account of any capital stock or any obligations
of the Company ranking junior to the Securities and such other obligations.
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In the event that, notwithstanding the foregoing, any payment or
distribution of any character, whether in cash, securities or other property
(other than securities of the Company or any other corporation provided for by a
plan of reorganization or readjustment the payment of which is subordinate, at
least to the extent provided in these subordination provisions with respect to
the indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment), or any security
shall be received by the Trustee or any Holder in contravention of any of the
terms hereof, such payment or distribution or security shall be received in
trust for the benefit of, and shall be paid over or delivered and transferred
to, the holders of the Senior Indebtedness at the time outstanding in accordance
with the priorities then existing among such holders for application to the
payment of all Senior Indebtedness remaining unpaid, to the extent necessary to
pay all such Senior Indebtedness in full. In the event of the failure of the
Trustee or any Holder to endorse or assign any such payment, distribution or
security, each holder of Senior Indebtedness is hereby irrevocably authorized to
endorse or assign the same.
No present or future holder of any Senior Indebtedness shall be
prejudiced in the right to enforce subordination of the indebtedness evidenced
by the Securities by any act or failure to act on the part of the Company.
Nothing contained herein shall impair, as between the Company and the Holders of
Securities of each series, the obligation of the Company to pay to such Holders
the principal of (and premium, if any) and interest on such Securities or
prevent the Trustee or the Holder from exercising all rights, powers and
remedies otherwise permitted by applicable law or hereunder upon a Default or
Event of Default hereunder, all subject to the rights of the holders of the
Senior Indebtedness to receive cash, securities or other property otherwise
payable or deliverable to the Holders.
Senior Indebtedness shall not be deemed to have been paid in full
unless the holders thereof shall have received cash, securities or other
property equal to the amount of such Senior Indebtedness then outstanding. Upon
the payment in full of all Senior Indebtedness, the Holders of Securities of
each series shall be subrogated to all rights of any holders of Senior
Indebtedness to receive any further payments or distributions applicable to the
Senior Indebtedness until the indebtedness evidenced by the Securities of such
series shall have been paid in full, and such payments or distributions received
by such Holders, by reason of such subrogation, of cash, securities or other
property which otherwise would be paid or distributed to the holders of Senior
Indebtedness, shall, as between the Company and its creditors other than the
holders of Senior Indebtedness, on the one hand, and such Holders, on the other
hand, be deemed to be a payment by the Company on account of Senior
Indebtedness, and not on account of the Securities of such series.
The provisions of this Section 1401 shall not impair any right,
interests, remedies or powers of any secured creditor of the Company in respect
of any security interest the creation of which is not prohibited by the
provisions of this Indenture.
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The securing of any obligations of the Company, otherwise ranking on a
parity with the Securities or ranking junior to the Securities, shall not be
deemed to prevent such obligations from constituting, respectively, obligations
ranking on a parity with the Securities or ranking junior to the Securities.
Section 1402. Trustee and Holders of Securities May Rely on Certificate of
Liquidating Agent; Trustee May Require Further Evidence as to
Ownership of Senior Indebtedness; Trustee Not Fiduciary to
Holders of Senior Indebtedness.
Upon any payment or distribution of assets of the Company referred to
in this Article Fourteen, the Trustee and the Holders shall be entitled to rely
upon an order or decree made by any court of competent jurisdiction in which
such dissolution or winding up or liquidation or reorganization or arrangement
proceedings are pending or upon a certificate of the trustee in bankruptcy,
receiver, assignee for the benefit of creditors or other Person making such
payment or distribution, delivered to the Trustee or to the Holders, for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
Fourteen. In the absence of any such bankruptcy trustee, receiver, assignee or
other Person, the Trustee shall be entitled to rely upon a written notice by a
Person representing himself to be a holder of Senior Indebtedness (or a trustee
or representative on behalf of such holder) as evidence that such Person is a
holder of such Senior Indebtedness (or is such a trustee or representative). In
the event that the Trustee determines, in good faith, that further evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payments or distributions pursuant to this
Article Fourteen, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, as to the extent to which such Person is entitled to
participate in such payment or distribution, and as to other facts pertinent to
the rights of such Person under this Article Fourteen, and if such evidence is
not furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. With
respect to the holders of Senior Indebtedness, the Trustee undertakes to perform
or to observe only such of its covenants and obligations as are specifically set
forth in this Article, and no implied covenants or obligations with respect to
the holders of Senior Indebtedness shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and, subject to the provisions of Section 601,
the Trustee shall not be liable to any holder of Senior Indebtedness if it shall
in good faith pay over or deliver to Holders of Securities, the Company or any
other Person moneys or assets to which any holder of Senior Indebtedness shall
be entitled by virtue of this Article or otherwise.
Section 1403. Payment Permitted If No Default.
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Nothing contained in this Article Fourteen or elsewhere in this
Indenture, or in any of the Securities, shall prevent (a) the Company at any
time, except during the pendency of any dissolution, winding up, liquidation or
reorganization proceedings referred to in, or under the conditions described in,
Section 1401, from making payments of the principal of (or premium, if any) or
interest on the Securities, or (b) the application by the Trustee or any Paying
Agent of any moneys deposited with it hereunder to payments of the principal of
(or premium, if any) or interest on the Securities if the Trustee or such Paying
Agent, as the case may be, did not have the written notice provided for in
Section 1404 by the times referred to therein of any event prohibiting the
making of such deposit or exchange, and the Trustee or any Paying Agent shall
not be affected by any notice to the contrary received by it on or after such
times.
Section 1404. Trustee Not Charged with Knowledge of Prohibition.
Anything in this Article Fourteen or elsewhere in this Indenture
contained to the contrary notwithstanding, the Trustee shall not at any time be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment of money to or by the Trustee and shall be entitled
conclusively to assume that no such facts exist and that no event specified in
Section 1401 has happened, until the Trustee shall have received an Officers'
Certificate to that effect or notice in writing to that effect signed by or on
behalf of the holder or holders, or their representatives, of Senior
Indebtedness who shall have been certified by the Company or otherwise
established to the reasonable satisfaction of the Trustee to be such holder or
holders or representatives or from any trustee under any indenture pursuant to
which such Senior Indebtedness shall be outstanding; provided, however, that, if
prior to the third Business Day preceding the date upon which by the terms
hereof any money becomes payable (including, without limitation, the payment of
either the principal of or interest on any Security), or in the event of the
execution of an instrument pursuant to Section 401 acknowledging satisfaction
and discharge of this Indenture, then if prior to the second Business Day
preceding the date of such execution, the Trustee or any Paying Agent shall not
have received with respect to such money the Officers' Certificate or notice
provided for in this Section 1404, then, anything herein contained to the
contrary notwithstanding, the Trustee or such Paying Agent shall have full power
and authority to receive such money and apply the same to the purpose for which
they were received and shall not be affected by the notice to the contrary which
may be received by it on or after such date. The Company shall give prompt
written notice to the Trustee and to the Paying Agent of any facts which would
prohibit the payment of money to or by the Trustee or any Paying Agent.
Section 1405. Trustee to Effectuate Subordination.
Each Holder of Securities by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination as between such Holder and holders
of Senior Indebtedness as provided in this Article and appoints the Trustee its
attorney-in-fact for any and all such purposes.
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Section 1406. Rights of Trustee as Holder of Senior Indebtedness.
The Trustee shall be entitled to all the rights set forth in this
Article with respect to any Senior Indebtedness which may at the time be held by
it, to the same extent as any other holder of Senior Indebtedness; provided,
however, that nothing in this Indenture shall deprive the Trustee of any of its
rights as such holder; and provided, further, that nothing in this Article shall
apply to claims of, or payments to, the Trustee under or pursuant to Section
607.
Section 1407. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully for all intents and purposes as if the Paying Agent were named
in this Article in addition to or in place of the Trustee; provided, however,
that Sections 1404 and 1406 shall not apply to the Company or any Affiliate of
the Company if the Company or such Affiliate acts as Paying Agent.
Section 1408. Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or
be otherwise charged with. The holders of Senior Indebtedness may, at any time
or from time to time and in their absolute discretion, change the manner, place
or terms of payment, change or extend the time of payment of, or renew or alter,
any such Senior Indebtedness, or amend or supplement any instrument pursuant to
which any such Senior Indebtedness is issued or by which it may be secured, or
release any security therefor, or exercise or refrain from exercising any other
of their rights under the Senior Indebtedness, including, without limitation,
the waiver of default thereunder, all without notice to or assent from the
Holders of the Securities or the Trustee and without affecting the obligations
of the Company, the Trustee or the Holders of the Securities under this Article.
ARTICLE FIFTEEN
CONVERSION OF SECURITIES
Section 1501. General.
If so provided in the terms of the Securities of any series established
in accordance with Section 301, the principal amount of the Securities of such
series shall be convertible into shares
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of Common Stock in accordance with this Article Fifteen and the terms of such
series of Securities if such terms differ from this Article Fifteen; provided,
however, that if any of the terms by which any such Security shall be
convertible into Common Stock are set forth in a supplemental indenture entered
into with respect thereto pursuant to Section 901(8) hereof, the terms of such
supplemental indenture shall govern.
Section 1502. Right to Convert.
Subject to and upon compliance with the provisions of this Article, the
Holder of any Security that is convertible into Common Stock shall have the
right, at such Holder's option, at any time on or after the date of original
issue of such Security or such other date specified in the applicable Board
Resolution delivered pursuant to Section 301 and prior to the close of business
on the date set forth in such Board Resolution (or if such Security is called
for redemption, then in respect of such Security to and including but not after
the close of business on the date of redemption unless the Company shall default
in the payment due on such date) to convert the principal amount of any such
Security of any authorized denomination, or, in the case of any Security to be
converted of a denomination greater than the minimum denomination for Securities
of the applicable series, any portion of such principal which is an authorized
denomination or an integral multiple thereof, into that number of fully paid and
nonassessable shares of Common Stock obtained by dividing the principal amount
of such Security or portion thereof surrendered for conversion by the Conversion
Price therefor by surrender of the Security so to be converted in whole or in
part in the manner provided in Section 1503. Such conversion shall be effected
by the Company in accordance with the provisions of this Article and the terms
of the Securities, if such terms differ from this Article.
Section 1503. Manner of Exercise of Conversion Privilege; Delivery of Common
Stock; No Adjustment for Interest or Dividends.
In order to effect a conversion, the holder of any Security to be
converted, in whole or in part, shall surrender such Security at the office or
agency maintained by the Company for such purpose, as provided in Section 1002
and shall give written notice of conversion to the Company at such office or
agency that the Holder elects to convert such Security or the portion thereof
specified in said notice. The notice shall state the name or names (with
address), and taxpayer identification number, in which the certificate or
certificates for shares of Common Stock which shall be deliverable on such
conversion shall be registered, and shall be accompanied by payments in respect
of transfer taxes, if required pursuant to Section 1506. Each Security
surrendered for conversion shall, unless the shares of Common Stock deliverable
on conversion are to be issued in the same name as the registration of such
Security, be duly endorsed by or be accompanied by instruments of transfer, in
form satisfactory to the Company, duly executed by the Holder or such Holder's
duly authorized attorney, and by any payment required pursuant to this Section
1503. As promptly as practicable after the surrender of such Security and
notice, as aforesaid, the Company shall deliver or cause to be delivered at such
office or agency to such Holder, or on such Holder's written order, a
certificate or certificates
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<PAGE>
for the number of full shares of Common Stock deliverable upon the conversion of
such Security or portion thereof in accordance with the provisions of this
Article and a check or cash in respect of any fractional interest in respect of
a share of Common Stock arising upon such conversion as provided in Section
1504. In case any Security of a denomination greater than the minimum
denomination for Securities of the applicable series shall be surrendered for
partial conversion, the Company shall execute and register and the Trustee shall
authenticate and deliver to or upon the written order of the Company and the
Holder of the Security so surrendered, without charge to such Holder, a new
Security or Securities of the same series in authorized denominations in an
aggregate principal amount equal to the unconverted portion of the surrendered
Security. Each conversion shall be deemed to have been effected as of the date
on which such Security shall have been surrendered (accompanied by the funds, if
any, required by the last paragraph of this Section) and such notice received by
the Company, as aforesaid, and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be registrable upon
such conversion shall become on said date the Holder of record of the shares
represented thereby, provided, however, that any such surrender on any date when
the stock transfer books of the Company shall be closed shall constitute the
person in whose name the certificates are to be registered as the record holder
thereof for all purposes on the next succeeding day on which such stock transfer
books are open, but such conversion shall be at the Conversion Price in effect
on the date upon which such Security shall have been so surrendered.
Any Security or portion thereof surrendered for conversion during the
period from the close of business on the Regular Record Date for any Interest
Payment Date to the opening of business on such Interest Payment Date shall
(unless such Security or portion thereof being converted shall have been called
for redemption or submitted for repayment on a date during such period) be
accompanied by payment, in legal tender or other funds acceptable to the
Company, of an amount equal to the interest otherwise payable on such Interest
Payment Date on the principal amount being converted; provided, however, that no
such payment need be made if there shall exist at the time of conversion a
default in the payment of interest on the applicable series of Securities. An
amount equal to such payment shall be paid by the Company on such Interest
Payment Date to the Holder of such Security on such Regular Record Date;
provided, however, that if the Company shall default in the payment of interest
on such Interest Payment Date, such amount shall be paid to the person who made
such required payment. Except as provided above in this Section, no adjustment
shall be made for interest accrued on any Security converted or for dividends on
any shares issued upon the conversion of such Security as provided in this
Article.
Section 1504. Cash Payments in Lieu of Fractional Shares.
No fractional shares of Common Stock or scrip representing fractional
shares of Common Stock shall be delivered upon conversion of Securities. If more
than one Security shall be surrendered for conversion at one time by the same
Holder, the number of full shares of Common Stock which shall be deliverable
upon conversion shall be computed on the basis of
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<PAGE>
the aggregate principal amount of the Securities (or specified portions thereof
to the extent permitted hereby) so surrendered. Instead of any fraction of a
share of Common Stock which would otherwise be deliverable upon the conversion
of any Security, the Company shall pay to the Holder of such Security an amount
in cash (computed to the nearest cent, with one-half cent being rounded upward)
equal to the same fraction of the closing price (determined in the manner
provided in Section 1505(a)(v)) of the Common Stock on the Trading Day (as
defined in Section 1505(a)(v)) next preceding the date of conversion.
Section 1505. Conversion Price Adjustments; Effect of Reclassification, Mergers,
Consolidations and Sales of Assets.
(a) The Conversion Price shall be adjusted from time to time as
follows:
(i) In case the Company shall (x) pay a dividend or make a
distribution on the Common Stock in shares of Common Stock, (y)
subdivide the outstanding Common Stock into a greater number of shares
or (z) combine the outstanding Common Stock into a smaller number of
shares, the Conversion Price shall be adjusted so that the Holder of
any Security thereafter surrendered for conversion shall be entitled to
receive the number of shares of Common Stock of the Company which such
holder would have owned or have been entitled to receive after the
happening of any of the events described above had such Security been
converted immediately prior to the record date in the case of a
dividend or the effective date in the case of subdivision or
combination. An adjustment made pursuant to this subparagraph (i) shall
become effective immediately after the record date in the case of a
dividend, except as provided in subparagraph (vii) below, and shall
become effective immediately after the effective date in the case of a
subdivision or combination.
(ii) In case the Company shall issue rights or warrants to all
holders of shares of Common Stock entitling them (for a period expiring
within 45 days after the record date mentioned below) to subscribe for
or purchase shares of Common Stock at a price per share less than the
current market price per share of Common Stock (as defined for purposes
of this subparagraph (ii) in subparagraph (v) below), the Conversion
Price in effect after the record date for the determination of
stockholders entitled to receive such rights or warrants shall be
determined by multiplying the Conversion Price in effect immediately
prior to such record date by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding on such record date
plus the number of shares of Common Stock which the aggregate offering
price of the total number of shares of Common Stock so offered would
purchase at such current market price, and the denominator of which
shall be the number of shares of Common Stock outstanding on the record
date for issuance of such rights or warrants plus the number of
additional shares of Common Stock receivable upon exercise of such
rights or warrants. Such adjustment shall be made successively whenever
any such rights or warrants are issued,
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<PAGE>
and shall become effective immediately, except as provided in
subparagraph (vii) below, after such record date.
(iii) In case the Company shall distribute to all holders of
Common Stock any shares of capital stock of the Company (other than
Common Stock) or evidences of its indebtedness or assets (excluding
cash dividends or distributions paid from retained earnings of the
Company or dividends payable in Common Stock) or rights or warrants to
subscribe for or purchase any of its securities (excluding those rights
or warrants referred to in subparagraph (ii) above) (any of the
foregoing being hereinafter in this subparagraph (iii) called the
"Assets"), then, in each such case, the Conversion Price shall be
adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
record date for determination of stockholders entitled to receive such
distribution by a fraction the numerator of which shall be the current
market price per share (as defined for purposes of this subparagraph
(iii) in subparagraph (v) below) of the Common Stock at such record
date for determination of stockholders entitled to receive such
distribution less the then fair market value (as determined by the
Board of Directors, whose determination shall be conclusive) of the
portion of the Assets so distributed applicable to one share of Common
Stock, and the denominator of which shall be the current market price
per share (as defined in subparagraph (v) below) of the Common Stock at
such record date. Such adjustment shall become effective immediately,
except as provided in subparagraph (vii) below, after the record date
for the determination of stockholders entitled to receive such
distribution.
(iv) If, pursuant to subparagraph (ii) or (iii) above, the
number of shares of Common Stock into which a Security is convertible
shall have been adjusted because the Company has declared a dividend,
or made a distribution, on the outstanding shares of Common Stock in
the form of any right or warrant to purchase securities of the Company,
or the Company has issued any such right or warrant, then, upon the
expiration of any such unexercised right or unexercised warrant, the
Conversion Price shall forthwith be adjusted to equal the Conversion
Price that would have applied had such right or warrant never been
declared, distributed or issued.
(v) For the purpose of any computation under subparagraphs
(ii) or (iii) above, the current market price per share of Common Stock
on any date shall be deemed to be the average of the daily closing
prices of the Common Stock for the shorter of (i) 30 consecutive
Trading Days ending on the last full Trading Day on the exchange or
market specified in the second following sentence prior to the Time of
Determination or (ii) the period commencing on the date next succeeding
the first public announcement of the issuance of such rights or
warrants or such distribution through such last full Trading Day prior
to the Time of Determination. The term "Time of Determination" as used
herein shall be the time and date of the earlier of (x) the
determination of stockholders entitled to receive such rights,
warrants, or distributions or (y) the commencement of
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<PAGE>
"ex-dividend" trading in the Common Stock on the exchange or market
specified in the following sentence. The closing price for each day
shall be the reported last sales price, regular way, or, in case no
sale takes place on such day, the average of the reported closing bid
and asked prices, regular way, in either case as reported on the New
York Stock Exchange Composite Tape or, if the Common Stock is not
listed or admitted to trading on the New York Stock Exchange at such
time, on the principal national securities exchange on which the Common
Stock is listed or admitted to trading or, if not listed or admitted to
trading on any national securities exchange, on the Nasdaq National
Market ("Nasdaq") or, if the Common Stock is not quoted on Nasdaq, the
average of the closing bid and asked prices on such day in the
over-the-counter market as reported by the National Association of
Securities Dealers, Inc. or, if bid and asked prices for the Common
Stock on each such day shall not have been so reported, the average of
the bid and asked prices for such date as furnished by any New York
Stock Exchange member firm regularly making a market in the Common
Stock selected for such purpose by the Company or, if no such
quotations are available, the fair market value of the Common Stock as
determined by a New York Stock Exchange member firm regularly making a
market in the Common Stock selected for such purpose by the Company. As
used herein, the term "Trading Day" with respect to Common Stock means
(x) if the Common Stock is listed or admitted for trading on the New
York Stock Exchange or another national securities exchange, a day on
which the New York Stock Exchange or such other national securities
exchange, as the case may be, is open for business or (y) if the Common
Stock is quoted on Nasdaq, a day on which trades may be made on Nasdaq
or (z) otherwise, any day other than a Saturday or Sunday or a day on
which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
(vi) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at
least 1% in such price; provided, however, that any adjustments which
by reason of this subparagraph (vi) are not required to be made shall
be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 1505(a) shall be made to the
nearest cent or to the nearest .01 of a share, as the case may be, with
one-half cent and .005 of a share, respectively, being rounded upward.
Anything in this Section 1505(a) to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Conversion
Price, in addition to those required by this Section 1505(a), as it in
its discretion shall determine to be advisable in order that any stock
dividend, subdivision of shares, distribution of rights or warrants to
purchase stock or securities, or distribution of other assets (other
than cash dividends) hereafter made by the Company to its stockholders
shall not be taxable.
(vii) In any case in which this Section 1505(a) provides that
an adjustment shall become effective immediately after a record date
for an event, the Company may defer until the occurrence of such event
(x) issuing to the holder of any Security converted
73
<PAGE>
after such record date and before the occurrence of such event the
additional shares of Common Stock issuable upon such conversion by
reason of the adjustment required by such event over and above the
Common Stock issuable upon such conversion before giving effect to such
adjustment and (y) paying to such holder any amount of cash in lieu of
any fractional share of Common Stock pursuant to Section 1504.
(viii) Whenever the Conversion Price is adjusted as herein
provided, the Company shall file with the Trustee an Officers'
Certificate, setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such
adjustment, which certificate shall be conclusive evidence of the
correctness of such adjustment; provided, however, that the failure of
the Company to file such Officers' Certificate shall not affect the
legality or validity of any corporate action by the Company.
(ix) Whenever the Conversion Price for any series of
Securities is adjusted as provided in this Section 1505(a), the Company
shall cause to be mailed to each holder of Securities of such series at
its then registered address by first-class mail, postage prepaid, a
notice of such adjustment of the Conversion Price setting forth such
adjusted Conversion Price and the effective date of such adjusted
Conversion Price; provided, however, that the failure of the Company to
give such notice shall not affect the legality or validity of any
corporate action by the Company.
(b)(i) Notwithstanding any other provision herein to the contrary, if
any of the following events occur, namely (x) any reclassification or change of
outstanding shares of Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination of the Common Stock), (y) any consolidation, merger
or combination of the Company with or into another corporation as a result of
which holders of Common Stock shall be entitled to receive stock, securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock, or (z) any sale or conveyance of all or substantially all of
the assets of the Company to any other entity as a result of which holders of
Common Stock shall be entitled to receive stock, securities or other property or
assets (including cash) with respect to or in exchange for such Common Stock,
then appropriate provision shall be made by supplemental indenture so that (A)
the holder of any outstanding Security that is convertible into Common Stock
shall have the right to convert such Security into the kind and amount of the
shares of stock and securities or other property or assets (including cash) that
would have been receivable upon such reclassification, change, consolidation,
merger, combination, sale, or conveyance by a holder of the number of shares of
Common Stock issuable upon conversion of such Security immediately prior to such
reclassification, change, consolidation, merger, combination, sale or conveyance
and (B) the number of shares of any such other stock or securities into which
such Security shall thereafter be convertible shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the terms of adjustment provided for in this Section, and
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<PAGE>
Sections 1502, 1503, 1504, 1506, 1507, 1508 and 1509 shall apply on like terms
to any such other stock or securities.
(ii) In case of any reclassification or change of the Common Stock
(other than a subdivision or combination of its outstanding Common Stock, or a
change in par value, or from par value to no par value, or from no par value to
par value), or of any consolidation, merger or combination of the Company with
or into another corporation or of the sale or conveyance of all or substantially
all of the assets of the Company, the Company shall cause to be filed with the
Trustee and to be mailed to each holder of Securities that are convertible into
shares of Common Stock at such holder's registered address, the date on which
such reclassification, change, consolidation, merger, combination, sale or
conveyance is expected to become effective, and the date as of which it is
expected that holders of Common Stock shall be entitled to exchange their Common
Stock for stock, securities or other property deliverable upon such
reclassification, change, consolidation, merger, combination, sale or
conveyance.
Section 1506. Taxes on Shares Issued.
The delivery of stock certificates upon conversions of Securities shall
be made without charge to the holder converting a Security for any tax in
respect of the issue thereof. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the delivery
of stock registered in any name other than of the holder of any Security
converted, and the Company shall not be required to deliver any such stock
certificate unless and until the person or persons requesting the delivery
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
Section 1507. Shares to be Fully Paid; Compliance with Governmental
Requirements; Listing of Common Stock.
The Company covenants that all shares of Common Stock which may be
delivered upon conversion of Securities of any series which are convertible into
Common Stock will upon delivery be fully paid and nonassessable by the Company
and free from all taxes, liens and charges with respect to the issue thereof.
The Company covenants that if any shares of Common Stock to be provided
for the purpose of conversion of Securities hereunder require registration with
or approval of any governmental authority under any Federal or state law before
such shares may be validly delivered upon conversion, the Company will in good
faith and as expeditiously as possible endeavor to secure such registration or
approval, as the case may be.
The Company further covenants that it will, if permitted by the rules
of The New York Stock Exchange, Inc., list and keep listed for so long as the
Common Stock shall be so listed
75
<PAGE>
on such exchange, upon official notice of issuance, all Common Stock deliverable
upon conversion of Securities of any series which are convertible into Common
Stock.
Section 1508. Responsibility of Trustee.
Neither the Trustee nor any conversion agent shall at any time be under
any duty or responsibility to any holder of Securities to determine whether any
facts exist which may require any adjustment of the Conversion Price applicable
to such Securities, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed, or herein or in
any supplemental indenture provided to be employed, in making the same. Neither
the Trustee nor any conversion agent shall be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common Stock, or of
any securities or property, which may at any time be delivered upon the
conversion of any Security; and neither the Trustee nor any conversion agent
makes any representation with respect thereto. Neither the Trustee nor any
conversion agent shall be responsible for any failure of the Company to deliver
any shares of Common Stock or stock certificates or other securities or property
or cash upon the surrender of any Security for the purpose of conversion or for
any failure of the Company to comply with any of the covenants of the Company
contained in this Article Fifteen.
Section 1509. Covenant to Reserve Shares.
The Company covenants that it will at all times reserve and keep
available, free from pre-emptive rights, out of its authorized but unissued
Common Stock, such number of shares of Common Stock as shall then be deliverable
upon the conversion of all Outstanding Securities of any series of Securities
which are convertible into Common Stock.
Section 1510. Other Conversions.
If so provided in a Board Resolution with respect to the Securities of
a series, the principal amount of the Securities of such series shall be
convertible into or exchangeable for a principal amount of other securities of
the Company (which other securities may be issued under this Indenture or
otherwise), and the issuance of such securities upon any such conversion or
exchange shall be made in accordance with the terms of such Board Resolution.
ARTICLE SIXTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Section 1601. Immunity of Incorporators, Stockholders, Officers and Directors.
No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Security, or for any claim based thereon or otherwise in
respect thereof, shall be had
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<PAGE>
against any incorporator, stockholder, officer or director, as such, past,
present or future, of the Company or of any 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 personal liability
whatever shall attach to, or is or shall be incurred by, the incorporators,
stockholders, officers or directors, as such, of the Company or any successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by this Indenture or in any of the Securities or implied
therefrom; and that any and all such personal liability of every name and
nature, 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 or director, 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 Securities
or implied therefrom 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 Securities.
* * *
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
77
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
[SEAL] LOWE'S COMPANIES, INC.
-------------------------------
By: __________________________
Its: ___________________________
------------------------
Attest:
---------------------------
By: ________________________
Its: _________________________
[SEAL] THE BANK OF NEW YORK
------------------------------
By:___________________________
Its:___________________________
Attest:
- ---------------------------
By: ________________________
Its:_________________________
78
<PAGE>
State of North Carolina
SS:
County of Wilkes
On the ______ day of ____________, ____, before me personally came
______________ _________________________, to me known, who, being by me duly
sworn, did depose and say that he is _______________________________ of LOWE'S
COMPANIES, INC., 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 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.
[SEAL] ______________________________
Notary Public
State of New York
SS:
County of ____________________
On the _______ day of _____________, ____, before me personally came
___________ __________________________, to me known, who, being by me duly
sworn, did depose and say that he is ____________________________ of THE BANK OF
NEW YORK, 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 is such corporation's 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.
[SEAL] ______________________________
Notary Public
79
Exhibit 5
HUNTON & WILLIAMS
Riverfront Plaza, East Tower
Richmond, Virginia 23219
Telephone (804) 788-8200
Facsimile (804) 788-8218
FILE NO.: 23797.000201
October 16, 1996
Lowe's Companies, Inc.
Highway 268 East
North Wilkesboro, North Carolina 28656-0001
Registration Statement on Form S-3
Relating to $275,050,000 Issue Amount
of Unallocated Securities
Ladies and Gentlemen:
We have acted as counsel to Lowe's Companies, Inc., a North
Carolina corporation (the "Company"), in connection with the registration by the
Company of an aggregate of $275,050,000 of its (i) unsecured debt securities
("Debt Securities"), which may be either senior debt securities ("Senior Debt
Securities") or subordinated debt securities ("Subordinated Debt Securities"),
(ii) shares of preferred stock, par value $5.00 per share ("Preferred Stock"),
which may be issued in the form of depositary shares evidenced by depositary
receipts ("Depositary Shares"), (iii) shares of common stock, par value $.50 per
share ("Common Stock"), and (iv) warrants to purchase shares of Common Stock or
Preferred Stock ("Warrants") on terms to be determined at the time of sale (the
Debt Securities, Preferred Stock, Depositary Shares, Common Stock and Warrants
are referred to collectively as the "Securities"), as set forth in the
Registration Statement on Form S-3 (the "Registration Statement") that is being
filed on the date hereof with the Securities and Exchange Commission (the
"Commission") by the Company pursuant to the Securities Act of 1933, as amended.
The Securities are to be issued in one or more series and are to be sold from
time to time as set forth in the Registration Statement, the Prospectus
contained therein (the "Prospectus") and any amendments or supplements thereto.
In rendering this opinion, we have relied upon, among other things, our
examination of such records of the Company and certificates of its officers and
of public officials as we have deemed necessary.
<PAGE>
Lowe's Corporation, Inc.
October 16, 1996
Page 2
Based upon the foregoing and the further qualifications stated below,
we are of the opinion that:
1. The Company is duly incorporated, validly existing and in good
standing under the laws of the State of North Carolina; and
2. When (a) the terms of any class or series of the Securities have
been authorized by appropriate corporate action of the Company and (b) the
Securities have been issued and sold upon the terms and conditions set forth in
the Registration Statement, the Prospectus and the applicable supplement to the
Prospectus, and with respect to the Debt Securities, such Debt Securities have
been duly executed, authenticated and delivered in accordance with the
applicable indenture, then (x) the Debt Securities will be validly authorized
and issued and binding obligations of the Company and (y) the Preferred Stock
and the Common Stock will be legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement and to the statement made in reference
to this firm under the caption "Legal Matters" in the Registration Statement.
Very truly yours,
HUNTON & WILLIAMS
00779/07667
Exhibit 12
LOWE'S COMPANIES, INC. AND SUBSIDIARY COMPANIES
EXHIBIT 12 - COMPUTATION OF FIXED CHARGE COVERAGE
(In Thousands)
<TABLE>
<CAPTION>
For the Six Months Ended July 31, For the Year Ended January 31,
1996 1995 1996 1995 1994
<S> <C>
Income Before Income Taxes 250,918 225,745 352,107 343,531 198,324
Fixed Charges:
Interest Expense 30,029 23,424 48,937 40,110 23,043
1/3 Rental Expense 9,914 8,420 18,045 13,400 9,067
----------------------- -------------------------------
Earnings, as Defined 290,861 257,589 419,089 397,041 230,434
Fixed Charges:
Interest Expense 30,029 23,424 48,937 40,110 23,043
Capitalized Interest 2,872 1,897 5,768 4,678 3,592
1/3 Rental Expense 9,914 8,420 18,045 13,400 9,067
---------------------- -------------------------------
Fixed Charges 42,815 33,741 72,750 58,188 35,702
Fixed Charge Coverage (Ratio
of Earnings to Fixed Charges) 6.8 7.6 5.8 6.8 6.5
</TABLE>
Exhibit 15
DELOITTE & TOUCHE LLP
1100 Carillon
227 West Trade Street
Charlotte, North Carolina 28202-1675
Telephone: (704) 372-3560
October 16, 1996
Lowe's Companies, Inc.
North Wilkesboro, NC
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim financial
information of Lowe's Companies, Inc. and subsidiaries for the periods ended
April 30, 1996 and 1995 and July 30, 1996 and 1995, respectively, because we did
not perform an audit, we expressed no opinion on that information.
We are aware that our reports referred to above, which were included in your
Quarterly Reports on Form 10-Q for the quarters ended April 30, 1996 and July
30, 1996 are being used in this Registration Statement.
We also are aware that the aforementioned reports, pursuant to Rule 436(c) under
the Securities Act of 1933, are not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement of
Lowe's Companies, Inc. on Form S-3 of our report dated February 20, 1996 (March
4, 1996 as to the fourth paragraph of note 14) appearing and incorporated by
reference in the Annual Report on Form 10-K of Lowe's Companies, Inc. for the
year ended January 31, 1996 and to the references to us under the heading
"Experts" in the Registration Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Charlotte, North Carolina
October 16, 1996
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) _______
-----------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
-----------------------------------
(Exact name of obligor as specified in its charter)
LOWE'S COMPANIES, INC.
North Carolina 56-0578072
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
P. O. Box 1111
North Wilkesboro, North Carolina 28656
(Address of principal executive offices) (Zip Code)
Debt Securities
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate
trust powers.
The trustee is authorized to exercise corporate trust
powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
2
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all
in the City of Chicago and State of Illinois, on the 15th day of
October, 1996.
The First National Bank of Chicago,
Trustee
By /s/ Richard D. Manella
-------------------------
Richard D. Manella
Vice President
* Exhibit 1, 2, 3, and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 26 to the Registration Statement on Form S-3 of ITT
Corporation filed with the Securities and Exchange Commission on October 15,
1996 (Registration No. 333-07221).
3
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
October 15, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Lowe's Companies
Inc. and The First National Bank of Chicago, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Richard D. Manella
----------------------------
Richard D. Manella
Vice President
4
<PAGE>
EXHIBIT 7
<TABLE>
<CAPTION>
<S> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/96 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for June 30, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in C400 <-
Thousands RCFD BIL MIL THOU
------------------ ------ -------------- -----
<S> <C>
ASSETS
1. Cash and balances due from depository institutions
(from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1).. 0081 3,572,641 1.a.
b. Interest-bearing balances(2)........................... 0071 6,958,367 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B,
column A)................................................. 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B,
column D).............................................. 1773 1,448,974 2.b.
3. Federal funds sold and securities purchased under
agreements to resell in domestic offices of the bank
and its Edge and Agreement subsidiaries, and in IBFs:
a. Federal Funds sold..................................... 0276 5,020,878 3.a.
b. Securities purchased under agreements to resell........ 0277 918,688 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from
Schedule RC-C)............................................ RCFD 2122 19,125,160 4.a.
b. LESS: Allowance for loan and lease losses.............. RCFD 3123 379,232 4.b.
c. LESS: Allocated transfer risk reserve.................. RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance,
and reserve (item 4.a minus 4.b and 4.c) .............. 2125 18,745,928 4.d.
5. Assets held in trading accounts........................... 3545 9,599,172 5.
6. Premises and fixed assets (including capitalized leases).. 2145 623,289 6.
7. Other real estate owned (from Schedule RC-M).............. 2150 8,927 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)............................ 2130 57,280 8.
9. Customers' liability to this bank on acceptances
outstanding............................................. 2155 632,259 9.
10. Intangible assets (from Schedule RC-M).................... 2143 156,715 10.
11. Other assets (from Schedule RC-F)......................... 2160 1,592,088 11.
12. Total assets (sum of items 1 through 11).................. 2170 49,335,206 12.
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
5
<PAGE>
<TABLE>
<S> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/96 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands Bil Mil Thou
------------------ -------------
<S> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns
A and C from Schedule RC-E, part 1)........... RCON 2200 16,878,870 13.a.
(1) Noninterest-bearing(1).................... RCON 6631 7,855,880 13.a.(1)
(2) Interest-bearing.......................... RCON 6636 9,022,990 13.a.(2)
b. In foreign offices, Edge and Agreement
subsidiaries, and IBFs (from Schedule RC-E,
part II)...................................... RCFN 2200 12,677,057 13.b.
(1) Noninterest bearing....................... RCFN 6631 766,936 13.b.(1)
(2) Interest-bearing.......................... RCFN 6636 11,910,121 13.b.(2)
14. Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal funds purchased....................... RCFD 0278 1,318,968 14.a.
b. Securities sold under agreements to
repurchase.................................... RCFD 0279 1,197,589 14.b.
15. a. Demand notes issued to the U.S. Treasury RCON 2840 104,546 15.a.
b. Trading Liabilities RCFD 3548 6,431,784 15.b.
16. Other borrowed money:
a. With original maturity of one year or less.... RCFD 2332 4,437,636 16.a.
b. With original maturity of more than one year. RCFD 2333 75,308 16.b.
17. Mortgage indebtedness and obligations under
capitalized leases............................... RCFD 2910 283,041 17.
18. Bank's liability on acceptance executed and
outstanding...................................... RCFD 2920 632,259 18.
19. Subordinated notes and debentures................ RCFD 3200 1,275,000 19.
20. Other liabilities (from Schedule RC-G).. RCFD 2930 892,947 20.
21. Total liabilities (sum of items 13 through 20)... RCFD 2948 46,205,005 21.
22. Limited-Life preferred stock and related surplus. RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.... RCFD 3838 0 23.
24. Common stock..................................... RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to
preferred stock)................................. RCFD 3839 2,349,164 25.
26. a. Undivided profits and capital reserves........ RCFD 3632 584,878 26.a.
b. Net unrealized holding gains (losses) on
available-for-sale securities................. RCFD 8434 (3,951) 26.b.
27. Cumulative foreign currency translation
adjustments ..................................... RCFD 3284 (748) 27.
28. Total equity capital (sum of items 23 through 27) RCFD 3210 3,130,201 28.
29. Total liabilities, limited-life preferred stock,
and equity capital (sum of items 21, 22, and 28). RCFD 3300 49,335,206 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below
that best describes the most comprehensive level of auditing work
performed for the bank by independent external
Number
auditors as of any date during 1995 . . . . RCFD 6724 . .... N/A M.1.
1 = Independent audit of the bank conducted in accordance with
generally accepted auditing standards by a certified public
accounting firm which submits a report on the bank
2 = Independent audit of the bank's parent holding company
conducted in accordance with generally accepted auditing
standards by a certified public accounting firm which
submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in work accordance
with generally accepted auditing standards by a certified public
accounting firm (may be required by state chartering authority)
4 = Directors' examination of the bank performed by other external
auditors (may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external
auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit
- -------------
(1) Includes total demand deposits and noninterest-bearing time and
savings deposits.
6
EXHIBIT 25.2
===============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
Lowe's Companies, Inc.
(Exact name of obligor as specified in its charter)
North Carolina 56-0578072
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
P.O. Box 1111
North Wilkesboro, North Carolina 28656
(Address of principal executive offices) (Zip code)
----------------------
Subordinated Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule
24 of the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 15th day of October, 1996.
THE BANK OF NEW YORK
By: /s/ STEPHEN J. GIURLANDO
----------------------------
Name: STEPHEN J. GIURLANDO
Title: ASSISTANT VICE PRESIDENT
-4-
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business March 31, 1996, published in accordance with a
call made by the Federal Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 2,461,550
Interest-bearing balances .......... 835,563
Securities:
Held-to-maturity securities ........ 802,064
Available-for-sale securities ...... 2,051,263
Federal funds sold in domestic offices of the bank:
Federal funds sold ................... 3,885,475
Loans and lease financing receivables:
Loans and leases, net of unearned
income ................. 27,820,159
LESS: Allowance for loan and
lease losses .............. 509,817
LESS: Allocated transfer risk
reserve...................... 1,000
Loans and leases, net of unearned
income, allowance, and reserve 27,309,342
Assets held in trading accounts ...... 837,118
Premises and fixed assets (including
capitalized leases) ................ 614,567
Other real estate owned .............. 51,631
Investments in unconsolidated
subsidiaries and associated
companies .......................... 225,158
Customers' liability to this bank on
acceptances outstanding ............ 800,375
Intangible assets .................... 436,668
Other assets ......................... 1,247,908
-----------
Total assets ......................... $41,558,682
===========
LIABILITIES
Deposits:
In domestic offices ................ $18,851,327
Noninterest-bearing ....... 7,102,645
Interest-bearing ......... 11,748,682
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 10,965,604
Noninterest-bearing .......... 37,855
<PAGE>
Interest-bearing ......... 10,927,749
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 1,224,886
Securities sold under agreements
to repurchase .................... 29,728
Demand notes issued to the U.S.
Treasury ........................... 118,870
Trading liabilities .................. 673,944
Other borrowed money:
With original maturity of one year
or less .......................... 2,713,248
With original maturity of more than
one year ......................... 20,780
Bank's liability on acceptances exe-
cuted and outstanding .............. 803,292
Subordinated notes and debentures .... 1,022,860
Other liabilities .................... 1,590,564
-----------
Total liabilities .................... 38,015,103
-----------
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,078,197
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 3,197
Cumulative foreign currency transla-
tion adjustments .................. (5,765)
-----------
Total equity capital ................ 3,543,579
-----------
Total liabilities and equity
capital ........................... $41,558,682
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot |
Thomas A. Renyi | Directors
Alan R. Griffith |
